Abstract:

When a Russian transportation company decided to convert into a platform business to increase its efficiency and to win back market share, it was confronted with high levels of middle management resistance. The firm operated regional business units throughout Russia, each enjoying a very high degree of freedom in doing business. The structure of individual branches was determined by their regional managers. Thereby, each region developed its own organizational culture, own project delivery methods and different lines of communications with clients and hauliers.

The new information system that formed the backbone of the business model transition required the streamlining of the business processes throughout the entire company. The system provided free access for hauliers to all orders through the company’s platform, and the procedures were streamlined. The hauliers were assigned to orders to achieve a more efficient workflow, and the new performance measurement system rewarded increasing transaction numbers. Consequently, the change process triggered a high degree of management resistance towards the proposed business model transition. Still, the company successfully managed these cases of resistance, and entered into a growth path and now ranks among the leading transportation companies in the Russian Federation.

This paper studies the reasons for this resistance and how the company succeeded in overcoming it by using the work of the French sociologist Bourdieu. Based on interviews and the study of internal documents, this paper presents eight cases of middle management resistance and draws conclusions on what other organizations can do to alleviate similar situations. Social capital was originally built through strong ties in intra-group cohesion. The new platform business though required weak ties throughout the firm became of interest. The paper shows that most resistance is attributable to an immediate loss in social capital that the company failed to rebuild. Still, the decisions taken by the change management team or their decision to accommodate resistance behaviour rather than confront it, led to the creation of a new form of social or cultural capital.