Case Study of Small Business In England

Introduction

The business environment is constantly changing. Driven mainly by fluctuations in customer needs, changing regulations, new technological developmemts, falling profits, declineing market share and other internal and external forces has created a need for businesses to adopt new strategies so as to keep up with the pace of change (Nuorkivi, 2009). Irrespective of what causes change in organisation, change or business transformation is very difficult to manage and implement. As a result, management consultants have emerged as important agents who can help organisations successfully management and implement change.

The objective of this study is to evaluate the role of management consultants in change management and business transformation.

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Theoretical Framework

Change Management

Change management is concerned with successfully convincing users to accept new business process along with the technology that facilitates change. People are responsible for ensuring that organisations are functioning properly. While technology is important in ensuring the smooth functioning of the organisation, technology cannot substitute for human beings (Johnson, 1987). Technology is merely a working tool. In order to successfully implement new changes, an organisation must ensure that people are excited about adopting new technology. The organisation must also ensure that people believe in it, are ready to be trained in it and are ready to support it (Gouillart and Kelly, 1995) Change management ensures that all these things are in place before commencing with a new project. A successful change strategy requires the identification of forces for and against the change (Johnson, 1987).

In order to successfully manage change, it is important to begin by understanding the factors that drive change, the targets and the various aspects of change that take place in organisations. This is often referred to as the change arena which is depicted in figure 1 above (Susman et al., 2006). More often than not, organisations tend to benefit from change that is anticipated than from unanticipated change. It is not enough to be prepared for change. Organisations must also be aware of when change is necessary and how it can be successfully managed (Susman et al., 2006). There are a number of external and internal forces that may trigger change in organisations such as declining sales and profits, rising competition, eroding market share or imposition of new regulations. The above factors can be regarded as negative factors. However, change is not always triggered by negative forces. Sometimes, senior management may have a vision on how the company can perform better than it is currently doing and may deem it necessary to implement change that would enable the company to improve from its current position (Susman et al., 2006).

As can be observed from figure 1, change may occur either through adaptive learning or through generative learning. While generative learning can be more difficult to master, its impact on the organisation is more profound and far reaching. It seeks to develop deeper meaning and multiple connections in the phenomena that are being studied (Wittrock, 1974). Generative learning is best conducted in a team setting where participants can have the opportunity to review collective memories, archival and new data. Generative learning can also be achieved through discovery, experimentation and reflections which results in solutions to current problems (Susman et al., 2006). Discovery, experimentation and reflections can also result in the development of plans to seek newly recognised opportunities. A good generative learner is one who always asks the question “why” as opposed to one who just accepts things the way they appear. Change resulting from generative learning often results in long-lasting and profound effects on the organisation. In addition, change from generative learning often transforms the learner through the learning process (Susman et al., 2006).

The application of generative learning to business involves an examination of the basic assumptions about the organisation along with its approaches to business (Susman et al., 2006). Questions that often arise during the process include: who are the customers of the organisation, do the products and services create value for customers, if so, how, what is the most appropriate approach to deliver value to customers, what beliefs does the organisation have with respect to how it can best treat its customers, suppliers and employeesIt is not uncommon for managers to assume that they can provide answers to these questions. However, a seldom re-examination of managers can reveal inconsistencies between their assumptions and practices. By applying generative learning to the organisation, these inconsistencies can be corrected thereby enabling the organisation to benefit from an improvement in its structure, processes, products and services (Susman et al., 2006).

Like generative learning, adaptive learning is also valuable. However, it does not give serious consideration to most of the issues considered under generative learning. Rather, it focuses mainly on more efficiently and effectively delivering value to the organisation’s current customers (Susman et al., 2006). It is obvious that many companies have a proper understanding of their assumptions. This understanding enables them to act consistently with the assumptions. However, this may not always be the case as some companies may just be plain lucky because their unexamined assumptions are not out of touch with their customers’ value perception as well as their environment. Instead of engaging in generative learning, such companies can concentrate on producing better and perhaps low cost goods and services and delivering them to customers in a timely manner. However, it is always better to examine the assumptions by engaging in generative learning. Companies often consider generative learning a time-consuming and costly process and as such many companies tend not to be prepared to act effectively on what they have learned from the process.

