The impact of organizational change in a business


Organizational change is an important element of business growth and survival in the ever-changing and dynamic business environment that most business organizations operate in. Organizations that are rigid or are opposed to change may find that they are left behind. Change in an organization may include the adoption of new working schedules, change of operational culture, change of objectives, mission, vision, adoption of new technology among other things. In order for an organization to achieve change, it must have a clearly laid out purpose supported by specific objectives and the plan must also demonstrate that the organization has the capacity required for the desired outcomes to be achieved effectively.  Therefore, the organizational change plan must point out all the activities that need to be undertaken in order to achieve the desired change.

Organizational change has many advantages and significance to the organisation that it is important that an organisation plans for change. Change management is not just important to the organization but to the people working in the organization as well. In fact, it is documented that change management is an important aspect that benefits almost all the stakeholders in the organisation. These include the organization, the employees, the shareholders and the executive management. To the organisation, change management is important because the organization is just like an individual and change management guards it against shocks of rapid change by making change a planned and well-managed process. This means that when change is managed, the inherent benefits are known in advance and it becomes easier to assess the progress. Besides, the organisation can easily respond to the demands of its customers since customer behavior is also a dynamic aspect and the management of change helps the organization to respond well to these demands. Change management also helps the organization in aligning the existing resources so that optimal resource usage is achieved for maximum benefits.

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The overall impact of change to the organisation is an aspect that cannot be ignored especially considering that there could be negative outcomes of change and therefore an organisation needs to assess this impact to know the next step to take in case the outcomes are not favourable. Interrupting the day to day business operations is least desired and thus through change management, an organisation can implement change without interfering with the normal running of the business operations. Through acknowledgment of the concerns aired by the staff, it becomes possible for the organisational efficiency and productivity to be maintained or improved while at the same time implanting change. The significance of organisational change management cannot be mentioned without mentioning time since time is a very important factor of production. Through change management, it is easier to reduce the time needed to effect the change. The change management process that involves the staff is likely to increase the productivity and efficiency of the employees as they feel supported.

Building customer confidence and loyalty is the ultimate desire of most if not all business organizations and therefore through change management it is becomes even easier to build the customer confidence by including customer concerns in the change plans. The anticipation of the challenges that may accompany the change plan may not be favorable at all if it includes uncontrollable anxiety and therefore change management plan helps in responding effectively to the anticipated challenges. Since the element of risk associated with the desire may affect the organization negatively, it is recommended that the organization reduces this risk and the change management plan provides the organisation a good option for reducing the risk associated with the change. This includes management of costs that are associated with change to make sure that change is achieved without thwarting the organisation’s objective of managing its costs. Lastly, change management helps in creating a strong platform for the organization to establish a practice of best practices that also incorporates leadership development and team improvement.

The specific individuals in the organization also benefit from change management by ensuring a smooth transition in the organisation without negatively affecting employee morale. This makes sure that the company image is also maintained while at the same time maintain support for concerns of the employees regarding to the changes being effected. When change is conducted in an efficient manner through change management process it creates the correct perception for the staff and the public concerning the change. Efficient communication is a key element in ensuring that the change process is effectively achieved and it is only through change management that the strategies can be developed targeting communication between individuals and departments. By reducing anxiety and stress through proper planning of organisational change, the benefit that change management brings by gaining employee acceptance of the change process cannot be ignored. Therefore, all these points indicate the importance of proper change management process because it has multifaceted advantages to the organisation and other stakeholders.

Approaches to Models of Change

While there many models for change management, this paper only focuses on three models. The change management model taken by an organisation depends on a number of factors which include the number of changes the organization wishes to make and the time period the change process should take to be effected. The models discussed are the McKinsey 7-S Model, the change management model by Lewin and the Kotter’s Eight Step Change Model. All three models have similarities as well as differences.

McKinsey 7-S Model

This model was developed by individuals who were working for the McKinsey & Company in 1978 and it incorporates a holistic approach to change management through a collective approach to the organization of a company by determining how the organisation will carry on with its operations (Recklies, 2007). The model incorporates seven basic factors that are used as key elements when considering how the organization will operate. The center of the model has shared value as the building element of the model and it looks at what the organization believes in, the mission of the company and what the company stands for (Recklies, 2007).

