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many actions have unexpected consequences and many unexpected factors have the most significant affect on change processes - Black Swans much analysis of change is based on principle of planning pulling of lever not important but how people react to it Perrow 1986 - Interdependencies - loose and tight linkages allow for prediction of some causal changes role of senior management to scan boundaries and determine how changes can be built into new routines Path Dependency Evolutionary Economics
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The Meaning ofChange: ContrastingPerspectives on the
Impact of Change
Philosophical Views of Change
Socratic view of the world in constantstate of flux no original substancesC20 Quantum Physics and Relativity discovery of atomic levels and constantflux and movement
Process Theory
centrality of time and sequencing ofevents into patterns or types
what appears as a fixed state can beunpacked into a temporary pattern ofrelationshipsimpact of model on organizational theory instead of organizational study it shouldconsider process of organizing
Linstead 2002organisation is tendency rather than state
time as central variable in understandingchange through participation andintervention humans change theirconditions of existence
Views from EvolutionaryEconomics on Routines andChange
organizational routines can be formalisedor passed informally through tacitknowledge
routines are exemplified as tacit as theyare not regularly scrutinized
Feldman 2000
routines have processual dimension andare therefore evolving over time
change in routine comes out of smalldifferences in circumstances doindividuals follow rules or bend them to fitcircumstances
Dysfunctions of Bureaucracy
people follow the rules rather than riskchallenging them and being scape goatedclassic US case studies identifybureaucratic ritualism, red tape and thebureaucratic personality
emphasis of inertia and resistance
Evolutionary Economics
Nelson and Winter 1982 EvolutionaryTheory of the Firm
firm engages in change at the incremental level through relations betweenriles routines and outcomes
inventiveness of individuals andincremental adaptive change
Weick 2000
individuals respond positively to the goals of the organisation accommodationsand experiments are repeated and shared which over time present significantchanges
emergent change likely when corporate culture encourages experimentation andinnovation as well as speak up when things arent working
emergent change builds on existingpractice and expertiseresponds by devolving power to thoseclosest to organizational boundaries
role of senior management to scanboundaries and determine how changescan be built into new routines
management of change as facilitativefunction determining what is worthchanging
main challenge is not role of staff butmanagement obstruction
Critique of Top Down Approach
introduction of new ideas and values intofirm undermines existing ideas andcreates resentmentambiguity around management of change being facilitationof continuing adaptation or larges scale top down changeprogrammes?
managers unlikely to allow incremental change due to pressing environmental factors and thecentral leadership role around change of modern managers
Historical Perspectives onUncertainty and Causality
much analysis of change is based onprinciple of planning
Tsoukas 1994 engineering model of causality
cause an effect theory of organizationalplanning however undone byintroduction of people to the process
pulling of lever not important but howpeople react to it
Virtual History
form of scenario analysis looking at alternative historical outcomesof processes emphasize uncertainty of historically determinedoutcomes
useful analysis where historian is takenback to hinge of history Cleopatra'snose/battle of Britain
general lesson achievement of aparticular set of outcomes cannot bedetermined in advance
management of change can fall victim toevents outside of organizational control
nobody can be certain how a changeprocess will end
Sociological Impact ofUnintended Effects of Change
sociological interest in unintended effects of action
Japanese Economic Bubble 1991
high levels of domestic lending led tosignificant debt and poor regulation
increasing of interest rates led to higherdebt levels and widespread bankruptcy
consumers moved en masse into savingscreating stagnant lost decade
many actions have unexpectedconsequences and many unexpectedfactors have the most significant affect onchange processes Black Swans
Perrow 1986 Interdependencies looseand tight linkages allow for prediction ofsome causal changes
however some are complex and difficult to project
change situation have analogous processes difficult topredict how events are to be perceived
magnification effects can occur from confluence ofindependent factors creating unintended impacts
Path Dependency and Tipping Points
Path Dependency
limit to how far an organisation can change historyand culture cannot be jettisoned as is therefore pathdependant
adaptive change is the norm andtransformational change is limited
punctuated equilibrium organizationsalter their systems and structures throughshort bursts of change
Tipping Point Gladwell 2000
idea of small changes leading totransformative change reference tocommunications and the web
principle of network externalities atipping point when system moves fromone equilibrium to another
change is achieved by a small additionand stands in contrast of punctuatedequilibrium
Lesson 1 Mindmap.mmap 06/04/2009
Organisations in anAge of Uncertainty
and Change
The Age of TransformationsGrey & Sturdy 2003
perceptions of change will differ with standpoints modernworld is full of a majority of people who are still poor anduneducated
In modern organisations key decisions a still made by asmall minority and activities are largely formalised
each period in history perceives itself as subject tosignificant change with C16 ideas of change influencing ourthoughts on advancement and progress
recent events including terrorism suggestthat changes may not necessarily relateto progress
in organisational studies a negative imageof change is rarely used
currently organisational change is seen as a good thing andlack of change associated with negative factors such aslaziness and myopia
Economic Changes in the late C20
Economic Developments post 1945
post war economic stability in 1950s and 1960sfollowing pre war fluctuations and wall street crash extremism and WW2
evolution of Keynesian consensus stability of nationaleconomies through management of demand via publicworks, social security and active fiscal policy
establishment of public sector characterised by bureaucracyand provision of global services on basis of citizenship
private sector was characterised by largefirms that became dominant actors in theeconomy
firms were large and bureaucratic with strong sense ofmanagerialism markets were dominated by big players withno significant competition GM, Ford Chrysler marketoligopoly
led to global market dominance with significant levels ofexports to European markets
brief period of international economic stability characterised bylarge hierarchical and standardised organisations
Economic Developments since 1970s
growth of foreign competition from Japan and Asia in areasof electronics began to undermine power of Western firms
greater structural flexibility in places such as Japan and Germanyovertook the slower US companies with longer hierarchical chains andlower levels of product and service innovation
growth of inflation, declining overseas earnings and increasedinternational demand increased import prices
growing public sector required significant cuts to reduceinflationary pressures led these organisations to reconsider sizeand function and reduce labour forces
general sense of crisis with belief thatfundamental changes were needed inorganisation of economy and firms
Two approaches to understanding this changePost industrial forms of economic organisation
post modernist approach to linearmodels of rational planning
Fordism to PostFordism
Post Fordist Debate
1980s view of the changing nature of organisationsand shift away from large bureaucracies
Fordism associated with system of mass productionwith standardised products made on large scales bylow skilled employeescharacterised by division of knowledge and execution
considered US automobile industry andassociated suppliers and their linkages tonational economies
postFordism also described as Flexible Specialisation three alternative approaches flexibility/specialisation/innovation
modern organisations are now measuredby these three variables
Flexibility
post Fordist organisations should be moreresponse to changes in the environment,reduce layers of bureaucracy
delayering reduced decision making timesand extension of job roles providing moreempowerment
workforces would be differentiated according to need skill andcommitment workforces would be reduced to include more temporarywork increasing when necessaryproblematic in highly unionised sectors
postFordist organisations would alsodevelop better networks with suppliers aswas done in Japan
would allow for reduced cost pressure onthe firm and allow for concentration oncore competencies
Specialisation
founding principle of capitalism but not thecase on Fordist economy with high levelsof vertical integration
view that diversification needed to be related and many postFordist firms were taking specialisation forward at significantlevels
subcontracting of unnecessary activitiesto the supply chain to increase costmanagement and efficiency outsourcing
similar discussions during 1980s within public sector aroundinflexibility and need to outsource functions and introduceprivate sector philosophy and entrepreneurial spirit
Innovation
post Fordist approach considered incremental improvementachieved by employees on the job rather than big lab model
development of networks of cooperative organisations drawingin suppliers and customers as well as linking up with academiaSilicon Valley networks of universities and venture capital
Organisational Models
Virtual Organisations
low levels of fixed assets/continuity ofexistence on the web/flexibility of requiredskills
Network Organisations
organised through contracting/strongerlinks with suppliers/strong on flexibility
Boundaryless Organisations
remove traditional organisationalstructures allowing resources and ideas toflow according to need
Project based Organisations
temporary body assembled for specifictask Hollywood studio system
Modular Organisations
organisations split into discrete units thatcan be assembled into combinations ortransferred outside
Process based Organisations
result of 1990s fad of BPR buildingprocess from bottom upward anddiscarding organisational boundaries
Modernism and Postmodernism
Modernism
associated with the idea of knowledge asfinite achieved through scientificapproaches
scientific approach within an organisationcreates a meta narrative which issingular and doesn't allow for anychallenge
Postmodernism
emphasis of uncertainty andunpredictability in human activity
Bauman 1989
linkage of order and predictability to Nazism
value of multiple voices and the spirit ofdoubt rather than certainty
multiple voices allows for people at thebottom of society and the organisation tobe heardsubaltern groups and post colonial studies
challenge of postmodernism advocatesdiversity which impacts on the modernorganisation
development of open source software i.e. Linux
Wikipedia and development of knowledgethrough participation and interaction
can organisations develop this openmodel of learning and change can theidea of a single logic be imposed?
