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Shell Canada Company Organisational Development Process Research Paper

Executive Summary

Organisational development is a process which entails continuous improvement of organisational procedures through designing and implementing effective organisational change. It can also refer to a scientific field of inquiry where scholars investigate and come up with recommendations on how to develop organisations both in the public and private sector.

The implementation of organisational change is accompanied by management of the change for it to be successful. If change is not managed properly, it may backfire or disrupt organisational stability. There are two theoretical perspectives to organisational change and they include evolutionary and teleological perspectives.

Resistance to organisational change is a major stumbling block to organisational development and as a result, organisations need to come up with strategies of dealing with resistance to organisational change.

Shell Canada is an example of organisations which have recently implemented organisational change through restructuring. Even though the change was successful, there were some elements of resistance which the organisation managed to overcome.


This paper is based on the topic of organisational development. It seeks to explore management of organisational change by looking at the theoretical perspectives to organisational change, resistance to organisational change, and how to deal with the resistance.

The paper uses Shell Canada as an example to demonstrate how change can be implemented and how to deal with issues of resistance. The objective of the paper therefore is to establish the link between organisational development and management of organisational change.

It is argued that effective management of organisational change is a major strategy of organisational development. The reason is that if change is managed properly, the resistance to the change is minimised and as a result, organisations are able to realise the much needed growth and attain their mission and vision.

Literature Review

There are two main theoretical models of explaining and conceptualising organisational change namely the evolutionary and the teleological models. The major distinction between the two is the manner in which they address the issue of determinism in the change process.

The evolutionary model relies heavily on determinism in explaining organisational change while the teleological model does not. However, both models tend to conceptualise organisational change as a linear and rational process which occurs due to forces which are internal or external to organisations. Each of the models has several other approaches of explaining and conceptualising organisational change.

One similarity between the two models is that they both anticipate first and second order change, with first order change being reversible and second order change being irreversible. First order change usually aims at restoring equilibrium in organisations.

When organisations implement first order change, they do not intend to introduce new things nor are they interested in learning anything from the change but they are solely interested in maintaining the status quo, which in many cases is associated with resistance to organisational change.

Second order change is the reverse of first order change and is characterised by introduction of new procedures and adoption of different approaches in organisations. The change is necessitated by the failure of existing procedures to help organisations meet their objectives.

The leaders of organisations therefore think of new ways of doing things so as to stay on course in meeting their objectives. With second order change, employees learn new ideas, skills, and techniques and apply them to transform their organisations from dormant to vibrant entities in terms of meeting organisational goals and objectives.

Evolutionary Model of Organisational Change

The major assumption of this model is that change in organisations depends on the situations and environments in which organisations operate. The model has its origin from the natural selection theory which was adopted in organisational change with the philosophy that change is always happening and no force can effectively prevent it from happening (Armenakis & Harris 2002).

Later, there emerged the resource dependence approach which points out that organisations can never be self-sustaining but they rely on external environment and resources and therefore, managers in organisations have to come up with adaptive systems to enable them to cope and survive in the ever changing internal and external organisational environments (Crossan & Maurer 2011).

Teleological Model of Organisational Change

This model is also known as scientific management or planned change. The major assumption of this model is that change in organisations occurs as a result of concerted efforts by organisations’ leaders who see the necessity of change, plan, and execute it for the benefit of organisations.

The model is perhaps the most common in the literature of organisational change. Approaches which lie under this category include organisational development, strategic planning, and organisational learning (Di Schiena, Letens, Van-Aken & Farris 2013).

What is Resistance to Change?

Resistance to change refers to the behaviour exhibited by employees once they realise that the proposed change may disrupt the status quo. The resistance may be overt or covert. However, when the resistance is not managed properly, it may turn to an open rebellion by employees who may hold demonstrations, organise strikes or engage in a go-slow in an attempt to resist the change.

What Causes Resistance to Change?

Resistance to organisational change manifests itself mainly in three levels namely level one, level two, and level three. Level one resistance has to do with confusion about the change and disagreement with the idea of change.

In most cases, it is attributed to lack of previous exposure to organisational change (Greenwood & Miller 2010). Employees are preoccupied with three questions of when will the change begin and end, how much the change will cost, and the change outline.

Level two resistance is characterised by emotional and physiological reaction to organisational change (Greenwood & Miller 2010). It manifests itself either consciously or unconsciously in the employees and it is mainly characterised by fear and anxiety.

Employees perceive the proposed change as dangerous to them especially when it could lead to restructuring of the organisation, which may lead to change of jobs, demotions or in worst cases, retrenchment. Due to these fears, the employees prepare themselves to fight the implementation of the change (Greenwood & Miller 2010).

Level three resistance to change is about what the change means or represents to individual employees. Employees may resist the change if it may interfere with their faith, personal preferences or if it represents a threat to their cultural beliefs.

How to Manage Resistance to Change

Resistance to organisational change is one of the major obstacles of organisational development. The reason is that if change is resisted, then it means that organisations either remain dormant or are rendered obsolete. Various scholars have suggested ways of managing the resistance to organisational change. One of the scholars is Kurt Lewin who wrote extensively on organisational theory and development.

