Change Management Strategies at HSBC: A Detailed Analysis

This report presents a comprehensive case study analysis of change management strategies implemented by The Hong Kong and Shanghai Banking Corporation (HSBC). It explores the nature and drivers of change, the corporate culture of HSBC, and the bank's approach to managing employee resistance. The analysis includes an examination of key performance indicators and the application of change management models, such as Kurt Lewin's model, to facilitate successful organizational transformation. The report also delves into the barriers to change and the six change approaches proposed by Kotter & Schlesinger. Furthermore, it discusses the roles and responsibilities within the change process, highlighting leadership styles and their impact on the adoption of new practices. The study emphasizes the importance of communication, employee involvement, and supportive leadership in navigating organizational change effectively, ultimately aiming to provide insights into HSBC's ability to maintain a competitive advantage in a dynamic business environment.

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Change Management
Hong Kong and Shanghai Banking Corporation.
Student’s Name
6/18/2019

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Executive Summary
Change is inevitable in the organization and successful management of change allows
the company to sustain its competitive advantage in the complex business environment. The
report describes the case study analysis of The Hong Kong and Shanghai Banking
Corporation. It covers the analysis of the key performance indicators and the strategies
adopted by HSBC in managing change in the organization. It also covers the strategies
adopted to overcome the resistance of the employees and the culture of the organization. It
will include the application of change management model for successful implementation of
change and covers the barriers to change.

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Contents
Introduction................................................................................................................................5
1. Nature and Drivers of change management...........................................................................5
2. Corporate culture of HSBC....................................................................................................7
Strength of change culture.....................................................................................................8
Roles and responsibilities in adoption of new culture...........................................................9
3. Managing resistance of employees........................................................................................9
Barriers to change................................................................................................................10
Six change approaches.........................................................................................................10
4. Key performance indicators.................................................................................................12
Conclusion................................................................................................................................13
References................................................................................................................................14

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Introduction
Due to the complexities in the business environment, it becomes imperative for the
business organizations to successfully implement the change in the organization and advance
its business operations. It allows the bank to improve its performance and maintain a
competitive advantage in comparison to its competitors. The changes in the technology and
the pressure of the government and the competitors drive the forces to implement change in
the organization strategy and the business process (Hayes, 2018). In the additional
paragraphs of the report, it will comprise the change adopted by the Hong Kong and
Shanghai Banking Corporation.
The Hong Kong and Shanghai Banking Corporation was established in the year 1865
and is headquartered in London. This banking institution has grown into the largest global
banking institution that serves a wide range of products and services to a customer base of
approximately 100 million customers. In order to sustain its competitive advantage, the
corporation has focused on making timely changes in its organizational strategy and process
and was able to manage the resistance and develop the organizational culture that supports
change. It has received the award of excellence for making continuous initiatives to
implement change in organization and attain higher profitability in the business (Graetz,
Rimmer, Smith & Lawrence, 2011).
1. Nature and Drivers of change management
Change is inevitable and one of the main forces behind improvement, strength, and
progress. The concept of change management involves the moving of the current state of the
organization through transition to the desired future state. It focuses on incorporating the
organization tools to help the individuals in making successful personal transitions that lead

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to the successful adoption of change. It helps the organization to sustain its competitive
advantage in the complex business world (Cameron & Green, 2015).
The main drivers for implementing change in the organization consist of the external
and internal factors. The internal factors include the cultural imperatives and dissatisfaction
among the leader and the employees. It also includes the capabilities and the resources of the
organization which will help in implementing successful change in the organization. The
external factors are the main factors that laid the underlying cause of the adoption of the
change in the organization. It includes the changes in the economic environment such as
stability of the economy and the fluctuation in the interest rates. It includes the increase in the
competition and the changing preferences and needs of the customers. The external forces
also include changes in the demand and supply of the raw material and the advancement in
the technologies (Jones & Pollitt, 2016).
For successful implementation of the organizational change, the bank can focus on
collecting the data and designing the metrics. It will help in selecting the time span and
avoiding the loss and frustration of momentum. The organization must focus on cultural
mapping which includes understanding the culture of the organization. Its existing paradigms
and the norms, values and the practices that help in understanding the management practices
and the behavior of the employees (Naheem, 2016).
Development of a project plan which acts as a framework to analyze where the
flexibility can be allowed and at what step the boundaries need not be crossed. It will lay a
clear plan for implementing the proposed change in the organization (Reason, 2016).
To undertake a change in the organization the leaders must focus on communicating
the need for implementing change. It must focus on persuading the employees and designing
an efficient reward system that helps in motivating the employees. It must provide job and

