HSBC Change Management Initiative: Analysis and Evaluation

This report provides an in-depth analysis of HSBC's change management initiatives, focusing on the bank's efforts to adapt to a globalized market and enhance its competitive advantage. It examines the core culture of HSBC, utilizing the cultural web model to identify factors influencing change management success. The report explores employee engagement strategies, the challenges of resistance to change, and the importance of awareness and strategic evaluation. It also delves into key performance indicators used to measure the effectiveness of the change management process. The analysis covers the application of frameworks like Kotter's theory and the McKinsey 7-S model to HSBC's change initiatives. The report discusses the drivers necessitating change, the responsibilities of participants, and the appropriate leadership styles for change scenarios within the organization. It provides a comprehensive overview of the initiatives undertaken, barriers faced, and the strategies employed to overcome these challenges. This report also highlights the importance of employee engagement, the risks associated with expansion, and the mitigation strategies used to address resistance to change.

Running head: CHANGE MANAGEMENT INITIATIVE
Change Management Initiative
Name of the Student
Name of the University
Author Notes:

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Table of Contents
Introduction................................................................................................................................2
Change management Overview.................................................................................................2
Core Culture...............................................................................................................................4
Resistance to change..................................................................................................................7
Awareness to change and strategy evaluation........................................................................8
Key Performance indicators.................................................................................................10
Conclusion................................................................................................................................10
REFERENCES.........................................................................................................................12

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Introduction
The Hong Kong and Shanghai banking Corporation better known as HSBC is of the
largest banks in the world. They have earned the title of the “World’s Local Bank” for their
steads that they have made in the terms of Glocalisation (Koller, 2007). It can be said that an
organisation has been successful in achieving glocalisation when they have been able to
achieve the feat of Thinking globally and acting locally (Porto and Belmonte, 2014). The
latter should be the vision of multinational corporations across the world. Thus, it can be
opined that, this drive of the company has separated the company form its competition.
HSBC was established in 1865 and since then they have operated in the market and have
established branches all across the globe. The bank has a customer base of approximately one
hundred million and have approximately 9500 offices across the various countries. The
company was recognised as one of the first global banks after they formulated the “Managing
for Value”, campaign back in 1998. The vision was formulated by the bank in order to
maximise stakeholder satisfaction. It has been found out that the company have been subject
to change even since the beginning of the twenty first century. The company have
incorporated various change management initiatives which are targeted towards increasing
the corporate governance, boosting the internal processes within various branches that the
bank is established in. The paper will discuss the change management initiatives that have
been incorporated by the company in terms of employee engagement and other. The paper
will also highlight the barriers to change that have been faced within the company, the
awareness to change that the company has promoted and the key performance indicators of
the change management process.

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Change management Overview
A change initiative is taken up in order to change the operations that take place within
an organisation. HSBC initiated a change management campaign in order to gain competitive
advantage in the market. A change initiative plan is needed when companies expand beyond
the territories (Shirey, 2013). Thus, the requirement for a change management plan was
evident within the HSBC when they opted to expand their business to Brazil, China and
India. Other than gaining competitive advantage, the change initiative was undertaken by the
by the bank in order to enforce their value proposition of the company in comparison to the
competitors. The aim of the bank was to increase the base of customers, reduce the costs that
are associated with their services, automate the processes, improve the delivery of their
service and engage the employees of the organisation, as the organisation realised that
employee engagement can help in achievement of the latter (Breevaart et al., 2014).
Furthermore, the company also included environmental sustainability in their initiatives. The
company rightfully identified the importance of employee engagement and included a four
step model which comprised of monitoring the attitude of the staff, enforcing the importance
of Managing for value and educating the employees about the motives of the company.
Moreover, the initiative can be justified as the company found out that they needed to carry
out the aforementioned strategies, as they identified that the employees were expressing
negative attitudes towards the change initiatives that were being undertaken by the company,
and it was also identified that the employee failed to realise the managing for value
proposition of the company.
It can be opined that the company can implement the change management plan
according to the McKinsey 7-S model and Kotter’s theory. The initiatives of the company
can be aligned perfectly to the aforementioned perspectives of change management. The
Kotter’s theory revolves around processes such as creating an urgency for change within the

