Health Pak Transformational Change Management: A Detailed Report

This report provides a comprehensive analysis of transformational change management within Health Pak, a New Zealand-based packaging company. It assesses the need for change across system, process, and people levels, highlighting the challenges posed by high product segmentation, localization costs, and supply chain inefficiencies. The report explores change management models, ultimately selecting Kotter's 8-step model for its strategic approach. A detailed action plan is presented, outlining steps to establish urgency, build a guiding coalition, develop a vision and strategy, communicate the vision, empower employees, generate short-term wins, consolidate gains, and anchor new approaches in the culture. The plan addresses key objectives such as retaining sales volumes, reducing localization costs, enhancing supply chain management, and fostering a responsive organizational culture. The report emphasizes the importance of transformational leadership in driving and sustaining change within Health Pak.

1Health Pak transformational change management
Running head: HEALTH PAK TRANSFORMATIONAL CHANGE MANAGEMENT
Health Pak transformational change management
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2Health Pak transformational change management
Executive summary
This report concerns with change management that involve the system, process and
people as well. It analyzes two models of change that could take place within Health Pak
company. It applies the Kotter change model on Health Pak through the implementation of a
written action plan to be communicated to the stakeholders by clarifying the detailed steps of the
plan and the required resources.

3Health Pak transformational change management
Contents
Introduction......................................................................................................................................4
Task 1: Transformation needs assessment.......................................................................................5
1.1 System change........................................................................................................................5
1.2 Process change......................................................................................................................6
1.3 People change........................................................................................................................7
Task 2: Transformation frameworks and models............................................................................8
2.1 Approaches and models of change management...................................................................8
2.2 The selected Kotter’s model of change management and its justification...........................10
Task 3: Health Pak action plan......................................................................................................10
a. The need for transformation…...............................................................................................10
b.Creating a vision of transformation & strategy……………………………………………..11
c.Stakeholder change management……………………………………………………………13
d.Communication strategy plan………………………………………………………………. 15
Conclusions....................................................................................................................................16
References......................................................................................................................................18

4Health Pak transformational change management
Introduction
Organizational change takes place during the business lifecycle. Changes are present all
the time, the matter that requires organizations to regularly modify their strategies, processes and
structures to remain competitive in the dynamic business environment. The degree of the
required organizational transformation differs according to the nature, severity, scope and speed
of the change (Hernaus, 2008).
The Health Pak Company was established 60 years ago in New Zealand. It represents the
largest packaging company in the country and considered a leading supplier of guest products to
be delivered to hotels, motels and airlines. Also, it exports to the world market (Health Pak
Company, 2016).
This report analyzes the two models of change that could take place within Health Pak. It
applies the Kotter change model on Health Pak through the implementation of a written action
plan to be communicated with the stakeholders.

5Health Pak transformational change management
Task 1: Transformation needs assessment
1.1 System change
a. Identification of system change
Organizations are considered as systems that could range between a simple and a very
complex framework. Every system has three major components, the inputs, processing and
outputs. The system inputs are the organizational resources that could take the physical or the
intangible form. These resources go along the business process to transform them from raw
materials to products and services that could be sold to the customers. The business process
could be enhanced when the stakeholders' feedback is considered in the process development
(Saxena, 2009). Systems consist of subsystems that act in harmony to achieve the organizational
goals. Organizations as systems are not isolated from the changes that take place in the outside
environment. They interact and respond to the changes through anticipating future changes by
making assumptions and creating alternative plans for the future to exploit the opportunities.
Also, organizations define their core competencies to be able to create and sustain their
competitive advantages. Process reengineering could benefit in the situation of complex
problems that require structural changes, unlike the process improvement that requires small
changes (Jansen 2014).
Accordingly, the case of Health Pak requires process re-engineering to be able to respond
to the market challenging dynamics, especially in the value-based segment. The high product
segmentation and high localization are costly as well, considering that the sales volumes are
deteriorating and expected to continue to decrease, this system of product customization should
be changed.

