Executive Summary
The report majors on Hempel Paints and explains why it performs well in the coating industry. The organisation has been producing paints that meet its customers’ needs across the globe (Hempel Paints, 2021). Based on this, it is important to understand how Hempel operates in the constantly changing environment. The research uses PEST analysis to determine the drivers of change in the organisation. One of the drivers identified is environmental and social sustainability. The functional organizational structure provides a conducive environment for Hempel to quickly adopt the changes. This structure makes Hempel flexible and open to the implementation of any modification (Hempel Paints, 2021). The organizational culture also helps the organisation to adopt the changes identified effectively. The strategic approaches such as diversity management and inclusivity have helped the HR managers in creating a suitable environment for change. The HR team are working to make sure that the organization achieve its objectives.
Introduction
In recent years, change in contemporary organizations has become a way of life and the pace of control. As a result, organizations adopt new approaches to increase efficiency and become more productive. Hempel, based in Qatar, has continuously changed its operations to become competitive in the market (Dun and Bradstreet, 2022). It is among the largest independent producers and suppliers of decorative and protective coatings. The company has provided high-quality coatings and technical services to the Qatar market. In addition, the organisation has undergone continual changes to become a market leader and fulfil customers’ needs. These changes have helped Hempel to dominate the sector and achieve its goals. Therefore, Hempel has embraced change to remain relevant in the industry, become competitive, and increase its performance.
Relevance of Hempel and Identification of the Drivers for Change
Hempel Paints is the leading brand in the coating industry and has been enjoying a formidable market share in Qatar. As shown in figure 1, the company is one of the major players in the market (Mordor Intelligence, 2022). The company is a private company that works in the material industry. It creates and manufactures coating solutions for the protective, ornamental, industrial, and yacht industries. The company is well-known in the market for producing high-quality paints and solutions. In addition, the organisation employs approximately 87 people to handle its operations (Dun and Bradstreet, 2022). For the past five years, Hempel has invested heavily and conducted extensive research in intumescent coatings, resulting in the development of a superior quality coating.
Hempel wants to attain a competitive advantage in the market. The coating industry in Qatar is highly competitive due to a conducive business environment attracting and allowing all businesses to thrive (Dun and Bradstreet, 2022). Therefore, the organisation remains dedicated to increasing sales through organic growth and acquisitions as part of its ambitious growth strategy. According to the CEO, “We will continue to look for new companies to welcome into the Hempel family. This will further support our growth ambitions” (PCE International, 2021). This goal is based on the view that as the organisation grows in size, it solidifies, makes more profit, and becomes less vulnerable to external threats such as takeover by others. As a result, Hempel continues major in its growth strategy through mergers and acquisitions to achieve economies of scale.
With the need to achieve its growth strategy, Hempel introduced its leadership and management changes. In 2021, the organisation announced a new Executive Group Management team to spearhead its growth trajectory to double Hempel by 2025. In addition, the company will be able to become even closer to its clients with a new company structure. “I am thrilled to announce today’s changes,” Lars Petersson. “My new leadership team will lead a new way of working at Hempel – we have organized our business in an even more customer-focused structure, which will unleash potential and energy from the organisation to deliver on our Double Impact strategy” (Hempel Paints, 2021). Based on this, the change in the leadership was meant to assist the organisation in achieving its growth strategy.
Environmental sustainability is one of the factors that drive change in the organisation. There is a growing global emphasis on sustainability, and Hempel is dedicated to making a constructive contribution to addressing a number of the world’s current and future sustainability concerns across segments (The Peninsula, 2018). Hempel plays a significant role in assisting customers on their paths to sustainability and observes increased interest in sustainable solutions across segments. As a result, Hempel’s products have never been more in demand than they are now. For example, this started in October 2019 when the company joined the Getting to Zero Coalition, a multi-stakeholder initiative aiming to see the deployment of commercially feasible zero-emission shipping boats by 2030 (Hempel Paints, 2021). The increasing demand for sustainability offers opportunities for Hempel paints.
Social sustainability is also driving change at Hempel as they set higher standards on safety, inclusivity, fairness, and a conducive working environment. For over a century, the Hempel family has always been about mutual trust, respect, and support (Hempel Paints, 2021). The company wants to do more on sustainability to attract and keep the exceptional talent required to propel its future growth. Hempel continues to invest in social sustainability programs to improve its workers’ health and wellness while also enriching their work experience at Hempel (Hempel Paints, 2021). The company wants to be more than just a fantastic place to work and build a rewarding career. They also want to be an example of how true inclusivity, fairness, and respect lead to superior business performance and larger societal benefits.
