Theoretical frameworks for procurement change management in organizations

Running head: PROCUREMENT CHANGE MANAGEMENT 1 PROCUREMENT CHANGE MANAGEMENT 9

Procurement Change Management Assignment 1: Change Management in Procurement The procurement function is increasingly playing a strategic role within organisations irrespective of size and industry of operation. This transformation has been driven by, among other factors, changes in the business environment, shifts in the operational and supply chain, and increased focus on sustainability. Essentially, procurement is now a crucial driver of change. As a result, a clear understanding of change management principles is important for successful procurement transformation. Indeed, recent scholarly efforts in the field of change management have explored the link between organisational change and project management areas such as procurement (Griffith-Cooper & King, 2007; Levasseur, 2010; Lundy & Morin, 2013; Hornsten, 2015; Larsen & Eskerod, 2016). It is imperative for procurement leaders or practitioners to comprehend the relevance of change management concepts to procurement management. This paper identifies five recent scholarly articles relating to procurement change management and singles out the theoretical or conceptual frameworks used in each article. The paper specifically explains each identified theory and evaluates each theory’s application to procurement change management in a real world organisation. Next, the paper justifies the theory that would be the most appropriate as a basis for conducting a case study on the organisation’s change management practices within procurement contexts. Two research questions based on the selected theory are then formulated. Finally, a plan for collecting and interpreting data to answer the questions is proposed. Theoretical/Conceptual Frameworks Hornstein’s (2015) article is the first selected article. The article, a review of literature, explores the connection between project management and organisational change. According to the article integrating organisational change and procurement and other project management areas is now a necessity. Hornstein’s (2015) article is based on organisation development (OD) theory. Developed by scholars such as Kurt Lewin, OD theory is one of the major theoretical frameworks on which organisational change is premised. The theory mainly emphasises change planning (planned change), group dynamics, action research, and participative management. This means that OD is anchored on behavioural and social sciences. Change management within the context of OD denotes the continuous process of adapting an organisation’s strategy, structure, processes and capabilities to a constantly evolving internal and external environment (Hornstein, 2015). As the old adage goes, change is inevitable. Accordingly, organisations continuously evaluate where they want to go in the future and take the necessary steps to reach there. This is vital for continuity. However, certain antecedents are important for successful change implementation. These include but not limited to employee engagement, employee empowerment and motivation, leadership commitment to change, and flexibility. For Hornstein (2015), the field of project management can benefit immensely from OD concepts. Many organisational tasks today are increasingly accomplished as projects. The tasks may involve acquiring another firm, adopting a new organisational structure, implementing a new information system, supply chain improvement, quality enhancement, and so forth. These tasks constitute organisational change as they enable an organisation to shift from the present state to a new state. Moreover, these projects provide an opportunity for organisational learning, further warranting the integration of project management and change management. Levasseur’s (2010) article, the second article selected, is also based on OD theory. The author employs OD theory to examine the factors that contribute to project success and failure. From a change management perspective, much of project failure is attributable to the people side of organisations. More specifically, projects mainly fail because of resistance to change, ineffective stakeholder communication, little or no people engagement, weak management support, and interpersonal conflicts. In other words, most project managers have little or no knowledge of managing the people element of projects. The application of change management concepts has the potential to address these challenges. According to Levasseur (2010), project managers can improve project outcomes by ensuring stakeholder involvement throughout the course of the project, two-way communication, and collaboration. The link between project management areas and change management is further demonstrated in Lundy & Morin (2013)’s article. The article particularly focuses on the impact of leadership on resistance to change in the context of projects. According to the article, an engaging leadership style is crucial for minimising resistance to change. An engaging leadership style means that the project leader effectively involves everyone affected by the project in the decision making process. This view is supported by the previous two articles, which identify participative management as vital for project management success (Levasseur, 2010; Hornstein, 2015). Involving key stakeholders in decision making increases support for the project, ultimately contributing to project success. Besides Lewin’s three-step change management model, Lundy & Morin’s (2013) article is based on Kotter’s eight-step change management model. Both models recognise the importance of addressing factors that may hinder change. Though these factors may relate to processes, structures, and practices, much of the focus should be people on non-technical factors. People resist change due to, among other factors, lack of involvement in the change process, poor understanding of the necessity of the change, fear of possible negative consequences such as layoffs, and unwillingness to abandon the status quo. Addressing these concerns requires effective leadership. In other words, the leadership style the project leader adopts significantly influences how the project team and other internal stakeholders support the change. Based on the work of Dulewicz & Higgs (2005), Lundy & Morin (2013) categorise leadership styles into three groups: goal-oriented leadership style (leader-centric style), involving (participative) leadership style, and engaging leadership style (focuses on empowering followers). An engaging leadership style is especially valuable in the project environment. When the project team is effectively empowered, support for and commitment to the project is likely to be high. Griffith-Cooper & King’s (2007) article also focuses on change leadership. The article defines leadership as the set of activities, techniques, and principles applied to manage the human aspects of change. Effective change leaders achieve success by focusing on intrinsic motivation, cultivating collaboration, responding to human needs, and forging two-way communication. This resonates with the transformational style of leadership, wherein the leader strives to empower and inspire followers. Such an approach to leadership can significantly influence project success. Finally, Larsen & Eskerod’s (2016) article, a case study of change management practices in a public sector project, also emphasises the importance of stakeholder involvement in project management. The article is based on a number of theoretical frameworks drawn from project management and change management literature, notably the task perspective and the organisational perspective. The task perspective places emphasis on the task or the project, while the organisational perspective views the project as some sort of a smaller organisation within the larger organisation. The organisational perspective has increasingly become relevant for project management due to interaction between the project and other organisational processes. Dissimilar to the task perspective, which is characterised by top-down