Case Study: Change Management in a Small Firm

Case Study.  Change Management in a Small Firm

It is often said that small businesses are responsible for a large part of job creation in the economy. The value of these small businesses and the role they play in the economy is sometimes underestimated, however there is nothing small about their impact on our economy and therefore they fulfill a crucial role in the business environment. For these small firms to undergo changes is more off a challenge than it is for bigger companies. The bigger firms are likely to have more experience with change because of their company history, where small firms, either caused by their newness or slow-growth histories, may well not have. Therefor when managing change in a small company, it requires specific management skills, not only to handle the change itself, but also just as important, to manage the change after it has been implemented.

In the case of Small firms, what are the key factors for successful implementing change and how can it be managed effectively, especially in the complex business environment of small firms? This question is relevant, especially if the claim of Beer & Nohria (2000) that about 70% of all initiated change initiatives fail holds true.

Small firms are defined as; organizations with less then or exactly 10 Full Time Employee (FTE) lead by entrepreneurs. In most of these small firms, the leading manager is also the owner of the firm. These owner-managers are usually involved in all processes of the firm, what can lead to a competitive advantage. In order to do so, these firms have to continuously adapt in terms of cost, quality and diversity. Therefore, it is important to implement change in the most effective way, to achieve increased competitiveness. For these small firms to undergo changes is more a challenge than it is for bigger companies.

For analyzing this case study, use Kotter’s model. Kotter (1996:21) advocates an eight-stage model for creating major change.  It is worth investigating this model in more detail from other sources.  The stages include:

  1. Establishing a sense of urgency
  2. Creating the guiding coalition
  3. Developing a vision and strategy
  4. Communicating the change vision
  5. Empowering broad based action
  6. Generating short-term wins
  7. Consolidating gains and promoting more change
  8. Anchoring new approaches in the culture


Kotter (1996) argued that most of the major change projects are divided in a set of small and medium-sized change initiatives. He further argues that there are two major factors that are essential to institutionalize change in a firms’ corporate culture;

  1. Show employees “how the new approaches, behaviors and attitudes have helped improve performance” (Kotter, 1996, p. 58).
  2. Making sure that “the next generation of management personifies the new approach” (Kotter, 1996, p. 58)


Presentation of the case  

For this case study, a fiction Saudi based company Epsilon is used as study object. The company has a workforce of 10 Full-Time Employees (FTE) at a central office, of which three are owners and have a management position and seven are operations and support staff. There is no strict hierarchy other than that the managers are equally in charge. The management has weekly meetings to discuss the day-to-day business activities and have no special meetings for discussing organizational changes. The operations of Epsilon are all related to health products. They host events, do product promotions and give workshops about healthy lifestyle. The promotion of healthy products is their main operation, and hold accounts for about 85% of the business. Epsilon has about 2000 product promotions a year, which are all planned and managed by the seven office employees with support from the management. Epsilon  uses professional healthy product consultants to do the product promotions. These consultants are freelancers and being deployed all over the country in healthy product stores. The office employees of plan the different promotion campaigns and contact the consultants to check for availability. A typical workday for a health product consultant would be promoting a healthy product in customers nationwide. The business environment of can be characterized by intense competition, trust and personal relationships. The companies that assign projects to Epsilon are high demanding, and are switching regularly from suppliers.

Key Issues related to Change in Epsilon

  • Epsilon is facing more competitive demands, which forces them to perform quicker and more efficient at a lower price but with higher quality (Pressures for change).
  • Regular conflicts between the owners (Change leadership)
  • Different sense of urgency between employers, employees and freelance consultants (Communication).
  • Employees’ collective desire for the change is weak (Readiness for Change)
  • Lack of a Vision for Change (Planning for Change – Strategy for Change)
  • Employee empowerment is lacking (Employee participations and Culture)


Based on the above information given please answer the following questions:

  1. Provide an evaluation of the current situation in this firm. How the situation might be different in large firms and why? (6 points)
  2. If you were a Business Consultant, what your suggestions would be for implementing changes in this small firm. (8 points)
  3. How cultural factors affect the readiness for Change and Resistance to Change in Small Firms? Please explain using your experience and literature (at least two citations) (6 points)



  • Each answer should not exceed one (1) page and overall to three (3) pages. Please use references in the 3rd
  • The font type used for this exam must be ‘Times New Roman’ with a font size of 12. Line spacing of paragraphs should be 1.0
  • Final Exam should be submitted on August 1st Submitting after the deadline will not considered for grading.


Cheating and Plagiarism: Those who copy or use the work of others without attribution will receive no credit for the exam. More than one incident of cheating and/or plagiarism will trigger University disciplinary action.

Plagiarism Policy:

  • The work you submit for credit must be your original work.
  • Assignments that are not the original work of the student are considered plagiarized.
  • Plagiarism occurs when another person’s work, words, or ideas are presented as one’s own without the use of a school-recognized method of citation, such as APA style (e.g., copied from another source such as an author or another student without properly acknowledging the actual writer/author).
  • Plagiarism also occurs when knowingly giving or allowing one’s own work to be copied or otherwise duplicated by another for academic credit, or when resubmitting one’s own work for academic credit.
  • All those who violate this policy will receive a zero for the final exam and the case will be turned over to the Dean of Student Affairs for further action.


xxxxxx (1400 no. of  words count)




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Answer Excerpt

If I were a business consultant, xxxxx    xxxxx        xxxxxxx I would  xxxxxxx   xxxxx  give the   xxxxxx   xxxxxx  following  xxxxxx suggestions  xxxxx  xxxxx implementing  xxxxxx on   xxxxxx xxxxx  for   xxxxxx  changes in this small firm.  xxxxxxx Development xxxxxx as xxxxx  of a vision xxxxxx and g xxxxxxx, communication, development xxxxxxx  strategies, leadership, xxxxxxxx  and provision of resources.

I would suggest to the firm’s management xxxxxx  to xxxxx develop a xxxxxxxx for the changes and develop xxxxxxx for the same. Currently, the firm does not have a xxxxx for change,

xxxxxx (1400 no. of  words count)



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