1

Leadership and Organizational Change in the Context of IT

*Eashani Rodrigo, Lakshitha Samarathunga, Sachith Wimalarathna,

Dinidu Jayasekara, Medavi Somarathne

Email: *eashanirodrigo@gmail.com

Sri Lanka Institute of Information Technology, New Kandy Road, Malabe, Sri Lanka.

ABASTRACT

This research investigates Information Technology (IT) driven organizational changes in Sri Lankan organizations by focusing on the leadership aspects. The main objective of this research is to identify which leadership styles are most effective in ensuring the success of change management processes within IT project implementations. In order to achieve this, firstly the research conducts an in-depth investigation of the relationship between leadership and change management practices within organizations. Encapsulating the findings, a model is proposed to pinpoints the most effective leadership style that should be adopted in accordance with each stage within the change management process the organization is about to undergo. The research involved qualitative methods. Models by Goalman (2000), Kotter (1996), and Cooper and Zmud (1990) were consulted to build an initial framework surrounding leadership and change management practices. Using the Case Study method, in-depth interviews and document reviews were conducted for nine leading Sri Lankan organizations which had undergone IT change. Analysis of results revealed that organizations are increasingly realizing the value of employing change management practices when introducing IT change to their organizations. The attention of leaders was found to be more focused on the culture, behaviours and attitudes of employees who are part of the change process than on the steps within the change process itself which are prescribed by change gurus. Eliminating people resistance has been treated with the highest priority based on the argument that effectiveness of change management processes is directly linked to winning over the people resource. Leadership styles were found to be practiced more from a public relations (PR) perspective to win the people over in the short term and thereby ensuring long term success. Key words: Leadership, Organizational Change, Information Technology, Change Management Process, Leadership Styles, Sri Lankan Context, IT Driven Change

INTRODUCTION

John P. Kotter, one of the change management gurus has said that the change is an

unavoidable reality in the business world today. In such a turbulent environment if the change

is not handled properly it can drive them crazy, costs a great deal of money and will cause a

lot of pain [1]. Modern business organizations are turbulent and face dramatic changes such

2

as strategic changes, technology changes, business process changes, mergers and

acquisitions. Taking these aspects in to consideration IT driven change plays a critical role in

organizations today. IT driven organizational change is considered to be the current focus in

many business organizations as they introduce or implement new IT systems nowadays to

gain the competitive advantage [2]. If the organization did not adapt to changes, the

organizations could not compete. Managing of change is important in order to embrace the

change and reap its benefits. Leadership plays a vital role in managing change by involving

and supporting throughout the process to make the change a success. Many studies have

highlighted the importance of leadership in change management. Leadership is very much

related to change and as the velocity of change increases, there is a greater need for effective

leadership [1].

There are a number of studies on importance of leadership and change management [1]-[5].

However leadership styles that should be adopted for managing an effective IT change

process has received lesser attention. Research focus draws the attention towards the

leadership styles to be adopted during change management process when organizations go

through IT driven organizational changes.

No past research has been reported on leadership and change management in Sri Lanka. It

has been identified that for most organizations in Sri Lanka change management is a new

practice. Therefore, this study makes a valuable contribution to the field of leadership and

change management as this research carries a comprehensive study to fill the knowledge gap

in that area.

This paper presents the findings of a comprehensive research. It comprises of five sections

followed by the introduction. In the next section literature review is presented and the results

are given in section four. Paper ends with the discussion of research study and suggestions for

further research.

3

LITERATURE REVIEW

As a background to the study this section briefs on the leadership and leadership styles, IT

implementation process and change management processes and IT driven change

management. The relevance of leadership and management of IT driven organizational

change is examined here.

Information Technology plays a significant role in organizations‟ business processes today.

IT has triggered many changes forcing organizations to embrace changes which happen due

to IT implementations. Many researchers have introduced different IT implementation

process models such Rogers, Kwon and Zmud, and Gerwin [6], [7]. Basically all models are

based on three main processes namely: initiation, implementation and naturalization [6].

These researchers have identified that implementation of IT changes should be well planed

and should be carry out systematically in order to gain the real benefits of change. Failing to

manage the change effectively will end up in poor implementations [4].

Researchers argue that proper framework should be adopted to carry out the IT

implementation as well as to manage the IT driven change simultaneously. Past researchers

have developed a number of models to explore as change management processes. Three step

Lewin‟s (1951) change model , Kotter‟s (1995) eight steps model and Prosci‟s (1996)

ADKAR model can be cited as examples [8]. All these models address the change

management in general, and still no comprehensive model has been developed to depict IT

driven change management process. Kotter‟s (1996) eight steps model targets large scale

organizational change and gives a comprehensive elaboration about the change management

process and as it directly establishes a relationship with the leadership and organizational

4

change process, which is the underlying concept of this study [1][3]. Hence, Kotter‟s change

model is used as the base of study in the research.

