MOHAMED SHAHIM

CHANGE MANAGEMENT

S1308021850
BBMC4103

TABLE OF CONTENTS

2 .................................................................................................................................................................... 1
3

ABSTRACT .......................................................................................................................................... 2

INTRODUCTION OF WHOLESALE & RETAIL INDUSTRY OF MALDIVES ............................. 3

5 DISCUSSION ABOUT EXTERNAL CAUSES OF CHANGE AND INTERNAL ELEMENTS OF

THE WHOLESALE AND RETAIL INDUSTRY OF MALDIVES ............................................................ 4
5.1

EXTERNAL CAUSES OF CHANGE ......................................................................................... 4

5.1.1

GOVERNMENT LEGISLATION........................................................................................ 5

5.1.2
(ICT)

ADVANCES IN THE INFORMATION AND COMMUNICATION TECHNOLOGY

5

5.1.3

GLOBALIZATION .............................................................................................................. 6

5.1.4

CHANGE IN CONSUMER NEEDS, REQUIREMENTS AND EXPECTATIONS ........... 6

5.2

INTERNAL CAUSES OF CHANGE........................................................................................... 7

5.2.1

PEOPLE CHANGE .............................................................................................................. 8

5.2.2

STRUCTURAL CHANGE ................................................................................................... 8

5.2.3

TECHNOLOGICAL CHANGE ........................................................................................... 8

6 INTRODUCTION OF ORGANIZATION AND DISCUSSION OF THE MAJOR CHANGE

COMPONENT.............................................................................................................................................. 9
6.1

INTRODUCTION OF POISE ...................................................................................................... 9

6.2

MAJOR CHANGE COMPONENT.............................................................................................. 9

7 APPLICATION OF LEWINS THREE STEP MODEL TO MANAGE THE MAJOR

COMPONENT OF CHANGE .................................................................................................................... 11
7.1

UNFREEZING ........................................................................................................................... 12

7.2

MOVING .................................................................................................................................... 12

7.3

REFREEZING ............................................................................................................................ 13

CONCLUSION ................................................................................................................................... 14

REFERENCES ................................................................................................................................... 15

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MOHAMED SHAHIM
CHANGE MANAGEMENT

S1308021850
BBMC4103

ABSTRACT
This assignment is a part of the final mark up for the Change Management Module. In this

assignment, I will be discussing about external causes of change and internal elements of the
Wholesale and Retail industry of the Maldives. Furthermore, an organization will be chosen from
the given industry, and its major change components will be discussed. Moreover, application of
Lewins three step model to manage a major component of change will be highlighted brief
summary of the whole essay will be discussed to end the assignment.

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MOHAMED SHAHIM
CHANGE MANAGEMENT

S1308021850
BBMC4103

INTRODUCTION OF WHOLESALE & RETAIL INDUSTRY OF

MALDIVES
Before we begin with the wholesale and retail industry of Maldives, first lets have

a thorough idea of what the terms wholesale and retail means.

The terms wholesale and retail themselves explain the difference. Wholesale
means selling in large quantities and retail means selling in small quantities. In wholesale,
the goods are mainly sold to the retailer who sells it to the customers. A wholesaler might also sell
the products directly to the customers (Differencebetween.net, n.d.).
According to (Ministry of Economic Development, 2013) the wholesale and retail
trade sector contributed US$ 96 million (4.3 percent) to GDP in 20123. This sector is the fourth
largest employer in the Maldives with approximately 12,000 jobs in 2006.
The geographic location of Maldives positions us well to tap one of the top five
retail markets in the world. The retail market in close proximity to the Maldives is estimated to be
more than US$ 450 billion annually and is one of the fastest growing retail markets in the world
(Ministry of Economic Development, 2013).

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MOHAMED SHAHIM
CHANGE MANAGEMENT

S1308021850
BBMC4103

DISCUSSION ABOUT EXTERNAL CAUSES OF CHANGE AND

INTERNAL ELEMENTS OF THE WHOLESALE AND RETAIL
INDUSTRY OF MALDIVES
Organizational

changes

arent appearing from

nothing

or

because

of

themselves. In a lifecycle of a business or an industry, changes occur. Change is inevi table.

According to (Lindblad, n.d.), successful small-business owners keep track of all the factors that
can have an impact on their business. They know when to sweat the small stuff without taking
their eyes off the big picture, and they understand that all kinds of circumstances can change the
all-important bottom line. Knowing the internal and external factors that affect an organization
gives a small-business owner the intelligence he needs to sort out the company's priorities and
make strategic plans for the future.
The main causes of changes are External causes of change and Internal causes of
change.

