Multinational Firm Strategies and Change Management

This assignment delves into the complexities of multinational corporations by examining their strategic approaches. Students will analyze how multinational firms structure their organizations, implement change management practices, and adapt their marketing strategies to operate effectively in diverse global markets. The provided research papers offer insights into various aspects of multinational firm operations and provide a foundation for critical analysis and discussion.

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MANAGEMENT OF CHANGE IN MULTINATIONAL FIRMS
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Table of Contents
Introduction................................................................................................................................2
Background information on diversity and the nature of the international business...................2
Theoretical models of change for multinational firms...............................................................3
Lewin’s Model........................................................................................................................3
ADKAR Model......................................................................................................................5
Kotter Model..........................................................................................................................7
McKinsey 7s Model...............................................................................................................8
Conclusion..................................................................................................................................9
List of References....................................................................................................................10

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Introduction
With the technological advancements and adoption in the global business arena,
diversity management is a vital aspect that should be adopted by a company with the aim of
remaining effective in the competitive global market. In a systematic review, Shah, Hasnu,
and Butt (2016) point out that any local, regional, or international firm seeking to succeed in
business should embrace diversity toward their business thinking, strategies, styles of
leadership, as well as in their business activities and innovation strategies. The same study
denotes that diversity is no longer on making numbers but is focused on how the organization
authentically treats its stakeholders down the foundation of the business model adopted. As a
result, diversity has become a time-sensitive imperative in the current business environment.
This paper hence seeks to evaluate the theoretical models of change that can be adopted by
business executives with the aim of transforming ways of working within their multinational
firms to meet the desired business goals.
Background information on diversity and the nature of the international business
Recognizing the need for diversity in a workforce is a value that is expected of all
company executives and leaders. In a systematic study, Akinyi (2011) points out that the
ongoing process of globalization in the social, political, and economic facets have led to the
significant increase in the cross-cultural interpersonal contract. In other words, intensified
internationalization in the global economic arena has been achieved through joint ventures,
alliance as well as acquisition and cross-border mergers as pointed out by Hamraz, Caldwell,
Wynn, and Clarkson (2013, p. 676). The same study denotes that top most global
organizations all across the world are made up of cultural and ethnic differences within the
working environment. It is because business managers and executives have realized the

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importance of making a business environment broad and diverse to effectively reach the
target customers. As a result, Masiero and Campomar (2016) point out that globalizing a
diverse population requires a very intellectual dialogue all across the workforce to ensure
effective change in productivity and performance in the business is realized. As a result,
many studies recommend the adoption of proven and effective theoretical models that can
effect change in both regional and multinational firms. However, the scope of this paper will
focus on multinational firms only.
Theoretical models of change for multinational firms
Lewin’s Model
Lewin’s Model is a change management model that is known for its popularity and
efficiency when adopted both locally and internationally in the business management
processes. The model was developed by Kurt Lewin, a physicist and social scientist who used
the changing states of an ice block to explain the organizational and structural change
(Lindberg 2013). In his study, Lewin observed that a block of ice cube has the ability to
change its physical states from the solid form to the liquid form through a process known as
unfreezing, also called melting in the modern science. At the liquid state, it is very easy to
control it into the shape one desires, and this is the stage referred to like the change stage. The
new form solidifies into the required shape through a process known as freezing. The model
consists of three steps that are unfreezing, change and the freezing stage.
In a systematic study, Lapatinas (2015) points out that the Lewin’s model has been
adopted as a management strategy by many international executives with the aim of
transforming the performance of the workforce as well as the overall organizational
performance. In adopting the model, the study denotes that the management always starts by
preparing people of the changes that are coming, a stage known as unfreezing. For instance,

