leadership & change management, lecture 5, by rahat kazmi
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This Lecture was prepared for my MBA students in London. It will benefit students, lecturers or managers who like to polish up their leadership skills. Feel Free to download this lecture in pdf, however, if you need the ppt slides, please send me a payment of £1 by paypal at: [email protected] and I will happy to send you the lecture. Hope it was beneficial to you.TRANSCRIPT
LEADERSHIP AND CHANGE
MANAGEMENT - NATURE OF ORGANIZATIONAL CHANGE
- REASONS FOR RESISTANCE TO CHANGE
- MANAGEMENT OF ORGANIZATIONAL CHANGE
- IMPORTANCE OF ORGANIZATIONAL HEALTH AND PERFORMANCE
LECTURE 2
BY
RAHAT KAZMI PREPARED BY: RAHAT KAZMI
SEPTEMBER 2010
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To explain the nature of organizational change and explore reasons for resistance to change
To examine the management of organizational change, and human and social factors of change
Review the importance of organizational health and performance, and ability of the organization to adapt to change
Objectives
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Culture
Process People
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Why Change?
Adaption of new ideas
Organisations need to continually
adapt to new situations if they
are to survive and prosper
Constant Change keeps
Organisations Agile
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Don’t Try to Change Me…….
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Old Learning Model New Learning Model
Old & New Change Models
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Why Change? Other Factors
Market Transparency
Labour Mobility
Global Capital Flows
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What is System?
SHRAED VISION
YOU ARE ACCOUNTABLE
SHAREHOLDER INVOLVEMENT
TOOLS & SKILLS
ENABLING BEHAVIOUR
MEASURES & PROCESSES
S
Y
S
T
E
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Change We can Believe in
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10 Principals of Change Management
1) Address the Human Side Systematically
2) Start at the Top
3) Involve every Layer
a) Define Strategy
b) Setting Targets
c) Design
d) Implement
4) Make the Formal Case
a) First confront reality and articulate a convincing need for change
b) Demonstrate faith that company has a viable future and the leadership to get
there
c) Provide a roadmap to guide behaviour and decision making
5) Create Ownership
6) Communicate the Message
7) Assess the Cultural Landscape
Values-Beliefs-Behaviours and Perceptions
8) Address Culture Explicitly
9) Prepare for the Unexpected
10) Speak to the Individual
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Change Is.....
The human experience consists of matching our
capabilities against the challenges we face. A sense
of balance, is maintained in our lives when:
=
• Capability Challenge =
Ability/willingness Danger/Opportunity
We seek this kind of balance because it makes us feel that things are
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Change Is.....
Change occurs when this balance is disrupted. There
are two ways the status quo can be disrupted;
positive change or negative change:
=
• Capability Challenge =
>Positive Change
or
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Change Is.....
When people believe their capabilities exceed a challenge, they
generally feel positive because the outcome is not only desirable but
expected (for example the birth of a child.) When the reverse is true,
people feel negative not only because the outcome is undesirable, but
also because such situations lack predictability.:
=
• Capability Challenge =
>Negative Change
Most people find it is extremely uncomfortable to face situations filled with the
unknown because of the loss of predictability. We are attracted to situations that
are familiar because they allow us the feeling of being in control.
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KURT-LEWIN’S CHANGE MODEL
UNFREEZE
CHANGE
REFREEZE
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KURT-LEWIN’S CHANGE MODEL
Kurt Lewin‟s model of change
Stage Characteristics Organizational impact
Unfreezing
People in the organization
made aware of
problems/performance gap
and need for change
This diagnosis stage is often driven by
a change agent
Changing
People experiment with new
workplace behaviour to deal
with needed change
This intervention stage features specific
training plans for managers and
employees
Refreezing
People employ new skills and
attitudes and are rewarded by
organization
Changes are institutionalized in the
corporate culture
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THE CHANGE PROCESS
Present State
Desired State
Transition
State
Desired
State
The above model for change can be used to understand and plan for
change. It uses the analogy of an arrow to explain the change process of an
organization.
The 1st circle in its original shape represents the current state of the
organization. In order to change, the 1st circle must be unfrozen, moulded to
its new shape, and then, refrozen. Similarly the organization, in order to
change positively, must melt any forces, which resist change and create a
climate of acceptance and trust that will reinforce or refreeze the new state
of the organization.
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Characteristics of the Transition State
Low stability.
High, often undirected energy.
Past patterns of behaviour become highly valued.
High emotional stress.
Control becomes a major issue.
Conflict increases.
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Managing Change - Examples
Situation
A deregulation in the telephone industry that was capped by the antitrust
settlement broke up the Bell system and triggered the great shake-up at the
GTE Corporation.
