CH13 - Managing organisational change Flashcards
Organisations which fail to change are unlikely to survive. They should therefore not question whether they need to to undertake change. What should they question instead?
What to change?
What to change to ?
How to successfully manage change?
Triggers for change can be divided in external and internal. What are the external triggers?
External environmental triggers divided into 2 groups -
Macro (indirect) environmental factors, identify using PESTLE. A few examples include
Political-eg change government,competition policy,import duties
Economic- growth or recession, local labour cost,disposable income
Social- attitude to work and leisure,attitude to health and education
Technological-growth in internet, public use of IT
Legal-new labour laws, employment law
Environmental- emissions targets
Porters 5 forces(direct triggers) Competitive rivalry Power of customers Power of suppliers Threat of new entrants Threat of substitutes
These are WHY triggers!
Triggers for change can be divided in external and internal. What are the internal triggers?
Internal triggers
Philosophy-new ownership,CEO, managements style
Reorganisation- takeover, restructuring,cost reduction
Personnel- procedures, training/development, promotion
Conditions- location change, outsourcing , flexible working
Technology-new procedures/systems, change of IT Demand,integration of roles
These are WHY triggers
What needs changing can be classified by the extent of the changes required and the speed required.
Extent of change can be transformation or realignment
Speed is incremental or “Big Bang “
Describe the 4 categories under these 2 axis
- Extent=transformation, speed = incremental (evolution)
Transformational changes implemented gradually through interlinked initiatives. Proactive, anticipating need for future change.results in fundamentally different organisation. - Extent=realignment, speed = incremental (called adaptation)
Change undertaken to realign the way in which organisation operates; implemented into a series of steps. - Extent=realignment, speed = Big Bang (called reconstruction)
Change undertaken to realign the way in which organisation operates, with many initiatives implemented simultaneously. Often forced and reactive because of changing competitive context - Extent=transformation , speed = Big Bang (called revolution)
Simultaneous initiatives on many fronts. Change is likely to be forced and reactive because of changing competitive conditions.
Incremental change is known as?
Big Bang is known as?
Incremental change is know as continuous change
Big Bang is known as discontinuous change
What is difference between transformational change and realignment?
Transformation entails changing an organisations culture. It is a fundamental change that cannot be handled within the existing organisation paradigm.
Realignment does not involve fundamental reappraisal of central assumptions and beliefs and can usually be managed in the existing cultural paradigm.
Selecting approach to strategic change. Evolution or revolution? Most managers struggle with how bold they should be.
With transformational change a break from the past is needed - turning away from companies heritage and starting with a clean slate.
On the other hand incremental change- recognising the value of continuity, building on past experience, investments and loyalties.
Window of opportunity for achieving revolutionary strategic change can be small for a number of reasons- what are they?
Competitive pressure - when companies market position starts to erode quickly a rapid and dramatic response may be the only option. Especially when an organisation threatens to slip into insolvency.
Regulatory pressure - from government or regulatory agencies to push changes through in a short period of time.
First mover advantage - a more proactive reason for instigating revolutionary change is to be first to introduce a new product, service or technology and to build up barriers to entry for late movers.
Cultural process of change - why is inherent culture important ?
Culture can be embedded and resistant to change
Existing Culture can limit the types of strategy development and change that can be considered.
Faced with change, managers will seek to minimise uncertainty by defining situation in terms of what is familiar.
Faced with a change trigger management will -
Try to improve effectiveness of existing strategy,
If this doesn’t work than a change in strategy may occur but in line with existing.
Even when manager know more radical changes are needed, they find they are constrained by existing routines,assumptions and political processes.
Achieving change in an organisation is often difficult and prone to failure. Why is this and what theory’s have been identified as possible approaches for managing the change?
It is due to conflict views of different stakeholders involved
3 theories are
Lewin’s force field analysis
Lewin’s three stage model
Beer and Nohria’s theory e and theory o
What is Lewin’s force field analysis ?
Managers should consider change in terms of
The driving forces - factors encouraging and facilitating the change
The restraining forces - factors that hinder the change.
Change only successful if driving forces larger than restraining
Strengthen the driving forces, weaken the restraining forces or do both.
Model can be view from perspective of employees or organisation-
Employees faced with change-
Driving forces- fresh challenges, improved rewards,more job satisfaction
Restraining forces- anxiety over job security and loss of power or status.
From organisation view-
Driving forces-increased market share, customers demanding new product, increased efficiency.
Restraining forces - lack of training, capital outlay, fear of disruption.
Describe Lewins 3 stage model.
Known as ice cube model. 3 stages
1.Unfreezing - make need for change obvious, create initial motivation to change by convincing staff of undesirability of current situation.
Ways to achieve include-
Identify and exploit areas of stress or dissatisfaction
Introduce additional forces for change- tighter budgets, new personnel in favour of change.
Increase employee knowledge of markets, competitors and the need for change.
2. Change - identify what the new norm should be. Often involves Establishing new patterns of behaviour Setting up reporting relationships Creating new reward/incentive schemes Introducing a new styles of management
- Refreezing - stabilising the change so people don’t slip into old ways. By,
Larger rewards for those who have fully embraced the new culture
Publicity of success stories and new heroes e.g employee of the month
What are the criticisms of Lewins 3 stage model. (Ice cube model)?
Kangeroo et al suggest that it’s too simplistic.
They argue that the model is based on assumptions that organisations are stable and static so change results only from concentrated effort and only in one direction.
They argue change is multidirectional and found everywhere. It happens in all directions simultaneously and is often a continuous process
What is Beer and Nohria’s theory?
They identified that a large proportion of change initiatives failed, due to managers been overwhelmed by the detail of the change management process and failing to focus on the overall goals of the change.
