cknowledgement

I would like to thank you my parents and my brothers for their help and the encouragement in
my all endeavors. Without them I would not have able to come this far.

My HND in business management and degree in business administration studies have given me a
good foundation to cope up with this MBA and I want to give a big thank you to ESOFT
lecturers for giving this confidence and knowledge.

Specially want to thank you Mr. Hazeer , for making this subject interesting and keeping us up to
date about subject matters and assisting us in making this assignment. Your encouragement and
guidance made us to do more and even you thought us other subject aspects which helped us
greatly. You have being a great inspiration for all of us and a good friend.

E-soft staff was always giving a good service and helping us in achieving our academic goals.
MN7127 Change Management and Consultancy Assignment i |1

Abstract

Purpose of this assignment is to identify importance of change management of organisations.

Knowledge and understanding of importance of proper change management tools definitely help
in developing me into the position of a good change agent.

Data for this particular case study assignment was based upon core learning materials provided
by the university. Information on books and internet was useful when drafting this and was able
to include up-to date data and examples, and university library material was comprehensive and
up to date which was much helpful. And guidance from Mr. Hazeer throughout the period helped
me to add more and make this a complete assignment.

“The only thing that is constant is change” – Heraclitus of Ephesus

(Source: (Goodreads.com, n.d.)

Change is an element that every person and organizations experience throughout its existence.
And the requirement of change has become more important than ever with globalization,
advances in technology and market competition. Further more importantly organizations do
undergo constant change in order to make it having the necessary competitive edge in reaping
market opportunities. Customers do experience existence of greater choice than before due to
this organization change element and this has become much fruitful for every stakeholder if the
change does achieve its intended objective.

Technological industry is dynamic and unpredictable where product oriented mobile phone
which was invented had turned out to be more market oriented where consumers do seek in
technological advanced features which will in turn enhance their entertainment experience. And
that mobile phone industry in meeting these consumer expectations have become more
aggressive in competing with each other and rolling out more similar or more advanced devices.
Further globalization and internet have added opportunities and challenges to organizations
where they need to adapt to external environment changes effectively in order to reap benefits.

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i |2

Table of Contents
Acknowledgement...........................................................................................................................1

Abstract............................................................................................................................................2

List of Figures and tables.................................................................................................................3

Introduction......................................................................................................................................5

Case Study Analysis........................................................................................................................6

1. Samsung strategic change context in year 2016......................................................................6

1.1. Balogun and Hope Hailey’s change kaleidoscope model.................................................6

1.2. Mckinsey 7s framework...................................................................................................9

2. Cultural change of Samsung..................................................................................................13

2.1. Competing Value Framework.........................................................................................14

2.2. The cultural web.............................................................................................................16

3. Critical Evaluation.................................................................................................................19

3.1. Kotter’s 8 step Model.....................................................................................................19

3.2. ADKAR Model...............................................................................................................23

Conclusion.....................................................................................................................................25

Referencing....................................................................................................................................26

Appendices....................................................................................................................................30

List of Figures and tables

Figure 1 - Types of Organisational change......................................................................................5
Figure 2 - Change Kaleidoscope model...........................................................................................6
Figure 3 - Samsung electronics’ organisation structure................................................................10
Figure 4 - 8 Point battery safety checklist.....................................................................................11

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i |3

Figure 5 - Competing value framework.........................................................................................14

Figure 6 - OCAI assessment results...............................................................................................15
Figure 7 - Cultural web..................................................................................................................16
Figure 8 - Kotter's 8 step model.....................................................................................................20

Table 1 - Comparing Samsung's culture before and after change.................................................17

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i |4

Introduction
Samsung group which commenced in year 1938 diversified itself from food exporting in to many
industries including current electronic device manufacturing through establishment of Samsung
electronics in reading market opportunities (Samsung, n.d.). And Samsung did roll out its first
android based smart phone in year 2010 (Henderson, 2017). And further it did follow up Apple’s
competition as a fast follower where Apple was ahead of Samsung in innovation capabilities.
And in light of Samsung’s failure of Galaxy Note 7, the organization learnt that their approach
must change in order to survive and further grow within the industry.

