CHANGE MANAGEMENT IN SMES: THE IMPORTANCE OF COMMUNICATION DISSERTATION SUBMITTED BY Mark K. Alvin Submitted to: Dr. Michael Vieregge DecS 401 Business Research In partial fulfillment for the requirements of the Degree of the Bachelor in International Business Degree Hertfordshire University 2 Hertfordshire University Abstract The present study examines the theory and practice of change management in the SMEs of the UK and looks at the role played by the communication in change management in SMEs by reviewing scholarly literature on the subject and by conducting secondary research case studies on two important SMEs from the IT- industry of the UK, namely Softcat and ANS group plc. These two SMEs are at the top in the list of The Sunday Times‘ top 100 SMEs to work for. The secondary data published on the two SMEs was selected on the basis of its relevance with the subject and was analysed using ‗generic inductive analysis.‘ The analysis of the secondary data on Softcat and ANS Group confirmed the importance of change management in SMEs as was found in the literature on the subject. It was also found that communication can play a significant role in employee engagement, strategy implementation and consequently in change management. The study also produced some other important findings regarding the SMEs of the UK and made important recommendation for the SMEs as well as for the future studies on the subject. Keywords: Small and Medium Sized Enterprises, Change management, Communication in change management, ANS Group, Softcat. 3 Table of Content Abstract ........................................................................................................ 2 Chapter 1: INTRODUCTION ............................................................................. 5 1.1. Study Background ................................................................................ 5 1.2. Research Statement .............................................................................. 7 1.3. Research Questions: ............................................................................. 7 1.4. Study Rationale .................................................................................... 7 1.5. Research Methodology........................................................................... 8 Chapter 2: LITERATURE REVIEW ...................................................................... 9 2.1. Introduction ......................................................................................... 9 2.2. Change Management ............................................................................ 9 2.2.1. What is Change Management............................................................. 9 2.2.3. Importance of Change Management ................................................. 13 2.3. Change Management in SMEs............................................................... 14 2.3.1. The culture of change in SMEs ......................................................... 14 2.3.2. How to manage change in SMEs ....................................................... 16 2.4. Communication in Change Management ................................................ 17 Chapter 3: RESEARCH METHODS ................................................................... 19 3.1. Introduction ....................................................................................... 19 3.2. Research Method ................................................................................ 19 3.3. Research Strategy .............................................................................. 20 3.4. Introduction to case studies ................................................................. 22 3.4.1. Softcat .......................................................................................... 22 3.4.2. ANS Group .................................................................................... 24 4 3.5. Research Instrument – Secondary Data ................................................. 25 3.6. Data Collection ................................................................................... 26 3.7. Data Analysis ..................................................................................... 27 Chapter 4: DISCUSSION OF FINDINGS ........................................................... 29 4.1. Introduction ....................................................................................... 29 4.2. Study Findings ................................................................................... 29 4.2.1. Key and Core Categories of Softcat .................................................. 30 4.2.2. Key and Core Categories of ANS Group ............................................. 36 4.2.3. Comparison of Core Categories ........................................................ 38 4.3. Discussion ......................................................................................... 40 Chapter 5: CONCLUSION .............................................................................. 43 5.1. Introduction ....................................................................................... 43 5.2. Conclusion ......................................................................................... 43 5.2.1. Major Conclusions .......................................................................... 43 5.2.2. Minor Conclusions .......................................................................... 44 5.3. Recommendations for Future Research .................................................. 45 5.4. Recommendations for SMEs ................................................................. 45 5.5. Limitations of the Study....................................................................... 45 REFERENCES ............................................................................................... 47 APPENDIX A: OVERVIEW OF SECONDARY DATA ON SOFTCAT............................ 57 APPENDIX B: OVERVIEW OF SECONDARY DATA ON ANS GROUP PLC. ................ 59 5 Chapter 1: INTRODUCTION 1.1. Study Background Change has long been accepted as the only permanent phenomenon in the world. However, the pace of change has so dramatically increased in past few years that an organization cannot survive without continually adapting to the changes (Blokdijk, 2008). In the present world, there are several internal and external drivers of change for an organization. However, internal drivers are also found to derive from the external drivers (Mackenzie-Robb, 2004). So the main sources of change are the factors working outside the organization (Mackenzie-Robb, 2004). It is critically important for a manager to have an understanding and timely knowledge of these external as well as internal factors to accommodate the organization in this changing world. For adaptation of any change in an organization, there is a need of proper management of change process (Paton & McCalman, 2008) which involves planning, designing, implementing, sustaining and accessing changes within an organization (Lientz & Rea, 2004). Change management is essential in this ever- changing world to ensure that any transformation within an organization is smooth and efficient (Blokdijk, 2008). Change management is somewhat different – and more difficult – in SMES as compared to large enterprises. Asremarked by Winch and McDonald (1999): ‗Undergoing fundamental transitions may well pose a particular challenge to the small or medium enterprise (SME), which limits their abilities to maintain their position against larger competitors in rapidly changing business environments. While larger firms are likely to have experienced major change at some point in their company history, smaller firms, either because of their newness or their slow-growth histories, may well not have. An SME may easily therefore find itself with limited indigenous management skills – not only in change management itself, but, just as critically, also in the new skills that will be necessary to manage the enterprise after the change has taken place‘ (p. 49). 6 Winch and McDonald (1999) were very right in their assentation that SMEs, thoughimportant contributors of GDP, often lack the managerial skills needed to improve the competitive advantage of a firm (Tilley and Tonge, 2003). However, it seems untrue that their experience of change is limited as compared to larger firms. As they are less formal, they have less structural resistance to change and therefore they are expected to be more agile (Macri, Tagliaventi, & Bertolotti, 2002). Nevertheless, it is important for them to use these changes for improving the competitive advantage and this is the area where the problem lies. Due to lack of managerial and technological skills, they often fail to properly plan and implement changes in the organization (Tilley & Tonge, 2003). In simple words, SMEs welcomes changes but fails to manage them. Change management is SMEs is not a very new phenomenon and a number of studies have been conducted on it in past few years (e.g. Winch & McDonald, 1999; Raymond, et al., 2009). Studies have outlined the hurdles faced by SMEs in the implementation of change management programmes (Macri, Tagliaventi, & Bertolotti, 2002; Panizzolo, 1998) and have suggested the methods to deal with these hurdles (Winch & McDonald, 1999). Several studies have also been conducted on the appropriate approaches and methods of change management for SMEs (e.g. McAdam, Stevenson & Armstong, 2000; Raymond et al. 2009). However, no study was found to particularly investigate the importance of communication in the implementation of change management in SMEs. In 2006, McKinsey conducted a global survey, in which executives from all over the world were asked to access a transformation they had been involved in (Vinson, Pung, & González-Blanch, 2006). The purpose of the survey was to provide an insight into the change management practices. The results of the survey revealed that communication is the key to the success of any transformation within the organization and is an important part of change management (Vinson, Pung, & González-Blanch, 2006). The importance of communication for change management has also been acknowledged by other experts in the field like Lautner (1999), Kitchen & Daly (2002), and Proctor & Doukakis (2003). 7 The purpose of the current study is to examine the theory and practices of change management in SMEs and to look at the emphasis given to ―communication‖ in managing change in SMEs. For theoretical understanding the researcher has reviewedscholarly literature on change management in SMEs whereas for understanding the change management practices, secondary research has been conducted on two SMEs working in the IT-industry of the UK. The two selected SMEs are Softcat and ANS group plc. 1.2. Research Statement The notion of change has been the focus of the theory and practice of management for decades. Managers and scholars have acknowledged the importance of change management for gaining competitive advantage in today‘s dynamic business environment. Keeping in view the significant role played by the SMEs in the economy of a country, it is important for the mangers of SMEs to effectively manage the changes implemented in these enterprises. However, one important hurdle faced by these mangers is the resistance from the employees of SMEs due to the communication gap between the managers and employees. The present study looks at the role played by the communication in change management in SMEs by reviewing scholarly literature on the subject and by conducting secondary research case studies on two important SMEs from the IT- industry of the UK, namely Softcat and ANS group plc. 1.3. Research Questions: 1. What is the importance of change management for SMEs in the current business environment? 