Change Management.docx

Change Management ORGANIZATIONAL ADAPTATION The word adaptation is a metaphor that captures the endeavors of organizations to be fitted better to its environment Two things remain prominent with organisation in this process It has an articulated purpose An established mechanism for achieving it Most organizations are constantly evaluating their purposes questioning verifying and re-defining the way of interaction with their environments Effective organizations maintain alignment with its environment and ineffective organization fail to maintain the alignment with environment These effective organizations also constantly modify and refine the mechanism by which they achieve their purposes and are re-arranging their structure of roles relationships and managerial processes Hence the essence of management is coping with external environmental change by changing objectives changing structures and changing processes We will discuss here the same as the concept of organisation adaptation frame-work or model as proposed Miles and Snow The model contains two major elements It specifies the major decisions needed by organization to maintain an effective alignment with its environment This also highlights an organizational typology which portrays different patterns of adaptive behaviour The Adaptive Cycle Strategic Choice theorists argue that organization behaviour is only partially ordained by environmental conditions and the choices made by top managers are the critical determinant of organization structure and processes The adaptive cycle is present in all organization according to Miles Snow and it is more visible in new or growing organizations Now the question is what is meant by adaptive cycle This has been defined by the two leading scholars as under The Entrepreneurial problem An entrepreneur must give a concrete definition of organization domain a specific good or service and a target market or market segment and the entrepreneurial problem is an added dimension In either a new or on-going organization the solution to entrepreneur problem is marked by management s acceptance of a particular product-market domain and this acceptance becomes evident when management decides to commit or allocate resources Second is to achieve objectives related to the entrepreneur domain In many companies entrepreneurial solution is sought by through the development and projection of an organizational image internally and externally Therefore in this phase two important phenomena are the identification of a new opportunity and the initial impetus for movement toward it Engineering problem begins to appear at this stage The Engineering Problem The engineering problem involves the creation of a system which operationalizes management s solution to the entrepreneurial problem Such a system requires management to select appropriate technology input-transformation-output for producing and distributing the chosen product and further needs new information communication and control linkages Job-order batch or flow production As solution to the problems are reached through initial implementation of the administrative system but final configuration of the organization will be reached as management consolidates relations with the environment final shape of the organization will be settled during administrative phase The Administrative Problem Administrative system is to reduce uncertainty within the organizational system Therefore in this phase management establishes process for coordinating and controlling internal operations and rationalizing the system already developed It also involves formulating and implementing those principles which will enable the org to continue to evolve innovation This phase is termed pivotal by the author in the cycle of adaptation owing to the followings Rationalization and Articulation Management must be adept at two conflicting functions first to create an administrative system structure processes for monitoring and controlling current activities and second at the same time allowing the system not to jeopardize the future innovation This has been identified as lagging and leading variable in the process of adaptation The lagging variable suggests organization must rationalize through the development of appropriate structure and processes strategic decisions made at previous points in the adjustment process While the leading variable the administrative system must facilitate the org future capacity to adapt by articulating and reinforcing the paths along which innovative capacity can proceed Therefore an administrative system is such to deal with past and future The same dilemma can be identified in the classical principle of Henri Fayol especially when he talked of maintaining stability and initiative in the organization In terms of marketing management of an organization the same problem persists as revenues from existing product and at the same time the need to develop new products and businesses The dilemma is how can we get both out of the same structure one needs innovation and creativity while the other demands tight discipline and regimentation Having dealt with adaptive cycle as given by Miles and Snow the question then arises how organizations move through the cycle For this we need to understand the typology presented by them in the form of different set of organizational strategies The question is what strategies organizations employ in solving their entrepreneurial engineering and administrative problems The research of Miles Snow shows that there are essentially three-strategic types of organizations Defenders Prospectors Analyzers Each strategy has a distinct way to engage or interact with its environment Each type has its own unique strategy for relating to its chosen market Each has a particular configuration of technology structure and process that is consistent with its market strategy Besides the fourth type of organizations exist known as Reactor which is identified by Miles Snow as a form Strategic failure owing to inconsistencies among its strategy structure technology and process Defenders The defender deliberately enacts in an environment for which a stable form of organization is appropriate Stability is achieved by the defender s definition of and solution to its entrepreneurial problem The defenders define it as how to seal off a portion of the total market in order to create a stable domain and they do so by producing only a limited set of products directed at a narrow segment of the total potential market Within this domain defender strives aggressively to prevent competitors entering its turf but also ignores developments and trends outside of their domains Over a time he is successful in carving out its own niche which is difficult for competitors to penetrate The engineering problem for the defender is how to produce and distribute goods as efficiently as possible The defender does so by developing a single core technology that is highly cost efficient out put on continuous and predictable basis Some defenders follow vertical integration strategy by incorporating each stage of production from raw material to distribution of final output The defender s Administrative problem is How to achieve strict control of the organization in order to ensure efficiency So this is resolved through structural-process mechanism described as mechanistic bearing the following features Top management group heavily dominated by production and cost-control specialist Little or no scanning of the environment for new avenues Functional structure characterized by division of labour centralized control communications through hierarchical channels Such administrative is suitable for generating and maintaining efficiency but have adaptive or adaptability problems Therefore this system operates well for stable industries and is ineffective for turbulent industries where market environment changes quickly For example this view of strategic adaptation is popular amongst managers in developing countries e g electronic industries in context of Pakistan split air conditioner may be different from traditional manufacturers of window air conditioning units The question then is why traditional stable business in this industry was un-able to realize and adapt quickly in the changed environment Or it is the organization who acted like defenders of the Miles Snow s typology SKELETAL MODEL OF ADAPTATION A state of adaptation in a biological sense describes a state of survival for an organism Analogously a state of adaptation for a business organization is one in which it can survive the conditions of its environment There may be several niches available to a firm for surviving the conditions of its environment Simon gives us three modes that are open to a system Passive insulation Defender Reactive negative feedback Analyzer Predictive or Proactive adaptation Prospector Three states of adaptation are given by Chakravorti He used the terms as unstable state stable state and neutral state All three states of adaptation are viable The unstable state is the most vulnerable to changes in the firm s environment a neutral state is the most vulnerable and a stable state vulnerable only to certain environmental changes In the unstable state a firm tries to buffer itself from its environment as it is extremely susceptible to environment to environmental changes The manager of such a firm concerned with the fragility of the firm s adaptation is continuously on the lookout for new buffering arrangements These firms are called defenders and have narrow product -market domains and they seldom seek to make major adjustments in their technology structure or methods of operations To Miles and Snow such an organization adapts by simply ignoring the environmental events or demands A stable state describes the state of adaptation in which instead of buffering itself from the environment the firm is open to it and in fact offers a reactive move in keeping with every move of the environment The firm reacts to environmental changes and complies with environmental mandate Called an analyzer by Miles Snow such a firm has a buffered core like the defender but unlike the defender it also has extensive market surveillance mechanism that enable it to imitate the best of products and markets by others In a neutral state a firm can withstand most environmental changes because they have been anticipated before their occurrence and the firm has invested in the requisite adaptive ability For Miles and Snow such types of organizations are called prospectors which are in continuous search for market opportunities They often create changes in their environment to which their competitors must respond A true prospector is almost immune from the pressures of a changing environment since this type of organization is continually keeping pace with change and frequently creating change itself accords to Miles Snow All the three states of adaptation are viable ways of coping with the environment Defender Prospector and Analyzer are all stable form of organizations and manager chooses to pursue either of these strategies to cope effectively with its competitors If management chooses to pursue one of these strategies and designs the organization accordingly then the organization may be an effective competitor in the particular industry over a considerable period of time All state of adaptations does not have the same immunity from environmental changes The neutral state has the highest immunity followed by the stable and unstable states A firm seeking to ensure its future should prefer a neutral state of adaptation over the other two states But then the fundamental question arises Why do not all firms show for the preference for such an ideal option Similar to the teacher-student environment metaphor why cannot all students get the same grade or a grade The answer has two parts The state of adaptation depend on the firm s resources that it commands adaptive ability The nature of management processes within these firms process of adaptation influences the state of adaptation sought Determinants of Adaptive ability How can adaptability be improved Lawrence Lorsch gave the concept as differentiation and integration Improving on firm s differentiation and integration would increase its adaptability Christenson called this as level of organization which again is composed of differentiation and integration and then relabeled as Organizational Capacity The organization capacity measures the information processing ability of firm and is an aggregate measure of the human resources of that firm Andrew suggests that adaptation is measure by the nature and extent of the firm s material resources Miles and Cameroon defines the same as Environmental Receptiveness Cluster which influences the state of adaptation The cluster includes two things Resource scarcity the extent to which elements in the input of an org lean in needed resources Internal resources defined as the generalizability of a firm s core technology and expertise and the extent of its slack Material resources include inputs like finance and technology The Process of Adaptation The process of adaptation consists of two sub-processes Adaptive generalization and Adaptive Specialization Adaptive Generalization It is the process of improving the goodness of fit in a given state of adaptation It refers to the rationalization of processes and structure using Material Capacity MATCAP and Organizational Capacity ORGCAP for moving to the nearest adaptive fit Adaptive generalization refers to the process that improves the survival potential of the organization Managing slack is the key to adaptive generalization This requires that an old fit be consciously disturbed for the sake of new and higher fit Require MATCAP ORGCAP Adaptive Specialization This involves the choice of strategy appropriate to the environment and resources of the firm and the design of a matching structure An important part of strategic management is adaptive specialization which involves Managing the choice of purpose for the firm so as to exploit its material and organizational capacities optimally Minimizing the misfit in the match between the chosen purpose and the firm s ORGCAP and MATCAP Adaptive specialization involves formulation of strategy keeping in view firm's resources Adaptive generalization and adaptive specialization follow each other in a cyclical pattern References The above lecture notes are essentially prepared from the following articles excerpts and clippings are also taken from the same Chakravarthy Balaji S Adaptation A Promising Metaphor for Strategic Management The Academy of Management Review Vol No Jan pp Miles Raymond E Snow Charles C et al Organization Strategy Structure and Process The Academy of Management Review Vol No Jul pp - Prospectors The prospector enacts an environment that is more dynamic than other types of organizations Unlike the defender whose success comes primarily from efficiently serving a stable market the prospector s prime capability is that of finding and exploiting new product and market opportunities For Prospector maintaining a reputation as an innovator in product and market development may be perhaps more important profitability Entrepreneurial problem for prospector is how to locate and develop market opportunities The systemic addition of new products or markets combined with retrenchment in other parts of domain characterizes the prospector The prospector must have the ability to scan survey a wide range of environmental trends and events So the organization spends heavily on individual and groups who scan the environment Change within industry and to different industry is major tool of the Prospector manager to gain edge over competitors Product and market innovation protect the organization from a changing environment but the organization risks the low level of profitability and stretch over expansion of it resources Engineering problem for prospector is how to avoid long term commitments to a single technological process Therefore the solution for this problem from prospector s perspective is to invest in flexible proto-type technologies and also to invest in multiple technologies Prospectors have low degree of routinization and mechanization Prospectors believe in organic organization where technology is embedded in