6Health Pak transformational change management
b. Prepare a performance and Objective for change
According to Blumenthal and Haspeslagh (1994), as cited in Hernaus (2008), there are
three types of organizational transformation, including operational improvement, strategic
transformation and corporate self-renewal program.
Health Pak system re-engineering is considered among its organizational operational
improvement. It considers ideas restructuring, moving the organizational boundaries and change
the information flow within the system that facilitates achieving the company objective of the
segmentation and localization system change is to retain the high sales volumes and reduce the
cost of localization.
1.2 Process change
a. Identification of process change
Organizational transformation requires a comprehensive methodology to critically
addresses the process design components to be able to create a long-term change. Zook & Allen
(2001) as cited in Hernaus (2008), argue that there is not a particular model that could be used in
conducting transitional process-based design. Although, about (5-10)% of profitable business
organizations succeeded in transforming their core business during the past decade. Edosomwan
(1996) as cited in Hernaus (2008), developed an integrative model that involves 6 R's in the
transformation process re-engineering; requirements (customers, suppliers, services, process
owners, products,); rethink (systems, structures, processes, rules, procedures, technologies);
redesign (the system as a whole, process optimization, reducing waste, output); retool (supply
systems, technology, transformation models); reevaluate (goals, results, metrics); realization
(opportunities, needs, strengths, challenges, threats).

7Health Pak transformational change management
The process reengineering requires a leader who is aware of the certain parts of the
process that needs to be changed in a timely manner. The fast based changing environment
requires the flexibility in managing each situation with the appropriate management tool (Jansen
2014).
Health Pak should make process re-engineer, especially in its supply chain. A large
number of logistics providers is not recommended because it lost its scale efficiencies. Dealing
with few suppliers is more beneficial to the company in order to gain price and quality
advantages that enhance its whole supply chain and increases efficiency.
b. Prepare a performance and Objective for change
Health Pak seeks to make self-renewal by creating organizational relationships to be able
to adapt to the changing environment that guarantees the elimination of performance gaps in the
future (Hernaus, 2008). The objective of the process reengineering is to enhance the supply
chain management by reducing the number of suppliers to gain competitive advantage. Dealing
with the suppliers as partners maintain a long-term relationship, standardizes the product quality
and assures a stream of supply materials in a timely manner.
1.3 People change
a. Identification of people change
In business, change takes place on the individual, group and organizational levels. It is a
continuous process that cannot be stopped. That is why a flexible leadership skills should take
place and have the necessary power to flexibly manage the different varying situations (Ajmal et
al., 2012). The transitional change requires change agents that could be formal leaders or

8Health Pak transformational change management
informal powers of the employees to successfully implement the necessary change (Magsaysay
& Hechanova, 2017).
The best leadership style that could be applied in Health Pak is the transformational
leadership. They enjoy a high level of morals, empower their employees and satisfy their higher
needs. The Health Pak staff needs to trust their leaders that is why the transformational leader is
the best style to manage change in the company (Yahaya & Ebrahim, 2016; Amanchukwu,
Stanley, & Ololube, 2015).
b. Prepare a performance and Objective for change
Transformational leaders strive to maintain a culture that assures the employees' well-
being. Every situation required certain leadership behavior to flexibly manages it and maintain
the employees' job satisfaction. The organizational transitional change is a complex process that
needs to be managed carefully to achieve its predefined goals (Kazimoto, 2013).
The objective of people change is to quickly and responsively manage the change that is
expected to arrive at Health Pak in the future through the transformational capabilities of the
leaders.
Task 2: Transformation frameworks and models
2.1 Approaches and models of change management
Many approaches take place in analyzing the change management, although the best
known and applicable models are Lewin's change management model and Kotter change model.
a. Lewin's change management model
 The model stages: This model consists of three stages of unfreeze, move towards the desired
goal and refreeze. The unfreeze stage witnesses the organizational goals' setting to change.

