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CHANGE MANAGEMENT IN SMES: THE IMPORTANCE OF COMMUNICATION

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					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



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                                          57



                  APPENDIX A: OVERVIEW OF SECONDARY DATA ON SOFTCAT



   MacLeod, D & Clarke, N. (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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