PEST model of external analysis best determines more drivers leading to change in the organisation. According to Romasheva and Ilinova (2019), the PEST analysis assists businesses in determining what factors may have an impact on their business and developing strategies to deal with those changes. The external drivers will make a company modify their products, operations, strategies, and organizational structure. For example, technological disruption is causing most businesses to continue modifying their infrastructure to remain competitive in the market. Hempel has acquired ground-breaking technology that will transform the insulating coatings business while improving worker safety and reducing customers’ environmental footprint (Veronica and Hsing, 2019). This indicates that external factors drive most of the changes made by the organisation. As a result, Hempel continues to look at the changes in its external environment to influence the changes they make.
Hempel intends to realize its growth strategy through acquisition, organic growth, and investments. The organisation wants to acquire and merge with other companies to become a major (CFCM, 2021). However, this change will undoubtedly trigger resistance from employees and investors of the company. The uncertainty caused by a merger or acquisition can heighten stress and signify danger to target firm personnel. Employees are afraid to lose their jobs due to mergers and acquisitions. Apart from the employees, the organisation is likely to face investors’ resistance. Furthermore, new mergers and acquisitions are likely to interfere with the amount of dividends the shareholders obtain (CFCM, 2021). Therefore, the organisation should be prepared to handle the inevitable resistance from relevant stakeholders.
Critical Evaluation of Relevant Theories and Concepts to Organizational Structure
Modern Organizational Theory
All organizations depend on their internal and external environments to identify and implement change. According to modern organizational theory, an organisation is a system that changes with the change in its environment, both internal and external (Eberle and Soegtrop, 2019). This theory views an organisation as an open system. The openness of an organisation is usually determined by its organizational structure. This means that an organisation constantly interacts with its surroundings and quickly adapts to the changes to survive and flourish in the market. For example, an effective organizational structure is one that is flexible due to increased collaboration and decision making through dual chains of commands (Yorio, Edwards and Hoeneveld, 2019). As a result, this theory requires an organisation to create a flexible organizational structure in order to make it open.
Functional Organizational Structure
A functional model is where employees are organized based on their activities in the organisation. For example, as shown in figure 2, the HR employees have departments similar to finance, IT, research and development, and sales and marketing. The most prevalent advantage of a functional organisation is that it guarantees a consistent level of departmental expertise by specialization. This ensures that issues raised to the follow-up group are managed by appropriately qualified staff, resulting in higher customer retention. Operational speed is another benefit of this form of organizational specialty. However, the structure faces disadvantage such as lack of coordination and delay in decision-making. Therefore, the organisation needs to facilitate teamwork when using this organizational structure.
The organisation has used external factors as influencers to its changes. To achieve this, the organizational structure must be flexible and responsive towards any modifications. In addition, the changes adopted by Hempel Paints in Qatar were simple and relevant because internal and external factors have a significant influence (Hempel Paints, 2021). As a result, they were implemented due to limited resistance and effective communication as well as quick decision-making. For example, Hempel Paints is headed by a chairperson and have several departmental leaders. The managers can make independent decisions influencing operations in their department with minimal influence from executives. Therefore, an organization’s ability to adopt changes depends on aspects like organizational structure.
A Mechanical and Organic Approach
Hempel Paints looks to work in a mechanical approach, with clear strategic goals and directives. This presents a view of a strong, dependable, process-driven, and stable mechanism, which appears to be how the company operates (Peprah and Ganu, 2018). The mechanical vision of the organisation characterized many ancient ideas of organizations and management. The disadvantage of utilizing this form of organisation would be a lack of flexibility to adjust in uncertain settings. It is undeniably unpredictable and unstable. To be successful, organizations must be able to adapt to changes in their environment. An organic structure would be a good choice for allowing for flexibility. As a result, the mechanical approach of the organisation would assist in the management and adoption of change.
Appraisal of Change Management Concepts and The Role of Management in The Success of Hempel Paints
Lewin’s Change Model
Kurt Lewin’s change model is one of the frameworks used by organizations to adopt change. This is one of the change management principles that companies utilize as a change roadmap (Burnes and Bargal, 2017). The model consists of Unfreezing, modifying, and refreezing phases. The model is a simple and useful paradigm for understanding the transformation process when making a change. The change process involves establishing the need for change and working toward the required level of behavior, and finally establishing the new behavior as the norm (Kunert and Staar, 2018). In this scenario, a company begins the process by determining the need for change. The model is still widely used today, and many recent change models are based on it.
Unfreeze
Change unfreezing is a critical stage in the change management process. The first step is to prepare an organisation to accept the required change. This can be achieved by recognizing the need for change and creating awareness among employees and relevant stakeholders. Hempel Paints’ leaders understand and communicate the need for change to employees and other parties involved (Hempel Paints, 2021). For example, they recognize the importance of adopting new technologies on a regular basis to improve organizational efficiency. To eliminate opposition, the change is effectively communicated to employees. During this stage, the organization’s leaders assist with the effective implementation of the change (Burnes and Bargal, 2017). This is the reason for the successful implementation of changes witnessed at Hempel Paints.