4.1 EXTERNAL CAUSES OF CHANGE

External causes of change are all those things that are beyond your control. Or in
other words, things that are generated from the outside environment. The wholesale and retail
industry of Maldives also has various external causes of influences. Some of them include the
following.

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MOHAMED SHAHIM
CHANGE MANAGEMENT

S1308021850
BBMC4103

4.1.1 GOVERNMENT LEGISLATION

This area as an external source of organizational change deal with the laws and
bylaws retrieved by the parliament as well as regulations issued by the government. This change
is mainly due to the legislations, government stability, taxation and so forth.
Due to the Goods and Services Tax Act (10/2011) of Maldives, and the rise of
tax amount 6% from 3.5% caused the businesses to increase the price of their goods and services
provided. This act was implemented in 31 December of 2011 and the rise of 6% tax was from 1st
January 2012 onwards ( Maldives Inland Revenue Authority, 2011).
Recently, the Government of Maldives decided to make the changes to the shops
opening time and closing time. Due to this, the shops currently will be closed at 22:00pm at night.
This also will have an impact on the businesses as well as the whole industry.

4.1.2 ADVANCES IN THE INFORMATION AND COMMUNICATION

TECHNOLOGY (ICT)
Information and Communication Technologies are widely used in each and every
industry. They enables to revolutionize the sectors with its new trends and advancements. They
mainly support the core business, enable control of equipment, provide information or knowledge
for decision makers, and they allow the creation of new softwares and hardware solutions.
ICT also enables the large datasets processing giving a possibility of obtaining
relevant information and knowledge can be obtained from data. Internet also enabled the business
to do their day to day transaction, furthermore mobile and wireless technologies also help the
businesses to speed up new product development and look for new innovative ideas.

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MOHAMED SHAHIM
CHANGE MANAGEMENT

S1308021850
BBMC4103

Recently Maldivian industry also has entered into the Rapid Technological
Advanced era. Due to this, businesses had to change their way of doing business in the new
technologically advanced way.

4.1.3 GLOBALIZATION
According to (Mourdoukoutas, 2011) due to globalization business can
communicate efficiently and effectively with their partners, suppliers, and customers and manage
better their supplies, inventories, and distribution network. Local producers can sell their products
in distant markets with the same ease and speed as in their home country.
Maldivian businesses, especially the businesses in Wholesale and Retail industry
have integrated the internationalization or the globalization of markets. Due to the technological
advancements, companies now can communicate with various multinational companies across the
borders. And in order to be competent in the challenging market, businesses has evolved to keep
up with the global developments by dealing with global companies.

4.1.4 CHANGE IN CONSUMER NEEDS, REQUIREMENTS AND

EXPECTATIONS
Consumer needs and wants is something that the businesses cannot control. This is
one of the main external factor that can influence any industry. Consumer needs and wants are also
directly linked with economic factors as well.
According to (Suttle, n.d.), during economic boom periods, people have more
disposable income. Hence, they may buy more clothing, increasing sales for clothing
manufacturers, wholesalers and retailers. However, recessions have the opposite effect. Sales for
these various clothing entities may be significantly lower. Consequently, retailers may be stuck
with large amounts of inventory. And they may have to sell the clothing at substantially reduced
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MOHAMED SHAHIM
CHANGE MANAGEMENT

S1308021850
BBMC4103

prices. Clothing manufacturers and retailers may also need to sell lower-priced clothing brands to
compete with more generic brands. Consumers often shop for cheaper brands when they have less
disposable income.

Fig: 1 Quarterly Business Survey, Q1-2015 (MMA, Maldives)

As seen in the figure 1, a huge percentage is shown as Insufficient Demand that has
a significant limitation in business activities.

4.2 INTERNAL CAUSES OF CHANGE

Internal sources of organizational change are forces which appear inside the
organization. Controlling these organizational changes is easier for entrepreneurs and
managers because they are from inside the organization, something that according to the
managerial functions, management can control (Sutevski, 2009).
Internal causes of change are mainly due to changes in People, Structure and
Technology.
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MOHAMED SHAHIM
CHANGE MANAGEMENT

S1308021850
BBMC4103

4.2.1 PEOPLE CHANGE

People in the organization can be managers or employees, but all they represent
a source of organizational change. Employees are persons who must take the initiative to
change

their

work

places,

or

changes

in

work

tasks

for

more

efficient

and effective performance (Sutevski, 2009). Managers may attempt to make this kind of change
when human resources are shown to be the major cause of organizational ineffectiveness.

4.2.2 STRUCTURAL CHANGE

Organizations may be required to significantly alter their existing structure to adapt
to the development of new strategic business units, new product lines, or global expansion.
Changing structure means disrupting hierarchies and communications, which must then be
reintegrated (Boundless, 2015).