Lesson 2 mindmap.mmap 10/04/2009
Images of Managing Change
Six Images of Managing Change
Change Manager as Director
image of control and achievableoutcomes with change manager to directorganisation in particular way
change as a strategic choice andorganizational survival depends on it
number of nstep models assume thatmanager can implement change followinga number of steps
number of different models depending onconfluence of factors which if aligned toproblems will achieve desired outcomes
Change Manager as Navigator
control still at heart of management action but range offactors will mean not all objectives are met
shared assumption with contingency theory that changeunfolds differently over time according to organizationalcontext
change not a series of linear events overa given time but rather a continuousprocess
role of change managers to navigate their way through thiscomplexity by identifying options available and monitoring theenvironment
change courses will need plotting andchanging depending on thesecomplexities
Change Manager as Caretaker
management image still of control butability to exercise control constrained byinternal and external forces
i.e. desire to introduce entrepreneurialthinking undermined by forces ofbureaucratization
Lifecycle Theory
managers as caretakers of organisation as itpasses through various lifecycle stages
natural process of development with underlyingtrajectory that cannot be changed
Population Ecology
using neoDarwinist logic to argue howenvironment selects organisation forsurvival or extinction
organizational variation, selection and retentionlimited power of CM interaction andpartnerships or reposition/reinvention
Institutional Theory
similar CM activity undertaken acrosswhole populations of organizations dueto interconnectedness
all organisations subject to three types ofpressure Coercive/Mimetic/Normative
Change Manager as Coach
change managers are able to intentionally shapeorganizational capabilities allowing for competitivesuccess
change manager relies upon building right set ofvalues and skills that staff can draw on to meetorganizational goals
Reinforced by traditional OD theory where change manager helpsstructure activities to help staff solve their own problems
Change Manager as Interpreter
change manager in position of creating meaning for otherorganizational members making sense of events andactions
likelihood of alternative meanings and therefore only some willbe realized with others emerging from alternative interpretations
change manager needs to present legitimate arguments and are akin to strategistscreating imaginary links between events and situations to create meaning
organisations in ongoing state ofaccomplishment and re accomplishment 4 drivers of organizational change
animation
direction
paying attention and updating
candid interaction
Change Manager as Nurturer
assumption that small changes might have impact on anorganisation and managers cannot directly control their outcomes
managers may nurture these organisationfacilitating qualities that allow for selforganisation to occur
Chaos Theory
non linear organizational changefundamental rather than incremental
companies regenerate themselvesthrough learning and interactive changeresulting in new dynamic order
change managers can nature capacity for selforganisation but not manage outcomes
Taoist Theory
change as cyclical, processional and based onmaintaining equilibrium
change outcomes are produced through nurturing yinyangphilosophy with new order containing its own negation
Using the Six ImagesFramework
framework reflects a range of pure formsthat may not exist in reality
images have blurred boundaries and willoverlap and intermingle
Surfacing our Assumptions about Change
allows for reflection of images andassumptions we hold about CM
being aware of mental models allows usto consider their relevance
allows change managers to assess theassumptions of others they are workingwith
Assessing Dominant Images of Change
encourages change managers to reflect on whether theyare dominated by a particular view of change
helps identify whether the organisation subject to changeis dominated by a particular view is it encodedgenetically?
Using Multiple Images and Perspectives of Change
exposure to a range of images reduceslikelihood of change manager using asingle image
image in use dependant on type of change
image in use depends on context of change
image in use depends on the phase of change
image in use depends on simultaneousinvolvement in multiple changes
Images of Managing Change
Images of Managing
Management as Control historically dominant/planning,organizing, commanding and controlling/topdown hierarchicalview/organisation as machine driven by management
Management as Shaping participative management style/inclusion of othersin decision making/shaping behavior/organisation as organism shaped notcontrolled/creation of organizational capabilities strong platform forresponding to external changes
Images of Change Outcomes
Intended
dominant assumption in CM literature thatintended outcomes are achievable
change as realization of prior intentthrough action of change managers
Chin & Benne 1976 3 Strategies forintentional change
empirical rational changedemonstrated as aligned with groupinterests
normative/re educative when people dispensewith old orientations and gain commitment to newones
power coercive intentional change bythose with greater power of others
Partially Intended
some but not all changes are achievable
different managerial skill levels will affectapplication of change outcomes
consequences may be intended and unintended
system wide changes do not alwaysachieve main outcomes
Unintended
difficulty in implementing desired changeoutcomes due to a range of variables thatinhibit implementation
internally politics/past practices/deepseated values/perceptions
externally industrialrelations/regulation/legeslation/industrytrends
Images of ChangeOutcomes
Images of ManagingControlling (activities) Shaping (capabilities)
Intended DIRECTOR COACHPartially Intended NAVIGATOR INTERPRETERUnintended CARETAKER NURTURER
Lesson 3 Mindmap 1.mmap 10/04/2009
Images andApproaches to
Managing Change
Images of OrganisationsMorgan 2006 Examination ofOrganisations through Images
Organisation as Brain or Machine
Machine
organisations understood asselfregulating system
principle of managers as designers who determinethe work and frame of reference for the output ofthe machine
most potential interactions and impacts of processes arepredetermined based on existing information change canthen be planned in detailchange is treated as specific project withdefined and controlled processes andoutcomesmachine based metaphors assume allparts of process work as expected conscious ability to change work patternsis not considered
smaller scale change activities areassociated with this model where fix andmaintain are dominant approaches
Brain
organisation conceived as decision making entityprocessing external information which in turnbecomes outputslinked to principle of rational decision making andorganisation as information processing systeminformation on external environment is collectedthrough boundary spanning activitiesinformation is processed through the organisationwhich maintains the existing system or modifies torespond to environmental changesBounded Rationality limit to amount of relevantinformation and organisation can collect satisficing rather than maximisingsuggest that the model of a brain is limited,however technological advances have meant thataccess to data is now a lot more sophisticated
Organisation as a Culture
organisations consist of cultureslanguages and symbolsorganising is an interpretive activity where cooperationemerges out of shared norms and valuesvalues and norms merge with other processes such as symbolsand stories to create a common set of images as a resource toexplain the current environment
emergence of a specific language in the organisation icebergmodel where majority of body sits below the surfaceorganisational change is therefore about changes organisationallevels and the built in culturechange can be dangerous with high levelsof uncertainty black box
