HOME | ÍNDICE POR TÍTULO | NORMAS PUBLICACIÓN Espacios. Vol. 37 (Nº 34) Año 2016. Pág. 14
Mateus PANIZZON 1; Paulo Fernando Pinto BARCELLOS 2; Margareth Rodrigues de Carvalho BORELLA 3
Recibido: 20/06/16 • Aprobado: 24/07/2016
3. Research Problem and Objectives
4. Research Method and Data Collection
ABSTRACT: This article presents the perception of academic units’managers about the organizational changes generated by an Enterprise Resource Planning (ERP) system implementation, according to Kotter’s framework (Kotter 2012; Kotter and Cohen 2012). The study is of applied nature and exploratory, involving a quantitative and qualitative approaches. The overall performance of the change management process measured by Kotter and Cohen (2012) scale was 66%, and qualitative data points out that the initiative was a failure. Therefore, this case study contributes to further theoretical development and understand of the Kotter and Cohen (2012) model predictive power to anticipate success or failure in change management. |
RESUMO: Este artigo apresenta a percepção dos gestores de unidades acadêmicas sobre as mudanças geradas pela implementação de um Sistema ERP (Enterprise Resource Planning), baseado no modelo de Kotter (Kotter 2012; Kotter and Cohen 2012). O estudo é de natureza aplicada e exploratória, envolvendo uma abordagem quantitativa e qualitativa. O desempenho global do processo de mudança medido com a escala de Kotter e Cohen (2012) foi de 66%, e os dados qualitativos apontam que a iniciativa foi um insucesso. Esse estudo de caso contribui para ampliar o escopo teórico e entender o poder preditivo de sucesso do modelo de Kotter and Conhen (2012). |
In Brazil, universities and colleges environment has changed dramatically due to governmental incentives to federal institutions, the emergence of private business groups focused on higher education, the arising of small colleges with a reduced structure and operational costs, and the proliferation of distance learning in institutions spread all over the country. In this competitive environment a communal university, which is a non-profit higher education institution (HEI) managed by a community’s foundation, neither counts with the same sources of financial resources as federal universities do, nor has the aggressive competitive behavior of small educational entrepreneurial groups. Furthermore, communal universities do not have the reduced structure that distance learning institutions do. Therefore, a communal university needs to change to be competitive. The change process involves cost reduction and the optimization of bureaucratic procedures what means a cultural change in the organization. In the communal university in study, in the South of Brazil, a business management system project was implemented to achieve the desired change of the organizational culture.
The adoption of an ERP system deals with organizational transformation, in which new processes and organizational reengineering are essential to achieve the proposed goals. This involves structures based on processes, operation and strategy, that come along with the need for management professionalization. Paviani (2007) has approached the subject focused on competitiveness increase of a higher education institution (HEI).Organizational changing is the biggest challenge to be overcome, in which the changes are established by processes, since a little change in routines and procedures, until a large institutional transformation (Silva andLeite2014). Sabau et al. (2009) emphasize that managing the complexity in one systematic vision through an information system, shape it and updated it with the evolution of technology; this will be the real challenge in the coming years.
Presently, federal educational institutions are receiving a greater support from the government, private groups arise in the educational business environment, small colleges with reduced structures, some of them focused on distance learning, proliferate in the country, generating new business models (Osterwalder and Pigneur 2010) in the educational field. In this context, a new competitive profile is emphasized involving some change in a communal HEI business model. The needed changes put a strong pressure on communal HEI’s, due to the required reduction of operational costs and the optimization of most bureaucratic processes. This is the case of the Brazilian communal HEI presented in this study, based on the implementation of a business management system project called “Project Alfa”.