4.2.3 TECHNOLOGICAL CHANGE

Technological changes are involved in both external and internal causes of change
in an industry. In terms of internal change, technological changes mainly deals with modifying the
level of technology in both the management and production systems. Due to the technological
changes, business meetings are held online, and it has helped the decision making process to be
quicker. Furthermore, technological advancements have helped the companies to increase their
efficiency in production of output as well.

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MOHAMED SHAHIM
CHANGE MANAGEMENT

S1308021850
BBMC4103

INTRODUCTION OF ORGANIZATION AND DISCUSSION OF THE

MAJOR CHANGE COMPONENT

5.1 INTRODUCTION OF POISE

Poise is a sole trader located in Male, mainly focused on perfume distribution
and marketing. They started their business in the year 2007 as a simple business where they
actually sold the perfumes to the various shops and boats. Later on, in September 2009 they opened
their first showroom named as Poise where their products are displayed under a same roof. During
this time, their main product was Parisvalley perfume only. They further widened the market by
introducing body sprays and other various brands of perfumes in the year 2011.
Currently, they are one of the leading perfume distributors in Maldives being the
authorized distributor of the various brands of perfumes and body sprays. These include;
Parisvalley, Louise Cardin, Aris, Ame, Zavia, Lovisa, Fog, Azka, Scottish and many others. They
distribute the perfume and body sprays to all over the country.
In order to widen their market and to market their perfumes and body sprays they
have opened another four branches and hoping to further widen the market.

5.2 MAJOR CHANGE COMPONENT

As mentioned in the introduction, Poise is involved in marketing and wholesale and
retail of the several brands to all across the Country. They have to manage various transactions of
orders and daily transactions of bills and so forth.
They used to manage the whole customer order in a very basic manner. Meaning
that, they used to manually do all the transactions. Since they get various huge orders of requests

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MOHAMED SHAHIM
CHANGE MANAGEMENT

S1308021850
BBMC4103

for various items by a number of customers in a single day, it was difficult to ready their orders
and deliver them with a single storage, which is also their main shop, Poise at the time.
Therefore, they decided to introduce an intranet system, so that the Poise and the
storage unit will be connected in a way when the poise receives the order they could save the order
in the system, and it can be seen from the storage unit. With this, the staffs at the storage unit can
prepare the order and deliver it to whoever necessary or the customers can receive the order from
the storage unit.
With this intranet system, they were able to see the stock inventory of each and
every shop and when the stock is getting low, each shop can order for the stock and the storage
unit will send the stock right away.

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MOHAMED SHAHIM
CHANGE MANAGEMENT

S1308021850
BBMC4103

APPLICATION OF LEWINS THREE STEP MODEL TO MANAGE THE

MAJOR COMPONENT OF CHANGE
Kurt Lewin emigrated from Germany to America during the 1930's and is

recognized as the "founder of social psychology" which highlights his interest in the human aspect
of change (Change Management Coach, n.d.).

Figure above gives a very brief understanding about the whole Lewins
three step model to manage change.
Lewin theorized that all change will meet resistance; therefore, it is important to
prepare people for the change in advance. He refers to this process as unfreezing the current
state of the organization. Once the people are ready, you can make the change. When the change
is complete, you need to re-freeze to ensure that the changes become permanent (Selwyn, 2011).

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MOHAMED SHAHIM
CHANGE MANAGEMENT

S1308021850
BBMC4103

6.1 UNFREEZING
The Unfreezing stage is probably one of the more important stages to understand
in the world of change we live in today. This stage is about getting ready to change. It involves
getting to a point of understanding that change is necessary, and getting ready to move away from
our current comfort zone (Change Management Coach, n.d.).
During the unfreezing state, the most important thing is to build a good
communication connection between the employees. According to (Selwyn, 2011) communications
should focus on helping employees understand the need for the change to occur while still
providing the functional and emotional support necessary to help employees at all levels. Make
sure employees are a part of the overall process to ensure that their concerns are properly
understood and addressed.
When poise was decided to upgrade to the whole intranet system, they
communicated with all the staffs, and discussed about the importance and how it would benefit the
daily transactions and talked about how it would improve the efficiency of the work and manage
time (Khusham, 2015). And it happened to get a good feedback from the staffs, since they were
already having a tough time, moving and travelling both places in order to receive the orders and
all.

