Identification of Stakeholders in an Organisational Change Process

Action Processes That Lead to Change of Organisational Identity and Organisational Identification

The Hong Kong subsidiary adopted the change process originally devised by Jones and Brazzel (2012) and extended it using Lewin’s (1951) three-step change model into a framework with five consecutive stages: (1) diagnosing the organisation; (2) determining the desired future stage (unfreezing); (3) implementing action (moving); (4) evaluating the action; and (5) institutionalising the action process (refreezing) as one complete action cycle. The first action cycle took almost two years to complete and each of the stages in the change process lasted from three months to a year. The Hong Kong subsidiary has established special work structures to plan and execute the change process. The management team of the Hong Kong subsidiary took a leading role and provided the necessary resources for the action processes. After the completion of the first action cycle, the result would be inputs for the second cycle, which would go through those five stages again. The second action cycle actually took another 1.5 years to complete. Table 1 provides a summary of the first cycle of the action process of the Hong Kong subsidiary.

Stage 1: Quantitative Survey

The new organisational identity of the Hong Kong subsidiary as a service-oriented company was the desired future stage that the organisation ultimately wanted to achieve. Data for the longitudinal study were collected over three years. The management team of the company considered that a rational action process approach should be adopted to assess the effectiveness of the action processes on organisational identification development. Therefore, quantitative surveys on organisational identification perception were conducted prior to the action process and at the end of each action cycle to evaluate the effectiveness of the action process, and the results were used as part of inputs for the next action cycle.

The management team started the diagnosis stage with a survey conducted in late 2010. All employees of the company were distributed a hard copy of the questionnaires and were introduced to the purpose of the survey by written instructions and guidelines attached to the questionnaire. Responding was entirely voluntary and all responses were collected in a collection box placed in the office reception area and other work stations to allow anonymous responses. The survey was based on a seven-point Likert-type scale ranging from 1 (strongly disagree) to 7 (strongly agree), used to explore employee perceptions of their current organisational identification with the company. The six items in the survey were taken by the management team from a study of organisational identification perception by Mael and Ashforth (1992), as the measures are generally considered the key parameters that reflect organisational identification perception. The six items are as follows.

• 1.
  When someone criticises our organisation, it feels like a personal insult.
• 2.
  I am very interested in what others think about our organisation.
• 3.
  When I talk about our organisation, I usually say ‘we’ rather than ‘they’.
• 4.
  Our organisation’s success is my success.
• 5.
  When someone praises our organisation, it feels like a personal compliment.
• 6.
  If a story in the media was to criticise our organisation, I would feel embarrassed.

Similar quantitative surveys, based on the same items, were conducted after each of the implementation processes in each action cycle. The survey results helped to provide management with feedback to be used in modifying planning before engaging in the next cycle of action and to inform the implementation process of subsequent cycles of action. The survey results were also later established as a formal structure of a steering committee with members from management to demonstrate commitment. The pre- and post-implementation surveys aimed to explore the possible changes of employee perceptions of organisational identification during the action processes.

Formation of the Steering Committee

To demonstrate commitment of the changes, management of the Hong Kong subsidiary, immediately following receipt of the directive, set up a five-member steering committee composed entirely of local senior management members. The managing director was appointed as chairperson. The steering committee was established to plan, implement, and evaluate the action strategies to enable employees to associate with the new values and strategies, and adopt the new identity imposed by the headquarters. It was charged with managing the process of embedding the new identity. The steering committee met every Monday morning to review the action plan strategy and actively discuss, review, and record how they should continue to implement this new direction imposed by the headquarters.

Clarification of the Organisational Identity and Its Current Status

Immediately after its formation, the committee conducted a communication meeting with all managers and supervisors to deliver the new sets of values and strategies as recommended by the parent company. The participants were asked to evaluate the changes and identify the cultural and institutional differences between the Hong Kong subsidiary and headquarters. During the meetings, the steering committee selected participants from each of the key divisions and departments to join the identity workshop as an organized brainstorming session. These participants were selected due to their being more outspoken than their colleagues. The identity workshop participants collected opinions from departmental managers and supervisors on the organisational identification process.