Number of researchers have highlighted that leaders should manage the change in order to

achieve effective organizational change [1],[9],[2]. In the context of change management

Kotter [1] defines leadership as:

What the future should look like, aligns people with that vision, and inspires

them to make it happen despite the obstacles (Kotter) [1].

This research focuses on leadership styles. Studies have highlighted that leadership styles

play a vital role in organizational change. Goleman [9] have mentioned that organizational

climate is influenced by leadership style. Number of leadership styles are experimented,

researched and have found by the contributors such as Lewin [8], Likert [8] and Goleman [9].

These contributors argue that leaders do not rely on just one leadership but it can change

according to the scenario [9].

Conceptualization

A high level conceptual view of relationship between leadership and IT driven change is

shown in Fig.1.

5

As shown in Fig.1 the change management process need to be practised inside the IT

implementation process. The effectiveness of this practice is directly affected by leadership

styles. To examine this framework, models as shown in Table 1 are used.

In summary, the following inferences have been made from the literature review:

Leadership is critical for an effective change management.

From leadership aspect, leadership styles will have a higher influence on the

effectiveness of the change management.

Steps follows in change management process will become critical success factors for the

IT change process.

Organizations must give all the three aspects (IT implementation, Change management

and leadership styles) their focus when IT driven change is taking place.

The final framework for the research can be built as in Fig.1.

Organizations should follow change management process within their IT change process.

(As shown in Fig1 )

6

Further it has found Steps follows in change management process will become critical

success factors for the IT change process.

For the real world case scenario analysis purpose three models namely, Kotter (1996)

eight step model [1][3], Cooper and Zmud (1900) IT Diffusion model [10] and Goleman

(2000) Six leadership Styles model [9] can be adopted to the research framework.

Summary of the models which has used to develop the research framework is shown

below.

METHODOLOGY

This study focuses on real-life scenarios and explores “How” and “Why” questions. Hence,

we adopted the case study approach. Case study approach is a method used to narrow down a

very broad field of research into one easily researchable topic. According to

Shuttleworth[11], case study method attempts to test a theory with a typical case or a specific

topic. Thereby using the case studies we will be able to develop and practically test the

research findings from literature as well as see the practical aspects of the scenario.

7

In this study, the framework which was synthesised from the literature survey is used to

develop interview protocols and for the case analysis. Semi-structured and unstructured

interviews in nine organizations were conducted which has undergone IT changes. Case

study data was collected by our research authors using interviews of approximately one hour

duration and based on the same interview protocol. Top IT executives in leading Sri Lankan

organizations were interviewed including who have contributed in large IT implementations.

Table 2 presents profiles of the cases which have been studied in this research.

Table 2

Case Profiles

Case Background of

company

Respondent Major IT

implementat

-ions

Time Success/Failu

re of

implementati-

on*

Case A One of the top

diversified

conglomerates in Sri

Lanka

Head of IT

department

ERP system 5 years

ago

Successful

Case B Multinational

financial institute

which has been

operating for over 100

years in Sri Lanka.

Project

manager

Inquiry

system

HR system

Few

years ago

Successful

Case C Leading financial

institute in Sri Lanka

System

Development

Manager

Internet

banking

system

E-link system

Few

years ago

Successful

Case D Financial institute IT manager Intranet Few

years ago

Partially

successful

Case E Leading financial

institute in Sri Lanka

Head of

Network

Relations

Core banking

system

Few

years ago

Successful

Case F Multinational apparel

manufacturing

company and the

largest in Sri Lanka.

Head of SAP SAP ERP

system

10 years

ago

Successful

Case G Leading financial

institute in Sri Lanka

Acting CIO Core banking

system

Few

years ago

In general it is

a success. But

there are small

failures.

8

Case H Leading financial

institute in Sri Lanka

CIO Core banking

system

Few

years ago

Successful

Case I Financial institute IT manager System

upgrades-

core banking

system.

Few

years ago

Successful

*This is based on individual perception of the interviewee

RESULTS

Table 3 presents the summery of the findings.

Table 3

Summary of findings (Focused steps of Kotter’s model and the leadership Styles)

Case Use of

formal

change

managemen

t approach

Most focused steps

(focusing on Kotter‟s

(1996) model)

Leadership Styles used

during the change

Existence of

people

resistance

during change

Case A No Steps 4, 5, 7 and 8 Authoritative,

Affiliative, Democratic

Yes

Case B Yes Steps 1, 2, 3, 4, 7, and 8 Authoritative,

Affiliative, Democratic,

Coercive

No

Case C No Steps 2, 4, 7and 8 Affiliative, Democratic Yes

Case D No Steps 4, 6 and 8 Authoritative,

Affiliative, Coercive.