6.2 MOVING
This phase is also called the transition phase. Because the employees are already
unfrozen and they are moving to their new being.
Lewin recognized that change is a process where the organization must transition
or move into this new state of being. This changing step, also referred to as 'transitioning' or
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MOHAMED SHAHIM
CHANGE MANAGEMENT

S1308021850
BBMC4103

'moving,' is marked by the implementation of the change. This is when the change becomes real.
It's also, consequently, the time that most people struggle with the new reality. It is a time marked
with uncertainty and fear, making it the hardest step to overcome. During the changing step people
begin to learn the new behaviors, processes and ways of thinking (Hartzell, n.d.).
During the time Poise implemented the intranet system, they faced a few
challenges. They had to train the staffs to the new system, and they had to teach the staffs how to
manage the inventory and to add the orders. It required some time for them to get used to the
system. And some of the staffs faced some difficulties at the time and later on they got used to it
pretty well.

6.3 REFREEZING
Change will only reach its full effect if its made permanent. Once the
organizational changes have been made and the structure has regained its effectiveness, every
effort must be made to cement them and make sure the new organization becomes the standard.
Further changes will be made down the line, but once the structure has found a way to improve
the way it conducts its operations, re-freezing will give the people the opportunity to thrive in
the new organization and take full advantage of the change (Morrison, 2014).
After the change or the transition stage where employees start using the new
change, they get used to it and it gets permanent. It is where the refreezing stage occurs.
Now Poise has four main shops (under different names), and all the shops and the
storage unit uses the same intranet system for their daily uses.

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MOHAMED SHAHIM
CHANGE MANAGEMENT

S1308021850
BBMC4103

CONCLUSION
Poise is a wholesale and retail business shop in Maldives that distributes several

brands all across the country. The wholesale and retail industry has various causes of change.
These changes are mainly the external causes of change which are beyond the control of the
business. These causes of change include, various government legislations, Advances in the
Information and Communication Technology, Globalization and Changes in customer needs,
requirements and expectations. Internal causes of change which can be controlled by the business
includes, the people change, structural change and technological changes.
Poise has implemented an intranet system where their shops are connected in a
single system which helped them to do their day to day transactions and set the order online.
Lewins three stage model consists of Unfreezing, Change and Refreezing stages. Unfreezing stage
is about communicating the issue with the staffs and alerting the employees about the importance
of the change. During the change or the transition stage, the required change is implemented.
During the stage employees are little resistant to the new change. Then comes the Refreezing stage,
this is where the employees get used to the change. And more they used to the change, it gets
permanent.

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MOHAMED SHAHIM
CHANGE MANAGEMENT

S1308021850
BBMC4103

REFERENCES

Maldives Inland Revenue Authority. (2011). GOODS AND SERVICES TAX ACT (10/2011). 05 08.
Boundless. (2015, July 21). Inside and Outside Forces for Organizational Change. Retrieved from
https://www.boundless.com/management/textbooks/boundless-managementtextbook/organizational-culture-and-innovation-4/managing-change-for-organizations39/inside-and-outside-forces-for-organizational-change-211-10718/
Change Management Coach. (n.d.). The Kurt Lewin Change Management Model. Retrieved from
http://www.change-management-coach.com/kurt_lewin.html
Differencebetween.net. (n.d.). Difference Between Wholesale and Retail. Retrieved October 20,
2015, from http://www.differencebetween.net/business/difference-between-wholesale-andretail/
Hartzell, S. (n.d.). Lewin's 3-Stage Model of Change: Unfreezing, Changing & Refreezing. Retrieved
from Study.com: http://study.com/academy/lesson/lewins-3-stage-model-of-changeunfreezing-changing-refreezing.html
Khusham, A. (2015, October 20). Intranet system in Poise. (M. Shahim, Interviewer)
Lindblad, M. (n.d.). Internal & External Factors That Affect an Organization. Retrieved October 19,
2015, from http://yourbusiness.azcentral.com/internal-external-factors-affect-organization11641.html
Ministry of Economic Development. (2013). Position trade among top five export sectors. The
Maldives Economic Diversification Strategy.
Morrison, M. (2014, July 07). Kurt Lewin change theory three step model unfreeze, change, freeze.
Retrieved from https://rapidbi.com/kurt-lewin-three-step-change-theory/#.ViyV_X4rKJA
Mourdoukoutas, P. (2011, September 10). The Good, The Bad, And The Ugly Side Of Globalization.
Retrieved from Forbes: http://www.forbes.com/sites/panosmourdoukoutas/2011/09/10/thegood-the-bad-and-the-ugly-side-of-globalization/
Selwyn. (2011, November 29). Lewins three-stage change process: what can we learn from a 60
year-old theory? Retrieved from http://www.selwyn.org/selwyn/node/14
Sutevski, D. (2009, July 11). Sources of Organizational Change. Retrieved from
http://www.entrepreneurshipinabox.com/9/organizational-change-source/
Suttle, R. (n.d.). The Macroenvironmental Factors Affecting the Clothing Industry. Retrieved from
Small Business: http://smallbusiness.chron.com/macroenvironmental-factors-affectingclothing-industry-37254.html

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