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organisation, creating coalition, identifying issues and formulating a strategic vision,
engaging the employees, reduction of hindrance to the smooth operation of achievement of
goals related to change, followed by the establishment of short term and long term goals
(Henry et al., 2017). The latter can be termed as a Systems perspective of Change
management which is a perspective of change management which is a by-product of
interconnected components in the organisation. On the other hand, the company can opt to
abide by the 7-S change management perspective which involves, clear identification of the
objectives, identifying and developing the strategies to manage the change that is imbedded
in the culture and social aspects within the organisation (Ravanfar, 2015). Hence, it can be
considered as an Institutional Perspective of management. It has been opined if the above
strategies are carried out successfully in, the organisation will be able to gain competitiveness
in the industry. This perspective to change management also involves panning of the
strategies for the future of the company. Thus, by incorporating the above mentioned factors,
HSBC will be able to ensure that that they can effectively manage the change management
initiatives within the organisation.
Core Culture
The organisation culture that exists within an organisation, determine their core
competencies (Cadden, Marshall & Cao 2013). The culture that exists within an organisation,
is responsible for the maintaining the ethical standards within the organisation (Kuntz et al.,
2013). It determines, the level of engagement of the employees in the organisation (Slack,
Corlett & Morris, 2015). Furthermore, the culture of an organisation is the key factor that
contribute to the sustainability of the strategic change management plan of the company. It
has been found that the company have faced hindrances in terms of the initiating the change
within the organisation. The employees if the organisation where not motivated enough to
incorporate the change initiative that was being undertaken by the company. The issues that

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exist with the organisation can be evaluated using the cultural web model. According to the
cultural web model, contains six elements that have been summarised by a common factor
known as a paradigm that can be termed as situation that is an assimilation of scientific and
non-scientific factors that contribute to the success of the change management initiative
(Johnson & Scholes, 1999). Following are the components of the paradigm;
Stories: It resembles the current impression that the stakeholders have about the organisation.
The past activities that have been carried out by the organisation along with the current
policies within the organisation resemble this factor. Consideration of this factor is important
as it helps in determining the goodwill of the culture of the company. The level of employee
engagement and the existent culture within HSBC has been identified as the reason for the
change management initiative of the company.
Routines: The level of expectation of the employee and the customers of the company
determine the effectiveness of the routines within HSBC. The employees of the organisation
showed resistance to the change of according to the motives of the company. Thus, the
change management initiative was taken up by the company.
Symbols: HSBC is positioned in the market as the local bank of the world as a result of the
glocalisation practices of the company (Agrawal, 2014). Furthermore, the company has been
accredited as the biggest organisation in the world.
Control mechanism: It can be opined that the sustainability initiative of the company has one
of the biggest repertoire of the company. The bank have existence of various operational
division through which they determine the nature of services which is directed towards the
customers. The services that are provided by the company are moulded according to the
global standards of the companies. Thus it can be said that the prices are controlled by the
consumers of the services of the company.

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Hierarchy structure: Even though the authority exists in the hand of the senior management
of the company, the former implements policies across the different functional department of
the organisation that are directed towards the sustainability of the stakeholder. The company
pays direct attention to the needs of the employees and have implemented plans towards the
engagement of the employees. They also realise importance in sustainable initiatives and thus
have implemented various sustainable initiatives.
The key drivers to change has been identified as the sustainable initiative towards the
sustainable initiatives towards the environment. The other key driver to successful change has
been identified as the initiative of the company to engage the employees through the strategic
policies that they have implemented successfully in the organisation. The new organisational
culture that has been implemented in the organisation have been identified as the change
initiative undertaken by the company in order to expand out if the borders of the companies
that they are already established in. The company has formulated favourable strategies
regarding the Human Resource policies and employee welfare. The company was subject to
hostile activity from the unions of the country and an astounding rate of attrition within the
company. This is when the company realised the importance of human resource strategies.
The bank suffered through loss of profitability, however, they compensated the employees by
implementing policies such as financial support and flexibility to the employees.
Furthermore, the company included strategies through which they educated the employee
about the ultimate goals of the company which helped the company in boosting the rate of
success of the company concerning achievement of the strategic goals.
The activities that are being performed by the company are effective on their own. However,
it can be suggested that the company should include the practice of the nudge theory in their
change initiative. The nudge theory includes the following stages:

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 Clear definition of the goals of the change
 Options backed up by evidence
 Justification of the change initiative
 Compilation of feedback
 Identification of limitations and hindrances to the operations.
 Alignment with the goals of the change in the short run through which the long term
goals of the company can be achieved.
Resistance to change
HSBC who were supposedly seeking for superior competitive advantage in the
market, decided to move their sales, customer services, sales and technology to countries
such as India, Brazil and China. The risk associated with the expansion move of the company
is deemed to be risky for the company as the capital that was invested in the company
amounted between USD $20 to USD $30 million. Thus, existing employee in the division
that were being offshored to the Asian and the South American country, created speculation
within the employees. Thus, speculation resulted in the following;
1. Job security issues: It was supposedly perceived by the employees that shifting of the
departments of offshore countries results in speculation within the employee
regarding security of their roles (Noe et al., 2017). It is a general concern of the
employees that creation of a similar division abroad results in loss of jobs of the other
department who perform the same tasks.
2. Unknown territories: The aim of the company was to move into foreign territories in
order to gain competitive advantage. However, high amount of capital is seen to be
invested in the company. Thus, the employees are supposedly unaware about the
sustainability of the company in the long run.

