V IE T N A M N A T IO N A L U N IV E R S IT Y IIANOT SCHOOL OF BUSINESS DOAN TUI rmiONC, THIJY ORGANIZATIONAL CHANGE MANAGEMENT IN NON-GOVERNMENTAL ORGANIZATION (ACTIONAID VIETNAM) Major; Business Adm inistration Code: MASTER OF BUSINESS ADMINISTRATION THESIS S U P E R V IS O R : TA NGOC CAU H A N O I , 004 v iii TABLE OF CONTENTS A B ST R A C T iii T O M T A T v A C K N O W L E D G E M E N T S vii TABLE OF C O N T E N T S viii LIST OF F IG U R E S xi A BBREV IATIO NS AND A C R O N Y M S xii CHAPTER I : IN T R O D U C T IO N 1.1 B A C K G R O U N D 1.2 PU R PO SE 1.3 M ETH O D O LO G Y [.3 Research p u rp o se 1.3.2.Research approach 1.3.3.Research strateg y .4 1.3.4.Data collcction m eth o d ! 3.5.Sample selectio n 1.3.6.Data analysis IV O U T L IN E CHAPTER 2: LITERA TU RE R E V IE W I FUN D A M EN TA LS OF O RG A N IZA TIO N A L C H A N G E W hat is an organization? .7 Basic o f O rganizational C h a n g e 2.1 Conceptions about organizational ch an g e 2.2 Perspective on C h a n g e 10 2.3 The System s M odel o f C h a n g e 12 O rganizational C hange As An Adaptive C oping R esp o n se .13 viii / ix II PRIO R RESEARCH ON N G O s 17 III TRA D ITIO N AL MANAGEMENT OF ORGANIZATIONAL CHANGE 21 CHAPTER 3: CASE STUDY OF ACTIONAID V IE TN A M 26 I IN T R O D U C T IO N 26 II CA SE STUDY M ETH O D 29 S tart-up 30 Designing & Desk study 31 Interview & Gathering information 31 Analysis & Recommendations 33 III WHY THEY SHOULD C H A N G E .33 External Environment Context 33 Internal Forces .36 IV C H A N G E PROCESS IN A A V 37 V R ESU LT OF CHANGE PR O C E SS 38 Change approach from service delivery to rights b a se d 38 Change approach from direct operations to partnership with government line agencies and N G O s 39 Subscribes to decentralization and devolution o f decision-m aking authority and responsibility 40 Engagem ent in a larger area .42 VI REM AINS F IN D IN G 42 Internal C om m unication 42 Psychology o f staffs 43 Organizational structure 45 Clarity and consensus at the HR-OD D epartm ent 47 Decentralization o f HR functions 48 CHAPTER 4: R E C O M M EN D A TIO N S 50 ix I ST REN G TH EN IN G INTERN AL C O M M U N IC A TIO N - FOSTER OPEN C O M M U N IC A T IO N 50 II B U ILD IN G C A P A C IT Y 52 C om petency assessm ent 52 I raining need assessm ent annually 53 Coaching and training for m an ag ers 55 R ationalization o f activities in line with s ta f f s cap acity 55 III R ESTR U C TU R IN G TH E A A V 56 CH APTER 5: C O N C L U S IO N S 59 R E F E R E N C E S 61 A P P E N D IC E S 63 Appendix A: Q uestionnaire for AAV structure and m anagem ent assessm ent 64 Appendix B: Q uestionnaire for AAV change assessm ent 71 Appendix C: Approach for Overcom ing Resistance to C h an g e 72 Appendix D: List o f Interview ees 73 Appendix R: A ctionAid V ietnam O rganization C h art 75 LIST OF FIGURES Figure 1: Thesis m eth o d o lo g y Figure 2: Thesis O u tlin e Figure 3: Types o f ch an g es 11 Figure 4: Lewin's th e o ry 14 Figure 5: The way a NGO creates v a lu es 20 Figure : Change m anagem ent p ro c e ss 24 Figure 7: AAV's Expenditures by th em e 28 Figure : AAV's Project, Support and Fundraising Costs over the last years28 Figure 9: AAV's Incom e source 2003 29 xii A B B R E V IA T IO N S A N D A C R O N Y M S NGOs: N on-Governm ental O rganizations AA: ActionAid AAV: ActionAid Vietnam CSP III: Country Strategy Paper III DA: Developm ent Area PACCOM : People’s Aid Coordinating Committee V1JFO: Vietnam Union o f Friendship Organizations CPRGS: Com prehensive Poverty Reduction and Growth Strategy I ll; PR: Hunger Eradication and Poverty Reduction , CD: Country Director JD: Job Description HR-OD: Human Resource - O rganizational Development SMT: Senior M anager Team CSR: C orporate Social Responsibility CBO: C om m unity-Based Organization TNA: Training Need Assessment IA-SL: Impact Assessm ent - Share Learning xii C -H A P T ^ R INTRODUCTION 1.1 BAC KG RO U N D "You cannot step twice into the same river, fo r fresh waters are ever flowing in upon y o u " (Heraclitus) Today's environm ent is change more suddenly and frequently than ever before The reality o f yesterday proves w rong today, and nobody really know s w hat will be the truth tom orrow Change in social, economy, political, etc are all factors that contribute to a growing clim ate o f uncertainty Keep in pace with these changes, not only business organizations but also non-profit organizations such as ActionAid Vietnam today are also beset by change - change to survival, change to adapt, and change to grow In the book Thriving on Chaos, Tom Peters stresses the im portance o f change to the modem organization: "To up the odds o f survival, m anagers at all levels must become obsessive about change"1 He adds, "Change m ust becom