Organizational Change Culture Impact

Adelia Kolbe – BDP Research Project 2008
The impact and effect of change in the organisation
1
Chapter 1
Introduction
1.1 Background
The organization has undergone various processes of change relating to the
implementation of global improvement initiatives. The change management
process has been approached with an upward trend in poor timekeeping,
absenteeism and staff literally walking out of their jobs. The cultures across the
site have become more diverse as a result of Employment Equity taking full
effect. With the numbers of African / black staff increasing, the language and
cultural diversity has sparked dissent amongst employees.
1.2 Statement of the Problem:
Some employees are reluctant to accept change in the organization.
1.3 Research Objective:
The research project aims to:
- define change
- culture and change
- explain factors that cause change
- describe the change process
- describe challenges in managing change
- conduct an empirical study within the GSK Cape Town site, Production
and Administration divisions
1.4 Delimitations:
The study will be conducted within the GSK Cape Town site, which will be spread
across both the administration and production divisions.
1.5 Research Design
The research will consist of a detailed literature review on change, followed by
an empirical study within GSK.

2
1.6 Significance of the study:
The study could produce information to aid the management team to address
the concerns of staff.
1.7 Outline of proposed study:
 Chapter 2 will deal with the literature review.
 Chapter 3 will deal with data analysis and interpretation
 Chapter 4 will produce the findings and recommendations.
1.8 Summary
The first chapter deals with the burning platform as it refers to the resistance of
employees to embrace change in the organization. The outline of the chapters to
follow is also highlighted.
Chapter 2 will provide a detailed study on the explanation and process of change
within the organization.

3
Chapter 2
Literature Review
2.1 Introduction:
The organization has undergone an immense, an intensive and a strenuous
change process through the course of the year which has created a climate of
uncertainty amongst staff. The changes are related to, but not limited to the
need for the business to improve efficiencies on site. Changes in the global
market have resulted in various GSK sites across the globe being impacted by
site closures and staff cutbacks.
Every organization has a culture. The only question is, “do you shape it or does it
shape you?” Leading the culture of the organization is as important as leading
the strategy and structure. While sometimes overlooked as the "soft stuff," it
directly impacts business results and is one of the most important things top
leaders have to do. At best, our culture can be a competitive advantage, at worst
it can be a significant drag on business results.
Above all, a mind shift on the part of GSK as a whole will be needed. Everybody
knows we have the opportunity, but the mentality has to change. The attitude of
everyone in the GSK value chain needs to change so that barriers are seen as
opportunities.
2.2 Defining the concept change
Change includes growth, innovation, redundancy, relocation and diversification.
The business faces change all the time, driven by internal or external influences.
For change to be effective, deploy the SMART methodology – specific,
measurable, agreed, realistic and time – limited. Keep it simple.
Whatever the area of change, you will need the co – operation of your
employees.
Resistance from employees is the biggest stumbling block to successful change.
A thorough, ongoing communication process is required where the reasons and
benefits are communicated to eliminate uncertainties and perceptions.
www.is4profit.com/business-advice/employment/managing-change.html
Humans are creatures of habit and are generally content with stability and
certainty. We set our own limitations with respect to growth and change.
Resistance to change comes from fear, usually fear of the unknown, or more
accurately fear of the imagined.

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It is a fundamental floor for the business to ignore this and not to assess the
readiness for change within the organization. Failure to effectively communicate
and address the issues and concerns of staff result in immediate resistance to
the change process. The business will suffer the consequences thereof.
Change in organizations is really the norm today. The world demands it and
organizations adapt to it as a level of improvement for global competition and
increased productivity. We need more accountability, openness to change,
teamwork and to develop high performance behaviours.
2.2 a) Creating a Culture of Change:
Organisational behaviour refers to the actions of individuals in which tasks are
conducted in the organization guided by the perceived organizational culture.
Sean Hadskins, OE Expert, GSK, CT
“The culture of a company is the behaviour of its leader. Leaders get the
behaviour they exhibit and tolerate. You change the culture of a company by
changing the behaviour of its leaders” Richard Brown, CEO, EDS
Culture is the “personality” of the organization and can be defined as the core
beliefs, traditions, shared feelings and values. The culture not only shapes
managers and employees behaviour, but also determines the manner in which
people interpret and respond to any given organizational situation. Values are
important building blocks of culture and are deep-seated and enduring. They
motivate behaviour and emotional responses.
They underpin the very way people approach their work, make choices and
decisions, and deal with each other. The leadership of an organization is
responsible for the creation and management of its culture and should aim to
achieve alignment between managers and employees individual values and the
organizational values.
Setting an organizational culture allows managers and employees to understand
and respect diversity and individual differences.
www.integratehr.com/solutionscultureandvalues.htm
The ambitions and visions for the GMS culture is to build a culture in which
people value development and the creation of an environment of empowerment
and engagement at all levels, whereby a positive team spirit of collaboration,
innovation and continuous improvement is fostered.

