Maintain change in human resources management of Tetra Pak Company

Theories: Transition of HRM, Change management, John Kotter Model, ADKAR model, how to make change stick Design: The author uses the survey method by questionnaires collecting via email

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DOAN QUYNH HOA

MAJOR: BUSINESS ADMINISTRATION EXECUTIVE MASTER OF BUSINESS ADMINISTRATION

CODE: 8340101

DISSERTATION OF MASTER OF BUSINESS ADMINISTRATION

Moderator: Prof., Dr Nguyen Dong Phong

Ho Chi Minh City, 2019

DECLARATION

It is to declare that this is my own original work and has not been presented for a degree in any other universities

Signature ……… Date ………

First of all, I would like to express my big thanks to my beloved co-workers at Tetra Pak for spending your valued time in participating in my survey and interviews and for giving me your feedbacks and ideas of my study My sincere thanks also go to management team of Tetra Pak, who does their best to grant a professional and world class working environment, especially their granting progressive learning opportunities to their co-workers

Above all, my big thanks to Prof Dr Nguyen Dong Phuong and Dr Tu Van Binh, who supported me with guidance and sharing their expertised inputs to make this study successfully

Last but not least, I want to send my heartfelt thanks to classmates of EMBA4 and my loved ones in family, who stand by me during whole course and support me during busy time of preparing dissertation

Once again, my big thanks to all of you!

TABLE OF CONTENT

Sub-cover

Declaration

Acknowledgement

Table of content

Abbreviation

List of tables

List of figures

Abstract

Forewords

Chapter I Introduction ……… 1

1.1 Chapter introduction………1

1.2 Background of the study……… 1

1.3 Methodology………6

1.4 Research questions……… 6

1.5 General objective……….7

1.6 Tetra Pak……… 8

1.7 Problem statement……… 10

Chapter II Literature review………16

2.1 Chapter introduction……… 16

2.2 Theoretical framework……… 16

2.2.1 Change………16

2.2.2 Change management……… 17

2.2.3 Transformational leadership……… 19

2.2.4 John Kotter change model……… 21

2.2.5 ADKAR model……… 24

2.2.6 Transition of Human Resource Management………25

2.2.7 How to make change repeatedly and reliably in people management… 27

Chapter III Research methodology……….29

3.1 Chapter introduction……… 29

3.2 Research design……… 29

3.3 Population……… 29

3.4 Data collection………29

3.5 Data analysis………30

Chapter IV Result and finding………32

4.1 Chapter introduction……… 32

4.2 Respond rate……… 32

4.3 Demographic characteristics……… 32

4.4 Employees’ perceptions on change in human resource management… 36

4.5 Part A: Change understanding……… 38

4.6 Part B: Expectations……… 57

4.7 Part C: Leading change……… 60

4.8 Part D: Transition period………62

4.9 Solutions and recommendations for maintain change in HRM …………68

Chapter V Research summary discussion and conclusion………71

5.1 Chapter introduction……… 71

5.2 Research objective achieved………71

5.2.1 HRM change………71

5.2.2 Reasons for change……… 71

5.2.3 Success factors for change……… 72

5.2.4 Expectations of staff and managers……….73

5.2.5 Leadership during change in people management……… 74

5.2.6 Challenges during transition………75

5.2.7 Effectiveness of change in people management……… 76

Chapter VI Recommendation………77

6.1 Chapter introduction……… 77

6.2 Leadership……… 77

6.3 Employee engagement and communication……… 82

6.4 Project management……….83

6.5 Make change repeated and reliable, a fundament of sustainability………83

Reference………

Annex………

1 Questionnaire………

2 Letter to respondent………

ABBREVIATION

HRM - Human resources management

HRMS – Human resources management system

HRBP – Human resources business partner

WCM – World class manufacturing

BOM – Board of management

HRCS – Human resources core services

Definitions

- WCM: In https://www.managementstudyguide.com stated: World class manufacturing is a collection of concepts, which set standard for production and manufacturing for another organization to follow Japanese manufacturing is

credited with pioneer in concept of world-class manufacturing World class manufacturing was introduced in the automobile, electronic and steel industry

For further information, please find in below link:

World Class Manufacturing - Meaning and its Principles

- Buddy: In Tetra Pak a buddy has a key role in on boarding the new employee They make the new hire feel welcome, they connect them with new colleagues and they are mainly the one point of contact to understand how things are done here

It is someone based in the same location as the new hire and can introduce them to the site and facilities Most importantly, it is someone who lives the Tetra Pak values and culture