e the norm, not T om e Peters, T h riv in g on C haos, N ew York A lfred A K nopf, 1997 cause for alarm "2 M any m anagers find themselves unable to cope with an environm ent or an organization that has become substantially different from the one in which they received their training and gained their early experience Other m anagers have trouble transferring their skills to a new assignm ent in a different industry A grow ing organization, a new assignment, and changing environment m ay all be encountered by today' managers To be successful, managers must be able to adapt to these changes, manage them and move forward Thus, w ithin scope o f this thesis, I would like to study the organizational change m anagem ent applying into the case o f ActionAid Vietnam Purpose o f the thesis will be presented in (he next section 1.2 PURPOSE T he purpose o f this thesis is to aim: ■ Firstly, give out a systematical approach and test organizational change m anagem ent theory also; ■ Secondly, apply this theory into practical case o f AAV to find out the best recom m endation, w hich will help AAV managers in all level have a guide on how to m anage change effectively for a success transition period; * Thirdly, detect som e theoretical issue o f organizational change m anagem ent,' which can apply in N G O s in specific environment o f Vietnam 1.3 M ETH O D O LO G Y M ethodology usually prefers to the general approaches to research while method refers to techniques for gathering evidence Therefore m ethodology is a theory and analysis o f how a research does or should proceed Specific method for the case study will be described and elaborated upon later in the chapter three o f the thesis A graphical overview is presented below' as the m ethodology o f this research: ! Ibid Figure 1.1: Thesis methodology Validity and Reliability Research Purpose 1.3.1 R esearch A pproach R esearch Strategy Data Collection | I D ata Analysis Research purpose A research can classify into three basic purposes exploratory, descriptive and explanatory ■ Purposes exploratory: is a research that is designed to allow an investigator to just "look around" with respect to some phenomenon, with the aim being to develop suggestive ideas ■ Purposes descriptive: objective o f this stage is to develop careful descriptions o f patterns that were suspected in the exploratory research ■ Purposes explanatory: purpose o f this stage is to develop explicit theory that can be used to explain the empirical generalizations that evolved from the second stage This study comes with descriptive and explanatory purpose more than exploratory purposes only 1.3.2 Research approach The research approach o f this study is qualitative Qualitative research approaches have traditionally been favored when the main research objective is to improve the understanding o f a phenomenon, especially when this phenomenon is complex and deeply embedded in its context Its many methodologies and techniques have heiDed researchers get a better grasp of a variety of management situations The last few years had seen an explosion of interest in qualitative methods, oarticularly within organizational aspects The use o f qualitative methods can counteract the perceived current imbalance between theory testing and theory generation The distinction between qualitative and quantitative techniques is only a small part o f a far w ider debate about epistemology and ontology In qualitative research the distinction betw een data collection and data analysis may not be clearcut In practice, for example, as a series of interviews progresses, the researcher will often be creating, testing and modifying analytic categories as an iterative process, such data analysis m ay be considered an organic whole that begins in the datagathering stage and does not end until the writing is complete The characteristics o f qualitative research are as follow3: ■ Qualitative research is descriptive; ■ Qualitative research are concerned with process rather than simply with outcomes and products; ■ Qualitative research tend to analysis their data inductively; • Qualitative research has the natural setting, as the direct source o f data and the researcher is the key instrument; ■ Qualitative research can reveal how all the parts work together to form a whole:' • It assumes that reality is holistic, multidimensional, and ever-changing 1.3.3 Research strategy Research strategy were used in this thesis is case study According to theory, a case study approach should be used when how or why questions are being posed about a contemporary set o f events over which the researcher has little o f any control This study is based more on research questions o f how character and focuses on contemporary sets o f