Another element is the strategy, which stands for what the organisation plans to do to face the external surroundings or how it plans to react to what happens in the external environment. The model also includes the structure of the organisation as an important factor that basically represents the organisational structure of the company (Recklies, 2007).  The systems denote the procedures, practices and routines that characterise the way the work is going to be done (12Manage, 2007). The style in the model symbolizes the culture of the company and the prevailing organisational culture and styles of management that are used within the organisation in question. On the other hand, staff represents the people employed in the organisation and their roles in the organisation and what role they can play in the proposed change process. Lastly, skills represent the abilities that the organisation collectively has or the abilities of each individual employee. The McKinsey Model has four main merits. First, it is an effective way to diagnose and comprehend the organisation holistically. It also offers a good direction for change in the organisational. The third benefit is that it is an amalgamation of both rational and emotional components. Lastly, all parts are interconnected, so all sections must be considered and focused on (Recklies, 2007). The model has disadvantages too, one of them being that when one of components is changed all parts of the model are prone to change due to the interrelatedness.  Another major drawback is that this model overlooks differences (Morgan,). It has been noted in previous works that the organisations that adopted this model of change tumbled from the top (Morgan,).

Kurt Lewin’s Change Management Model

This change management model was developed in the 1950s by Kurt Lewin, a psychologist by profession. In the model, Lewin distinguished three fundamental stages of change and these stages are still in use in today’s business environment. The first stage is the unfreezing. Most people seem to be in a frozen state due to the fact that they fear change and would naturally resist it. They hence want to stay within safe zones and avoid the risks associated with change by resisting it. It is at this point that they need to be unfrozen from the frozen state. This is not an easy thing to be achieved because most individuals in the organization become comfortable with the established status quo and lose this comfort when the environment shows signs of change. This implies that they need proper motivation to accept and appreciate change and overcome the frozen state (Syque, 2007). After the acceptance of change by the relevant people, the next stage is the transition stage. This is the period within which the change is taking place. This period requires strong leadership qualities because it might imply a change in the culture of the organization (Mind Tools, 2007). I addition time because people resist change and accepting change is like accepting a new culture, a feat that requires sufficient time to succeed. One of the functions performed by leadership during this stage is a reassurance to the team that the change is necessary and good for the company to survive. When the transition stage ends, the next stage which is refereed to as the refreeze stage starts. This stage is characterized by stability since everyone in the organization is now used to the change and all individuals in the organization are accustomed to the changing environment (Syque, 2007).

The Lewin’s change management model has a number of advantages; one of the merits being the fact that the model is easy to understand and simple to follow. In addition, since the model is implemented in steps, it becomes more efficient and thus it is mostly used in modern business organizations to effect change. However, the model also has some demerits and one of these merits is that the model is highly timely and the change process can only be effectively successful if this timeliness is put into consideration. Another drawback is that at the refreezing stage, many individuals are concerned and anxious that another change is imminent; as a result, they are in change shock and this can affect the efficiency and effectiveness of the employees thereby negatively affecting their performance (Syque, 2007).

Kotter’s Eight Step Change Model

The model comprises eight steps to effect change in an organization. The first step is to increase the urgency of change by demonstrating to the employees that the change is needed and necessary for the organization to survive then follow it with step two that involves assembling a team for the change (Chapman 2006). In step three, the vision is constructed to aid in offering the direction for the change.  Then all these are communicated to the entire organization and the relevant stakeholders in step four. In the fifth step, the main activity is to empower all the parties involved in the change process so that they can effectively achieve the desired objectives of change. Step six involves creation of short term goals that can be assessed as the change process is in progress (Chapman, 2006). In the next step, the main idea is to persistently focus on the objects of the previous steps that involve focusing on the change process and its effectiveness. In the last step of the model, the change is made permanent (Rose, 2002).

The model lays down the importance of communication as a way to shoe employees that the change is decidedly necessary, can be achieved and would not affect their jobs. When a change team is built this must be from the existing employees that must have been assessed and found to be up to their task to achieve the desired change (Rose, 2002). The vision constructed in the third step is an important pointer for the direction the change will take the organization in the future and how the organization will look like in the future following the success of the change (Rose, 2002). This vision must be followed by those put in charge of managing the change if at all it should be expected to succeed as desired. The short term goals set help in encouraging acceptance of change by the employees since the employees will be shown the progress of the change they have been told periodically. This is the step that should include rewards to build more spirit in the employees to encourage performance on the set goals (Rose, 2002). By being persistent it becomes easier to influence change when the short term goals have been achieved hence boosting the effectiveness of the change process in the long term. By making the change permanent, the organization incorporates the change into its culture, values and organizational practices.

This model too has both advantages and disadvantages. One of its strong merits is that the model is easier to follow since it is a step by step approach to change hence making it possible to follow on the progress of the change process. The model does not specifically focus on change but rather focuses on the acceptance of change and the preparedness of all those involved for the change to be effective. This is strong merit because it means the transition is effected easily. Nevertheless, the model suffers from two main disadvantages. First, all the steps must be followed and skipping one step is likely to render the change process a failure. The model also takes a long time to achieve change.