2. How is change management being practiced in the SMEs of the UK? 3. Is ―communication‖ an essential tool for effective change management in SMEs? 4. To what extent, do SMEs of the UK use communication in change management practices? 1.4. Study Rationale A number of studies have found communication to be the key to the success of change management in organization (Lautner, 1999; Kitchen & Daly, 2002; 8 Proctor & Doukakis, 2003). However, there is lack of studies investigating the importance of communication for change management in SMEs. Therefore, the researcher decided to conduct secondary research on change management in SMEs in order to analyse the importance given to the communication in two important SMEs of IT-industry of the UK. The findings of the present study can assist not only in understanding the current trend of change management as practices in the SMEs of the UK but also in deciding the objectives of future studies on change management in SMEs. The study can serve as a base for future studies on SME‘s change management investigating the role of communication in this regard. One other rational for conducting the present study is based on the importance of SMEs in the economic development of a country. SMEs have been recognised as ―life blood of modern economies‖ (Ghobadian & Galler, 1996). Their survival in this highly competitive business environment is important for the sake of the entire economy and change management is one important way through which these enterprises can achieve competitive advantage (McAdam, Stevenson & Armstrong, 2000). Therefore, it is important to conduct studies on change management in SMEs in order to suggest the ways to improve change management in these enterprises. The current study is expected to fulfil the same objective by showing the role of communication in improving change management in SMEs. 1.5. Research Methodology The present study is a qualitative study based on the phenomenological paradigm of research. The selected research strategy for the present study is case study. Two SMEs from the IT-industry of UK has been selected as the case studies namely Softcat and ANS group plc. The researcher collected the secondary data on these two SMEs and critically analysed the collected datato answer the above- mentioned research questions. 9 Chapter 2: LITERATURE REVIEW 2.1. Introduction The aim of the present study is to examine the theory and practice of change management in SMEs and to look at the importance given to the communication as a change management tool in these organizations. To achieve this purpose, the researcher critically reviewed the relevant scholarly literature on the subject. The chapter presents that literature review which assisted the researcher in conceptual and theoretical understanding of the subject together with setting the direction of the study in line with the direction provided in the previous studies. The chapter begins with the conceptual understanding of change management and its importance in any organisation. It is followed by the critical review of literature on the change management in SMEs with the aim to examine the culture of change in SMEs as well as the ways through which change is managed in SMEs. In the end of the chapter the researcher reviewed the literature on the role of communication in SMEs and found that the previous studies consider communication as essential to the efficient change management in SMEs. The knowledge presented in this chapter will be used in the fourth chapter to discuss the findings obtained from secondary research. 2.2. Change Management 2.2.1. What is Change Management There is no universally accepted definition of change management. Nickols (2010) claimed that all the definitions of change management can be categorised into four views namely change management as task of managing change, as an area of professional practice, as a body of knowledge and as a control mechanism. After reviewing the literature on change management, the researcher found that the most common view of change management is the last one where change management is seen as mechanism or process to control the implementation of change in organization. However, few scholars like Mackenzie-Robb (2004) view change management as a body of knowledge as well as a professional practice. 10 Lorenzi (2005) defined change management as ‗the process by which an organization reaches its future state – the vision.‘ Though he used the term ―process‖ for change management, the focus of his definition is on the approach to this process. For him, change management should have the vision-oriented approach. It should be aimed at facilitating the efforts to achieve the pre-defined aim of an organization – mentioned in the organizations‘ corporate strategy. He asserted that before implementing a change one needs to have a vision for change and must communicate this vision to individuals in the organizations to make them serve as change agent (Lorenzi, 2005). Mackezie-Robb (2004) also recognized the importance of having a clear idea of the desired future state of organization and named it as ―change goals.‖ He asserted that these change goals ought to answer the why to change, what to change and how to change questions. For Lientz and Rea (2004) change management is the ‗approach to plan, design, implement, manage, measure and sustain changes in business process and work‘ (p. 9). As compared to Lorenzi (2005), Lientz and Rea (2004) did not explicitly mention the nature of the approach. Furthermore, they also recognised change management as a process and suggested some activities which ought to be the part of change management process (Lientz & Rea, 2004). Combining the two view of change management we can say that change management is a process of planning, designing, implementing, managing, measuring and sustaining change with a vision-oriented approach. Change management encompasses strategies to implement changes (Lorenzi, 2005). There are several strategies to manage change. Mackezie-Robb (2004) described the four strategies of change management namely rational- empirical, normative-reeducative, power-coercive, and environmental-adaptive. The details of these strategies are shown in the table below. Mackenzie-Robb (2004) held that the most common strategies are power-coercive and a combination of power-coercive and rational-empirical strategies Whatever, the strategy is, it is important for a manager to have a clear vision of the desired future state of organization as well as the complete understanding of current and past state before developing strategies for change management (Lorenzi, 2005). 11 Strategy Focus Rational-Empirical The change strategy is based on appealing to human self-interest through offering incentives. Normative-Reeducative This strategy has the tenet that people tend to adhere to social and cultural normalities, and therefore if these are re-defined, commitment to the new values can be achieved through communication and education Power-Coercive Here, the approach accepts that people will do as they are told, so the change strategy is based on the exercise of authority with, where necessary, the imposition of penalties for failure to comply. Environmental-Adaptive People are adaptable. This approach is based on a gradual transference from an old environment/organisation to a new one. Table 2.1: Strategies to change management and their focus (Mackenzie-Robb, 2004, p. 8) Lorenzi (2005) introduced a five-stage model for the process of change management. He had tested the model with Mantel and Riley in another study and found the model to be efficient in dealing with resistance to technological change (Lorenzi, Mantel, & Riley, 1990). The first stage of the model is assessment which ideally begins prior to the implementation of change. This stage is completed in two steps; in the first step all the peoples who are expected to get affected from the change are informed, in writing, about the impending change followed by the second step of collecting relevant and reliable information from the involved people. The next phase is named as Feedback and Options during which a manger analyses, integrates and organised the collected information so that the collected information can be presented to decision makers. The phase is important to have the understanding of the current scenario and the vision held by staff. The staff‘s vision can be used to review the vision of an organization which can help in strategic planning and implementation process (Lorenzi, 2005). 12 Once the collected information is presented to the strategy decision makers, the next stage of change management begins which involves the development of strategy from an organizational perspective. The fourth stage of change management involves implementation of the developed strategies to desired behavioural changes in the involved people. The stage is conducted in series of steps which is important to bring gradual progression toward the desired behavioural change and finally toward the desired future state (Lorenzi, 2005). Once the change has been implemented the final and very important stage of change management is to re-access the impact of change. The stage is similar to the first stage of assessment but in this stage the purpose of the assessment is to ensure that the change will sustain (Lorenzi, 2005). Lientz and Rea (2004) were of the opinion that the most neglected area of change management process is the re- assessment of implemented change to ensure that the change is persistent and to maintain the momentum of change. Re-assessment Implementation Strategy Developmnet Feedback and Option Assesment Figure 2.1 Lorenzi‘s Model of Change Management Another renowned five-stage model of change management, discussed by Mackenzie-Robb (2004), is known as ADKAR having stages of awareness, desire, knowledge, ability and reinforcement. The awareness stage is aimed at determining the need of change while the design stage looks at the desire of the staff to bring the change. The next stage so knowledge is concerned with determining the strategies and programs to change followed by the stage of ability which involves the implementation of requirements of change. The re-enforcement 13 stage is a post-implementation stage with the aim to determine the sustainability of implemented change. The model is much similar to the former model of change management except the fact that the former model was more detailed and has clear focus on the direction of change. Besides, the clear direction, the model acknowledges the importance of communication in the process of change management. Therefore, for the purpose of the present study, Lorenzi‘ model of change management has been. 2.2.3. Importance of Change Management In this highly competitive business environment, organizations are trying hard to continuously re-analyse their strategies and approaches in order to choose the best suitable strategy or approach for gaining competitive advantage (Lorenzi, 2005). Introduction of new business strategies, advanced managerial techniques, and revised business models have also increased due to greater research in business management (Paton and McCalman, 2008). The change in the structure and function of the organization as well as the market has been greatly accelerated. In the rapidly changing environment, the challenge is not to implement changes but to survive with them and, where possible, to use them to improve the organization performance (Kitchen & Daly, 2002) However, in most of the cases, organization fails to successfully anticipate and capitalise these changes (Vinson, Pung, González-Blanch, 2006). One of the reasons for this failure of organization to adapt to these new developments is due to the lack of emphasis on change management (Hiatt & Creasey, 2003). Proper management of change not only ensures the successful implementation of change but also aids in sustaining the implemented change (Paton & McCalman, 2008; Lientz & Rea, 2004). Since management is about organizing, planning, structuring and controlling, change management implies that the change is implemented in proper structure after through planning and organizing and is in control of the management. Such control and planning is important to deal with the actual and potential resistance to change (Lientz & Rea, 2004). Thus, change management is all about alleviating the 14 resistance to change, most often coming from the people within the organizations (Turbit, 2000). Hiam (1997) claimed that organizations that have the ability to implement better changes in lesser period of time can easily gain competitive advantage. However he also pointed out that the faster and better implementation and management of change is not a simple task and is one of the most challenging jobs of management. 