Figure 1 - Types of Organisational change

(Adapted from: Balogun and Hope Hailey, 2009)

The change path does base on above four main types of change and further organizations can
combine these change types in taking in to account depth of change that organization must
undergo (Balogun and Hope Hailey, 2009). Samsung is said to embrace revolutionary change in
this crisis situation according to case that is discussed. The change will be big bang for Samsung
as it must respond to the market competition as soon as possible in order to maintain its market
position which will be crucial for the organization survival. Samsung electronics CEO Mr. Kwon
Oh-Hyun as the change agent has taken the sphere head by breaking up its existing business

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i |5

practices and in pushing towards the change which will have a sustainable effect over its
existence.

Case Study Analysis.

1. Samsung strategic change context in year 2016

Samsung’s IM division was responsible in production of mobile phone devices (2016 Samsung
Business Report, 2017). And with the crisis long term survival was in question, which made in
way for strategic change for the whole organization.

1.1. Balogun and Hope Hailey’s change kaleidoscope model

This kaleidoscope is a useful model for managers which will illustrate factors and different
options available which can be considered with planned change (Johnson, Whittington and
Scholes, 2011). With this model organization is analyzed through eight elements which are
shown in below figure.

Figure 2 - Change Kaleidoscope model

(Source: Kfknowledgebank.kaplan.co.uk, 2012)

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i |6

The time factor is much crucial for change and it would differ according to situations, Industry it
operates and ability of the organization in terms of resources available (Balogun and Hope
Hailey, 2009). When it comes to Samsung quick response is required for change as organization
is in crisis situation in light of the Galaxy Note 7 failure in August 2016 (Samsung Sustainability
Report, 2017). And when taking the industry it operates, Industry itself is rapidly changing and
highly competitive. Samsung must quickly react and proceed to change in order to remain
competitive. Accordingly CEO of Samsung has decided that Samsung must quickly change its
strategy from fast follower to first mover.

When considering scope of the organization in Organisational change we do need to look in to in

what degree the change must occur. For Samsung the Note 7 failure was affected directly to
Information technology and Mobile communications division or IM division (2016 Samsung
Business Report, 2017). This change is a must requirement for the division but Samsung as a
whole organization has many things to learn from Note 7 scenario as the whole organization was
on to fast follower prominence where CEO has emphasized that change will happen for the
whole organization.

Brand identity of Samsung and its existing market position must be preserved within this change
process. And its existing innovative capabilities must preserve and improved through change
process. Especially Samsung’s lucrative B2B business in manufacturing electronic parts for other
businesses like Apple must be maintained continuously (Kang, 2017). Its marketing and supplier
relationships are some other aspects which must be preserved (Samsung Sustainability Report,
2017).

Samsung’s degree of diversity must be considered within the organization’s employee groups in
this change aspect. Samsung is a global organization and have many manufacturing and
subsidiaries worldwide and does employ local employees providing local touch for every country
(Samsung Sustainability Report, 2017). Samsung can be identified as a heterogeneous
organization which will be a challenge for the company in implementation of change out of
South Korea (Johnson, Whittington and Scholes, 2011). Country level implementation of change
process must be carried out taking in to account its local elements.

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i |7

Organization’s change must be considered analyzing its capacity or the available resources. And
in taking Samsung, Organization is equipped with highly skilled team of engineers and with
enormous amount of capital where CEO can invest in towards this change (Samsung
Sustainability Report, 2017). The existing innovative backbone of Samsung in inventions of
processors and semiconductors will be a great strength in this process of achievement of change
(Samsung Sustainability Report, 2017).

Capability of an organization can be identified through its success in managing its change
(Balogun and Hope Hailey, 2009). Organization expertise or its readiness for change must not
read as capabilities of an organization and in some instances though organizations do under go
change, but they somehow not able to achieve the change as they do not learn on their own
mistakes and not able to handle the change processes effectively (Johnson, Whittington and
Scholes, 2011). Samsung as a market reader it has responded to market changes positively and
taken up opportunities making best outcome in mobile device manufacturing and in to other
consumer electronic device manufacturing. Samsung’s existing engineering capabilities must be
enhanced to undergo the planned change; it will require whole organizational commitment in
turning itself it to an innovative organization.

