51110 - Lecture 12 2002

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BUSINESS STRATEGYBUSINESS STRATEGY

51110 / MKT300251110 / MKT3002

LECTURE Twelve

Topic 12: Managing strategicchange

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Module 12Module 12

Managing strategic changeanaging strategic changeq Learning outcomes- at the conclusion of this

module, students should be able to:

Describe the main types of strategic change processes; Define a learning organisation; Undertake a forcefield analysis based on cultural web

mapping;

Describe the main styles of managing change; Describe how political processes and change tacticsmight facilitate change; Undertake the role of a change agent and the roles of

others in managing strategic change; and

Understand how effective strategic change relates towider aspects of strategic management.

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Key words and conceptsKey words and conceptsq Transformational change

q Learning organisation

q Forcefield analysis

q Zone of uncomfortable debate

q Education and communicationq collaboration

q intervention

q Direction

q

Coercionq Routines

q Symbols

q Change agent

q Middle managers

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IntroductionIntroduction

q The success of strategic change in anorganisation depends on the extent towhich people change the beliefs andassumptions that they hold and theirbehaviour in their organisational lives.

q Main focus A clear view within an organisation of the

strategy to be followed.

Commitment to change in the organisation.

Managing strategic change is contextdependent.

Paradigm and cultural web.

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Understanding types ofUnderstanding types of

strategic changestrategic change

q Types of strategic change

Incremental change:q Build on skills, routines, and beliefs of organisation.q Change is efficient and likely to win commitment.

q Realignment of strategy based on existing paradigm.

Transformational change:

q Change which cannot be handled within the existingparadigm and organisational routines.

q Make changes to the way of doing things.

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Understanding types ofUnderstanding types of

strategic change (Cont)strategic change (Cont)

Incrementalchange

Transformationalchange

Proactive Tuning Plannedtransformational

Reactive Adaptation Forcedtransformational

Nature of change

Manage

ment

role

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Change and the learningChange and the learning

organisationorganisationq Learning organisation: is capable of benefiting

from the variety of knowledge, experience andskills of individuals through a culture whichencourages mutual questioning and challengearound a shared purpose or vision.

(Johnson & Scholes 1999, p. 498)

q Changes in the business environment need alearning oriented approach.

q Instigate the share of knowledge and information.

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Managed changeManaged change

Unfreezing and the management of change

Unfreezing mechanism

Organisational anticipation

Organisational flux

Information building

Experimentation

Refreezing Sustaining change

Organisational symptoms Stages Pressures for conformity

Questions and challenges

Felt need for change

Competing views of causes

of problems and remedies

Information collection and

political testing of support

New ideas tested out

Early signals made sense

of within paradigm

Political pressures not to

rock the boat

Attempts to reconcile competing

views within current paradigm

Information made sense of

within the paradigm

Resistance to new ideas

or

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Imposed (Forced)Imposed (Forced)

changechange

q Imposed change can be either because of:

changes in the industry environment (eg.Competition, technologies); or

some external agency forces change (eg.

government impose regulation, GST, quality

control).

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Diagnosing strategicDiagnosing strategic

change needschange needs

q Key issues:

Why strategic change is needed; The basis of the strategy (purpose);

Specific directions and methods of strategy

development; and

Changes in strategic architecture required.

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Detecting strategic driftDetecting strategic drift

q Strategic drift: occurs when the organisationsstrategy gradually moves away from relevance tothe forces at work in the environment.

q Symptoms: Little toleration of questioning or challenge in the

organisation;

Major power blockage to change;

An organisation with little focus on the externalenvironment; and

Deteriorating relative performance.

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Identifying forces blockingIdentifying forces blocking

and facilitating changeand facilitating change

q Cultural web

Stories, symbols, power, organisation,controls, rituals and routines, and

paradigm.

q Forcefield analysis

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An openness to changeAn openness to change

q Zone of uncomfortable debate (ZOUD):

encompasses sensitive aspects of the

organisation and managerial attitudes and beliefs

which tend to be avoided in open discussion.


q Managers have to enter the ZOUD to discuss and

tackle issues formally to overcome those

blockages to change.

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Managing strategicManaging strategic

change processchange process

q Changes in structure and control systems

(chapter 9 and 10)

q Styles of managing change (differ betweencontexts and circumstances)

Education and communication

Collaboration

Intervention

Direction

Coercion

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change process (Cont)change process (Cont)

q Changes in organisational routines

q Symbolic processes in managing change

The creation and manipulation of symbols has impact to

reshape beliefs and expectations (eg. uniforms,

information and control system)

q Power and political processes in managing

change

Reconfiguration of power, acquiring additionalresources, building alliances.

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change process (Contchange process (Contq Communicating change

Change in strategic direction is complex;

Communicate the priorities of the strategy; Gathering feedbacks;

Involvement of staff members; and

The need of knowing what will happen from the staffmembers perspective.

q Change tactics Timing.

Job losses and de-layering.

Visible short-term wins.

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Roles in the changeRoles in the change

processprocessq Three key categories

The change agent;

Middle managers; and

Other organisational members (eg. External

stakeholders, outsiders).

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The change agentThe change agent

q The change agent: is the individual or group that

effects strategic change in an organisation.


q Characteristics:

Sensitive to internal and external context of change (eg.

values & beliefs of organisation, environmental factor

-competition)

Understand the required strategic architecture.

Employ appropriate style of managing change.

Have visionary capacity, good at team building and

playing, self-analytical.

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Middle managersMiddle managers

q Middle managers are implementors of

strategy and their roles include:

Allocation and control of resources;

Monitoring performance and behaviour of

staff members

Explaining strategy to their subordinates.

q

They could also be blocking the changeprocess.

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Other organisationalOther organisational

membersmembersq External stakeholders

Influences will be based on their level of interest andpolitical power.

Approaches to managing change will differ from

different stakeholders.

q Outsiders A new CEO brings a fresh perspective on the

organisation.

New middle and senior executives require adequatesupport from the CEO to manage the change processeffectively.

Consultants the symbolic importance of the changeprocess.

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Managing strategic changeManaging strategic change

and strategic managementand strategic managementq Environmental assessment

Managers and staff in the organisation should

continually monitor the environment to determine the

effectiveness of the changed process.q Leading change

Managing change is not just a concern of following a set

of activities.

Changes should be made on the basis of organisationalcontext and the values and beliefs within the

organisation.

q Linking strategic and operational change

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Managing strategic changeManaging strategic change

and strategic managementand strategic management

(Cont)(Cont)

q Strategic human resources management

Integrating HR policies with the strategies and the strategic

change process. Eg. Training, salary packages.

q Coherence in managing change.

Consistency between the intended strategy. Eg. Strategic

objectives, staff members behaviour in reinforcing the

strategy. Strategic change is consistent with the environmental

changes.

The strategy is feasible (the organisation has the required

resources).

Strategic direction aims to achieve competitive advantage.

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Lectureecture 122 reviewreviewq Understanding types of strategic change

q

Diagnosing strategic change needsq Managing strategic change processes

q Roles in the change process

q Managing strategic change and strategic

management

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Next lecture and tutorialNext lecture and tutorial

qUnit revision.

q

Exam preparation.qNo tute

Documents

51110 - Lecture 12 2002