LECTURE # 38

1. LECTURE # 38

2. What are radical or revolutionary changes? • Changes associated with strategy or Strategic changes are considered revolutionary changes. • E.g. restructuring, privatisation of a state owned unit, merger, take-over, acquisition or joint-ventures. • Similarly changes pertaining to product development or market development and the strategies how to engage customers through differentiation, technology or cost leadership. • Exit or Entry decision of product, market, R& D etc • Other changes could be down-sizing, cost-cutting but these are related to structural changes as well.

3. Why Radical Change? Debate between effectiveness of continuous and discontinuous change? Which one is more effective? Rational adaptation theorist believe organisation change can easily and speedily be managed given the various types of exogenous changes. Natural selection theorist view organisation as complex systems severely constrained by exogenous forces that create and institutionalise strong web of commitments. From this perspective organisations are inherently inflexible to respond to external opportunities and threat, and rarely engage in transformations.

4. Orlikowski challenged the concept that changes must be planned, technology is the primary cause of technology based organisational transformation, and that radical changes always occur rapidly and discontinuously. • Change cannot be anticipated and is discontinuous in nature • Organisational transformation is an ongoing improvisation enacted by organisational actors trying to make sense of and act coherently with the world.

5. 2. Radical or Transformative changes Related concepts are quantum change, discontinuous change or radical change. Caution : Strategic change defined as variation in organizations long term goals and mission and may occur in either incremental or revolutionary manner -Increment view holds that organization experiences large scale strategic changes quite slowly while revolutionary view suggests long periods of organization experience brings very little strategic variation instead punctuated by short intense periods of change. -organization change vary little through incremental change • Incrementalism fail to account for large scale organizational transitions which are related with total structures, management processes and corporate cultures.

6. Where the theme is : • Restructuring • Repositioning • Revitalization or Renewal Assumptions of incrementalism: • Senior managers have the capacity to fully anticipate the environmental forces (opportunity & Threat) and future conditions for further development. The assumption may be valid for stable times and age of continuity. 2. Organization is run by intelligent and proactive managers. In fact organization and societal selection process is such that majority of managers are mediocre and have limited information, limited experience to the industry and cannot judge complex information outside their industry and organization so cannot scan the environment effectively.

7. 3. Third assumptionis that large scale organization change can always be accomplished incrementally. • Fact is managers have little control over economic fluctuation, political intervention, industry restructuring; and on other discontinuities in technological developments which destroy whole market and organization processes and structures. • These discontinuities are often beyond the control of managers because managers are members of a dominant coalition with a historical conditioned model of reality . • Their culture is fixed mindset , reactive , rule based and precedence.

8. It is difficult to have internally motivated change • The need is to have externally imposed change. Revolutionary Change Theorist view organization as having deep structures (Gersick 1991) or coherent configuration of strategy, structure, systems, controls & ideologies which are highly stable limit the range of options available to manager contemplating change. Deep structures initiate inertia and power commitments of organization members to existing conditions preclude departure from change.

9. What causes Revolutionary change: • Revolutionary changes can result from well defined trigger eventsthat can overcome organization inertia or deep structure Basic categories: 1. Leader 2. New Strategy – expansion or diversification, product process development , BPR very popular in mid 1990s. 3. Gestalt phenomenon 4. Prolonged lack of fit between organization & its environment 5. Technological innovations 6. Dramatic shift in governmental policies 7. Re-engineering