Readiness of an organization for change can be described through main two points, employee
knowledge about the change and how it will happen and the second is individual commitment
towards the change (Balogun and Hope Hailey, 2009). As a fast follower Samsung’s change will
be new to the employees, but as the message has already communicated through internally and
external negative organization reviews after Note 7 failure, employees have the awareness that in
order to survive the organization must change itself towards innovation (Kovach, 2016). The
biggest challenge is the individual commitment towards change that must address by Samsung
through new HR practices and investment in learning and development.

Having power of an organization is important to get the things done. And Samsung as a family
business, its power lies with Lee family and organization path will be mainly decided
accordingly by them (Lee, 2017). When considering organization functional power sales and
marketing departments will be having much financial power as with their budgets, but with the
change Samsung must provide extensive power towards research and development departments

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i |8

in facilitating new innovations. According to Samsung Sustainability Report (2017) CEO and
higher management has taken up the change process seriously implementing many
reorganization plans like forming global quality innovation office under direct purview of CEO,
which shows that power vested change agents are steered in implementing the change.

With theories of Balogun and Hope Hailey (2009) the change context for Samsung will be
revolutionary with transformational scope from existing business practice of fast follower to
innovator and nature will be big bang due to time constrain with the market competition.
Reorganization of Samsung will pave way changes from top to bottom and CEO will be acting as
the change agent with a close supervision and with the power vested on change formalities and
other senior management will play the role of change team. Systematic change process will make
the outcome much effective and socialization with the new change will lead in having the culture
embrace the change (Balogun and Hope Hailey, 2009).

1.2. Mckinsey 7s framework

This framework is an internal analysis of an organization which was devised by Mckinsey

consulting group in order to assess how organization’s elements do come together in a way
where each element in turn are supporting or configured in attaining intended strategy (Witcher
and Chau, 2010). In having a perfect fit within these configuration of 7 elements identified in this
framework is much difficult and must manage carefully. When the organization seeks in
improving one element will jeopardize the status of other elements and when one element is
neglected by the organization that will affect including other six elements negatively, it is
important that the organization have a best fit configuration within these elements (FitzRoy,
Hulbert and Ghobadian, 2012).

The framework further divides these 7 elements in to two main categories as hard elements and
soft elements. Hard elements include structure, strategy and systems of an organization that can
be directly influenced (Witcher and Chau, 2010). And soft elements are remaining element
namely shared value, style, skills and staff of an organization which are intangible and can be
highly influenced through culture (Witcher and Chau, 2010).

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i |9

Structure – This analyses how organization is made up and the system of reporting (FitzRoy,
Hulbert and Ghobadian, 2012). Organization structure of Samsung is centralized and flat,
mainly divided according to products manufactured, where it has CE division consisting
consume electronics, DS division with device solutions targeting B2B business and IM division
focused in IT and mobile communication device manufacturing (2016 Samsung Business Report,
2017).

Figure 3 - Samsung electronics’ organisation structure

(Source: Samsung Sustainability Report, 2017)

In order to give much needed strategic focus Samsung operates these divisions separately where
these divisions can perform according to its assigned manufacturing segment (Samsung
Sustainability Report, 2017). And in illustrating its global network at the end of year 2016
Samsung operated 220 hubs worldwide including subsidiaries like manufacturing and sales
(2016 Samsung Business Report, 2017).

After the crisis the management started the process of restructuring the organization keeping the
pattern intact in order to give it more strategic focus on innovation. And Samsung integrated

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i | 10

customer feedback with every department responsible to product development (Samsung

Sustainability Report, 2017). Samsung created global quality innovation office under direct
supervision of CEO in order to prevent quality issue as they arise and to steer innovation
throughout the organization (Samsung Sustainability Report, 2017). But yet as Vice Chairman
Jay Y. Lee caught in bribery and embezzlement charges and other Samsung internal scandals
surfaced have highlighted the need of further organization restructuring (Lee, 2017).

Systems – These do include daily business activities that employees go through in order to
complete a set task these do come in form of formal in informal systems (Fleisher and
Bensoussan, 2015). Some of Samsung systems can be identified as HR systems, financial
management systems, customer management systems and learning and development systems.
These systems are reassessed by Samsung regularly in order to improve the systems according to
time and market conditions (Samsung Sustainability Report, 2017).