While generative learning may seem irrelevant and expensive, it is very important when implementing change in organisations. Instead of trying to make a choice between adaptive and generative learning, it should be noted that generative learning and adaptive learning are not close substitutes for each other. Rather, the two processes should be considered as complementary processes. It is important for an organisation to involve in both processes to achieve success in the change process. Generative learning can enable a company to identify new customers while retaining existing ones. It can also enable the company to identify new markets, develop new products and services and offer them to existing customers. On its part, adaptive learning enables the company to identify approaches to deliver the goods and services to all customers in a more effective and efficient manner. Generative learning is particularly important for small and medium size enterprises as it enables them to identify opportunities for developing new products and delivering them to new customers and in new markets.

Lewin (1951) developed one of the earliest models of planned organisational change. The model consists of three steps in the change process. These include unfreezing the present pattern, developing the new pattern, and then refreezing at the expected new level (Cummings and Huse, 1989; Weilhrich and Koontz, 1993). Lewin’s model is attractive because of its simple nature. This is because it outlines the general stages that need to be considered when implementing change and thus the process that must be followed for successful change management (Okumus and Hemmington, 1998). Lewin’s model has been criticised as a process that is began and completed within a very short time frame. For example, Moorhead and Grin (1995) argue that change management need not be treated as a one-off process. Rather, change management should be considered as a continuous process. The three stage model of Lewin has therefore received very limited practical support. In addition to Lewin’s three-stage change framework, a number of other linear models have been proposed (e.g., Burnes, 1992; Thompson, 1993; Grundy, 1993; Kotter, 1995). The models proposed by the aforementioned authors share a number of common characteristics which can be grouped under the following five categories (Okumus and Hemmington, 1998):

• Identification and diagnosis.
• Consultation, exploration and negotiation;
• Planning;
• Implementation; and

While the characteristics appear to be common to all the models, care must be taken not to consider the categories as clearly distinct, discrete steps. In practical applications, as well as in most situations, there is often a considerable degree of integration and thus blurring among the different stages (Burnes, 1992; Vandermerwe and Vandermerwe, 1991). In the first step, the need for change is identified, the organisation’s current position is analysed and the ideal future state of the firm is determined (Hill and Jones, 1992).

The need for change must not come from a particular management level. It can come from senior, operational or middle level management (Thompson, 1993). In the second stage, the problem environment is explored and consultations and negotiations are initiated with key stakeholders of the firm (Okumus and Hemmington, 1998). In the third stage, planning is conducted. This involves taking into account the resources available, the culture, the required level of commitment and the competencies of the management team in the perspective of the issues identified in stage 2.

The planning stage also requires the formulation and design of time tables and implantation approaches. It has been suggested that it is important to employ analytical tools prior to the implementation phase. Commonly used analytical tools include the systems approach (Carter et al., 1984), force field analysis (Lewin, 1951; Thomson, 1985) and stakeholder analysis (Grundy, 1993). Using analytical tools makes it easier to take into account a wider range of the change environment such as the analysis of possible resistance to change, identification of those that can be affected by the change and the merits and demerits of different change strategies (Okumus and Hemmington, 1998).

In stage four of the change management process, the change is implemented. The implementation stage is the most difficult step of the process because it requires moving from the known to the unknown and as such is risky, complex and stressful (Clarke, 1994).

The nature of change is contingent in nature because it is important to choose the right time and pace to implement the change process (Jick, 1995). In a study of organisational culture and structure and their relationship to successful change, Kanter (1983) contend that the change masters are literally the right people in the right place at the right time.

The final stage of the change management process is monitoring and evaluating the results of the change against the original objectives. In doing so, the extent to which the implementation of the change has achieved its objective is investigated and conclusions are reached to determine whether further adjustments or changes are required. While the monitoring and evaluation phase may be regarded as the final stage in the process, it should be noted that change must be viewed as a continuous process. The evaluation stage should result in the identification of further opportunities for improvement. This means that the evaluation phase can be regarded as the starting point of a change cycle (Okumus and Hemmington, 1998).

Management Consulting

Management consulting is the practice of assisting firms to enhance their performance, mainly through the analysing previous business issues and developing plans for improvement. Accounting to the Oxford Dictionary For the Business World (1994) a management consultant is a professional advisor who specialises in providing advice to organisations so as to enable them improve their efficiency and thus enhance their profitability. According to Ainamo and Tienari (2002) modern management consulting is the process of providing independent advice across time and place directly into the board rooms of organisations.