2.3. Change Management in SMEs 2.3.1. The culture of change in SMEs Organizational change has been a popular topic of management studies since the twentieth century (Raukko, 2009). It is a broad area of research and a number of studies have been conducted on this subject in the last century (Lewin, 1947; McNulty, 1962; Zeffane, 1996). A bulk of literature is also published on the organizational changes in SMEs, though the interest in this area of research is quite recent (Wiesner, Banham & Poole, 2004). Here, the purpose of the review of this literature is to examine the trend of organizational change in SMEs in past few years and to look at the hurdles faced by SMEs in implementing such change. Palmer and Andrews (1997) has called SMEs the ―fastest growing section of business population‘ which is evident from the fact that in 1996, there were 3.7 million SMEs in the UK (Department of Trade and Industry, 1996) and in 2009, the figure raised to 4.9 million (Department for Business Innovation and Skills, 2009). Their contributed to the economy of the UK is a well-documented fact (Ghobadian and Gallear, 1996). Therefore, their economic survival is critically important for the economic development of the country and for this, they need to change themselves with the changes in industry and market (McAdam, Stevenson & Armstrong, 2000). Like larger organizations of the country, SMEs are also working in the dynamic environment and are trying to change themselves with the changes in the business environment. Important organizational changes in the SMEs, as identified by the previous studies, are merger and acquisition (Raukko, 2009);web presence (Fernando & Guy, 2005); e-procurement (Meehan & Muir, 2008); and extended 15 enterprise resource planning (Búrca, Fynes, & Marshall, 2005). Department of Business Enterprise and Regulatory Reform (BERR) conducts surveys of SMEs annually to look at their economic and organizational performance. In a recent survey of BERR, it was found that SMEs have become more innovative in past few years (Williams & Cowling, 2009). They are introducing new products and services in the market and are experimenting with new methods and process in their business operations (Williams & Cowling, 2009). Todtling and Kaufmann (2001) have claimed that SMEs are more prone to innovative changes than larger organizational because of less power and closer relationship with market. Furthermore, it is relatively easier to implement changes in SMEs because of their simple organizational structure and smaller size (Moger, 2000; McDonald & Wiesner, 1997). In addition, as found by McAdam (2000), SMEs are also able to sense the changes in the market prior to larger competitors as their relationship with the market is much closer than the larger ones. This early recognition and earlier response to market changes can serve as a key factor for the competitive advantage of SMEs (Wiesner, Banham & Poole, 2004). However, Oakey (1993) found that organizational changes require proper assessment of the industry and market. Furthermore, Chu (2003) has found that most of the change endeavours in SMEs are not successful because of the absence of change culture in these enterprises. Presence of organizational culture that is conductive to change is very important for successful implementation of any change in the organization. Studies have shown that the main resistance to organizational change comes from the individuals working in the organization (Chan & Swatman, 2003) and the best cure to this resistance is to implement a change-accepting- culture in organization. Resistance to change come from the management side as well (Gray, 2002). Some managers are reluctant to experiment new approaches and technologies in organisation because of the risk involved in such changes (Kahneman, Knetsch, & Thaler, 1991). Kehneman, Knetsch and Thaler (1991) noted that in mangers the fear of negative outcome is much stronger than the attraction of potential gains. They named this stronger fear of negative outcome as ―endowment effect.‖ Gray 16 (2002) claimed that the endowment effect is stronger in SMEs as compared to larger organization. Since in the majority of SMEs, the owners of enterprises also serve as managers, there is greater chance of resistance to change that involve risk (Gray, 2002). However, Wiesner, Banham & Poole (2004) claimed that this centralised and dominant leadership can work in the favour of change adaptation. They asserted that individual entrepreneurship plays a vital role in SMEs and if the owner or the manager of the organization is welcoming to the changes and innovation, there is higher probability that the organizational will go for change. Nevertheless, they seemed to overlook the importance of employees working in the organization. It is true that managers play an important role in SMEs and they have the authority to implement any change they want. However, for sustained implementation of change and for gaining the desired output from the implemented change, the acceptance of change among the employees is significantly important. Therefore, in recent years the focus of studies on organizational change has been shifted toward the behavioural change in the employees of organization to develop a change- welcoming culture in organization (Kulvisaechana, 2001). 2.3.2. How to manage change in SMEs Raukko (2009) found that majority of the literature on organizational change is focussed on the role of management. Change management has been seen as a critical success factor for organizational change (Lamsa & Savolainen, 2000; Hiatt & Creasey, 2003). A number of studies have also looked at the management of change in SMEs (Coetsee & Visagie, 1994; Gray, 2002; Guido, Gail, Nancy & Pierluigi, 2010). Coestee and Visagie (1994) were of the opinion that there is high resistance to change in SMEs and to deal with this resistance effective management of change is necessary. However, as observed by Garratt (1994), SMEs pay little attention to the preparation and training of mangers for change management despite the dominant role of managers in SMEs. Marshall et al. (1995) conducted a study on SMEs of UK and found that the changes in such organization are more successful if supported by managers of those organizations. 17 One important requisite of change management is to recognize the importance of managing the behaviour of people working in an organization (Coestee & Visagie, 1994). A manager should be able to change the behaviour and attitude of people involved with change in order to make them accommodate with the changing needs of organizations. This is particularly important in the case of SMEs because in SMEs change process is usually initiated by owners and the participation of employees in change process is limited. To deal with the resistance to change, managers of SMEs should encourage the participation of people who will be affected by a change in the change process. This is a key to effective change management in SMEs (Coestee & Visagie, 1994). 2.4. Communication in Change Management The notion of change has been the focus of the theory and practice of management for decades. A number of scholars have studied its utility and importance in business organization (e.g. Kennerfalk & Klefsjo, 1995; Brown, 1998; Bloodgood & Morrow, 2000; Daft, 2001). However, in past change in business organization was seen in the context of the restructuring of the organization including its expansion and contraction (Chandler, 1994). In the present scenario, as discussed above, the more focus is on behavioural change which involves changing the culture of organizations rather structure (Kulvisaechana, 2001). The culture of organization is strongly associated with the people working in an organization and, therefore, to change the culture you need to change the behaviour and vision of involved people (Kennerfalk & Klefsjo, 1995). For this you need to communicate with them to inform them about the reason for change implementation, to convince then that the desired change is critically needed, to make their vision similar to the vision of change and to examine the effects of change in them once the change has been implemented (Armenakis, Harris, & Field, 1999). Lorenzi (2005) recognised the importance of human to human interaction as a critical success factor of change management. This human interaction can help a manager in dealing with the people‘s fear to accept organizational change and in encouraging them to serve as change agent. Armenakis, Harris and Field (1999) 18 suggested five key elements that should be part of the message communicated to employees by change mangers. These are explaining the gap between current and desired state of organisation; justifying the appropriateness of the change in bridging the gap; expressing the confidence on organization‘s capability to successfully implement the desired change; demonstrating the seriousness of the management in implementing the desired change; and showing the personal benefit an employee can gain from the implementation of desired change. The importance of communication is well illustrated in the Lorenzi‘s model of change management which is the theoretical model of the present study. From assessment till re-assessment the importance of communication cannot be overlooked. In the first stage, the model asks for informing the involved people about the impending change as well as collecting information from them through communication. This communication is important as it enhances the manger‘s understanding of current situation in the second phase of change management process. In the third phase the manger communicate with decision makers and in the last phase the manger again communicate with the involved people to get information regarding the acceptance and sustainability of change (Lorenzi, 2005). In SMEs the flow of communication is easier and more effective due to their simple structure and smaller size (Banham, 2006). This can help managers in effective management of change. In SMEs managers often follow the traditional managerial techniques with lesser involvement of people in change process. In the recent changing environment such traditional managerial techniques are inefficient and managers of SME ought to act as leader and should pay attention to the interpersonal dimensions of management (Goleman, 1998). 