Graduate Diploma: Change Management in Stena Line Case Study

This case study examines the change management strategies employed by Stena Line, a major ferry company, focusing on the undercover investigation conducted by CEO Gunnar Blomdahl. The analysis identifies key factors driving change, including substandard customer service, flawed designs in new ferries, wage disparities, contractual uncertainties, and low profitability. The report explores techniques for organizational change, highlighting Blomdahl's transformational leadership style, and evaluates his leadership against Kotter's criteria. It also discusses strengths, weaknesses, and relevant theoretical models. The study concludes with recommendations based on Lewin's change management model, along with metrics for measuring the effectiveness of the proposed strategies, emphasizing the critical role of change management in organizational growth and development. The assignment is based on the Graduate Diploma in Applied Management CX770022 Business Transformation and Change module.

Running head: CASE STUDY: CHANGE MANAGEMENT IN STENA LINE
CASE STUDY: CHANGE MANAGEMENT IN STENA LINE
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1CASE STUDY: CHANGE MANAGEMENT IN STENA LINE
Executive Summary
Change management is the process of bringing about changes in the scope of the business
structure and processes of an organization. This report provides a case study on the
Undercover Boss, Gunnar Blomdahl, the CEO of the Stena Line ferry company. The various
key factors driving change within the organization have been identified and the techniques
that can be applied to counter these problems have also been discussed. Gunnar Blomdahl
shows a transformational leadership style, so the characteristics that make him so are also
evaluated with respect to the survey carried out by him. Finally, recommendations following
Lewin’s change management model have been provided with the metrics that can measure
the effect of the changes thus brought. In conclusion, it is mentioned how change
management is an essential element for the growth and development of an organization.

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Table of Contents
Introduction................................................................................................................................4
Analysis......................................................................................................................................5
Key factors driving change in Stena Line..............................................................................5
 Sub-standard customer service....................................................................................5
 Flawed design in new super-ferry...............................................................................5
 Disparity in wages among the crew.............................................................................5
 Contractual uncertainty...............................................................................................5
 Low profitability..........................................................................................................6
Techniques required for organizational change.....................................................................6
Leadership style of Gunnar Blomdahl...................................................................................7
Kotter’s criteria of effective leadership..............................................................................8
Strengths and weaknesses..................................................................................................9
Theoretical models...........................................................................................................10
Recommendation of change management strategy..............................................................11
Lewin’s change management theoretical model..............................................................11
Metrics for strategy used..................................................................................................12
Conclusion................................................................................................................................12
References................................................................................................................................14

3CASE STUDY: CHANGE MANAGEMENT IN STENA LINE
Introduction
The concept of change management encompasses the approaches taken by an
organization to bring about development in the organizational structure thereby catering to
the requirements of the customers as well as the employees (Hayes, 2018). The primary focus
of this report is to interpret the concept of change management with respect to the Swedish
ferry operator Stena Line and the strategies undertaken by the former CEO Gunnar Blomdahl
as an undercover boss to improve on functions of the organization. An analysis of
Blomdahl’s leadership style is also essential for the understanding of the techniques and tools
that should be implemented in order to bring about organizational changes and fix the
problems that is faced by the firm.
Stena Line, based in Sweden, is a ferry company that provides its services in various
countries like Denmark, United Kingdom, Germany Norway and other European countries
and incorporates within its operation 18-ferry courses (Stenaline.com, 2019). The former
CEO of Stena Line Gunnar Blomdahl had invested more than a billion pounds to make
various upgradations including the addition of ships, ports as well as introduction of two
large super ferries, Stena Hollandica and Stena Britannica. Additionally, investment was
made on two ports in Belfast and Cairnryan along with introduction of superfast ships to the
services provided in the Irish Sea (Kizielewicz, Haahti, Luković & Gračan, 2017). In 2012,
Channel 4 conducted a series titled ‘Undercover Boss’ in which one of the episodes featured
Blomdahl. In this episode, he carried out a survey, without giving out his real identity, to
observe the efficacy of functions in his organization. On doing so, it was discovered that
there were certain faulty areas of performance that needed prompt and efficient addressal.

