Analyzing Change Management in HSBC: MGT301, KOI, T319 Report

This report provides a comprehensive analysis of change management within the Hongkong and Shanghai Banking Corporation (HSBC). It explores the key drivers of change, including economic factors, technological advancements, and internal organizational shifts. The report examines how HSBC has addressed and overcome resistance to change through various strategies and communication techniques. It delves into the application of change management theories and models, specifically Lewin's Change Management Model and the McKinsey 7-S Model, to understand how HSBC navigates organizational transitions. Furthermore, the report investigates the role of leadership and management styles in implementing change effectively and considers the application of the triple bottom line theory for sustainable development. The analysis highlights HSBC's approach to adapting to market trends, improving operational efficiency, and achieving its strategic goals. The report provides a detailed overview of the challenges faced by HSBC, the strategies employed to manage these challenges, and the outcomes achieved. It offers insights into how HSBC has successfully managed change to maintain its competitive advantage and achieve its business objectives.

Running head: MANAGING CHANGE IN HSBC
MANAGING CHANGE IN HSBC
Name of the Student
Name of the University
Author Note

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Executive Summary
In this paper the author discusses about the change that is happening in the Hongkong
Shanghai Banking Corporation. The key drivers of change that is increasing the business,
reducing cost and the resistance that the company is facing for change. The paper also
discusses about the models and theories used for managing change; Lewin’s Model and
McKinsey 7 Stages. The leadership and management style and how it helped the bank in
implementation of change is also mentioned. The triple bottom line theory for sustainable
development is also examined upon.

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Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Key Drivers of Change...........................................................................................................3
Overcoming Resistance to Change........................................................................................4
Problems in the Organisation.................................................................................................5
Change Management Theory.................................................................................................5
Lewin’s Change Management Model................................................................................5
McKinsey 7 S Model.........................................................................................................6
Application of Change Management Theories..................................................................6
Triple Bottom Line.................................................................................................................7
Leadership Style.....................................................................................................................8
Conclusion..................................................................................................................................9
Recommendation........................................................................................................................9

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Introduction
The Hongkong and Shanghai Banking Corporation is one of the leading banks in the
world. It started in 1865 as a local bank catering to the international needs of the clients. Its
headquarters are in London with over 9500 offices across the world. There have been many
changes that the bank has gone through since the mid-nineties. HSBC faced many difficulties
and resistance while changing and implementing new ideas that would benefit the whole
company. Resistance towards change can be defined as an unwillingness of the employee to
adopt the change due to the employees not wanting to get out of their comfort zones, learn
new skills. There is a trouble that people have in establishing a vision of the life that would
be after the change; this creates a fear of the unknown and the uncertainty that lies ahead that
discourages people from changing. (Our history, 2020)
The aim of the paper is to understand the managing of change done by HSBC, the
change theories and models used by the bank in reducing the resistance and implementing it
as smoothly as possible, the leadership and the managing style of the bank in the
implementation of the change. To know how the company is using the triple bottom line
theory for a cleaner future.
Discussion
There are many factors that have to be kept in the mind while changing the policies
and the operations of a company. Change is inevitable in the company; to keep up with the
trend in the market, the advancement in the technology and the economic conditions of the
market place changes have to be made. Change can be created either externally or internally.
Adapting to the changes before them being forced on the company helps the company in
getting a competitive advantage in the market (Damanpour, Sanchez‐Henriquez, and Chiu.,
2018). HSBC has always reacted to the changes with an early start to gain more advantages
out of the change.
Key Drivers of Change
HSBC has had many changes in the management system and its operation due to
changes in the economy, the instability of the government, inflation and recession as well as
the changes in the technologies. The internal factors that bring about change were hiring of
new people, employees leaving the organisation, offshoring of the work and implementation