The purpose of the “Project Alfa” (Silveira, Matté, and Garner 2007) is the development of an ERP (Enterprise Resource Planning) system for the HEI management, with under new standards, considered as “Project Alfa”. The project objectives are: a) to promote the improvement of administrative processes looking for innovation and encouraging the best management decisions; b) to develop an adequate management system to deal with and to replace current processes of some HEI specific areas such as human resources, comptrollership and finances, materials management and commercial activities; c) to transfer the developed business management system to other communal HEI through the creation of an association. The project started in February, 2008 and, was planned to finish two years later, mobilizing a relevant amount of human and financial institutional resources. The project development involves two more phases: (1) “Project Alfa” II, with focus on teaching, researching and processes extension, and (2) “Project Alfa” III, that focuses on knowledge management. However, the philosophy behind “Project Alfa” is not the current ERP replacement; it is a revision process of the existing computerized systems to check their ability to support each other. So that changes may be proposed, the reason for current procedures was investigated, showing the “why” and “how” of the current system status quo, and lighting up some paradigms that are rooted into the institution.
The project emerges as an opportunity to investigatethe change in study, through the framework proposed by Kotter (Kotter 2012), Kotter and Cohen 2012; Cohen 2005). For that purpose, academic units’ managers of the communal HEI were interviewed to find out their perception of the changes generated by the “Project Alfa” implementation.
The article structure is formed by: introduction; theoretical references; b) research problem and objectives; research method and data collection; c) data analysis and results; d) final comments.
To understand the use of technology (in this study, an ERP system) it is necessary a careful evaluation of its impact on and of the changes caused in an organization. It is important to emphasize that technology cannot be separated from human factors in the organizational context (Kochan and Useem 1992). Given companies representativeness in daily life, changes originated in organizations affect people’s identity (Giroux 1993; Rouleau1999) and the relations with the organization itself and with the world.
Powell and Dent-Micallef (1997) found out, that, by itself, technology does not produce sustainable competitive advantage, unless it is leveraged by intangible sources such as organizational leadership, organizational culture and business processes considering the behavioral changes which are inherent in an organizational change process.
Effective organizational change is more than a problem of technology, structures, skills and employees’ motivation. It depends on a cultural change that begins with the learning process and follows through the awareness, attitudes and beliefs as a way to the development of new skills (Morgan 2006; Senge 2006).
The implementation of an ERP (Enterprise Resources Planning) is a critical process. There are some reasons for this assertion: technology implementation takes time, high costs are involved, it generates changes in the organizational structure and faces resistance from employees (Santos, Freitas, and Luciano 2005). The generated organizational change is one of the most organizational efficiency, and coordination mechanisms, as well as technical skills and employees’ motivation (Saccol, Macadar, and Soares 2003).
To deal with the organizational changes occurred in the implementation of an ERP system, it is necessary to understand how it happens and what elements are involved. Knowledge of the change processand its evolutionary stepsmight help to understand, interpret and deal with it (Churchill and Lewis 1983; Fontana and Iarozinski Neto2005; Dobbs and Hamilton 2007).
In this context, organizations structured by tasks need to redesign their processes in a reengineering effort (Hammer and Champy 1993). Therefore, it is necessary to identify the various dimensions of each process, namely: flow of products and services, sequencing of activities, cycle time, relevant data and information, people involved and their reactions, as well as the interdependencies among the parties engaged in the process operation (G. Rummler, Ramias, and R. Rummler 2010).
Cerqueira (2006) states that management systems implementation procedures involve basic steps, such as, the implementation planning, the system deployment preparation, procedures and details of operational controls and the implementation of the management system itself. He also stresses that the project should include explicit information about its objectives, involved people, responsibilities and implications, from the beginning, as well as the projected changes fostered by the new management system.
Top leadership’s role is extremely important to fulfill these requirements. It is through the manager’s attitude that value is created for other participants of the process. It is also a task of the manager to reduce adverse variables risk. Approaching managers’ role, Cerqueira (2006) says that found problems should not be presented to the group in a negative, but as opportunities to be pursued in a project that needs improvement. To inform employees that efforts will still be required to complete the project and to argue that the focus may not be lost to avoid people following different directions, annulling all work already performed, is one of the leader major tasks.
According to Kotter (2012), leadership means to take an organization into the future, to find out opportunities and to exploit them successfully. Leadership is about vision and leaders are those who get people to buy in producing useful change. Management is a set of processes that involve to plan, organize, to measure performance and solve problems. The author states that leadership counts for 70% to 90% of a change process while management contributes with 10% to 30%.