LIST OF TABLE

1 Table A: Summary of SWOT analysis pertaining HRSC in Tetra Pak……… 12

2 Table 3.0: Sample size………29

3 Table 3.1: The summary of data collection and analysis……… 31

4 Table 4.0: Respond rate……… 32

5 Table 4.1: Breakdown of awareness of employees about functions and responsibilities of HR Department……… 38

6 Table 4.2: Breakdown satisfaction of employees about recent change in HRM systems in company………40

7 Table 4.3: Success evaluation of HRM strategy execution at department level…….41

8 Table 4.4: Understanding reasons for HRM change……… 43

9 Table 4.5: Clear reasons communication………45

10 Table 4.6: Success factors for change……….46

11 Table 4.7: Change success factors done in company……… 49

12 Table 4.8: Satisfaction rate about change management skills of superior ………….51

13 Table 4.9: Critical HR functions for organizational change……… 53

14 Table 4.10: People management skills of superior………55

15 Table 4.11: Expectations to change management in people management………… 57

16 Table 4.12: Employee’s satisfaction during change………59

17 Table 4.13: Critical activities from top management required during leading change……… 60

18 Table 4.14: Awareness and knowledge about change execution……… … 62

19 Table 4.15: Feeling of employees during transition period……… ….63

20 Table 4.16: Success factors for transition period……… ….65

21 Table 4.17: Effectiveness of change in HRM……… … 67

LIST OF FIGURE

1 Figure 1.1: HR Model version 2.0 applicable in Tetra Pak………10

2 Figure 1.2: Global workforce study 2016 – Willis Tower Watson………14

3 Figure 1.3: Strategy till 2020 in Tetra Pak……… 14

4 Figure 2.1: 8 steps of leading change……….21

5 Figure 2.2: Administrative HR vs strategic HR……….26

6 Figure 2.3: Time spending for administrative tasks and strategic tasks of a HR leader……… 27

7 Figure 4.1: Gender of respondents……… 33

8 Figure 4.2: Age of respondents……… 33

9 Figure 4.3: Education background of respondents……….34

10 Figure 4.4: Positions of respondents……… 34

11 Figure 4.5: Service years in the current positions of respondents……… 35

12 Figure 4.6: Service time in Tetra Pak……….35

13 Figure 4.7: Awareness of employees about HR department functions……… 39

14 Figure 4.8: Satisfaction about change in HRM system in Tetra Pak……… 40

15 Figure 4.9: Success evaluation of HRM Strategy execution at department level… 42

16 Figure 4.10: Understanding for HRM change ……… 44

17 Figure 4.11: Clear Vision communication……… 45

18 Figure 4.12: Success factors for change……… 47

19 Figure 4.13: Change success factor done in company………50

20 Figure 4.14: Satisfaction rate about change management skill of superior…………52

21 Figure 4.15: Critical HR functions for organizational change……… 54

22 Figure 4.16: People management skills of superior………56

23 Figure 4.17: Expectations to change management in people management ……… 58

24 Figure 4.18: Employee’s satisfaction during change……… 59

25 Figure 4.19: Critical activities from top management required during leading change……… 61

26 Figure 4.20: Awareness and knowledge about change execution……… 62

27 Figure 4.21: Feeling of employees during transition period……… 64

28 Figure 4.22: Success factors for transition period……… 66

29 Figure 4.23: Effectiveness of change in HRM………67

30 Figure 6.1: 6 leadership Elements with Supporting Behaviours……… 79

ABSTRACT

Purpose: This study aims at investigation the understanding from middle level

management team of Tetra Pak about change and change management in people management function Besides, it also seeks for the managerial implications for BOM

Theories: Transition of HRM, Change management, John Kotter Model, ADKAR

model, how to make change stick

Design: The author uses the survey method by questionnaires collecting via email or

directly, individual interview and group interview to 25 employees at middle management level of Tetra Pak JSC To get primary data to investigate the understanding about change and change management in recent change in people management at company and from that will determine the solutions to have a repeated and reliable organisational change

The data will be allocated into the different category respondents:

1 Gender of respondent

2 Age of respondent

3 Education background of respondent

4 Position level of respondent

5 Service year in company of respondent

6 Service year in current position of respondent

and analysis will be performed based on the qualitative technique

Via questions and answers, the author seeks for understanding in depth of context of change and change management from points of view of employees The questions are drafted as below:

1 What did employees understand about change and change management in their departments and within organisation?

2 What and how were employees experiences with change and change management in their departments and within organisation?

3 What and how did employees understand about change and change management in people management?

4 What did employees understand about their roles in change and change management in general and in human resource management particularly?

5 What did employees understand about roles of managers, management board in change and change management, both in general aspect and in human resource management?

6 What and how did employees do to contribute to change and change management?

7 What are the most success factors for an organisation initiative change and manage change successfully, especially in people management?