After the crisis of Note 7 Samsung did implemented many new systems that focused in
mitigating quality issues. And the most important system identified is 8 point battery safety
checklist where focused in mitigating battery issues like Note 7 which led to halting the
product’s manufacturing (Samsung Sustainability Report, 2017).

Figure 4 - 8 Point battery safety checklist

(Source: Samsung Sustainability Report, 2017)

Strategy – This is the long term direction of the organization which will also seek in attaining
competitive advantage within its competitive spectrum (Witcher and Chau, 2010). Samsung’s
strategy was to seek market leadership through reverse engineering products of other

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i | 11

competitors, mainly Apple and provide a lower priced product through mass production in
achieving economies of scale.

The strategy of Samsung reconstructed in achieving vision 2020 of “Inspire the world, create the
future” through product innovation and making the organization a market leader in product
innovation and providing a quality output for customers (Samsung Sustainability Report, 2017).

Skills – Organization’s capabilities and competencies, and employee skills that are demonstrated
will shape up organization’s productivity and efficiency in seeking its goals and objectives
(Witcher and Chau, 2010). Samsung does give much importance in selecting the right person and
in enhancing its employee skills/knowledge. And Samsung has developed many learning and
development programs provided from the induction of an employee (Samsung Sustainability
Report, 2017). And knowing the importance of knowledge based human capital Samsung does
provide external learning programs with in line of its own programs offered through in house
campuses (Samsung Sustainability Report, 2017). With the organization change Samsung have
concentrated in equipping new skills on innovation and research in new business possibilities,
and have increased spending in training needs through internal universities and with
collaboration with external education institutes (Samsung Sustainability Report, 2017).

Staff – This is the human capital involved by the organization in its business activity (Fleisher
and Bensoussan, 2015). Samsung employed through worldwide 308745 persons as at end of year
2016 (Samsung Sustainability Report, 2017). As Samsung does operate as a global entity it must
adjust to multicultural aspects followed by global recruitment of employees (Samsung
Sustainability Report, 2017). In seek of strengthening innovation it is focusing more on
accumulating new energetic workforce through university partnerships and through focused head
hunting HR practices.

Style – The style within this framework does discuss regarding leadership style and the
leadership approach towards the organization performance (Witcher and Chau, 2010). Through
research it has identified that Samsung leadership did practice authoritarian leadership style and
less 2way communication (Kelly, 2016). And engineers at Samsung did follow orders
accordingly even they did encounter doubt on product quality (Kelly, 2016). But as per recent
organization reforms with CEO’s announcement the management have signed a declaration

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i | 12

announcing that authoritarian leadership will be eliminated and internal communication

mechanism within the organization will be effectively enhance (Samsung Sustainability Report,
2017). These steps will enhance innovative capabilities through freedom of work but by keeping
some important decision making aspects within higher management.

Shared values – Organisation values does guide employees of the organization and is embedded
within the organization culture and work routine (Witcher and Chau, 2010). Samsung has
identified its core values as People, Excellence, Integrity, Change and Co-prosperity (Samsung
Sustainability Report, 2017). And Samsung have taken up ‘people first’ concept and does
provide many learning and development opportunities for employees and through elimination of
authoritarian leadership style Samsung does seek in people centric open culture which will in
turn help in innovation (Samsung Sustainability Report, 2017). Through values of corporate
citizenship Samsung does seek in providing positive externalities through education and
environment conservative activities like recycling mobile phones (Samsung Sustainability
Report, 2017). Ethical way of doing business practices will be much crucial for Samsung in its
step towards innovation as it has already made news about patent infringement of Apple
(Reisinger, 2015).

2. Cultural change of Samsung

In organization change process organization culture can be identified as an important factor

which will shape up the final outcome and imbed the change in to roots (Johnson, Whittington
and Scholes, 2011). Organizational culture will shape up organization’s employee behavior
through elements like Organisational values, beliefs and customs. Organization culture has a
direct effect on the way of doing work by an employee in an organization and this culture (values
and beliefs) is shared within the organization through employee relationship in formal and
informal ways (Balogun and Hope Hailey, 2009).

As Samsung does have a strong fast follower culture rooted within the whole organization due to
its lucrativeness, it will be much difficult to change the cultural spectrum. The leadership must
ensure that effective strategies are implemented including socialization of the change elements
and making them imbedded in organization values (Johnson, Whittington and Scholes, 2011).