people Therefore technological flexibility permits a rapid response to changing domains but the organization cannot develop economies or efficiency in production and distribution system because of multiple technologies This type of decentralization increases cost as economies are difficult to achieve through this way Administrative problem for prospector is how to facilitate and coordinate rather control numerous and diverse operations Solution for this problem for prospector lies in having organic-structure-process mechanism Therefore top management is dominated by R D and marketing experts planning is broader rather than intensive and oriented towards results not methods The prospector s structure is characterized by low degree of formalization decentralized control lateral and vertical communication etc Therefore flexibility is the catchword for all three types of problems of entrepreneurial engineering and administrative Administrative system is ideal to maintain flexibility and effectiveness but may result in underutilization or misdirected utilization of resources Analyzer The research shows that the defender and prospector seem to reside at the opposite ends of continuum of adjustment strategies Between these two extreme we have analyzer and it is a unique combination of the two types A true Analyzer is an organization that attempts to minimize risk while maximizing the opportunity for profit It combines the strengths of both the prospector and defender into a single system The best word to describe Analyzer s adaptive approach is balance The entrepreneurial problem is how to locate and exploit new products and market opportunities while simultaneously maintaining a firm base of traditional products and customers The obvious solution is to operate in hybrid domain that is both stable and changing The analyzer move towards new markets or products only after their viability has been demonstrated This may be accomplished though imitation of the prospector once success is demonstrated by the prominent prospector At the same time majority of the analyzer s revenue is generated by a fairly set of traditional products or markets a defenders attribute The operational efficiency of defender is to pursue and effectiveness of prospector in looking for new markets and products Therefore analyzer can grow through both market penetration and market development strategies The duality of analyzer s domain is reflected in its engineering problem and solution The main problem for analyzer is how to be efficient in its technology which a stable portion and to be a flexible in changing portion The organization must learn how to achieve and protect equilibrium between conflicting demands for technological flexibility and for technological stability This equilibrium is accomplished by partitioning production activities to form a dual technological core Stable component resembles the defender s technology functionally organized routinized standardized and mechanized while flexible technological component resemble the prospector s technological orientation functionally decentralized and organic Administrative problem is how to differentiate the organization structure and processes to accommodate both stable and dynamic areas of operation Therefore analyzer solves this problem through some version of matrix organization The head of key functional units most notably engineering and production unite with product managers usually housed in marketing department to form a balanced dominant coalition The product managers influence is usually greater than the functional manager since his task is to identify promising product- market innovations and to supervise their movement through applied engineering and into production in a smooth and timely manner The presence of engineering and production in the dominant coalition is to represent the more stable domain and technology which are the foundations of the Analyzer s overall operations Reactors Besides the fourth type of organizations is Reactors This type of organization exhibits a pattern of adjustment to its environment that is both inconsistent and unstable This type lacks a set of response mechanism which it can consistently apply to a changing environment The reactors adaptive cycle usually consists of responding inappropriately to environmental change and uncertainty performing poorly as a result and then reluctant to act aggressively in the future Interesting question here would be why organizations become reactors Three reasons cited by the authors Miles Snow et al and are as follows Top management may not have clearly articulated the organization s strategy For example a company founded by one-man prospector with immense personal skills successfully establishes its business but upon his death the firm is in strategic void Management does not fully shape the organization structure and processes to fit to a chosen strategy Strategy is a mere statement not a guide to behavior similarly functional strategies might not be aligned This is a typical case with organizations in LDCs to come forth quick with beautiful written vision and mission statements and other strategy documents The ultimate cause of instability and failure might be the tendency on the part of management to maintain the organizations current strategy-structure relationship despite overwhelming changes in environmental conditions Adaptation and Strategic Management Adaptation in one respect can be identified as strategic management as well Therefore some scholars define strategic management as the process of continuously adapting to the changes in a firm s environment is called strategic management According to Scott and Greiner too strategic management is not only needed to cope with changes in firm s external environment but also to cope with changes caused by processes internal to the firm Scott Greiner While to Ansoff the question is how do we configure the resources of the firm for effective response to unanticipated surprises This leads us to the recently developed perspective of strategic management known as Resource Based View RBV According Cyert and March The successful strategy itself would be a destabilizing influence effect on that strategy because of the surplus or slack Because as the firm enjoys success generates surplus of profits and resources as a consequence and can therefore seek new activities and strategies expansion in newer areas which is destabilizing in nature Nonetheless a distinction has to be made between strategies of action triggered by changes in the external environment and a strategy of structure Hence the bigger question for Ansoff is how do we configure the resources of firm for effective response to unanticipated surprises STRATEGIC CHANGE Before going to discuss the concept of strategic change let us first discuss the concept of strategy What do we mean by strategy its components and its usage as a word strategic especially For instance one may observe its wide usage as strategic investment strategic management strategic finance and strategic planning and strategic marketing etc Therefore whenever we talk of strategy it is essentially assumed that we are also dealing with its inalienable components which are as under Objectives - this may also mean vision mission goals and targets Resources financial human informational technological etc Environment Government customer society economic conditions and specific environment means particular to industry in which organization operates like vendors buyers competitors etc The environment may be friendly hostile or neutral Time orientation short term or long term orientation Competitors strategy or tactics of competitors nature of competition and rivalry Therefore for students of business it is important to know the constituent elements of the word strategy whenever it is referred This lecture is based on the chapter of a very popular book on strategic management comprising of a comprehensive framework for managing strategic change is given which is as under A Framework for Managing Strategic Change Diagnosing the Change situation Types of Strategic Change The Importance of context Organization culture Force field analysis Management Styles and Roles Styles of managing change Change agency roles Strategic leaders Middle managers Outsiders Levers for managing change Structure and control Routine Symbolic processes Political processes Communication Change tactics Types of Strategic Change First step in diagnosing the change situation is whether change is needed or not If the change is needed then related question would be of what type Therefore our concern is to identify various types of change Balogun and Hailey have given the following typology of strategic change so as to identify the types of change required The nature of change in an organization can be incremental or big bang one Incremental change is built on skills routines and beliefs for bringing in efficiency While the big-bang approach to change might be needed on occasions for example if the organization is facing crisis or needs to change its direction The scope of the change means whether change can occur within the current paradigm that is current organizational beliefs and assumptions and can be classified further as realignment of strategy rather than a fundamental change of strategic direction Or change requires a paradigm change that is transformational change Combining these two axes we have four types of strategic change as given in the figure below Scope of Change REALIGNMENT TRANSFORMATION Nature of Change INCREMENTAL EVOLUTION ADAPTATION BIG BANG REVOLUTION RECONSTRUCTION Adaptation is change which can be accommodated within the current paradigm and occur incrementally It is the most common form of change in organizations Reconstruction is concerned with rapid change and upheaval in an organization For example organization may make structural changes like major cost-cutting programs to deal with difficult or changing market conditions Evolution is change in strategy which requires paradigm change but over time Evolution can also explained in terms of taking organization as learning system continually adjusting their strategies with the changing environment This we discussed earlier as learning organization But the danger in following incremental and evolutionary and incremental change lies in experiencing strategic drift as organizations are based and bounded by the existing paradigm and routines of the organization Revolution is change which require rapid and major strategic and paradigm change or where strategic drift has resulted in developing extreme pressures for change The Importance of Context There is no one right for the management of change The success of managing change will also be dependent on the wider context in which that change is taking place Balogun and Hailey therefore build a number of important contextual features that need to be taken into account in designing change programs Some contextual features are Time - How quick change is needed Scope - What degree of change is needed Preservation - What characteristics to retain and what combination to change Diversity - How homogeneous or heterogeneous the organization is from within MANAGEMENT STYLES AND ROLES Education and communication involve the reasons for and means of strategic change Educating and communicating about strategic change might be very time consuming activity and direction might not be clear to managers especially in large organizations Change may be ineffective owing to misinformation and ineffective communication For strategic change to take place reliance on top down communication processes may be problematic Collaboration or Participation in the change process is the involvement of those who will be affected by strategic change in the identification of strategic issues the strategic agenda the strategic decision making processes or the planning of strategic change This can help in increasing ownership and commitment to change and change process It may entail the setting up of project teams or task forces Nonetheless this may prove to be more time consuming process but would lead to enhance the quality of decision Strategy workshops can be quite useful for cross levels of management to work on particular strategic problems provide solution within a larger strategic framework and drive change mechanisms down to routine aspects of organizational change Intervention is the coordination of and authority over processes of change by a change agent who delegates elements of the change process Change agent retains control though interventions For example at particular stages of change such as idea generation data collection detailed planning the development of rationale for change and the identification of critical success factors are delegated to project teams If such teams do not take full responsibilities of the change processes then change sponsors tries to ensure the monitoring of change progress Direction involves the use of personal managerial authority to establish a clear future strategy and how change will occur It is essentially top down management of strategic change It may be associated with clear vision or strategic intent developed by someone seen as leader in the organization There are different styles of managing change Two broad categories are directive and participative styles Different stages in the change process may require different styles of managing change Directive style is speedy and effective but runs the risk of overall acceptance while participation or intervention may be helpful in gaining wider acceptance and commitment across the organization but at the same time tends to be slower in its pace If the organization corresponds to the kind of adhocracy network or learning organization it is likely to employ collaboration or participation based styles In the most extreme for directive style becomes coercive engaged in the imposition of change This is a type of forced learning entailing explicit use of power but may be necessary for the organization facing crisis or concerned with large scale and rapid organizational transformation Such type of transformation is least successful without crisis or creating crisis Change Agent Roles Change agent is an individual or group that affects strategic change in organization In simple words change agent is the creator of change or strategy These may be senior executives or CEO middle level managers and outsiders like consultants Traditionally it is the external consultants especially in the Western economies who are hired for their specialized job and expertise to come and visit organization to diagnose the ailment and give prescription for corrective measures in strategy or structure Another type of change agents are internal consultants or senior executives and can be identified as strategic leaders who are well verse with organization s problems and policies The approach of such in-house strategic leaders could be legal bureaucratic transactional or transformational Nonetheless the common prescription is that strategic change could take place meaningfully if the CEO or strategic leader is visionary Therefore we need a transformational or visionary leadership in order to have strategic change The question of course now will be what the attributes of such type of leadership are From our own cultural perspective one such prescriptions is given by our national poet as The attributes of a leader as someone who is a visionary true communicator a communication which touches heart and full of empathy and commitment who stands committed and can have feelings of others Another perspective is MOUND model of change management which emphasizes greater role for the middle level manager as change agent Therefore recall your memories for Z theory of management which says policy making implementation and organizational actions will be most effective at middle levels of management instead of top down theory X or bottom up theory Y This essentially is known as ringsei in Japanese language which means consensus oriented decision making The logic is that is the middle level managers and their network who have greater levels of collegiality communicability and placed strategically between senior executives and lower level workers and supervisors to bridge the gap and hence make