events, therefore I thought that a case study was the m ost suitable research strategy for this study ' Bogdan & B iklen 1992 62 14 A A V Capacity B uilding Analysis Report , 2003 15 A A V H um an Resource & Organizational D evelopm ent Strategy Paper , 2004 62 63 appendixes 63 64 Appendix A: Questionnaire f r AAV structure and management assessment o Status Cri e i tra Done None/ Some Much N.A Clarity and consensus e i t on xss organization's v s o and g a s iin ol which are operationalized Vision and goals are written in the organization’s constitution or policy The executive members can explain the organizational vision and goals i Staff/members have received training/onentation on the vision Organization reflects/reviews the results o f the programme in relation to its vision/goals The organization has established good reputation among stakeholders I j Decisions are made i n a participatory way Senior staff/members are involved when major decisions are made ! j 64 - O D Staffs know the decisions making process/channel Even unpopular but important decisions are made ! Decisions are made independent of undesired external pressure such as political pressure S taff respect decisions made at different levels Annual plans and budgets are approved by general assembly General Assembly meets at least once every year i Responsibilities and authority levels o f executive members/ senior staff are clearly defined Delegation of authority occurs Are senior staff allowed to make their own decisions? Does the Chairperson Director have to approve all decisions made by other staff? j 65 ! 66 Does the Chairperson/Director ! involve other staff before making decisions'? Are there sub-com m ittees to carry out /decide different issues? W hat are the exam ples to show that the D irector/Chairperson stands by the decisions made at the various levels even though s/he may not agree with it? oiis Personal P l c e and procedures e i t practiced and are geader xs, sniie estv W ritten personnel policies exist and are updated regularly The organization has a written onogram ■ Staff/members are provided with training to improve capacity All available positions are fulfilled based on open advertisement Staffs perform ance is appraised formally (either written or oral) 66 — - 66 Does the Chairperson/Director involve other staff before making decisions? Are there sub-committees to carry out /decide different issues? W hat are the examples to show that the Director/Chairperson stands by the decisions made at the various levels even though s/he may not agree with it? Personal P l c e and procedures oiis e i t practiced and are gender xs, sniie estv Written personnel policies exist and are updated regularly The organization has a written onogram Staff/members are provided with training to improve capacity All available positions are fulfilled based on open advertisement Staffs performance is appraised formally (either written or oral) 66 68 n and dedication Enhances mutual development j among other NGOs based on the prem ises that they are partners and not competitors It ensures funds are always used for their intended purpose It is transparent about what they Endeavours to achieve high standards in the organization’s work It is independently managed and is i not seen as an extension o f another i agency Staff/members are required to treat each other with respect and equality Communications are open and spontaneous Regular meetings are held Information is shared with staff/members through letters, I reports, bulletins, memos, verbally, i ! etc jI 68 ! j 68 and dedication Enhances mutual developm ent ! | among other N GOs based on the i premises that they are partners and not competitors It ensures funds are always used for their intended purpose It is transparent about what they Endeavours to achieve high standards in the organization’s work It is independently managed and is not seen as an extension o f another agency I | | Staff/members are required to treat ! each other with respect and equality | Communications are open and i spontaneous Regular meetings are held Information is shared with staff/members through letters, i reports, bulletins, memos, verbally, | ! etc t i , i i j * 68 » o9 Relevant information are provided to ! the target people in time j Executive committee members and senior staff are easily accessible A programme supportive administration (Procurement, inventory and Admin.) e i t xss ! : j Registration with Social Welfare Council and/or respective district office exists and is up-to-date Organization has a constitution and by-laws i Procurement is done through competitive pricing emphasizing i quality goods and services ! i— j A simple inventory o f all major ! ! i ; ; assets, material and equipment is - maintained