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the international business arena is characterized by diversity in culture, language, race, taste
and preferences, and lifestyle among other vital business aspects of diversity as pointed out
by Luo and Jiang (2014, p. 134). The unfreezing stage is the initial stage that consists of the
psychological preparation of the employees of the change in an organization. In other words,
using the model as a tool of change requires the organization to ensure it practices regular and
proper training and development on issues that can directly or indirectly impact change.
It involves of breaking the current culture and building the new future culture that is
projected to be effective in achieving the target goals and objectives of the company
according to Lapatinas (2015, p. 427). Therefore, the training the workforce of essential
aspects of diversity in business will enable them to evaluate and understand that the existing
culture cannot continue propelling the company to its future success and must be changed in
accordance with the nature of the international business arena. At this stage, the need for the
change is determined by surveying the current status of the organization and understanding
the main reasons why the change as to take place. In a systematic study, Akinyi (2011) points
out that the change leader must also understand the doubts and concerns of the change and
ensure that there is strong support from the senior leadership. The change stage is where the
main action takes place after removing the uncertainties from their minds. It usually takes
longer period since many people take much and different time to embrace and adapt to any
change.
For the success of the change, real leadership is very paramount to steer forward the
successful adoption of the model as it involves numerous communications steps on the
beneficial factors of the intended change. This is through dispelling any rumors of biases
through honesty and being open and giving everyone in the company opportunity to
participate hence creating empowerment among the staffs. Refreezing is the last stage, where
by the organization internalize and institutionalize the aspects of the change. At this juncture,

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the company ensures that the aspects of the changes are used all the time with all the
confident and stable employees. Therefore, the leaders should make sure that they create a
feedback system to enable them to collect any concerns and reactions of the employees.
These feedbacks will assist them to act appropriately to any resistance or any challenge to the
implementation. They should also realize the short-term wins and reward them to motivate
more employees to adopt and embrace the change.
ADKAR Model
ADKAR model is an abbreviation that stands for various aspects of change in
organizational management. These include 1) Awareness of the need for change, 2) Desire
for the change, 3) Knowledge about the change, 4) Ability to adapt and incorporate the
change and 5) Reinforcement of the change into action (Van & Sun 2011, p.64). ADKAR is a
goal oriented model which focuses on the steps taken to acquire a particular purpose
concerning an individual to achieve the organizational goal. The model aims at making
everyone to understand that change happens at the individual level within an organization
since most of the employees tend to be rigid to change and are easily associated with the
negative side of change as pointed out by Luo and Jiang (2014, p. 138).
In other words, it is necessary that every organizational manager with the focus on
international business success should create awareness of the change to the employees. Van
and Sun (2011) point out that this can effectively be achieved by proper communication to
the employees while taking time to positively respond to their concerns with honesty and
openness based on the reality of the international business. The leaders make sure that the
information passed is connected to the individual and company benefits, an aspect that will
help the employees to focus on working towards change for the benefit of the organization as
well as their profession. For example, Google Inc, conducted a one-week departmental
training to ensure that the employees were convinced on the need of change to a more

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effective and updated software that could globally be adopted to change the global business
arena. With the help of its motivated and able engineers, the company was able to develop
different accounting systems that have since been adopted in almost every large business
globally according to Lindberg (2013, p. 3). In other words, it was easy to achieve since the
management created the desire for participation from each employee in the change process by
explaining the roles of each employee’s roles and duties.
The process should be through one-on-one communication with the employee, a
strategy that can enable the management to read the reactions and concerns of each employee
which can then be addressed in the process of change to ensure everyone is motivated
towards achieving the set goals. The change management leader disseminates all information
that is required to make the change through a knowledge-building program. The change
program should only be after achieving awareness and desire for change from the employees
otherwise the staffs will be less concerned with the knowledge-building process. The
knowledge-building process is achieved through training, experience, and mentoring as
pointed out by Enderwick (2011, p. 89).
Adopting the model hence help the change management leader to determine and
identify the ability of every individual in their performance on respective tasks and allocate a
duty that each employee can do best to achieve the desired change. After the achieving the
ability reinforcement, the leaders reinforce the change into action by averting the employees
from the old habits into the new ones. However, adopting the model requires the management
to ensure that there is enough time for the process since people are always slow and tend to
be very rigid when it comes to change. ADKAR model can thus be adopted in a multinational
organization with the aim of effectively planning for any change through diagnosing the
failure of the current situation and creating the need for that particular change.

