Executive Summary
Companies that could still function are faced with the problem of ensuring business
continuation amid an economic disruption caused by the COVID-19 epidemic. Not
everybody can work remotely within those organizations, and staff in some areas must still
report to work. The organizations are facing several challenges to carry out their operations
during the pandemic and post-pandemic periods.
Despite the above statement, Ceylon Tobacco Company has selected to carry out the
assignment. As the first step, the introduction to the company is provided. Subsequently, the
challenges faced by CTC are discussed, and then the situation is analyzed using McKinsey 7-
S Model. At last, recommendations are given using Kotter’s 8 steps model and Lewin’s
change management model.
Table of Contents
Executive Summary...................................................................................................................1
1. Introduction to Ceylon Tobacco Company.........................................................................1
2. Identification and justification of potential organizational challenges...............................2
2.1. Performance management...........................................................................................2
2.2. Compensation management.........................................................................................2
2.3. Management of safety and health................................................................................3
2.4. McKinsey 7-S Model..................................................................................................4
2.4.1. Strategy................................................................................................................4
2.4.2. Structure...............................................................................................................5
2.4.3. Systems................................................................................................................5
2.4.4. Skills.....................................................................................................................5
2.4.5. Staff......................................................................................................................5
2.4.6. Style......................................................................................................................6
2.4.7. Shared values.......................................................................................................6
3. Recommendations for overcoming the challenges.............................................................7
3.1. Kotter’s 8 step change model......................................................................................7
3.1.1. Generate a sense of necessity...............................................................................7
3.1.2. Structure a guiding coalition................................................................................8
3.1.3. Create a strategic vision and plans.......................................................................8
3.1.4. Communicate the vision to gain buy-in...............................................................8
3.1.5. Encourage others to act........................................................................................8
3.1.6. Generate short-term wins.....................................................................................9
3.1.7. Maintain acceleration...........................................................................................9
3.1.8. Integrate changes into the culture........................................................................9
3.2. Lewin's Change Management Model........................................................................10
3.2.1. Unfreeze.............................................................................................................10
3.2.2. Change................................................................................................................10
3.2.3. Freeze.................................................................................................................11
4. Conclusion........................................................................................................................12
References................................................................................................................................13
List of Figures
Figure 1: McKinsey 7-S Model..................................................................................................4
Figure 2: Kotter’s 8 step change model.....................................................................................7
Figure 3: Lewin's Change Management Model.......................................................................10
1. Introduction to Ceylon Tobacco Company
Ceylon Tobacco Company PLC is a tobacco business headquartered in Sri Lanka that
manufactures, markets, and exports cigarettes (Ceylon Tobacco Company , 2020). It is indeed
a British American Tobacco affiliate. Throughout Sri Lanka, CTC has a monopoly over
cigarette as well as tobacco sales. During 1904-1911, British Tobacco began selling
cigarettes. Since about the 1980s, CTC has had a primary listing just on Colombo Stock
Exchange. CTC is indeed Sri Lanka's solely legal cigarette manufacturer and importer.
Another total of 5 billion sticks is available for sale (Ceylon Tobacco Company, 2020). The
market for beedi sticks has estimated to be over 2.3 billion sticks. As per the corporation, it
controls 95 percent of the overall market, while illicit commerce accounting for 5%.
CTC is now confronted with a variety of unique issues relating to the epidemic, all of which
will necessitate committed, efficient strategies if it is to stay competitive throughout this
period (Ceylon Tobacco Company, 2021). Physical separation is already a key component of
attempts to combat the virus's global spread, as well as it must really be a top focus for CTC.
CTC is revising its HR practices in response to the unpredictable market. As they manage the
difficulty of integrating cost considerations with the requirement to deliver a continuous,
consistent connection, goals including finding the correct blend of permanent as well as
flexible workers in the team became more critical than ever.
1
2. Identification and justification of potential organizational challenges
2.1. Performance management
Performance management is indeed a constant process of discovering, assessing, and
improving individual as well as team performance while also aligning performance with the
organization's strategy (Lebas, 2015). It's critical to make sure that workers' work is in line
with the organization's strategic objectives. Employees must continue to work well to keep
CTC afloat during a crisis as COVID-19. Nevertheless, it appears that perhaps the COVID-19
epidemic has influenced organizational performance management. CTC has lowered or
discontinued performance management because of the obstacles posed by COVID-19
(Ceylon Tobacco Company, 2021). Given the changes in workplace conditions, evaluating
employees' performance during this crisis might be difficult. Additionally, several factors
associated with the COVID-19 pandemic may have an impact on employee performance.
