HR Case Study: Unitel Vision 2022 Cultural Change Analysis

Introduction

One of the largest telecommunications companies in the Asia-Pacific region, Unitel faced intensifying competition from foreign and local firms following its privatization. To cope with these competitive demands, senior management concluded that a cultural change — an inevitable consequence of privatization — had to be pursued. Several problems emerged when Vision 2022 was announced with the assistance of an external consultancy firm. This change strategy was designed to transform how teams work, how decisions are made, and how possibility thinking should be implemented across the organization. The sections below examine the key HR and employee relations (ER) issues that would affect Unitel's operations and competitiveness, and present recommendations for each issue.

Cultural Change Issues and Recommendations

With the introduction of Vision 2022, there was a clear shift in the company's culture, as an outside consultancy firm recommended that Unitel position itself as the best enterprise in the region. This brought some positive developments, including standardization, improved communication between senior and lower-level workers, enabling decisions to be made at lower levels, developing a customer-needs tracking facility, and formulating the U-test decision-making process. However, employees did not feel a sense of inclusion when an outside firm was engaged to lead the change, and they were not motivated as a result. Cultural change cannot be achieved through a top-down approach; rather, it should create an environment that draws on employees' hearts and minds and builds a shared perception of how things should be done (Walker & Soule 2017).

According to Kotter, employees resist organizational change for several reasons: the formal structure, lack of discouragement from upper management against pursuing the new vision, insufficient skills, and difficulties with personnel or information systems (Adiratna, Fahmi & Kuswanto 2018). In Unitel's case, the formal management structure — which appeared to be imposing change from the top down — and the standardization initiative, which was not fully acceptable to all employees, were the primary reasons for low change readiness. Employees believed that Vision 2022 was exclusively about refreshing lower-level staff rather than implementing change across the whole organization, from bottom to top.

The role employees were expected to play in the change should have been valued, and management needed to demonstrate appreciation while instilling a sense of belonging. This was absent in Unitel's case. Rather than soliciting inputs from workers, the company relied on an outside source for change implementation, which generated negative perceptions about both Vision 2022 and senior management. The cultural change appeared to have been imposed on employees rather than developed with their participation, leaving them feeling dejected and unready. Adverse attitudes proliferated — including the view that the initiative was simply a waste of money.

Contemporary employee relations research holds that worker trust is essential for successful organizational change implementation (Lines et al. 2005). When trust exists between management and employees, it becomes a primary indicator of organizational success — particularly when both stakeholders belong to the same organization undergoing cultural change, as at Unitel. Information sharing becomes more fluid, organizational citizenship behavior aligns with organizational goals, and both parties become more receptive to incoming change. None of this was evident at Unitel. Organizational change is a critical juncture at which trust is either built, developed, retained, or destroyed, and managers can only make effective decisions when they have earned the confidence of their subordinates.

The collective cultural change issues can be addressed using Kotter's eight-step model for cultural change (Carman et al. 2019). The first phase involves creating a sense of urgency, building a guiding coalition, and developing a vision and strategy. Here, Unitel should ask employees to identify potential threats — such as increased market competition following privatization. As the organization's internal strength, employees have intimate knowledge of the company, and their inputs should be valued. The second phase involves communicating the change vision, empowering employees to take required actions, and defining short-term wins. Incorporating employee feedback and ideas at each level of Unitel's hierarchy would be beneficial; even when external consultants are engaged, including and empowering staff is essential. The third phase involves consolidating gains and anchoring the change. Monitoring the successful implementation of communication processes between senior and lower management would help sustain the change. New and existing priorities established following Vision 2022 should be embraced equally across all levels.

Poor Employee Relations Issues and Recommendations

Several employee relations failures were evident in Unitel's case, as described below.

The introduction of Vision 2022 effectively divided employees into two camps: believers and non-believers. The non-believers developed negative perceptions of the cultural change and the management driving it, with some expressing the view that "the management is deaf." Weak communication was compounded by understaffing and material shortages, while simultaneously management focused on purchasing cheap equipment to maximize profit margins. The notion of "rank and file" working together was simply not reflected in reality at Unitel.

A communication bridge must be maintained at all times if a company wishes to succeed. If cultural change was meant to establish effective communication across all hierarchical levels for better overall market performance, then Unitel's failure to sustain this bridge undermined any prospect of competitive advantage. The firm remained determined to pursue change without effective communication — and the positive outcomes that communication would have produced were lost as a result.

There was no meaningful inclusion of lower-level employees in decision making when Vision 2022 was introduced. Although communication increased in relation to the change initiative, Vision 2022 set specific milestones for departments to meet. This planted a belief among employees that their own attitudes were being targeted for change rather than the organization's structural processes. Senior management told employees that their problems were self-induced and attributed primarily to attitude.