Findings: Based on the findings the author will define:

1 How employees perceive change and conduct changes in daily human resource management The searching for perceptions of employees about change and change management will mainly focus on:

- Change in HRM

- Reasons for change

- Success factors for change

- Expectations of staff and managers during change and change management

- Leadership during change and change management

- Challenges during change

2 From the point of views of employees about change and change management the author define the insights about employees’ believes about change that echoes inside the organisation and consider those echoes as initiatives for a successful, repeated and reliable change in human resource management, which certainly consist of the followings:

And the results of research will be proposals for key management indicators, key performance indicators and key activities indicators, on the other words, managerial implications

In the era of globalization, business organisations do not confine themselves in on area

or in one country, they always want to expand their business to far regions This is synonymous with challenging they are facing, the increment in change, both in technology and also business environment Doing foresee such challenge, almost international companies prepare themselves ready to those changes Change in technology causes change in the way we communication as well as the way of business administration And of course, changes should start from people, the “core of this wave” And the question is how to manage a Human Resources Management System in a sustainable way and ready for any changes of digital era?

The above-mentioned questions are the initiative for this dissertation and to see how people in Tetra Pak understand about change and change management recently in their departments and the function of people management throughout the organisation With the count on the fundamental research and also research results the author can propose a practical managerial implication to improve partially the services quality of human resource management in the organisation

Ho Chi Minh city, 15 th November 2018

Doan Quynh Hoa

CHAPTER I: INTRODUCTION

1.1 Chapter introduction

This study helps researcher understand how employees perceive change and conduct changes in daily human resource management From the point of views of employees about change and change management the author might define the insights about employee’s believes about change that echoes inside the organisation and might consider those echoes as initiatives for a successful and repeated change in human resource management

In this context, reference was made to employees within the Tetra Pak Employees were invited to express their viewpoints of change and change management and how these had impacted upon their work environment and their lives within the Tetra Pak The study uses qualitative methodology, also seek for the collective voices of employees into the central discussion of change and change management The data collection process was done via informal and formal interview primarily knew employees’ viewpoints and understanding of change and change management processes and practices within company

The informal and formal interviews irradiated employees’ opinions, issues related to the work environment and people management of Tetra Pak

During the survey, the following themes emerged from the data: an understanding of change and change management; expectations of employee about change and change management; leading change; transition period

The correspondence of participants will help the researcher have insights to define experience of employee about change, their understanding about change and leadership during change, their expectation during change, their feeling and expectation during transition period, their expectations in term of change and change

in people management in company…

1.2 Background of the study

Change management and leading change nowadays seems to be the crucial required skills for leaders and middle level managers But unfortunately, many companies

failed with changes such as failures in changes of digital transition, business processes, customer relation management, restructuring, reengineering etc… Many researchers have investigated the reasons why changes dead And the most probably reasons are:

- At the first stage, the change might be designed not fit with the company’s strategy, business complexity and business pressure

- Change message is not conveyed in a transparent and effective way and that causes shortage of in depth understanding from the employee side This makes employees feel angry, worry or even very bad

- The change implementation is spontaneous without proper tools and operating models

- The key players of change fail to manage the resistors and impact of change

on those peoples who are most affected by change

- Too much focus on long term wins but forget to acknowledge small and rapid wins

And according to Dr Linda Ackerman Anderson there are 5 common reasons cause failure of organisational change:

- Poor planning sets up organisational change for failure

- Inadequate support from leadership

- Lack of resource

- Priority focus on systems vs people

- Inadequate change leadership skills

The booming economies have created business opportunities but also facing challenge for organizations “change or die” This change phenomenon urges companies and organizations change The above-mentioned failure reasons have clearly proved that said easier than done We can see one common reason of change failure is losing focus of the leaders, they focus too much on the theories or systems and processes but did not convey a messages of change/change initiatives to their teams why organizations should change, what they should attempt to achieve and how

they should execute change This is really not an easy task to do

In nowadays unstable business environment, the need for change and implementing change successfully turns into a competitive advantage The development and change

in technology in last two decades are proven track record for this philosophy Because change is the perfection of existing product, of quality, of service, of process, of systems Other than technology, working environment is also defined by other factors that closely impact and influence companies such as economics, politics, sociology Such factors show a significant role in change management, as they will define why

to change, what to change and how to change

Throughout her career path of nearly 20 years in human resource management, the researcher has had chance to participate in many changes from large scale change to small scale change such as organizational wide change (restructuring, leadership change, adding on new policies, introducing new technology), transformational change (organizational strategy), personal change (inter-department change, hiring, lay off or dismissal), unplanned change (change that cannot be predicted like flood, strike or uprising) or even remedial change to correct poor performance of an employee, department or even of business Different types of change need different action plan, preparation And most of all, preparation is the key of successful achievements in change