Workplace separation, communication gap, family diversions, heavy workloads, as well as
occupational stress variables, which have evolved because of COVID-19, are major
determinants of staff performance, particularly among workers who work from home in CTC
(Ceylon Tobacco Company, 2021). Moreover, managers' awareness of how as well as what is
necessary to manage such remote teams affects employees' effectiveness when working
remotely. It is critical for CTC to retain and develop existing performance management
processes throughout this health emergency. CTC should share pertinent information about
the organization’s current direction with its employees, acquire important business data, as
well as give feedback, all of which will assist CTC to retain talent as well as prevent legal
action.
2.2. Compensation management
Employees earn intrinsic as well as extrinsic benefits for executing their jobs, which are
referred to as compensation management (Coughlan & Schmidt, 2018). Employee motivation
and performance can be influenced by compensation. CTC has established government
measures in response to the COVID-19 epidemic to give financial assistance to staff
throughout this health emergency as well as to encourage the employees to follow the stay-at-
home directives.
Short-term remuneration, commonly known as part-time work, has also been used by CTC to
keep the economy afloat while safeguarding businesses and jobs (Ceylon Tobacco Company,
2021). It is providing employees with a temporary limitation in their business hours to assist
2
CTC facing a drop in demand with retaining their personnel and avoiding layoffs.
Organizational compensation practices and policies are influenced by these factors. They may
also create a complex as well as tough workplace for managers as well as HR professionals.
Paid sick leave, may lead to a rise in worker absenteeism from work (Darma & Supriyanto,
2017). At the very same time, this aids in the prevention of employee absenteeism while they
are ill. Furthermore, government regulations including paid medical leave assist to encourage
their deployment in businesses where workers have not had such advantages, implying that
directors and HRM professionals should consider how to preserve them just after the
epidemic to prevent losing workers' motivation (Odunlami & Matthew, 2014).
2.3. Management of safety and health
The employer is responsible for their workers' safety when they are on the job (Kazutaka,
2012). CTC must guarantee that the organization is free of any hazards that might injure them
physically else psychologically, or even kill them. COVID-19 has created a new hazard in the
workplace which is a major cause of stress among employees as well as a big issue for
managers as well as HRM professionals (Ceylon Tobacco Company, 2021). The influence on
workers' health varies depending on the workplace as well as the employee's job title. In this
scenario, two key issues may be recognized: how to restrict the transmission of the infection
and help safeguard from infection, as well as how to raise employee knowledge of the need
of adhering towards the workplace preventative measures.
COVID-19 is indeed harmful to one's physical health, and it is also harmful to one's mental
health. Employees working from home may experience psychological strain as they feel
alone and pulled between their job and personal lives (Nnaji, et al., 2022). Furthermore,
individuals who are expected to really be physically present at work may return to
the office fearful of acquiring the disease or spreading it to their family, thereby increasing
their stress levels and increasing their risk for mental disorders.
3
2.4. McKinsey 7-S Model
The McKinsey 7-S framework shown in Figure 1 is used to analyze the existing situation of
Ceylon Tobacco Company.
Figure 1: McKinsey 7-S Model
Source: (McKinsey &Co., 1980)
2.4.1. Strategy
CTC is following several strategies to sustain itself in the market. However, it is critical for
CTC to retain and develop existing performance management processes throughout this
health emergency and no strategies were developed by the company regarding performance
management (Ceylon Tobacco Company, 2021). In contrast, the strategies implemented by
CTC regarding compensation management helps the company to retain their employees. The
company is providing financial incentives to the employees to survive during the pandemic.
Meanwhile, the management of health and safety is also carried out by CTC which includes
4
the physical of the staff. However, when it comes to the mental health of the employees who
are working from home remains the same.
2.4.2. Structure
The HR department is having the utmost responsibility in managing the organization and the
employees (Hanafizadeh, 2011). However, all the decisions are made with the consent of the
managing directors of the Organization. Both the employees who are working from home and
the employees going to work physically must report to the respective department heads.
2.4.3. Systems
Recently, new systems have been introduced by the company. For example, the people who
are working from home need to sign in using the Microsoft team accounts for the meetings
and morning briefings. In addition, short-term remuneration has also been used by CTC to
keep the economy afloat while safeguarding businesses and jobs (Ceylon Tobacco Company,
2021). Paid sick leave was also introduced by CTC to motivate their deployment in
businesses where workers have not had such advantages, implying that directors and HRM
professionals should consider how to preserve them just after the epidemic to prevent losing
workers' motivation. Vaccination policies were also introduced by CTC to prevent the
employee’s health and safety.
