Crisis Risk and Strategic Change Management in KPMG Cyprus

This article discusses the importance of change management, crisis and risk management in KPMG Cyprus. It presents a comprehensive critical analysis of the change management process in KPMG Cyprus using Burnes Framework for Change management. The article also discusses the style of management and organization change in KPMG Cyprus.

Running head: CHANGE MANAGEMENT
CRISIS RISK AND STRATEGIC CHANGE MANAGEMENT
Name of the Student
Name of the University
Author note

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Introduction
Change management is an important aspect for sustainable development in organizations.
When an organization undertakes different projects or initiates campaigns to improve its
performance, utilizes different opportunities to address key issues then the organization requires
a complete change (Hayes 2014). This change can be in the process its job rules, the structure of
the organization and the variety of the technology used. Besides these, human resource is also a
crucial factor in Change management because they are the one who drives the change and
implements them in their jobs (Doppelt 2017). Therefore, resistance or the satisfaction of
employees can lead to a big hurdle in Change management process. However, if the employees
embrace the change and adopt them in there working culture, unexpected results can be seen in
Change management process (Cameron and Green 2015). Crisis and risk management are also
an important factor while going through change management. The crisis management is a
response of economic or human resource related crisis and depending on the nature and extent of
it, considerable resources are used to fix the problem (Goetsch and Davis 2014). On the other
hand, risk management is a strategic process that is implemented on the system for effective
control and management of the upcoming risks. Therefore it helps to identify the potential
threat, assesses there possible effects on impacts and then take necessary steps to minimize the
risk (Nordin et al. 2012). In this assignment, Change management, crisis and risk management
will be discussed in the context of a company KPMG Cyprus. Further, a professional report
having comprehensive critical analysis of the Change management process in KPMG Cyprus
will be presented. Burne’s Framework for Change management will also be implemented in the
process and the type of change, which is most applicable in the organization, will be discussed.

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Furthermore, a comprehensive explanation will be demonstrated with examples so that the style
of management and organization of the change can be explained.
Company background
KPMG is an organization having global networks of member firms that are independent.
These firms offer audit, tax and advisory services throughout the world. The primary function of
this organization is to work closely with their clients and to help them mitigate risk and crisis and
utilize opportunities for tremendous growth (Benn, Edwards and Williams 2014). The
Organization was formed in 1987 with the amalgamation of Peat Marwick International (PMI)
and Klynveld Main Goerdeler (KMG). These two companies involved there member firms in
KPMG. In the name KPMG, K stands for Klynveld, because Piet Klynveld founded this
accounting firm in Amsterdam in the 1917. Whereas, P is Peat William, who founded the
accounting firm in London in 1870 (KPMG 2018). M stands for Marwick, who founded this
accounting firm in New York 1897 and finally G is for Goerdeler, who became the first
Chairman of KPMG. Currently Lynne Doughtie is the CEO of KPMG Having headquarters in
Netherlands there are more than 189000 people work as employees of KPMG that provides
financial Audit and tax advisory to leading businesses throughout the world (Giniat et al. 2012).
However, like every organization KPMG also gone through several risk management Change
and crisis management processes that has let the company with the opportunity to reach ultimate
success (KPMG 2018). Starting from individual Change management to organizational and
initiative based Change management KPMG has implemented each step to introduce new
process in the system. In this assignment those changes and crisis management processes will be
discussed.

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Burnes theory of change management
Change management is process that has found its presence in literature reviews and
critical discussions rarely. The primary reason behind this is the superficial nature of the change
management theories. However, in the real situation, change management is the process that
completely depends on the market trends, market solutions to the upcoming problems (Burnes
and By 2012). Not just the private sector but the public sector organizations as well require
proper change management to develop their standards and achieve sustained success. There are
several traditional models such as Lewin’s change management, Kotter’s change management
that are extremely simple and do not match the requirement depending on social, cultural and
economical context (Burnes and Cooke 2013). To overcome these issues of pre-existing models,
Burnes developed the theory, frame work of change, and named it as the Theory of
Postmodernism. This theory relates to the evolution of knowledge, laws, regulations and the
study of human progresses (Contrafatto and Burns 2013). This model was created to replace the
theory of modernism. Hence, this model includes the social change theory, critical change
theory, experience based design and large-scale change theory to define and cover the every
aspect of change management (Burnes and By 2012).
In this theory of Burnes, a new paradigm of organizational change was witnessed. This
newer paradigm was invented so that the scientific change related to newer ideas and
frameworks can be carried out (Burnes and Cooke 2013). This paradigm was mainly focused on
postmodernist thinking’s and for that purpose, approaches such as cultural excellence approach,
the Japanese approach for management and organizational learning was included in the newer
paradigm. However, the three important approaches of the Burnes change management
framework was the postmodernism, realism and complexity approaches (Hornstein 2015). The