Organisation as a Political System
groups and individuals pursue their owninterests in conflict with each other
relationship between legitimacy, authorityand power often ambiguous
Barnard 1938 Zone of Indifference
employees accepted imposition ofmanagement control subject to agreedterms and conditionsproblem for management when zone wasnot recognised or didn't renegotiate thezoneorganisations create miniconstitutionalorders based on shared principlessuccessful organisations haveconstitutional order or system of rules towhich both managers and staff consentin terms of change managementmanagers should place emphasis onmaintaining legitimacyall change process should consider theimpact on the constitutional order andimpact on zone of indifference
Theories E and O of ChangeBeer & Nohira 2000
Theory O
cultural approach to change with purpose to develop organisationalcapabilities especially employees to become involved in identifyingand solving work related problems
organisations as non linear dynamic systems with manyunintended consequences when linear action is taken
builds on principle of emergent change ensure adaptations aremade at appropriate points to environmental pressures
Theory E
reflection of the machine and engineering based approachesrequiring the exercise of power within the organisation
focus towards topdown program driven change with leaders settinggoals based on expectations of financial markets
Leaders focus on strategies and structures focusing on the hardware of the system
Mixing Metaphors
a number of tensions between theories Eand O interpretive/authoritative someorganisations will have a mixture of both
causes significant confusion and conflictwithin organisations
Marshak 1993 Managing Metaphors of Change
4 main metaphors about organisationalchange and change agents
Fix and MaintainBuild and Develop
Move and Relocate
Liberate and Relocatelanguage and metaphors describingchange process must reflect movement ofprocess to avoid confusion
Key Lessons
listen to images you and other use todescribe change
ensure metaphor and literal meaning are the samedescribe change situation using all 4 metaphors to gain new insights
align symbolic language system to get people to fix, build or move in unisonwhen stuck deliberately change prevailing metaphors tog et out of the box
Lesson 3 Mindmap 2.mmap 11/04/2009
What Changes inOrganisations
Types of Change
different types of organizational change
First Order Incremental Change adjustments in systems and process
Second Order Discontinuous Change transformational radical change atorganizational core
Nadler & Tushman 1995 4 categoriesof distinction between first and secondorder change
Fine Tuning anticipatory changes toexternal environment
Adaptive incremental changes inresponse to competitors
Reorientation anticipatory majororganizational modification based on previousstrengths
Recreation frame breaking change withpast practices and directions
First Order Incremental Change
Frohman 1997 Change as individual initiatives
considers impact on organizationalchange of individual innovations andactions
people at local levels are able to identifyinnovative changes
these innovators are those that go beyondthe basics of their jobs and focus less onteamwork and more on results
often remain unseen by organisations andare undermined by different structures
Feldman 2000 Change as development of local routines
routines can be a source of change inorganisations when enacted by differentpeople with different interpretations
routines are changed when pastoutcomes fail to be met and whenoutcomes open up new possibilities
Second Order Discontinuous Change
Palmer & Dunford 1997 8 models of change
Delayering
Networks/alliances
Outsourcing
Empowerment
Flexible Working Groups
Short Term Staffing
Reduction of internal and external boundaries
Disaggregation
number of commentators have warned caution on radicalorganizational changes and suggest integration of old and newsystem i.e. Disaggregation with hierarchy
Transformational Types
Type 1 transition of organisation from entrepreneurial toprofessional management structure
Type 2 revitalization of established company to focus onnew markets and operate effectively
Type 3 visionary change
Beyond First and Second Order
Midrange Organizational Change
tectonic movements within anorganisation to overcome inertia
moderate earthquakes destroy outdatedaspects of the organisation while buildingon other relevant ones
Change as Punctuated Equilibrium
evolution of organisations through long periods ofstability punctuated by short bursts of change
Change as Robust Transformation
limitation of assuming that firms should bebrought into equilibrium withenvironmental changes that may only betemporary
critical to identify what is required toengage with change
Myer etal 1990 Rethinking LinearAssumptions of Change
critique dominant view of linear change large groups of orgs undergodiscontinuous changes 3 forms
Jolts passing shocks causing temporary disruption
Step Functions emerging permanent conditionsthat require organizational movement
Oscillation cycles of discontinuity expansion and contraction of market
Key Implications for Change Managers
important to not assume types of change can be easilycategorized as small and adaptive compared to large andtransformational
importance of perception and mentalframeworks Interpreter
important to consider the impact ofmultiple organizational changes and theirinterrelationships Navigator
important to remember impact of smallerlevel changes on larger organisation Nurturer
managers may assume that as long as people are coachedthey will take the initiative to address problems Coach
Change may mean adding and integratingrather than replacing and removing
change may be needed to remain stable Director
implicit assumption that incrementalchanges are less risky
Types of Change Lessons fromthe Front Line
Downsizing
intentional process of reducing staffnumbers commonly used since 1970s
different approaches includeretrenchment/downscaling/downscoping
can be financially costly and not alwaysused for cost reduction purposes faces anumber of key challenges
Employee Retention
Avoiding Hard Landings loss of skills and competencies
Minimization of political behavior
Survivor syndrome
Poor communication
Due diligence
Cultural adjustment
Technological Change
common source of change managementin modern organisations
number types of change includingERP/CRM/wireless/BPR/6 Sigma
technology often used to address short termproblems and raises a number of challenges
goal synthesis position within the organisation of IT
choice of technology
identifying political barriers
Role of the IT team
communication of technological change
timeframe
contingency planning
M&A
common activity over the last 100 yearsand remain entrenched changemanagement activity
producing successful M&A is a largechallenge for firms with many M&Aprocesses failing number of keychallenges
Cost savings often overvalued
impact of Cultural Adjustment
Balancing Change and Continuity
Due Diligence
Employee Retention
Contingency Planning
Power Structure
Communication
Lesson 4 mindmap 1.mmap 14/04/2009
Diagnosis forChange
Models: Why Bother
fundamental propositions of models
diagnosis exists within our heads asmanagers regardless of specific models
implicit models have a powerful impact onthought processes and approaches tochange
key choice is whether we use explicit or implicit modelsimplicit models have a range of limitations often based on limited experiences
Burke 2008 5 key uses of models
managing complexity of situationshelping identify areas of most need
highlighting interconnectedness oforganisational propertiesproviding a common language to discussorganisational characteristicsproviding a guide to sequence of actionsto take in a change situation
Modelling Organisations
The SixBox Organisational Model
model attempts to provide rader screen of key variables
Purposes what is our business?
Structure how is work divided?
Rewards do all tasks have incentives?
