WEEK 5 A framework for change Approaches and choices (Chapter 10)

1. WEEK 5 A framework for changeApproaches and choices(Chapter 10)

2. Lecture 5 Learning outcomes • Exploring the varieties of approaches to change • The contingency approach to change • The new paradigms of change • Organisational culture and change • The Japanese approach to change • Organisational Learning and change

3. Change is multi-disciplinary As Stickland (1998: 14) remarks: ... the problem with studying change is that it parades across many subject domains under numerous guises……………………..

4. Varieties of change – 1 • Smooth incremental, covering slow, systematic, evolutionary change. • Bumpy incremental, pertaining to periods where the smooth flow of change accelerates. • Discontinuous change, which is similar to the punctuated equilibrium model. Senior (2002)

5. Varieties of change – 2 • Top-down systemic change aimed at transforming the organisation. • Piecemeal initiatives devised and implemented by departments or sections in an unconnected fashion. • Bargaining for change where a series of targets are jointly agreed between managers and workers, but are pursued in a piecemeal fashion. • Systemic jointism where managers and workers agree a total package of changes designed to achieve organisational transformation. Storey (2002)

6. A Contingency approach Turbulent times demand different responses in varied circumstances. So managers and consultants need a model of change that is essentially a ‘situational’ or ‘contingency model’, one that indicates how to vary change strategies to achieve ‘optimum fit’ with the changing environment.(Dunphy and Stace, 1993: 905)

7. Criticisms of contingency • Ignores environmental manipulation • Ignores managerial choice • Ignores the difficulty of changing structures, cultures and managerial behaviour • Assumes that survival depends on being the best.

8. Figure 10.1 Varieties of change

9. Figure 10.2 Change continuum

10. Figure 10.3 Approaches to change

11. Figure 10.4 Speed and focus of change

12. Figure 10.5 A framework for change

13. Organisational change Summary • There are many approaches to change • All tend to be situation-specific • Managers can influence situational constraints • Organisations can exercise choice in: • What to change • How to change it • When to change.

14. In search of new paradigms(Chapter 3)

15. Describing organizational culture( Senior & Fleming) • Artefacts • Language in the form of jokes, metaphors, stories, myths and legends • Behaviour patterns in the form of rites, rituals, ceremonies and celebrations • Norms of behaviour • Heroes • Symbols and symbolic action • Beliefs, values, attitudes • Ethical codes • Basic assumptions • History

16. Culture–Excellence Key figures • Tom Peters and Robert Waterman • Rosabeth Moss Kanter • Charles Handy Core concept: Culture determines Performance.

17. Organisational culture Why does it matter? Peters and Waterman found a strong link between excellence (good performance) and organisational culture.

18. 7 S framework

19. Peters and Waterman Eight key attributes of excellent organisations • Bias for action • Closeness to the customer • Autonomy and entrepreneurship • Productivity through people • Hands-on, value-driven • Stick to the knitting • Simple form, lean staff • Simultaneous loose–tight properties.

20. Rosabeth Moss Kanter (1989)When giants learn to dance: mastering the challenges of strategy, management, and careers in the 1990s Kanter’s Post-entrepreneurial model • Restructuring to find synergies • Opening boundaries to form strategic alliances • Creating new ventures from within – encouraging innovation and entrepreneurship.

21. Charles Handy (1989)The age of unreason The world is changing, therefore, organisations must change. In future, organisations must be • Knowledge-based • Run by a few smart people • Populated by a host of smart machines.

22. Charles Handy Emerging organisations • The Shamrock organisation • 3 distinct groups of staff • Core , Contractual Fringe, Flexible Labour Force • The Federal organisation • Network of individual organisations allied to achieve a common purpose • The Triple I organisation. • Information , Intelligence, Ideas = added value

23. Changing organizational culture to bring about organizational change( Senior & Fleming) • Assessing cultural risk • The relevance of culture change to organizational change (1) Ignoring the culture (2) Managing around the culture (3) Changing the culture (4) Changing the strategy to match the culture

24. Summary Organisations must promote • Strong, flexible cultures • Innovation and entrepreneurship • Teamwork and individual enterprise and development • Reward systems based on contribution and not position • Brain power and not muscle power • Flat, anti-hierarchical structures • Small corporate and middle management staffs • Tight control of a few key measures • Continuous, radical change.