organization effective in seeking its goals and objectives effectively The MOUND model is illustrated below The Mound Model for Change MIDDLE OUT UP DOWN LOWER MIDDLE UPPER This means any idea or strategy which is conceived by middle level of any one function area or department quickly moves out at the same horizontal level to middle level managers in other function areas or departments The idea or strategy soon moves upward to senior executives and CEO and once they get convinced by newer suggestions make part of organization wide policies Hence the new idea or strategy then quickly moves downward The MOUND model seems more appropriate for managing change in large organizations and bureaucracies where distances between top level managers and implementation levels are very high Recent concept of change agent might include lower level managers and workers especially from knowledge worker and knowledge management perspectives The concept of knowledge worker is that all members of the organizations are considered knowledge workers even those who are the shop-floor level have tacit knowledge and know their job best and can contribute effectively for organization through a conducive learning environment Levers for managing strategic Change The followings are different levers that can be employed to manage strategic change Structure and Control Systems Changing aspects of structure and control of organization are considered important aspects of strategic change But most of the time top managers may change strategy but behaviour and assumptions remain the same with the result that change programme tends to be ineffective What is more important is that whether the proposed strategic change brings in conformity of thinking values and system or promotes and incorporates criticality Generally when we talk of system we mean to stress uniformity conformity and stability but systemic thinking also tend to incorporate different views of reality and critical thinking Because system itself is composed of various subsystems having different demands and functions Therefore it is important for change agents and change leaders while designing structure and control system that it should not just be considered for manufacturing consent instead should be directed to promote knowledge and values appropriate for strategic change Routines Routines are the organizationally specific ways to do things around here which tend to persist over time and guide people s behavior Routines may also be considered as a double edge sword in the sense that it may lead organization to carry its operations in distinct ways and achieve its competitive edge but also present a risk to act to block change and creativity and may lead to strategic drift Changes in organizational routines can be a powerful signal of and stimulus for change because change in strategy should correspond to change in implementation or operations But then routines are closely related with the existing paradigm hence changing strategy means changes in taken for granted assumptions and taken for granted routines and ways of doing things that are the cultural elements Routines are even considered more powerful than even education and communication technique of changing people Thus changing routine is a good technique to change behavior which may help people in evaluating and changing their beliefs and assumptions Therefore it is suggested for managers who are trying to effect strategic changes to take personal responsibility not only for identifying changes in routines but also for monitoring that they actually occur The changes may appear to be mundane but they can have significant impact SYMBOLIC PROCESSES Change processes are not always of an overt formal phenomenon and may also be symbolic in nature Symbolic acts and artifacts of an organization and managers help preserve the paradigm and there exist a relationship between organization culture and its strategy Symbols are objects events acts or people which express more than their intrinsic content They may be everyday things which are nevertheless meaningful in the context of a particular situation It is argued that the creation or manipulation of symbol has impact to the extent that changing symbols can reshape beliefs and expectation because meaning becomes apparent in day to day experience in the organization Many of rituals of the organizations are implicitly concerned with effecting or consolidating change They are capable of being managed proactively new rituals can be introduced or old rituals done away with Symbolic significance is also embedded in the systems and processes of the organization Reward system information and control system and the very organizational structures that represent reporting relationships and often status are also symbolic in nature For example take the case of selection interview for organization A highly formal interview procedure may signal a mechanistic hierarchical organization whereas a more informal dialogue is likely to signal an environment and expectation of challenge and questioning If selection processes are changed different types of managers are appointed and visible encouragement to challenge and questioning is given this can signal within the organization a commitment to strategic change In this sense selection processes are symbolic in nature Similarly changes in physical aspects of the work environment are powerful symbols of change Typical here is the location and change of location for head office relocation of personnel changes in dress or uniform and alteration to office space or office space The most powerful symbol of all is the behavior of change agent themselves particularly strategic leaders Their behavior language and the stories associated with them signal very powerfully the need for change and appropriate behavior relating to the management of change Beside stories rumours on grapevine the use of language used by change agent also effects change process Either consciously or unconsciously change agents may employ language and metaphor to galvanize change In this context language is also powerful not only for the communication of facts and information but because of its symbolic significance and is able to carry several meanings at once Political Processes One cannot escape politics where there is human concern The reconfiguration of power structure in the organization is needed which depends on the nature of change Radical or transformational the type of change more radical will be the reconfiguration of power structure The momentum for change will need powerful advocacy within the organization typically from the chief executive members of board union and other influential outsiders Change occurs in organization combining the interest and power of individual and groups thereby making the understanding of political context in and around organization quite essential for achieving change successfully Like elsewhere in organization too there is a ruling party unsaid and opposition party whether it is a public or private sector organization Members of organization perceive to be on either side and the nature of nature of opposition varies from the type of industry sector and size of organization Similar concept is of organization elite trustworthy and loyal people are appointed on key or prime position for the use of authority and control of resources Thus change may either means a threat for existing elites or perpetuation of their rule Therefore people rules and resources are manipulated to achieve change related objectives The successful change management means involvement in the political activities like building the power or political base overcoming resistance and achieving compliance for change related policies and objective Categorically stating the political activities may include the followings to build the political support or power base to encourage support or overcome resistance to achieve commitment to a strategy or course of action COMMUNICATING CHANGE Of all communication is perhaps the most complex human and organizational phenomenon So communication change what it is intended to achieve or what is involved in the communication process and the way to communicate is in fact a very complex one The effective communication of vision mission and strategic intent down to lower tiers of or all across organization is not a simple and easier task It may be important to clarify and simplify further the priorities of the strategy One approach is to emphasize a limited number of key components or aspects of strategy rather than to communicate the strategy with overall complexity and ramification The choices of media also vary from employing techniques such as face-to-face one-to-one through routine bulletins and notice boards and circulars around the organization The involvement of members of organization in the strategy development process or planning strategic change is also in itself is means of communication and can be very effective Communication needs to be seen as a two-way process Feedback on communication is important particularly if the changes to be introduced are difficult to understand or threatening or if it is critically important to get the changes right One such effective technique to get feedback is through focus group employed by senior executives to see the implementation and acceptance of change Another powerful technique is the use of grapevine informal communication which takes the form of gossips rumours and storytelling Now senior executive wants to control and manage the grapevine in the best interests of the organization Change Tactics There are also some very specific tactics of change which might be employed to facilitate change process i Timings The importance of timing is often neglected in thinking about strategic change Timing also refers to choosing the right time tactically to promote change For example the greater the degree of change the more it may be useful to build on actual or perceived crisis If members of the organization perceive a higher risk in maintaining the status quo than in changing it they are more likely to change Another important tactic for acceptance or rejection of change is the sequence of events or how the change is introduced piecemeal or as a whole and which should come first and which should come later ii Dismissals Job Losses and Delay ring Change programs are often associated with job losses from the closure of units of the organization with hundreds or thousands of job losses to the removal senior executives or even chief executive For example this becomes so especially if the organization is in its drive for automation resulting in the removal of the whole layers of management and hierarchy It was during s when larger MNCs were going for mergers restructuring and outsourcing that thousands of employees lost their jobs out of change in strategy Therefore the tactical choice of where job losses should take place related to the change program iii Visible Short Term Wins Strategy may be conceived of as having to do with long term direction and major decisions Nonetheless what is essential is to have the implementation of strategy is that change program should have detailed action plans and tasks associated with strategy For example a retail chain developing a new store concept and demonstrating its success in the market may need short term wins like the effective breaking down of working of old ways and the demonstration of better ways the speeding up of decisions by doing away with committees and introducing clearly defined job responsibilities and so on Promoting Winners Heroes Change most of the time result in creating either winners or losers It is not considered win- win for everyone What is needed by senior leadership is to promote winners and heroes as symbol of high performers so that this may create a culture of high performance Success stories are propagated amongst managers for their mind and behavioral programming and repeat success This in overall is considered important tactic in the implementation of strategy References This lecture is based on Chapter Managing Strategic change of Exploring Corporate Strategy written by Johnson Johnson th edition For change in organization culture see further www soi org For MOUND model see Alex Miller s book on Strategic Management th edition STRATEGIC CHANGE Continued The concept of change and strategic change can be interpreted and understood from different perspective Here the concept will be discussed from an organizational transformation perspective One such perspective is given by Andrew M Pettigrew one of the leading management scholars who proposed that change should not be considered only in terms of the processes but should also be considered from the historical cultural and political features of the organization His model reveals a continuous interaction between the context of change process of change and content of change He defines context as why and when of change and is constituent of outer context and inner context The outer context refers to prevailing economic circumstances whereas inner context is concerned with internal influences such as resources capabilities structure culture and politics Content is defined as what of change and is concerned with areas of transformation While process is described as how of change This refers to actions and interactions of the various stakeholders as they negotiate proposal for change The model is useful for understanding complexities of organizational change even for smaller and ordinary level of change Pettigrew Whipp s Typology In his article Context and action in the organizational transformation Pettigrew gave the partial review on the literature for leadership and then tried to develop the linkage between leadership and organizational transformation According to Pettigrew and Whipp the essential dimensions of strategic change are context content and process of change Let us deal with them in details one by one Context on X-axis Why of change There are some authors like for instance Berg Kervasdoue Kimberly who consider change as an ahistorical a processual and a contextual in character This is also because of the methodological problems associated with social sciences in general and the organization and management studies in particular Very few studies reveal that change process is studied substantially from the temporal and contextual perspective For example you might have observed that management principles we study are most of the time are sweeping generalizations devoid of context in which they are evolved This is also important to see whether change project is studied as a single event or as a set of discrete episodes separated from immediate and more distant antecedents Such episodic views give only a snapshot view and fail to provide data on the mechanisms and processes through which changes are created He suggested contextual analysis for observing the transformational change meaningfully See the figure below for this - - The figure above reveals that strategic change or major organizational transformation would involve questions about the content context and process of change and interaction amongst these broader categories of change The starting point for this analysis of strategic change is the notion that formulating the content of any new strategy inevitably entails managing its context and process Outer context refers to the social political economic business and competitive environment in which the firm operates Inner context refers to the structure corporate culture and political context within the firm through which ideas for change have to proceed Thus the firm may be seeking to change technology manpower products geographical positioning or indeed corporate culture The process of change refers to the actions reactions and interactions from the various interested parties as they seek to move the firm from its present to its future state According to Pettigrew the frame of reference used to guide this research on strategic change is a continuation and development of the author s consultant s previous work on organizations as political and cultural systems While Andrews King and Cleland believe that here is no pretense to see strategic change as a rational analytical process of analyzing environments resources and gaps revealing and