Mechanisms are there helpfulcoordinating mechanisms?
Relationships How is conflict managed?
Leadership are all the boxes kept in balance?
The 7 S Framework
developed by McKinsey based on 2 key principles1. organisational effectiveness is aconsequence of interaction betweenmultiple factors2. successful change requires attentionto the interconnectedness of thesevariables
The Star Model
Galbraith argues that the organisation isat its most effective when 5 majorcomponents of OD are alignedprominence given to strategy ascornerstone of OD misalignment willlead to sub optimal performance
The Congruence Model
Nadler & Tushman development of open systems modelproposition argues that organisationaleffectiveness determined by consistencybetween each elementviews organisation as comprising 4 keyelements task/individual/informalorganisation/formal organisation
views the entire organisation as atransformation process contextualised byits environment
The Burke Litwin Model
12 factor model that differentiatesbetween elements which are source ofmajor transformational change and thosethat are incrementala planned organisational change shouldflow from the top and influence the lowerlevels
The 4 Frame Model
structural frame organisations asmachines turning inputs into outputshuman resources frame relationsbetween the organisation and its staffpolitical frame organisations as placesof political conflict
symbolic frame essence oforganisation in culutre and symbols
Component Analysis
PESTLE analysis
helpful process when analysing elementsand components of the modelshelpful for those companies who haven'tfully considered the impact of broadtrends on the future
Scenario Analysis
allows for understanding of impact to afirm of different events and scenariosused extensively by Royal Dutch Shell
Gap Analysis
analysis of 3 questions where are wenow? where do we want to get to? howcan we get there?
generality allows for most managers to participate
high consensus allows for immediate action to betaken while low consensus allows for closerattention to the organisations objectives
The Strategic Inventory
Newsflash Exercise
Cultural Web
allows for a detailed understanding of anorganisation and can help outline barriersto change
mapping out what is ormally taken forgranted can start to question what isnormally ignored
Structural Dilemmas
Bolman & Deal identify 6 dilemmasaround getting OD structures accurate
differentiation vs integrationgap vs overlap are key tasks left out of new structure?
under use vs overload of stafflack of clarity vs lack of creativity
excessive autonomy vs excessive independencetoo loose vs too tight
The Boundaryless Organisation
shifting paradigm for organisationalsuccess new success factors offlexibility/integration/innovation
to meet these success factorsorganisations need to reduce 4 boundarytypes vertical, horizontal,external,international
Diagnosing Rediness for ChangeStakeholder Analysis
those individuals within or without the organisationwho have a capacity to influence the success ofchange multilayed approach
identify stakeholders who can influencethe organisation
asses capacity to influence change at hand
check out track record of approach to change
assess individual interest in each change process
identify most influential stakeholders
try to determine individual position on the change process
Force field Analysis
another model which allows for aconsideration of those variables that aredriving and resisting change
Lesson 4 Mindmap 2.mmap 20/04/2009
Identifying andDiagnosing Change:Contingency Models
Orientating Perspectives Pettigrew 1987 Framework fordistinguishing aspects of change
Why of Change context of changeprocess both external and internalWhat of Change content of change what is being implementedHow of Change process of change andhow is it managed?model suggests that any change processis a combination of these elements andrequiresconsistencyCongruency models of changeconcern themselves with linkages in changeprocesses i.e. if content of change was to encourage participatory activity theprocess should not be managed in a coercive way
The 'Why' of Change Understanding the Environment
Signals for Change
Market Performance
comparative measure concerned withoutward organizational performancefocus on market share, revenue growthand cost managementother indicators include comparison withpeer groups (public sector) and customersurveysdifficulty around improvement on existingranking is 2nd place good or bad?key factor is interpretive process andaccurate analysis of key statistics
Changing Environmental Conditions
stimulation of change through perceptions of changein the environment even if it hasn't happened yet!importance of getting ahead of the curve scoping and scenario analysisimpact of major uncertainty supply, technology, demand,politics and price volatilitymost orgs undertake some form of environmental analysis PEST and SWOT analysis
Organizational Performance
most reliable indicator come from within theorganisation around deteriorating performanceslower turnaround times, gainingconsensus across functional areas etcthese problems can by symptomatic of deeperstructural issues as well as increased tensionsbetween groupsimportant that signals are interpreted properly
Performance Gap Model allows firmsto measure themselves against ownobjectives and determine whetherchanges are needed and introduces arange of interpretations
Problems of Perception
Handy 1994 The SCurve Problem
key paradox of change management when should change occur rather thanwhen it does occur?best time for change is during period ofsuccess as it brings resources,confidence and reputationparadox is that people feel little urge tochange as this point and managers don'twish to rock the boatopportunities are missed and declinebegins people are now less likely tosupport changemodel anticipates there will be a dip inperformance because of uncertaintiesaround change dip will be smaller if ithappens earlier
The Escalation Problem
decision escalation people andorganisations recognize a problem butbelieve that it will improve with moreresource and timemore attached people become to acommitment the less willing they are tosee its problems millennium dome andConcordein military decisions there is greaterreluctance to back downdecision escalation can profoundlyinfluence change programmes it candisincline people to interpret signals fromthe environment
Groupthink
individuals take on consensus view to avoid challenging it often common when there are individuals with strongpersonalitiesextreme cases can include risk of bullyingor serial violence communism andRobert Maxwell Milgram experimentssuggests that organisations need toensure perceptions are opened up prior toworking on change
Generating Alternative Perceptions
developing a board with NED's withdiverse experiencesmentoring and coaching use of consultants to act assounding boards for issues of uncertainty that arecomplicated to discuss in publicdeveloping ongoing relationships with investors andanalysts can have an impact on change process butrisk is of herd mentality
Subtopic
The 'What and How' of Change Contingency and Congruence
Ashridge Model of Change Analysis
Market Advantage Test
Parenting Advantage Test
People Test
does the change reflectstrengths,weaknesses and motivations ofpeople in the organisation?
Feasibility Testconstraints in implementation
Specialist Cultures Test
Difficult Links Testdoes the change bridge difficult internal links?
Redundant Hierarchy Test
Accountability Test
Flexibility Test
Dunphy & Stace ContingencyApproach to Change
is the change pressure localized and confined toparticular activities or is it more general?
4 types of change that organisations undergo role ofchange agent is to identify appropriate type and followthrough
Fine Tuning
need for localized changes in spirit ofexisting model Caretaker
Incremental Adjustment
recognized need for something to occurbut incrementally Interpreter
Modular Transformation
more radical change but limited to onepart of an organisation processesinclude redrawing forms and boundariesof activities outsourcing
Corporate Transformation
most radical form of change with wholeorganisation subject to critique andrestructure
The How of Change Process Issues
Dunford and Stace have identified 4processes of change
Collaborative Change Techniques
nature of change needs determining bythose most close to itno existing blueprint and dependant onknowledge and skills of those involvedwill be time intensive and requires trustamongst all parties
Consultative Change Techniques
initial closing down of options bymanagement then engaging with thoseaffected
feedback may influence finalstructure/proposals
Directive Change
driven by top managers with mainemphasis on communication explainingwhy the change is necessary
will impact differently on individualswhose employment status will change
Coercive Change
those inside organisation are given nooption but to comply no attempt topersuade or incentivise
C19 factories and some militaryorganisations
most change efforts in the modern worldstraddle consultative/directive approaches
corporate transformations follow twotypes of change strategy
Charismatic Transformation
change based around one strongfigurehead with force of personality andpresence rallying point
Churchill or GE's Jack Welchmuch less common now as externalforces make it difficult for one leader tomaintain a presence for any significanttime frame
Turnaround Change
associated with strong sense of imminentcrisis and collapse Lufthansa in 1990s
highly directive and veer towards coerciveapproach and can include significantimpacts on staffing structures and levels
Lesson 4 Mindmap 3.mmap 21/04/2009
Sustaining Change
Signs of Sustained Change
what can be done to ensure that changeinitiatives do not falter and becomeembedded as normal practice?