19 Chapter 3: RESEARCH METHODS 3.1. Introduction This chapter is on the research methods of the present study which include the details of the paradigm, approach, method, strategy and instrument selected for the research study together with the justification to select them. Selection of appropriate research methods is very important because it decides the quality of study findings. Experts in the field are of the opinion that the selection should be made with consideration to aim of the study, research questions and available resources (Easterby-Smith, Thorpe, & Lowe, 2002). In the present study, all the factors have been given proper consideration. The chapter begins from the explanation of the difference between qualitative and quantitative research methods along with the reason for selecting qualitative research method for the present study. It is followed by the detailed description of case study as the research strategy of present study. Then, the chapter provides details of data collection procedure including the sources and the nature of collected data. The chapter ends at the explanation of how the collected data was analysed. Each section contains detailed information which is expected to be useful for future studies on the subject. 3.2. Research Method Decision regarding the selection of research instrument, the nature of collected data and the analysis of collection are based on the research method used in a study. For the purpose of the present study, qualitative research method has been selected because it supports in-depth enquiry of the research problem and allows collection of data derived from human perception and opinions (Easterby- Smith, Thorpe and Lowe, 2002). In qualitative studies, data is collected through instruments like interviews, focus group discussions, and observation which take time but allow detailed understanding of reported information as well as the context of the information (Amaratunga et al., 2002). 20 Qualitative research is more suitable for the present study because the research questions – which the study seeks to answer – requires detailed enquiry of the SMEs of the UK. The researcher wanted to look at both the structural and behavioural changes implemented in the selected SMEs and the how the implemented changes are being managed. The study also required the analysis of the use of communication in the selected organizations. Phenomenological paradigm and inductive research approach also favours the use of qualitative research methods (Amaratunga et al., 2002) 3.3. Research Strategy Research strategy is the element through which data is collected in a study. Keeping in view the research paradigm and method of the present study which clearly favours exploratory research and research purpose which asks for the contextual understanding of behavioural and structural change process in a SME, the researcher has decided to adopt case study research strategy. As described by Saunders, Lewis and Thornhill (2009), case study involves in-depth investigation of a particular phenomenon in its real life context. Blaxter, Hughes, and Tight (2002) suggested that case study ought to be used in the study where the phenomenon under-study is closely linked with the context in which it occurs. Since a number of external and internal forces influence the change management process in an organization, case study approach is the most suitable approach for studies on change management. In addition, majority of the studies reviewed during the literature review has used the case study strategy which underpins the selection of this strategy (e.g. Palmer & Andrews, 1997; Búrca, Fynes, & Marshall, 2005; Raukko, 2009) for the present research. Despite the strengths of case study which make is suitable for the present research, it ought to be noted that some issues inherent in the case study strategy has raised the mind of some scholars to question its credibility. Bryman (2001), for instance, questions the role of human objectivity in such studies when selecting evidence to support or refute, or when choosing a particular explanation for the evidence found, a fact. One of the implications of this influence is that content analysis will often be invoked to convert qualitative data into quantitative, which 21 can lead to losing the uniqueness and ‗contextuality‘ of the case being studied. However, phenomenological paradigm used in the present study assisted the researcher in dealing with this problem by allowing the researcher to be more focussed on the contextual exploration of the phenomenon under study instead of trying to separate itself from the subject being observed for the sake of objectivity (Saunders, Lewis, & Thornhill, 2009). More so, Collis and Hussey (2003) noted that case studies are time consuming and result in a massive deluge of information which most often is impossible to be analysed, thereby increasing the tendency to selectivity and biasness. Nevertheless, it is important to note that considering the nature of the research under enquiry and the research philosophy adopted, there is no or less doubt that case study strategy amidst other research strategies stands more appropriate in shedding light to the issue under investigation. It allows in-depth understanding and can provide anecdotal evidence which can be generalised using inductive approach (Saunders, Lewis, & Thorhill, 2009). While adopting the case study strategy for the present study, the researcher has two purposes in his mind. The first purpose of using case study, as described above, was to thoroughly analyse the change management process as practiced in the SMEs of the UK and to understand the value given to communication in these organizations. However, the researcher was also interested in examining how change in the degree of importance given to communication can impact the change management process in an organization. This purpose can only be achieved either by longitudinal case study of a single SME before and after the use of communication as change management tool or by cross sectional case study of two or more organizations with different approach toward communication and change management. The researcher chose the second option. However, for avoiding the collection of massive deluge of information, as identified by Collis and Hussey (2003) as an important weakness of case study strategy, the researcher conducted a cross-sectional case study on two SMEs only. The unit of analysis in this case study is the organization i.e. the two selected SMEs from the IT industry of the UK. These two SMEs are among the Sunday times‘ 22 top 100 SMEs of the UK and are the top most SMEs of IT-industry of the country (The Sunday Times, 2010). The first SME ―Softcat‖ is a privately-owned SME working in IT-solution sector (Softcat, n.d., ―who we are‖). According to the information placed in its website, it currently employees over 300 people and cares ―passionately‖ about the satisfaction of these employees (Softcat, n.d., ―who we are‖). The second SME ―ANS Group‖ is at 9th rank in the list of top 100 SME and at 2nd rank in the list of SMEs from IT-industry (The Sunday Times, 2010). It is located in two important cities of UK: Manchester and London and has 120 employees (ANS Group, 2011). Both companies are quite new, the former was established in 1993 and the latter in 1997. They are providing almost similar IT-services – Softcat is the provider of software licensing, hardware and security while ANS group claims to offers services related to infrastructure 3.0; networking and security and unified comms and collaboration.These similarities in the two companies make them a good choice for comparison in the present study. The researcher will collect secondary data published on these organization and will analyse the collected data deductively to examine how the change management is being conducted in these two organizations and what role is played by communication in this regard. The findings obtained from the two organizations will be compared and contrasted with each other to provide a more general output. 3.4. Introduction to case studies Two SMEs were selected for the present case study. The reason for using two case studies instead of one has already been discussed. Here, the detailed introduction of the two SMEs will be provided to justify the selection of Softcat and ANS Group for the present study. This introduction can also aid in understanding the context in which the two organization functions which can facilitate in associating the change management process and the role of communication in the two organization with the background information about the two SMEs. Such a contextual based learning is very important requirement of qualitative analysis. 3.4.1. Softcat Softcat was founded in 1993 by Peter Kelly who is still the chairmen and the major shareholder of the company (Softcat, n.d. a). Besides, some 90 employees 23 out of the total 300 employees of the company are shareholder or option holder of the company (Softcat, n.d. b). The company claimed to have strong financial position with turnover in excess of ₤146 million in 2010 (Softcat, n.d. a). The graph below presents the revenue growth of the company from the financial year 2001-02 to 2009-10 which clearly shows the consistent progress of the company since its inception (Softcat, n.d., b). Figure 4.1: Revenue growth of Softcat (Softcat, n.d., b) The services provided by the company include software licencing, IT- services, commodity IT sourcing, hardware infrastructure and security solution (Softcat, n.d. c). In software licencing they offer services ranging from license consolidation to complete Software Asset Management (Softcat, n.d. d). The hardware infrastructural products offered by the company ranged from simple consumables to enterprise solutions (Softcat, n.d. e) whereas the security services include technical pre-sale support, technical installation services, qualified security consultancy and security audits & testing (Softcat, n.d. f). 24 Figure 4.2: Services offered by Softcat (Softcat, n.d. c) The company has been praised for its innovative and employee-based strategies (The Sunday Times, 2010b). The management of the company is of the view that the products they offer are not unique but the way they offer it is unique (MacLeod, & Clarke, 2009; Hockey & Ley, 2010; The Sunday Times, 2010b). The company‘s innovative approach with efficient management of change with focus on staff‘s involvement in change process and recognition of the importance of internal communication and team cohesiveness is what makes the company the right choice for this case study research. Understanding the company management approaches and techniques can provide the guidelines for other SMEs in the IT-sector on how to survive in this highly competitive and rapidly changing business environment. 