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Analysis
Key factors driving change in Stena Line
In the survey carried out by the CEO of the Stena Line Ferry Company, it was found
that there were several challenges residing within the organizational structure and procedures
of the Company. These weaknesses operating within the Company can be recognized as the
key factors driving the change brought out by the CEO and can be listed as follows:
 Sub-standard customer service – Customer relations is a very important aspect in
any service oriented business organization like Stena Line. After the survey, it was
found out that the services provided to the customers was quite poor. It is so because
the requirements of the customers were not catered to with promptness and due
acknowledgement.
 Flawed design in new super-ferry – Another problem that was recognized was the
flawed design in the new super ferries that were launched in the North Sea, Stena
Hollandica and Stena Britannica. A huge amount of money and resources was
invested in the launching of these two super ferry services but due to the faulty
construction by the designers of these models, the expected services and profitability
could not be met (Grahn, Taljegård, Ehnberg & Karlsson, 2014).
 Disparity in wages among the crew – Equal wage system is an essential in any
business organization. In Stena Line, the foreign crewmembers who were recruited
within the vast organizational structure of the Company were not given wages as per
the minimum wage standards of UK (Seafarers, 2016). This caused a disparity among
the workers and thereby a sense of resentment, not allowing a smooth provision of
services.
 Contractual uncertainty – the profitable and successful operation of a business
organization can be ensured if the workers are contended in terms of payment and

5CASE STUDY: CHANGE MANAGEMENT IN STENA LINE
certainty of employment. However, a problem that was discovered by Gunnar
Blomdahl in Undercover Boss was that many of the employees in the Company were
working on a contractual basis thereby not giving them the assurance of employment.
Such an aspect raises moral questions about the functioning of a business
organization.
 Low profitability – Investments are made in business organizations with the
expectation of equal or high profitability. In this aspect, a problem encountered by the
CEO of Stena Line was that in spite of the huge investments of over one billion
pounds, the lack of customer services, faulty ferry ship designs and resentment among
the crewmembers disallowed the maximum utilization of resources, thereby reducing
profitability.
Techniques required for organizational change
To address the previously mentioned problems, there are a few techniques and tools
that can be used to bring about organizational change in the operational scope of the Stena
Line Company, which can be listed as follows:
 Transformational Leadership – A transformational leader is one who creates groups
among the organization according to the areas that require immediate attention
(McCleskey, 2014). Moreover, the role of a transformational leader is to incorporate a
vision and ideals among the various groups to guide them through inspiration. The
efforts made by Gunnar Blomdahl to identify the problems within the organizational
scope of his organization, makes him a transformational leader.
 Providing reasoning for change – Changes can be brought about from the very core of
organizational procedures through the provision of proper rationale to guide the
change (Cullen, Edwards, Casper & Gue, 2014). The leaders and CEO of Stena Line

6CASE STUDY: CHANGE MANAGEMENT IN STENA LINE
need to address the needs for change with the members of the Company so that they
can improve on their designated fields of operation.
 Participation – Another important element required to bring about profitable and
sustainable change within an organizational structure is the participation of all
employees (Hornstein, 2015). This participation requires them to individually
recognize the faulty areas and commit to support the change that is required in
bringing about a solution to those problems and weaknesses.
 Employee security – The success of any business organization is constructed out of
the combined efforts of the employees. In this aspect, the company Stena Line should
provide security of employment for every employee, foreign or native. This also calls
for equal wages as per the standards set by UK.
 Stimulation of employee activeness – Employee readiness in a business organization
ensures promptness towards the provision of customer services (Heyden et al., 2017).
According to the survey conducted by Gunnar Blomdahl, Stena Line displays a lack
in the field of customer services. This problem can be remedied by stimulating a
recognition for the changes required, thereby guaranteeing an increased amount of
promptness from the workers to provide services to the customers.
 Technological advancements – Another essential change required to bring about
profitability within a business organization is technological advancements (Coccia,
2016). These technological advancements will ensure the remediation of the faulty
designs in the new services provided by Stena Line.
Leadership style of Gunnar Blomdahl
Leaders exhibit different manners and patterns of behavior in order to influence and
affect the behavior of his or her followers. Leadership styles are the determinant factor that
impacts how an organization and its members strive to accomplish their goals and objectives