for a change to stick it must become anintegral part or organizational culture
to be sustained it is important for peopleto note new practices as normal ratherthan change
unless change seeps into organizationalbloodstream it may be a passing diversion
Actions to Sustain Change
Reisner 2002 Lessons from Change at US Postal
don't miss key opportunities
connect change initiatives to core business
don't mistake incremental improvementsfor strategic transformation
be realistic about limits and pace of change
Redesign Roles
role changes may be significant elementof change process not just outcome
too much emphasis placed on changingpeople's attitudes changes in roles willimpact on behaviour
Redesign Reward Systems
no fundamental changes that don'tinvolve amendment to reward system
rewards should include public recognitionof those whose behaviour are consistentwith desired change reinforcement ofbehaviour
Link Change to Selection Criteria
who gets appointed to key positions canhad symbolic role in reinforcing change
Act Consistently with Advocated Actions
organizational members often awaitsignals from senior management provingthey walk the walk
key indicator of success in this area iswhether management practices havebeen aligned with new priorities
credible commitments allocation ofresources to a project which in real termswould be a sunk cost showscommitment by management
Encourage Voluntary Initiative
most effective senior managers havebeen those who specify general directionof change but leave specific details to theoperational level
Measure Progress
measurement acts as means ofmonitoring progress of change and willhave impact on people's behaviour
getting metrics will be right PWCconsiders leading and laggingmeasures/internal and external measuresand costs and noncost measures
Celebrate En Route
outcome of change process can take time need for quick results to keep hope alive
no better motivator than frequent successwhich can be used as catalyst for futurechange and allocation of resources forpriority areas
Fine Tune
key challenge around refining elements ofchange program with being interpreted asa failure
Some Words of Caution
Expect Unanticipated Outcomes
may include reinforcing outcomes such asincreased commitment or counteractingoutcomes such as lack of commitment
no amount of planning and procedure canever remove unexpected outcomes
Measurement Limitations
assessing success of innovative practicecan be complex and ambiguous
risk of premature measurement and notrecognizing the benefits of change overtime
change doesn't always follow a linearpattern and will therefore provide differentoutcomes at different times
Don't Declare Early Victory
celebrating a win is fine but don't declaretotal victory until total change isembedded within the organisation
Escalation of Commitment
recognition that not all changes arepositive and that they can be fixed bythrowing more resources at them
Straw & Ross 2004 4 Determinants of Escalation
Project Determinants lack of progressperceived as temporary problem
Psychological Determinants selfjustification bias
Social Determinants saving face and hero effect
Organizational Determinants resistance from internal departments
Recognise Productive Failure
learning from a failed change project addsto corporate store of knowledge
learning organisations see failure as anatural state and opportunity for futureenhancement
Lesson 5 Mindmap 2 Chapter 12.mmap 22/04/2009
ImplementingChange: Change
Management,Contingency and
ProcessualApproaches
Director Image of Managing Change Change Management and ContingencyApproaches
Change Management Approaches see pp223
KirkPatrick 2001
7 stage systematic model requiring allsteps to be followed
Mento, Jones and Dirndorfer 2002
12 step model not be regarded onlysequentially but as part of integratedprocess
Pendlebury, Grouard & Meston 1998
10 keys model can be adapted to suitparticular circumstances omissions willlead to failure
Nadler 1998
12 action steps can be applied at every level of theorganisation providing useful tools for initiating and leadingchange
during transformational process three key elements needmanaging organizational power/motivation and process oftransition
Ghoshal & Bartlett
importance of sequencing andimplementation of activities in a changeprocess 3 key phases rationalization/revitalization and regeneration
Kotter 1995
8 step model
Establish need for urgency
Ensure there is a powerful changegroup to guide the process
Develop a vision
Communicate the vision
Empower staff
Ensure short term wins
consolidate gains
embed change in culture
Is CM Supplanting OD?
preliminary research has shown that CMresearch has dominated discussions inrecent yearsalthough attention to CM seems to be growing its importantto note that OD has been around significantly longer andremains a staple part of the change repertoire
ODCM Debates
number of ongoing debates in this areaincluding the case that CM hassupplanted OD in 3 key ways
theoretically CM has a broader scopeconsidering human performance anddevelopment
role of CM practitioner is wider operatingwithin a team rather than as an advisor
OD looks at changing attitudes prior tochange while CM changes structures toaffect behaviour
defenders of OD cite limitations within thefield but also note alignment of CM withconsulting and other fads
CM practitioners critique OD for being toodominated by practitioner perspectives
Contingency Approaches
Dunphy & Stace 1990 ChangeContingency Approach Model
Developmental Transitions
constant change as organisation adaptsto external environmentconsultative leadership style with leaderacting as coach aiming of commitment bystaff
Task Focused Transitions
directive style with leader acting ascaptain seeking compliance of staff
overall change managed from the top butconsultation may take place lower downthe line
Charismatic Transformation
recognition that organisation is out of stepwith market and there is need for a radicalchange
Turnarounds
aimed towards framebreaking changes leaders operate at commanders forcingchanges through the organisation
Taylorismfine tuning paternalism
approaches to change can be possiblyviewed as differing paths that the firmmight adopt at different stages
Huy 2001 4 Ideal Types of Change
Commanding Change
short time period abrupt and rapid implemented by senior managementdemanding compliance
Engineering Change
medium term fast change perspectiveundertaken by design analysts changingsystems
Teaching Intervention
gradual long term approach ODperspective assisted by outsideconsultants
Socializing Intervention
change developing through participativeexperiential learning based on selfmonitoring
Why Contingency Approaches are not Dominant
fitting an organizational change programto required change may be easier intheory than practice
contingency models are more ambiguousand require greater management choice
contingency focus is on specificleadership style may pose a challengeto managers who cannot adopt differentstyles
what is contingent to management ofchange are there any universalvariables?
Navigator Images of ManagingChange ProcessualApproaches
process approach shares assumption ofcontingency theory that changes evolvesdifferently over time according to context
part company in assuming that changeshould not or cannot be solidified as aseries of events within a given time
Pettigrew's work on ICI initially considerschange as an understanding of varietyand mixture of causes and juxtaposition ofrational and political
political and contextual approach tochange change as complex interplaybetween content, process and context
intervening in an organisation to createstrategic change will be a challenge toideology, culture and systems ofinterpretation
Processual Change Management
creating strategic change is a long termprocess of conditioning educating andinfluencing
change managers need to examineexternal and internal context of change todetermine sources of continuity as well asgaps
key question is it possible to codify tasksand skills appropriate for such a sensitiveactivity without making it overdeterministic?