Integrated business management systems are being widespread in organizations, due to the integration of various operational areas. However, some challenges must be faced in the implementation process that, if not well managed, tends to fail. One of the more challenging aspects of an organizational change refers to people which might be frightened by the process. Therefore, a change process success or failure is tightly linked to human behavior. People must recognize benefits from their involvement or, according to Frankl (2006), to find a meaning in the required behavior change. This is a leadership task that demands time and persistence.
According to Kotter (2012), the change process involves eight steps:
Stage 1: Establishing a sense of urgency
Stage 2: Creating the guiding coalition
Stage 3: Developing a vision and strategy
Stage 4: Communicating the change vision
Stage 5: Empowering broad-based action
Stage 6: Generating short-term wins
Stage 7: Consolidating gains and producing more changes
Stage 8: Anchoring new approaches in the culture
For Kotter (2012), to establish sense of urgency consists in taking people out of their“comfort zone” since inertia and immobility will not produce the desired effects to change the organization. The second stage for effective change leadership is to create a guiding coalition. This task requires putting together a group with enough power to lead the change because a fragmented or unprepared team is unable to accomplish that task. This is highlighted by Robbins and Judge (2014) when they affirm that employees must be, highly motivated to perform a task satisfactorily. Team’s motivation can be increased by the establishment of a meaningful organizational goal its members may see and wish to make true. Kotter (2012) argues that the major role of change leaders at this stage is to gather the “right people and who can work as a team”. Usually, teams are formed by people without appropriate characteristics which cannot work together and by groups without the capacity to promote change.
Heifetz and Linsky (2002; 2009), note thatit is important to form a well-structured team, to show the proposed improvement of work processes, and, to collect ideas from project members.
Vision communication to the participants of the change process must be made in a clear way. According to Kotter (2012), the simple transfer of data is not a synonymous of communication. It is necessary to use every vehicle possible to constantly communicate the new vision to participants which must feel involved with the visualization of the task to be done.
The fifth stage core addresses the issue of empowerment as a key factor in effective change, meaning the ability to remove barriers that block transformation. This can be done by getting rid of obstacles and by changing systems and structures that undermine the change vision. Furthermore, to encourage risk taking and nontraditional ideas and activities is a must. However, Kotter (2012) highlights four main barriers to empowerment: structures, bosses, skills, and systems (Figure 1).
Figure 1. Barriers to empowerment
Source: Kotter (2012).
Short-term wins act quickly and help to reduce small groups resistance, while others might resist increasing the team's faith in the project success. However, those who still resist must be the target of motivation additional efforts to accomplish change tasks. In this stage, it is required to plan for visible performance improvements, or wins, to create these wins, and visibly to recognize and reward people who made wins possible (Kotter 2012).
While minor changes are highly significant, one of the most important stages is to allow no discouragement, consolidating gains and producing more change, due to people that are always waiting for the opportunity to go against the whole process. To minimize that risk, it is required to use increased credibility to change systems, structures, and policies that don’t fit together and don’t fit the transformation vision. Also, to hire, promote, and develop people who can implement the change vision is needed. One of the actions resorted to by change leaders is to use opportunities for celebrating accomplished stages (Kotter 2012). Anchoring new approaches in the culture is the last stage of the change process. For a lasting change, it is necessary to reach the culture of the organizationas the key factor to sustainthe change process. In this stage, a better performance is created through customer and productivity oriented behavior, more and better leadership, and more effective management. Also, it is required to articulate the connections between new behaviors and organizational success. Furthermore, means to ensure leadership development and succession must be developed (Kotter 2012).
Figure 2 presents a comparison between organizations of the 20th and 21st centuries indicating that those organizations that do not adapt to new organizational forms will face troubles to succeed in the change process.
This is particularly appropriate for the communal HEI in study, once its structure, systems and culture characteristics are those of the 20th Century organization. Issues such as bureaucracy, expectation that Senior Managementwill solve all problems, performance data distribution to a few people only, centralized, political, and slow to make decisions were latent characteristics until the “Project Alfa” was triggered.