This case study uses the Kotter’s Eight Step Change Model as the best choice for effecting change in Vue Cinema Company. The model is chosen for its simple characteristic and the fact that this model allows the employees to be well prepared for the change they are being introduced to prior to the formation of the vision for the anticipated change and this makes the transition period easier to cope with in the long term.  Moreover, this model has fewer drawbacks than the others and also Vue Cinema operates in an industry that highly dynamic and quickly changing thus to effect change requires an approach that can bring substantial change while at the same time offering less interference to the operation of the day to day business activities.

Strategic Intervention Techniques for Effecting Change

Adapting to change in an organization means that the organization must be able to come up with strategic interventions techniques that attend to new core capabilities and make the change process as efficient as possible. One of the most efficient strategic intervention techniques is change leadership strategy. This strategy carefully combines the organization’s culture and leadership strategy in its approach to the change process (McGuire, 2003). Achieving change in a complex environment might just be as challenging and complex if the right formula is not available yet this strategy can be integrated into the change management process through recognition of core capabilities of the organization with respect to leadership and cultural values of the company. Identification of core capability is essential because this provides coherence in the organizational processes and gives a clear, precise, uncomplicated coalescing idea that guides all other choices made within the organization. Identification of the core capabilities should also focus on the markets and customers, the products offered by the company and then focus on the competitors. The focus alone is not helpful but it is important in isolating what needs to be changed and what does not require a change at all (McGuire, 2003). Among the complex challenges that organizations face and which this strategic intervention technique can help include the following:

(a) Mergers and acquisitions and the desire for coalescing cultures;

(b) readiness of the leadership for change as businesses compete to attract, retain, and promote talent and expand leadership suitable to changing conditions;

(c) Interdisciplinary collaboration for increasing the effectiveness of boundary-spanning shared work; and

(d) Creating and tracking strategic intent amidst the instability of competition and new technologies.

The figure below illustrates the schematic overview of the approach this strategic intervention takes and the major decision centers.

Figure 1: Leadership Culture Strategic Intervention

Organisational Change Plan Case Study: Vue Cinema

Organizational Overview of Vue Cinema

Vue Cinema is a cinema company based in the UK and the Republic of Ireland founded in 2003 by timothy Richards and Alan McNair. It was formerly called SBC International Cinemas.  The company currently has about 69 high-tech multiplex cinemas in the UK and the Republic of Ireland.  This makes Vue Cinema the third biggest British cinema chain. It has 654 big screens, with approximately 140,500 seats. It has made some acquisitions in the past such as the Sterner Century acquisition in 2005.

In mid-2006, the company completed an important venture for executive management as the management bought out a stake in the company retaining 51% of the shareholding in the cinema company.


The need for strategic change in Vue Cinema

Strategic change in Vue Cinema is necessitated by the dynamics in the internal and external environments. Within the internal environment of the company, many factors necessitate the need for strategic change for the company to remain focused and survive. The first factor is demographics in the company. The company has been growing steadily since its establishment in 2003 and there have been some changes that have taken place such as mergers and acquisitions and these necessitate change since mergers and acquisitions imply that the companies need to merge their cultures. As employees of the different organisations come together, there must be a strategy ton ensure creation of a shared culture. In addition to the need for shared culture and values, other workplace demographic dynamics that cal for strategic change to be established relate to the diverse ages of the employees. As new employees join the company, it is mostly likely expected that the older employees are also older age-wise. The company must establish mechanisms to deal with perceptions (interpersonal relations) and also the working schedules must be adjusted to fit into some of the employees’ social and family schedules. Without considering issues that are of concern to employees, such as stereotyping, it may be a great challenge for the organisation to guarantee retention of the skilled and experienced employees. Strategies must be put in place to consider employee development. All these are dynamics within the company’s internal environment that necessitate strategic change within Vue Cinema.

Within the external environment, there is rapid technological development that keeps the company on toes to ensure it either adopts the technological developments or falls out of competition. For instance, in the last ten years, great advancements have been witnessed in the screens that are used in public cinemas with products such as plasma screens being adopted and now there are 3D HD technologies that an organisation like Vue Cinema needs to keep up with the competitive nature of the cinema and entertainment industry.