9Health Pak transformational change management
The leaders do their best efforts to minimize the resistance to change. In the second stage, the
proper actions are taken to enable the new changes to take place. The third stage witnesses
change implementation and creating a new reward system (Bukłaha, 2014).
 The model advantages: It enables the organization to move from the status quo to a new
future desired state that strengths its market and financial positions. Also, it enables the
employees and their leaders to look forward to the change and get prepared for it.
Accordingly, change represents a big motivation to the employees rather than a challenge
that threatens them (Rajan & Ganesan, 2017).
 The model disadvantages: The staff members keep comparing the benefits of the old system
and the new system, the matter that consumes their energy and lowers their adaptation level.
Also, some of the staff members could lose self-esteem due to cognitive restructuring, which
needs quick response to manage the employees' morals (Rajan & Ganesan, 2017).
b. Kotter change model
 The model stages: Kotter change model assumes that there are eight steps to change. The
model starts with establishing a sense of urgency, followed by building a guiding coalition,
then developing innovation vision and strategy, then communicating them with the
organizational staff, then employees should be empowered, then generating short-term wins,
followed by implementing more change and achieving gains and finally, a new culture takes
place (Rajan & Ganesan, 2017).
 The model advantages: The model provides a clear definition of the change stages to
facilitate the change process that leaves no room for mistakes and ensures safe
transformation process. Also, it focuses on preparing people to change to gain their support
the matter that ensures their satisfaction and trust (Imran et al., 2017).

10Health Pak transformational change management
 The model disadvantages: It is a lengthy process of change that could take time, the matter
that is useful only in the long-term change. Also, some steps could be ignored in the case of
short-term and when a quick change is required (Imran et al., 2017).
2.2 The selected Kotter’s model of change management and its justification
Kotter model could be used as a strategic change management tool, it enables the
organization to change its vision and carefully drives it through the transformation process. It
assumes that the organization should create a sense of urgency for implementing the change to
be accepted by people and driven by them as well to achieve the new goals (Roh, Turkulainen,
Whipple, & Swink, 2017).
Health Pak has already established the sense of urgency for change by clarifying its bad
position in the market and the necessary changes required to be implemented on the system,
process and people levels to avoid future losses and survive in the market.
Task 3: Health Pak action plan
a. The need for transformation
Health Pak witnesses a bad performance and lower profits because of the large number of
suppliers that it finds difficulties in dealing with them, paying high salary packages above the
market average and gives its employees extra allowances of working hours, its operation in
highly segmented market and localization impose huge efforts on the company processes to
fulfill the mass customization process. Also, the promotional policy and the distribution process
are not effective and require to be changed. The change management objectives are as follows:
 To retain the high sales volumes and reduce the cost of localization.

11Health Pak transformational change management
 To enhance the supply chain management by reducing the number of suppliers to gain
competitive advantage.
 To quickly and responsively manage the change that is expected to arrive to Health Pak in
the future through the transformational capabilities of the leaders.
Kotter's eight steps strategic model of change implementation was selected to critically
review the change process of Health Pak. The figure (1), shows the 8 step model.
Figure 1: Kotter's change model
The planning process starts with establishing a sense of urgency among the managers,
leaders and employees who act as change agents and involve in change implementation. The
resistance to change is expected and the CEO responsibility is to establish a sense of urgency that
could involve creating an artificial financial loss to show the severity of the current business
situation and the necessity for change. This stage aims to eliminate any sort of complexity.
b.Creating a vision of transformation & strategy
In this stage, the new vision of the company has been developed to reflect the future
orientation of the company. The Health Pak new vision is "The leading global packaging

12Health Pak transformational change management
supplier". The strategies of accomplishing this vision are defined by setting the resources, efforts
and time required for implementing the strategies.
c.The guiding team requirements
i. The behavioral qualities: After assuring that the team appreciates the change process, this
stage represents the union of most successful change agents that guide the team with power,
expertise, credibility and formal leadership authority to provide transformational leadership
and guidance. In this stage, the group efforts are formalized and gave the power to lead the
future changes as shown in figure (2).
Figure 2: Characteristics of the guiding coalition
ii. The ethical considerations: Ethical factors involve being honest with others in
communicating information about the transformational change. Also, to show respect to
others, including the individuals, law and organizational standards. In addition to protecting
the company secret information and devote ethical attitude towards the environment
(Cameron & Quinn, 2011).
iii. The cultural considerations: The cultural factors should be considered when implementing
the change strategy. The employees should have shared values when dealing with
stakeholders, including care about customers, work for quality rather than quantity, customer
satisfaction has the top priority and after sales service is guaranteed to maintain the customer
loyalty (Raineri, 2011; Cameron & Quinn, 2011).