Apart from determining the need for the change, Hempel Paints’ leaders who understand the change to be adopted are often required to champion the change. The change process usually starts with leadership coaching and developing a change champions network in this organisation. Leaders are assessed and chosen based on their ability to inspire change. In addition, Hempel’s leadership leads to developing a change strategy and communication plan to facilitate the process (Hempel Paints, 2021). Since the main purpose of a change process is to ensure that everyone in the organisation moves from the current state to the future state, leaders of Hempel play an integral role in eliminating resistance from stakeholders. Therefore, the leadership of the organisation is expected to create a conducive environment for change.
Change
Change is the second stage of the Lewis change model, which the organisation employs. To remain up to date with the disruption in the business environment, current technical advancements were implemented at this level. A team of researchers was formed to constantly produce suggestions for enhancing processes in order to attain the desired efficiency (Burnes and Bargal, 2017). The IT department of the organisation was financially supported to ensure that it functions efficiently in the sector. In addition, new executive leadership were installed to help the organisation achieve its growth objectives. As a result, the change process is crucial in transitioning from one state to another.
Refreeze
After implementing the change, refreezing is the most important phase in the overall process. Hempel Paints managers adopted strategies such as training the employees on the new changes to the organisation. Refreezing phase is significant because it ensures that people do not revert to their old patterns of thinking or behavior before executing the change (Burnes and Bargal, 2017). Efforts should make sure that the change is not missed. However, it should be engrained in the company’s culture and maintained as the proper way of thinking or performing. Because it is anticipated that positively reinforced behavior will be duplicated, positive reinforcement of individual efforts is often used to reinforce the new state.
Role of Management in Hempel’s Success
Hempel is able to maintain the provision of quality products because employees perform tasks in accordance with the company’s aims and vision. Top management ensures that everyone knows the company’s general aims and strategy to attain greater success (Hempel Paints, 2021). It is not sufficient for an employee to be aware of the duties that must be completed. They need to understand where the company is headed and what management plans to accomplish to see how their efforts fit into the wider picture. Top management then directs front-line managers to develop individual goals for each employee. These should be reachable but challenging because each employee is motivated to improve. When creating goals, keep in mind the company’s current state as well as its overall strategy and direction.
Hempel Paints understands the importance of social responsibility to its success. To achieve this, the organisation must invest in corporate social responsibility. Social, environmental, and economic initiatives are the three basic pillars of corporate social responsibility. Hempel has reaped numerous benefits from its investment in social responsibility (Hempel Paints, 2021). With the help of good management, the company has established a positive reputation in the global industry. Many people want to work for the company due to its initiatives to support the employees and other stakeholders. As a result, employee productivity has increased dramatically, and the firm’s labor turnover rate has decreased. In addition, the organization’s management has helped guide all operations around corporate social responsibility. This has been important in reducing government regulatory influence.
The success of Hempel is attributed to its effective communication. According to O’Rourke (2019), communication is the most crucial aspect of effectively managing employees, customers, and other important stakeholders. The organization’s level of transparency and cooperation among personnel has been achieved through communication from managers. In addition, effective communication is needed for a company to continue achieving its goals and objectives. As a result, Hempel’s managers can effectively communicate to accomplish better their managerial tasks, such as planning, leading, directing, controlling, and organizing (Hempel Paints, 2021). Therefore, the organization’s management has played an integral role in ensuring effective communication.
Critical Assessment of the International Management from A Cultural Perspective and Its Influence On Hempel Linked to Working in Global Marketplaces
Internationalization contributes to changes in an organisation to accommodate the differences in culture. It is detrimental for contemporary businesses to overlook the culture of different countries. For effective operations of Hempel, a good understanding of different cultures represented by stakeholders is required (Hempel Paints, 2021). The organisation achieves this by making sure that its culture supports diversity. Effective understanding of the stakeholder’s cultural beliefs enables the organisation to change the environment. For example, they face minimal resistance from the employees when implementing the changes. However, without considering the cultural beliefs of employees mount a resistance, especially when adopting a change. Therefore, Hempel’s organizational culture that supports diversity has helped in the effective adoption of changes.
Organizations such as Hempel have become more industrialized due to increasing globalization. As a result, the company’s practices have taken a new turn to impact changes in the external business environment, characterized by constant activities that expose the environment to fluxes (Hempel Paints, 2021). Therefore, the leaders had to develop rules and enforce regulations to direct work processes in organizations to address the management of both individuals and the environment in order to practice in a more ethical manner. In addition, organizational culture provides employees with the tools they need to understand and manage what is going on in their environment, which helps the host community maximize its resources. As a result, the organisation uses appropriate leadership to handle stakeholders from different cultures.