The reality in work life of researcher showed that change never eases and change implementation is hard to get right Because change automatically impacted people,

so it is very important to get people involved in whole change process Hence a transparent communication, commitment and ownership of leadership are the most important factors to get the beginning aspiration of people Once organizations get the aspiration from their people then the change flow will be done step by step in different change models Some companies can choose ADKAR model (Awareness, Desire, Knowledge, Ability, Reinforcement), some may choose Johns Kotter model, which includes 8 steps:

1 Create sense of urgency

2 Building a guiding team

3 Form strategic and vision initiatives

4 Enlist volunteer

5 Empower action by remove barriers

6 Generate short term win

7 Sustain acceleration

8 Make change stick

Every change, from wide change to small change will hit its own change curve (which will be mentioned more detailed in next session) but somehow, the success factors will be definitely the ownership, commitment, priority of initiative, capability and resources

By undertaking MBA course is a tough decision of research while she is gone to her daily fast pace in FMCG industry and hard to find time for have work-life balance The researcher understood that undertaking this course is a change in her life and she was aware of the time consumption and her life tempo in about 1.5 year Thanks to that awareness, she has well prepared for this change with a concrete plan to make this change happens Thanks to this course the researcher had chance to systemize her knowledge in change and change management and read many literatures by many writers about those topics Many respected scholars propose a wide range of their experience, researches and perspective on change in many different ways, in which change is classified Some change models focus on the people element of change like ADKAR model, some theories are developed and offered valuable tools to project management professionals as a process-driven model

Though in modern world economic history there are many stories and recognitions of successful change of global players such as Microsoft Research Group merge in 2016

In September 2016, Nadella shook things up again with the merging of the Microsoft Research Group with the Bing, Cortana, and Information Platform Group teams to create a new AI and Research Group With about 5,000 engineers and computer scientists, its goal is to innovate in artificial intelligence across the Microsoft product line Tinypulse.com

Or the story of Google split up under the Alphabet umbrella in 2000s:

Lary Page broke up Google into its constituent parts, making each one its own company, with all of them owned by a new umbrella corporation called Alphabet Page sits atop the structure as CEO of Alphabet, with Google cofounder Sergei Brin as president and long-time Google exec Eric Schmidt as chairman Each of Alphabet’s companies has its own goals and a CEO focused solely on those goals Tinypulse.com

Or the entire organisation restricting of British Airways in 1981

To increase profits, Lord King, new chairman decided to restructure the entire organization by reducing its workforce from 59,000 to 39,000, eliminating unprofitable routes, and modernizing the fleet He repaired the airline’s image

by bringing in a new marketing expert Within 10 years, the airline reported the highest profits in its industry: $284 million Tinypulse.com

Despite of those success stories, surely questions pertaining change elements and how is change managed and executed successfully and sustainably are challenging to administrators

Based upon their organizations’ situation, the administration will define the change strategies and methodologies to ensure change implemented successfully with less impact on their employees Because from an employee’s side, any type of change will

be able to impact directly or indirectly on their private lives and/or the nature of their work lives The effect can be either change in working condition, their compensation package, engagement or future motivation Because of this reason, it is crucial that co-workers are empowered, involve in change and on the top, understand the whole change process in order to be able to analyze the effectiveness of change But in fact

of researcher’s survey in Tetra Pak indicated that some employees reacted not acted before change This might come from communication and employees are not aware of their roles in change at organization in generally or in their department in particularly, even company did not limit them from involving in change and raise their voices and views pertaining change and change management On a later stage in chapter 4 the author will have a specific analysis to help the readers understand in

pro-depth about the perceptions of employee about change in organization and also change in human resources management On this basis, the insights of employees of Tetra Pak contributed to this study and help to evaluate the effectiveness in recent changes in Tetra Pak

Rising from those arguments stated above, the researcher of this study tried to acquire

a comprehensive study to understand employee’s insights of change and change management in Tetra Pak

1.3 Methodology

The literature study for this dissertation started in November 2018 and close by March

2019 The researcher approached such theories of transition of HRM, change management, leading change, how to make change stick, employee motivation, digital transition, social responsibility

The process for data gathering is conducted by interviewing and surveys sent to 25 employees of middle management level of Tetra Pak within above mentioned timeframe by two steps: 1st one is survey and the 2nd one is group/individual interviews in an formal interview and informal ways (conversations) to perceive their insights about current changes in organization This informal interviewing method helps the researchers to obtain more open opinions of employees on change and in some case the conversations came into a meaningful discussion between interviewer and interviewees Responding from employees are noted to enrich know-how of researchers about understanding change and change management of participants

As above mentioned, survey is also sent to participants with questions presented The participants will answer the questions based on their experience and understanding

1.4 Research questions

Via primary questions the author seeks for understanding in depth of context of change and change management from points of view of employees The questions are drafted as below:

1.4.1 What did employees understand about change and change management in

their departments and within organisation?