Yes

Case E No Steps 1, 2, 4, 6 and 7 Affiliative, Democratic Yes

Case F No Steps 1, 4, 7 and 8 Authoritative,

Affiliative, Democratic,

Coercive

Yes

Case G No Step 1, 4, 7 and 8 Authoritative,

Affiliative, Democratic,

Coercive

Yes

Case H No Steps 4, 7 and 8 Affiliative, Democratic Yes

Case I No Steps 1, 4, 6, 7 and 8 Authoritative,

Affiliative, Democratic

No

9

From the case study investigation it is evident that most organizations do not use a formal

approach towards change management. However they have adopted certain processes

associated with change management, without a conscious application of them.

The complex IT changes in most organizations were associated with implementing Enterprise

Resource Planning (ERP) systems. When the IT change had been triggered by ERP system it

has lead them to realise the importance of managing the change. According to a top IT

executive many organizations in Sri Lanka are not aware of change management.

Unfortunately I doubt that they know not John P. Kotter but the area he

contributed (Case C).

Most IT changes the case study organizations went through were successful according to

their own judgement. However it was evident from the investigation that most of the projects

have taken longer time than they planned for. Certain organizations suffer from the problem

of not utilizing their system fully. However without practicing a formal change management

approach, these organizations managed to be successful in there change may be merely due to

a proper leadership. Generally these organizations highly focussed on Step 1,4,6,7 and 8.

These steps require complete support from the leader. Therefore leadership involvement and

the support to the change can be considered as high.

According to nine cases generally they followed Affiliative style, Authoritative style and

Democratic style out of all six leadership styles during the change. These leadership styles

were identified from the characteristics Goleman‟s Six Leadership style model [9] they

possessed. Choosing the leadership style was situation oriented. In general during the

initiation of change they practised Authoritative then Democratic and in the latter part of

change the focus was towards Affiliative style.

10

In exceptional cases organizations had used Coercive Style apart from those styles.

According to an IT executive during the ERP implementation their motto was:

SAP able or Sack able (Case B).

Facing an ERP implementation was the common situation to those organizations which used

Coercive. This situation caused them go through dramatic changes for the first time and face

higher people resistance. According to the IT executives‟ perceptions, lack of a proper

organizational culture was the cause for people resistance. Therefore the situation have forced

these organizations adopt Coercive style but they shifted to Affiliative style ones people got

adapted to the change. According to the Case F and Case E they follow people oriented

leadership style:

We do not insist people to do it instead we ask shall we do it (Case F).

I think people are more part of the organization than earlier (Case E.)

Therefore from the case study analysis it is evident that leadership style strongly effected on

orgnization to be successful in change. Without any formal approch to change managemnet

case organizations leadership was the force to drive the change. Therefore during the change

process they followed people oriented leadership styles such as Authoritaive, Democratic

,Affiliative styles. Use of this people oriented leadership approach made them successful in

thier change.

DISCUSSION

This research revealed another dimention of change mangement other than change

managemnet process and leadership. Cases revealed „people resistance‟ is another dimention

that should be foucsed during change management.

11

People resist. It is not a very simple thing. The change is very tuff for people

(Case A).

Dramtetic change lead them to face remarkable situations of people resistance. In some cases

problem of people resistance lead them to adopt rigid methods to avoid it which lead to

unsatisfaction of emplyees. However in these situations change have been accepeted by

emplyees for the fear of losing thier jobs.

Not having a proper people focussed change management approach and lack of a change

supprotive culture must have lead to people resistance. However these organizations have

used several methods to deal with people resistance. Proper communication of change ,

higher support and invlovement from leadership, adopting people oriented leadership styles,

use of feedback mechanism and proper trainning are some of methods used.

In the effort of eliminating people resistance case organizations have focused on recreating

their culture. Having a change suppritive culture is considered to be the key element for

avoiding people resistance.

Finally going through the literature survey as well as the case study we were able to develop

a model related to the most appropriate leadership and managing the IT change process. It is

evident that as from the success cases scenarios as well as from the interviewees‟

recommendations people oriented leadership style(s) is the most appropriate leadership style

to be adopted.

Analysing all nine cases it was revealed that in general they followed mainly three leadership

styles out of all six leadership styles during the change in order to make the change a success.

Namely they are: Affiliative style, Authoritative style and Democratic style.

12

All these three stages were used all together within all stages. Therefore according to the

situation they focussed more on one of these leadership styles. But from the analysis it

showed that in early steps of the model they focussed more on Authoritative style and in the

middle steps their attention was drawn to Democratic style and the in final stages their focus

was more towards the Affiliative style.