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Culture shaping in the organization:
The relationship between culture and change:
Organisations have definable cultures which influence success or failure of
strategies and new business initiatives.
Culture change is a leader led process
 The shadow of the leader
Transformational change occurs at the heart and head level
 Behaviours that need to change
The culture shaping methodology creates a healthy, high performance culture
which aims to produce sustainable business results and achieve commitment to
change.
Senn – Delaney Leadership Group
An enduring challenge is to change the institutional culture of organizations so
that co – operation and development thrive. Culture alignment with respect to
change management and leadership practices are inclusive and engage
participatively with the organization’s priorities.
Frank Horwitz, Business Report, Monday, September 8 2008
The GMS Culture:
 The positive aspects of our culture are that personal accountability and
integrity are high as individuals are clear on what has to be done.
 Individuals have a can do attitude and a strong sense of urgency in
carrying out tasks.
 The less positive aspects are that the commitment and contribution of
employees are not recognized.
A Healthy Culture
Teamwork
Openness to Change
Personal Accountability
Mutual Respect
Openness & Trust
Caring About Customers
Innovation
Healthy State of Mind /
Higher Mood State
Gratitude
Appreciation
Curiosity
Insight – Creativity
Optimism – Hopefulness
Sense of Humor

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 There is less of an emphasis on involving and engaging people at all
levels.
 Innovation and continuous improvement are not yet embedded as a way
of working.
Building a leadership culture is a reflection of the shadow of the leader.
“Leadership has to involve other people. It has to involve motivating them to
achieve their vision. Now, to do that requires a special state of mind. If you are
really going to achieve something great, you have to be ready to be wrong,
because leading, when it tends to be useful, involves risks. You are not always
right and can’t worry about that. And looking good is a time related issue. As we
have shorter time to do things, looking good versus really achieving vision may
be contradictory.”
Roger W. Johnson
Chairman, President and CEO of Western Digital Corporation
Leadership, Teambuilding and Culture Change
Senn Delaney Leadership
“ Building an institution with a healthy culture has to be a huge part of whatever
you do as a leader.”
Alair A. Townsend, Publisher, New York Business Journal
Leaders that are aware of the power of culture realize that when new initiatives
are being introduced, the strength and style of their culture can actually support
the change efforts or work against them as a significant barrier. Hence the
culture halts the forward progress of the initiative. The same initiative in another
culture gets implemented quite easily.
The power of culture shaping in the organization is to support new initiatives and
changes.
Since culture can significantly determine the success of a given initiative, it is
important for those in leadership positions to understand the culture they have,
its strength and style, and its’ potential to either support or block an upcoming
change initiative.
Effective leaders shape the culture of their organizations through their actions,
attitudes and the shadow they cast influences everyone around them.
Leaders must behave the way they wish their followers would behave.
The shadow they cast is very powerful within the business world and has a great
influence on those around them. The leader of a group casts a shadow that
influences the group culture. The shadow may be weak or powerful but it always
exists.
A healthy culture also cultivates leaders that lead by example and not words.
So leaders have to lead by example and be aware of the impact they create.

7
b) Factors that cause change:
Whenever the business environment changes significantly, through for example;
increased competition, technological breakthroughs or an economic downturn,
the organization will have to respond accordingly in order to survive. Companies
often respond to industry or environmental changes with a new competitive
strategy along with an appropriate reorganization.
New strategies need to be developed and implemented to meet increased
competition and changes in the market. The challenge of change is to shift the
culture into alignment with the new strategy.
Whenever an organization faces changes in its business environment, survival
and prosperity depend on its ability to quickly change direction. Generally this
involves a shift in strategy followed by changes in organizational structure.
As new strategies are developed and new structures put into place, many
employees resist the new change and are reluctant to embrace it. These cultural
habits and methods of working and managing are often at odds with the new
strategy and organizational structure. While the goals have shifted, the old ways
of working and doing business still exist. As a result, conflict and tension arise,
aggressive behaviour , frustration and lowered morale prevent the organization
moving toward its goals, which could lead to new strategies and initiatives being
ignored or sabotaged and will generally result in failure.
A need for innovation is clear, but the culture of the organization is resistant and
reluctant. Change in response to competition is imperative, but the culture within
the organization resists it. Although a strategy is developed to provide integrated
solutions to the business, the culture hinders the progress of it. In an
organization that is out of alignment, more and more effort is required to make
things work as the organization struggles to meet the challenges of today with
the attitudes of yesterday.
Winning Teams Winning Cultures, Larry Senn, Jim Hart
Reorganization or restructure in any organization creates thoughts of doubt and
uncertainty. The possibilities of redundancy and retrenchment are increased
drastically and the fears of being in a jobless situation are rife amongst
employees. If change is not communicated clearly to all, customers, suppliers
and employees who are affected, resentment will grow if people are excluded.
Cost is a huge factor which drives change and offers the biggest potential
benefits. The cost of not changing can result in the loss of sales and customers
and eventually laying off employees. As the business aims to boost and increase