Determine the Desired Future State

After reviewing the results of the first survey, which showed staff perception of the current situation, the steering committee decided to involve all senior managers in an identity workshop dedicated to formulating the future desired identity. The aim of the workshop was to allow senior managers to have a better understanding of the changes ahead and to help build their commitment to the organisational changes. The senior managers, together with the steering committee, were also responsible for reviewing the results of the organisational identification implementation at each key stage of the study. An identity workshop was conducted with 11 senior managers in April 2011. It started with an icebreaking session, followed by a briefing on the purpose and expected outcome of the workshop, which was to review the current state of organisational identification in the company and determine the future and desired organisational identification.

During the brainstorming exercises in the workshop, the senior managers compiled a list of characteristics that could represent the future and desired organisational identification. Discussions were conducted and the previously identified characteristics were shortlisted, grouped, and categorized. Finally, the senior managers established a main theme that summarised all the characteristics that have been identified. This main theme became the new direction and strategic intent for the Hong Kong subsidiary, and could be framed as a more localised and understandable message of ‘What is professionalism to you?’ They then selected the earlier-identified characteristics that could better represent professionalism and created five key messages to reflect those characteristics, which were simple, straightforward, and easy to understand: ‘We act as a team’; ‘We deliver what we promise’; ‘We do our best’; ‘We are responsible’; and ‘We keep on improving’. Starting each message with ‘We’ included both the company and individual employees as part of the company. The workshop also concluded that a task force should be established for more detailed implementation of the organisational identification strategy. Nominees from key divisions and departments from different hierarchies were proposed by the senior managers who participated in the identity workshop. These nominees were familiarised with the new values and strategies, the future stage of desired identity developed in the workshop, and the responsibilities of the task force. They were then invited to join the task force on a voluntary basis, so that their participation was a sincere expression of their willingness and commitment.

Develop an Integrated Action Strategy

Action strategy development was perhaps the most important stage in the action process, as it determined the organisation identification implementation strategy for the Hong Kong subsidiary. The steering committee decided to involve middle management, who knew better the needs of the frontline staff. A communication meeting was conducted in March 2011 to present the new organisational identity to all managers, followed by dividing the managers into groups with an appropriate mix of divisions and conducting a brainstorming workshop that was facilitated by members of the management team. This workshop aimed to get the managers involved in the development of the organisational identification implementation strategy. The AIDA model of Strong’s (1925) sales process was adopted as the framework for organisational identification communication. AIDA is the abbreviation of the sequential stages of communication: A, Awareness; I, Interest; D, Desire; and A, Action.

In line with Pascale, Millemann, and Gioja’s (1997) opinion that employee participation would prevent resistance and encourage a welcoming and creative approach to change, the managers agreed that their participation would facilitate a sense of ownership and the likely successful implementation of the organisational identification. This also fostered understanding among the Hong Kong subsidiary staff of the reasons for the change and established the grounds for employee collaboration during the action process.

Formation of the Task Force

The task force was formally established with 12 members from different divisions and departments, and task force meetings were held to work out the implementation plan for the approval of the steering committee. The task force felt that to create awareness of the organisational identification, communications should be more frequent and designed to reach all staff. A weekly internal newsletter and short messages sent to the smartphones of employees were selected as key tools to deliver organisational identification messages, as each employee had access to the company intranet, as well as a company e-mail account and a mobile phone sim card. An editorial committee was established to ensure these important messages were well planned and would achieve the AIDA effect.

By this stage, the organisational identification implementation process was well underway. The task force had conducted biweekly meetings to review progress. Between meetings, task force members and office staff representatives contacted frontline representatives, either by phone or face to face, and collected their feedback on the organisational identification activities. This feedback was reviewed in each task force meeting and became inputs to the next activities. The meetings were recorded in writing and meeting minutes were put on a common server that was accessible to the steering committee and task force.

Evaluate the Action and Revisit the Issues

The key process of organisational identification implementation – evaluation – started in May 2011. Prior to the organisational identification implementation, a ‘pre-change’ questionnaire survey of the employees was conducted in October and November 2010. As described earlier, questionnaire surveys were also conducted as each of the cycles of the organisational identification implementation process were completed, to evaluate the effectiveness of the implementation. To ensure there was an appropriate comparison- and perception-tracking mechanism, the same questions were used in all surveys.