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i | 13

2.1. Competing Value Framework

Academics from University of Michigan including Robert Quinn and Kim Cameron developed
competing value framework in taking in to account importance of organization culture and other
attributes through research in order to assess whether the organization is effectively performing
(Cameron and Quinn, 2011). This looks in to individual leadership behavior and how those
behavior leads in producing or shape up organization culture and competency and how these
shaped up Organisational competencies will in turn produce specific set of organization values
(Cameron and Quinn, 2011). Firstly this framework devised through identifying two sets of
tensions, tension between flexibility and stability and tension between internal organization focus
and external organization focus. And these tensions creates four types of cultural profiles
including Clan, Adhocracy, Hierarchy and Market profiles which in turn have competing values
in individual level, Organisational level and the outcome level (Cameron and Quinn, 2011).

Figure 5 - Competing value framework

(Source: Vanderveen, 2016)

Taking further this competitive value framework Organisational culture assessment instrument
(OCAI) was designed to assess organizations in terms of how will they fit within this cultural
profiles (Lamers, 2010). And with this assessment organizations can be assessed through

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i | 14

dimensions including organization dominant characteristics, organization leadership,

management of employees, Organization’s Glue, Strategic Emphasis and organization’s criteria
for Success (Cameron and Quinn, 2011).

Figure 6 - OCAI assessment results

(Online Survey: OCAI Online, 2017)

As per the OCAI assessment underwent on Samsung before the decision of making the
organization an innovator by the CEO, it is evident that it does display more of market cultural
type where Samsung was much focused on external focus with stability (Cameron and Quinn,
2011). Samsung before the change was a highly competitive player, fast follower where it seeks
opportunity within the competition and launches devices with similar features in order to cope up
with competition.

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i | 15

And after the change Samsung adapted in to adhocracy culture, where it transform in to an
innovative organization in electronics industry. And as per 2016 year end statistics Samsung has
ranked at 2nd place in global R&D spending with $ 12.7 Billion which is 22.5% from revenue
generated and Apple has only spent $ 8.1 Billion which is 18.9 % contribution from revenue,
which does showcase the grasp of adhocracy culture and further recent deployment of Note 8
phone is an best example of an true innovator (Strategyand.pwc.com, 2017).

2.2. The cultural web

Jerry Johnson and Kevin Scholes developed this framework in order to analyse ways in how an
organisation can alter or improve its culture in relation to the organisation change process and
effectively managing the change (Balogun and Hope Hailey, 2009). This cultural web depicts
web of 6 interrelated elements which affects organisation internal behaviour and the 7th element
named the paradigm is in the center which illustrates the sum of other six elements and speaks of
the pattern of organisation work environment (Johnson, Whittington and Scholes, 2011).

Figure 7 - Cultural web

(Source: Kfknowledgebank.kaplan.co.uk, 2012)

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i | 16

Table 1 - Comparing Samsung's culture before and after change

Elements Before August 2016 After August 2016

Samsung resembles as a fast follower Samsung Galaxy S8 and S8 plus turned

Symbols image in the market and does out to be innovative products which
benchmark Apple’s technology with displays Samsung as an innovative
its mobile phones in providing a low industry player (Spence, 2017).
cost device compared to Apple
And also launch of recent Note 8 has
(Heisler, 2016) .
helped strengthen the image of
Image of copying Apple through Samsung.
many patent infringement cases filed
by Apple (Reisinger, 2015).

Power Authoritative power structure Enhanced commitment of the

Structure
(Worstall, 2012). leadership including CEO, board of
directors and change implementation
Organisation leadership is focussed on
team in a collaborative approach with
fast follower approach with relation to
the whole organisation in order to have
past success stories (Worstall, 2012).
a long term effect.

Top management Signing declaration

to eliminate authoritarianism (Samsung
Sustainability Report, 2017).

Centralised and vertical hierarchical Collaboration of customer feedback

Organizational organisation structure that hinders two with departments responsible in
Structure way communication and collaboration developing new products (Samsung
between divisions (Worstall, 2012). Sustainability Report, 2017).

Creation of Global Quality Innovation

Office under the direct leadership of
CEO to mitigate quality issues and
steer innovation throughout

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i | 17

organisation (Samsung Sustainability

Report, 2017).

