Association of Business Executive (UK)

Fortune School of Technology and Management

Assignment on

Leadership & Change management

In

Taipei Fubon Commercial Bank & I.t Culture Change Conflict

Amarjeet Singh Bharth

Student Id: W09539

PGDBM

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TABLES OF CONTENTS

1) INTRODUCTION……….………………………………………………………………3

2) ORGANITASATIONAL CHANGE…………………………………………………3

3) FORCES OF CHANGE………………………………………………………………….4

a) Resistance to change……………………………………………………………..…4

b) Overcoming resistance to change……………………………………………..4

c) The Politics of Change……………………………………………………………….5

4) LEWIN’S THREE STEP CHANGE MODEL…………………………………….5

a) Unfreeze…………………………………………………………………………………. 6

b) Change…………………………………………………………………………………….6

C) Refreeze……………………………………………………………………………………6

5) A MODEL FOR MANAGING CHANGE……………………………………………6

6) IT CULTURE CHANGE CONFLICT……………………………………………….7

7) APPROCHAES TO MERGER…………………………………………………………8

8) CHANGE IT GROUP MEMBER MIND SET…………………………………….8

9) TURN TO CUSTOMER – ORIENTED SERVICE……………………………….9

10) RESOLUTION OF IT CULTURE CHANGE…………………………………….9

11) CONCLUSION……………………………………………………………………………10

12) REFERENCES……………………………………………………………………………10

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1 INTRODUCTION

TAIPEI FUBON COMMERCIAL BANK C, Ltd. provides a range of commercial banking services in Taiwan. It offers wealth of management services; consumer banking products and services, such as auto loans, housing loans, credit loans, and credit cards; and corporate banking products and services, such as credit extension, cash management, export-import financing, accounts receivables, syndicated loans, financial consulting, custodianship, corporate investment and wealth management, corporate trust, real estate investment trust, financial assets-based securities, cross-selling of securities, non-life insurance products, life insurance products, and investment-trust business.

Fubon Financial Holding Company (Fubon FHC) acquired the assets of Bank of Taipei, a government-owned bank and used Taipei-Fubon Bank as the identity. Bank of Taipei and Fubon Commercial Bank were complementary to each other. However, in order to preserve the brand position and strengths of both parties, as well as minimizing potential repercussions, Fubon FHC then decided to merge these two banks through actively integration of information systems, workflow, organization and staff. On January 1, 2005, after two years of intensive preparation, Bank of Taipei and Fubon Commercial Bank were officially merged into Taipei Fubon Commercial Bank.

ORGANISATIONAL CHANGE:The study of organizational change is important because global and societal change is both pervasive and persistent. We live in a rapidly changing world. The last ten years have witnessed the collapse of communism in the erstwhile Soviet Union and the eastern bloc countries.

CHANGE:After the uncertainty created in the unfreeze stage, the change stage is where people begin to Resolve their uncertainty and look for new ways to do things. People start to believe and act in Ways that support the new direction. The transition from unfreeze to change does not happen overnight: People take Time to embrace the new direction and participate proactively in the change.

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A related change model, the Change Curve, focuses on the specific issue of personal transitions in a changing environment. Unfortunately, some people will genuinely be harmed by change, particularly those who benefit strongly from the status quo. Others may take a long time to recognize the benefits That change brings. You need to foresee and manage these situations.

FORCES OF CHANGE:

RESISTANCE TO CHANGE:

Changing the behaviour of individuals and groups in the organization.

Overt and immediate.

Voicing complaints, engaging in job action Implicit and deferred.

Loss of employee loyalty and motivation, increased errors or mistakes,

increased absenteeism.

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OVERCOMING RESISTANCE TO CHANGE:

Education and communication.

Participation.

Facilitation and support.

Negotiation.

Manipulation and co-optation.

Coercion.

THE POLITICS OF CHANGE:

Impetus for change is likely to come from outside change agents.

Internal change agents are most threatened by their loss of status in the

organization.

Long-time power holders tend to implement only incremental change.

The outcomes of power struggles in the organization will determine the speed

and quality of change.

LEWIN’S THREE-STEP CHANGE MODEL

The outcomes of power struggles in the organization will determine the speed and quality of change.

LEWIN’S THREE-STEP CHANGE MODEL

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Unfreeze: Unfreeze is the fundamental step in the theory. It is about helping stakeholders, employees, administrators, boards and government) understand that change is required. It is about helping the stakeholder’s ³let go´ or not do things how they have always done. The effects of the driving and restraining forces come into play at this step. If the restraining force is greater than or equal to the driving force, there will be no change. Change: change to a new level or changing means exactly that it is about replacing the old actions with actions That is consistent with the goal.It is about not doing what one has always done that was counterproductive andReplacing it with concrete new actions. To help maintain the motivation for change, working in groups or obtaining,Support is effective. Others help to relieve pressures, provide an environment where errors can be made and learnedFrom, offer positive reinforcement, and coaching.

Refreeze: This is the final step in the 3-Step model. When the changes are taking shape and people have embraced. The new ways of working, the organization is ready to refreeze. The outward signs of the refreeze are a stableOrganization chart, consistent job descriptions, and so on. The refreeze stage also needs to help people and the Organization internalizes or institutionalizes the changes. This means making sure that the changes are used all theTime; and those they are incorporated into everyday business. With a new sense of stability, employees feel confident and comfortable with the new ways of working. Refreezing or making the new productive actions habits isRefreezing. Those all the models Cheryl planned to do in the organization, to make the better outcome of it.