assessing strategic alternatives and choosing and implementing carefully analyzed and well thought through outcomes Rather in the manner of Bower and Mintzberg the transformation of the firm is seen as an iterative multilevel process with outcomes emerging not merely as a product of rational or bounded rational debates but also shaped by the interest and commitment of individuals and groups the forces of bureaucratic momentum gross changes in the environment and the manipulation of the structural context around decisions Pye and Pettigrew revealed important aspects of inner and outer context in another article titled Studying Board Context Process and Dynamics Some Challenges for the Future For them important aspects of the outer context include the extent of regulation in the industry in which an organization is located its ownership structure and investor relationships with the board the presence of other influential stakeholders e g lobby groups outside the organization and the potential for mergers and acquisitions activity While the nature of the industry and business besides other important elements of the inner context include the commercial requirement of the organization to develop new core competencies or strategic direction level of perceived trust in the board as viewed by insiders and outsiders life cycle of the company and of the board and its culture stage of board development The inner context can further be classified into two variables tangibles and intangibles The tangibles are structure and resources of organization while organization culture and organization politics Intangibles govern tangibles In the words of technology it is the software organization culture and politics which governs hardware structure resources Content on Y - axis What of change The content of strategic change is dependent upon managing its context and process The process skills at the most general level involve the legitimation of the content of strategy in the evolving inner and outer context of the firm The content of change refers to the particular areas of transformation under examination Thus the firm may be seeking to change technology manpower products geographical positioning or indeed corporate culture The process of change refers to the actions reactions and interactions from the various interested parties as they seek to move from its present state to future state This may include change in the following aspects of organization Assessment and choice of products and market Objectives and assumptions Fixation of targets and evaluation criteria Process on Z-axis How of change Two points are essential to understand the process aspect of change The first is that structures cultures and strategies are not just being treated as neutral functional constructs connectable to some system need such efficiency and adaptability those constructs are viewed as capable of serving to protect the interests of dominant group Second the biases existing in structures and cultures can protect dominant groups by reducing the chances of challenge and features of inner and outer context can be mobilized by dominant or aspiring groups to legitimate the existing order or indeed to help create a new order These points are as pertinent to understanding processes of strategic change as they are to achieving practical outcomes in strategic change The political and cultural view of processes gives a central place to the processes and mechanisms through which strategic changes are legitimated or delegitimated The content of strategic change is thus ultimately a product of legitimation process shaped by political cultural considerations though often expressed in rational analytical terms This recognition that transformation in the firm may involve a challenge for the dominant ideology cultures systems of meaning and power relationships in the organization makes it clear why and how the processes of sensing justifying creating and stabilizing major change can be so tortuous and long We can also talk of various formal and informal on-going organizational processes like communication decision making objective setting and controlling etc The process in organization in turn depends upon the followings Change managers Models of change Formulation implementation process example this is stated to be the requirement of ISO certification that each and every member of organization undergoing certification should know what their mission vision and values are This is why one can observe that employees wear badges with inscribed quality statement of the company and every prominent place at factory and in offices also contain vision and mission statements for the purpose of enhanced communicability HIGGINS S MODEL AN ADAPTATION FROM WATERMAN S SEVEN S MODEL The purpose of this LECTURE is to discuss one of the most familiar models which is commonly known as McKinsey s -S model and was first introduced to us in by Thomas J Peters and Robert H Waterman Jr The most notable thing about the -S model is that it supports and is similar to the framework of the managerial functions planning organizing staffing leading and controlling In the -S framework the author emphasizes on cross-functional way of thinking about the execution of a revised version of strategy across an organization Successful organizations spend a great deal of their time on strategy execution and realize that execution of a strategy is just as important if not more important than formulating a strategy So the general tendency here is that how an organization can achieve successful strategy execution that revolves around aligning key organizational factors with strategy Strategy We are well familiar with the hierarchy of strategic intent which is formulation of corporate business functional operational level strategies after evaluating scenarios thru SWOT analyses In strategy we go for an analysis about changes in Strategic Intent which can be quantitative or qualitative And there are three types of strategic levels at which a strategy could be accomplice corporate business and functional levels The corporate strategy defines what business or businesses the firm is in or should be in and how the firm will conduct that business or those businesses in a fundamental way For instance an organization has some number of businesses In some it estimates the opportunity of growth potential and in some others it estimates losses The organization goes for divestment in those who are in loss and go for fresh investment where the growth potential has been estimated The business strategy describes how a firm will compete in a particular business A firm s business strategy is its major plan of action aimed at gaining a sustainable advantage over competitors Relative differentiation and relative low cost are the two most frequently suggested generic business strategies Some other business level strategies are development of new product innovation in research and development or capturing of some other markets Functional strategies support the business strategy Functional strategies in the areas of marketing finance operations human resources management R D information and logistics should be aligned with the business strategy Process strategies normally cut across functions and are aimed at integrating organizational processes across the organization in order to make them more effective and more efficient Strategy formulation involves the consideration of strengths for example core competencies and capabilities weaknesses threats and opportunities All strategies must all be aligned for strategic performance to be optimal at both intra and inter levels The distinct aspect of this model is that it talks about the alignment of various strategies at multiple levels and also with deal with alignment issues with other variables explained below Often such type of alignment is overlooked in the implementation models Structure The structure means job grouping of jobs authority and its delegation field units Head office departmentation operating procedures control etc The organization s structure according to Higgins consists of five parts jobs the authority to do those jobs the grouping of jobs in a logical fashion for example into departments or divisions the manager s span of control and the mechanisms of coordination The first four of these parts are normally shown in an organization chart The last is usually described in the firm s operating policies and procedures Major issues include the choice of the organizing principle for primary organizational units for example product versus function or product versus geography and how such authority to delegate to organizational units and managers traditionally thought of in terms of centralization versus decentralization or mechanistic versus organic For instance rivalry between marketing and production departments or between marketing and finance departments creates ethnocentricity or conflict in working environment Nonetheless structural harmony can be created through promoting policies of internal customer and cross-functionalism Systems and Processes Organizational systems are designed to get things done from day to day For example with in organizational system we have sub systems like strategic planning systems information systems capital budgeting systems manufacturing processes reward systems and processes quality-control systems and processes and performance measurement systems This is the third factor in Higgins model is which we have discussed earlier in Management Orientation The systems and processes enable an organization to get things done on day to day basis The point here is that the change in strategy envisage by organizational planners should be compatible to the day-to-day practices as well For dealing with such actions we have two practices Internal Customer Philosophy Cross-Functionalism At systemic level we have an internationally practices which is given by ISO- This suggests that the systemic structure should be able to deal with the philosophy of Internal Customer It means that in order to promote inter-departmental harmonious relationship one department should treat other as an internal customer The other managerial philosophy is of cross-functionalism which places greater emphasis on amongst the interaction and cooperation of specialized functional units such as departments according to their role in the organization for organizational stability and cohesion One such technique to promote cross-functionalism is of job rotation Style leadership management style The consistent pattern of behavior exhibited by leaders managers when relating to subordinates and other employees Major issues include the way leader s or manager s presents communicate and control the people or situation How effective the decision making process is In literature particularly in management context we have four leadership styles available Authoritarian Style Consultative Style Consensus oriented Style Democratic Style The other thing which important that how a leader relate itself to its subordinate either he believe on transaction oriented relationships which is short term or professional phenomena or transformational oriented which is long term and a progressive phenomenon Staff The number and types of employees with what types of individual and group competencies the firm needs to meet its strategic purposes The staffing means filling positions in the organization structure The main issue is that how to create an appropriate Management Inventory or Human Asset in an organization and it can be synergized with strategic change or strategic intent Resources The extent to which the organization has adequate resources to achieve its strategy people staff technology and money are the three most critical Resources may include funding for divisions such as R D or technology such as software or systems such as those for knowledge management and organizational learning The other major concern is the extent to which the organization leverages its resources However it is important that resource-strategy compatibility is highly desirable Shared Values organizational culture The values shared by members of the organization that make it different from other organizations Managing values and cultural artifacts are critical to successfully leading organizational change This operates at intangible level and has significant impact on the working environment of an organization Strategic Performance Strategic performance is a derivative of the other seven S s Strategic performance is possessed by an organization as a whole or for profit-based parts of the whole Performance can be measured at any level Financial performance measurements are critical barometers of strategic performance but its expanded version of balanced scorecard approach now a days is considered best Because most organizations and business units are structured along functional lines marketing operations finance human resources R D information logistics cross functional execution issues are sometimes overlooked when strategy is changed Important thing to note is that strategic change operates at holistic level integrative of different functional areas The same is also known as strategic performance IMPLEMENTATION AND STRATEGIC CHANGE CONSTRAINING FORCES IN THE IMPLEMENTATION OF STRATEGIC CHANGE CASE STUDY OF XYZ COMPANY In this LECTURE we will continue our discussion about the implementation of strategic change Again at strategic formulation one can get extraordinary type of vision and mission prototypes but at implementation level the results are often quite otherwise The recent surveys also exhibit the similar conclusions about the success pattern of strategy formulation-execution mechanism Therefore this is an attempt for analyzing the situation realistically by dealing various scenarios in generic terms According to an author the following variables hamper the execution of strategic change Systems a Misdirected reward and evaluation In organizations the actions of change in strategies particularly at operational level depend on linkage between performance and reward systems One thing which happened in most cases is that the organizations do not have suitable criteria for performance evaluation It means the organizations do not have a suitable portfolio of attributes at different hierarchical levels which could measure the performances In this scenario organizations may face inequity and injustice which lead them into anarchy and conflict However we see various efforts that have been made to link reward with performance and to induce managers to make decisions that are in the long-term interest of the enterprise At Ford Company for example more emphasis is given to stock grants that reward the achievement of -year objectives These criteria include not only return on equity but also measures such as customer satisfaction involvement of employees and product quality Furthermore performance is compared with that of competitors For instance even though quality may have improved at Ford if more quality improvements have been made by a competitor this will be held against Ford's managers if their quality improvements have not been sufficient b Oppressive control systems Oppressive control system means a system which is tightly managed and where element of exploitation is very high The control system in an organization has several directions In broad terms we can divide them into two types tangible control systems and intangible control systems Most controls are designed for specific things policies wages and salaries employee selection and training research and development product quality costs pricing capital expenditures cash and other areas where an organization wishes performance to conform to plans These controls are tangible or visible in nature where traditional approaches are to be applied such as budget summaries and other financial analyses Many other types of controls are dependent on intra-organizational relationships leadership styles organizational learning and culture based established patterns These are intangibles or invisible in nature and where modern attitudinal and behavioral approaches are to be applied For instance decentralization of authority - especially in product or territorial divisions - on the one hand creates semi-independent units but also