Expansion of horizontal
communication and using collective
intelligence platform in order to
communicate between top management
and employees (Samsung Sustainability
Report, 2017).

Control Product reengineering was imbedded Implementation of 8 point battery

Systems
within technical learning and checklist system in order to prevent
development systems. incidents like Note 7 battery explosions
(Samsung Sustainability Report, 2017).
System of fixed rate performance pay
increases (Samsung Sustainability Implementation of performance based
Report, 2017). pay system according to individual
performance and his/her contribution
(Samsung Sustainability Report, 2017).

Improved quality control mechanism in

order to sustain brand image of quality.

Stories In the smart phone industry Apple has CEO’s decision to transform the
identified as a leader in innovation company in to first mover from fast
where Samsung copy Apples follower.
technology in order to provide a
30% growth in pre-order of Samsung
device at a lower price with the same
S8 which is the highest record for any
experience (Reisinger, 2015).
device in Samsung history due to its
Washing machine recall in Australia innovative features and committed
due to low quality and safety risk management team in steering
(Samsung au, 2015). innovation (Spence, 2017).

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i | 18

Routines Reactive to market conditions through Proactive and trying to invent a new
fast follower approach. device or technology which will
provide competitive advantage.
R&D mostly focused on enhancing
reengineering practices than Consolidate and reducing business
innovating. meetings by half in order to improve
meeting practices (Samsung
Sustainability Report, 2017).

Eliminating unnecessary overtime work

(Samsung Sustainability Report, 2017).

R&D team working towards innovation

rather than focussing on reengineering
other products.

3. Critical Evaluation

Understanding of organization change context and culture is not sufficient. It is much important
to continuously keep on evaluating the change process in order to develop the organization in to
a learning entity. Learning from past errors will make future change processes to be effectively
devised (Kotter, 2012). . Also evaluation of currently in progress change will allow organization
to identify gaps that needs to be addressed (Kotter, 2012).

3.1. Kotter’s 8 step Model

Dr. Kotter did identified 8 steps for change which will helpful for managers and these 8 steps can
be divided in to 3 main categorical stages; change preparation, implementation and change
management.

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i | 19

Figure 8 - Kotter's 8 step model

(Source: Soemartopo, 2016)

Establishing sense of urgency – Leaders and managers must develop a compelling case for
change and must communicate why it is important to move from the current state to the future
new state (Kotter, 2012). The failure of Galaxy Note 7 is a shock for Samsung and they recalled
more than 2.5 million Note 7 devices worldwide in October 2016 and the following day they
ended its production (BBC News, 2016). This did affect negatively to the organization,
financially and to its brand identity. And Samsung’s share price fell by 7.5% at the same day
losing $ 14 Billion in organization value (Farrell, 2017). With this CEO did issue a statement
worldwide that they will move on to change process. And investigations commenced throughout
the organization in seeking causes for the failure and to start reorganization process (Samsung
Sustainability Report, 2017). The leadership and management have given the sense of urgency as
the change is critical for organization survival and that with Samsung’s resources it will be able
to change itself to an innovator.

Build a powerful guiding coalition – It is important to have a team that drives the change of an
organization and these change agents must be embedded within the organization (Kotter, 2012).
As the change agent CEO has taken the leadership and has formed the global quality innovation

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i | 20

office under him with participation of other higher management positions like CFO (Samsung
Sustainability Report, 2017). And higher management is in close monitoring in order to make
this change process a successful one. Board of directors of Samsung has provided its full
contribution in this requirement (Samsung Sustainability Report, 2017).

Create a shared vision for change – This vision must be short, understandable and an emotional
element which may motivate employees (Kotter, 2012). Samsung did have a quality management
vision from year 2009 “perfection in quality beyond your imagination” and does have a vision of
“Inspire the world, Create the future” looking towards 2020, but yet it did not focus in research
and development instead it focused on market requirements as a fast follower. Mission statement
clearly states that they do focus in innovation aspect (2016 Samsung Business Report, 2017).
The leadership must focus in embedding these visions and mission statements within the
organization culture and make it effective (Johnson, Whittington and Scholes, 2011).