Johnston 1975
Problem Sensing spreading legitimacyof organizational problems
Development of Concern aboutspecific problem establishing buy in
Acknowledgement of Problem Importance
Planning and Acting clarification of futuredirection senior management establishing atension within the organisation
Stabilsing Change making things which happen stick
Dawson 2003 10 Lessons ofProcessual Change
simple linear change recipes should be challenged
change strategies will need adaptationdue to the impact of reactions to them
change takes time and is unlikely to entailcontinuous improvements
assumptions should always be questionedmanagers need to learn from experiencedstories of change
training needs to be aligned with change outcomes
communications need to be contextualised sensitive tocompeting narratives
substance of change is likely to alter over time
political processes will be central to how changes occur
change involves interwoven contradictory processes
Lesson 5 Mindmap 1 Chapter 8.mmap 21/04/2009
Models for ManagingChange: Process,Organisation andCommunication
Lewin and the Freeze Metaphor
model considers change as three stageprocess of unfreezing, movement andrefreezingmodel argues the need to return to idea ofchange as a process to bring together itsdifferent aspectsas the organisation pursues a moresystematic change program routes can becarefully analyzed and subject to scrutiny
Unfreezing
focus on breaking with the past andslaughtering sacred cowscan include new office locations, differentimages or a model of frugalitythis has its limits and a line must bebalanced on how far to criticize the past
Creating a New Vision
past traditions need substitution creationof vision is complex task of research,articulation, stabilization andcommunicationre branding can be risky BA and tail finsor restructure of Post Office
Mobilise and Energise
research suggests that intensivecommunication can mobilise staff but canalso de motivate when linked to issues ofuncertaintykey danger of change management isthat the most talented will leave leavingfurther de motivation amongst existingstaff
Support and Reward New Behaviour
appropriate incentivisation and rewardsystems communicating symbolicrewards identifying those who haveachieved under the new regime
Be Political
change is a complex game requiring themanagement of multiple interestsrecognition that power may need to beasserted over particular individualsdeveloping alliances with other groups toimplement the changealliances shift over time and are onlysustained when useful
Pettigrew Model of Congruence
broader model that develops long termperspective on change receptivecontexts of change
strategic and operational changeachieved through positive interaction of 5CSF:
coherence of change programclear environmental assessmentconsistent and committed approach tochange leadershipability to link operational and strategic change
close attention to HR dimension
Receptive Contexts for Change
quality and coherence of operational objectivesavailability of change leaderslong term environmental pressuressupportive culturecooperative interorg networks
simplicity and clarity of goalsfitting change agenda to the locale
innovative firms are doing more things together and not leavinganything out emphasis on congruence and complementaritiesbetween change types
Nadler Systematizing theModel of the Organisation andIdentifying Key Stages
Nadler stage approach model suggests that there are 4 different aspectsof the organisation that must be focused on and engaged with as part ofthe change process
if these aspects are not reinforcing andcomplimentary then the change cannotsucceed concept of congruence
Task Environment
what are specific work activities that needchange in the organisation?requires specific analysis of workorganisation and how processes are linedup
Individuals
what people will be needed for new tasks does the skill profile of existingemployees match to this need?
if there is no skillneed fit then change will struggle
Formal Organizational Arrangements
structures procedures and processes how activities are grouped together andsignificance for monitoring
issues concerned with implementing newprocedures linked to new objectives in thechange process
Informal Organizational Arrangements
issues of culture and beliefs how ismanaged viewed across the organisationis the culture supportive of the changeprocess?
Nadler also considers pairings of thesefactors to better identify problems for thechange process
Individual/Task Resistance Problem
mismatch between skills knowledge andexpectations of existing workforce andnew taskslimited number of possibilities includingretraining but will not be universal
Task Environment/FormalOrganisation Control Problem
do formal arrangement support the new tasks?does reporting and responsibility ensurethat the environment is properlymonitored?
Formal/Informal Organisation
informal arrangements can developcooperation in order to achieve tasks new structure may undermine this
may reduce variety and lead to passiveresistance followed by conflict
5 Stage Model
Recognising the Change Imperativecommitment to shared participation
Developing a Shared Direction
creating a general vision of change thatencompasses critical areas of need
Implementing Change
Redesign organizational hardware structure and sequencing of activities
Redesign of organizational software managerial behaviour and reward andappraisal
Redesign of strategic selection processes
Consolidating and Sustaining Change
baking in of changes and continuedcommitment to communication andinformation
consolidation through measuringprogress/celebrating wins/not declaringvictory too soon
Lesson 5 Mindmap 3.mmap 22/04/2009
Power Politics andResistance in theManagement of
Change
Main Principles
two perspectives of employeeengagement
Persuasion collaborative/consultativechange processes with emphasis onchanging how people think
Direction/Coercion overcoming resistance
Resistance to Change InitialPerspectives
Force field Analysis Lewin
model used to explain pressures thatmove as well as inhibit change
preliminary battle is between these 2variables and would lead to stasis if notaddressed
Types of Resistance to Change
Overt
Covert concealed activities andindustrial sabotage/whistle blowing
Unintended decline in moral
Cynicism
Approaches to Resistance
Unitary Perspective organisation as singleentity with goals articulated by management opposition is illegitimate and will resistunionisation
Pluralist Perspective recognition ofmultiple perspectives within organisationalthough assumption that groups willcommit to consensus
Conflict Perspective no expectationthat different groups within the org haveshared interests
Levels of Resistance to Change
Collective Resistance to the EntireChange Process
overt clashes in change process wherethere are strong collective actors capableof creating alternative perspectives
common in highly unionised settingswhere large groups can bring significantresources to bear common in UKindustrialised areas
Workgroup Resistance to Impact ofChange on Particular Conditions
degree of collective organisation of aworkgroup as well as informal cohesionwithin it
groups may be threatened by the changeprocess which may reduce status orconditions work to gain collective power
French & Raven 1960 Types of Group Power
Reward Power
Coercive Power
Referent Power way in which certaingroups emerge as representing keyorganizational attributes
Legitimate Power
Expert Power
Individual Resistance
most difficult to deal with and is oftenassociated with personality issues andpersonal experience
The Cycle of ResistanceCarnall 2007 Coping Model of Change
Denial reject what has happened andpretend it isn't necessary strongest levelof resistance
Defence dominant view that somethingis wrong and change is needed increased negativity of self image andindividual resistance
Discarding acceptance of change aspositive in some ways
Adaptation engagement with thechange process of testing and amendingit
Internalization
Dealing with Resistance to Change
Dealing with Collective Resistance
games and tactics are used within conflictwhich can create advantages
Pfieffer 1993 7 stage process to enter politics game
decide goals
diagnose patterns of dependence andindependence within the org
establish their views of your goals
identify their power bases
identify the bases of your own power and influence
determine strategies and tactics
chose course of action
Eccles 1999 recommendations fordealing with resistance
convince critics of validity of your strategy
demonstrate that new behaviour will take them forward
buy support or flatter
marginalise critics
neutralize or exit critics
Dealing with Individual ResistanceCarnell 2007 Challenges faced byindividual in dealing with change
Know Yourself articulation of feelingsand get views on what skills needdeveloping allow people to come toterms with change
Know the Situation individual needs tocome to terms with the new environment
Know others who can help talking toothers who can help
Working on self esteemmodel requires overcoming individualresistance and requires organizationaltime and resource
Lesson 6 Mindmap 2.mmap 03/05/2009
Language,Discourse and
Sensemaking in theManagement of