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primary concept behind these theories was the constant change in the world, in which the older
theories were obsolete and required to be reframed or changed so that the newer challenges of
the world can be addressed. Hence, maximum organization in that era rejected the obsolete
frameworks and adopted newer theories having realism as one of their primary approach
(Hechanova and Cementina-Olpoc 2013).
The concept behind postmodern perspective was the changed style of competition, nature
of the work and production that forced organizations to change their mass production technique
to flexible production technique. (Hatch 2018) The term Neo Tayloris or Fordist organization
form developed that determined that the statement of previous change management theories that
the bureaucracy was not finished but had modified its nature, as well as also supported the
elimination of labour and automation. Organization started believing on postmodernism because
it provided rationales, skeptical decisions and it believed in multiple realities, fragmentation and
subjectivity (Payne and Askeland 2016). Further it determine that the modern organization
should become international with no boundaries, the leaders should behave like facilitators,
communicate using oral, sign informal and symbolic means so that the organization can be
controlled through proper planning and self regulation (Barrow 2014). The two areas on which
particular attention is placed in postmodernism are culture, which is being shared by all members
in the organization. Organization cultures are inconsistent, ambiguous and in constant state of
flux hence, thinking of managing the flux of culture is unreal. The second fact is power,
depending on teamwork instead of individual working capacity(carter 2012).
The realist approach was also mentioned in this section as an alternative to modernism
and postmodernism. It demonstrated that to define any event occur in organization, it is
important to understand the social structure of the organization, rules, regulations as events are

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generated due to casual mechanism and causal power (Dawson and Andriopoulos 2014).
Therefore, the realism theory deals with only one truth and rejects multiple realities. Further, in
this context the complexity perspective should also be discussed as it concerned with the
appearance of order in active nonlinear systems operating at the edge of disorder. Therefore,
organizations are also compound systems that need to function at the edge of disorder and have
to react rapidly and incessantly to changes in the surroundings from beginning to end process of
impulsive self-organizing change (Doherty, Horne and Wootton 2014).
Further, to understand the most applicable approach of change management in KPMG
Cyprus the organizational structure should be matched with the organizational culture. This is an
important aspect as, in case the structure of the organization is mechanistic and culture becomes
not suitable for that approach, the organization will not be able to function properly (carter
2012). Prior to merging in 1987, there were different organizational culture and structure for
KPMG firms and different leaders led the organizations from years. However, after merging, the
organization structure expanded and changed, requiring a different and dynamic leadership who
can lead the organization towards success (Dawson and Andriopoulos 2014). Further, it should
also be mentioned that the culture and structure should be supportive to operate efficiently.
Dominant coalition is one of the key aspects of organizational culture. It should be consistent and
should aim over long-term period. However, the primary disadvantage of this theory was related
to leaders. With changing leaders, the theory lost its consistency and the reason behind it is
situation and political and perspective related facts (Doherty, Horne and Wootton 2014).
Hence, the theory of postmodernism should be implemented on the organization as it
breaks the entire structure into fragments so that issues related to each fragment can be solved
(Doherty, Horne and Wootton 2014). Unlike obsolete change management theories, it mixes real

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problems with virtual ones chronologically to create a plan for risk and crisis management with
mixture of thinking’s, aspects and expressions. Further, as the organization was building with
blocks from four different firms, it would help them to unite and use languages and symbols so
that a new organization reality can be created (Carter 2012). Furthermore, this theory provided
the opportunity to the organization to choose the reality and act upon it as per their ability so that
they have access on their own choices, actions and outcomes. Finally, being a group of four big
firms, the thirty provided them with the power to achieve dominant position over other in the
organization and accept their reality (Dawson and Andriopoulos 2014).
Further, for changing in the culture of the organization, Cummings and Worley’s six-step
change management should be implemented. As the theory of Burnes determined that culture
cannot be changed but can be modified so that working environment can be improved by the
management (Cummings and Worley 2014). The Cummings and workers sex step change
management determined that to implement change in any organization 3 steps need to be
followed firstly the change need to be motivated by creating a vision or generating political
support. Secondly, the transition of the change should be process and finally the change should
be sustained so that process can be made effective (Hornstein 2015). Further, with change in the
culture of the organization, change should also be introduced in process and communication
skills as the company was prepared my metering four different firms having four different
mindset of employees (Cummings, Bridgman and Brown 2015). Therefore to minimize the risk
of conduct and difference, change management should be included in the process of the
organization. For these purpose, the Prosci's three step process should be used. The three phase
process had steps such as preparing for change, managing change and reinforcing change. These
three steps were inclusive of nine steps such as assessing the readiness of the organization for the