Management consulting is aimed mainly at creating a management practice. In order to achieve this aim, management consulting competes with a variety of other institutions such as academic establishments and media houses. A combination of educational institutions, media houses and management practices, therefore constitute the knowledge management industry (Kipping and Engwall, 2002). The term knowledge management industry stems from the fact that management consultancies belong to a group of companies known in the management literature as knowledge management firms. Their main assets include the competence and knowledge of their personnel (Kipping and Engwall 2002). Three broad categories of management consulting have been identified including strategy consulting, organisational consulting and change consulting (Nadler and Slywotzky 2005). While these three categories of consulting appear to be independent from one another, the reality is that they have become seamlessly intertwined as a result of a combination of the various categories in modern day consulting.

Strategy consulting has its origin from economics. Throughout most of its existence, strategy consulting has been regarded as a top-down approach that involves executives providing their support to the business strategy and making it known to the rest of the firm. Organisational consulting originated from psychology. It begins with small group dynamics and then looks upward at the organisation. Strategy consulting and organisational consulting have traditionally operated independently. However, in recent times, these two categories of consulting have become increasingly integrated with each other in the services offered by modern management consulting firms as well as in the practice of management consulting (Nadler & Slywotzky 2005).

Change consulting originated from organisational consulting. Traditionally, organisational consulting tended to involve a wide range of changes. As a result, the implementation of these changes required special attention to the human factors of change. Strategy consulting only gravitated towards change management issues recently because early strategy projects focused primarily on small groups of senior management (Nadler & Slywotzky 2005). Despite this late integration of the different management consulting categories, consultancies today have become increasingly involved in the facilitation of change management (Poulfelt et al. 2005). Despite the increasing integration of the three consulting categories, consulting companies can be distinguished using a number of dimensions. Consulting companies differ in terms of degree of customisation, infrastructure or problem solving services, sales driven culture vs strongly enforced core philosophy and expert or advisor (Poulfelt et al., 2005; Duboff, 2005).

Previous Research

Based on the discussion of change management and management consulting, it is obvious that management consulting and change management are potentially related. Despite this potential link between change management and management consulting, there is limited empirical evidence exploring this relationship. In addition, despite the importance of change in small businesses, change management and the potential role of management consulting thereof, there is little or no empirical evidence on the potential link between these management aspects.

There is very scare empirical research on the management consultants’ roles in the context of large scale, long-term business transformations. This scarcity has been attributed to the fact that the role of management consultants in business change or transformations is often discussed in the context of the overall change rather than in the context of specific aspects of the change. Management consultants are often considered to be actors of the operational and organisational change. Given that change is an inherent characteristic of management consulting, it is difficult for researchers to focus deliberately on a particular aspect and magnitude of change. In particular, the literature has paid no attention to the management consultants’ role in facilitating change in small businesses.

Among the few studies that have considered the role of the management consultant in business change or business transformation, Hellgren et al. (2004) examined the role of the management consultant in the context of post-merger and acquisition integration. While their findings appear to be contextually bound, some appear to be applicable to most types of business transformations. Their evidence in particular suggests that the management consultant is important as a homogeneralisation agent, a facilitator, a negotiating agent, and a colonisation agent (Nuorkivi, 2009).

Many other studies such as Schein (2000); Maister (2008) Nadler and Slywotzky (2005) argue that there is no explicit evidence on the role of management consultants in large business transformations. Some studies have focused on business transformations from an angle that is different from the role of the management consultant.

It can clearly be seen in the literature that there is a huge shortage of research on the potential role that management consulting firms can play in helping businesses implement change management. This is the case despite the difficulties that organisations often face in implementing change. Even the limited number of studies that has considered this area of research has not focused any attention on the role of management consultants in the implementation of change in small businesses. Small businesses are very important for the growth of the economy. In addition, small businesses are likely to lack the knowledge and expertise required for the successful implementation of change. Small businesses are therefore likely to be heavily reliant on change management consultants for the successful implementation of change. It is against this backdrop that this study intends to contribute to the literature by investigating the role played by management consulting firms in implementing change in small businesses in England, as well as analysing how the results can be implemented in Small Businesses in Africa.

References

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