The paper comprehensively analyzes the importance and significance of different change management theories and models in their support and explanation of the procurement risks. This is with the inclusion of unforeseen instances such as nonperformance, risk of quality, change in scope, or time management. The changes trigger potential damage to the outcome of the procurement processes that adversely affect the overall project. Therefore, the paper focuses on five change management theories and models to support and/or explain the procurement risks. These including Lewin’s change management model, Kotter’s theory, the McKinsey 7-S model, Nudge theory, and the Satir change management model.
Change Management Theories and Models in Procurement Risks
Developed by Kurt Lewin, the model is fundamental in breaking down massive entities of change into small manageable groups. These are based on three key features that include unfreeze, change, and refreeze. In the management of procurement risks, Lewin’s change management model in the first phase of unfreezing the current processes allows all the involved individuals and teams to understand the need for change (Wang, City & Ellinger, 2009). This gives room for every person to be on board in the procurement processes; thus minimizing the associated risks that would be associated with the implementation of different steps. The understanding of the need for change leads the procurement process to acquire diverse feedback that informs various approaches of mitigating potential risks (Sanderson, Lonsdale, Mannion & Matharu, 2015). This sets the course for changes to be made in a manner that focuses on supporting the procurement processes and assurance of efficiency.
The refreeze step allows the commencing of the status quo of the adopted changes in the procurement process. The mitigation of procurement risks is based on the sufficient period provided in the adoption of change limiting or eliminating potential resistance (Hussain et al., 2018). Also, there is an extensive amount of time to assess all potential leaks to the procurement processes that enhance the arising risks through the involvement of teams. The existence of strong senior management is integral to strengthen team-wide changes at different points of the procurement processes (Aven, 2016). Hence, it enhances the efficiency and significance of the procurement project.
Kotter’s theory of change management was developed by Harvard Business School, Professor John P. Kotter. The theory comprises of eight stages that provide extensive opportunities to mitigate risks that may arise in the procurement processes (Pollack & Pollack, 2015). The utilization of Kotter’s theory is crucial in the implementation of changes in the procurement project. The approach builds enthusiasm, morale, and understanding of the importance and needs for change in the procurement project.
Kotter’s theory creates a sense of urgency in adopting changes in a procurement project. This room builds a change team responsible for implementing the adopted variations in the procurement processes. This is informed by the intention to achieve the highest benefits of the procurement project. The formation of strategic vision in Kotter’s change theory is crucial to guide and maintain the procurement process focused on the stipulated mechanisms (Pollack & Pollack, 2015). With a combination of the communication of the vision, it significantly minimizes the procurement risks that would otherwise be massive. The confusion experienced with a clear vision and lack of communication amplify the procurement risks. Therefore, Kotter’s theory outlines approaches to remove existing barriers to change.
The capacity to focus on short-term wins gives the procurement team a sense of dedication and motivation to preserve in achieving high goals. This leads to the commitment of maintaining the momentum instituted in the changes in the procurement project (Aven, 2016). Consequently, this theory significantly reduces or eliminates the procurement risks that posit to undermine the procurement project’s efficiency potentially.
The application of the McKinsey 7-S model works best in the point where the risks of the problem are known, but there is the uncertainty of how to resolve them. The application of the 7-S model in change management to mitigate the procurement risks serves as a guide to resolving the identified procurement problem efficiently (Baishya, 2015). The strategy outlines the approaches in which the procurement risks can be resolved. Based on the problem or risk, the strategy streamlines the actions of the procurement team to adopt changes and maintain balance in the implementation process effectively. The structure helps remain on course and within the stipulated framework. The systems provide the mechanism to which the procurement changes are implemented. The systems support every step and maintain manageable levels.
The procurement team ought to develop shared values to ensure they function and operate towards the same goals. This eliminates the risks of contradicting each other in the implementation of procurement changes (Ravanfar, 2015). The style maintains the culture and conduct of the staff in the procurement process. The determination of the required number of staff and specialization (skills) is fundamental to the elimination of procurement risks. Therefore, the necessary skills matching staff and task distribution impacts the success of the procurement project.