3.4.2. ANS Group ANS Group was founded in 1996 – three year after the foundation of Softcat – and currently owns two offices in the UK housing 120 employees (ANS Group, 2011). It provides hardware, software and managed services to public and private enterprises in the UK (ANS Group, 2010a). It offers solution and services in four key areas: Infrastructure 3.0 25 Networking and Security Unified Comms and Collaboration Managed Services (ANS Group, 2010a) The financial position of the company is quite good. Its turnover has increased from ₤12.1 million in 2009 to ₤13.3 million in 2010 (Malthouse, 2010). The company has recently announced the opening of 20 jobs across (―ANS Group to create 20 jobs‖, 2011) and has found to have a plan of growing the size of their organization even further (Malthouse, 2010). The company was at the 9th place in the Sunday Times‘ top 100 SMEs to work for and at the 2nd position in the SMEs related to IT-industry (The Sunday Times, 2010a). The company claimed to respect the corporate social responsibility and has the policy to make the environment clean through recycling and reducing carbon footprint as well as to prove education, job opportunities and sponsorship for young local people (ANS Group, 2010b). The company acknowledged the value of change and has recently implemented two new changes: one in its communication structure and the other in its investment policy (Gee, 2009; Malthouse 2010). The company has been found to acknowledge the importance of placing a ―well-planned change management process‖ before making any change in the change in the enterprise (Gee, 2009). This acknowledgement makes the company a suitable choice for current study as the purpose of the current study is to look at the process of change management as practiced in SMEs of the UK. 3.5. Research Instrument – Secondary Data Research instrument is the tool or technique used in a research to collect data and is considered as very fundamental in research process (Saunders, Lewis, & Thornhill, 2009). The research instrument select in a study ought to support the research aim and should be based on the pre-selected research paradigm and methods. In the present study, the aim as well as the paradigm and method of the research asks for the selection of an instrument that can collect adequate data related to the structure and function of selected organization using organizations as 26 unit of analysis. Thus, the study requires detailed inquiry of all forces working inside and outside the SMEs to support or hinder the change process as well as the importance given to communication by these organizations. Such a detailed enquiry was only possible through the secondary research. Though primary research instruments like interview and focus group discussion can provide in-depth enquiry of the problem it can deviate the unit of analysis from organization to individual. Furthermore, it was very difficult to get access to relevant information through primary research instruments. Another reason for using secondary data as research instrument, instead of using any primary research instrument, is that the researcher cannot access the managers of the two selected SMEs. If the researcher could access those managers, the researcher would conduct both primary and secondary research on the subject and will use the findings obtained from the primary and secondary research to complement each other. The secondary data used as the instrument in the present study include the publications of the two selected organizations as well as the information placed in their official website. Furthermore, news articles published in the popular newspapers and magazines of UK will also be analysed. 3.6. Data Collection The data needed for the present study was collected in two steps. First, the researcher collected the scholarly data on the subject understudy for theoretical understanding of change management and the role played by communication in the change management of SMEs. It was followed by a subsequent collection of secondary data on Softcat and ANS Group to examine the practice of change management and communication in the SMEs of the UK. The main source of data collection was internet, however, the researcher also taken help from the libraries providing printed literature on the subject. For the first phase of data collection, the researcher registered himself in important databases of management studies like Emerald and Ebsco Host. The research articles were usually taken from the renowned journals of management 27 and SMEs like Journal of Managerial Issues, The Journal of Enterprise Information, South African Journal of Entrepreneurship and Small Business, Harvard Business Review, Journal of Small Business and Enterprise Development, International Small Business Journal, Corporate Communication: An International Journal and Journal of Organizational Change Management. Furthermore, works of the experts on the subject understudy like Lornzi and McAdam were also collected for review. The main sources of data collection in the second phase were the official websites of Softcat and ANS group and the websites of the important newspapers like The Times, The Sunday Times, and Guardian. 3.7. Data Analysis Instead of using specific approaches for data analyses like grounded theory, discourse analysis or content analysis, the researcher decided to use ‗generic inductive approach‘ for data analysis, as suggested by Thomas (2003). The approach is not only convenient but also efficient in analysing qualitative data and the quality of the conclusion derived from this analysis is in no way lower than the conclusion drawn from the above mentioned specific traditional approaches (Thomas, 2003). Moreover, the approach is based on the pattern derived from the analytical techniques usually used in qualitative studies. The three purposes of using this approach in the analysis, as described by Thomas (2003), are in line with the aim and objective of the present study. These purposes were: 1. To condense extensive and varied raw text data into a brief, summary format 2. To establish clear links between the research objectives and the summary findings derived from raw data 3. To develop model or theory about the underlying structure of experience or processes which are evident in the raw data The researcher analysed the collected data through multiple reading and interpretation to answer the research questions. After this primary analysis, categories were derived from the raw data which were used as key themes. The researcher then made decision about the important and less important themes on 28 the basis of the dominance of the themes in the secondary data and on the basis of the information obtained from the literature review. 29 Chapter 4: DISCUSSION OF FINDINGS 4.1. Introduction The chapter presents the findings of the secondary case study research conducted on Softcat and ANS Group – two important SMEs from IT-industry of the UK. The chapter begins with the presentationof the key and core categories obtained from close reading of the collected text published on Softcat. The researcher read the text in detail and after getting familiar with the content, identified and defined the key categories. The general categories were derived from the research questions while the specific categories were derived from the multiple reading of text. All the key categories are shown and explained in this chapter followed by the presentation of core categories which are the categories obtained from refinement of the key categories. These core categories provides the answers to research questions as well as some new information on the subject on which future studies can be conducted. The key and core categories of two case studies have been shown separately and the core categories for the two have been compared keeping in consideration their contextual information to obtain final context-specific findings. Finally, the chapter ends with the discussion of the findings obtained from the present research. 4.2. Study Findings A large number of webpages, publications and news articles were collected for the analysis out of which the researcher selected the ones relevant to the subject under study. Details of the secondary data reviewed for the present research is shown in appendix (For details of the secondary data on Softcat see Appendix A and for details of secondary data on ANS Group see Appendix B). The selected secondary data for both organizations was closely read and categorised. Further refining of the key categories led to the formation of core categories. The obtained categories as well as the comparison of the categories for the two case studies are provided below. 30 4.2.1. Key and Core Categories of Softcat The table shown below presents the key and core categories obtained from the close reading of the secondary data on Softcat. As can be seen some 41 key categories were obtained which were further categorised into 7 core categories. Of the seven core categories four are related to the research questions while 3 categories provide additional information about company. The first core category ―change‖ is related to the company‘s engagement with internal and external change forces. The text referring to company‘s recognition of importance of adding new ideas or description of practices of implementing change was coded with ―change‖. This category contains three key categories namely technological innovation, adding new ideas, and moving away from traditional practices. Technological innovation refers to the company‘s efforts to introduce new technological products in the market. Sam Routledge, the Solution Director of Softcat, admires the technology innovation by saying: ‗As a geek at heart, I love new technology initiative…‘ (Softcat, n.d. g) The company‘s vision of change is not limited to technological changes only. It also encourages innovation and entrepreneurship and welcomes new ideas either they comes from management or from staff. In 2008, the company‘s chairman, Mr. Kelley, voices a new idea of doing some social work. The company‘s staff welcomed the idea and made other related advices which were welcomed by the company: ‗Voicing the idea [of doing some social work] at a dinner party, chief executive officer, Peter Kelly, was advised to get in touch with Hands Up Holidays, which specialises in holidays with a volunteering element‘ (Kelly, 2008, p. 18). The third important theme found in the secondary data highlighted the company‘s focus on changing with the changing environment. Mr Kelly criticised a number of traditional practices and claimed to experiment some new innovative practices which can bring not only structural but also behavioural changes. One important change brought up by the company is to move the traditional focus on personal-achievement to team-achievement. As noted by The Sunday Times: 31 ‗The me, me, me mentality that traditionally typifies sales jobs, where prima donnas win the day — and the commission — is conspicuously absent at Softcat. Here it is all about the team‘ (The Sunday Times, 2010b). Another change implemented by the company is that the company‘s chairperson did not follow the common practice of SMEs in the UK of owner- manager‘s dominance. Instead, he chose to act as a leader, took responsibility of the decision but allows the company‘s staff to being part of the decisions making: ‗Kelly — by his own admission a "weird and eccentric entrepreneur" — entrenched a democratic ethic at the company's outset. While running the 17th mile of a marathon and pondering how to organise his newly expanding workforce, he had a light bulb moment: let them decide which team to join, rather than tell them where to go. It worked. And ever since, staff have had a vote on company-wide decisions.