7CASE STUDY: CHANGE MANAGEMENT IN STENA LINE
(Renko, El Tarabishy, Carsrud, & Brännback, 2015). These include autocratic, team, cross-
cultural, facilitative, democratic, strategic, transformational and laissez-faire styles of
leadership.
Gunnar Blomdahl is an exemplary leader in his organization the Stena Line because
he made special efforts to inspect the operations of the crew and other employees to identify
the problems and address them adequately. In the following analysis, the criteria for effective
leadership will be discussed with respect to Gunnar Blomdahl and his leadership style will be
identified using theoretical models.
Kotter’s criteria of effective leadership
John Kotter, a leadership professor at Harvard Business School, has formulated
certain criteria that ensures the effectiveness of leadership towards driving change. Following
are the standards for effective leadership:
1. Setting direction – The role of the leader is to indicate a direction in which changes
are to be brought. While planning of the counter-measures is a procedure related to
management, the area of leadership encompasses the deliberation of the sources of
problem and their adequate addressal (Silva, 2016). Gunnar Blomdahl has been able
to identify the directions in which the changes need to be brought about. These
identified areas include an improvement in customer relations and services,
development of more efficient designs, providing employment security to the
employees and maintaining a parity in the wage structure of the crewmembers.
2. Aligning people – Interdependence is a key feature in modern organizations. In this
aspect, the role of a leader is to create linkages among employees so that they can
work in groups efficiently. Collaborative efforts can lead to the provision of prompt
attention to problems, facilitating their remedy. The Stena Line CEO, Gunnar

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Blomdahl can manage the challenges faced by his organization by aligning the
crewmembers and employees into groups that focus on specific problematic areas. In
doing so, all the problems will be addressed and solved duly.
3. Motivating people – The function of leadership is to bring about change. The
generation of energized behavior among the followers ensures their full participation
in the procedures of change. Successful motivation also ascertains the ability of the
employees to overcome challenges and difficulties (Algahtani, 2014). Gunnar
Blomdahl has been successful in motivating his employees and crewmembers by
recognizing their grievances and the moral questions that arose from the issues of
disparity in wages and lack of employee security. This has in turn made his leadership
style an effective one with respect to the criteria set by Kotter.
Strengths and weaknesses
The strengths in the leadership of the Stena Line CEO, Gunnar Blomdahl, are the
factors of employee motivation and appropriate recognition of problems in organizational
structure. The investments made by the company in the field of growth and development of
the organization did not achieve its expected profitability. However, by disguising himself as
Per Hansen, a Norwegian manager, he was able to interpret the ways in which the company
was failing at several key areas like customer services. The effectiveness of his leadership
lies in the way he dealt the encounter with problems and aimed at solving them.
However, there are certain weaknesses in his leadership skills that include the
involvement of the employees and crewmembers in the decision-making processes towards
change. In this way, Gunnar Blomdahl was ineffective in reaching out to the root of the
challenges and addressing them from the viewpoint of his employees.

