Association of Business Executive (UK)

Fortune School of Technology and Management

Assignment on
Leadership & Change management
In

Taipei Fubon Commercial Bank

& I.t Culture Change Conflict

Amarjeet Singh Bharth

Student Id: W09539
PGDBM

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TABLES OF CONTENTS

1) INTRODUCTION……….………………………………………………………………3

2) ORGANITASATIONAL CHANGE…………………………………………………3

3) FORCES OF CHANGE………………………………………………………………….4

a) Resistance to change……………………………………………………………..…4

b) Overcoming resistance to change……………………………………………..4

c) The Politics of Change……………………………………………………………….5

4) LEWIN’S THREE STEP CHANGE MODEL…………………………………….5

a) Unfreeze…………………………………………………………………………………. 6

b) Change…………………………………………………………………………………….6

C) Refreeze……………………………………………………………………………………6

5) A MODEL FOR MANAGING CHANGE……………………………………………6

6) IT CULTURE CHANGE CONFLICT……………………………………………….7

7) APPROCHAES TO MERGER…………………………………………………………8

8) CHANGE IT GROUP MEMBER MIND SET…………………………………….8

9) TURN TO CUSTOMER – ORIENTED SERVICE……………………………….9

10) RESOLUTION OF IT CULTURE CHANGE…………………………………….9

11) CONCLUSION……………………………………………………………………………10

12) REFERENCES……………………………………………………………………………10

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 1 INTRODUCTION

TAIPEI FUBON COMMERCIAL BANK C, Ltd. provides a range of

commercial banking services in Taiwan. It offers wealth of management
services; consumer banking products and services, such as auto loans, housing
loans, credit loans, and credit cards; and corporate banking products and
services, such as credit extension, cash management, export-import financing,
accounts receivables, syndicated loans, financial consulting, custodianship,
corporate investment and wealth management, corporate trust, real estate
investment trust, financial assets-based securities, cross-selling of securities,
non-life insurance products, life insurance products, and investment-trust
business.

Fubon Financial Holding Company (Fubon FHC) acquired the assets of Bank of
Taipei, a government-owned bank and used Taipei-Fubon Bank as the identity.
Bank of Taipei and Fubon Commercial Bank were complementary to each
other. However, in order to preserve the brand position and strengths of both
parties, as well as minimizing potential repercussions, Fubon FHC then decided
to merge these two banks through actively integration of information systems,
workflow, organization and staff. On January 1, 2005, after two years of
intensive preparation, Bank of Taipei and Fubon Commercial Bank were
officially merged into Taipei Fubon Commercial Bank.

ORGANISATIONAL CHANGE:
The study of organizational change is important because global and societal
change is both pervasive and persistent. We live in a rapidly changing world.
The last ten years have witnessed the collapse of communism in the erstwhile
Soviet Union and the eastern bloc countries.

CHANGE:
After the uncertainty created in the unfreeze stage, the change stage is where
people begin to Resolve their uncertainty and look for new ways to do things.
People start to believe and act in Ways that support the new direction. The
transition from unfreeze to change does not happen overnight: People take
Time to embrace the new direction and participate proactively in the change.

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A related change model, the Change Curve, focuses on the specific issue of
personal transitions in a changing environment. Unfortunately, some people
will genuinely be harmed by change, particularly those who benefit strongly
from the status quo. Others may take a long time to recognize the benefits
That change brings. You need to foresee and manage these situations.

FORCES OF CHANGE:

RESISTANCE TO CHANGE:

 Changing the behaviour of individuals and groups in the organization.

 Overt and immediate.
 Voicing complaints, engaging in job action Implicit and deferred.
 Loss of employee loyalty and motivation, increased errors or mistakes,
increased absenteeism.

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OVERCOMING RESISTANCE TO CHANGE:

 Education and communication.

 Participation.
 Facilitation and support.
 Negotiation.
 Manipulation and co-optation.
 Coercion.