1.4.2 What and how were employee experiences with change and change

management in their departments and within organisation?

1.4.3 What and how did employees understand about change and change

management in people management?

1.4.4 What did employees understand about their roles in change and change

management in general and in human resource management particularly? 1.4.5 What did employees understand about roles of managers, management

board in change and change management, both in general aspect and in human resource management?

1.4.6 What and how did employees do to contribute to change and change

management?

1.4.7 What are the most success factors for an organisation initiative change and

manage change successfully, especially in people management?

The secondary questions were designed to understand further about the expectations about their roles in change and also their recommendations for a successful change

1 Did employee want to participate in initial step right after change initiative communicated?

2 What did employee expect to have successful changes included change

in people management?

3 What were success factors to have successful changes included change

in people management?

1.5 General objective

The answers of primary and secondary questions will help the researcher understand

in depth how employees perceive change and conduct changes in daily people/human resource management

From the point of views of employees about change and change management the author might define the insights about employee’s believes about change that echoes inside the organisation and might consider those echoes as initiatives for a successful

change in human resource management From that points solutions for maintain change and change management repeatedly and reliably in HRM will be proposed With regard from the findings, the study reveals the needful factors for maintain change frequently and reliably

1.6 Tetra Pak

Tetra Pak was founded by Ruben Rausing and built on Erik Wallenberg's innovation,

a tetrahedron-shaped plastic-coated paper carton, from which the company name was derived In the 1960s and 1970s the development of the Tetra Brik package and the aseptic packaging technology made possible a cold chain supply, substantially facilitating distribution and storage From the beginning of the 1950s to the mid-1990s the company was headed by the two sons of Ruben Rausing, Hans and Gad, who took the company from a family business of six employees, in 1954, to a multinational corporation

Tetra Pak is a multinational food packaging and processing company of Swedish

origin with head offices in Lund, Sweden, and Lausanne, Switzerland The company offers packaging solutions, filling machines and processing solutions for dairy, beverages, cheese, ice-cream and prepared food

In Tetra Pak, the business philosophy reflects by their band promise “PROTECT WHAT GOOD” They bring promise to life by committing to protect food, to protect people and to protect future

When it comes to food, company working with customers and partners to make food safe and available everywhere through our innovative and market-leading food processing, packaging and service solutions

Not only Tetra Pak’s people but also communities where it operates are also secured and supported

Company’s business philosophy is protecting the future of our earth and long-term

success of clients – Source https://tetrapak.com/sustainability

In Tetra Pak Research and Development is the core competitive advantage of company As customers always need faster, better and cheaper development to reduce

their operational cost and to increase performance in order to remain competitive Company invests in technology and new products in response to customers, consumer

and market dynamics – Source - https://tetrapak.com/about/tetra-pak-in-brief

In order to remain competitive in the market change and change management are core competence of company and its people to ensure innovation, development and growth stably Human capital in Tetra Pak nowadays is encourage to develop themselves and develop others to meet higher and higher expectation from customers

Tetra Pak Binh Duong JSC founded in 2016, and in October 2017 they organized the groundbreaking ceremony for liquid foods packaging factory in the Industrial Zone VSIPIIA, Binh Duong province This factory is the forth factory of Tetra Pak group in cluster South Asia – East Asia and Oceania The factory is a supplementary for company’s strategy in cluster South Asia – East Asia and Oceania, where the demand

on milk and beverage is getting higher and higher This factory will help company to get closer to their customers and shorten their lead time

Pertaining human management in Tetra Pak, since 2008 company launched new HR model named HR ONE version 1.0 that switching from administrative human resource management to strategic human resource management By 2016, version 2.0 was deployed, HR work is split into 3 core functions:

Figure 1.1: HR Model Version 2.0 applicable in Tetra Pak

Source: Presentation about People Process Tetra Pak’s Global HR – Internal Document of Tetra Pak

The figure showed clearly that new HR model split into transformational work and transactional work Where organizational services work on transformational function

of HR practice and play differentiated and strategic roles and is centered in embedded

HR and HR centers of expertise Then country services and core services play as

“one-stop-shop” for employee relations, compensations and benefits, training and development, or any other HR related requisitions, ensuring prompt and accurate support for all employment related issues Thanks to those standardized and centralized way many administrative tasks are done in a very effective way Tetra Pak also deploys a digital platform where employees can find answer for standard, routine questions The very technology allows service centers approach employee easier and

on the other hand enables employees’ concerns and needs to be unraveled with fewer dedicated HR staff One significant change in this HR model is the roles of line manager, with facilitation from HRCS experts, they will play the key roles of people management Whereas, as before said, HR staff plays as facilitators