8
profit and sales, there is a greater need to improve efficiencies. Improvement
initiatives result in new ways of working.
In order for the business to operate more efficiently, the Lean and Six Sigma
approach and methodologies have become more prominent. Operational
Excellence (OE) has become globally recognized and is used as an improvement
initiative to increase outputs and efficiencies. Operational Excellence is also a
cost saving initiative for the business, but can be viewed as a technique to
replace employees, with positions becoming redundant with the leaner way of
operating in the business.
Change is one of the most pressing challenges the world faces and GSK wants to
be part of the solution and has launched the OE programme across the site to
support global changes. Operational Excellence helps to cut costs and improve
efficiencies which allows it to remain competitive and the leader in the industry.
Through the implementation of the lean methodologies, the overall performance
of its manufacturing processes are optimized to meet the increasing customer
demand. Lean and Six Sigma are complementary principles, and if applied
correctly bring about long - term cost – saving initiatives in the business. Its
competitiveness is enhanced through the successful use of Operational
excellence principles. Operational Excellence is a process driven, strategic
business approach to improving manufacturing operations which allows the
business to respond to the ever changing demands of the industry and the global
market. Six Sigma in place and in use provides a better product or service, faster
and at a lower cost than the competition.
Continuous innovation is a critical success factor for the business to grow.
Change is the price of survival. Continuous renewal of organizations is a
prerequisite for the business to survive.

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c) The change process:
Planning for change: A Diagrammatic representation
Define the
change
Assess the
climate
Identify the change
approach
Develop target
readiness
Create culture fit
Build agent capacity
Develop
reinforcement
Strategy
Build
communication plan
Prioritize action
Plan
ImplementMonitor
GSK’s Accelerated Change Methodology

10
The journey

11
The journey continues
See addendum 1: The GMS Culture Change journey
Effective Implementation of change:
Once the need for the change has been determined, there are several steps that
will reduce resistance and aid in the implementation.
They are:
 Communicate to all role players
 Exhibit commitment to the change
 Listen to people’s concerns
 Involve and engage as many people as possible
 Communicate, communicate, communicate
 Weed out hard-core resistors
 Provide feedback
While there is no guarantee of success, the leaders who understand their own
reactions to change and are able to anticipate their group’s resistance to
proposed changes, can develop an implementation plan that is more likely to
succeed.
Leadership, Teambuilding and Culture Change, Senn - Delaney Leadership

12
d) Accelerated Change Management and the challenges faced by management:
Change in organizations is happening at an unprecedented pace, leaving people
uncertain of the rules, confused about procedures, and anxious about personal
security and well-being.
The ability to manage change has become a vital leadership skill – perhaps the
only real definition of leadership.
Successfully leading change is a tremendous challenge since a natural response
to change is resistance.
To become effective leaders and change agents, we must learn to manage
change by understanding and anticipating resistance and knowing how to
eliminate the barriers it can create.
Change is an emotional issue for all as people face uncertainty, have self-doubts
and fears.
Change is uncomfortable and forces people into the unknown.
Implementing a change is as much about understanding the emotional basis of
resistance as it is planning the actual change.
“If we want to change a situation, we first have to change ourselves. And to
change ourselves effectively, we first have to change our perceptions.”
Stephen R. Covey
“The change is going to be so rapid that as business leaders, we have to find out
how to make change a satisfier rather than a dissatisfier. And I believe that’s one
of the major challenges we face. The future leaders of all institutions who figure
out how to encourage their people to change – have them feel good about
change – are the ones who are going to come out ahead.”
David T. Kearns
Former Chairman and CEO of Xerox Corporation
Globally and in the South African Corporate world it is evident that change has
become inherent as an on – going process and thus the need now arises to
equip both the Leadership and the workforce to manage these processes.
A leader is a change agent, and an effective leader needs to know how to
implement change in a way that helps people move past their uncertainty and
resistance in order to approach the change willingly with an open mind. Leaders