THE POLITICS OF CHANGE:

Impetus for change is likely to come from outside change agents.

Internal change agents are most threatened by their loss of status in the
organization.

Long-time power holders tend to implement only incremental change.

The outcomes of power struggles in the organization will determine the speed
and quality of change.

LEWIN’S THREE-STEP CHANGE MODEL

The outcomes of power struggles in the organization will determine the speed
and quality of change.

LEWIN’S THREE-STEP CHANGE MODEL

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Unfreeze: Unfreeze is the fundamental step in the theory. It is about helping
stakeholders, employees, administrators, boards and government) understand that
change is required. It is about helping the stakeholder’s ³let go´ or not do things
how they have always done. The effects of the driving and restraining forces
come into play at this step. If the restraining force is greater than or equal to the
driving force, there will be no change.
Change: change to a new level or changing means exactly that it is about
replacing the old actions with actions That is consistent with the goal.It is about
not doing what one has always done that was counterproductive and
Replacing it with concrete new actions. To help maintain the motivation for
change, working in groups or obtaining,Support is effective. Others help to
relieve pressures, provide an environment where errors can be made and learned
From, offer positive reinforcement, and coaching.

Refreeze: This is the final step in the 3-Step model. When the changes are
taking shape and people have embraced. The new ways of working, the
organization is ready to refreeze. The outward signs of the refreeze are a stable
Organization chart, consistent job descriptions, and so on. The refreeze stage
also needs to help people and the Organization internalizes or institutionalizes
the changes. This means making sure that the changes are used all the
Time; and those they are incorporated into everyday business. With a new sense
of stability, employees feel confident and comfortable with the new ways of
working. Refreezing or making the new productive actions habits is
Refreezing. Those all the models Cheryl planned to do in the organization, to
make the better outcome of it.
A MODEL FOR MANAGING CHANGE:

Five sets of activities required for effective change management which was
stated by cherly is:
1. Motivating change
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2. Creating a vision
3. Developing political supports
4. Managing the transition and
5. Sustaining momentum

The first step is getting people to want to change, to believe change is

necessary, and to commit to abandoning the status quo for an uncertain future.
Cummings and Worley suggest three methods for creating readiness to change:
sensitize people about the pressures for change, that is why change must
occur; show discrepancies between the current state affairs and the future state
of affairs and communicate positive, realistic expectations for change is plan
things are not working, profits and market share are dropping survival is in
doubt these conditions increase readiness for change.

IT culture changes conflict

In the light of IT conflict perspective, there were three changes conflict types
between the two banks’ IT integration, Table 3 summarizes IT culture change
conflict of two banks’ integration in terms of system, Vision and contribution.
System conflict describes the conflict occurring when the values implicit in a
specific IT contradict the values held by the group members use, or expect to
use the system. First of all, different group member values in IT platform’s
selection existed within the two banks merging.

Table 3. IT culture change conflict of two banks’ IT integration

IT integration Fubon Bank Bank of Taipei Conflict type Case event

IT GV: Cost GV: Reliability System IT platform
architecture saving VEI: Efficiency Conflict integration
VEI: Ease of
Use
IT processes IV: Business IV: IT-focused Vision Conflict Network bank
unit VEI: Formal system
focused integration
VEI: Flexible
IT skills GV: Creative GV: Follow Contribution Project
IV: General rule Conflict management
skills IV:
Professional
skills

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*Note that IV denotes IT values, GV denotes group member values, and VEI
denotes value embedded in a specific IT.