1.7 Problem statement

Business slowed down in 2016 and 2017 was a year in which the pace of GDP growth quickened in eight of Tetra Pak top ten markets, including Russia and Brazil, where

muted recoveries reversed two years of economic downturn Three of company’s five geographic clusters reported year-on-year improvements in net sales, with Europe’s 1 per cent growth ending the negative trend of the past four years By contrast, for the first time in more than a decade, Greater Middle East & Africa reported a year-on-year fall in net sales (at comparable exchange rates), as tough market conditions in Egypt, Pakistan and the Arabia area took a heavy toll on sales of laminated packaging material This is because of the packaging business climate remained harsh, with consumption in core categories continuing to decline and the competitive environment (especially in packaging material segment) increasingly aggressive That reflects in

2017 the sales of packaging material dropped down In part, this was caused by the continued weakness of core categories, but a shift in product mix, from family packs

to portion packs, also had an impact, as did net pricing reductions in response to

aggressive competition worldwide – Source - laval/comments-by-tetra-pak-ceo

http://www.tetralaval.com/about-tetra-Even Vietnam belongs to cluster of top ten market, but Tetra Pak Vietnam still faced with challenging, especially with retaining people as the competitors have risen up strongly recently Talented and well-trained employees left Tetra Pak (turnover rate in

2017 higher than 20%, mostly came from technician and engineer level), employee engagement low, employees’ expectation in term of career advancement opportunities very high

Foreseeing such change and challenging through daily operation and employee relationship, HR team has done SWOT analysis to define “where we are” then have

an appropriate action plan The analysis showed a very obvious truth and practical situation:

Table A: Summary of SWOT analysis pertaining HRCS in Tetra Pak

Desired State Characteristic Category Current State Rationale

Localization and aligning

with the business and global

guidelines

Being more knowledgeable

Best practice sharing across

the cluster

Partnership Good Policies and procedures

Account management Partnership Client expectations that HR knows it

all

Services We are reactive Contextualizing Communication Perceived as lack of human touch Contextualizing the rationale

and having a pragmatic

approach

Communication Too process driven – time consuming

Drive the correct mindset and

culture that stakeholders will

be more independent

Partnership Are we doing too much of tracking

Improve collaboration within

the HR function Partnership We are working in silo(s)

Be more involved in strategic

Communication Change management communication

Learn to blow our own

Improve understanding of

Having backups who are able

to provide support whilst we

One of the spotlights is making further progress in the development and deployment

of digitally-enabled products, services and applications that will fuel growth and

productivity for company’s customers, as well as for company itself, from codified packages to predictive maintenance In Tetra Pak, they have several streams of activity now under way in this fast-moving and increasingly significant area of their business Source - http://www.tetralaval.com/about-tetra-laval/comments-by-tetra- pak-ceo

Another focus is on employee engagement The management board is understandable the value of achieving sustainable engagement is business priority Though in Tetra Pak, every 2 years there will be employee engagement survey and show to global management board and respective clusters or local operations a full picture and statistics about employee engagement with various benchmarks such as result in the past, result of Tetra Pak global and Global High Performance norms so that they prepare action plan to regain engagement In 2015, the biggest and most critical difference of cluster South Asia – East Aisa and Oceania with Global High Performance norm is CHANGE AND COLLABORATION And Tetra Pak Vietnam was not an outsider, one of hot potatoes thin Tetra Pak Vietnam needs to take improving action is CHANGE Bases on this fact, survey result was communicated to team, root cause analysis was made, action plan was also made with prioritization and consolidation with cluster level But the fact figured out that in fast pace business, people often decline or resist with change, that leads business outcome at risk

This figure below is from the 2016 Global Workforce study from Willis Towers Watson Organisations with LOW = below average traditional engagement 9.9 % Operating Margin HIGH = Organisations with above average traditional engagement 14.3 %

Figure 1.2: 2016 global workforce study - Source - Willis Tower Watson

Because of this essence, the strategy till 2020 is made:

Figure 1.3: Strategy till 2020

Source – Internal document of Tetra Pak

Despite the outstanding performance and well-known reputation of Tetra Pak, this study is done based on the need thin Tetra Pak wants their change repeatedly and sustainably in a given amount of time, financial and human resources Especially change and change management in people management