Change
The Power of Language
important role of language in shapingpeople's world views
communism, nazism and control overmass media and reshaping of language Orwell Newspeak, big brother andthought crime
shifting perceptions and meaningsthrough language DTI to BERR
connotation of name changes andattempts to change perceptions GordonGekko
reconceptualisation through languagechanges friendly fire and collateraldamage
Hirsch & De Soucey 2006
impact of 'organizational restructuring' rhetorical tools as linguistic persuasiondevices
non offensive language used to mask andsugarcoat slumps as having positiveoutcomes
language as non hierarchicalphenomenon people are all free tointerpret it individuallylanguage continually developing and hard to regulate
new words appear each year and newlanguage developed out of the Internet
language needs to be seen as terrainthrough which individuals withinorganisations communicate and shapemeaning
Language and Discourse
Discourse systems of language in usein specific situations
language in use is critical part of changemanagement process with actors seekingto enroll support for their own position byusing specific words
opponents of change will seek toundermine discourse through challengingthese words
Heracleous & Barrett 2001 differinginterpretations of languages in changeprocess
looked to determine nature of discourseand how they influenced organizationalchangedifferent stakeholders within the processunderstood market in different ways
different interpretations were embedded inlanguage which actors usedkey distinction between what people sayand underlying assumptions which linkthe speech acts into a coherent discourse
conflict between stakeholder groupstalking 'past' each othercritical to understand deeper values and'deep structures' real meaning ofdiscourse
Rhetorical Strategies andOrganizational Change Symons 2005
how actors construct arguments toachieve particular interpretations of realitywhile resisting othersorganizational changes are about conflictsover meaning relating to a range of keyfactors
creating identities
where change is implemented andresistance occurs there is battle overlegitimacy of resistance
disputing realness
challenges arise over whetherjustifications for change are real or arebeing manipulated
setting boundariesbattle over us and them and role of middle managers
drawing on local discourseresistance using the impact of change on local area
Organizational Change andInstitutional Entrepreneurs
impact of how organizational change isfacilitated by involvement in changingsocietal perceptions of business
whale watching industry and attempts byindustry to change public perception ofwhales and their behaviour
businesses sought to change thediscourse around whales by fostering ahumanistic image
Munir & Phillips 2005 InstitutionalEntrepreneurship
development of Kodak Moment and roleof company in associating product withnew lifestyle
Kodak developed a particular view of itselfas a company Theory O
Narratives and Organizational Change
emphasis of story telling and its role inunderstanding an organisationorganisations consist of stories whichcarry an implicit lesson on how peoplebehave or how the organisation works
stories survive in corporate netherworldand help explain how the organisation gotto a certain position
emerge in complex ways within orgs andact as way of exposing an underlying truthof the org
from a change perspective narrativeshave 2 key implications
what are the unexpressed feelings ofstaff to the constitutional order?
change management narrative needsto link old and new narratives
Sensemaking andOrganizational Change
Weick 2001 Sensemaking
Sensemaking as fundamental activitywithin orgs people try to rationalize andunderstand what is going on to createorder and make situations rationallyaccountable
if conditions of sensmaking areundermined chaos can ensue
key issue is to build and changeorganisations in orderly way that allow fortransition to work properly developed arange of key questions
social context
removal of social anchors and networksundermine change
identity
sensmaking on the individual level doesthe change allow for people to have aclear position?
Retrospect
ensure that the past is not jettisoned andpeople don't regret their previous work
salient cuescan people spot the cues about new behaviours?
ongoing projectsresilient in the face of interruptions
plausibilitysocial building of view about what is being constructed
enactment
does the change allow people to to testtheir assumptions around change, rewardsatisfaction etc?
Lesson 7 Mindmap.mmap 05/05/2009
Senior Managersand the Leadership
of Change:InternationalDimensions
Accounting for NationalDifferences
power of different participants in thechange process will vary betweencultures and societiesfocus of power and politics within andwithout organisations and changemanagement processes derive from thisrelationshipimpact of divergent capitalism and howdifferent national settings shape thepower of managers, shareholders andemployees
Roe 2004 Political Determinants ofCorporate Governance
how social conflict is settled affectsownership and how authority is dividedthose societies dominated by strongdemocratic institutions i.e. Germany willhave employees with powerful rights andcontrols3 fold set of relationships between actorswith different interests Shareholders/Managers/EmployeesSubtopicSubtopic
Power of Employees in MoCProcess InternationalDifferences
Liberal Market Economies
UK and USA outcomes of industrialstruggles have left employees weakerfirms as isolated hierarchies that need tooperate in constantly changing marketconditionsreducing employees, shutting downfacilities and moving into new areasvery little employee power be itinstitutional or regulatory to slow downchange processes
Coordinated Market Economies
Germany and Scandinavia capital,labour and state act in concert throughkey associations such as unionsemployee power reflected in powerfulunions and collective bargainingGerman model of codetermination works councils and 2tier board system representation of staff and shareholdersconsiderable blocking power through works councilsrights embedded within national contextwhere labour is a social partnerGerman model pursues Theory Oapproach with incremental anddevelopmental processes of changereinforced by nature of skills in theGerman system and role of vocationaltraining which in turn influencesmanagement structurescorporate governance system builtaround long term support for firms makinglong term commitments to staff
Stakeholder Model
Japan low union membership and lowstate intervention but focus on long termemployment and high investment in skillsmodel reflects need to develop consensusat all levels within the organisation longand protracted approach to workingchanges communicated through broadernetwork of cooperating companies Keiretsu including suppliers
Shareholders, Managers andChange Processes CMEGermany
where employees are empowered thisoften militates against dispersedownership in favour of blockholding
shareholders have to undertake high levelof monitoring and scrutiny of firm levelactivitiesin Germany this has lead to the retentionof firms as family interests with capitalrequirements met from retained earningsof through the national banking system
changes are slow and incremental oftenderived from technological upgrading
reflected in differences of stock marketcapitalization as % GDP
even in PLC ownership remainsconcentrated with blockholders aiming forthe long term with little exit strategies
blockholders forced toward consensualapproach reinforcing Theory Odevelopment process
German system has a number ofproblems in terms of private benefits ofcontrol at the cost of small shareholdersand potentially employees
major changes therefore take placethrough the intervention of a core group ofshareholders and occasionally the statechange is therefore initiated by andnegotiated by an inner group ofblockholders, managers and employees outside investors are weakly represented
a number of significant changes havebeen affect the German model in recentyears
management challenge of employee power
as opportunities for lower costs overseasemerge many firms have moved location
internationalization
international M&A underminingnationalistic claims against overseaspredators
diminishing of blockholders
changes in tx law have allowed this groupto sell shares wthout capital gainsimplications
transparacy of accounting
Shareholders, Managers andChange in the USA and UK
key power struggle within capitalbetween management and shareholders
shareholder value as dominant discoursewith change management implications
transparency issues have advancedshareholder decision making withsystematic auditing processesSOX developed to more closely bindmanagement to accurate reportingstandards
linkage of management compensation toshareholder value trying to addressprinciple agent theoryproblem of low risk to agent unlike shareholder
in the UK senior managers are morestrongly bound to shareholder interestwith less protection against M&A activityin the USA a range of regulatorymechanisms help protect managementfrom aggressive shareholder activity managers have more room to move interms of change processes