The utilization of Nudge theory is based on the available and essential evidence that informs the course to which the procurement changes should take. The determination of the direction of change is integral to the mitigation procurement risks that arise as a result of change implementation. The Nudge theory defines the changes to be adopted in the procurement process (Esposito, Hernandez, van Bavel & Vila, 2017). This ascertains that procurement risks are addressed during the identification of changes as it assesses potential implications. The consideration of the procurement team’s point of view is critical to support their approaches and conduct in the implementation process. Based on the provided evidence, the opinions can be adopted or improved to ascertain high benefits in the procurement process (Esposito et al., 2020). This eliminates procurement risks attributed to the negligence of the professionals involved in the implementation process.
The Nudge theory emphasizes the value of listening to the employees’ views and presentation of different choices. The evaluation of different alternatives creates the opportunity to adopt the best and most effective approach to be utilized in the procurement process (Esposito et al., 2020). The team is motivated by short-term wins, which should be solidified in change management. Thus, it impacts the efficiency of the procurement process.
The Satir change management model primarily focuses on the staff involved in the implementation of the procurement project. The elimination of risks can be adequately addressed by the consideration, monitoring, and addressing issues raised by the staff in the implementation process. The model addresses the status quo, resistance, potential chaos, integration of changes, and establishment of a more beneficial status quo (Dias, Hernandez & Oliveira, 2020). The Satir change model adequately prepares the adoption of changes and enhances the efficiency of the implementation of the change. Therefore, the outlined roadmap acts as a reinforcement to proposed changes in a sustained manner that ascertains minimal risks.
In conclusion, the adoption of different change management theories is fundamental to ascertaining the highest results are achieved in the procurement implementation process. The application of the change management theories and models simplifies and explains the entities involved in the change process, allowing the address to potential risks. The assessment of every aspect is crucial to determine potential approaches to mitigate the associated risks. As well, it is fundamental to limit the level of risks through the evaluation of different approaches involved in the procurement project. The use of a fixed price contract maintains high results through the utilization of the change management theories that maintain high resolve and commitment to attaining the set standards of the procurement project.
Aven, T. (2016). Risk assessment and risk management: Review of recent advances on their foundation. European Journal of Operational Research, 253(1), 1-13.
Baishya, B. (2015). McKinsey 7S framework in corporate planning and policy. International Journal of Interdisciplinary Research in Science Society and Culture (IJIRSSC), 1(1), 165-168.
Dias, G. C., Hernandez, C. T., & Oliveira, U. R. D. (2020). Supply chain risk management and risk ranking in the automotive industry. Gestão & Produção, 27(1).
Esposito, G., Hernández, P., van Bavel, R., & Vila, J. (2017). Nudging to prevent the purchase of incompatible digital products online: An experimental study. PloS one, 12(3), e0173333.
Hussain, S. T., Lei, S., Akram, T., Haider, M. J., Hussain, S. H., & Ali, M. (2018). Kurt Lewin’s change model: A critical review of the role of leadership and employee involvement in organizational change. Journal of Innovation & Knowledge, 3(3), 123-127.
Pollack, J., & Pollack, R. (2015). Using Kotter’s eight stage process to manage an organisational change program: Presentation and practice. Systemic Practice and Action Research, 28(1), 51-66.
Ravanfar, M. M. (2015). Analyzing Organizational Structure based on 7s model of McKinsey. Global Journal of Management and Business Research.
Sanderson, J., Lonsdale, C., Mannion, R., & Matharu, T. (2015). Evidence on the impact of procurement and supply chain management practices and techniques. In Towards a framework for enhancing procurement and supply chain management practice in the NHS: lessons for managers and clinicians from a synthesis of the theoretical and empirical literature. NIHR Journals Library.
Wang, Y. L., City, T., & Ellinger, A. D. (2009). Applying Lewin’s Change Model in the Development of a Learning Organization.
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