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change and for that using effective communication planning (Hornstein 2015). The managers
should be provided with training related to the process and sponsor related roadmaps should be
fixed. Furthermore, resistant management process should ne utilized to provide training to each
employees and after the process, feedback Should be collected and corrective action should also
be taken against any foul practice. After this, the model provides opportunity to review the
process and reinforce change in the organization (Hayes 2014).
Style of management and organization change
According to Burke (2013), management is a process that help to manage and organize
activities of any organization and help them to achieve their defined objectives. There are several
roles that the managers are destined to play in an organization and it is their management style
that determines their ability to handle any adverse situation. Hence, it is a type or leadership style
that the managers use to handle organizational situations. (Wheelen et al. 2017) There are 6 type
of management style that the managers use for their leadership purpose within organizations.
These are Directive, Authoritative, Affiliation, Participative, pacesetting and coaching
management style. The directive style of management is applied with an objective of immediate
compliance from the employees (Dale 2015). The manager following this management style are
dominating and closely controls the employees. Their motivation process also composed of
threats and disciplines. This is an important leadership style when deviations are really and
people need a strong leader. Managers who use the second leadership style Authoritative, are
directive and have clear vision regarding the process. They are able to provide clear direction to
the employees by staying firm and fair and motivates them passionately by providing them their
task performances feedback (Chaudhry and Javed 2012). The third management style affiliative
has the objective of creating peace and harmony amongst employees and leaders this

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leadershipprioritizesemployees over tasks and hence is able to avoid conflicts and build good
relationship with them this leadership style helps to motivate employees through counselling.
Participative management style depends on making commitments and takes decision depending
on the consensus among the employees. These managers take input from the employees, and
encourage employees to provide input for decision-making (Dale3 2015). Further, their style of
motivation is also different as they provide rewards to the employees for motivation. Pacesetting
style of management has the primary objective of accomplishing tasks to a high standard of
excellence and for the purpose, these managers perform task on their own and sets example for
the employees to perform tasks like them using self-direction. The final management style,
coaching has the primary objective of long-term professional development of employees
(Wheelen et al. 2017). These type of managers are development oriented and helps or encourages
employees to develop their strengths and improve their performance. It is very important for the
managers to understand the time and situation when different management style should be used.
Managers should change their styles according to the circumstances that they are presented with.
There are four quadrants of situational leadership, which is based on the amount of support and
direction needed. The first quadrant telling determines the need of high amount of direction, as
the employees are unable to understand the process (Burke 2013). The second quadrant
delegating is about the guidance when the employees learn about the process, whereas the third
quadrant is participation in which the employees have the potential to achieve success but
requires support from the leader for direction. The final quadrant is selling in which employees
require less support and high guidance to achieve personal and organizational target. These
diverse styles depend on the circumstances and the connection behavior (amount of support
required) and task behavior (amount of guidance required). In this organization, depending on

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the organization and employee structure and culture, participative and coaching management
style was used (Dale 2015). AS the organization was developed from a merger of big firms of
different countries having different names, cultures and working experience, the common leader
of the organization provided a clear example through which, the manager was able to unite the
organization and motivated the employees to go through the change and bring success to the
company. Further, they also utilized leadership technique such as transformational and
transactional leadership to form a bigger and better workplace (Chaudhry and Javed 2012).
Transactional leadership is based on agreement with accessible directorial goals and
performance prospect using competence management and the use of rewards and penalty as
feedback (Odumeru and Ogbonna 2013). The leaders of transactional leadership style are task
and result oriented. Especially effectual under strict time and resource limitation and in highly
specified projects, this approach adheres to the status. Hence, using this leadership technique the
managers can take closer look at the performance of the employees (Clarke 2013). On the other
hand, transformational leadership focuses on employee motivation and engagement so that their
performance can be increased and their self-value can be enhanced. The leaders in this leadership
style focuses on the performance of the leaders so that people following them can follow their
footsteps (Dumdum, Lowe and Avolio 2013). A transformational approach focuses on person’s
strengths and weaknesses of employees and on enhancing their potential and their obligation to
organizational goals. For KPMG, the4 leaders and managers used the blend of transactional and
transformational leadership style and made one comprehensive approach using the best aspects
from these leadership and management styles (Ejere and Ugochukwu 2013). Where the best
aspect of transactional leadership that is the exchange of focus between leader and followers was
taken, on the other hand, from transformational leadership the aim of leader to help their

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employees beyond their level and help them to achieve their personal target was also included in
the leadership style. However, they do not limit themselves to one approach and depending on
the objectives and the situation, they moved from using one approach to the other as needed
(Clarke 2013). One big advantage of the comprehensive leadership style was the manager's
capability to retain employees and customers. Using transformational leadership, they were fully
engaged with people and satisfied their needs as well as the organization's needs (Dumdum,
Lowe and Avolio 2013).
Conclusion
Organizational change is a very important process that helps to achieve sustainable
development, improve performance and address different issues that hampers the organizations
success. Employees and customers are crucial factors for change management as they are the one
that drives the change and implements it in the process. Therefore, it is the duty of the managers
and leaders to decrease the number of resistance and conflicts so that change management can be
smoothly implemented in the process. KPMG is a global network of auditory and advisory firm
that helps large businesses with their legal and taxable matters. However, this company also has
to go through change management to achieve present success. Burnes theory of Change
management determines that there are three concepts the modern organizations should
implement in their process such as postmodernism, realism and complexity perspective. using
these three concepts the organization implemented change in the organizational culture, using
comings and Worley’s six type of change management. Further, in the assignment, different
management styles and leadership approaches have been discussed which were used in KPMG
Cyprus for transforming and changing the organizational process and culture.

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