empowerment and smooth relationships between various levels in an organizational hierarchy The point here is that control should be on invisibles as equal as with visibles which certainly is an important objective to gauge the success in change implementation It must do more than say that a management group has followed generally accepted standards of management control The concept of the modern organization as it exists today in the United States originated with Pierre S Du Pont and Alfred P Sloan It was Sloan who structured General Motors with an emphasis on centralized staff and decentralized operation Policy-making and operations were distinguished Control was maintained through a number of control techniques and budgets This kind of organization worked remarkably well and is still the predominant way large enterprises are organized today However new technology new demands in the environment and a new work force call for a new kind of organization based on information c Inflexible budgeting systems Budgeting is the formulation of plans for a given future period in numerical terms As such budgets are statements of anticipated results either in financial terms - as in revenue and expense and capital budgets or in non-financial terms such as in budgets of direct labor-hours materials physical sales volume or units of production It has sometimes been said for example that financial budgets represent the dollarizing of plans Perhaps inflexibility is the greatest danger in budgets Even if budgeting is not used to replace managing the reduction of plans to numerical terms gives them a kind of misleading definiteness It is entirely possible that events will prove that a larger amount should be spent for this kind of labor or that kind of material and a smaller amount for another or that sale will exceed or fall below the amount forecast Such differences may make a budget obsolete almost as soon as it is formulated if managers must stay within the straitjacket of their budgets in the face of events like these the usefulness of budgets is reduced or nullified This is especially true when budgets are made for long periods in advance Budgeting is never more perfect than the planning behind it and plans - especially long-range plans are subject to the imperfections caused by change and uncertainty Such uncertainty or sometimes change in strategy can be incorporated if budgets are inflexible and easily be reorganized However this phenomenon also depends on the degree of centralization d Arbitrary cost allocation systems This variable basically relates to decision making pattern The questions here are that whether cost allocation is based on rational basis or emotional or political or either professional basis So it is a decision making phenomena either participative of limited to few organizational political elites This definitely leads the strategic change towards failure At rational and sometimes professional level we have cost valuation technique for efficient cost allocation which is called cost-benefit analysis It seeks the best ratio of benefits and costs this means for example finding the least costly way of reaching an objective or getting the greatest value for given expenditures The major features of cost effectiveness analysis are that it focuses on the results of a program helps weigh the potential benefits of each alternative against its potential cost and involves a comparison of the alternatives in terms of the overall advantages e Overly Rigid formal planning system Planning involves selecting missions and objectives and the actions to achieve them it requires decision making that is choosing from among alternative future courses of action Plans thus provide a rational approach to achieving pre- selected objectives Planning also strongly implies managerial innovation rather than rigidity and bases our decisions on purpose knowledge and considered estimates Planning bridges the gap from where we are to where we want to go Without plans the organizations are at high risk or chance But without flexible planning system an organization if not in slump is at stagnation The second thing is that planning and controlling are inseparable or plans thus furnish the standards of control So efficient control system depends on flexible planning and decentralized structure Structures a Too many hierarchical levels Organization levels exist when there is a limit to the number of persons a manager can supervise effectively even though this limit varies depending on situations In every organization it must be decided how many subordinates a superior can manage When an organization go for a large in size or for empire building it often no longer be able serves his target customer or stakeholders but in trying to serve itself More broadly there are three problems associated with large hierarchical levels It is an expensive option It complicates the communication process Finally it complicates the planning and control systems Then what should be the ideals figures For instance the prominent British consultant Lyndall Urwick found that the ideal number of subordinates for all superior authorities to be four while at the lowest level of organization where what is delegated is responsibility for the performance of specific tasks and not for the supervision of others the number may be eight or twelve While in a survey of large companies made by the American Management Association the number of executives reporting to the presidents varied from one to twenty-four and only twenty-six presidents had six or fewer subordinates the median number was nine In forty- one smaller companies surveyed twenty-five of the presidents supervised seven or more subordinates and the most common number was eight Comparable results were found in other studies In our societal perspective these figures are different from ideals and also form models of developed societies For instance at managerial stage we have hierarchical levels in our public sector organizations as compared to or in average western models And at non-managerial stage we have hierarchical levels as contrast with western models that generally have - levels So what the outcome is mal-governance and least development Therefore in s we have seen the trend of rightsizing and downsizing with parallel of cost cuttings b Overly narrow span of control According to classical school approach the term span of management deals with specifying numbers of subordinates for an effective span In other words there is a limit to the number of subordinates a manager can effectively supervise but the exact number will depend on the impact of underlying factors So what should be the ideal It depends upon some essential factors like Vision and Missions Strategic Change Rate of Change Hierarchical Levels Organizational Planning Training Technology Delegation of Authority and Responsibility Communication Practices and Techniques Organizational Culture etc We have two schools of thoughts about the optimality of span of control One is the classical school of thought which prescribed that at upper and top levels the span is from three to seven or eight subordinates However more recent views come from operational-management theorists who have beloved on open ended approach that are based many underlying variables in a management situation But in a very real sense none of these studies is truly indicative of the actual span of management For one thing they measure the span only at or near the top of an enterprise Secondly it is probable that spans below the top executive are much narrower According to a study of more than companies of all sizes revealed a much narrower span in the middle levels of management than at the top While in broader term we can divide the management span into two types one is wide and the other is narrow A wide span of management is associated with few organizational levels a narrow span with many levels The advantages and disadvantage of the both categories are given in the following table ORGANIZATION WITH NARROW SPAN ADVANTAGES Close supervision Close control Fast communication between subordinates and superiors DISADVANTAGES Many levels of management High costs due to many levels Superiors tend to get too subordinates work Excessive distance between lowest level and top level ORGANIZATION WITH WIDE SPAN ADVANTAGES Superiors are forced to delegate Clear policies must be made Subordinates must be carefully selected DISADVANTAGES Danger of superior's loss of control Requires exceptional quality of managers Tendency of overloaded become decision bottlenecks c Responsibility without authority Although research still does not address all key the key managerial activities such as structuring the organization or clarifying of authority-responsibility relationships because of person-to-person variability and that require a comprehensive look at what successful and effective managers really do But in general the authority responsibility mismatch has considered one of biggest hindrance in managerial success It has normally considered more as structural phenomena rather than individualistic For instance in most of the cases managers are assumed to be responsible instead of appropriately authoritative One reason for that is the geographical dispersion between authority structure and responsibility structure So the point is that there must be equilibrium between manager s functional authority and perceived responsibility Some recent research studies have focused this phenomenon under the domain of total managerial job d Top down management system It is the most traditional and oldest style of management where management flows from people at higher levels to those at lower levels in organizational hierarchy This kind of management exists especially in organizations with an authoritarian atmosphere Therefore in today s context it has been much disliked form of organizational structure Most of the time the strategy goals and objectives manipulation is retained at the higher level of organization Even middle level managers are working as operators In fact it is commonly argued that effective management has to start with subordinate otherwise problem will develop In top down communication information is often lost or distorted as it came down the chain of command Top management issuance of policies and procedures does not ensure prompt communication Consequently an effective feedback system is required for finding out whether information was perceived as intended by the top management The possible consequences are Least motivated and least involved employees Mechanistic organizational environment Stagnant efficiency Poor coordination between operation of functional level and higher level etc e Restricted communication channels It is generally considered in traditional communication structures that top management is the most informed segment in an organization Is this assumption particularly in modern context is a myth or reality Modern research now argued that middle level and operational level managers are the more informed people in an organization Because they are getting information simultaneously from multiple channels such as backward channels forward channels and also through organizational hierarchical channels Therefore the point here is that an open ended organization is more intelligent and interactive with the environment f Lack of accountability Although employees are empowered to make decisions they believe will benefit the organization they must also be held accountable and responsible for results Accountability phenomena works at two levels at extraneous level and at internal level At extraneous level the organization held accountable to individual to a group or groups of people to government and ultimately to society This is reactionary and legal way of accountability At intra-organizational level there must be some restraints or checks that can held accountable to individual level and department s level at business level and at corporate level The objective here is that morality should be generated form within the organization J O McKinsey came to the conclusion that a business enterprise should periodically make a management audit an appraisal of the enterprise in all its aspects in the light of its present and probable future environment Although McKinsey called this appraisal a management audit it is actually an audit of the entire enterprise g Bloated over-fed staff functions In management literature still there are number of obstacles which require some deep extrication like the problem of semantics The terms such as organization line and staff authority responsibility and policies are exemplified by variety of meanings And much confusion also has among managers as to what these terms are So what the roles of line and staff are This is one of several areas of management that causes more difficulties more friction and more loss of time and effectiveness One widely held view of line and staff is that line functions are those that have direct impact on the accomplishment of the objectives of the enterprise On the other hand staff functions are those that help the line persons work most effectively in accomplishing the objectives The people who hold to this view almost invariably classify production and sales and sometimes finance as line functions and purchasing accounting personnel plant maintenance and quality control as staff functions According to an another classification purchase production sales departments are under line authority domain and accounting finance personnel plant maintenance and quality control are under staff authority domain The point here is that the organization should go first to differentiate between line authorities and staff authorities and form an appropriate model so that the problems of overlapping and over feeding could be avoided Strategic Direction a Absence of innovation goals Usually innovation means the creation and usage of the ideas In an organization this can mean a new product a new service or a new way of doing things as Peter Drucker regards the two basic business functions as innovation for example the creation of new goods or services and marketing A business can scarcely survive without at least one of these functions and preferably both On contrary innovations may be very risky and are at times not successful Organizations fostering innovation are attributed with the following ways Appreciation and rewarding for new ideas Development of tolerance for failure Operate with few and simple rules Hampers to innovation such as excessive planning or intolerance of mistakes is eliminated Information sharing is greatly encouraged Processes Procedures and guidelines foster innovation Establish close relationships with customers Technology sharing with others in the company Keeping the project alive by allocating time or financial grants Keeping the divisions small As James Brian Quinn found in his research that successful large companies are listening carefully to the needs of their customers They establish teams that search for creative alternatives to serve their customers but within a limiting framework and with clear goals in mind And Peter Drucker suggests that innovation applies not only to high-tech companies but equally to low-tech established businesses According to him worthwhile innovation is not a matter of sheer luck it requires systematic and rational work well organized and managed for results Following some success stories attribute innovation as a matter of survival General Electric s ambitious plans for the factory of the future may have been a costly mistake These plans may have been based on unrealistic forecasts and GE's unrealistic expectations to automate industry The concept of the new factory expressed the wish of the chairperson who wanted to promote entrepreneurship in an organization that was known to be highly structured At Johnson Johnson autonomous operating units are encouraged to innovate The organization culture allows failure to occur Hewlett-Packard encourages researchers to spend percent of their time on their pet projects and Merck allocates time and resources to its researchers for working on high-risk products with a potential for high payouts Dow Corning and General Electric engage in joint projects with customers to develop new products b No formal strategy for