A MODEL FOR MANAGING CHANGE:

Five sets of activities required for effective change management which was stated by cherly is: 1. Motivating change

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2. Creating a vision 3. Developing political supports 4. Managing the transition and 5. Sustaining momentum

The first step is getting people to want to change, to believe change is necessary, and to commit to abandoning the status quo for an uncertain future. Cummings and Worley suggest three methods for creating readiness to change: sensitize people about the pressures for change, that is why change mustoccur; show discrepancies between the current state affairs and the future state of affairs and communicate positive, realistic expectations for change is plan things are not working, profits and market share are dropping survival is in doubt these conditions increase readiness for change.

IT culture changes conflict

In the light of IT conflict perspective, there were three changes conflict types between the two banks’ IT integration, Table 3 summarizes IT culture change conflict of two banks’ integration in terms of system, Vision and contribution. System conflict describes the conflict occurring when the values implicit in a specific IT contradict the values held by the group members use, or expect to use the system. First of all, different group member values in IT platform’s selection existed within the two banks merging.

Table 3. IT culture change conflict of two banks’ IT integration

IT integration Fubon Bank Bank of Taipei Conflict type Case eventIT architecture

GV: Cost savingVEI: Ease of Use

GV: ReliabilityVEI: Efficiency

SystemConflict

IT platformintegration

IT processes IV: Business unitfocusedVEI: Flexible

IV: IT-focusedVEI: Formal

Vision Conflict Network banksystemintegration

IT skills GV: CreativeIV: General skills

GV: Follow ruleIV: Professional skills

ContributionConflict

Projectmanagement

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*Note that IV denotes IT values, GV denotes group member values, and VEI denotes value embedded in a specific IT.

APPROACHES TO MERGER

a) Merger ambition and IT integration strategies

In order to expand market share, Fubon Bank and the Bank of Taipei decided to merge by absorptionin 2002, with the Bank of Taipei as the surviving company and Fubon Bank as the absorbed company.At the beginning, the Bank of Taipei has maintained operations along with Fubon Commercial Bank as an independent entity. However, in order to reduce operating costs and enhance cross-selling, Fubon FHC then decided to merge two banks through fully integration of information systems, workflow, organization and staff..b) Process of integrationIn the beginning, the adjustment of infrastructure is quite a time-consuming process. Taipei Fubon Bank detected that there are different organizational culture in the both sides. To achieve the full integration goal, “one bank, one process, and one system”, they made cultural integration before system integration, and then turned IT department into the service-orientated organization. The integration process is shown as follows.

(1)Change IT group member mind set

The Bank of Taipei adopted IBM mainframe platform and core banking applications. Fubon’s IT staffs were responsible for data migration to the mainframe systems of the Bank of Taipei. A staff of the Bank of Taipei recalled, “These people are more uncomfortable because their system will beStopped after merging and they have to learn the new IT platform and skills.” Taipei Fubon Bank held a series of the team-moving trainings. These courses encouraged IT staff to recognize the changes caused by the merger, and to change their mind sets. After that, the original Fubon’s IT staffs wouldbe responsible for process integration, and the original staffs of the Bank of Taipei took charge of the system integration.

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(2)Turn to customer-oriented service by management-by-objective strategy

In the past, IT staffs of the Bank of Taipei were more technology-focused, and information systems were limited to support internal customers. Taipei-Fubon Bank adopted management-by-objective strategy to deliver customer-oriented services. IT staffs of Fubon Bank were responsible for service design, while these of the Bank of Taipei took charge of system implementation.

IT integration and IT culture change conflict

In this assignment, we have identified three types of IT culture conflict, and the resolution of conflict in achieving IT integration. Below, we briefly discuss the IT merger strategies and different types of IT conflict, and the contingencies for their successful implementation. We then explore how compatibility between IT cultures can affect IT integration. They have important normativeImplications for the effectiveness of IT integration after merger.

Prior research shows that high-level integration needs the cultural integration to obtain better synergies.When IT structure, processes and corporate culture of two organizations are significantly different, they may create more conflicts, and IT departments may not be able to adopt immediately the higher level of integration methods. In this study, we adopted Leidner and Kay worth’s IT cultural change conflict with the viewpoint of strategic alignment model to examine the post-merger IT integration phenomenon.

Resolution of IT culture change conflict

After detecting the phenomenon of IT cultural differences, Taipei Fubon Bank adopted two main activities to resolve IT culture changes conflicts:(1) The wisdom of changing group member values. Taipei Fubon Bank changed the group values through team moving courses, which contribute to reducing the system conflict emerging in IT structure integration and the contribution conflict in the personnel skill integration.(2) Promoting shared IT values. Taipei Fubon Bank reduced the vision conflict occurring in network banking integration and the contribution conflict

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in personnel’s IT skill integration. These findings are in line with previous studies (Robbins, 2000; Weber and Camerer, 2003), although no previous studies have asked this question.

CONCLUSIONS

We adopted a case study on a merger of Fubon Bank and the Bank of Taipei into a financial holding company with the contrasting perspective of IT groups. The paper thus offers a novel way of looking at the IT culture perspective of IT integration after merger and implementation. In addition, although the case study relates to only one specific organization, some more general implications were derived in previous sections. These inferences ontopics, such as system conflict occurring in IT platform’s integration, vision conflict occurring in IT process integration, and contribution conflict occurring in IT skill integration, can become valuable themes for debating in any organizational contexts. We have also suggested that the enhancement ofOur understanding of the conflicts which influence successful integration and the promotion of shared IT values in a merger can thus improve our normative alignment model and guide the management. Knowledge about IT cultural conflicts can be a valuable aid to managers and other participants whoTake charge of making effective IT integration after merger. We have discussed a case involving the chief executive’s leadership, such as the awareness of the differences of IT culture, the wisdom of changing group member values and prompting shared IT values in IT integration.

References:-

www.google.comsshttp://management paradise.co.in

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