2.4.4. Skills
Working from home introduced by the company is new to the staff of the company since they
are not used these kinds of systems earlier (Ceylon Tobacco Company, 2021). The company
decided to use Microsoft teams to connect the people who are working from home. However,
most of the employees are not familiar with the software and how to use it properly. In this
case, the technical skills of the employees need to be developed. Also, the employees are
finding difficulties in applying their communication skills via an online platform.
2.4.5. Staff
The employees who are working both physically and virtually need to be considered. The
company has decided to call only the required staff to the organization and inform the other
employees to work from home. When it comes to new recruitment, the company is using the
online platform to conduct the initial round of interviews and the selected people have been
advised to full fill their formalities online. When it comes to performance evaluation of the
employees, CTC found it difficult to measure the performance of the employees virtually
(Ceylon Tobacco Company, 2021). CTC has established government measures in response
5
to the COVID-19 epidemic to give financial assistance to staff throughout this health
emergency as well as to encourage the employees to follow the stay-at-home directives.
Short-term remuneration, commonly known as part-time work, has also been used by CTC to
keep the economy afloat while safeguarding businesses and jobs.
2.4.6. Style
Democratic leadership style has been observed in Ceylon Tobacco Company where the
managing director is seeking the advice and ideas from the head of the departments and HR
team in making the decision whether to call the certain employee to work is really needed or
not (Ceylon Tobacco Company, 2021). Before, introducing the short work hours and
vaccination policy the HR has discussed with the employees the importance of this and got
their consent, and then implements these policies and procedures.
2.4.7. Shared values
The staffs are adventurous, loves teamwork, and have faith in one another even they are
working from home (Ceylon Tobacco Company, 2021). It is the responsibility of the
company to support the employees in maintaining the work-life balance especially when they
are working from home. The HR manager is accountable for implementing the policies for
the betterment of the company during the covid 19 pandemic.
6
3. Recommendations for overcoming the challenges
3.1. Kotter’s 8 step change model
As shown in Figure 2, Kotter’s 8 step change model can be used to overcome the identified
challenges due to the changes that have happened in CTC.
Figure 2: Kotter’s 8 step change model
Source: (Kotter, 1996)
3.1.1. Generate a sense of necessity
Initially, CTC must examine any possible hazards that may occur in the immediate or distant
future. Evaluating technological changes such as using teams for communication, competitive
advancements to sustain the market, significant market changes due to the pandemic, and so
forth are all examples of threats (Auguste, 2013). It is the responsibility of the HR team to
explain and communicate the importance of these changes and make the employees
understand the necessity for these changes. Prior to suggesting the need, the company can
conduct a meeting including all the staff of CTC, and they can explain the existing problem
among the teams due to the pandemic situation and must get their opinions as well. Once the
7
employees are understanding the requirements for the need then the management can go
ahead and establish a sense of urgency (Appelbaum, et al., 2012).
3.1.2. Structure a guiding coalition
After creating a sense of urgency, the HR manager and the team can identify the staff who are
showing interest in the changes. After that, it is required to choose a leader with a diverse set
of talents and expertise. Form a coalition also with the support of such a leader and convince
all other staff who are unwilling to change (Radwan, 2020). To ensure that all staff can
depend upon that coalition, it should be comprised of individuals from all departments and
levels within the CTC.
3.1.3. Create a strategic vision and plans
After that, the HR manager must create a sensible vision. The changes will most likely be
complex and difficult to comprehend. As a result, you must develop a vision that is clear,
simple, and comprehensible to the staff at all levels (Galli, 2018). Then a common goal can
be established within CTC. It is required to consider each feedback received from the
employees and to enthusiastically respond to questions and doubts raised by the employees.
3.1.4. Communicate the vision to gain buy-in
The vision must be communicated by the HR manager. He/she should repeat the vision
statement at each opportunity if the company wants to be more effective. The HR manager
needs to follow the below-mentioned key activities for successful communication (Hayes &
Richardson, 2018).
What you are doing is far more important than what you speak.
Develop a shared vision and get buy-in from across all levels of the organization.
Recognize and address employee problems to reduce employee resistance.