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Theoretical models
There are several theoretical models that define the leadership styles of leaders in
various organizations. In this case, the model of transformational leadership can be applied to
the CEO of Stena Line, Gunnar Blomdahl.
The theory of transformational leadership brings within its purview, the capacity of a
leader to work in teams and recognize the requirements of change, thereby improvising a
vision for the purpose of guidance and inspiration towards the followers
(Nanjundeswaraswamy & Swamy, 2014). Transformational leadership also requires the
motivation of the followers to improve their job performance through a sense of collective
identity with the organization (Long, Yusof, Kowang & Heng, 2014).
Gunnar Blomdahl can be considered a transformational leader because of his display
of an array of characteristics. The CEO of Stena Line shows a low level of neuroticism
because of his lack of anxiety and stress relating to the problematic situation in service
provision. Blomdahl is able to maintain his calm and analyze the situations that need his
immediate attention. Furthermore, he also displays a high level of openness when it comes to
experiencing a role other than his usual managerial activities (Gillet & Vandenberghe, 2014).
The fact that he disguised himself as Per Hansen to survey the functioning of his organization
from the root-level shows that he is able open to interacting with the workers and
crewmembers in spite of his hierarchical position in the organization. Moreover, he also
expects to bring about change in the business strategies of Stena Line, depicting his ability to
adapt to such organizational changes. Blomdahl’s conscientiousness is also interpreted
through his identification of the problems faced by the workers and crewmembers regarding
the disparity in wages and lack of employment security. Moreover, the episode in Undercover
Boss also features his empathy towards a Filipino worker who had to come to terms with the
demise of his daughter while he was working. Blomdahl appreciates the pride and loyalty of

10CASE STUDY: CHANGE MANAGEMENT IN STENA LINE
his workers but at the same time he intends to improve their performance by bringing about
certain changes for the development of the organization. For these several characteristics,
Gunnar Blomdahl can be regarded as a transformational leader.
Recommendation of change management strategy
Certain recommendations can be provided as to how the problems faced in Stena Line
can be countered successfully through the Lewin’s change management model.
Lewin’s change management theoretical model
Lewin’s change management model involves the modification of the behavior of the
workers and employees in an organization. This follows a three-step process: unfreezing,
changing and freezing (Cummings, Bridgman & Brown, 2016).
In the stage of unfreezing, the workers are made to realize the problems and that a
change is about to commence. This step counters the anxiety, doubts and impatience working
in their minds, thereby providing them with a groundwork for the change in process
(Bartunek & Woodman, 2015). A participation on the part of the employees is essential to
ensure the success of this step.
The next step involves carrying out the desired changes within the organizational
scope. This step is of paramount importance, as the changes need to be implemented in a
prompt manner so that the workers or their functions do not relapse to how it was before
(Bakari, Hunjra & Niazi, 2017). The step therefore requires vigorous action so that the
changes become adaptable to the workers.
The final step requires the freezing of the changes thus made. When the changes have
been conducted within the organizational scope, certain evaluations and monitoring has to be
done to ensure the adaptability of the employees (Hussain et al., 2018). This will further
ensure the stabilization of the changes.

11CASE STUDY: CHANGE MANAGEMENT IN STENA LINE
Through the above-mentioned procedure, the employees of the Stena Line will be
able to adapt to the Lewin’s change management strategy. This will ensure their acceptance
towards the change and result in the development of the organization.
Metrics for strategy used
The metrics for the strategy of Lewin’s change management model in the context of Stena
Line are as follows:
1. Customer satisfaction rate – This metric is used to determine whether the organization
has been able to meet the requirements of the customers or not. In order to evaluate
the customer satisfaction rate, the satisfaction rate of the customers before and after
the application of the change management model can be compared. If there is an
increase, then it can be deduced that the strategy has been successful.
2. Employee satisfaction rate – This metric measures the rate of satisfaction in the
employees. An increase in this rate after the application of the change management
model can determine the success of the strategy.
3. Net profitability – Profits incurred before and after the application of the
recommended change management model can be compared to measure this metric.
An increase in results will ensure the success of the strategy, and a reduction will
indicate its failure.
Conclusion
From the assessment of the survey conducted by the Undercover Boss, Gunnar
Blomdahl, it can be concluded that there are several operational challenges that may be faced
by an organization, but with proper change management, these problems can be countered
efficiently. The Lewin’s change management model can be applied as a strategy to bring
about changes within Stena Line. The problems of customer dissatisfaction, employee

12CASE STUDY: CHANGE MANAGEMENT IN STENA LINE
dissatisfaction and profitability can be improved upon through the three-step procedure. This
will ensure the growth and development of the organization at an increased rate.

13CASE STUDY: CHANGE MANAGEMENT IN STENA LINE
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