entrepreneurship Gifford Pinochet makes a distinction between the intrapreneur and the entrepreneur Specifically an intrapreneur is a person who focuses on innovation and creativity and who transforms a dream or an idea into a profitable venture by operating within the organizational environment In contrast the entrepreneur is a person who does similar things but outside the organizational setting Entrepreneurs have the ability to see an opportunity to obtain the necessary capital labor and other inputs and to put together an operation successfully They are willing to take the personal risk of success and failure Organizations that have entrepreneurial like orgonomics or attributes develop ability to see an opportunity willingness to take risk and commitment to systematic innovation are progressive dynamic and long lasting structures For instance When Steve Wozniak could not get his dream of building a small computer fulfilled at Hewlett-Packard he left that prestigious firm to form - together with another entrepreneur Steve Jobs - Apple Computer Entrepreneurship in general is thought to apply to managing small businesses but some authors expand the concept so that it applies also to large organizations and to managers carrying out entrepreneurial roles through which they initiate changes to take advantage of opportunities For instance Progressive companies such as IBM or M consciously try to develop an organizational environment that promotes entrepreneurship within the company c No vision from the top If the top executive of an organization is visionless or retained them on existing level of achievements then organization suffers immobility and lacks strategic direction for long term survival as a very famous English quotation delegate that fish stings from the head An ideal organization s leaders or top management has known about how to form a plan that constitutes a standard and ordinate it to vision of the organization He also has the ability to compare it with the present structure and execute changes should be made when possible d Lack of commitment from senior executives Similarly senior executives must be committed meaningful and incorporate with the objectives mission and purpose of the organization They must also have clear understanding about their area or intentional structure of roles for better serving in today s highly infiltrated environment But we have seen different scenarios in organizations For instance one survey of CEOs in Fortune enterprises indicated that executives spend little time with lower-level employees Professor Henry Mintzberg who previously studied the activities of executives interpreted the findings as showing that management by walking around is not very prevalent in these large companies Managers spend a lot of time with those who are at similar organizational levels Yet by wandering around managers could obtain a great deal of information not available through formal communication channels e No entrepreneurial role-model at the top In a learning environment employees at the lower level learn from the middle level and from the top level management If there are no such role models in an organization then it suffers asymmetry communication gaps and perhaps leadership vacuum Policies and Procedures a Long complex approval cycles It is a typical area of Office Management Study or OM study in which we analyze day-to-day procedures and conventions in office environment For instance in public sector organizations we have seen that the approval of a document require dozens of signature and other complexities So if an organization has this kind of old and classical system that creates problem of efficiency effectiveness and disorder in organizational outcomes b Extension documentation requirements even problem with iso- Over-documentation is other hindering phenomena that affect the efficiency and effectiveness in an organization This is even not a local phenomenon in developing countries business and organizational environments but at international level too For instance ISO certifications require documentation over documentation that creates an abnormality in organizations This is because we are overly relaying on visibles rather than on invisibles that led an organization to mechanistic and spiritless structure The point here is that every organization should determine its own formality and informality levels according to their operational size and industry norms c Over-reliance on established rules of thumb It means the over-reliance on past patterns experiences norms and conventions This approach creates hindrance to value-addition and creativity and makes an organization a stagnant body d Un-realistic performance criteria The unachievable or unrealistic performance criteria also create constraint during implementation of strategic change This thing creates de-motivation in organizations In our previous lecture we have discussed some major constraints that can occurs during the implementation phase of a changed strategy Previously we have discussed the following factors which are tangible in nature Systems and subsystems Structural Strategic direction Policies plans and procedural alignment Now the remaining two variables intangible in nature are followings People Culture People The matter under discussion is how to manage people It is the people who at the action level can make change implementation either a successful or failure So people s traits psyches attitudes behaviors and their orientation is required to be analyzed particularly at lower levels where masses of people directly involved in change orientation and execution a Fear of failure non performance and humiliation It is a general tendency that whenever a change program or a plan introduced in an organization and is perceived negative by greater majority of managers in the organization as against the established patterns norms and conventions then the resistance level will quite high One such reason for higher resistance towards change plan has been the perceived threat of non-performance which acts as a source of failure associated with humiliation Here innovative organizational structure provides some remedies For instance it allows failure to occur This also means that organization culture is not geared towards learning b Resistance to change non comfort zone Again the fear of change lead the individuals or groups from a comfort zone to a non-comfort zone where learning about new values new technologies new patterns or fears about unknowns produce resistance This resistance to change can cause considerable loss of efficiency in organizations In fact if organization goes for successful execution of strategic change then strategists should go for removing this phenomenon Therefore there must be the introduction of learning oriented culture or entrepreneurship like attributes in organizational environment c Parochial bias ethnocentrisms Parochialism provincialism or ethnocentrisms means to interpret the things or developments on self-reference basis Again there is tendency among individuals or among groups that they percept changes narrowly and un-sophisticatedly At organizational level where we have different hierarchies groups departments and divisions the parochialism is dangerous for the health of the organization Under such situation management consultant and strategists must workout for exploring the dominant interpretation of the change acceptability and ensure that the benefits of that change should be for large masses with minimized costs d Turf protection hiding behavior Turf protection means favoritism or protection of individuals or a group or groups who have some vested interest with change process For instance the protection for those ones who are non-performers or may be for those who are loyalist toward change initiators The turf protection therefore leads an organization towards failure in change implementation In the context of developing countries for instance where we have seen a more personalized style of management the turf protection culture is more prominent and highly lucrative e Short-term orientation Short term orientation means short sightedness Earlier in strategic direction variable we have discussed that the leaders who have short term view in respect of time often go for immediate calculations instead long term of deferred gratifications This is a myopic view of organizing and such behavior is actually associated with individual psyche The same behavior also matter for organizational perspective The organizations who go for immediate calculations suffer losses in the long run Contrarily the organizations who go for deferred attitude may be at deficit in short term but in the long run they are more lucrative In cross cultural terms for instance traditional Asiatic peoples such as Japanese Chinese or Malays have had long term behavior then other Asiatic ones In reality we have also seen them more developed and rich f Complacency satisficing behavior It is generally observed that the people who involved in change process are more satisficing and complacent than from those who actually are not involved Therefore complacent people are those who retained their energies at certain level which may be appropriately below from maximizing level In general the behavior of employees are satisficing rather than toward maximizing One thing that produces such scenario is organization structure and design If an organization structure is decentralized and behavior of employees is complacence towards objective setting and achieving than it goes for maximizing behavior On the other hand organizations that are based on centralized structure then normal behavior of employees are not complacent and based on wait-and-see strategy Therefore this is satisficing behavior instead of maximizing because of the least involvement of employees Complacency concept actually studied under the domain of Management by Objective MBO in both Management and Change Management disciplines It is normally used as a tool for avoiding resistance and conflicts g Inappropriate talent skills If an organization wants to avoid resistance then they should be appropriately equipped with the requisite level of skills knowledge and aptitude It is based on learning behaviour or on learning culture in an organization Here organization strategists can play an important role in change implementation process by determining the required skills and aptitudes and how can these be acquired Because it is crucial for change implementation and for achieving the desired level of productivity Culture a Ill-defined values or preferences and priorities Managers often top managers sometimes cannot create the climate for the enterprise Sometimes this is because they have unable to define and prioritize the values and preferences in organization The values and preferences of the organization are depending on the values and preferences of the top management because their values influence the direction of the firm Also some times top management has conceived the values and preferences but unable to share them with the bottom of the organization That makes implementation difficult and can create conflict in organizations So why values preferences and priorities are important Because Values can be thought of as forming an ideology that permeates every day decisions In successful organizations value-driven corporate leaders serve as role model and are a symbol to the external environment The organization culture created by corporate leaders can result in managerial functions being carried out in quite different ways b Lack of consensus over priorities This concept has already been discussed in our previous sessions that there must be consensus over priorities goals and objectives formulation Because people interpret and differ on organization goals and objectives both in qualitative or quantitative terms and also give meanings to events at self-reference basis If consensus lacks then naturally conflict is bound to occur c Lack of fit The point here is that there must be a fit or balance between organizational culture and newly formulated strategy For instance in Higgins -S model the first -Ss Strategy Structure Systems and Processes Style leadership management style Staff Resources Shared Values organizational culture are derived from waterman s model and th S derived by Higgins that is Strategic Performance So what actually Strategic Performance means The complimentarily or alignment of all seven variables is given in the connotation of strategic performance variable If there is some misfit between any of these variables then there could be the resistance in organization against desired change d Values that conflict with entrepreneurial requirement Sometimes an organization based itself on such values which may contrary to the values of an entrepreneurial or progressive organization Such kind of organizations normally has the following attributes Risk averting rather than risk taking attitude Fearful about failure Non innovative Introvert personality Least progressive thinking For coping with such problems the organization should move for transforming the attitudes and behaviors of his people that it is in the best interest of our organization to have entrepreneurial like values or behavior So values and strategies should be compatible to each other e Non-egalitarian values elitist-orientation Egalitarianism means believing in equality or maintaining relating to or based on a belief that all people are in principle equal and should enjoy equal social political and economic rights and opportunities In organizations context there should be very little gap between leader and follower or between bosses and subordinates Therefore such kind of organizations is considered very progressive and long lasting We can also found similar attribute in context of economies For instance the economies where gap between rich and poor is wider therefore such economies are very less progressive least growth oriented and have high degree of power distance We can see such characterization especially in agrarian societies Similarly the non-egalitarianism or in other words hierarchy and power differentiation in organizations also affects the change implementation process If an organization is based on non-egalitarian kind of behavior then it creates a moral deficit in actions which are vital for successful change implementation In these organizations the element of resistance is rather high as against those organizations which are egalitarian Why implementing strategic change is so difficult The author Alex Miller has cited some further variables which can cause constraints in implementation of a revised change strategy Organization Immune system It is the tendency of the human system that human system seeks homeostasis and equilibrium In every organization there is an immune system which is working for the achievement of a comfort zone In other words human system desired a world which could be more stable more predictable and more controllable The same spirit is also working behind the base of scientific knowledge that it is struggling for achieving certainty reliability and predictability And same spirit is working behind the social sciences that it is also struggling for predicting the various kind of human behavior So that appropriate controllability could be achieved Therefore on the basis of this knowledge which a management paradigm manifests desired level of policies actions and processes has been designed But when a change occurs firstly it creates a kind of disequilibrium and unstable environment At second place a resistance against this is emerged which is again a human system or immune system phenomena that makes the implementation process so difficult So to overcome such resistance one should associate different kind of incentives or packages that could lead the people to change their existing perceptual patterns and toward next level of equilibrium Numerous complex variables are at work It means in organizations where simultaneously numerous complex variables are working interactively any intervention in one field or domain do not yield results Why Miller has said this Because commonly number of strategists or even scholars associate a whole change process with one or two apparent variables that according to them brings