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income security during the adoption of the change in the organization. Adoption of such
techniques and tool will allow the bank to avoid the resistance of the employees towards
successful adoption of change (Tidd & Bessant, 2018).
2. The corporate culture of HSBC
The cultural-web model consists of the six interrelated elements that help in determining
the cultural issues faced by the bank.
1. Stories and Myths
HSBC is considered as the largest global banking institution that offers a wide range
of products and services. It adopts the changing culture when it focuses on growing its
business horizontally by realigning its value proposition offered to customers and
involving more employee engagement (Johnson & Scholes, 1999).
2. Rituals and Routines
At the initials stages of the bank, it is analyzed that the employees have a negative
attitude towards change and found difficulty in engaging with the organization
culture.
3. Symbols
HSBC is well recognized as a world’s local bank that focuses on continuous change
and innovation and has received excellence award for its services.
4. Control system
At the initial stages, the organization was tightly controlled by the leaders and does
not deliver the power to employees to participate in decision making and involved in
activities (Johnson & Scholes, 1999).
5. Organization structures

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HSBC follows a formal structure where the authority flows from top to bottom and
has tighter control over the actions of the employees which in turn restricts the
flexibility of employees.
6. Power structures
The powers under HSBC are held by higher-level managers and leaders. It is based
upon the level of position held by the person in the organization hierarchy.
From the above model, it is analyzed that the key drivers for change in the
organization include the resistance and the negative attitude of employees. The role of
government interventions and the fluctuations in the market.
In response to the key drivers for change, the bank focuses on adopting a new culture
model that focuses on educating the employees and addressing the issues faced by
them. It focused on motivating the employees and encouraging them to participate in
decision making (Jones & Pollitt, 2016).
Strength of change culture
The key strength of the model is to allow two pay communication and ensuring
transparency in the actions. It has developed workshops to provide learning to the employees
and increasing job satisfaction. It has opened the communication lines with the employees
and ensures transparency with its customers (Hossain & Khan, 2016).
The bank can apply Kurt Lewin’s change management model which covers three steps:
Unfreezing
In the first step, the leader will analyze the behavior of the employees towards the change and
will educate them to adopt the change. It will focus on avoiding the resistance of the
employees (Hussain et al, 2018).

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Changing
Under this, the bank will move towards bringing the transitions and implementing change. It
will focus on developing new learning and behaviors of employees (Hussain et al, 2018).
Refreezing
Under this step, the bank will ensure that the changes in the policies, procedures, norms are
accepted and stabilized (Hussain et al, 2018).
Roles and responsibilities in the adoption of a new culture
Role Activities and Responsibilities
Leader The leader of the bank will ensure that the
change is implemented and will focus on
developing new strategies and procedures. It
will hire change agents to undertake a
successful change in an organization.
Project Manager and divisional managers The managers will be responsible for
educating the employees and motivating
them to adopt to change. It will design the
workshops that promote learning of new
process and will take the employee feedback
to ascertain that the change is adopted in
management practices.
Employees The employees will ensure to successfully
implement the new practices and
communicate with the higher level managers.
3. Managing resistance of employees
The leaders of the bank must focus on adopting the combination of the transactional
and transformational style of leadership. The transformational leadership allows the leader to
inspire and motivate the employees in adopting change in the organization. It will allow in