Communicate the vision – It is important that vision is communicated within employees of the
organization (Kotter, 2012). Through review meetings, internal emails, intranet and employee
training sessions are some mediums that can be used in communicating the vision (Johnson,
Whittington and Scholes, 2011). The CEO has already communicated the change direction of the
company in transforming itself in to an innovative organization (Samsung Sustainability Report,
2017). The leadership must focus in embedding this vision within the organization culture which
will infuse with organization values (Kotter, 2012).

Enabling to act on vision by removing obstacles – The change team must step in and remove
obstacles that do interfere in achieving the vision and must constantly seek feedback in knowing
what’s working well and things that not working well which are acting as obstacles and must
address them effectively by empowering employees to overcome  (Cameron and Green, 2007).
Samsung must look on the big picture as it has wide network throughout the world and seek
whether they have obstacles in meeting this vision it may come in resources or policy
implementations. For example Samsung will have to provide necessary financial backbone to its
research and development departments which will be lacking.

Create short term wins – It will be powerful when the organization does provide benefits of
change on early stages which may motivate employees and provide sense of the change process

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i | 21

(Kotter, 2012). Samsung is successful in launching Galaxy S8 and S8 edge phones (Spence,
2017). And later Galaxy Note 8 is market winner with many innovative features (Herh, 2017). It
has received many awards for innovations in consumer electronics development recently which
does showcase short term wins and that organization change has become successful (Herh,
2017). Samsung does have profit sharing scheme where it did provided incentives to the
employees of semiconductor division in January 2017 from the profit boom of the division (Jin-
young, 2017).

Reinforcing and building on the change – Organizations seeking change must keep repeating
above steps until the change is embedded within the organization (Cameron and Green, 2007).
For example Samsung will have to keep on communicating its vision for innovation and
removing obstacles throughout the change process. Samsung on its change process have carried
out new HR practices which does makes employee rewards based on performance which will
keep on reinforcing employees to perform well according to organization’s new change
especially at research and development work areas (Samsung Sustainability Report, 2017).

Institutionalizing the new approaches – Samsung must ensure that the change do sticks or
anchored within the organization’s procedures, operating models and peoples day to day work
(Kotter, 2012). Samsung has imbedded these changes with its organization, it has implemented
many procedures and systems in line with the change like Global grievance handling standard
procedure, Internal financial control procedures and Building innovation driven culture within
the organization and many more systems in stimulating innovation driven organization (Samsung
Sustainability Report, 2017).

This model does provide an easy way in application for top-down change processes and how that
change process can be further improved (Cameron and Green, 2007). And Dr. Kotter’s model
provides leaders and managers step by step analysis of planned or ongoing change process and
can take effective decisions accordingly (Cameron and Green, 2007). As this is a radical move of
Samsung, decisions must be taken quickly in an autocratic way by the leadership. And will not
have time in listening to employee grievances and ideas.

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i | 22

3.2. ADKAR Model

Firstly organization change process must be divided on to 3 main states, namely current state,
transit state and future state which will be important as change process will be much manageable
through employing different targeted tactics (Hiatt, 2006). The ultimate goal is to move the
whole organization in to future state through individual change process. This model will provide
elements of how and when to use different change management tools available to the
organization (Hiatt, 2006). This model provides us 5 building blocks which will affect individual
change and leading on to successful change on whole organization (Voehl and Harrington,
2016). And it is important to follow step by step in completing one block at a time (Hiatt, 2006).

Awareness – Understanding change requirement of Samsung by individual worker is essential.

And that effective communication must be in place to facilitate to know nature of change, how it
will happen and what will be the consequence if not changed (Hiatt, 2006). Through worldwide,
news has spread on Note 7 failure and from CEO’s message Samsung individual worker is aware
the current state of the organization and change is essential to survival.

Desire – Individual motivation towards change is essential and that it must become a win-win
situation for both organization and for individual worker (Voehl and Harrington, 2016). This can
promote through future prospects of higher incentives if the change becomes successful (Hiatt,
2006). Samsung has started performance based incentive scheme to encourage employee full
contribution towards organization performance (Samsung Sustainability Report, 2017).

Knowledge – Individual employee must have the knowledge regarding the change (Hiatt, 2006).
And this can be easily done through training and development and improved effective
communication (Voehl and Harrington, 2016). Samsung will have to address this in global
context as it has a global network of existence which may have to invest huge capital. And
importantly Samsung must educate what to do within the transit stage and after implementation
of change. Samsung has expanded horizontal communication and using collective intelligence
platform in order to communicate between top management and employees (Samsung
Sustainability Report, 2017).