a successful change in organizations For instance you have often heard a common sentence from number of intellectuals on television that if education could improve then all problems related to development could be solved Another one says that if political structure could effectively be solved then all problems will be automatically solved And so on and so forth But in real life many variables are interconnected with each other and form a complex system Similarly in organizational perspectives management consultants often suggest that training is the most important component for dealing approximately all sorts of managerial problems This training paradigm is more popular during s s and even in s And in s technology paradigm is considered vital for all sorts of managerial hindrances and can go for efficiency and competitive advantages Interconnectedness of various elements As Alex Miller said metaphorically Organization is like a woven fabric or sweater if you pull one string or single thread you run the danger of unraveling the whole The change management in organization is a difficult process It is because strategists normally consider a single variable instead of the holistic view of the organization For instance what should be the ramifications for other departments or for the culture of the organization when an organization goes for introducing the new technology So these kind of issues or linkages must properly be addressed or analyzed when an organization go for a change because Organization is just like a woven fabric The Need to change everything at once The phenomenon that change should be happened overnight is the most basic reason behind many change programs failures There are two schools of thought about change implementation patterns One is the incremental or gradual school of thought and the other is radical school of thought The first school of thought believes that if change pattern should be incremental of gradual then it is more effective efficient and long lasting As Mintzberg argued that many strategic changes are actually emergent strategies or those that evolve incrementally over long period of time The second school of thought believe that people already conceive gradual changes into their day-to-day businesses which is a continuous learning phenomena in organizations So any gradual changes have very little impact on the overall results of the organizations The real change could only be achieved through large scale transformational or radical pattern which is based on shock-therapy or to compel people s mobility from comfort zone to non-comfort zone The Japanese for instance normally believe on incrementalism while the Russian believe on radicalism in context of change management patterns WHY IMPLEMENTING STRATEGIC CHANGE IS SO DIFFICULT In the last LECTURE we discussed four variables out of six which the author Alex Miller cited in his book about the generic dynamics of resistance to strategy implementation These variables are Numerous complex variables are at work Organization Immune system Interconnectedness of various elements The need to change everything at once The remaining two variables are Activity centered change Focus on quantity or numbers Before we proceed to the next two variables let me discuss some significance about the change implementation process Significance of the Strategic Change Implementation Process The weakness of many change results is often attributed to failures in the implementation process rather than strategy itself Beer et al This quotation is indicating about a post-implementation phenomenon which an organization faces after an unsuccessful attempt of change implementation The blame game often directed toward implementation process rather than strategic change itself One problem is that research has long been characterized by search for the one best way to implement change Dunphy Griffiths This quotation is describing a dilemma that the research in change management mostly work around to searching a universal solution or a roadmap for implementing change in organizations but unable to deliver it The school of thought is quite predominant in its assertion that management is a universal phenomenon Activity Centered Change It is a one of the dominant reasons for failure in the implementation of change program This failure is largely depend upon the difference between the real nature of change and the perceptual nature of change in terms of execution In other words change program should be activity centered or transformation centered For instance a change programs outcome demands the transformation centered approach but it is mostly executed through activity centered approach And also such appraisal is a typical fallacy that culminates into to the failure of a change program or strategy For instance an organization introduces a training program for the purpose of behavioral modification or values transformation So the imperative in this training program is the transformation of behaviors or values rather than to measure its success on activity centered factors such as the way it is organized how many participants attended it etc What happens is that the training program which is a means to achieve certain ends of values transformation becomes end in itself Focus on quantity or numbers Sometimes it is called revenue centric approach in which number matters From change management perspective the results of any change program could be measured in terms of numerical values rather than on the basis of desired characteristics In corporate organizations context for instance budgets setting is based on numeric rather than on objectives So it is imperative for organizations to focus on both qualitative and quantitative aspects while going through policy making Change Implementation Approaches Two broad categories of implementation approaches are Participative Approach Unilateral Approach Participative approaches Participative approach is the most famous approach in today s business environment It is comparable to the organization development OD model that focuses on the planned and controlled change of organizations in the desired directions The fundamental assumption behind OD structure and participative change implementation approach is the same and that is Attitudinal Change And both are using the same techniques for attitudinal change like Sensitivity training Teams building Participation Job-redesign Participation is also a means of recognition It satisfies the need for affiliation and acceptance of the people which is the third need in Maslow s hierarchy In general people are not motivated by being consulted but by being in to the act Hence the key mechanism of attitudinal change in this method is the generation of the support among the workforce which leads to empowerment of people by being them in the act As a consequence the right kind of participation yields both motivation and knowledge valuable for successful change implementation and enterprise success Unilateral Approach It is a unilateral type of change and comparable with the Behavioral Modification BM model The BM model is extension of some wider concepts such as of Motivation Rewards Learning and Organizational Culture It is an attempt to understand and reduce complex change processes in the organizations to explicit rules procedures and strategic actions to deal with all possible contingencies including legal compliance Similarly the philosophy of unilateral approach or traditional way of management is based on actions rather than on attitudes If actions goes right then automatically the attitudes and behaviors goes right It is sometimes also called the classical school of bureaucratic approach Unilateral approach is measured through outward actions and focuses on process design or redesign job redesign restructuring particularly the restructuring of authority communication and work rules And it is a typical top-down phenomenon As for legal compliance technology is another mean for achieving the unilateral approach because it is considered universal For instance managers have a tendency to rely on technology in order to enhance productivity and efficiency in organizations On the other hand the modern participative approach is based on attitudes Attitudinal change will lead to change in behaviors and actions automatically Change Typology Before implementation process deployment there must be some issues that need to be addressed For instance at what circumstances which kind of change implementation approach is valid However it depends upon industry and nature and size of the organizations But before going for comparison we must differentiate between change classifications Technical-Structural Behavioral Social Focus of Unilateral Change The successes experienced by the workforce from forced changes will ultimately lead to workforce satisfaction and support In forced change there is an element of push or threat from top to down that makes the people to comply on all policies and procedures People get experiences support and ultimately satisfaction from the forced compliance by the senior executives Also people mechanize themselves according to certain actions which are now standards until the next level of standards introduced The unilateral approach has some indicators which are followings These are based on prescriptive control and authority which modify objective or formal aspect of the work place Prescriptive means there is an element of consultation Control means that this is a planned or contingent change Authority means force that is used for changing people s behaviors and this leads eventually to attitudinal change This approach tends to be top- down procedural focused on resource allocation and follows authority lines Those who believe in unilateral approach argue that participation bring chaos and disorder because it is abstractive in nature and cannot be measurable The successful change results can only be achieved through work itself instead of participatory and empowerment oriented organization culture Advocates of this type of change participation and culture things are too abstract to enhance productivity On the other hand peoples who believe on participative approach argue that this is focus on consultation or consensus oriented techniques that change values attitudes skills and untimely cause a change in behavior which is a permanent phenomenon The other consequences are reflected in the following ways Because employees are involved they develop an ownership of the change plan initiated which gets translated into commitment and motivation to make the change work Comparison In comparison we are analyzing the change effectiveness or successful implementation which is contingent upon the interaction between types of change and techniques of change At first Lawrence observed the distinction between both technical and social aspects of change Technical Change The technical aspect of change involves making measurable modifications to the physical routines of the job Conversely Social change refers to the modification of established relationship Lawrence concludes that the technical change could be introduced without social change if the social relations were accustomed to change It means that technical change can only be introduced when there is frequent change in social relations in organization Otherwise if the rate of change in social relationship is static or well established then change could not be easily introduced Nonetheless a change may be primarily technical but can create social effects that may impact on the outcome of change Therefore it is imperative here is that the type of change technical structural or behavioral-social should correspond to the corresponding technique of change Lawrence describe social relationships are essentially based on give and take relationship or two way relationship on the other hand technical approach is unilateral in nature That is why he advocated participation as the one best method for introducing change because it corresponds to social relationship Similarly another author Leavitt expanded the technical-social framework by adding a third category into the framework and that is structural change According to him Technical change means change in actions measurement computers and in communication system Social change means change in large set of goals establishes around people Structural change means change in empowered work force collaborative work arrangements and in matching personal fulfillments to organizational needs As a third valuable the purpose of structural change is to enhance organization performance through design and redesign of organization structure which means the redesigning areas of responsibility authority decentralizing profit centers and reorganizing work flow Yet there is another scholar Michael Beer who just gave a single category of change instead of two or three that is the change in knowledge which automatically leads to an attitudinal change instead of structural technical and social change Key contingencies in change types Strategy style leadership attributes matching theory in effective implementation Personality is the primary determinant and background of the manager socio-psyche orientation for what manager does Managers cannot alter their behavior to suit a situation Researches on both types of contingencies strategy-style or personality has linked them to the locus of control which is helpful in strategy execution like that of product innovation or differentiation strategy In overall analysis the issue is how to lower resistance and increase support for the change program or plan Therefore some key LECTUREs are first to identify or diagnose the type or nature of change program and the second is the implementation method which should be contingent upon types of change Dunphy Stace By addressing the second issue we have the following findings by the author IMPLEMENTATION APPROACHES In overall analysis of implementation process the issue is how to lower resistance and increase support for the change programme or plan Key LECTURE for us is to identify or diagnose the type or nature of change programme Implementation method is contingent upon type of change Dunphy Stace The size and scale of change is contingent upon unilateral or shared techniques of change Therefore what is required is to have a match of the two in case the change strategy is effective This further means that for smaller changes consultation and consensus methods are considered effective so as to lower resistance and raise support for the change By the same token large scale changes like structural job-redesign policy process top down unilateral method is more effective than participative techniques The rationale for structural changes is that participation is too distant for individual interests and support is unlikely to be generated and hence participation is considered unnecessary for such type of changes to be implemented The technical-structural or behavioural-social type of change is contingent upon unilateral or shared technique of change matching the type with method Implementation of technical structural change requires more directive and less participative method as work force dislike changes such as downsizing and reorganization Within the context of implementation of change plan or strategies we come across four different theses of implementation which are Logical Incrementalism of Quinn Radical or Transformative change Punctuated Equilibrium Model Tushman Romanelli s Model OD models We have already dealt partially with Quinn s model but let us revise refresh and deal this in the context of implementation of a change strategy Incrementalism The concept is rooted in Lindblom s concept of muddling through who down plays the concept of rational and comprehensive change within organizations He deemphasized planning school and argued that most organizations are heavily built upon their past actions in determining their future direction These past actions serve as the basis of the organization future Since organizational and decision maker s resources are limited the most economic actions are those that are minor variations from the current state Hence most change is considered as an extension of organization s history or a series of successive limited comparisons to previous actions