‘ (Softcat, n.d. g) The core category of ―change‖ clearly shows that the company not only recognises the importance of change in the current rapidly changing environment but has also implemented a number of changes and will welcome the changes in future. The second category of change management provides answers to the second research questions. It explains in detail how change is being managed in Softcat. The key categories provide an insight to the important steps and processes involved in change management, as practiced by Softcat. The first key category ―taking input from employee before implementing change‖ refers to an important step of change management practiced by Softcat. While implementing a new practice of doing social work in Fiji in place of giving bonuses to staff members, the company asks the staff to choose the way they prefer: ‗However, not all of the hard-working sales force was keen on the idea of giving up their annual reward in return for hard labour. ―We‘re a democratic company so we put it to the vote and it was a very close call,‖ admits Kelly‘ (Kelly, 2008, p. 18). 32 Core Categories Key categories Change Technological innovation welcoming new ideas Moving away from traditional practice Change Taking input from employee before implementing management change Recognising the hurdles faced in change management Considering employee‘s preferences in strategy making Sustaining successful changes Focus on culture Owner‘s determination to change Dominant and centralised leadership Taking risk Importance of Communication for engaging employee communication Communication for achieving desired goals Understanding through communicating Practice of Regular communication with staff communication Open face to face communication Communication through Email and blogging Communication at all levels of organization Informing staff about company‘s business performance Orientation Communication between the management Communicating company‘s goal and objectives Communicating company‘s strategies Providing needed help Employee Absence of a formal employee engagement programme Engagement Engaging employees through communication Informal engagement with staff Involving employees in decision making Employee Making employee enjoy working in the company satisfaction and Making employee love the company loyality Employee motivation Incentive trips Dedication/Passion Recognising employee‘s efforts Customer Unique customer services satisfaction Time management Multiple modes of service Making relationship with customers Satisfied employees for satisfied customers Evolving technology in accordance to customer needs Table 4.1: Key and Core Categories of Softcat 33 Another important practice of Softcat with regard to change management is ―recognising the hurdles faced in change management.‖ In the article written by Kelly on the company‘s tour to Fiji, he acknowledged a number of hurdles faced by the company in implementing their new decision of doing social work in Fiji. The third key category i.e. ―Considering employee‘s preferences in strategy making‖ refers to the company‘s policy of making strategies with consideration to the employee‘s preferences. The company not only involves staff in decision making process – as highlighted in the first key category of this core category– but also makesits policies keeping in view the demographics of their company‘s staff: ‗The average age of our sales team is 26; they‘re young graduates and they got tonnes from doing this‘ (Kelly, 2008, p. 19) The company is also keen to sustain the implemented changes, if successful. After a successful trip to Fiji, Mr Kelley announced a second trip to Peru. He said: ‗We would absolutely do it again … ‗Another volunteering trip has been strongly requested‘ (Kelly, 2008, p. 19). The secondary data also revealed some other important practices of Softcat with regard to change management. Some portions of text were found to indicate the company‘s, particularly the chairman‘s, focus on changing the culture rather structure. These portions were coded with the fourth key category ―focus on culture‖. Kelly‘s focus on cultural change is evident from the way he introduced himself on the website of the company: ‗As Chairman I have strived to create an environment and culture which allows our people to enjoy their work, have fun and succeed in meeting our shared goals of achievement and customer satisfaction‘ (Softcat, n.d. g) The paragraph shown above was also coded with the fifth key category because it shows the ―Owner‘s determination to change.‖ A lot of secondary data was coded wit this category as there is greater focus on Kelly‘s personality and efforts to create an innovative and unique company. The sixth key category in this core category is much linked with the fifth one as it indicates the company‘s 34 centralised and dominated leadership which plays a significant role in implementation and management of change.This category includes text like this: ‗Kelly, whose unofficial title is minister of fun, is the inspiration behind Softcat social stuff‘ (The Sunday Times, 2010b). The last key category in this core category is ―taking risk‖ which includes the text referring to the company‘s practice of taking risk while implementing new changes. Risk management was found to be an important part of company‘s change management. The third core category ―importance of communication‖ is associated with the third research question. It contains 3 important key categories which providethree key areas for which communication is important. The firs key area i.e. key category is ―communication for engaging employee‖ which includes text referring to the company‘s recognition and practice of engaging employee through communication. ‗Absolutely, [narrative – communication] is essential [to increasing employee engagement]‘ (Hockey & Ley, 2010, p. 62) Some content in the collected secondary data was coded for ―communicating for achieving desired goals,‖ which shows the importance of communication in strategy formation and management: ‗If you can‘t communicate and relate to your staff in a way that they understand and they feel a part of, it‘s impossible to achieve what we want to achieve‘ (Hockey & Ley, 2010, p. 62). The third key category in ―importance of communication‖ is ―understanding through communicating‖ which highlights the importance of communication in an organization to improve understanding between the staff and management. ―Practice of communication‖ is the fourth core category which provides answer to the fourth research questions. It explains the way communication is done in Softcat. Softcat has been found to understand the importance of communication for a company and the management of the company is of the view that the communication with the staff should be regular, open, face-to-face as well as through blogging and emailing, and at all level of organizations. The key categories 35 also show that internal communication in the company include ―informing staff about company‘s business performance,‖ ―orientation,‖ ―communicating company‘s goals and objectives,‖ ―communicating company‘s strategies‘ and ―providing needed help‖. One important key category in this core category is ―communication between the management‖ which shows the company‘s practice of conducting meetings not only between employees and management but also between the management of the company. ‗And every Thursday I hold a management meeting… and we hold that from 8.30 to 10.00 and we discuss every issue going on in the business‘ (Hockey & Ley, 2010, p. 52). The last three categories are the by-products of this analysis. They are related to the important areas of management which were not part of this study. However, they cannot be neglected as they contain some valuable information for future studies on management. ―Employee engagement‖, ―employee satisfaction‖ and ―customers satisfaction‖ appears as the key features of the company that made it the best SME of the UK to work for. With regard to ―employee engagement‖, the key categories show that company‘s lacks a proper employee engagement programme yet it uses communication to engage employee with the management. The company also acknowledges the importance of informal engagement and practice it through arranging parties and social get-together. The company also engage employees in decision making process through voting. ―Employee Satisfaction and Loyalty‖ is an important key strategy of the company. The company wants its employees to enjoy working in the company and to build a loving relationship with the company. The company also acknowledges the importance of employee motivation and gives attractive incentives to the deserved employees. One important incentive given to the sales staff is ―incentive trip.‖ One such trip has been made and the company is planning to arrange another trip in coming years. The company‘s is focussed on improving dedication and 36 passion in the employees and for this it formally recognises the efforts by the staff while talking about the success of the company. Regarding ―customer satisfaction‖, the company policy is to provide unique services to their customers as they products remains the same. The uniqueness in the services is brought about by providing the services to the customers in least possible time and through as many modes as possible. The company tries to make long-term relationship with the customer – a key strategy to gain competitive advantage. The company believe that to satisfy customer, a company should satisfy its employees which in turn will satisfy the customers. Another important strategy of company with regard to customer satisfaction is to revise and evolve the technology in accordance to evolving needs of customer. 