Hempel has worked to improve collaboration and accelerate corporate cultural integration. One of the missions of the organisation is to strive to shape a brighter future with sustainable coating solutions. Hempel is a company with strong values that works with customers in the maritime, infrastructure and energy industries as a world-leading supplier of trustworthy coating solutions (Hempel Paints, 2021). The organisation has effectively developed strategies to enhance collaboration among stakeholders. For example, Hempel has a policy requiring HR to recruit employees from different cultures. Additionally, to become competitive in the industry, employees are supposed to be trained to work and relate with colleagues from different cultures.
Analyze The Impact of the Strategic Approach to HR and Its Application Within Hempel Paints
Hempel’s HR team performs more than just hiring and recruiting employees. They help create a link between the employees and organizations to achieve their goals and objectives. The HR department is responsible for four major functions: acquisition, development, motivation, and maintenance (Stewart and Brown, 2019). These factors can influence corporate culture and how easily it adapts to change and behavioral attitudes within a company. This is due to the fact that any attitude formed by HR flows down to management. For instance, if management feels rewarded and confident in their ability to manage well, this change will be carried on to staff, allowing for modifications. Thus, the HR team plays an integral role in linking the employees to an organisation to achieve the intended purpose.
The HR of Hempel works to create an inclusive environment for everyone. Stewart and Brown (2019) define inclusion as a collaborative, supportive, and respectful environment that increases the participation and contribution of all employees. The organization’s strategic approach, such as the need for an inclusive workforce, helps shape the operations conducted by HR. This ensures that the HR department works towards creating a conducive and collaborative environment (Stewart and Brown, 2019). HR must ensure that all employees are protected, treated equitably, and feel included, whether they are actively involved in dispute resolution or conducting labor negotiations. As a result, the primary aim of this initiative is to make sure that the employees, customers, investors, and stakeholders from different cultures work together to achieve a common objective.
A great culture enables the correct strategic vision and strategy to be implemented. Leaders must assess how their organization’s culture ties to and supports its strategy. As a result, HR is ideally positioned to provide essential discussions about the current environment and how it may need to evolve in order to support the plan (Stewart and Brown, 2019). This is the only role that has a comprehensive view of employee performance and effectiveness across the organisation. The most effective human resource managers work with leaders and employees to communicate the desired culture through concrete, real-world examples and actions.
The HR of any organisation has the ability to get into employees’ thoughts and feelings across levels, business units, functions, and regions. Early employee engagement in the strategy is crucial for capturing their hearts and minds in the long run. As a result, HR may assist in soliciting employee comments, thoughts, opinions, and suggestions about the plan and how it should be executed (Stewart and Brown, 2019). If big changes are on the horizon, such as a restructure or the installation of new technology, HR can also serve as a change coordinator by developing and implementing the strategies and plans required to lead and explain the transition.
Although the organization’s financial objectives are usually fronted in a top-level plan, people and talent priorities are also significant. Some of the initiatives driven or supposed by the HR team are attracting and retaining top talent, building new core capabilities, and improving diversity and inclusion (Stewart and Brown, 2019). The HR department is expected to ensure that human resources are effectively managed. With a strategic approach, HR can ensure that the organizational plan addresses talent and people issues. Business leaders and managers own the organizational strategy’s people and talent requirements. As a result, the HR professionals may design those criteria and ensure that the organisation is set up to execute those objectives successfully.
As a strategic approach, diversity allows the HR team to begin recognizing new trends in managing people from different cultures. They can effectively manage diverse teams when their personnel have a good understanding of various cultural integration. As a result, HR may focus on features that motivate employees, decrease turnover, and increase productivity levels, all while developing an inclusive workplace (Stewart and Brown, 2019). HR professionals play a crucial role in developing and promoting a diverse culture through management and leadership. Allowing each employee to learn, grow, and contribute to the organisation is another respectful and inclusive component. Therefore, the need for effective management of a diverse team enables the HR team to develop coping mechanisms.
Conclusion
Hempel has used strategic approaches to become one of the leaders in the coating industry. The organisation engages its stakeholders when they want to adopt a change. This is to reduce the resistance of the employees and investors, especially when the change is about mergers and acquisitions. Hempel also understands the need for an effective leadership team to spearhead the change process. The organisation is working with the HR department to achieve its strategic objectives. As a result of internationalization, an organisation needs to manage its diverse team effectively. The HR team is required to create an inclusive and collaborative work environment for all employees. This is integral in the effective management of change in an organisation, such as introducing new technology. It is easy to adopt a change when the employees are working as a team.
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