Institutionalize the Action Process

In June 2012, the steering committee conducted a full-day evaluation session to evaluate the appropriateness of the action process, assess the effectiveness of the steering committee and the task force and compare the outcomes and with the expected results of the activities and communication, as well as to review the success of the organisational identification implementation. It found that the strategies and actions instituted by the steering committee had been effective, and some of them (e.g., communication by electronic means) had been adopted as company policies, procedures, and routines. The task force and steering committee also revisited and updated issues such as constraints, resources, and organisational identification perceptions to identify any needed modifications to the organisational identification strategy before proceeding to the next action cycle. Among all the constraints and resources addressed by the task force and steering committee during the evaluation session, the correct identification of stakeholders was considered to be the most important as the Hong Kong subsidiary could decide the roles and participation of each stakeholder during the organisational identification implementation process. However, this general statement raises more questions than it answers, such as: Who are the stakeholders? Which stakeholders are involved in the organisational identification and which are not? What are their roles in the organisational identification process? Are there different levels of stakeholder involvement? How can we identify stakeholders and their levels of involvement? Therefore, the steering committee of the Hong Kong subsidiary carried out a comprehensive study to identify the stakeholders before the start of the organisational identification implementation process.

Identification of Stakeholders

The steering committee of the Hong Kong subsidiary considered that stakeholders and the company represented by management were interdependent. For instance, stakeholders build social relationships with each other while the company provides the necessary environment that develops social relationship and interactions. Furthermore, stakeholders influence each other by formal and informal communications, and the company provides the necessary information and power to stakeholders to facilitate such communication. After a few discussions, the steering committee concluded that the interdependence of the influencing powers between stakeholders and the company were important in the organisational identification process and had to be examined in detail. The steering committee further elaborated on the influencing power of stakeholders and the company as (1) the influencing power of stakeholder groups that can exert power on other stakeholder groups in the company; and (2) the influencing power of the company (represented by the management groups) that can exert power on different stakeholder groups. Subsequently, the steering committee established two parameters that could measure the influencing power of stakeholder groups and the company. All stakeholder groups were evaluated with these two parameters so that each stakeholder group could be identified with (1) their level of influence on other groups, and (2) the level of influence of the company on each of the stakeholder groups. This evaluation mechanism allowed the steering committee to identify the stakeholder groups to which the company had to pay greater attention.

The evaluation results justified whether the stakeholder groups could play an active role as influencers in the organisational identification process. Among all the influencers identified, top management plays an irreplaceable role. Top management is usually represented by the subsidiary manager or the managing director, who acts as the figurehead of the organisation. They are the role models and opinion leaders who can exert a strong influence on other employees during organisational identification. Nevertheless, employees in the lower hierarchies are also key influencers of organisational identification. They are able to understand the needs and lifestyles of their co-workers; therefore, they are more able to design and conduct communications that can be easier to be understood and accepted by frontline employees.

The steering committee determined that all employees at all hierarchy levels, from top management to frontline staff, could at certain stages of the change process act as influencers. The steering committee devised a list of stakeholders or stakeholder groups, which included:

• employees’ family members;
• supervisors;
• co-workers;
• managers;
• directors;
• subsidiary manager (managing director);
• competitors;
• customers; and
• suppliers.

The steering committee decided to adopt a more rational approach with a quantitative mechanism to determine the influencing power of each of the stakeholders identified. Each individual stakeholder or stakeholder group was assessed by their (1) level of influence on others and (2) level of influence of the company on stakeholder groups. A 0–10 scale (with 0 as no influence, 5 as average, and 10 as most significant) was determined by the steering committee and task force for each of the stakeholders, based on the two evaluation criteria after a series of discussions and debates. Table 2 shows the summary of the scores.

According to the results shown in Table 2, the highest scores were obtained by supervisors, indicating their stronger influencing power towards subordinates. Certainly, supervisors who have day-to-day interactions with their subordinates might be regarded as more trustworthy and therefore able to exert an even stronger influence on others than people at the top. One might anticipate that the leading roles in organisational identification would not be confined to the management level. Top management, with their position of power, were ideally placed to manage, monitor and evaluate the organisational identification strategy, while employees from other levels were better placed to execute the strategy due to greater knowledge of the needs of their colleagues.

The stakeholders and their influence established a relationship matrix by plotting different stakeholders or stakeholder groups onto the different quadrants of the matrix (Figure 1). The relationship matrix illustrated who were the key stakeholders and their importance in the organisational identification process according to the potential of the organisation to manage relationships with these stakeholders and the potential of the stakeholders to influence others.