4.2.2. Key and Core Categories of ANS Group The key and core categories obtained from the inductive analysis of selected publications is provided as follows Core Categories Key Categories Change Introducing latest product Acknowledging the change in IT-industry Addition of new staff Unified communication and collaboration Change Management Implementing new technology Centralised and dominated management Taking input from the employees Practice of Secure communication communication Informal communication Use of technology for communication Knowledge Recognising importance of knowledge management management Knowledge management through IT network Employee‘s incentives Acknowledging employee‘s efforts Offering rewards Offering special incentives on important occasions Table 4.2: Key and Core Categories of ANS Group Plc. There are total 15 key categories related to the subject understudy which grouped together to form 6 core categories. The firs core category is about ―change‖ and it includes four key categories composed of secondary data on the 37 how the company views change and what new changes has recently been implemented in the company. The first key category in this core category is ―introducing latest product‖. The secondary data coded with this category revealed company practice of introducing latest products that can be very useful for business firms in the market. As noted by Company Eye, ‗ANS Group takes the latest world-class vendor products one step closer to market by packaging them into solutions that offer a real business benefit‘ (Company Eye, 2007, p. 2). ―Acknowledging change in IT industry‖ is the second category which includes text in which the company, through words and action, accepted that the IT industry is continuously and rapidly changing. The third and fourth key categories include text referring to two recently implemented changes in the company. The first change is the company‘s focus on adding new staff and the second change is the introduction of unified communication and collaboration in the company. The second core category ―change management‖ includes three key categories on the management of change in ANS Group plc. The first key category shows that the companybelieve that new technology is necessary for business management and is taking technical help to manage change in organization. The company is investing a large sum of money on quality management systems. The second key category in this core category refers to the role of management in the organization which is critical to understand the change management practices. The management of the company is found to be centralised and dominant which makes the decision on their own and tool the complete responsibility of company‘s growth. ‗Scott Founded ANS and has been responsible for its steady growth over the last 10 years‘ (Company Eye, 2007, p. 3) Despite the dominant leadership, one sentence was found to show that the company recognising the importance of taking input from the change. This sentence is published by The Sunday Times on the company‘s staff belief that the company‘s did acknowledge their opinions and views while making decisions: 38 ‗They [employees] feel that these people [managers] listen rather than just tell them what to do‘ (The Sunday Times, 2010c) The third core category ―practice of communication‖ is related to the fourth research question on the use of communication in the company for change management. The company assets that the internal and external communication of and organization should be secure. However, the company also arrange some semi- official gatherings for informal communication between staff and management. Finally, the last key category in this core category includes text on the use of technological systems for internal communication in the company. Being an communication service provided, the company prefer technological communication on the personal face to face communication. ANS takes advantage of new technologies to communicate with staff, with its own Twitter account and a regular "latest and greatest" email update from the marketing team (The Sunday Times, 2010c). The two core categories of ―knowledge management‖ and ―employee‘s incentive‖ do not provide any particular information regarding subject under study but provides valuable information on the current practices in SMEs of the UK and cannot be neglected. 4.2.3. Comparison of Core Categories The core categories of the two companies have many similarities and differences. The core categories of ―change,‖ ―change management,‖ and ―practice of communication‖ are common and are related to the subject understudy. The secondary data on ANS Group provides no information regarding the ―importance of communication‖ on which secondary data on Softcat provides detailed information. The secondary data on Softcat was focused on employee engagement, employee satisfaction and loyalty and customer satisfaction. By contrast the secondary data on the ANS Group was neither focussed on employees nor customers but on knowledge and incentives offered by the company. With regard to change, both Softcat and ANS Group recognised the importance of technological changes with the company and in the market. However, in case of Softcat, cultural change has been given considerable importance which 39 was not present in the case of ANS Group. Furthermore, Softcat rejected a number oftraditional practices still in use in ANS Group plc. For instance, in Softcat the staff takes part in decision making except the strategic decision making which is the responsibility of management. Nevertheless, ANS Group plc.has not yet implemented the democratic ethic of Softcat and in this company major decisions are made by the board with consideration to the input received from the employees. The change management process is also explicitly mentioned in the secondary data of Softcat while there are only few references to change management in the secondary data on ANS Group. Softcat‘s process of change management is very similar to the Lorenzi‘s model of change management with proper time given to assessment and re-assessment of the implemented changes. The company learns from every new change by recognising the hurdles faced in implementation of change. The only common key category related to ―practice of change management‖ in the two companies is the dominance and centralisation of management in the companies. However, in case of Softcat, the management has decided to change its role from management to leadership because of which the company has dominant and centralised leadership rather management. The chairman of the company serves as an inspiration for the employees which aid in the creation of culture of change in the Softcat. The two companies also differ in their practices of communication. Softcat seemed more inclined toward face to face open communication with little emphasis on the role of technology for facilitating communication. On the other hand, ANS Group plc. is focussed on secure communicating through social networking sites, emailing and other IT-based communication tools. These differences in the company may arise out of the differences in the involvement of employees in the business. In Softcat, many employees are shareholder or option holder which makes their involvement more significant in the company. The increased involvement of the employees in the company‘s business can be the main reason behind the company‘s proper focus on change management and communication. 40 In both company‘s data the importance of communication and practice of communication did not contain any key category related to change management which shows that both company has not yet explicitly accepted the importance of communication for change management. However, in case of Softcat, practices of change management involve regular communication at all level of organizations. 4.3. Discussion The present study was set out with the aim of finding the theory and practice of change management in the SMEs of the UK. The researcher first concern was to know the importance given to change management in SMEs. The literature shows that in theory, the importance of change management for SMEs is well recognised (Coetsee & Visagie, 1994; Gray, 2002; Guido, Gail, Nancy & Pierluigi, 2010). The secondary research showed that though change management is being practiced in the selected SMEs of the UK, the companies do not give verbal recognition to the importance of change management. However, Softcat is found to give importance to the change management through cultural change together with technological change. The practices of Softcat are in concordance to what is being recommended by Chan and Swatman (2003) for successful change management. As discussed in the chapter 2, Chan and Swatman (2003) held that the successful implementation of change is not possible without developing change-accepting-culture in SMEs. The high level of employee satisfaction despite continuous changes in the Softcat is evident of the success of Softcat in building a culture of change in the organization. The second research question was based on the practice of change management in the SMEs of the UK. On this subject, considerable information is obtained from the present secondary research. The study found that the SMEs with democratic culture have a proper change management process in which input is taken from the employees before implementing any decision. The employees take part in the change process and the company is often successful in implementing and sustaining changes. On the other hand the SMEs with the traditional centralised and dominant management often manage changes with little involvement of employees. In the companies where employee engagement in change management 41 process is higher has higher employee satisfaction, as evident from the results of survey conducted by The Sunday Times (2010a). These findings of the study are in concordance with what has been reported in the literature on change management. Goleman (1998) has reported that many SMEs in the UK are still practicing the traditional managerial techniques with lesser involvement of people in change process. However, he also suggested that managers of SME ought to act as leader and should pay attention to the interpersonal dimensions of management. This leadership role and focus on interpersonal dimension of management has been found to be practiced by Softcat. The success of the Softcat clearly shows the importance of employee involvement in change process for the success of an SME. No particular secondary data was found on the importance of communication in change management in both SMEs. In theory ―communication‖ has been regarded as an essential tool to change management (Armenakis, Harris, & Field, 1999) but in practice there is little emphasis on the use of communication as change management tool. However, the data revealed the importance of communication for employee engagement, for achieving desired goals and for improving the understanding among the management and employees. In the literature on change management, there is considerable focus on cultural and behavioural change (Kulvisaechana, 2001; Lorenzi, 2005). Scholars have claimed that for bringing such a behavioural change it is important to bridge the gaps between employees and staff (Armenakis, Harris, & Field, 1999). Since communication has been found to improve employee engagement and is found to increase understanding between employees and management, it can indirectly facilitate behavioural change. Furthermore, change has defined as the process of achieving the desired future state (Lorenzi, 2005) and as communication has been found to facilitate the achievement of this state, it facilitates the change management process. Thus, all three benefits of communication, as found in the secondary research, are strongly associated with the change management process and it shows that managers of the SMEs in the UK consider communication to be indirectly – instead of directly – associated with change management. 42 This finding of the study contradicts with what has been reported in the literature. The importance of communication for change management has also provided by a number of scholars like Lautner (1999), Kitchen & Daly (2002), and Proctor &Doukakis (2003). The secondary data also reported no association between the communication and change acceptance in the SMEs. This finding neither means that the communication is not important for the SMEs in the UK nor means that communication is indirectly associated with change management. It simply shows that the mangers of the SMEs in the two selected organizations have little awareness about the importance of communication for change management and there is a need to develop this awareness among the mangers of SMEs in the UK. One important finding of the study is with regard to different approaches used by the SMEs of the UK for internal and external communication. Softcat was found to be inclined toward face to face open communication with little emphasis on the role of technology for facilitating communication. On the other hand, ANS Group plc. is focussed on secure communicating through social networking sites, emailing and other IT-based communication tools. Since the two companies also differs in the level of employee engagement in change process, it is found that the face to face open communication is associated with higher involvement and engagement of staff in change process. 