He proposed a three stage theory which involves unfreezing, implementation of change, and freezing. Lewin’s approach has been used by many organisations with a high success rate and that is why it is popular in the study of organisational change and development (Hilden & Tikkamaki 2013).

The freezing stage entails creating a sense of discomfort with the status quo in organisations. Managers discuss with employees the demerits of maintaining the status quo. The discussions are aimed at making employees uncomfortable with the state of affairs in organisations.

When employees feel uncomfortable, they are given an opportunity to recommend what can be done to improve the state of affairs in organisations. The aim is to make sure that the change is owned by employees. The stage is very critical because it determines whether the change becomes successful or not (Hoffmann 2009).

Managers collect the views of employees and harmonise them with their views and present them to organisational change experts who design a change plan with deadlines and indicators for monitoring the change process.

Before moving to the next stage, the change experts may recommend the training of employees on certain aspects to equip them with certain skills which are necessary for them to embrace the change (Jenkin 2013).

The implementation of the change stage entails following the guidelines developed by change experts and sticking to the dates. During the stage, employees are continuously empowered with information about the change and what it means to them.

They may also be given some incentives such as increased payments or bonuses for them to stay motivated during the implementation of the change. Managers also clarify any issues which may not be clear to employees. By so doing, the managers are able to implement the change through the help of employees (Tsasis, Evans & Diamond 2013).

The freezing stage involves the creation of a new organisational culture which is in line with the changes already implemented in organisations. The stage is crucial because employees need to change some of their beliefs, attitudes, and norms for them to be comfortable with the new dispensation.

Lewin’s approach has however been criticised for being very simplistic especially in the way it assumes that employees can be taken through these stages without difficulties. Its critics argue that it is mechanical and unrealistic.

But despite the criticism, the approach remains common in the world of organisational change even today, especially in the preparation of employees for change mainly through doing appraisals and evaluation of activities of organisations and their effectiveness, which is used by the managers to make important decisions about implementing change in organisations (Avolio, Zhu, Koh & Bhatia 2004).

Types of Resistance to Change

Psychological resistance

When change is implemented in an organisation, there is a lot of uncertainty regarding the consequences of the change. This uncertainty is what is known as psychological resistance to change and its characterised by the fear of the unknown by the members of an organisation.

Psychological resistance also comes with the fear of failure because the employees may not have certain skills or capabilities to navigate through the change successfully and for this reason, they think that their job or status may be at risk and as a result resist the change.

This type of resistance to change is characteristic of people who are addicted to the status quo.Such people show very low motivation and are less confident towards the proposed change. People who have psychological resistance to change usually think that when they try new things, they will not be as successful as in the past (Kezar 2001).

Logical resistance

Logical resistance to change occurs when the change in an organisation benefits certain departments at the expense of others. For example, an organisation may increase staff in one department and reduce staff in other departments thus making the employees in those departments which do not benefit from the change resist it.

What perhaps can be done by the management in such a case is to ensure that the change does not appear to be discriminatory (McCormick & White 2000).

Logical resistance also occurs as a result of misinterpretation of the change by the employees. This misinterpretation happens when those in charge of the implementation of the change do it as an ‘order’ rather than involving the employees in the change process through wide consultations.

The employees need to be made aware of the intended change, why it is necessary, and how it will affect them. The leaders should focus more on addressing the fears of the employees through clarifying everything to them. If this is not the case, then the employees resit the change.

Social resistance

Social resistance to change happens when members of an organisation have embraced what is referred to as team or group work. In such teams, the employees usually develop personal relationships with each other.

They also develop some group norms, which are informal rules which govern their work environment and their relationship to each other. When a change is proposed, the group members may believe that such a change may disrupt their group norms and as a result, they resist the change.

Ideological resistance to change

Organisations both in the public and private sector are formed under certain core values which guide them and give them an identity. There is no organisation which does not have a philosophy for its establishment. The philosophy and core values of an organisation evolve with time and become an organisational culture which is internalised by all the members of an organisation.

Some organisations may value hard work, honesty, and quality while other organisations may not adhere to such values. Other organisations may be guided by service to humanity while others may be guided by profit maximisation. Ideological resistance to change therefore happens when the proposed change may interfere with the organisation’s core values.

Findings and Conclusions

Shell Canada is a branch of the Shell group of companies which are spread all over the world with a history of over 93 years in business and with its headquarters in London. The organisation underwent some major organisational changes in 2000 (Grant 2002).

The changes basically entailed major restructuring of the organisation to make it more productive, especially due to increased competition from other oil and gas producing companies like B. P. The restructuring saw some 1000 positions scrapped as well as the redesigning of the coordination and organisational control systems to make them more sensitive to, and respond adequately to competition.

The elimination of the 1000 corporate positions in the organisation led to the decentralisation of power to make decisions to divisions (shell Canada included).It also enabled the top leadership of the Canada division to make decisions with ease and in a timely and efficient manner (Grant 2002).