While many organisations might feel comfortable in the local market, this can no longer be true since globalisation is being adopted by businesses in al sectors and this has made competition to be a global thing. For this reason, globalisation is an opportunity and still a considerable threat for Vue Cinema. Vue Cinema needs to expand beyond the UK and Ireland and make its operations more global to compete effectively with other companies like 20th Century Cinema and Fox that have made their operations global. Developing economies like China have become very attractive markets and businesses announce their competitive positions in the market by exploring such markets.

Dynamics in the marketplace also necessitate the need for strategic change to be undertaken in the organisation as these dynamics not only control the local competition but also the impact the internal running of the organisational operations. These dynamics include entry of new players, change of government or standardisation institutional regulatory policies, and change of consumer tastes and preferences. Consumer dynamics are also importamt as they affect the advertisement and promotion options a company can choose. For instance, many consumers use internet and therefore internet advertising has become a major option for many businesses to advertise. With all these factors put into consideration, it proves that Vue Cinema needs a process of managed strategic change to remain competitive and stand strong in the cinema and entertainment industry on the global platform.

Vue Cinema’s Current organization

The company has multiplexes that range in size from 4 to 27 screens which give each site slightly different staffing as a result. A specific management team is responsible for running each cinema. The management team is complete and comprised of a general manager, two to five assistants who are drawn from the management team and who are included depending on how complex the site is and its size.  While the general manger takes care of the running of the cinema at the site level, he or she is assisted by the other members of the management team. the management teams are also comprised of team leaders who take control of the running of the cinema operations on shifts while the customer assistants offer their services to the customers and report directly to the management team.

Besides the management teams, cinemas are also comprised of teams that are dedicated to running the projections and maintaining the sound equipment. The projections department is also structured like the rest of the other departments in the cinemas. Overall responsibility is vested on the technical manager who is supported by the senior projectionist and the entire projections team is accompanied by other projection staff who may be made of 2 to 4 individuals and who work on part time basis. While this team of temporary projections employees offers part-time support to the permanent projections team, it also works in other ad hoc assignments within the normal operations of the cinema business. Since majority of the company’s sites  are  digital, they are ran by a technical manager or the management team.

Vue Cinema’s One Point of Sale

The company completed the incorporation of integrated software in all of its sites. This integrated system called the Vista Entertainment Solutions that help in ticketing and increase the efficiency in the ticketing exercise. Thus, introduction of this integrated system, Vue Cinema had to change from the previous WaBITS ticketing system. This change of course requires a thorough change management approach to enable a smooth transition and incorporate change without interfering with the running of the business operations.

With the new system, the company’s customers can buy tickets at any of the company’s retail points and through the company’s website online. Even though Vue Cinema is the second largest cinema company in the UK, it is the first cinema company to introduce the one point of sale concept by integrating its ticketing system. By being the first company to implement this in the cinema business in the UK, the company faces a major challenge as the market leader in embracing the technological change. One of the challenges is that the company must have strategies to ensure that the technology works for the company so that the other competitors do not overtake it by embracing such technology making it more successful to them. The other challenge is that if the company doesn’t have proper change management strategies to make the technology work, the employees and internal stakeholders are likely to be reluctant to any future propositions for change.

In terms of growth, the company still has a lot of opportunities to take advantage and it has grown slowly though through the years since 2003. It currently operates in the UK, Ireland, and Portugal. In Portugal, it only has one centre. As already mentioned in the review of the related literature, there are many country destinations that can be very important in investment and the company should develop strategies to expand investment to these destinations to compete with other players in the cinema business such as Warner Bros and Fox. These destinations include Japan, China, and Brazil.

However, the company has taken the concept of growth with a local perspective rather than a global one. When the company acquired Apollo Cinema Company in 2012, Vue Cinema became the second largest company in the UK cinema industry where Odean is the market leader. This acquisition enabled Vue Cinema to retain 14 new sites across the country.  Moreover, it is still imperative that business view diversification beyond just putting business in different lines of operations but also look at it in terms of diversifying the regional presence of the company. This hence calls for strategic change management within the Vue Cinema operations and approach to the market to make moves that indicate greater global approach to business and increase the chances of grow the and survival in this era of increased competition on a global perspective.

Task 3:

Internal and External Stakeholders that influence strategic change plan implementation process

Within the internal environment of the company, the key stakeholders that influence the process of strategic change management include the shareholders, the employees, and the executive management. Of course the role played by business models in today’s complex business environments cannot be downplayed when considering the role of stakeholders in strategic change management planning. Besides providing information on the way systems are running the organisation as indicated in the Kotter’s Eight-Step Strategy, business models also give us a better view of the organization’s culture in terms of how it organizes its vital resources through a process of value creation and maintenance. Through this perspective, we find that an organisation’s business model is integrally connected to the risk management process, which cannot assume the importance of employees, managers and the shareholders as the major internal stakeholders.