Figure 1. Relationship Matrix of Stakeholder Groups in the Hong Kong Subsidiary

Using the relationship matrix, the Hong Kong subsidiary identified different groups of stakeholders that could be mobilised as active actors in the organisational identification process. The steering committee clarified and classified the various stakeholders who could possibly play a role in the organisational identification of frontline staff as first- and second-tier stakeholder groups, used to denote their levels and sequence of participation. These groupings were accomplished from the steering committee discussions. The steering committee members decided that there was a need to establish a work structure for organisational identification. This work structure should comprise those employees who were willing to join the work group as participation in this group was supposed to be voluntary. the selected employees would benefit the process more if they had a high level of influence on others. The stakeholders who could fulfil these criteria were marked as potential nominees for the organisational identification work structure.

The managing director of the subsidiary and top managers were grouped as first-tier stakeholders, as they were considered to be members who could be easily mobilised. The subsidiary manager and top managers comprised the management team of the organisation and provided a unity of command, because in most organisational change and development processes, the management team is responsible for high-level decision-making and overseeing the process. As such, the management team has taken up the role of a steering committed during the change process. More often, a separate change team in the form of a workgroup or task force was formed with members from different departments to cope with the change process and dissolved after the task was accomplished. The Hong Kong subsidiary defined this workgroup as a task force and became the execution arm to denote its responsibility as the strategy implementer.

Building a Relationship Matrix to Facilitate Portfolio Analysis and Management Tactics

The steering committee determined that the application of the stakeholder approach by means of the relationship matrix should be further developed as a framework to generate organisational identification strategies. A direction was set for the task force so that organisational identification strategies and tactics designed later and any other changes thereafter would be on the right track. The steering committee reviewed the various tools and techniques on stakeholder mapping and proposed that the relationship matrix developed by the steering committee as the portfolio analysis for the stakeholders could be further developed into a tool for management tactics. Each of the nine quadrants of the relationship matrix denoted different relationship-crafting targets that organisational identification tactics should aim for. The steering committee also allocated a budget and resources to support the organisational identification tactics according to their expected fulfilment of these targets.

Practically, the steering committee prioritised its relationship-crafting targets based on those stakeholders who have a stronger influence on others’ organisational identification and those who are less remote and more easily mobilised. In order to develop a longer-term stakeholder strategy, a few meetings and workshops were conducted by the steering committee on the portfolio analysis of the various stakeholders. In a thorough discussion among members of the steering committee, with input from the task force and using the various quantitative data such as the ratings and scores of stakeholders, the steering committee members identified supervisors, managers, senior managers, and the divisional directors (grouped as top managers for simplicity) and subsidiary managers and managing directors as having a relatively high influence on employees’ organisational identification. These stakeholders had to be mobilised to exert their influence in a more systematic and effective way. Nevertheless, the ultimate objective of the relationship-crafting was to drive stakeholders’ impacts on organisational identification to the blue quadrant in the far-right corner of the relationship matrix (Figure 1) so that stakeholders could exert greater influence on employees under the management of the organisation.

Stakeholders who fall into the blue quadrant can exert a strong influence on employees’ organisational identification. The organisation can assume them to be leaders, champions or allies leading the organisational identification process. Stakeholders in the green quadrants are to be encouraged and empowered to take up active roles in the organisational identification process. The organisation should pursue every means to build relationships with those stakeholders with strong influence, but it currently lacks a strong relationship-building ability. In order to overcome this obstacle, the Hong Kong subsidiary organised company-wide social activities throughout the year, with regular weekly or monthly activities for social groups and other one-off events that catered for more participants. This relationship-building work encouraged the spreading of positive word-of-mouth by family members, which helped the Hong Kong subsidiary employees to strengthen their organisational identification.

The portfolio analysis and tactical development by means of the relationship matrix offer an effective application for the crafting of relationships between employees and stakeholders. The lowest left-hand quadrant (grey) in Figure 1 indicates stakeholders that have the least influence in the organisational identification process and will be left aside for future review. For those stakeholders who have an intermediate capability to influence or be influenced, there is a need to develop or maintain a good social relationship with them, with the expectation that they will become more active over time. Stakeholders who have a high capability to influence others are encouraged to be involved as actors in the organisational identification process. Those who have less capability to exert influence on others can be empowered to become more influential. The top-right corner is the ultimate stage of development of the stakeholders to become either leaders in the organisational identification process or champions or allies to support the execution of the organisational identification strategy.

The relationship matrix developed by the Hong Kong subsidiary provided concrete information and analytical results on: (1) the identification of stakeholders; (2) the assessment of the influential power of stakeholders; (3) the appropriate combination of stakeholders to form a work structure; and (4) the determination of management tactics.