The eight stages proposed by Kotter (2012) are reflected in the implementation of the ERP system in the studied communal HEI, as it is shown by involved employees’ perception.
Figure 2. Comparison between organizations of the 20th and 21st Century
Source: Kotter (2012)
The research problem is expressed by the question: “what is the perception of HEI Academic Unit Managers about the change of procedures resulted from the implementation of the ERP system?”
Integrated management systems importance has been highlighted by Haeckel & Nolan (1993) which addressed the need to “manage by instruments”, mainly through organizational processes redesign, whatstimulated the implantation of an ERP.
The objective of this study is the respondents’ perception analysis, about changes generated by the “Project Alfa”, from its beginning to the phase prior to the system implementation, based on Kotter and Cohen (2012). Specific objectives involve to evaluate: a) the sense of urgency; b) the organization for change; c) the change vision alignment; d) the vision communication process; e) short-term wins; f) To design and test the research instrument adapted to the context of the organization could be considered as a last specific objective.
The HEI, target of this study, is inserted in a community of the south of Brazil, whose colonization by Italian immigrants began in 1875. The HEI has been participating of the development of this region since its foundation, in 1967. The structure of this HEI is formed by education units as follows: Headquarters, Campus and Nucleus. In the Headquarters, activities of research and extension are developed in addition to higher education. In the Campus, higher education and extension activities are performed while the Nucleus is a smaller unit where just higher education is developed. In this study, the HEI is formed by two campuses, six nuclei and the headquarters. All of the units are geographically distributed in nine different towns up to 75 miles away from the headquarters, serving a population of about one million people. Policies and guidelines stem from the headquarters and are deployed in campuses and nuclei. In this HEI there are more than 80 undergraduate courses, 15 master’s and doctoral programs and 70 MBA courses, involving approximately 40,000 students. As a communal institution, this HEI is a non-profit private university created by the civil society that reinvests all income in its own educational activity, contributing to the development of both, the region and the country, through the supply of a quality education.
This case study can be classified as an exploratory research. According to Yin (2013), the case study is an empirical inquiry that investigates a contemporary phenomenon in its real context, especially when the boundaries between phenomenon and context are not defined clearly. The exploratory research aims to provide a greater familiarity with the problem, to make it more explicit or to build hypotheses. As this is also an applied research, of quantitative nature, a survey was used as a technical procedure (Hair Jr. et al., 2015).
A questionnaire proposed by Cohen and Fink (2003) was used as the survey instrument. Formed by 30 questions to be answered according to a Likert scale of six points, the questionnaire was divided into seven blocks matching to the first seven change process stages. The last stage by Kotter (2012) “anchoring new approaches in the culture” was not investigated because the ERP was not implemented totally.
The instrument was reviewed and improved by two statistician and two experts from the HEI organizational development area. After the pretest, questionnaire answers were changed to a Likert scale of seven points, allowing a neutral answer to the respondent. Moreover, questionnaire words were adapted to the academic context, and two open questions were included at the end of the instrument.The questions accomplished by their respective numbers of the questionnaire are presented with their results in Table 1. Research population was formed by 20 academic unit, campus and nucleus managers of the communal HEI. Given that academic units are located in nine different places, the survey was submitted by e-mail, in Excel format, with a cover letter signed by the Coordinator of the “Project Alfa” Steering Committee showing his support. The directors of these academic unities answered the questionnaire. The return rate of the questionnaires was 50% increasing to 85% after a second contact with respondents was made.
Because academic units, campuses and nucleus of the HEI in study are different, a statistical test was performed to identify the degree of significance between the respondents’ answers. TheMann-Whitney nonparametric test of independent samples with a significance level of 5%, was used. It tests whether two independent samples were taken from populations with equal averages. This is an alternative to the ‘t’ test because the test does not require any assumptions about population distribution and their variances. For Hair Jr. et al. (2009), The Mann-Whitney test is one of the most used for two independent samples and an alternative to the parametrical ‘t’ test when the sample is small, 17 respondents in this specifically case.
Collected data were treated through SPSS statistical software. The sample was formed by 17 respondents and valid questionnaires.