43 Chapter 5: CONCLUSION 5.1. Introduction The aim of the present study is to find the theory and practice of change management in the SMEs of the UK as well as to examine the role played by the communication in the change management process. For this purpose, two SMEs from the IT-industry of the UK have been selected as case studies and the researcher analysed the secondary data published on them. The chapter presents the conclusion derived from the ―general inductive analysis‖ of secondary data published on the two selected case study. Besides the description of conclusion, the chapter also contains recommendation for the future studies on the subject and for the SMEs of the UK. At the end of the chapter the limitations of the study has been provided. 5.2. Conclusion The analysis of the secondary data on Softcat and ANS Group resulted in the creation of two types of core categories. Some of the core categories were directly associated with the research questions while some were treated as the by-product of the present study as they have no direct link with the subject understudy but are important enough to be part of the study findings. Therefore, the conclusions derived from the study findings are divided in two groups: major and minor conclusions. Major conclusions were the conclusions related to the research questions while the minor conclusion provide the important information with regard to the SMEs of the UK but has no direct link with the subject understudy. 5.2.1. Major Conclusions After thorough analysis of the literature published on the change management in SMEs and the secondary data on the Softcat and ANS Group – two important SMEs of the UK – the researcher came to the conclusion that importance of change management in the SMEs of the UK is not negligible. Both SMEs of the UK were found to practice change management but they do not give verbal recognition to the importance of change management. Another important conclusion of the present study is with regard to the importance of changing culture 44 in the organization. The theory and the practice of Softcatis evident of the benefits of changing the culture of the organization with the technological changes which are common in the SMEs of the IT industry of the UK. With regard to the practice of change management in the UK, the study concludes that the SMEs of the UK differ significantly in the process of change management. In some SMEs, the involvement of the employees in the process of change management is much higher whereas in others the management plays the main role in managing change. The study concludes that the SMEs having higher involvement of employees in change management process have higher employee satisfaction and are relatively more successful. The importance of communication in the change management process if well established in the theory but is not clearly manifested in the practice of the SMEs. However, the findings showed the importance of communication for engaging employees and for achieving goals and objectives which indirectly facilitate the process of change management. The study found that there is lack of awareness among the managers of the SMEs in the IT industry of the UK about the direct association of communication with change management. There are also significant differences in the way communication is being done in the SMEs of the UK. Regarding these practices, the present study concludes that open communication facilitates employee engagement and better management of change. 5.2.2. Minor Conclusions The study found some important key areas which are the focus of the SMEs of the UK and the companies claimed to gain competitive advantage from them. These key areas include employee engagement, employee satisfaction and customer satisfaction for Softcat and knowledge management and employee incentives for ANS Group. The study concludes that the main reason for the growth of Softcat can be its recognition of the importance of employee and customer satisfaction. Similarly, the success of ANS Group can be behind the role played by knowledge management and employee incentive. 45 5.3. Recommendations for Future Research The study recommends the further research to be undertaken in the following key areas: role of employee satisfaction on the customer satisfaction in the SMES of the UK; knowledge management in the SMEs and its role in employee satisfaction; the association between employee engagement and satisfaction; the impact of employee engagement on the change management, the reasons behind the differences in the change management practices of different SMEs of the UK and much more. An empirical study to test the findings obtained from the present research will be interesting to conduct. Future studies on the change management regarding the role of employee involvement in change management process would be of great help to understand how communication between staff can be important for change management. 5.4. Recommendations for SMEs Since Softcat has been ranked the best SMEs of the UK to work for, the present study suggests other SMEs of the UK to learn from the practices of Softcat. Involvement of the employees in the decision making process facilitate the implementation of the dedications. Since, the number of employees in the SMEs is not very high, it is quite easy for such enterprises to achieve cohesiveness through better communication. The study also highlighted the importance of informal meetings between the staff members for employee motivation and engagement. SMEs of the UK are strongly recommended to offer attractive incentives to their employees and to make them satisfy. The satisfaction of employee is found to be the key for the success of the SMEs. 5.5. Limitations of the Study Finally, it is important to look at the limitation of the present study. The present study is limited to the two SMEs from the IT-industry of the UK. The findings obtained from the present study are not generalizable and should be understand in their context. One important limitation of the present study is the use of secondary data. The secondary data, though aid the researcher in collecting bulk of information on the two SMEs - which was not possible with the primary research with lack of access to managers of the SMEs of the UK – the researcher failed to 46 find some important findings due to the unavailability of secondary data on that subject. 47 REFERENCES Amaratunga, D., Baldry, D., Sarshar, M. & Newton, R. 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(2009) Engaging for success: enhancing performance through employee engagement. Surrey: Office of Public Sector Information. Point 64 on page 111 This is a report from two experts in the field of business management to the government. One of the authors has served as Senior Advisor on Change and Performance in the Cabinet Office while the other was a former advisor to former Prime Minister Tony Blair. The purpose of the report is to assist the government of UK in recovering Britain‘s economy through promoting employee engagement in organizations. While narrating the challenges faced by the SME in employee engagement, the report talked about Softcat in brief. The paragraph has been taken from the report for inductive analysis Hockey, J. & Ley, I. (2010). Leading for engagement: how senior leader engage their people. National Institute of Government. [Internet]. Available from: <http://www.nationalschool.gov.uk/downloads/LeadingForEngagementReport.p df > [Accessed 12 March, 2011]. This is a very detailed report on the role of leadership in employee engagement. In several sections, the author discussed the role of managing director of Softcat in promoting employee engagement in his company. For the review of the present study, those paragraph has been used. Kelly, P. (2008). How Softcat gave it back. M&IT, July/August, pp. 18-19. This is a case history written by the chairman of Softcat, Peter Kelly, on a company‘s trip to Fiji for an IT magazine. This secondary data was of critical importance for this study as it provides a view of how extra-official activities can help in change management. Softcat (n.d. a) Who we are. [Internet]. Available from: <http://www.softcat.com/who-we-are> [Accessed 12 March 2011] This is a web page from the official website of the company. The webpage provide details of the company and was analyzed to examine the importance given to change and communication by the company in its formal introduction. 58 Softcat (n.d. g) Who we are: meet the people. [Internet]. Available from: <http://www.softcat.com/who-we-are/meet-the-people> [Accessed 12 March, 2011] This webpage provides the views and opinion of the senior management of the company which can be helpful in understanding management focus on change and communication The Sunday Times (2010b). IT Solutions: Softcat. The Sunday Times [Online], February 28. Available from: <http://business.timesonline.co.uk> [Accessed 12 March, 2011] This is a news article from The Sunday Times in which the newspaper described the reason for ranking Softcat as the best SME of the UK. 59 APPENDIX B: OVERVIEW OF SECONDARY DATA ON ANS GROUP PLC. The Sunday Times (2010c) ANS Group: IT and Communication. The Sunday Times [Online]. February 28. Available from <http://business.timesonline.co.uk> [Accessed 12 March, 2011] An important news articles published in The Sunday Times in which the newspaper explains the reason for placing ANS Group at the 9th position in their list of 100 best SMEs. The article provides the views on the company from an outside source which is important to analyse. The news article also contains important information regarding the mode of communication in the company. Fletcher, S.J. (2010a) Chairman‘s Statement. In: ANS Group Annual Report 2010. [Internet]. Available from: <http://www.ansgroup.co.uk/files/pdf/financial_accounts_2010.pdf> [Accessed 12 March, 2011]. The company‘s chairman‘s statement on the annual report provides good insight into the areas which are important for the company. It describes the factors on which company‘s management is more focused. Fletcher, S.J. (2010b) Outlook.In: ANS Group Annual Report 2010. [Internet]. Available from: <http://www.ansgroup.co.uk/files/pdf/financial_accounts_2010.pdf> [Accessed 12 March, 2011]. Another section of annual report 2010 – written by the chairman Mr. Fletcher – contains the company‘s overall performance in the last financial year. This publication of ANS Group is important was examined to look at the changes implemented during 2009-2010 and the way they have been managed. Company Eye (2007) Associated Network Section Plc. [Internet]. Available from: <http://www.unquoted.co.uk/companyinfo/Associated%20Network%20Solution s%20plc.pdf> [Accessed 12 March 2011] 60 This is a report on the company which contains details of the company as observed by Company Eye.
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