Therefore by analysing these case studies, generalizing the findings the final model can be

presented as in Fig. 2.

Fig. 2: Proposed Model: Most appropriate leadership styles and IT change managing process

This proposed model suggests that:

13

During an large IT driven change along with IT change process organizations should

follow a formal change managemnet process.

Organizations should follow change managemnet process steps within the IT change

process‟ three stages as proposed by the model.

Each step in change managemnet process become the critical factors which affctes IT

change implemenation.

The highlighted steps are the most critical steps in change managemnet process which

should be given a high priority.

Above mentioned three leadership styles are the most effective leadership styles to be

followed in order to do an effective change mangement.

During this process they should follow the relevant leadership styles giving more

focus on highlighted leadership style in particular stage. (Authoritaive in first stages,

Democratic in middle stages and Affiliative in last stages).

As limitations of the model it can be argued that as this is a generalized model there is a

possibility to change when consider different countires, organzatioanl type (eg: mulitnational

comapnies) and the type of the IT change.

In summary, this research has focussed on leadership and change management aspect in an IT

driven organizational change in the context of Sri Lanka. This research confirms that

leadership plays a critical role in change management. It is evident that a proper leadership

can lead the change to a success and use of people oriented leadership styles can avoid people

resistance. Finally this research have identified Authoritative, Democratic and Affiliative

leadership styles are the considered to be best leadership style to be adopted during the

change management process to making a change a success. However this study suggests that

the organizations should follow a formal change management process when dealing with IT –

14

driven change and they should use people oriented leadership styles to make the change a

success. Therefore this study proposes a model to be used during IT-driven changes to

effectively manage change.

The knowledge gap in the area of change management in the Sri Lankan context should be

filled as the proper awareness and knowledge on this area carries a higher value for the

business organizations. This research focussed on identifying the appropriate leadership

styles and the process to be used in managing the change. Still there is a knowledge gap in

the cultural aspect of change management area. Therefore investigating on the proper culture

which is supportive to change could be another area for future research.

ACKNOWLEDGEMENT

The authors wish to thank Dr. Theekshana Suraweera who has been the supervisor of this

research. Also authors wish to thank case study organizations and the IT executives who

kindly provided information to carry out this research. Due to the confidential nature these

details are not disclosed. The support of Sri Lanka Institute of Information Technology,

Malabe is sincerely acknowledged.

REFERENCES

[1] John P. Kotter. Leading Change. Boston: Harvard Business School Press, 1996.

[2] Esther Cameron, Mike Green. (2004). Making Sense of Change Management: a complete

guide to the models, tools and Techniques of organizationalchange. [on-line]

http://books.google.com. [Dec 29, 2009].

[3] John P. Kotter. The Heart of Change:Real-life Stories How People Change Their

Organizations. Boston: Harvard Business School Press, 2002.

[4] R. A. Patson, J. McCalman. Change Management: A Guide to Effective Effective

implementation. London: SAGA Publications Ltd,2000.

[5]Annabel Beerel. (2009). Leadership and Change Managemnet. [on-line]

http://books.google.com. [Feb 20, 2010].

15

[6] M.A. Quaddus. Diffusion of information technology: an exploration of the stage models

and facilitating the user's choice by system approach. Curtin University of Technology,

Australia.

[7] Wang, Mo Winnie Lee, One-Ki (Daniel) Lim, Kai H. (n.d). Knowledge management

Systems Diffusion in Chinese Enterprises: A Multi-Stage Approach with the Technology-

Organization-Environment Framework. City University of Hong Kong, Hong Kong.

[8] Esther Cameron, M. G. A complete guide to the Models, Tools and Techniques of

organizational change. London: Kogan Page Limited,2004.

[9] Daniel Goleman, Leadership That Gets Results, www.hbr.org, Harvard Business School

Publishing Corporation, March-April 2000.[PDF]. Available: www.hbr.org. [Accessed: Dec

21, 2009].

[10] R.B Cooper, R.W Zmud, “Information Technology Implementation Research: A

Technology Diffusion Approach”, Management Science, 1990, pp. 123-139.

[11] Martyn Shuttleworth, \Case study research design," Experiment Resources, 2008

[online]. Available: http://www.experiment-resources.com/case-study-research-design.html.

[Accessed: Mar. 30, 2010].

[12] E.K. Foreman, Survey Sampling Principles, 120 Vol. New York: Marcel Dekker, 1991,

pp.4.

[13] Arlene Fink, Conducting research literature, 3rd ed. California: SAGA Publications,

2010, pp. 3.

[14] Change Management. Internet: http://en.wikipedia.org/wiki/Change management, Feb.

28, 2010 [Feb 28, 2010].

©All Right Reserved - 2010