Management of Change - Swissray International

A Case Study Review

Seminar Paper 2004 13 Pages

Economics - Job market economics



1 Abstract

2 Introduction

3 Company overview
3.1 Swissray International, Inc
3.1.1 Internal Structure & Processes
3.1.2 Organisational Culture
3.1.3 External Environment
3.1.4 Forces Driving & Forces Resisting Change

4 Management of Change - a theoretical review
4.1 Strategic Change
4.2 Organisational Change
4.3 Linear Model of Organisational Change

5 Case Study - Swissray International
5.1 Lessons learnt

6 Conclusion


List of Figures:

Figure 1: Three Perspectives on Change

Figure 2: Swissray in 2000 (Organisational Chart)

Figure 3; Swissray´s Key Drivers & Key Resisting issues for Change

1 Abstract

This assignment assesses my personal experience on conditions and dimensions in change management on an organisational and individual level, offering an analytical approach to a reflective personal view, placing this against a review of the most recent reported findings in the literature on the topic of change management and its consequences in an organisational setting. The case study of Swissray International, Inc. tries to bring out the personal level of my experiences and learning on how I contributed to re-orientating an organization's strategy.

2 Introduction

The literature1 describes the process of change management as tools and techniques to manage individuals and the related HR issues effectively, when implementing organisational change or to remake the companies into better competitors (Kotteri,1998,p.1). One example that springs to mind is the reference to Weiss (2001, p.27), referring to the three perspectives on change, illustrated in Figure 1 below.

Abbildung in dieser Leseprobe nicht enthalten

Figure 1: Three Perspectives on Change

My personnel experience has shown there is no organization, small or large, global or local, that is immune to change. In order to manage demographic and competitive forces with the latest technological, every organization across the board, in all market segments, is attempting to fundamentally alter the way they do business. According to a study conducted by Weiss (2001, pp23- 29ii), only a small percentage of these efforts actually result in realizing their aims. Transformational change strategies often fall short of their goal - as this case study confirms too - because the organisation itself does not change the way it behaves.

Yet change remains acknowledged as a key factor in management, as has been underlined by Executive Online Group research2 (2002) revealing that among 100 UK companies employing ≥500 people, 35% of the work of all directors is devoted to change, with a total of 79% major initiatives FGM - Management of Change - A Case Study Review of Swissray International, Inc. recorded as M&A’s, down-sizing and corporate restructures. The study further assumes that the time spent on these tasks is likely to increase over the years.

3 Company overview

3.1 Swissray International, Inc.

Swissray International, Inc. (NASDAQ: SRYI.PK, HQ in NY, USA) designs and manufactures digital x-ray equipment for the hospital and physician market worldwide. The company was founded as Teleray AG in 1981, in Hitzkirch (Switzerland) and begun marketing conventional x-ray equipment to its home country. In 1988 the company was renamed Swissray Medical AG and, six years later, opened-up a US subsidiary as Swissray Medical Systems Inc., entering the North American Market. In late 1997, Swissray received its IPO (NASDAQ listing) and marketing clearance for the first direct digital x-ray system worldwide. The company currently employs 126 employees; its European HQ and centralised R&D division is located in Hochdorf, Switzerland.

Its strategy is based on factors such as market penetration, the patent status of products, and the regional location of their major customers, their financial strengths, and the resources the company can bring to bear on changing market opportunities.

3.1.1 Internal Structure & Processes

Swissray is horizontally organised with the concept of business synergies, working on balancing crossfunded strategic ideas. Management has followed cooperation on key strategies from the start, taking over total control in setting Swissray´s objectives and priorities. However, since the so-called Frontline Managers are the people with their fingers on the pulse of the market, their insights have been used to help formulate the company’s strategy and have played an integral role in Swissray’s business development. From the very beginning, Swissray adopted an approach where structure follows strategy, with systems employed to support the structure.

In 2000, Swissray recognised that physical infrastructure is one of the most visible and telling measures of the overall health of the company and its strategic approach, viewing Swissray´s network of facilities and other assets as the corporate equivalent of the skeletal system. By then, the company had already missed the point for effective diversification, failing to tailor new products (e.g., service-based products) to meet customer needs. The service line has not been widened to explore ways of penetrating new market areas with, for instance, asset management based services for hospital providers. Similarly, neither has the product portfolio been broadened to incorporate sales tools that, for example, replace standard contracts with risk sharing ones.

Abbildung in dieser Leseprobe nicht enthalten

Figure 2: Swissray in 2000 (Organisational Chart)

Swissray Healthcare was abandon in 2001 and, according to Swissray’s latest PR News3 on July 8, 2004; the company has announced the absorption and merger of the Swissray America (former Swissray Medical Systems) and Swissray Information Solutions divisions into Swissray International. This latest merger reflects the ongoing effort to consolidate the business and, after the failed strategic alliance with Hitachi Medical and Marconi Medical in 2000/2001, direct the company back to its roots as a direct sales organisation.

3.1.2 Organisational Culture

By 1999, there was steadily increasing evidence of the organisation’s inability to overcome cultural incompatibility between the USA and Switzerland. The company was unable to communicate effectively and reinforce its plan to achieve strategic resonance. Swissray began lacking resonance between the speed of domestic and international market changes and the speed of management response. Rapid market changes in the past did not culminate in the company radically repositioning itself internationally. This inability to achieve projected sales targets led to the departure of key executives and time-consuming conflicts in the consolidation of businesses.

3.1.3 External Environment

Swissray needed to formulate an operating strategy first translating strategic objectives into operating requirements and then into goals and policies used to align its physical infrastructure. In late 1999, Swissray´s operating strategy was not integrated with any overarching networking strategy. Driven by Swissray Corporate leadership, a network strategy, which had at that time not yet been defined, was supposed to eliminate conflict by ensuring that corporate and business unit objectives were aligned - after all, Swissray well understood that facilities are not great due to technical infrastructure but because of their alignment with the companies’ business objectives.

The sourcing strategy was integral to the operating strategy and became pertinent with Swissray´s new production and R&D unit goals for the USA east coast at that time.

3.1.4 Forces Driving & Forces Resisting Change

Key drivers for change are forces creating a situation that demands change, e.g. reduced profitability of new competitors (Floydiii, 2002, p.73).


1 http://www.prosci.com/change-management.htm

2 http://www.changemanagementonline.co.uk/p132.html

3 http://biz.yahoo.com/prnews/040708/nyth054_1.html


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Title: Management of Change - Swissray International