Session 2 - The Nature of Change Flashcards
Identify some of the organisational changes reported in the press
ALWAYS IN THE PRESS
- Tesco plans to shift 3 UK call centres to Bangalore (market leader cost cutting)
- Xenos restructuring to help fast track new product development
- United Utilities to embrace the benefits of e-business
What are the 3 common types of change?
Downsizing, technological change, mergers and acquisitions
What are the change challenges with downsizing?
- Keeping core competencies
- Managing political behaviour
- Survivor syndrome
- Communication
- Cultural adjustment
What are the change challenges with technological change?
- Goal synthesis
- Choice of technology
- Political barriers
- Communication
- Time frame
- Contingency planning
What are the change challenges with mergers and acquisitions?
- Cost savings
- Cultural adjustment
- Balancing change and continuity
- Communication
- Power structure
- Employee retention
What are the theoretical types of change?
Grundy (1993) Smooth v bumpy incremental
Tushman et al (1986) Convergence v divergence
Dunphy & Stace (1993) / Wilson (1992) Fine tuning to corporate transformation
Planned v emergent
Predictable change
Hard v soft
Explain Grundy’s (1993) type of change
(Check lecture notes for graph)
Criticised for being too simplistic
3 stages:
1) Smooth incremental: change happens are continuous stable rate (50s - 70s).
- Can plan and manage the change and is easy to forecast.
2) Bumpy incremental: periods of stability with episodic change (like land mass shifts).
- Regular periods of restructuralising, central to decentralise vice versa but the fundamental goal won’t change.
- Change by means of which they achieve them.
3) Discontinuous: long period of stability with breakpoint.
- Change of culture, structure or strategy.
- Goals of company changed too.
Explain Tushman et al’s (1986) type of change
1st Order
CONVERGENCE
- maintaining fit between strategy structure and process:
- fine tuning improvements (doing what is already done better)
- incremental adaptation (small changes in response to minor shifts in the environment (10%))
- continuous improvements
2nd Order
DIVERGENCE
- changes in product life cycle or industry
- internal dynamics:
- reformed mission and core values
- altered power and status
- re-organisation / re-structure
- revised interaction patterns
- new senior executives
Explain Dunphy & Stace’ (1993) type of change
FINE TUNING
- on-going process
- fine-tuning the ‘fit’ of organisation’s strategy, structure, people and processes
- typically departmental level
INCREMENTAL ADJUSTMENT
- incremental adjustments to changing environment
- involves distinct modifications to corporate business strategies, structures and management processes
MODULAR TRANSFORMATION
- major realignment of one of more departments/divisions
- radical change focused on sub-parts
CORPORATE TRANSFORMATION
- corporation-wide
- characterised by radical shifts in business strategy and revolutionary changes throughout the whole organisation
Identify and explain the different depths of change
First order change = makes changes in established ways of doing things
Second order change = creates a new way of looking at situation
- First order change is not always incremental, nor all second order change discontinuous (e.g. incremental second order change and first order discontinuous change)
What are the 4 main phases of planned change?
Exploration, planning, action and integration
Explain the features of planned change
- Generally assume stability
- Assume that a common agreement can be reached
- Assume change can be isolated
(See Burnes (2009) for critique) - Top-down approach
- Can be small or large scale
UNFREEZE ——————–> MOVEMENT —-> REFREEZE
seeing need for change Actions Implementation
Explain the features of emergent change
- Linked to concept of organisation as open system, striving to maintain equilibrium
- Continuous process of experimentation and adaption aimed at matching capabilities to the needs of the environment
- Best achieved through many small-medium scale changes over time, that can lead to major reconfiguration
- Change is multi-level, cross-organisation process that unfolds an interative and messy fashion over years
- Change is political-social, not analytical or rational
- Role of managers is to create a climate which encourages and sustains experimentation, learning and risk-taking
- Bottom-up approach
Key activities for managers include:
- information gathering
- communication
- learning and creating environments for learning
What are the 3 different approaches to emergent change and their features?
1) Readiness for change (typically incremental though cumulatively may lead to discontinuous change)
- organisations developing the capacity for change - agility
- scanning the environment
- acceptance of and paying attention to P&P
- experimentation encouraged - with enough trust for some risks to be taken
2) Renewal (typically discontinuous)
- based on principles of ecosystem
- organisation needs to ‘destroy’ itself by creating a crisis to shatter constraints, then needs to be creative and bold
3) Complexity theory (either incremental or discontinuous)
- acknowledges complexity of organisational life and coexistences of conflict and cooperation
- suggests people can be self organising and that leaders should provide a general sense of direction but encourage diversity and create enough tension to damage the status quo and provoke innovation
Explain the stages of predictable change through the organisational life cycle
1) Entrepreneurial stage (when the org. is set up, key strategy is survival)
2) Collective stage (control & coordination)
3) Formalisation stage (develop control, comms, finance, etc. Org. getting larger so put processes in place)
4) Elaboration stage
Explain the stages of predictable change through the industry life cycle
(Check diagram from lecture slides)
- Identification of breakpoints in the environment
- Strebel (1996) identified 2 phases in the evolutionary cycle of competitive behaviour
- From divergent (innovation phase) to convergent (efficiency phase)
2 basic types of break-point:
- divergent breakpoints: associated with sharply increasing variety in competitive offerings
- convergent breakpoints: associated with sharp improvements in the systems and processes used to deliver the offerings
- Orgs should be aware of where they are in the cycle
Explain the features of difficulties
BOUNDED (hard)
- know what needs to be known
- know what the problem is
- know what would be a solution
- limited timescale
- priorities clear
- limited applications
- can be treated as a separate matter
- limited number of people involved
Explain the features of messy problems
UNBOUNDED (soft)
- don’t know what needs to be known
- know what the problem is
- no solutions
- longer uncertain timescale
- priorities called into question
- uncertain but greater implications; worrying
- can’t be disentangled
- more people involved
Draw the change spectrum
(lecture 2 slides)
What can’t TROPICS be used to identify?
Hard and soft organisational change
What does TROPICS stand for?
Time scales Resources Objectives Perceptions Interest Control Source
Apply TROPICS to hard change
TIME SCALES: clearly defined
RESOURCES: need for the change clearly defined
OBJECTIVES: clearly stated and could be quantified
PERCEPTIONS: of the problem and its possible solution shared by all
INTEREST: in the problem is limited and defined
CONTROL: is maintained by the managing group
SOURCE: of the problem originates from within the organisation
Apply TROPICS to soft change
TIME SCALES: ill-defined/medium to long term
RESOURCES: needed for the change uncertain
OBJECTIVES: subjective and ambiguous
PERCEPTIONS: no consensus of perceptions on what constitutes the problem/conflicts of interest
INTEREST: in the problem is widespread and ill-defined
CONTROL: is shared with people outside the managing group
SOURCE: of the problem originates from outside the organisation
