A Case of Olympia Capital Holdings Ltd
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PROBLEMS AND PRACTICES OF STRATEGIC CHANGE MANAGEMENT IN THE MANUFACUTURING SECTOR: A CASE OF OLYMPIA CAPITAL HOLDINGS LTD BY SHEM H.ODHIAMBO D/61/P/7424/02 SUPERVISOR: DR. M.OGUTU A MANAGEMENT RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF A MASTER OF BUSINESS ADMINISTRATION (M.B.A) DEGREE, FACULTY OF COMMERCE, UNIVERSITY OF NAIROBI DECLARATION This project is my original work and has not been submitted for a degree in any other University. Signed....................... Date......... Odhiambo, Shem Humphrey Reg.No. D/61/P/7424/02 This project has been submitted for examination with my approval as the University Supervisor. Dr Ogutu, Martin Chairman of Business Administration Dept University of Nairobi DEDICATION To my dear parents the late John Rabuogi and the late Judith Nyakoa for their love, wise counsel and selfless sacrifices to see me through my education. A special dedication to my brothers and sister for their moral support and encouragement. 11 ACKNOWLEDGEMENT This study would not have been successful had it not been to the valuable support assistance and guidance of various nature from several colleagues, friends and family members. I would like to express my heartfelt gratitude to all of them in general. I however feel obliged to mention a few names here to acknowledge their special contribution. First, and foremost, am grateful to God for giving me the strength, courage and patience to go through the programme. Secondly, I would like to acknowledge the special guidance and valuable contribution of my supervisor, Dr. M. Ogutu during the entire period of study. Special thanks goes to all the MBA lecturers for their encouragement and support throughout the whole course, also to Njoroge Thuo, my classmates, Benard Omwenga and Dr. Denis Ogolla for their unqualifying contribution, socially, materially and intellectually as we underwent the gruelling program. Finally, and most important, special thanks to my wife Pheonah and our daughter Judy for their understanding and support during the entire period of my MBA course. To God be all Glory and Honour. iii TABLE OF CONTENTS DECLARATION............................................................................................................................I DEDICATION.............................................................................................................................. II ACKNOWLEDGEMENT..........................................................................................................Ill ACRONYMS USED IN THE STUDY......................................................................................VI ABSTRACT............................................................................................................................... VII CHAPTER 1: INTRODUCTION.................................................................................................1 1.1 Background................................................................................................................................ 1 1.1.1 Strategic Change Management.......................................................................................1 1.1.2 The Manufacturing Sector............................................................................................... 2 1.2 Olympia Capital Holdings Ltd............................................................................................. 4 1.3 Statement of the Problem.....................................................................................................6 1.4 Objectives of the Study.......................................................................................................... 7 1.5 Importance of the Study........................................................................................................ 8 CHAPTER 2: LITERATURE REVIEW.................................................................................... 9 2.1 The Concept of Strategy.......................................................................................................9 2.2 Management of Strategic change..................................................................................... 9 2.3 Theoretical Foundation of Change Management...................................................... 10 2.4 Environments, Strategy and Capability........................................................................11 IV 2.5 The Change Management Models.....................................................................................13 2.6 Resistance to Change............................................................................................................17 CHAPTER 3: RESEARCH METHODOLOGY......................................................................19 3.1 Research Desig n .......................................................................................................................19 3.2 Data Collection......................................................................................................................19 3.3 Data Analysis..........................................................................................................................20 CHAPTER 4: THE RESEARCH FINDINGS.......................................................................... 22 4.1 Company Profile..................................................................................................................... 22 4.2 Process and Practices in Managing Ch a n g e.................................................................23 4.3 Major Considerations in D etermining Change Management Process..................24 4.4 Problems experienced in Managing Change..................................................................26 CHAPTER 5: CONCLUSION................................................................................................... 27 5.1 Summary, Discussions and Conclusions......................................................................... 27 5.1.1 Process and Practices in Managing Change............................................................. 27 5.1.2 Major Considerations in Determining the Change Management Process.... 28 5.1.3 Problems in Managing Change...................................................................................... 29 5.2 Limitations of the Study.......................................................................................................29 5.3 Recommendations for Further Stu d y .............................................................................30 5.4 Recommendations for Policy and Practice...................................................................30 REFERENCES............................................................................................................................ 31 APPENDIX I: INTERVIEW GUIDE 34 ACRONYMS USED IN THE STUDY GDP Gross Domestic Product MBA Master of Business Administration NGO Non-Governmental Organization NSE Nairobi Stock Exchange PVC Polyvinyl Chloride ABSTRACT This study looked into the problems and practices of strategic change management in the manufacturing sector as experienced by Olympia Capital Holdings Ltd. Further the study was also to identify the major considerations taken by the company to determine the change process. This company is seen as representing organizations that are changing in many ways in that the company changed hands and also the name and diversified its operations. The study was conducted by carrying out in-depth interviews with the top management of the company who were involved in the change process. Data was analyzed using conceptual content analysis to determine emerging themes and relate this to the theory of change management. The study revealed that the company adopted Kottler’s eight step model in managing change and the main problems experienced were resistance and financial constraints. The main achievements for the change effort were increased profitability and giving the company a life line from the imminent collapse it was faced with. A number of recommendations were made based on the findings of the study. Chief among these was that companies in the manufacturing sector who are considering implementing planned strategic change use should Kottler’s eight stage model. However, emphasis should be placed on a clear vision and strategy and empowering others to act on the vision. Another recommendation is that organizations intending to undergo strategic change management should source for adequate financial resources to enable the change process go on smoothly. Vll CHAPTER 1: INTRODUCTION 1.1 Background. 1.1.1 Strategic Change Management Strategic Change Management is a structured and systematic approach to achieving a sustainable change in human and organizational behavior. It involves moving the people in the organization from certain old behaviors to some new behaviors which are desired by the organization. Successful strategic change is built from an overall strategic management in the organization. The strategy of the organization is what legitimizes the change program. Change management involves some transitions from some current state which is undesirable to a desired future state, through a series of actions and activities. Change management is problem finding and problem solving practice in the sense that organizations undergoing change must have identified a problem from the environment or from the way they have been doing things, it is the problem that makes the current state undesirable and