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i | 23

Ability – Though knowledge is acquired time will be taken for actual performance (Voehl and
Harrington, 2016). And in some instances this ability is blocked by a barrier (Hiatt, 2006).
Samsung must ensure that these barriers are cleared and skill development is provided for
individuals who lack in. Feedback is essential to identify whether the ability is achieved or not.
And Samsung’s enhancement of horizontal communication will streamline communication
within divisions (Samsung Sustainability Report, 2017). Samsung is investing huge capital in
providing up to date training and development needs of their employees (Samsung Sustainability
Report, 2017).

Reinforcement – Samsung must anchor the change within its organization and must not have any
loophole which may take back this change process (Hiatt, 2006). Systems must be in place to
monitor that new practices are carried out effectively; positive feedback and performance based
incentives are some effective mechanisms (Voehl and Harrington, 2016). Leadership
commitment is essential at this place in making sure that he/she does not provide in chance of
creating that gap again.

With Galaxy Note 7 failure Samsung did perform financially positive for the year ended 2016
and performed better compared to year ended 2015. For 2016 the net income was 22.7 KRW
million and for 2015 it was 19.1 KRW millions (Samsung Sustainability Report, 2017). These
positive financial figures amidst crisis might discourage employee commitment to change. But
the leadership must emphasis that these financial performances are short term and that in order to
have long term sustainable growth innovational change is critical for the organization. And that
leadership can be identified as a pivotal element in Samsung’s change process, but with current
bribery allegations and resignation of CEO the initiated effort is under threat (Lee, 2017).

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i | 24

Conclusion
With above case study discussion it is evident that in order to survive within the highly
competitive market Samsung must change its strategic approach. The current situation of
Samsung have turned out to be in turmoil as heir of Samsung prisoned on bribery and corruption
charges and further CEO position was changed in October 2017 due to resignation of previous
CEO who steered the change. These aspects are harming the brand image and further will harm
the ongoing change process.

Management of human capital is very crucial in making the change process a success. And this
requires very effective mechanisms like effective communication and effective systems in
clearing barriers. Monitoring mechanism must focus in continuous work of attaining feedback
from employees which will enhance the ongoing change process. Within transition change
having knowledgeable and skilled change agent are essential and that Samsung must train these
teams and if there is a skill gap, which must be addressed immediately.

Resistant to change is natural as this does affect humans emotionally. There are many elements
which will lead in resisting to change including like culture the change approach. Change agents
must analyze every individual or section and devise plans in overcoming these resisting factors.
Education and effective two way communication are important aspects which will contribute in
overcoming this resistance.

Future will decide the success of Samsung within this highly competitive industry. But as an
electronic manufacturer and as a supplier of electronics to other players like Apple, Samsung is
in a much better place where it can integrate its innovations in processors with device segment.
With Samsung electronics organization analysis it is evident that it is moving on the right path
with adding value to organization’s long term in sustainably. Recent devices like Galaxy S8, S8
plus and Note 8 are success stories with innovative change. Reinforcing the change and
leadership contribution is important for Samsung in improving and moving on with the change
process. Finally it does come to decisions of leadership that moves an organization to future
betterment. And with recent vacuum of leaders, with scandals the future prospects are much
doubtful.

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i | 25

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i | 26

MN7127 Change Management and Consultancy

Assignment 1: Case study

Academic Year 2017-2018 Semester 2

Student Name: M.P.M. Umanga Kaviratne Submitted: 12th November 2017

First Marker: Mr. Hazeer Second Marker:

Assessment Criteria Comments

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i | 27

Application of the
appropriate theory to the
case study, demonstrating
depth of analysis

Reflection of the use of the

techniques in relation to
practice and theory
(relevant literature).

Written in a coherent and well

argued style

Presentation appropriate to
Master’s standard

 Clear structure
 Good grammar
 Sources properly
referenced

Overall Comments

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241
MN7127 Change Management and Consultancy Assignment i | 28

Agreed Mark:

Umanga Kaviratne LMU Reg. No.: 16035348 ESOFT Reg. No.: COL/E-3241