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Kotter Model
Kotter Model is an-eight step process framework adopted with the aim of ensuring
effective organizational change as pointed out by Shiliro (2012). The same study denotes that
model was created by John Kotter, who believed that continuous innovativeness,
technological and social-economic changes are the driving forces to help in ensuring an
organization effectively adopts change strategies that can ensure it remains relevant in the
competitive business market. The eight steps are; Creation of the sense of urgency that will
result in the motivation of all staffs to do their work. At this stage, the change leader
identifies the future situation of the company by examining the available opportunities that
are exploitable. For instance, stiff competition, change in customer preferences, changing
lifestyles, and technological innovations are some of the vital aspects that can help a manager
strategize effectively on the need of change.
The second step is forming a powerful coalition of the related persons and
departments such as job status and experts who are emotionally committed to the change. In
other words, Kotter Model suggest that driving an organization to change will require aspects
like hiring motivational speakers and experts in specific areas that the organization would
desire to focus their change. The third stage is the creation of the vision for change through
linking all the ideas to make a clear one. The creation of a clear vision enables every
participant to understand the reason behind the modification. Step four is a frequent and
powerful communication of the change to all the people that will be impacted, by addressing
honestly all the concerns raised. The fifth stage is the removal of any obstacle that might be
on the way of the implementation such as identifying the resistance individuals and engaging
them more suitable while rewarding those that embrace the change. The sixth stage is the
creation of short-term wins that will help to motivate all persons to the main aim of the
modification. The little achievements assist in reducing critics the seventh step is building for

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the change by increasing the number of the short-term wins. Through this, the success of the
change can be determined as all the employees will have a focus on the best system to be
adopted by the firm as well as the expected benefits as pointed out by Lindberg (2013, p. 3).
The last step is the anchoring of the change in the company’s culture by ensuring that
every day and every personnel adhere to the new changes. In a systematic study, Grosse
(2014) denotes that culture is a diversity aspect that directly affects the internal and external
performance of an organization. For instance, the international business arena often involves
different global businesses expanding into new markets with the aim of expanding their
customer base. In the process, the employees should be well aware that there is a possibility
of interacting with diverse individuals with different cultures towards the goods and services
offered by the organization. As a result, adopting Kotter Model enables the organization to be
prepared on cultural aspects that affect the performance of the business locally as well as in
the international market.
McKinsey 7s Model
McKinsey 7s Model developed by Tom Peters, Robert Waterman and Julien Philips
who were the McKinsey consultants in 1980s (Ravanfa 2015).The model has attracted
academic practitioners in strategic planning since it addresses more on coordination than the
structure in an organization. The model consists of 7 elements grouped into two categories
that are hard and soft. The main aim of this model was to show how these seven elements can
be brought into alignment with one another to achieve effectiveness in an organization. The
hard elements are the core of the company that can be identified and influenced by the
relevant stakeholders of an organization (Hanafizadeh & Ravasan 2011, p. 30). The Hard
elements are strategy, structure, and system, while, the soft elements, on the other hand, are
difficult to describe and are always influenced by the culture rather than the management.
The soft elements include style, staff, and skills and shared values.

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The strategy defines company’s approaches that are well developed and articulated to
enable it to achieve a competitive market share. All strategies, therefore, should align with
the company’s values, vision, and mission. The structure is the way a company subdivides
into departments and represented by particular leaders from the most senior to the casual
employee. Systems are the set procedures that control the daily activities and decision making
in a company. Skills are the know-how and abilities of different employees in the firm. Staffs
are the core of business; they are both the management and non-management personnel. Style
refers on how the resources’ in a company are controlled to achieve the objective while
Shared values represent the norms, values, and standard in the business that controls the
actions of each employee. Both Waterman and Peters observed that for the success of the
change, the leader must be able to identify all the elements that are not aligning. Then the
company determines the best alignment of the elements and weather the modifications should
be made and then doing the best action. The model is a procedural process that ensures
success only when the all seven elements of the company are aligned correctly.
Conclusion
In conclusion, multinational firms tend to have business activities on two or more
countries. In other words, the simple baseline is that such firms have production and sales
operations in multiple countries. At the same time, the diversity in location of the business
often comes with diversity in different aspects. They include the geographical conditions
such as terrain, languages spoken by the people, culture of the target customers as well as
their taste and preferences and lifestyles, and nature of the business suitable for such
locations among other factors. However, not all international firms often succeed in their
industry of operation, an aspect that forces other to operate under struggles that may lead to
their closure when not timely monitored. Therefore, the management and executives of the