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analyzing the needs, values, and beliefs of the employees and employing their charisma to
inspire them. It must adopt transactional leadership under which the leader must design
effective reward system to motivate the employees and develop long term relationship with
the employees. It must adopt a laissez-faire leadership style that allows the employees to
communicate and provide a constructive suggestion to implement innovation in the
organization. Engaging the employees with make them feel valued and more committed
towards the goals of the organization. It must focus on overcoming the opposition by
educating the employees towards the need to adopt change in the organization (Appelbaum,
Degbe, MacDonald & Nguyen-Quang, 2015).
Barriers to change
From the analysis of the case study, it is recorded that the main barriers towards
implementation of the change were lack of the communication strategy because it followed
the organization structure where there was one-way communication which did not encourage
the participation of the employees and does not engage them in the decision making the
process. This created dissatisfaction and resistance towards adoption of the change (Murrell,
Balan & Lentz, 2017).
The employees were not able to understand the complexities of the new
organizational strategies and the offshoring strategy of the bank increased the risk of job loss
and reduction in the income of the employees. This bad cultural shift creates dissatisfaction
among the employees and in turn, creates opposition in the adoption of change (Murrell,
Balan & Lentz, 2017).

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Six change approaches
The six change approaches technique is proposed by Kotter & Schlesinger to
overcome the resistance of the employees. It includes:
Education and communication
Under this, the bank must focus on educating the employees regarding the need to adopt the
change and making timely communication to avoid the resistance and making them
understand the importance to adopt change (Sacerdote, 2014).
Participation and involvement
To mitigate the resistance the bank must focus on involving the team members in designing
the strategies to adopt change in the organization.
Facilitation and support
This strategy involves providing the emotional and moral support to the employees and the
team members. It involves the delivery of efficient training and workshops to increase the
skills and competence of the workforce (Sacerdote, 2014).
Negotiation and agreement
To avoid the resistance the bank can provide the financial assistance and must negotiate to
encourage the employees in the adoption of change.
Manipulation and co-optation
Manipulation involves developing the ways to persuade the resistors and co-optation involves
assigning leaders to encourage the resistors and involving individuals in implementing
change (Sacerdote, 2014).

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Explicit and implicit coercion
It involves threating the employees using the external andinternal pressures to adopt change
in an organization.
4. Key performance indicators
HSBC adopted the four-step model to overcome the resistance of the employees under
which it provides training and encouraged the participation of the employees, educated them
to understand the need for change in the organization. It developed “together we win
campaign” under which it developed videos and audios and undertake question and answer
session with the management (Parmenter, 2015).
The offshoring strategy and the transparency in operations allowed the bank to retain
the interest of the customers and involving employees in the adoption of change. It helped the
bank in increasing profits and develops as a trustable institution for credit lending. The bank
focused on increasing the visibility and transparency that allowed the new approach to
finding a balance between conservative and innovative business practices related to credit
lending. The bank has adopted a number of sustainable initiatives that helped the bank to
become the first’s carbon neutral bank (Kaplan & Norton, 1992).
To evaluate the success of the change program the company can use the balanced
scorecard. It includes the four dimensions of the financial performance of the company, its
internal business process, it's capacity to learn and grow its customer service. The scorecard
will help the bank in analyzing its internal process and analyzing the current performance of
the company. It helps to develop the human resource. The company can use the balanced
scorecard strategy mapping under which it will visualize and communicate how to create
value for the company. It describes the cause and effect relationship and the last row of the

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map describes the organizational capability to improve the internal process of business and
finally achieving the financial and the customer perspectives (Kaplan & Norton, 2004).
Conclusion
From the above discussion, it is critical to note that change is inevitable and
successful management of change allows the company to sustain its competitive advantage. It
is analyzed that HSBC was successful in implementing change and overcome the resistance
of the employees by adopting the various techniques and tool to avoid resistance. The key
performance indicators allowed the company to sustain its competitive advantage and have
achieved the excellence award due to the adoption of the continuous change and innovation
and has turned into world’s local bank that delivers a wide range of the services and products
to the customers.