CHAPTER II: LITERATURE REVIEW

2.2.1 Change

De Jager (2001, p 24) stated that: Change is a simple process At least, it’s simple to describe It occurs whenever we replace the old with the new Change is about travelling from the old to the new, leaving yesterday behind in exchange for the new tomorrow But implementing change is incredibly difficult Most people are reluctant

to leave the familiar behind We are all suspicious about the unfamiliar; we are naturally concerned about how we get from the old to the new, especially if it involves learning something new and risking failure

In corporate environment change can be understandable as the switching from the known into the unknown As the future result of change is not certain and negatively impact competence profile of employees and abilities to cope with new things We can see in many studies and reality that most employees don’t want change, unless the

clear visions and reasons for change are communicated transparently to them That’s the reason why, in order to gain successful change, all relevant factors must be integrated such as vision, mission, communication, change management skills of leadership, contribution and company culture Each and every above- mentioned factors has it own role in change For instant:

- Vision orients the future business of company

- Mission acts like a guideline for change

- Communication and change management skills of leadership play key roles

Stemming from those above factors, we all see that change is the nature of now a day business, it is competitive advantage of organizations The one who initiates change and changes successfully is the person leads in the market and they are aware of the important of an integrated approach of merging structural, technological and behavioral apaches

2.2.2 Change management

There are many definitions of change managements, my most favourite definitions are:

“The coordination of a structured period of transition from situation A to situation B

in order to achieve lasting change within an organisation” BNET Business

dictionary

“… a systematic approach to dealing with change, both from the perspective of an organisation and on the individual level…proactively addressing adapting to change, controlling change, and effecting change” Case Western Reserve University

“Minimizing resistance to organisational change through involvement of key player and stakeholders” BusinessDictionary.com

”Change management is a style of management that aims to encourage organisations and individuals to deal effectively with the changes taking place in their work”

English Collins Dictionary

In term of execution, change management is a process with challenges when it comes

to evaluate the effectiveness of change in an organisation

As previously mentioned, successful change is the competitive advantage to their competitors of organization And all change will help organization to adapt, especially

in management perspective Organization can adapt internally or externally, within micro or macro scope But change has never been easy It must be highlighted that almost organizations managements are facing issues of resistance and communication when it comes to change They are key contributors and root causes change failure John Kotter has listed 8 common mistakes clearly in “Leading change “ (Leading change, 2012 page 16):

1 Allowing too much complacence

2 Falling to create a sufficient guiding coalition

3 Underestimating the power of vision

4 Under communicating the vision by factor of 10

5 Permitting obstacles to block the new vision

6 Falling to create short-term win

7 Declaring victory too soon

8 Neglecting to anchor changes firmly in the corporate culture

And of course, those errors cause surely consequence:

- New strategies are not implemented well

- Acquisitions don’t achieve expected synergies

- Reengineering takes too long and costs too much

- Downsizing doesn’t get cost under control

- Quality programs don’t deliver hoped for result

To eliminate errors, Kotter (1996) suggested the follow in solutions:

- Change practices and strategies must be managed and well executed

- All achievements must be scheduled ahead and relevant with expected results

- Restructuring should be done as soon as possible to ensure not only change will be effective but also cost and timing also effective and associated closely with change

- Manpower cutting off must be done in a proper manner with cost controlling and procedure respecting

- Quality deployment system must be carefully chosen to get the expected result

To survive in 21st century, organizations need to shift from traditional management system to modern one In order to maintain a successful and reliable switching, organizations should equip for themselves with clear vision description, modern day value, quality oriented mindset of all levels, internal customers (stakeholder) focus, fast pace adaption, innovation, flat organization chart, flexibility, cross-functionality, globalization and expanding network

2.2.3 Transformational leadership

The key role during change implementation is leading The leaders style will not only focus on change but also is the key element for creating direction and commitment According to John Kotter (Leading change, 2012 page 28) Leadership defines what the future should look like, align people with that vision and inspires them to make it happens despite the obstacles According to Kotter successful change depends on leadership from 70 to 90 percent whereas 10 to 30 percent of management He also stated clearly in his book (Leading change 2012, page 29), it shows clearly the differences between management and leadership:

Management Leadership

Planning and budgeting:

Establish detail steps and timetable for

achieving needed results, then allocating the

resources necessary to make it happens

Organizing and staffing:

Establish some structure for accomplishing

plan requirements, staffing that structure

with individuals, delegating responsibility

and authority to carry out the plan,

providing policies and procedures to help

guide people and creating methods or

systems to monitor implementation

Controlling and problem solving:

Monitoring results, identifying deviations

from plan then planning and organizing to

solve those problems

Establishing direction:

Develop a vision of the future, often the distant future and strategies for producing change needed to achieve that vision

Motivating and inspiring:

Energizing people to overcome major political, bureaucratic and resources barriers

to change by satisfying basic but often unfulfilled, human needs

Produce a degree of predictability and order and

has the potential to consistently produce the

short-term results expected various steak-holders

(such as for customers, being always on time, for

stock-holder, being on budget)

Produce change, often to a dramatic degree, and has the potential to produce extremely useful change (such as new product that customers want, new approach to labor relations that helps make firm more competitive

Many authors presented guidelines for transformational leaders, and one of them is Gary Yukl, has delivered comprehensive guidelines for transformational leaders in his book Leadership in organizations and they are around the following aspect

- Articulate appealing vision

- Explain how the vision can be attained

- Act confident and optimistic

- Express confidence in followers

- Use dramatic, symbolic actions to emphasise key values

- Lead by example

In the research, the author will present and analyze 6 leadership elements/skills required in Tetra Pak Those elements are not only base for delivery a successful change but also help all staff levels in Tetra Pak deliver best performance And of course, the skill matrix for leadership elements very much depends on staff level

2.2.4 John Kotter change model

Step 1: Create a sense of urgency

In order making change happens, it is necessary that the whole organisation desires change This will help to enhance the sense of urgency of change This is very important factor, as this will create initial motivation for moving things

During daily conversations in organisation, for instant when people talking about competitors, or happenings in the market and people start talking about change, that’s the very time change is initiated and nurtured In this step, transparent communication about current risks, opportunities, reasons for change need to be discussed and according to Kotter, if 75% of leaders in the organisation see and accept the change, it will be premise for executing next steps

Step 2: Build a guiding coalition

Convincing people “change is essential” is tough job This job needs to be supported and lead by key players in organisation Managing change is not enough, organisation top level needs also leading change And in order to lead a change, a coalition or a leading group for change is a must Those can be a group of persons who have

positive influence on other people In this step, the sense urgency for change needs to

be continuously promoted

The commitment of coalition members is the key element of this step, chains of coalition needs to be linked firmly with each other Frequent check the loose chains within coalition helps to remove change resistance and enhance collaboration in team

Step 3: For a strategic vision and initiatives

Wonderful ideas and solutions come up from initial thinking and initiatives about change Those perceptions will be connected and created an overview vision for change Vision should be relevant, clear and memorable This will provide people in the organisation reasons for change Only when other people see why are you making such effort to achieve the goals, then they will understand what they need to do and how they need to achieve that vision

You need to define the core values of change, strategies for change implementation and communicate clearly and effectively within organisation

Step 4: Enlist a volunteer army/Communicating vision and strategy

Change message can be discussed everywhere in organisation, that’s the reason why change vision and strategy need to be communicated and conveyed in all small things that leaders doing Take every single chance to communicate about organisation’s vision and strategy, not only in official meetings, but also in every single possible opportunity Integrating vision in daily problem solving will keep it in mind of people, and people will remember it

What you do is more important than what you say, prove to the people by your daily activities Besides, leaders need to eliminate the concern and worries of people in a transparent and honest ways Vision is the guideline for all business activities from training and development until performance assessment

Step 5: Enable action by removing barriers

People have trend to resist all change Leaders need to be aware of where is resistance

to define suitable change mechanism and removing barriers By empowering to your teams, you will lead change going ahead

Besides removing barriers and helping resistant understanding essence of change, acknowledgement and recognition to change makers are also important, as their change execution will be sample for other resistant

Step 6: Generate short term wins

Success is the most inspiring motivation Leaders need to show to people in organisation short-term or quick wins, so that the criticizers and resistant cannot prevent organisation from change Being aware of strong points and weak points of organisation and strategizing goals implementation (from easy goal to difficult goal) also help the leaders gain short term win and motivate employees

Step 7: Sustain acceleration

According to Kotter, short term or quick win is initial for long term and sustain win Successful change creates new chance and definition problems for improvement Lessons learnt (good points and improvement) after each achievement need to be analysed After success new targets will be defined based on that momentum and admit new members to coalition to ensure sustainable change

Step 8: Institute change

Change needs to be core part of organisation Vision needs to be integrated in daily business operation, this will help change spreads and inspires in company’s culture

Continuous support from existing employees and leaders is crucial Without supporting from those people, organisation may start change implementation over

Change, change progress communication, success story, induction new hires about change, recognition the contribution of members, both new ones and existing ones, succession planning are key success factors of this step to ensure change instituted

1 Awareness about needs of change

2 Desire to contribute and support change

3 Knowledge – How to make change happens

4 Ability to change

5 Reinforcement to maintain change

ADKAR model presents, firstly, all respective parties need to be aware of change need After that, this awareness must be shifted to desires to contribute and support change As a result, people will create a good design for change project The contributors of change project need to be well trained to make change happens And