25. Criticisms • Empirical evidence does not stand up • Back to ‘one best way’ • Assumes all organisations face the same problems and opportunities • People are the chief asset but... • are easily discarded • compete with each other • not all are treated the same way • Culture is the great cure-all • What about the Japanese?

26. The Japanese approach Distinct features • Personnel policies (soft) • Business practices and work systems (hard) Effectiveness comes from the ability to combine soft and hard practices.

27. The Japanese approach(Continued) Personnel policies (soft) • Lifetime employment • Internal labour market • Seniority-based promotion and rewards • Teamwork and bonding • Enterprise unions • Training and education • Company welfarism.

28. The Japanese approach (Continued) Designed to promote: • Loyalty and gratitude • Commitment • Sense of security • Hard work and improvement • Co-operation not conflict • Self-development.

29. The Japanese approach (Continued) Business practices and work systems (hard) • Long-term planning • 15 years • Market growth • Low dividends • Low profits.

30. The Japanese approach (Continued) Timeliness • Fast product development • JIT • Right first time. Quality • Total quality approach • Continuous improvement.

31. The Japanese approachSummary • Values and promotes loyalty • Slow promotion • Seniority principle • Lifetime employment • Paternalistic and deferential • Slow, collective decision-making Change is continuous, incremental, bottom-up but within an overall company vision.

32. The Japanese approachCriticisms • Two-tier labour markets • Lifetime employment = slavery • Teamwork = coercive pressure • Enterprise unions = exploitation • Cannot accommodate globalisation and workforce diversity • Threatened by economic shocks.

33. Organisational learning Some definitions • Organizational learning is the process by which the organization’s knowledge and value base changes, leading to improved problem-solving ability and capacity for action (Probst and Buchel, 1997: 15). • A learning organization is an organization skilled at creating, acquiring and transferring knowledge, and at modifying behavior to reflect new knowledge and insights (Garvin, 1993: 80).

34. Organisational learning (Continued) • Organizational learning means the process of improving actions through better knowledge and understanding (Fiol and Lyles, 1985:803). • An entity learns if, through its processing of information, the range of its potential behaviors is changed (Huber, 1991: 89). • Organizational learning occurs through shared insight, knowledge and mental models and builds on past knowledge and experience, that is, on memory (Stata, 1989: 64).

35. Organisational learning (Continued) Positives • A rich, multi-dimensional concept affecting many aspects of organisational behaviour. • An innovative approach to learning, to knowledge management and to investing in intellectual capital. • A new set of challenging concepts focusing attention on the acquisition and development of individual and corporate knowledge. • An innovative approach to organisation, management and employee development. • Innovative use of technology to manage organisational knowledge through databases and internet or intranets.

36. Organisational learning (Continued) Negatives • A complex and difficult set of practices, difficult to implement systematically. • An attempt to use dated concepts from change management and learning theory, repackaged as a management consulting project. • A new vocabulary for encouraging employee compliance with management directives in the guise of ‘self-development’. • An innovative approach for strengthening management control. • A technology-dependent approach that ignores how people actually develop and use knowledge in organisations. (From Huczynski and Buchanan, 2001: 135)

37. Organisational learningSummary • Survival depends on the organisation learning (adapting) at the same rate or faster than the environment changes. • Learning must become a collective and not just an individual process. • There must be a fundamental shift towards systems (or triple-loop) thinking by an organisation’s members. • This gives an organisation the ability to adapt to, influence and even create its environment. Change comes from learning and learning comes from change.

38. Organisational learningCriticisms • No agreed definition • Scarcity of rigorous empirical evidence • Organisations do not learn – people learn • It requires the creation of organisational diversity and consensus at the same time.