13
need to understand their own level of openness to change. How your employees
in your organization respond to change is a reflection of you and your mind set.
The essence of the leadership role today is to transform and perform at the
same time and is especially relevant during times of change, growth and
restructuring where highly effective transformational leadership is required.
“Progress always involves risk, you can’t steal second base and keep your foot
on first.”
Frederick Wilcox
“Don’t be afraid to fail. Don’t waste energy trying to cover up failure. Learn from
your failures and go on to the next challenge. It’s ok. If you’re not failing, you’re
not growing.”
H. Stanley Judd
The literature reference list:
 Leadership, Teambuilding and Culture Change by: Senn – Delaney
Leadership
 Winning Teams Winning Cultures by: Larry Senn and Jim Hart
 Lean Six Sigma by: Murray Adams, Mark Kiemele, Lee Pollock, Tom Quan
 Organisational Behaviour by: SP Robbins, A Odendaal and G Roodt

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Chapter 3
Data Collection, Analysis and Interpretation
3.1 Introduction
The significance of the survey aims to identify the burning platform of the staff
based at the GSK Cape Town site.
Data was collected by means of a climate survey which was handed to staff in
person from the administration and production divisions within the GMS Cape
Town site.
Distribution:
A total of 20 surveys were hand distributed to staff from the administration and
production divisions comprising of 8 sections with 34 questions.
The return and collection date for the completion of the survey was stipulated in
the cover letter which accompanied the survey.
Of the 20 surveys that were distributed, 11 staff members completed it, a
response rate of 55% which is relatively low. The reluctance from staff to
complete the survey can be attributed to the current situation within the
company where staff are of the opinion that a survey does not make any real
difference to the current situation within the company.
30% of the respondents are male and 25% are female. 30% of the respondents
are currently based in production and 25% are currently based in the
administration division.
The data collection and analysis will provide management with much needed
information to accurately address the concerns of staff.
3.2 The design of the survey
 It will be accompanied by a cover letter which provides an indication of the
purpose of the survey.
 The dimensions of the survey which comprises 8 sections are as follows:
Section 1:
Biographical Data:

15
Section 2:
Company Dimensions: Vision, Mission and Values
Section 3:
Management
Section 4:
Company Culture
Section 5:
Diversity
Section 6:
Gender
Section 7:
Racial Equity
Section 8:
Employment Equity
A copy of the survey and the cover letter which was distributed is attached
as Addendum 3 and 4.
3.3 Data Analysis:
The analysis of the data collected shows the following results:
Section 1: Biographical Data:
The percentage of female respondents totaled 25%, the male respondents
totaled 30% and the total percentage of staff that did not complete the
survey were 45%. The distribution amongst male and female respondents
were fairly equal. All the racial groups were representative in the sample and
each racial group listed their mother tongue as the language of preference.
The years of service with the company ranged from 1year to 38 years of
service. All divisions within the organization were representative.
Male Female No response Admin Production
30% 25% 45% 25% 30%

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Section 2: Company Dimensions: Vision, Mission and Values:
The majority of respondents identify with the vision, mission and values of
the company.
Disagree Agree
9% 91%
Section 3: Management:
The majority of respondents have a positive response toward the sites’
management approach.
Disagree Agree
45% 55%
Section 4: Company Culture:
With regard to association, job expectation and performance, the minority of
respondents is in disagreement with the statements on the survey and the
majority is in agreement.
Disagree Agree
18% 82%
Section 5: Diversity:
The respondents view on fairness and equal opportunity show that the majority
is in disagreement.
Disagree Agree
64% 36%
Section 6: Gender:
The respondents view on gender show that the majority are in agreement with
the statements on the survey that women are not treated fairly and do not have
equal opportunity.
Disagree Agree
45% 55%

17
Section 7: Racial Equity:
The minority of respondents view race as an issue within the organization.
Disagree Agree
55% 45%
Section 8:
The majority of respondents view appointments as unfair and discriminatory.
Disagree Agree
55% 45%
3.4 Data Interpretation:
The response rate from males in production and females in administration is
depicted below.
3.4.1 Major trends:
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Males
Females
Non-response
Production
Admin