j Office building, equipment and ! vehicles are properly maintained ! I Electricity and telephone bills are : i | I reasonable and regularly paid ! j All reiated legai contracts of the i ! I Oroani7ation ifundinp npreemenK ! iI ! i 70 Organization (funding, agreements, rent, etc) exists and are updated in time Meeting minutes are up-to-date Correspondence/reports/documents are kept systematically in files Records are made available regularly to all concerned such as donors, staff, and executive committee member beneficiaries 70 71 Appendix B: Questionnaire f r AAV change assessment o In recent times has your organization engaged in organizational change; what are they? What were the driving forces for these changes? Can you detail the particular nature o f the changes you have undertaking? How long has the change been going on? Are these changes positive or negative? How has your organization been responding to these forces o f change? What is the expected goal o f the change effort? What has been the impact o f the changes on staffs? Have the organization adequate resources to successfully complete the changes it has embarked upon? 10 How has the organizations response affected the way staffs are organized and the management strategies the organization has adopted? 11 How have staffs appreciated management activities? 12 In what particular wavs has the change processes affected management activities? 13 What's your opinion? Do they need or not? 71 Appendix C: Approach f r Overcoming Resistance t Change o o Approach Commonly used Advantages Drawback There is a lack of Once persuaded, Can be very time information or people will often consuming if lots inaccurate help with o f people are information & implementation o f involved analysis change Participation + The initiators People who Can be very time Involvement not have all the participate will be consuming if information they committed to the participators need to design the implementation o f design an change & others change inappropriate in situations where Education + Communication have considerable change power to resist f Facilitation + Can be very time resisting because works as well with consuming, o f adjustment adjustment expensive and problems problems still fail Negotiation + Someone or some > Sonietimes it is a Can be too Agreement group will clearly relatively easy way expensive in may lose out in a i No other approach Support People are to avoid major cases if it alerts change and where change other to negotiate that group has | for compliance I 72 considerable • ! power to resist M anipulation + Other tactics will It can be relatively Can lead to future Co-optation not w ork or are too quick and problems if expensive inexpensive people feel manipulated Explicit +• Speed is essential It is speedy and Can be very risky Implicit coercion and where the can overcom e any ad leave people change initiators kind o f resistance made at the possess initiators considerable power Appendix D: List o f Interviewees No 1 I ; ftterview Sfatus ; :hp afc tlntiW feweer^' ^ • • v-~ ‘ % ĩ: - R am esh Jung Khadka Country D irector Individual N guy en Tat Quan Northern Regional M anager Individual ! Nguven Quang Minh I IA&SL/SPO Individual Lam Phuong Nga Senior HROD Officer Individual Bui Phuong Anh OD M anager Individual ! N guven Huyen xMinh Senior Accountant Individual r ị !T a Van Tuan Senior Pro.Officer Individual Tran Ngoe Tue Head o f Finance & Admin Individual Pham Kieu Oanh ¡Gender Coordinator Individual 10 Hoang Phuong Thao I Fund & Fundraising Manager Individual ! ! -> ! Ì ! 74 11 Phan Van Ngoe PRAD M anager Individual 12 Le Q uang Duat Southern R egional M anager Individual 13 Le Phuong Thuan Programme Support Officer Focus Group 14 Tran Thi Thu Hien Fundraising O fficer Focus Group 15 Tran Lan Huong Accountant Focus Group 16 Do Thi Thinh Admin Assistant Focus Group 17 N guyen Hoai Chau Advocacy& Policy Officer Focus Group 18 Tran Nguyet Que Comm unication O fficer Focus Group 19 Truong Quoc Can Senior Pro.O fficer Focus Group 20 Ngo Duc Hinh IT O fficer Focus Group 74 Appendix K: A ctionA id Vietnam O rganization Chart 75 ... maintain organizational stability: driving forces and restraining forces The driving forces are those elem ents o f the organization that support a desired organizational change K eeping the organization. .. conceptualized change as a threestage process involving: ■ unfreezing the existing organizational equilibrium; deals w ith breaking down the forces supporting or m aintaining the old state; ■ moving to... encompassing definition o f what constitutes an organization 2.1.2 Basic o f Organizational Change 1.2.1.Conceptions about organizational change What is organizational change? Changing means departing to