3.1.5. Encourage others to act
It is required to separate the obstacles into categories such as personalities, physical, habits,
and legislation to gain a better understanding of each (Radwan, 2020). The HR team needs to
recognize the roadblocks to organizational transformation as well as solve them as soon as
possible. Employees can be empowered by providing them with the required training and
coaching. Making use of the Digital Adoption Platform and effective training interactive
walkthroughs will help to provide training and coaching.
8
3.1.6. Generate short-term wins
Give the staff a taste of victory as soon as feasible during the change process. This will
energize them and give your vision a boost (Hayes & Richardson, 2018). Request that the
change coalition's short-term aims take precedence over long-term objectives. Whenever the
target becomes smaller, the odds of failing are lower, and the company can attain long-term
accomplishment by completing several short-term objectives.
3.1.7. Maintain acceleration
According to Kotter, once you've had some success, you need to keep pushing the pedal
stronger to maintain the momentum rolling (Gupta, 2011). As a result, it's critical to keep the
change going long after it has been implemented. This can be done by continuing to set goals
as well as track the progress on a regular basis. Getting a lot of short-term wins speeds up the
long-term goals and ascertain that the change leaders as well as steering coalition team are
working tirelessly to bring about organizational change.
3.1.8. Integrate changes into the culture
The HR team can incorporate the shift through into the company's culture, inform everyone
in the company about the change, make a link between the change and the results, make a
fitness schedule, and stick to it, enhance the process by incorporating enhancements, be
receptive to new ideas and suggestions to integrate the changes into the culture (Gupta,
2011).
9
3.2. Lewin's Change Management Model
As shown in Figure 3, the change management model by Lewin is recommended to
overcome the identified challenges in CTC.
Figure 3: Lewin's Change Management Model
Source: (Lewin, 1947)
3.2.1. Unfreeze
The first step of change entails enabling CTC to recognize that changes are needed, which
entails dismantling the current status quo prior to constructing a new way of doing things
(Ceylon Tobacco Company, 2021). The HR manager needs to explain to the staff of CTC
about the changes that must be made and why it is important to go for such changes. The HR
manager of CTC can link to actual issues like declining sales numbers, poor financial
performance, or alarming customer feedback, for instance, this is the simplest to articulate.
During this stage, the HR manager needs to assess what needs to be changed by conducting
an existing survey of the team or company. Also, the HR manager must help the employees
to recognize why change is necessary (Levasseur, 2011). For example, the HR team can
communicate the issues faced by the company during the Covid 19 pandemic and the
company is going to carry out the changes by concerning the health and safety of the
employees. The HR manager needs to communicate the vision in terms of changes that must
be made.
10
3.2.2. Change
To begin, make sure the HR manager communicates effectively and frequently all through
the planning as well as the implementation of such changes (Hussain, 2018). Remember to
highlight the advantages, explain how well the changes would influence everyone, as well as
prepare everybody for what is to come. For instance, the use of Microsoft teams for
communication purposes is a new method that CTC is implemented. However, most people
are not aware of how to use the software and they show resistance to using the software. In
this situation, it is the responsibility of the HR manager to communicate with the employees
on the importance of using this platform to host meetings and communications. Based on the
requirements the employees can visit the office physically during this pandemic period.
However, the employees are refused to come to the office physically since they are afraid of
the infection. In this stage, the HR manager can communicate the new policies that are going
to be introduced such as paid sick leave. Furthermore, the HR manager has to make sure that
the company remains on top of any rumors as well as dismiss them (Manchester, et al., 2014).
That involves being upfront and honest when answering inquiries, dealing with difficulties
quickly, and tying the need for changes to operational requirements. Whenever appropriate,
the HR manager can also strengthen the employees by incorporating them into the procedure.
Line managers should also oversee day-to-day operations. Create short-term gains whenever
feasible to sustain the change.
3.2.3. Freeze
The CTC can refreeze once the changes such as the implementation of new policies such as
paid sick leave, providing financial incentives, short working hours, roaster base workdays,
and using of newly adopted Microsoft teams accounts have taken shape and personnel have
accepted the innovative methods of functioning. A steady organizational hierarchy, stable job
specifications, and so forth are visible evidence of such refreeze (Schein, 2016). The refreeze
step should also assist individuals and CTC in internalizing or institutionalizing the changes.
This entails ensuring that the modifications are implemented consistently and that they have
been integrated into daily operations. Employees are more confident and at ease also with
new methods of doing things because of the new level of stability.