66% of the 17 respondents are male and 33% female. 50% are between 40 and 49 years old, 39% are from 50 to 59 years old and 11% are aged over 60. About the working time for the organization, 11% have less than 10 years, 50% are between 10 and 20 years, 22% from 20 to 30, and 17% have over 30 years.
The descriptive statistics analysis was conducted, evaluating initially the average and the variation coefficient of data from the 17 respondents. Referring to the averages of the seven stages presented in Figure 3, there is a greater agreement among managers in relation to Sense of Urgency (5.46) and Vision (5.35) Communication low average (4.85) must be emphasized reinforcing the need for a greater effort in this phase. Empowerment, which is being considered as Training, is the stage with the lowest average (4.17). This block score was reduced due to questions 22 and 23 with the highest number of answers “I do not have an opinion”, which may indicate that this issue was not well approached in the pretest.
Figure 3. General Evaluation of Results.
In the evaluation of the same stages by location, considering as “headquarters managers located in the main campus and as “outsiders” managers located in other places (campus and nucleus), change perception is lower in units located closer to top management (“headquarters”), with an average around 10% higher (Figure 4).
Figure 4. General Evaluation of Results by Location
The obtained results for the change process of Kotter’s model are presented in Table 1. Based on the table, the comments are:
Table 1. Average and Variation Coefficient (VC) of questions and their respective numbering at the questionnaire
Variation coefficient (VC) reveals that variability between respondents is less in sense of urgency than in the others blocks, indicating higher perception homogeneity about the changing needs. In the change consolidation block there are more disagreements of perceptions between managers, which resulted in a higher variation coefficient.
Table 2 shows the results of the change process by location. We can affirm that the scores of the most of change processes are higher in the nucleus than in the headquarters and campuses. The exception is the communication and the empowerment, which are higher in the campus. None change process has the highest score in the headquarters. This result can be associated to the need to send all instructions and information with absolute precision to these unities that are distant from the headquarters. Thus, nucleus and campus, both perceive the change and its practices of a more positive way.
Table 2. Scores by location
|
Headquarters |
Campus |
Nucleus |
Sense of urgency |
5.24 |
5.56 |
5.64 |
Sense of organization |
4.72 |
5.31 |
5.43 |
Vision |
5.08 |
5.69 |
5.40 |
Communication |
4.67 |
4.75 |
5.12 |
Empowerment |
4.07 |
4.60 |
4.49 |
Short-term wins |
4.82 |
5.11 |
5.13 |
Consolidation |
4.40 |
4.63 |
4.77 |
To find out whether there is a statistically significant difference among all respondents (from academic units located in and from those out of headquarters), a Mann-Whitney ‘p’ test was used. Given that managers’ geographical dispersion can impact on change process variables such as communication, change perception might be affected. Table 3 shows that p-unilateral is not significant for any block, indicating a perceptions convergence among managers independently of location.
Table 3. Relation between Change Blocks and Locations
|
Performance |
Average
|
|
||
Block |
Headquarters |
Outsiders |
Headquarters |
Outsiders |
p -unilateral |
Sense of Urgency
|
68% |
68% |
5.75 |
5.75 |
0.3294
|
Organization |
57% |
61% |
5.00 |
5.25 |
0.2164 |
Vision |
61% |
64% |
5.25 |
5.50 |
0.1657 |
Communication |
46% |
62% |
4.20 |
5.33 |
0.0560 |
Empowerment |
62% |
46% |
5.33 |
4.20 |
0.0560 |
Short-term wins |
52% |
62% |
4.67 |
5.33 |
0.3294 |
Change Consolidation |
54% |
54% |
4.75 |
4.75 |
0.4299 |
However, given that the communication block has the lowest ‘p’ value, the geographical dispersion possibly can affect communication, what would require the development of specific strategies. Also, it’s important to observe that the Change Consolidation performance, based on the average mean, was 54%. Although the performance perception of the sense of urgency was 68%, which can be considered as insufficient, communication performance was 46% and, in general, the performance of other dimensions ranged from 52% to 62%. This means that the change perception wasn’t positive, despite the qualitative perceptions presented in the next section. These indicators represent an important anticipation of failure probability forecast of the initiative.