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of new management techniques. The company throughout the years has introduced certain
new policies for betterment of itself. The main reasons or factors for which the change was
brought about in the bank was to reduce the operating cost, increase the customer base,
double the value of the shareholders and to increase the core business. The company was
driven to change to increase its value and to complete the goals that was set by them
(Schoenmaker, and Peek., 2014).
Overcoming Resistance to Change
Resistance to change by the employees will always occur when there is a change
being implemented. There are many ways through which a company can overcome the
hesitance of the employees regarding the changes that are being made in the organisation.
The company to reduce resistance can have a communication that is transparent for
employees to voice their concern, must take into account the data presented on the change,
identifying the advantages of the change and motivating the employees in taking a part in the
change (Cummings, and Worley., 2014).
HSBC as has undergone numerous changes and has faced many resistances towards
those changes; the company used certain techniques and motivations for the resistance to be
as low as possible. The bank while implementing a change made sure it was according to the
business goal of the bank to reduce the resistance. The company took time in implementing
the change as it first tested it in a smaller environment so that people could get accustomed to
it; they sympathised with the employees in their grievances regarding the change and helped
them in transitioning through it. The company created a transparent loop of communication
that allowed it to receive feedback on the change and implement it in a way that is much
more suitable for the employees (Cameron, and Green., 2019). HSBC made sure that the
employees knew what their roles would be after the change and also attended to the fears of
the people in the organisation.
HSBC was successful in reducing the resistance that it faced for the change. The
techniques applied by them were useful and helped them have a working environment
without chaos. The bank did not want to increase the resistance that it had been facing, for it
the bank applied the managing strategies and the models of change. The success of the bank
can be measured by seeing the employee turnover and the operations of the bank. HSBC had
to outsource some of the work from China, India and Brazil, as there was cheap labour
available there. The employees were resistance towards it and unions were formed in its

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protest, however the bank managed it by giving employee benefits and compensations.
During the implementation of the managing for value plan by the bank the employees were
hesitant in learning new techniques and the company had to face a lot of resistance, it was
overcome by motivating the employees, having transparent communication and making them
understand the bigger objective (Managing Change, 2020).
Problems in the Organisation
There a number of problems that arose in HSBC in the years of its working. The
major problems that the bank had to face are:
 Government Regulations
 Economic Recessions
 Resistance for Change
 The Geo-Political Scenarios.
Change Management Theory
Change management theory or models are critical in implementing and managing
change. It aids to avoid implementing the changes that are not relevant or certain random
methods that do not contribute in the business goal. The change management theories can be
used to understand the problems that are being faced the organisation and the changes that
can be done in order to avoid them. There are many change management models that a
company can apply and use to its benefit, however before choosing a model a company must
keep the change model in lieu of the goal set out by them and whether the change
implemented is useful to the organisation and in accordance with its goal (Imran, et al.,
2016).
Lewin’s Change Management Model
According to Cummings, Bridgman, and Brown, (2016) Lewin’s change model is the
model that is the most easy to understand and use. This change management model is widely
used since its origin in the year 1950 by Kurt Lewin. In this model, the change in the
organisation is showcased through the help of the change in the states if the ice blocks. This
model has three parts to understand the change.
 Unfreeze: It is the first stage in the process and in this stage the company
must be prepared for the change and to understand as to why the change is

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necessary. This step helps in managing the resistance that is faced towards the
change.
 Change: In this step the change is implemented and carried out. This stage
takes the longest as embracing new changes and techniques takes time. In this
stage a good leadership and management style is required to carry out the
change in the most efficient manner.
 Refreeze: This is the last stage of this method and by this stage the change is
implemented. In this stage the company begins to return back to the normal
routines and the work. Here the co-operation of the people is required to
ensure that the change implemented is used all the time even after the
objectivity has been achieved. In this stage with stability and reassurance, the
employees become comfortable with the change.
McKinsey 7 S Model
In this model, the organisation uses seven steps to manage change. It is one of the
most relevant model. It was developed by certain consultants that worked in the McKinsey &
Company in the year 1980. The seven stages are as follows
 Strategy: In this stage the strategy or the plan is created to accomplish the
goals and the targets of the company.
 Structure: It is the stage where the structure of the organisation or the
organisational hierarchy is taken into consideration.
 Systems: In this stage the way the tasks are done in the organisation are
looked at for implementing a change.
 Shared Values: It is the core values of an organisation according to which it
functions.
 Style: It is the manner or the way in which a leadership and changes are
adopted or implemented in the organisation.
 Staff: Staff is the workforce of the organisation. It also asses the capabilities
of the employees to work.
 Skill: It refers to the skills and knowledge that the staff members have. It
affects the change that is being implemented on the organisation. (Shaqrah,
2018)