18
 The staff at the GSK Cape Town site strongly identify with the company’s
vision, mission and values and are aligned with the objectives of the
company. The staff has a strong association with the company image and
is aware of what is required of them with regard to performance and
expectation.
 Due to the recent increase in appointments of African/Black staff, it has
not been well received by the staff at the GSK Cape Town site. The
company has a legal obligation in terms of the employment equity act to
fill positions for previously disadvantaged individuals which has created
tension within the racial groups.
0%
20%
40%
60%
80%
100%
Agree
Company
Vision
Company
Culture
0%
10%
20%
30%
40%
50%
60%
70%
Disagree
Diversity
Employ.Equity
Racial Equity

19
 The management team at the GSK Cape Town site is however held in high
regard by more than 50% of the staff. It is evident from the results that
the management teams understands the needs of staff and appreciate
their efforts. The management teams are all aligned as they are able to
provide the staff with clear goals and direction.
3.5 Summary
The data collection and analysis looks at the information needed to be identified,
which leads the researcher in the direction to identify key areas that need to be
attended to.
The research instrument design is important to get the correct information of the
perception of all staff at the GSK Cape Town site. The method used was a formal
method and all staff was clearly briefed on what was expected of them during
the information gathering process.
The information would assist the researcher to look into certain directions that
was not identified earlier on in the research.
0%
10%
20%
30%
40%
50%
60%
Agree
Management

20
Chapter 4
Findings and Recommendations
4.1 Introduction
This chapter will look at all the results received and analysed and a conclusion
will be drawn on the interpretation of all the relevant information collated.
The survey showed little success due to the lack of support and approval from
the site leadership team members. The sample size was not broad enough and
all the role players within the organization were not reached. The participants
were reluctant to participate though they were assured of anonymity. With a
greater number of participants, a more accurate account of the climate within
the organization could have been been concluded. The few respondents who
opted to participate were however willing to assist with their time to complete
the survey which provided some valuable data for future research.
The results that were extracted from the analysis clearly show that the staff
understand their role in the organization but do not accept the transitional period
in terms of employment equity and the expansion of a more diverse culture. The
results prove that the success of any change management initiative needs the
understanding and participation from all the role players directly involved and
affected by the change to be a success.
4.2 Conclusions
4.2.1 Positive Findings
There are a host of positives that could be taken from this research. It has
created a foundation which needs to be built one step at a time.
From the company perspective the learning’s for future projects are well noted
and planning for change will be executed differently with communication and
participation as key drivers for successful implementation. The company has
continuously strived to remain a competitive force within the industry by
accepting the need for change and embracing the challenges it faces nationally
and globally.

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4.2.2 Negative Findings
The business is under constant pressure to comply with legislation and global
initiatives which is the driver of change at the Cape Town site. These external
pressures create a degree of fear and uncertainty amongst staff which directly
impacts the productivity and morale of the staff.
4.3 Recommendations
Communication is key to successful implementation of any change initiative.
Planning for change is critical to the business where readiness for change needs
to be assessed. All the role players should be consulted and engaged at every
level to ensure a smooth implementation of the process.
4.4 Possibilities for future research
Future research is possible as the information that was gathered was extensive
as it broadly explored the need for change. Transformation and change within
the organization will continue to remain a challenge to the management team
should a proper sensitivity analysis not be conducted prior to implementation in
the future. An effective communication strategy needs to be developed to further
harness multi cultural inter relationships.
4.5 Summary
It is evident from the research that the need for change within the organisation
has become the norm. Though change brings about fear and uncertainty
amongst staff members, it allows the business to remain competitive. An
effective strategy for implementation of change needs to be developed which will
cause minimal turbulence amongst staff in which the benefits can be derived
sooner rather than later.

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REFERENCES
 www.is4profit.com/business-advice/employment/managing-
change.html
 www.integratehr.com/solutionsculture
 Senn – Delaney Leadership Group
 Richard Brown, CEO, EDS Frank Horwitz, Business Report,
Monday, September 8 2008
 Roger W. Johnson
Chairman, President and CEO of Western Digital Corporation
Leadership, Teambuilding and Culture Change
Senn Delaney Leadership
 Alair A. Townsend, Publisher, New York Business Journal
 Winning Teams Winning Cultures, Larry Senn, Jim Hart
 GSK’s Accelerated Change Methodology
 Stephen R. Covey
 David T. Kearns
Former Chairman and CEO of Xerox Corporation
 H. Stanley Judd

23

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