11
4. Conclusion
Ceylon Tobacco Company is in the situation to go through several challenges in terms of
operation. The challenges regarding performance management, compensation management,
and management of health and safety are identified as the most critical challenges faced by
CTC due to pandemics. The company is facing difficulty in evaluating the performance of the
employees since the employees are not physically present in the office and it is difficult to
track the performance virtually. Further, the motivation of the employees seems to be reduced
earlier due to improper compensation management. However, CTC has established some
measures such as paid sick leave to motivate the employees. In addition, managing the safety
of the employees during the pandemic was also challenging for CTC. McKinsey’s 7-S model
has been adopted to analyze the existing situation.
However, to sustain in the market CTC must overcome the challenges identified. For that,
some recommendations have been given using the models. Kotter’s 8 step change model and
Lewin’s change management model are used to overcome the challenges. The HR manager
and the team can implement the models for the effective management of the challenges.
12
References
Appelbaum, S. H., Habashy, S., Malo, J. & Shafiq, H., 2012. Back to the future: revisiting
Kotter's 1996 change model. Journal of Management Development, 31(8), pp. 764-782.
Auguste, J., 2013. Applying Kotter’s 8-Step Process for Leading Change to the Digital
Transformation of an Orthopedic Surgical Practice Group in Toronto, Canada. J Health Med
Informat, 4(3).
Ceylon Tobacco Company , 2020. Ceylon Tobacco Company Annual Report 2020, Colombo:
Ceylon Tobacco Company .
Ceylon Tobacco Company, 2020. Ceylon Tobacco Company - Our history. [Online]
Available at: www.ceylontobaccocompany.com
[Accessed 18 January 2022].
Ceylon Tobacco Company, 2021. Ceylon Tobacco Company Annual Report 2021, Colombo:
Ceylon Tobacco Company.
Coughlan, A. T. & Schmidt, R. M., 2018. Executive compensation, management turnover,
and firm performance: An empirical investigation. Journal of Accounting and Economics,
7(1-3), pp. 43-66.
Darma, P. S. & Supriyanto, A. S., 2017. The Effect of Compensation on Satisfaction and
Employee Performance. Management and Economics Journal, 1(1).
Galli, B. J., 2018. Change Management Models: A Comparative Analysis and Concerns.
IEEE Engineering Management Review, 46(3), pp. 124 - 132.
Gupta, P., 2011. Leading Innovation Change - The Kotter Way. International Journal of
Innovation Science, 3(3), pp. 141-150.
Hanafizadeh, P., 2011. A McKinsey 7S Model-Based Framework for ERP Readiness
Assessment. International Journal of Enterprise Information Systems, p. 41.
Hayes, S. & Richardson, I., 2018. Scrum Implementation Using Kotter’s Change Model.
Limerick, University of Limerick.
Hussain, S. T., 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), pp. 123-127.
13
Kazutaka, K., 2012. Roles of Participatory Action-oriented Programs in Promoting Safety
and Health at Work. Safety and Health at Work, 3(3), pp. 155-165.
Lebas, M. J., 2015. Performance measurement and performance management. International
Journal of Production Economics, 41(1-3), pp. 23-35.
Levasseur, R. E., 2011. People Skills: Change Management Tools—Lewin's Change Model.
Informs Journal of Applied Analytics, 31(4).
Lewin, K., 1947. Frontiers in group dynamics: Concept, method and reality in social science;
social equilibria and social change. Human Relations , Volume 1, pp. 5-41.
Manchester, J., Gray-Miceli, D. L. & Metcalf, J. A., 2014. Facilitating Lewin's change model
with collaborative evaluation in promoting evidence based practices of health professionals.
Evaluation and Program Planning, Volume 47, pp. 82-90.
McKinsey &Co., 1980.
Nnaji, C., Jin, Z. & Karakhan, A., 2022. Safety and health management response to COVID-
19 in the construction industry: A perspective of fieldworkers. Process Safety and
Environmental Protection, Volume 159, pp. 477- 488.
Odunlami, B. & Matthew, O., 2014. Compensation Management and Employees
Performance in the Manufacturing Sector, A Case Study of a Reputable Organization in the
Food and Beverage Industry. International Journal of Managerial Studies and Research,
2(9), pp. 108-117 .
Radwan, A., 2020. Lead transformational change, minimize resistance with 8-step model.
Journal of Change Leadership, 21(7), pp. 1-5.
Schein, E. H., 2016. Kurt Lewin's change theory in the field and in the classroom: Notes
toward a model of managed learning. Systems Practice, Volume 9, p. 27–47 .
14