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Application of Change Management Theories
HSBC has applied these models to help in managing the change that implemented by
it. The Lewin’s model is used by the bank to understand where the changes must be done and
to implement it in a way that is suitable for the employees and faces the least resistance. The
Lewin’s method helps the bank prepare for the change and be ready for it to be implemented.
The McKinsey model addresses the in depth analysis of the company and its working.
It bridges the gap between the practical and the emotional component of the company for
better transitioning. HSBC used this model to have an efficient transition of employees
during the change. It aided the bank in addressing all the factors that were important in bring
a change and offered a direction for the change. Though the bank also had to face certain
disruptions, since the steps are interlinked and one-step failing meant all the steps failing
(Ravanfar, 2015).
By using these change theories the company identified the problems that were being
faced by them. These problems had cropped up due to various reasons such as the bank not
following the steps of the theory. HSBC in the start did not pay attention to the response of
the employees regarding the changes instead they tried to solve the problems in a quick
manner without giving time for the employees to adjust to the change that was being
implemented. The bank was quick in realising the problems, thus it got a head start from its
competitors during the recession as it could cut down its cost of operation and increase the
core business of the organisation (Kuipers, et al., 2014).
Triple Bottom Line
The triple bottom line is theory that suggests that companies focus on the social and
environmental matters as much as they focus on the profit. It is a form of sustainable
development that is a source of meeting the needs of the present generation without
hampering the future generations to meet their needs. There are three parts of the theory that
is economic, social and environmental line (McWilliams, et al., 2016).
 Economic Line: It is the measurement of the net profit or loss of the
company. The profit or loss of a company can be measured by making a
balance sheet.
 Social Line: It is the social responsibility of a company that it has to achieve
through the operations and working.

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 Environmental Line: It is what the company does for the planet and its
sustenance (Sarkis and Dhavale, 2015)
The bank is the one of the first banks to take an initiative towards a sustainable
development and implement the triple bottom line theory. HSBC is trying to provide finances
that will help in achieving a low-carbon economy; they also help the clients in transitioning
and managing the risk. Providing sustainable finance the bank has to provide credit and have
lending facilities and capital structure. Having a sustainable finance assists the business in
developing new technologies, infrastructure and energy sources for the future. The bank is
also providing fast developing green bonds in the market for climate and environmental
projects. The financial services provided by the bank are provided keeping in mind the
economic growth as well as the impact on the people and the planet. HSBC is taking
initiatives to reduce its waste and to provide a cleaner future for the new generation.
From the above discussion, we can infer that the management is concerned with the
implementation of the triple bottom line theory because of the initiative taken by the bank in
reducing the carbon economy and moving towards a sustainable future. The bank in 2019
was named as the ‘World’s most sustainable bank’ and it was also given an accolade for the
Best Bank in Sustainable Finance in both the Middle-East and Asia at the Euromoney Award
for Excellence (Sustainable Finance, 2020).
Leadership Style
An efficient leadership style and management is imporatant for any organisation
while implementing change. There are many styles of leadership that an organisation can
choose keeping in mind its goal, objective and outcome. Different organisations require
different styles of leadership (Nanjundeswaraswamy, and Swamy., 2014). A good leadership
and management style is necessary to reduce the resistance that a company faces towards the
changes that are being formulated.
According to Lai and Chen, (2019) leadership in HSBC has four pillars that which
helps the business in being competitive and motivated to perform better. The four pillars are
loyalty, hard work, commitments, and integrity. The leadership style in the bank has effective
and transparent communication that makes the employees feel as a part of the organisation.
The transparency has made the company achieve its target. This style of leadership that is
cooperative and transparent has helped the company in reducing the resistance towards the

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change that were being made in the organisation. The leadership of the bank is flexible thus;
it could manage change easily while delivering performance from the employees.
Conclusion
From the above discussion, it can be concluded that the bank had a number of changes
that it had to face. The key drivers for the change were increasing the core business, reducing
cost of operation and increasing the value of the shareholders. The bank also had to face
resistance towards the change which were overcome by the bank using different techniques
and efficient leadership. Sustainable development is a major undertaking taken by the bank.
HSBC to have a good CSR follows the triple bottom line theory that includes the economy,
social and global factors. The company used two managing change theories to implement the
changes to face less resistance from the employees. These change theories and models helped
the compny in identifying the problems and the solutions to overcome the problems.
Recommendation
There are certain things that the bank could to increase its value.
 The bank instead of applying the McKinsey model could use another theory in
which the steps were not interlinked with each other.
 The bank could change its pricing policy to increase the core business.
 Collect data from the market to know about the trends and implement the
changes according to the trend.

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