One internal factor which necessitated the restructuring of Shell is the desire to maximise profits.

The desire was to be achieved mainly through the elimination of 1000 corporate positions and the decentralisation of power to make organisational decisions to divisional leaders and managers, with a view of doing away with the bureaucratic red tape which hindered organisational efficiency and effectiveness as well as the maximisation of profits by the organisation (Grant 2002).

One external factor which precipitated change in Shell Company was competition from other oil and gas producing companies like B.P, which were entering the market with storm and promising customers more customer friendly goods and services at very friendly prices.

This competition made the organisation see the need of restructuring so as to streamline its systems to allow for proper competition with its competitors. The increase in the number of oil and gas producing companies also broke the monotony of Shell in the field of oil and gas, thus prompting the organisational changes (Grant 2002).

The role of the management of Shell Company in the change process was basically to plan and execute the change in a manner which was efficient and cost effective so as to minimise resistance while maximising the success of the change.

The Shell management was actively involved in brainstorming and evaluation of the organisational functions and processes as well as doing an environmental analysis to understand the market trends so as to inform the change process (Grant 2002).

The management was able to analyse the market and thus saw the need for the radical departure from bureaucratic red tape and create a lean organisation, which was highly decentralised so as to maximise on organisational efficiency and effectiveness (Grant 2002).

Resistance to the change process

Despite the proper calculations and planning of the change process by the management, there was resistance to the change. The targeted employees were not happy about the change because it went against their interests. It took a lot of effort to convince them that the change was not only necessary but was also compulsory for the organisation to remain relevant in the business.

In an effort to address the fears of the targeted employees, the management linked them with other potential employers even though there was no guarantee that they would get employed. However, the resistance did not adversely affect the organisation because the affected employees were simply dismissed.

It could have been worse if they were to remain in the organisation since they would have lobbied fellow employees and created a wave of resistance which would have made it impossible for the change to be effected.

One consequence of the changes in Shell was the remarkable reduction of head office costs following the elimination of the 1000 corporate level jobs. Following the changes, there was also increased organisational efficiency as well as increase in the number of returns due to the huge savings from the 1000 scraped jobs.

The employees’ remuneration was also increased marginally thus leading to low turnover rates in the organisation. The organisation also increased its competitive advantage at the global market of oil and gas products (Grant 2002).

Recommendations and Implementation

The elimination of 1000 corporate positions may have stabilised the Shell Canada division albeit for short-term. However, the company should have gone the extra mile to focus on improving the work environment. The reason is that employees need a conducive work environment for them to be productive.

The company should have introduced some incentives to motivate the remaining employees to discharge their duties with full dedication. Some of the incentives which it should have considered include provision of medical cover and on-the-job training of employees. The overall result would have been improved organisational efficiency and effectiveness.

Reference List

Armenakis, A.A & Harris S.G 2002, ‘Crafting a change message to create transformational readiness’, Journal of Organisational Change Management, no.15, pp.169-183.

Avolio, B.J, Zhu, W, Koh, W & Bhatia, P 2004, ‘Transformational leadership and organisational commitment: mediating role of psychological empowerment and moderating role of structural distance’, Journal of Organisational Behaviuor, vol.25 no. 8, pp. 951-968.

Crossan, M. M & Maurer, C.C 2011, ‘Reflections on the 2009 AMR decade award: do we have a theory of organisational learning?’, Academy of Management Review, vol.36, no. 3, pp. 446-460.

Di Schiena, R, Letens, G, Van-Aken, E & Farris 2013, ‘Relationship between leadership and characteristics of learning organisations in deployed military units: an exploratory study’, Adm. Sci., vol. 3, no.3, pp. 143-165.

Grant, R. M 2002, Organisational Restructuring within the Royal Dutch/Shell Group. Web.

Greenwood, R & Miller, D 2010, ‘Tacking design anew: getting back to the heart of organisational theory’, Academy of Management Perspectives, vol. 24, no.4, pp. 78-88.

Hilden, S & Tikkamaki, K 2013, ‘Reflective practice as a fuel for organisational learning’, Adm. Sci., vol.3, no.3, pp. 76-95.

Hoffmann D.G 2009, ‘Applying principles of leadership communication to improve mediation outcomes’, Dispute Resolution Journal, vol. 64, no.3, pp. 24-29.

Jenkin, T.A 2013, ‘Extending the 4 I Organisational learning model: information sources, foraging processes and tools’, Adm. Sci., vol.3, no.3, pp. 96-109.

Kezar, A.J 2001, ‘Understanding and facilitating organisational change in the 21st century’, Recent Research and Conceptualizations, vol.28, no 4. pp. 35-48.

McCormick, D. W & White, J 2000, ‘Using one’s self as an instrument for organisational diagnosis’, Organisation Development Journal, vol. 18, no.3, pp. 49-62.

Tsasis, P, Evans, J.M & Diamond, J 2013, ‘Learning to learn: towards a relational transformational model of learning for improved integrated care delivery’, Adm. Sci., vol.3, no.2, pp. 9-31.

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