Every change fall into one of these categories :
Theory E - shareholder value is main concern. Change involves incentives, layoffs, downsizing and restructuring.
Theory O - softer approach to change.cultural adjustment, enhancing employee capabilities. Incremental. Change, feedback, further change. Involving employees in change process.
Both have drawbacks. Theory E ignores feelings and attitudes of employees leading to loss of motivation and commitment.
Theory O often fails to make the tough decisions that may be needed to survive
In reality a balance is needed and both theories implemented simultaneously.
There is a spectrum of possible reactions to change. What are they?
Enthusiastic support- employees offer full support
Compliance (passive resignation) employees show indifference to change. Likely reaction is apathy & minimal contribution whilst still going along with change.
Passive resistance- employees demonstrate regressive and non learning behaviour.
Active resistance- employees do what they can to stop the change-engaging in protests, working to rule,minimal work, personal withdrawal. They can also resort to committing errors intentionally and ultimately sabotage.
Key point - Cima definition of resistance?
What 3 categories of reasons for resisting change
Resistance is “any attitude or behaviour that reflects a persons unwillingness to make or support a desired change”
Reasons for resistance to change
Job factors- fear of technological unemployment,fear of change to working conditions,fear of demotion or reduced pay.
Personal factors-implied criticism of current working method, feel less valued, work becalmed monotonous.
Social factors- dislike need to change current social environment, personal dislike of people implementing change, lack of consultation leading to rejection.
To determine appropriate leadership approach to manage resistance Kotter and Schlesinger highlighted the need to understand why certain people resistance change. Give some reasons.
Parochial self interest - some people concerned with how change affects them, instead of consider how it affects the success of business.
Misunderstanding- due to communication problems or inadequate information
Low tolerance to change - certain people keen on security and stability in their work.
Different assessments of the situation- employees may disagree on the reasons for change and on the advantages of the change process.
What are Kotter and Schlesinger approaches to deal with resistance to change?
Participation - involving employees,allowing input into decision making. Could easily result in employees enjoying raised levels of autonomy, allowing them to design their own jobs,pay structure etc
Education and communication- used to reinforce another approach. Relies on belief that communication of the benefits to change, will result in employee acceptance of their need to exercise the necessary changes.
Power/coercion- roots in formal authority that management possesses together with legislative support.
Facilitation and support - employees may have to be counselled to help them overcome anxieties about change. Management may find it necessary to develop individuals awareness of the need for change.
Manipulation and co-optation - covert attempts to sidestep resistance. Information given is selective and distorted to only emphasise benefits. Co-optation involves giving key people access to the decision making process.
Negotiation- often practiced in unionised companies. Process of negotiation is exercised. The bargaining leads to a situation of compromise and agreement.
What are the key considerations when deciding on an appropriate leadership approach.
The speed at which change must be introduced
Strength of the pressure for change
Level of resistance expected
Power held by manager
How much information is needed before change can be implemented and how long it will take to get the information.
Managers can create barriers to change, by the way change is conceived, designed and implemented. Not thinking through their objectives, resources available etc. Crucial is who leads the change.
Daft (1998) describes several factors that could case barriers - what are they?
Excessive focus on costs - management may fail to appreciate importance of a change that is not cost focused. (Customer satisfaction, employee motivation). They may ignore ideas that cost more than current practice.
Failure to highlight benefits of change. Training may be needed to help managers perceive thoughts as more positive.
Lack of confidence and cooperation- organisational fragmentation and conflict can result in lack of coordination for change implementation. New and old systems may be incompatible, assumptions made of how things currently work without proper thought.
Uncertainty avoidance - managers fear uncertainty associated with change. Constantly communication needed horizontally. “We’ve got to get this right 1st time” can lead to blame culture and reluctance to take risks.
Fear of loss - related to avoiding uncertainty. Managers fear loss of power and status but also their jobs if implementation is not careful and incremental.
Describe the role of a change agent.
Employed to encourage and facilitate change,help deal with resistance.
Familiar and non threatening figure.
Good relationship with key decision makers
Helps organisation to -
Define the problem and its cause-identity restraining forces or potential resistance and help management understand root causes.
Diagnose solutions and select appropriate cause of action.
Implement change - once course of action is selected, change agent is likely to be well informed of proposed change and reasons for it, so is best person to lead implementation.
Transmit learning process throughout organisation- change agent documents learning process and discussions which company has undergone during the change process. Then takes lead in spreading info throughout the company
What are key attributes for change agent?
Goals - clear definition of achievable
- sensitive to impact of stakeholders
- flexibility to adapt to triggers
Roles - team building skills
- networking skills inside and outside the company
- tolerance of uncertainty
Communication
- skills with colleagues
- personal enthusiasm, stimulating commitment
- meeting management
Negotiation
- creating vision and selling plans
- resolving conflict
- contract negotiation
Managing
- political awareness and influencing skills
- balancing goals and perceptions
- helicopter perspective
What are Kanters 7 “power skills” that change agents require to enable them to overcome apathy or resistance to change and enable them to introduce new ideas?
Ability to work independently.
Ability to collaborate effectively.
Ability to develop relationships based on trust, with high ethical standards.
Self confidence, with humility.
Being respectful of change process.
Ability to work across different business units and functions.
Willingness to stake personal rewards on results, and gain satisfaction from success.
What are advantages of using external change agents?
Can bring fresh perspective to a problem
May have specialist knowledge of required change e.g. TQM
Being a dedicated resource ,may be able to give more time and energy
Experience to avoid traps and pitfalls
Greater objectivity- no personal stake in outcomes of change
What are a managers strategic priorities for helping a business recover from a period of decline?
Reducing costs to improve Efficiency,and
Improving competitiveness in order to increase revenue