Unitel's employees felt marginalized when Vision 2022 was launched, perceiving that they had been excluded from the decision to pursue cultural change. In contrast, decision making should be a team-based process (Landry 2020). The overriding impression was that the change was designed to correct employees' attitudes, with the top hierarchy treating employees as the root of the problem. This provoked resentment that was neither favorable for Unitel's market image nor its operational effectiveness.

Many staff members believed that Vision 2022 was primarily about creating a favourable impression of top management on lower-level workers. Employees felt that a team-based culture that had previously existed was now disappearing. They desired a culture where customers were treated as the top priority — but not at the expense of staff members. Senior management selectively identified "change agents" who were enthusiastic supporters of Vision 2022, while a culture of genuine internal-external alignment was absent and skepticism among non-believers went unaddressed.

In an environment where perceptions of the new initiative were largely negative and lower-level employees needed reassurance that Vision 2022 applied to the whole organization, the impact on operational efficiency was damaging. Employees ceased to feel connected with the company, and morale declined. When employee morale falls, both the quality of work and service delivery deteriorate — outcomes that would ultimately damage Unitel's competitive standing in the market.

A further employee relations issue in Unitel's case was the apparent misalignment between the goals of the change strategy and the goals of individual employees. Exemplary leaders establish common objectives that are accepted by employees and beneficial to the organization. At Unitel, this was not observed: employees felt that senior management was making decisions in isolation, without acknowledging the concerns of those skeptical about the cultural change. Team spirit was absent, and no intellectual drive was apparent among employees.

This misalignment threatened Unitel's operational and competitive performance. Employees would not feel a sense of belonging and would be reluctant to contribute meaningfully to the change. Low morale would degrade both work quality and service delivery, and if such deterioration became apparent to customers and competitors, the company's reputation would be severely damaged.

The collective issues of poor employee relations can be addressed through a soft HRM approach. Effective people management in Unitel's case requires soft HRM rather than the hard HRM approach characteristic of the Michigan model. Soft HRM proposes that the focus should be on staff members' needs so that employee motivation is increased and sustained (Ihuah 2014). Applicable strategies include employee empowerment; an appraisal system incorporating training for the new cultural change and relevant professional development; competitive salaries with bonuses tied to contributions toward the change initiative; an open and transparent business environment with clear communication; and above all, a long-term workforce planning orientation. Communication plays an integral role in employee engagement and productivity (Sadia et al. 2016).

A robust HRM system would reduce variability in employee perceptions, unifying staff in their understanding of strategies and mission (Bowen & Ostroff 2004). This would help Unitel create an organizational climate in which employee attitudes and organizational behaviors are directed toward a common goal — Vision 2022.

Furthermore, drawing on McGregor's Theory X and Y, Theory Y would be more constructive in enhancing employee motivation and elevating readiness for the new cultural change at Unitel. Under Theory Y assumptions, employees embrace responsibility and possess the self-motivation needed to complete demanding tasks (Kopelman, Prottas & Davis 2008). They would welcome inclusion in decision making and contribute innovative ideas to problem-solving. They require minimal direction to perform well on challenging initiatives such as Vision 2022.

Conclusion and Summary of Recommendations

Unitel must recognize that organizational change is impossible without the full engagement of its people — employees and union members alike. The uncertainty felt by staff must be resolved so that their enthusiastic participation can generate a shared vision for achieving company goals, which would in turn reward those employees. Change readiness is an essential component of any cultural change initiative, as it shapes employees' attitudes toward the change and their willingness to support it. Administrative, procedural, and structural changes will all be required to drive improved overall performance.

Readiness levels can be adjusted based on the degree to which employees accept or resist the change. Employee engagement and participation should be ensured at all hierarchical levels, since cultural change affects the entire organization from top to bottom. Trust can be cultivated by reducing resistance to change, which in turn improves organizational commitment and strengthens management credibility.

The key recommendations for the identified issues are as follows:

Cultural change: Kotter's model for change should be applied at Unitel, creating a sense of urgency that nonetheless centers on employee inclusion, given that employees are the company's internal strength. Following privatization, potential threats — chiefly increased competitive intensity — should be identified collaboratively, and employee empowerment should be guaranteed throughout the process.

Poor employee relations: Soft HRM should be adopted in place of Michigan's hard HRM model. Applicable strategies include competitive salaries with performance-linked engagement incentives, and an appraisal system incorporating professional training and development aligned with the new cultural change. McGregor's Theory Y would effectively elevate employee readiness for change and improve motivation levels.

Poor management performance: Transformative leadership in the form of participative leadership would be valuable. The motivational model and exchange-based model provide a platform for improved staff performance and a stronger organizational culture, helping to align all levels of the hierarchy behind Vision 2022.

Weak industrial relations: Workplace partnership is a viable solution for building a constructive relationship with union members. The pluralist theory of ER ensures that remunerations are distributed equitably among all agreement participants, making union members more satisfied with the firm and more committed to its success.

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