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international firms are required to equip their employees with the desire and need for change
towards efficiency and sustainability of the organization when need arises. McKinsey 7s
Model, Kotter Model, ADKAR model, and Lewin’s Model can be adopted by multinational
firms to ensure their business not only survive but become efficient and sustainable in their
specific industry of operation.

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List of References
Akinyi, B,W. (2011). Organizational Change In Multinational Corporations: A Case Study
Of Ecolab- Nalco Merger In Kenya. International Journal of Enterprise Information Systems,
7(4), pp.23-63.
Enderwick, P 2011, 'Multinational Corporate Restructuring and International
Competitiveness', California Management Review, 32, 1, pp. 44-58, Business Source
Premier, EBSCOhost, viewed 24 August 2017.
Grosse, R, 2014. The Theory of the Multinational Firm, in Michael A. Hitt, Joseph L.C.
Cheng (ed.) "Theories of the Multinational Enterprise: Diversity, Complexity and Relevance"
(Advances in International Management. 165(8),83 - 97
Hamraz, B, & Clarkson, P 2015, 'Industrial evaluation of FBS Linkage – a method to support
engineering change management', Journal Of Engineering Design, 26, 1-3, pp. 24-47,
Academic Search Premier, EBSCOhost, viewed 24 August 2017.
Hamraz, B, Caldwell, N, Wynn, D, & Clarkson, P 2013, 'Requirements-based development
of an improved engineering change management method', Journal Of Engineering Design,
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Hanafizadeh, P. and Ravasan, A. (2011). A McKinsey 7S Model-Based Framework for ERP
Readiness Assessment. International Journal of Enterprise Information Systems, 7(4), pp.23-
63.

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Lapatinas, A 2015, 'Multinational versus National Firms on Labour Adjustment Costs: A
Structural Approach', Journal Of Labor Research, 36, 4, pp. 427-441, SPORTDiscus with
Full Text, EBSCOhost, viewed 24 August 2017.
Lindberg, D. (2013). Change Management Tools for Systemic Results. Change Management:
An International Journal, 12(3), pp.1-6.
Luo, Y, & Jiang, H 2014, 'Effective Public Relations Leadership in Organizational Change: A
Study of Multinationals in Mainland China', Journal Of Public Relations Research, 26, 2, pp.
134-160, Communication & Mass Media Complete, EBSCOhost, viewed 24 August 2017.
Masiero, G, & Campomar, M 2016, 'Marketing performance of subsidiaries operating abroad:
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11, 3, pp. 64-77, Academic Search Premier, EBSCOhost, viewed 24 August 2017.
Ravanfar, M. (2015). Analyzing Organizational Structure based on 7s model of McKinsey.
International Journal of Academic Research in Business and Social Sciences, 5(5).
Schilirò, D. (2012). Structural Change and Models of Structural Analysis: Theories,
Principles and Methods. Journal of Advanced Research in Law and Economics, III(2).
Shah, S, Hasnu, S, & Butt, S 2016, 'The Impact of Working Capital Policy on Financial
Performance of Manufacturing Companies in Developing Countries: A Comparative
Analysis of Domestic and Multinational Firms', Abasyn University Journal Of Social
Sciences, 9, 1, pp. 189-200, Academic Search Premier, EBSCOhost, viewed 24 August 2017.
Van de Ven, A. and Sun, K. (2011). Breakdowns in Implementing Models of Organization
Change. Academy of Management Perspectives, 25(3), pp.58-74.