APPROACHES TO MERGER

a) Merger ambition and IT integration strategies

In order to expand market share, Fubon Bank and the Bank of Taipei decided to
merge by absorption
in 2002, with the Bank of Taipei as the surviving company and Fubon Bank as
the absorbed company.
At the beginning, the Bank of Taipei has maintained operations along with
Fubon Commercial Bank as an independent entity. However, in order to reduce
operating costs and enhance cross-selling, Fubon FHC then decided to merge
two banks through fully integration of information systems, workflow,
organization and staff..
b) Process of integration
In the beginning, the adjustment of infrastructure is quite a time-consuming
process. Taipei Fubon Bank detected that there are different organizational
culture in the both sides. To achieve the full integration goal, “one bank, one
process, and one system”, they made cultural integration before system
integration, and then turned IT department into the service-orientated
organization. The integration process is shown as follows.

(1)Change IT group member mind set

The Bank of Taipei adopted IBM mainframe platform and core banking
applications. Fubon’s IT staffs were responsible for data migration to the
mainframe systems of the Bank of Taipei. A staff of the Bank of Taipei
recalled, “These people are more uncomfortable because their system will be
Stopped after merging and they have to learn the new IT platform and skills.”
Taipei Fubon Bank held a series of the team-moving trainings. These courses
encouraged IT staff to recognize the changes caused by the merger, and to
change their mind sets. After that, the original Fubon’s IT staffs would
be responsible for process integration, and the original staffs of the Bank of
Taipei took charge of the system integration.

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(2)Turn to customer-oriented service by management-by-objective
strategy

In the past, IT staffs of the Bank of Taipei were more technology-focused, and
information systems were limited to support internal customers. Taipei-Fubon
Bank adopted management-by-objective strategy to deliver customer-oriented
services. IT staffs of Fubon Bank were responsible for service design, while
these of the Bank of Taipei took charge of system implementation.

IT integration and IT culture change conflict

In this assignment, we have identified three types of IT culture conflict, and the
resolution of conflict in achieving IT integration. Below, we briefly discuss the
IT merger strategies and different types of IT conflict, and the contingencies for
their successful implementation. We then explore how compatibility between IT
cultures can affect IT integration. They have important normative
Implications for the effectiveness of IT integration after merger.

Prior research shows that high-level integration needs the cultural integration to
obtain better synergies.When IT structure, processes and corporate culture of
two organizations are significantly different, they may create more conflicts,
and IT departments may not be able to adopt immediately the higher level of
integration methods. In this study, we adopted Leidner and Kay worth’s IT
cultural change conflict with the viewpoint of strategic alignment model to
examine the post-merger IT integration phenomenon.

Resolution of IT culture change conflict

After detecting the phenomenon of IT cultural differences, Taipei Fubon Bank

adopted two main activities to resolve IT culture changes conflicts:
(1) The wisdom of changing group member values. Taipei Fubon Bank
changed the group values through team moving courses, which contribute to
reducing the system conflict emerging in IT structure integration and the
contribution conflict in the personnel skill integration.
(2) Promoting shared IT values. Taipei Fubon Bank reduced the vision
conflict occurring in network banking integration and the contribution conflict

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in personnel’s IT skill integration. These findings are in line with previous
studies (Robbins, 2000; Weber and Camerer, 2003), although no previous
studies have asked this question.

CONCLUSIONS

We adopted a case study on a merger of Fubon Bank and the Bank of Taipei
into a financial holding company with the contrasting perspective of IT groups.
The paper thus offers a novel way of looking at the IT culture perspective of IT
integration after merger and implementation. In addition, although the case
study relates to only one specific organization, some more general implications
were derived in previous sections. These inferences on
topics, such as system conflict occurring in IT platform’s integration, vision
conflict occurring in IT process integration, and contribution conflict occurring
in IT skill integration, can become valuable themes for debating in any
organizational contexts. We have also suggested that the enhancement of
Our understanding of the conflicts which influence successful integration and
the promotion of shared IT values in a merger can thus improve our normative
alignment model and guide the management. Knowledge about IT cultural
conflicts can be a valuable aid to managers and other participants who
Take charge of making effective IT integration after merger. We have discussed
a case involving the chief executive’s leadership, such as the awareness of the
differences of IT culture, the wisdom of changing group member values and
prompting shared IT values in IT integration.

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