You may apply this concept to evaluate practices and reforms in public sector organization Quinn identified this as logical incrementalism The concept of logical incrementalism remained a frequently cited concept especially s Its leading proponent Quinn believes in planned change and orderly transition He was thoroughly against radical change in strategy and in organizational directions systems or central processes He believes that effective manager is the one who moves the organization forward in small logical steps He thinks that incremental change increases confidence amongst employees and reduces organizational dependence on outsiders to provide momentum for strategic change Therefore he values evolutionary rather than a revolutionary change and an order rather than disorder Attributes of incremental change Consensus and collaboration style of leadership and management is required for incremental change instead of conflict and power oriented approach Similarly the use of expert authority and persuasiveness of data is considered more effective rather than of positional authority or emotionality of charismatic leadership Incrementalism is perhaps is the most suitable for the environment of stability and of continuity as this was illustrated during the s and s For Mintzberg a renowned management strategist strategy emerges over time through a continuing process of organizational actions and learning as it seeks to cope with and adapt to its environment To him the complex and dynamic nature of the organization s environment often coupled with the diffusion in the organization of its knowledge base for strategy making precludes deliberate control strategy making must above all takes the form of a process of learning over time in which at the limit formulation and implementation become indistinguishable His paradigm is of emergent strategy comes closer to incrementalist view of strategy implementation as it erodes the distinction between formulation and implementation Similarly for planning school incremental change is the method by which change can be implemented best by top management while for learning school it is the method organization learns from its interaction with environment Ansoff another famous strategist says in his book the new corporate strategy Firms and other organizations which are not subjected to strategic shocks do nevertheless go through discontinuous strategic changes This occurs through step-by-step accumulation of incremental changes which over a long period of time add up to transformation of culture power structure and competence Therefore the effective and planned change management means minimizing political and cultural resistance in an organization through incremental change Therefore what is obvious is that incremental change can also be transformational in nature over a period of time Incremental change reduces the resistance within the organization change for strategic changes is considered the reason and effectiveness of incremental strategy Planned Change Management versus Emergent Change Management By reviewing more than models of planned change Bullock and Batten developed a four-phase model of planned change that splits the process into exploration planning action and integration According to Burnes this is a highly applicable model for most change situations The model looks at the processes of change which describe the methods employed to move an organization from one state to another and the phases of change which describe the stages an organization must go through to achieve successful change implementation Although the planned approach to change is long established and held to be highly effective it has come under increasing criticism since the early s Firstly it is suggested that the approach s emphasis is on small-scale and incremental change and it is therefore not applicable to situations that require rapid and transformational change Secondly the planned approach is based on the assumptions that organizations operate under constant conditions and that they can move in a pre-planned manner from one stable state to another These assumptions are however questioned by several authors who argue that the current fast -changing environment increasingly weakens this theory Moreover it is suggested that organizational change is more an open-ended and continuous process than a set of pre-identified set of discrete and self-contained events By attempting to lay down timetables objectives and methods in advance it is suggested that the process of change becomes too dependent on senior managers who in many instances do not have a full understanding of the consequences of their actions Thirdly the approach of planned change ignores situations where more directive approaches are required This can be a situation of crisis which requires major and rapid change and does not allow scope for widespread consultation or involvement Finally the critics argue that the planned approach to change presumes that all stakeholders in a change project are willing and interested in implementing it and that a common agreement can be reached This presumption clearly ignores organizational politics and conflict and assumes these can be easily identified and resolved In response to this criticism of the planned approach to organizational change the emergent approach has gained ground Rather than seeing change to be top down driven the emergent approach tends to see change driven from the bottom up The approach suggests change to be so rapid that it is impossible for senior managers effectively to identify plan and implement the necessary organizational responses Therefore the responsibility for organizational change has to become increasingly devolved By the emergent approach to change emphasizes that change should not be perceived as a series of linear events within a given period of time but as a continuous open-ended process of adaptation to changing circumstances and conditions The emergent approach stresses the unpredictable nature of change and views it as a process that develops through the relationship of a multitude of variables within an organization Apart from only being a method of changing organizational practices and structures change is also perceived as a process of learning According to the advocates of the emergent approach to change it is the uncertainty of both the external and internal environment that makes this approach more pertinent than the planned approach To cope with the complexity and uncertainty of the environment it is suggested that organizations need to become open learning systems where strategy development and change emerges from the way a company as a whole acquires interprets and processes information about the environment The approach stresses a promotion of extensive and in-depth understanding of strategy structure systems people style and culture and how these can function either as sources of inertia that can block change or alternatively as levers to encourage an effective change process Furthermore Burnes argues successful change is less dependent on detailed plans and projections than on reaching an understanding of the complexity of the issues concerned and identifying the range of available options It can therefore be suggested that the emergent approach to change is more concerned with change readiness and facilitating for change than to provide specific pre-planned steps for each change project and initiative This strategy of disjointed incrementalism may have much to recommend it It reduces political obstacles to changes and avoids irresolvable arguments about complex goals and values The focus is on patching things up and dealing with obvious problems as they arise There generally is less disagreement surrounding the choice of methods for handling disasters Also the risk of ruin or great loss tends to be reduced by making incremental moves instead of far-reaching ones Incrementalism allows the organization to learn from its previous actions and still be in a position to remedy them Finally cognitive strain is reduced by dealing with manageable facts of reality by focusing on bottlenecks and by choosing from a short list of well-tried expedients for dealing with them Unfortunately the applicability of this approach to the realm of structural change has not been considered It may be reasonable to suggest however that incremental and piecemeal strategies might offer as many political economic risk reduction and cognitive advantages for changing structures as they do for modifying policies For example small structural adjustments that respond to specific and pressing problems are likely to cause least dissension and conflict Also they are more reversible cheaper and are less disruptive than extensive changes They therefore are less risky If small changes do not work out the organization s survival probably will not be threatened Finally small structural changes are less taxing to the imaginations and cognitive capacities of the executives They do not require lengthy periods of analysis or complex or elaborate master plans The strategy of disjointed incrementalism is consistent with the views of those who see organizations as loosely coupled systems Aldrich Weick It is maintained that different subunits of the organization can change independently without importantly influencing the other subunits Therefore it may be that many elements of structure can be changed locally and that much adaptation to the environment can be effected independently by organizational subunits IMPLEMENTATION RADICAL OR TRANSFORMATIVE CHANGE Continued Dunphy used the following typology for the causation for revolutionary change Environmental Creep The environment itself may be changing incrementally and in ways become imperceptible to managers Therefore the degree of change over time may be large and require major re-adjustment Organizational Creep The organization itself may move out of strategic alignment with an environment which remains relatively stable Diversification Acquisition Merger Shut downs Diversification for example often involves a major structural shift from a functional to a divisional structure Because the structures are radically different incremental change over is often not a realistic possibility Same is the case with acquisition merger and shut down as large scale additions or subtractions also preclude incrementalist approach Industry Re-organization An organization may be adjusting appropriately with an industrial structure but what if that structure itself may be altered dramatically For example deregulation or nationalization opening of borders and signing trade liberalization treaties like WTO are few examples of introducing discontinuity in industry environment Major Technological Breakthroughs Organizations might have invested too much in current technology while major new technology break through occurs which may dramatically change production costs This creates problems for old org with older technology while creating potential for new investors e g mini-mills in the steel industry Managerial implications Managing Radical Organization Transformation by Francis Bessant Transformation means profound fundamental changes in thought and an action which creates an irreversible discontinuity in the experience of a system in multiple dimensions of organization s strategy structure culture and work processes Here three key variables are Thought and actions Irreversible discontinuity Multiple dimensions Several factors create a transformational imperative Of these the most ubiquitous is technical change Many but not all organizations create value in ways that are defined through the exploitation of technologies Firms founded to exploit specific technologies are especially lnerable when there are discontinuous changes in the prevailing scientific paradigm dominant technologies or other factors that radically change the economics of the business The principal reason for this lnerability is that the prevailing core values routines strategies cultural imperatives and asset endowment were built on a business model that has become competitively inferior reactionary or obsolete When this happens a firm s traditional competitive advantage ebbs away but is generally not lost overnight In this condition firms face a multi faceted strategic dilemma A radical transition is required but firms can fail to recognize the urgency of the challenge lack understanding the scale of the destruction and reconstruction required or not possess the skills to handle the jump Hence a transformational imperative presents particular problems for strategic managers Radical organizational transformation requires multiple changes Strategies must be rewritten organizational culture realigned around different values processes re- worked and value chains re-designed Managing transformation is confronting in the extreme for those who lead and manage organizations Some studies of corporate transformation hold that cumulative incremental additional capabilities need to be built progressively by firms in order to transform or rejuvenate themselves The study of Francis and Bessant shows that firms needs to have a set of different distinctive and possibly temporary new capabilities need to be acquired generally from outside the firm and unleashed to make a radical transformation They proposed an analytical framework that identified five key organizational and managerial competencies which are given as under The five organizational and managerial competencies are Recognize the challenge Determine a transformational strategy Require Extensive innovation Manage Systemic change Upgrade leadership process Stage I Recognize the challenge Most organization faces strategic dilemmas in the sense that they are not in a state of readiness or not in a mood to go for change These dilemmas are identified by the manager as we are in a wrong place This author has defined as that organization face pre-action barriers which are Avoidance People in the organizations especially top managers cannot move away from their tested ways of doing business as they do not believe that the world has changed In other words this is a kind of success trap for individuals who are unable to differentiate environment and situations and believe that with same set of knowledge and skills they can counter each and every situation Indecision Even when the need for change is understood no one may know what the best strategic direction to follow is This is the problem of too many options and alternative on one hand and the problem of leadership and decision making amongst competing and splintered leadership Poverty Firms may find themselves needing to undertake radical change at the same time as their financial results are poor At the same time the cost of investment is very high especially in going for technology driven solutions The other examples are licensing maintenance up gradation and training etc Insularity The individuals in power in the organization are those whose life experience has been in creating that which now has to be destroyed High powered leadership isolated from people are least equipped to be the leaders of transformation Inability The management of major change programme or organizational transformation is a demanding task and relatively few leaders have the necessary prowess It is unlikely that managers who have spent years managing steady-state organizations will have the appropriate skills and values to lead transformational change Stage II Determine a transformational strategy TS For instance there are couples of generic TS of which four have been identified here in the following subsections TS Reconfigure the value stream Reconfiguring the value stream involves making major changes in the positioning of the firm with in a web of suppliers partners and or down stream agents For example firms contemplating a value stream transformational strategy may be able to change upgrade or develop their suppliers and do the same with downstream agents They may be able to find new ways to meet supply needs or reposition themselves within the value stream with advantage This may facilitate the organization to train impart technology and even indoctrinate suppliers as per it needs For example Sun Micro systems developed an extensive partnering network for service support that