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3. Fear of catastrophe: The Company aims to offshore some parts of their operations.
At the time of expansion, countries such as India, China and Brazil were completely
new territories for HSBC. Thus, there existed speculation regarding the success and
failure of the project.
The barriers that have been identified as a result of the change initiative of the company have
been identified as a result of the expansion initiatives of the company. However, the
resistance to change can be mitigated by carrying out the following;
1. Market Research: Market research helps in identifying information about the market
that the company aim to operate in. The company can gain awareness about the
existent external environment of the market they aim to operate in. Moreover, the
company can identify their internal strength and weaknesses through which they can
implement policies which can help in identifying the favourable opportunities for the
operations of the company overseas.
2. Establishment of a communication framework: Since the employees of the
organisation have speculation over aspects such as job retention and uncertainty of
their job roles, it can be opined that the company should include a proper
communication framework. This will ensure, that the ideas of the company are
directly communicated to the management and the employees who are concerned.
Once the employees are communicated directly about the ideas of the company, they
can focus their efforts to the achievement of the goals that have been propounded by
the management.
3. Establishment of favourable organisational policies: The policies that should be
established within the organisation should favour the employees. This would ensure,
that the employees are assured about their roles in the organisation. It would help in

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reducing the speculation related to job security and thus, the employees will be able to
direct their efforts towards their actual job roles.
Awareness to change and strategy evaluation
Kalpan and Norton’s balanced scorecard is an assimilation of the four factors that
formulate the vision and strategy of the company (Kaplan & Norton, 1992). The perspectives
include, the internal processes within the organisation that include the policies and
framework that effect the degree of processes within the organisation, and the employee
welfare and engagement strategies (Kaplan & Norton, 2004). The capacity of the
organisation, the financial competency of the organisation that determine the long term
sustainability of the organisation and the customer orientation of the organisation. The latter
resembles the strategies and policies that are undertaken by the organisation in order to
satisfy the customers and the ultimate need of the organisation that is the generation of
revenue.
It was found that the main problem with the operations of the company was due to the
internal processes within the organisation. As a result of the change motive that was
formulated, the employee speculated. The speculation was regarding the implications of the
offshoring strategy that was taken up by HDFC. The company has job designations that look
into the discontent of the employees, who were able to identify the grievance that the
employees were showcasing. As a result of the discontent of the employees, the management
identified that incidence of the same could lead to demotivation within the employees.
Demotivation in a job can be for numerous reasons. One of the most common factors for
demotivation in a job is as a result of the lack of security in the job. The need for security has
been identified a one of the most important factors that contribute towards the motivation of
the employees. Thus, the aforementioned strategies have been taken up by the management to
mitigate the same.

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The strategies that have been taken up by the organisation, revolve around welfare of
the employees and the CSFR activities. The chairman of the company identified that they had
to develop a strategy through which they will be able maintain balance between the
innovative and conservative business practices. The management decided to contribute to the
inter-cultural and socio cultural activities within the organisation. HDSC has been recognised
as company who have pioneered in terms of multiculturalism. They have also implemented a
smooth communication framework within the company through which they will be educate
the employees and identify their needs according to which they can implement their future
policies for the welfare of the same.
Key Performance indicators
The key performance indicators highlight the most significant factors that have
contributed to the viability of the case study. Following were key performance indicators that
contributed to the case study;
1. Education of the employees in terms of the organisational goals that were established.
Managing for value.
2. Green initiative that was taken up by company, carbon neutral state of the company.
3. Implementation of the policies that contribute to employee engagement.
4. The expansion orientation of the company through which they aim to offshore some
of the functional divisions to countries such as Brazil, China and India.
5. Transparency in the policies of the organisation that contribute to hindrance free
communication of goals and policies of the organisation to every functional
department of the organisation.

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Conclusion
HSBC has been recognised as the biggest banking entity in the world. They have
acted as pioneers in the banking industry. They have excelled in the motive of
internationalisation as a result of their glocalisation strategy. The company aimed to expand
to the foreign markets such as Brazil, China and India. The company used the offshore
strategy to move the department of sales, technology and customer services to the
aforementioned countries. As a result of the same, a certain degree of dissatisfaction and
discontent was received by the management from the part of the employee. The management
decided to formulate strategies though which they highlighted their motive of employee
benefits and welfare. Furthermore, they have incorporated strategies of environmental
sustainability. They were recognised as a company who gained success in attaining a carbon
neural state. It is expected that the company will perform favourably in the future as a result
of the policies implemented in the favour of the employees.