processes (the planned approach), the organisational perspective is characterised by bottom-up processes (the emergent approach). The emergent approach particularly advocates for openness, flexibility, adaptability, and involvement. This approach can contribute to project success by generating empowerment and commitment. Application to a Real World Organisation The selected real world organisation is an investment firm with operations in several states across the U.S. The organisation offers a suite of investment services to a diverse clientele, including individuals and organisations. The organisation has a vibrant purchasing function, which is involved in procuring all goods and services the organisation may require from third party vendors. These goods and services mainly include office supplies, stationery, office equipment, furniture, software, and professional services such as strategic consultancy. OD theory is relevant for the organisation’s procurement change management. The theory is especially relevant as most change initiatives at the organisation involve procurement. Recently, for instance, the organisation procured a system to modernise its human resource management (HRM) processes. With the system, the organisation has introduced a data-driven approach to manage the payroll, employee attendance, employee performance, recruitment and selection, remuneration and benefits, and other HRM aspects. The system is expected to enhance return on investment in HRM by improving the effectiveness and efficiency of HRM processes. For the organisation, the procurement of the new HRM system represents a shift from the conventional way of managing employees to a new, more effective approach. Change management aspects such as participatory decision making might be useful for successful implementation of the new system. The theory is also relevant to the organisation’s procurement management practices given the transformations it has been undertaking in the last few years. The organisation has embarked on an initiative aimed at improving procurement processes such as vendor selection, contract administration, and procurement evaluation. For this transformation to be effectively implemented, extensive engagement of key internal stakeholders is crucial. Procurement processes at the organisation affect or are affected by a number of internal stakeholders, including the management as well as the purchasing, operations, and finance departments. Change management best practice stipulates that these stakeholders must be effectively involved in the change process (Griffith-Cooper & King, 2007; Levasseur, 2010; Lundy & Morin, 2013; Hornsten, 2015; Larsen & Eskerod, 2016). They must understand why the transformation is required and their roles in achieving the transformation. This can be achieved by cultivating a climate of collaboration and participatory decision making as recommended by change management theory. Leadership theory also has important implications for procurement management practices at the organisation. More specifically, a project leadership style characterised by team involvement and empowerment has the potential to minimise resistance to change. As mentioned earlier, the organisation is in the process of transforming its procurement processes in an effort to improve procurement efficiency. Though the initiative has gone quite well so far, the possibility of resistance cannot be ignored altogether. To avoid or minimise possible resistance, the procurement manager and other project management leaders in the organisation must forge an environment of collaboration and participation. They must effectively communicate the goals of the procurement change initiative and put the necessary measures in place to motivate and empower project teams. The relevance of the task perspective stems from its focus on project tasks, while the organisational perspective is relevant because it pays attention to broader organisational processes. While efficiency and effectiveness in procurement activities is important, interdependency between the project and other elements of the organisation cannot be underestimated. Procurement activities at the organisation are considerably dependent on other processes within the organisation such as financial and operations management. Accordingly, the organisation must effectively balance between procurement projects and other organisational processes. Selected Theory for Case Study A careful examination of the selected literature reveals that the link between project management and change management is still a largely under-researched topic. Much of the research in this area focuses on either project management or change management. In other words, both topics are mainly approached separately. This is quite worrying given the increased relevance of change management principles to project management. The scarcity of research is particularly true for the connection between procurement management and change management. The few studies in this area focus on project management in general as opposed to specific project management areas. This could mean that procurement practitioners have little or no knowledge of the relevance of change management theory to procurement management. This is especially true for the selected organisation, wherein there is generally little application of change management principles to procurement processes. Understanding change management principles is crucial if the organisation is to achieve more successful procurement outcomes. The identified gap in research means warrants further research in this area. The selected organisation is a particularly useful case study for the research. Toward this end, two research questions are formulated. The first question is: 1) To what extent do procurement practices at the organisation reflect change management principles?; 2) Are procurement managers at the organisation aware of change management principles? Selecting the most suitable theory for the case study can be quite confusing since all the identified theoretical frameworks generally centre on OD. Even so, change leadership theory is deemed the most appropriate theory for the case study. Change management without a doubt is all about leadership. How do change leaders influence their followers and organisations to adapt to change? This is a fundamental question for change leadership. Change leadership theory, therefore, provides an ideal premise for answering the research questions. As the proposed research is a case study that seeks to establish the extent to which change management concepts are applied to procurement activities, procurement managers and other key project managers in the organisation would be ideal sources for the required data. The data can be collected via in-depth interviews so as to obtain a detailed understanding of the research problem. Change leadership theory would be valuable in interpreting the data as it would provide a basis for comparing the perspectives of managers with change management concepts. Conclusion Overall, change management principles can be useful to procurement management. As organisations transform procurement practices, it is imperative to base the transformation on change management concepts. This has the potential to produce more successful procurement outcomes.

References Griffith-Cooper, B., & King, K. (2007). The partnership between project and organisational change: integrating change management with change leadership. Performance Improvement, 46(1), 14-20. Hornstein, H. (2015). The integration of project management and organisational change management is now a necessity. International Journal of Project Management, 33, 291-298. Larsen, T., & Eskerod, P. (2016). Using change management principles in projects – an exploratory case study. Journal of Management and Change, 34/35, 44-59. Levasseur, R. (2010). People skills: Ensuring project success – A change management perspective. Interfaces, 40(2), 159-162. Lundy, V., & Morin, P. (2013). Project leadership influences resistance to change: The case of the Canadian Public Service. Project Management Journal, 44(4), 45-64.