All blocks have a statistically significant correlation (** for 0.01% and * for 0.05%), except for communication and empowerment (Figure 5). Other correlations emerge among stagesshowing thatthe change process does not necessarily follow a linear flow, but it is explained by a complex model with other relationships. For example, sense of urgency has a high correlation coefficient (0.838) and is statistically significant (0.01%) with short-term wins. Thus, sense of urgency respondents tend to a short-term wins higher perception. Likewise, organization respondents tend to a communication higher perception (0.838).
Figure 5. Blocks Correlation
Respondents were asked what was their perception of the change process which they were involved with.60% of respondents mentioned a positive perception, but it occurs under different perspectives according to a given context (strategic, operational, and human), as shown by quotes in Chart 1.
Chart 1. Qualitative Analysis.
Context
|
Quotes |
Strategic |
|
Operational |
|
Human |
|
Other |
|
Five years later, the “Project Alfa” didn’t succeed despite the presented analysis. One important predictive measure of Kotter’s approaches the performance perception of each one of the 7 change process stages. The average of managers’ change perception was 66% (Table 4). Notwithstanding the sense of urgency perception, lack of empowerment and consolidation were two main causes for project failure. Also, project expectations were high which perceptions are linked to. Administrative teams submitted to a reengineering process were not subject to analysis.
Table 4. Manager’s Change Perception
Sense of Urgency |
Organization |
Vision |
Communication |
Empowerment |
Short-term wins |
Consolidation |
General |
|
Mean |
5.46 |
5.06 |
5.35 |
4.85 |
4.17 |
5.06 |
4.64 |
4.94 |
% |
74% |
68% |
72% |
64% |
53% |
68% |
61% |
66% |
Qualitative data indicate three main project failure causes:
The objective of this study was to analyze academic unit managers’ perception of a communal HEI, located in the south of Brazil, about changes generated by the “Project Alfa” along its development process based on Kotter and Cohen’s framework (2012). Overall answers average was 4.97, which represents 66.17% of agreement with the change process stages. Managers’ perception of change repercussion is positive, aligned with the qualitative analysis findings. Also, there are elements to point out that the sense of urgency as well as the change vision is developed. Furthermore, Provost role as change leader counts with 67.66% of agreement. Nevertheless, 66% overall score doesn´t mean a framework good evaluation.
It is emphasized that communication, empowerment and consolidation (constancy) presented the lowest average agreements. Kotter (2012) argues that formal structures make the action difficult, and, considering the HEI bureaucratic organizational structure, to state that empowerment has a lower evaluation is coherent.
As to managerial implications, it seems that communication ought to be improved due to the number of answers “I do not know” to questions about empowerment and consolidation (constancy).Regarding communication questions, answers average was lower for questions 17 (Change progress is communicated to this unit in appropriate time) and 15 (I notice that change is discussed in routine and formal meetings). Albeit, a qualitative research to understand the kind of project return expected by managers could be made. It should be considered that research results are linked to the application context also: when of questionnaires sending, the “Project Alfa” had already left the review and process optimization stage. Currently, it was in the system programming stage, which had little interaction with end-users, and could generate a lack of communication feeling.
However, the finding of positive correlations between the change process different stages is a theoretical contribution of this work. Also, future research to better understand Kotter and Cohen’ approach (2012) - as not only a linear process but as a set of complex interactions that affect each other – is suggested. Another insight from this study is the predictive power of Kotter’s framework, once no implementation had success five years after the development of this work.
The article title is suggestive and provocative. Therefore, based on the results of this study, it’s possible to conclude that the answer to the question “can a business management system implementation drive organizational culture change?” is positive. It was exactly due to the university culture that the ERP system failed in its implementation in this HEI.
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1. Professor of University of Caxias do Sul. Brazil. E-mail: mpanizzo@ucs.br
2. Phd and Professor of Graduate Program of Management of University of Caxias do Sul. Brazil. E-mail: pfpbarce@ucs.br
3. Phd and Professor of Graduate Program of Management of University of Caxias do Sul. Brazil. E-mail: mrcborel@ucs.br