Organizational Change Management

This document discusses the concept of organizational change management and its importance in improving the financial conditions of a company. It explores the key drivers of change, both external and internal, and highlights the need for restructuring the hierarchical system to enhance communication and employee involvement. The document also suggests the McKinsey 7-S model as a suitable change management approach.

Running head: ORGANIZATIONAL CHANGE MANAGEMENT
ORGANIZATIONAL CHANGE MANAGEMENT
Name of the Student
Name of the University
Author Note

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Response to Part 1: Organizational strategy
The finance company, ACY Capital operates in Sydney but majority of the client base is
located in China. The company reflects a vertical hierarchical structure, which involves
instructing employees for managerial decisions. The company have strict policies of abiding
by the concept of authority. The authoritative strategy of ACY Capital restricted flexibility
and effective communication flow in the company. The financial scenario of the company
was negatively depleting with the decreasing customer base and stricter overseas policies of
money transfer. The rate of client base and revenue inflow is decreasing from the source
company. The company decided to acquire a Sydney based Australian company, ‘Synergy
Financial Markets’ as a response for the financial decline. The change management, which
best suits ACY Capital is McKinsey 7-S model, which, if implemented strategically, can
improve the financial conditions of the organization (Frankland et al. 2016).
The key drivers of change for the financial company, ACY Capital is:
External drivers
Customers- The depleting customer base in China, which was considered as the main source
of revenue for the company influenced the requirement for change in the organization.
Customer base was decreasing because of the inefficient hierarchical system in the
organization. The application of authoritative decision making, marked the lack of
communication flow and low employee involvement of the company. Changing business
environment and customer preferences in China marked the need for change management of
the financial company, ACY Capital.
Government- The changes the business environment of China and the stricter policy
implementation of transfer policy overseas in regards with the money transfer influenced the
need for change management in the organization.

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Business environment- The business environment of China changed with the application of
governmental policies and changing preferences of customers, which acted as an influence in
regards to the decision of change management in the financial organization, ACY Capital.
Internal drivers
Employee dissatisfaction- The lack of communication and gap between the managerial
decisions and employee involvement reflected the cause of employee dissatisfaction (Al-
Haddad and Kotnour 2015). Employee dissatisfaction was also based on the factor of
hierarchical structure of the company, which restricted the opinion of the employees. The
lack of communication among the interdepartmental system also marked the cause of
employee dissatisfaction.
Organizational system- The organizational culture of the financial organization, ACY Capital
was based on hierarchical culture. The culture restricted the involvement of employees in
organizational decision-making process (Hayes 2018).
Capabilities- The financial organization lacked the capability of developing flexibility,
employee satisfaction and integrating acquisition strategies (Radda, Majidadi and Akanno
2015). The incapability of developing employee involvement in relation to policy or system
structuring also marked the requirement of change management in the organization.
Financial resources- The financial resources of the organization started exhausting with the
decline in sales in China, which was considered as the base of revenue for the organization.
The declining financial resources of the organization influenced the requirement of change
management.

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Flow Diagram
Fig.: Flow diagram of change management
(Source: Created by author)

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Response to Part 2: Organizational Structure
The financial organization ACY Capital was established in the year 2013. The company
operates in Sydney and have two subsidiary offices in China. China was considered as the
main source of revenue for the business of the financial company. Majority of the workforce
belong to the Chinese community. The structure of the organization was hierarchical in
nature which presented an authoritative decision making structure where the structure
restricted the involvement of employees for the process of policy formation and decision-
making. The organizational structure was centralized and did not involve flexibility for the
subsidiaries of China. The structured lacked one of the crucial necessities of running a
business, communication. The organization lacked effective communication flow amongst
management and employees as well as ineffective communication flow between
interdepartmental employees. The hierarchical organizational structure isolated individual
teams of the organization and reduces the presence of cooperation in the communication flow
of the organization (Schindler and Hilborn 2015). The organizational structure of the
organization lacked efficiency and capabilities in regards to the adjustments and flexibility
for the changing international market. The earlier structure lacked communication flow,
flexibility, employee involvement, and employee satisfaction and adjustment capabilities in
regards to the international presence. The international presence is bound to reflect changes in
relation to governmental policies, international business laws and customer preferences,
where centralized system cannot suffice the financial standards of international customers.
The concerns identified in the internal and external environment of the business resulted in a
desperate need for change management. The change management model, which can best suit
the financial condition of the financial organization, ACY Capital is McKinsey 7-S model.
McKinsey 7-S model depicts the seven stages of strategizing and implementing change
management. The first step is strategizing the objective of change management, which in this

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case can be the strategy of shifting to local markets from international market as well as the
strategy of business acquisition (Stark 2015). The next steps are to structure the plan based on
the current financial and workforce policies and introduce changes (if necessary). The
financial organization, ACY Capital reflects the need for restructuring the organization’s
hierarchical system and cultural setting for implementing the change management effectively.
The restructuring process should address the organizational concerns of flexibility and
employee involvement. Structuring the system is another step, which will allow the
organization to break through the decentralized system (Sætren and Laumann 2017).
Ensuring a common positive shared value is crucial for the business in both home country
and in international business. Staff involvement and developing the skills of the staff
members by incorporating effective communication process is significant for the change
management (Alvesson and Sveningsson 2015). Skill development can be facilitated by the
implication of effective leadership practices and flexible policy structure (Hayes 2018).
Change management was not adopted positively and reciprocated the motive by reflecting
negative impact on the strategy of acquisition due to the inflexible structure of the
organisation.

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