Despite the fact that there is a need for harmonization between the mission of the governments (as stakeholders in many organizations) and the internal practices within institutions such as schools, there is clear evidence of complexity in arguing for shareholder value maximization especially if we consider organisations set for-profit purposes. This is in light of the modern organization environment where it is evident that the stakeholders in any organizations are more than initially thought or considered in the traditional business models. This is the reason shareholder maximization has been criticized since it is possible source of the agency problem.

Consider, for instance, an organization that struggles to maximise the shareholder value. While that objective would entirely set the business to take a profit-maximizing perspective, it must be harmonized with the society’s needs and objectives given that it is the society that gives the business the charter to exist and operate. Therefore, the goals set by the organisation must reflect the values it stands for, which in turn must embody the desires of all the stakeholders. If the goals set do not reflect the values in such a way that all stakeholders’ wishes are catered for, it is likely that agency problem will soon arise.

With respect to the external environment, the government, the society, and customers are the major stakeholders that influence the decision making of the firm. For the government, all the changes made by the business must adhere to the laid down regulations and laws. Customers expect that the business organisation strive to meet their needs in whatever they do. The society provides the company with the charter to exist and hence must be put into consideration whenever they make any changes be it tactical or strategic. Therefore, through strategies that target external environments, Vue Cinema has to focus on tactical and strategic decisions that aim to align its corporate strategy and strategic actions (Bolton, D 2010).

Task 4:

Appropriate Models for Change in Vue Cinema using Gap Analysis that reflects the circumstances Vue Cinema Faces AC4.1

The following Needs-Gap Analysis shows the circumstances facing Vue Cinema. With respect to the internal competencies and attributes, the company has the following strengths:

  1. Strong and well-coordinated management team
  2. Good internal practices with respect to customer support and employee relations
  3. Strong capital base assured by Doughty Hanson & Company (Equity Firm and one of the largest in the United Kingdom
  4. Full stadium format screens that give uninterrupted views
  5. Possession of 3D enabled screens of the latest technology
  6. Circuit of 80 cinemas

The following factors are needed to achieve future objectives that relate to globalization:

  1. Put expansion focus on emerging markets like China, Japan, and Brazil
  2. Employ the internal resources fully
  3. Develop a strong and permanent workforce to retain good talent
  4. Maintain market leadership

With the above attributes and performance levels, the following gaps are identified within Vue Cinema Company and which if rectified or followed up could make the business be in a better position in the future.

  1. Vue Cinema has not put all its potential to the fullest and it has been slow in expanding to the rest of the markets in the region and globally
  2. Considering taking market leadership in the UK

Measures that will monitor Progress

In order to measure progress, measures should be put in place that gathers feedback and evaluates how change is being adopted by both the internal and the external stakeholders. This includes feedback from the employees and from the customers. This will help in meeting specific objectives and changing the focus whenever necessary.

Another measure that should be put in place includes the involvement of the executive management and the supervisors to send messages to the other levels of management and help in making the changes successful. Lastly, another measure of gauging how successful the progress has reached is to carry out periodic review of the basic assumptions including the ones that relate to risk assessments and vulnerability of the business and the plans made for the future.


12Manage. (2007, April 9). 7-S framework (mckinsey). Retrieved April 12, 2007, from 12Manage Web site:

Bolton, D 2010, ‘The Adaptive Strategy Model: Burgelman (2002)’, PowerPoint Presentation, Swinburne University of Technology

Chapman, A. (2006). Change management. Retrieved April 12, 2007, from Business Balls Web site:

Create Advantage. (2012). evolutionary organization strategy framework. Available: Last accessed 8th Nov 2012.

McGuire J B. (2003) Leadership Strategies for Culture Change: Developing Change Leadership as an Organizational Core Capability. A White Paper by The Center for Creative Leadership – Friends of the Center Leadership Conference Orlando, Florida, October 8-10, 2003

Mind Tools. (2007). Lewin’s change management model: Understanding the three stages of change. Retrieved April 12, 2007, from Mind Tools Web site:

Morgan, O. (n.d.). Organization management part 1. Retrieved April 12, 2007, from Oliver Morgan Web site:

Recklies, D. (2007). The 7-s-model. Retrieved April 12, 2007, from Recklies Management Web site:

Rose, K.H. (2002, February). Leading change: A model by john Kotter. Retrieved April 12, 2007, from Business Source Elite.

Syque. (2007). Lewin’s freeze phases. Retrieved April 12, 2007, from Changing Minds Website:

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