Lesson 8 Mindmap.mmap 07/05/2009
Organising theChange Process:
The Role of MiddleManager
Middle Management and Change:Crisis or Opportunity
main feature of change in recent yearshas been impact of delayering
Lazonick 2005
20 largest US orgs have seenemployment drop from 4.5m to 1.9mpeople
shift in nature of the corporation fromhierarchy to flatter structures withdevolved decision making
role of senior management has faded andare no longer seen as experts but ratherdecision makers or strategists /facilitators
redistribution of responsibilities and reorganisation of functions between seniorand middle managers
Delayering in Organisations
"...the planned vertical compression of managerial levels ofhierarchy involving the wholesale removal of one or morelayers of managerial or supervisory staff from theorganisation's payroll"
Littler etal 2003 Consequences of Delayering
Increasing span of controlmore people for individual managers to oversee
Compression of managerial career structures
no further opportunities for careerprogression with emphasis on horizontalmovement
Redesign of management jobsrole of manager moves from control to mentor
Shifting organizational boundariesincrease in outsourcing activities
Development of Project Manager image offering flexibility, fluidity and constancyof change
Development of Portfolio Employeeimage manager with range if skills ableto work on a variety of tasks
broader changes have had a significantimpact on middle managers with researchsuggesting lowered morale, loyalty,motivation and job security
evidence from 1980s suggests that workwas intensified for middle managers anddecreases in job security
individuals may be subject to higher levels of anxiety/lowerdegree of organizational commitment, loss of jobsatisfaction and higher risks in career progression managerial survivor syndrome
Middle Managers and Change
Balogun 2003
middle managers subjected to muchcriticism potential negative influence onchange
MM's protect their own self interests andare reluctant to implement changes
growing evidence to suggest that MM'sare critical in the delivery of change andthat they can be positive strategic assetsin change delivery
using their position and contacts togather information for seniormanagement
encourage new and developing projectsincreasing adaptability
use resources to champion innovationand business opportunities
argument that MM's undertook 4 key roles
implementing needed changes
developing new working practices andreengineering existing ones
leading on issues of cost reduction
keeping the business going
shift from old to new accompanied byfocus on existing customers receive goodservice
key indicator on the disruption thatchange causes to core business
development of firefighting mentality
undertaking personal change
reviewing the role of the MM anddevelopment of their own jobs
development of signs and behavioursincluding informal communications andnetworking
helping others through the change
acting as role models responsible forformal and informal communication
these roles are highly time consuming canbe stressful and cause frustration andother serious impacts
noted that change process is ongoing andmanagers are faced with constantpressure of changing priorities and willseek out organizational schemata frames of shared reference
research has shown that frames ofreference are built over three key stagesin the change process
Time 1
perception of organisation was disruptedby big bang of change
process of unfreezing or de identification distancing from old schema led toambiguity and loss of meaning
future could not be developed fromhistorical interpretation achieved withexperimentation through gossip andbehaviour of others
visible indicators of change i.e. new locations
Time 2
managers develop new change processschemata which impacts on areas ofconflict
process of negotiation and interpretationwith one of the main issues developingaround the balance between new ways ofworking while maintaining the existingsystem
creates a tension between newdecentralized model and olderhierarchical model
Time 3
reidentification and coming to terms withthe new reality and goals of the business
common schemata are developedbetween middle managers
Delayering and Communication
Balogun argues that process of delayeringwhich removes hierarchical levels canalso impede factors of communicationand interaction within the managementchain
issue of communication gap will havepractical implications on the managementof change
senior management will have limitedinfluence on MM interpretation of changeprocess
MM's develop own interpretation ofchange relying on peers
through negotiation and conversationsMM's create change and in turn arechanging how they interpret it
within large organisations this will lead tomultiple meanings thatd evelop in specificcontexts
Balogun concludes that duringorganizational change it is essential to tapinto and monitor multiple interpretations
Lesson 9 Mindmap.mmap 10/05/2009
The ChangeRevolution/Change
Fatigue
Abrahamson 2004 RepetitiveChange Syndrome
change itself has become the goal ofmany organisations and have not properlyconsidered the impact of relentlesschange programmesevidence has shown that largeproportions of change programs such asTQM, BPR etc have failed or have beenabandoned
3 key symptoms of excessive change
Initiative Overload
production of one change after the other reduced levels of enthusiasm andcommitment
difficult to link outcomes to initiatives fog of rhetoric
Change Related Chaos
state of upheaval as wave of changesmove across the organisation confusesand disorients people creating anxiety andpolitical infighting
Employee Burnout
summary of all symptoms leads tocynicism and burnout people are unhappywith their jobs
symptoms emerge due to gaps betweensenior managers and other participants inthe organisationthis can be reduced with seniormanagement being more systematic interms of collecting data on about impactson change initiatives
Where does pressure forChange come from?
pressure for change is beyond a simpleand rational response to environmentalfactors
many organisations are addicted tochange a number of factors areresponsible for creating this addiction
Shareholder Value and Impact ofCapital Markets
growth of shareholder value discourse since 1970swhere previously firms could generate growth frominternally generated funds the growth of institutionalinvestors in large firms has had huge impact on powerof management to control change
investors have undertaken more detailed analysis of shortterm share price performance which twinned with shortterm market volatility has lead to pressure on firms to cutcost and reduce staff
retained cash within firms has been usedto buy back shares rather than used forfurther investment limited scope for change by management
Recent discussions about impact ofshareholder value by Jack Welch mayimpact future issues of change
The Role of Consultants
the specialist nature of consultancies and specific knowledge that they bringto organisations suggest that they feed uncertainty to clients and then offersolutions for changeconsultants offer a range of options toolsand techniques which they continue tosell en masse to clients on a regular basisconsultants also give a perception thatthe firm has a corporate will to change all change regardless of outcome willraise stock prices
Podolny 2005 Status Signals
organisations seek to reinforce andprotect reputation by engaging advisorswhich they think have a high status
Institutional Pressures
issue of fashions and fads firms seekexternal reassurance by reviewing thework of competitors determining recentfads of business mediaIsomorphic pressure of conformity to specific models impactof the halo effect company X is doing well so we should copy!particular impact of this pressure in UK public sector andmovement towards public sector model increased marketisationand outsourcing of key activitiesongoing change projects and habitual useof consultancies which filter down to NFPsector and other key stakeholders
huge impact of fads leads to confusionand demoralization
From Change Pressures toChange Consequences
addiction to change has had a range ofbroader implications range of personal,social and community impacts
development of the 'disposable American'as the consequence of significantdelayering and firm flexibility
emergence of employability or portfoliomodel where individuals becomeresponsible for building their own skills
as change initiatives become moreembedded they impact on how peopleview themselves corrosion of characterand spectre of uselessness
frequent relocations of managementimpact on family structures and widerdisconnection decline in civicparticipation and voluntary activities
flexibility and mobility and dual careerfamilies have had a growing impact onissues of socialization and family
two key factors that impact on corporatesocial responsibility
Challenge of Globalization and Fair Trade
firms with strong brands now need todemonstrate fair trade credentials
opening up of information sources i.e.Internet and blogging potential damage offirms is significant
Environmental Challengesreduction of carbon emissions and energy neutrality
Lesson 10 Mindmap.mmap 10/05/2009