Trigger External environmental change triggered by government laws.
Driver/Barrier Environmental
Actions Taken The company was forced to refocus its telecommunications business and
discontinue its other unrelated industrial businesses.
Results
GTE is attempting to integrate local phone service with cellular business to
create a streamline network. This would allow customers to easily call almost
anywhere.
CASE 1: Shake-up at the GTE Corporation
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Managing Change - Examples
Situation Black box wants to improve the efficiency of the organization by delivering
their products quicker to the customers
Trigger Internal organization problem in which slow employees triggered the
change.
Driver/Barrier Incentive
Actions Taken
A change agent at Black Box used action in the form of a reward system to
incentives employees. He dramatized the need for faster deliveries by
implementing a new bonus plan for the employees.
Results
Warehouse fulfillment teams worked overtime taking extra orders and
sending out same-day shipments. Employees earned 140% of their bonuses
and nothing else suffered.
CASE 2: Need for quicker product deliveries at Black Box
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Triggers of Change - Internal
Human Resource Issues
Organizational learning requires humans as agents.
Accordingly, changes in human resources within any organization pose major impetus for OL.
In Virany, Tushman, and Romanelli (1992), the researchers examine how changes in the chief executive officer triggered off necessary organizational learning among members in the top management team.
In a study on expatriation, Vink and Schapink (1994) argued that organizations must learn to work beyond Western ethnocentric theories of behaviour.
Effective intercultural managers are those who have acquired and shared their collective experiences on unfamiliar and different cultures.
On the relationship between personnel turnover and organizational learning, Carley (1992) showed that hierarchies were less affected by high turnover rates than teams, particularly when the task is non-decomposable.
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Triggers of Change - Internal
Implementation Issues
The introduction of a new technology, innovation, or R&D often triggers need
for
organizational learning (see George 1983; Bessant and Buckingham 1993;
Carlsson and Kean1976).
Implementing a new innovation often alters existing work routines, reward
structures, or communication patterns to the extent that organizations must
ensure sufficient slack resources to support learning activities to incorporate
the innovations successfully and to obtain full benefits of the innovation.
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Triggers of Change - Internal
Inter-organizational Relations
Organizational learning is an emerging paradigm for the study of strategy
making when firms diversify into new practices, products or services and
collaborate with other firms in creating new interorganizational relationships
or IOR (Alaharkonen and Rutenberg 1990) (Kazanjian and Drazin 1987).
The need for close collaboration and cooperation with others in IOR such as
strategic alliances imposes an unprecedented emphasis on organizational
learning as parties to the relationship need to institutionalize and
amalgamate distinct organizational practices, new job definitions, new ways
of managing and even redefining the nature of the firm (Lewis 1991).
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Triggers of Change - External
Business Environment Issues
Business turbulence comprises one of the most significant environmental jolts
faced by firms.
Rapidly changing dynamics of industries and competitive forces require firms
to learn faster than competitors in order to achieve sustainable competitive
advantage.
To survive, organizations must learn to shift from managing and producing in
the world of stable markets to one with short product lifecycles, continual
innovation, and rapid changes in customer demands.
Organizations must build a capacity to learn: to conduct quick studies and
tackle novel problems (Maccoby 1993; Hosley, Lau, Levy, and Tan, 1994)
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Triggers of Change - External
E-Commerce
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Triggers of Change - External
Digital Convergence
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Triggers of Change - External
Acquisitions
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Triggers of Change - External
Technological Environment Issues
The greatest jolt from the environment is the unprecedented pace of change
in technologies. Because of the high rate of technological change, formal
education in schools will never be able to totally prepare workers for their
lifetime‟s technological work demands.
It is thus paramount that firms create a learning environment within their
organizations to promote on-the-job learning and growth.
Continual learning and investing in the full spectrum of employee talents with
teamwork are cornerstones for coping with relentless pace of change in
technology (Benett and O‟Brien 1994; Atkinson 1994).
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Triggers of Change - External
Economic Environment Issues
Economic environment issues take on many forms. With globalization of
markets, organizations must learn to break the limited mindsets of national
markets to compete on a worldwide basis (Ghoshal and Butler 1992).
Firms in economic recessionary regimes must learn new survival skills to re-
vitalize the organization, steering the organization from danger to opportunity
(Hollingworth 1992).
Organizations in East European economies and other communist regimes face
great challenges when reforms coverted centrally planned markets to free,
open markets (Swiderski and Seiderski 1986).
Firms had to erase old organizational memories and routines of a socialist
economy and generate new rules, standard operating procedures to compete
in a new open market economy.
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Triggers of Change - External
Ecological & Political Environment Issues
Occasionally, organizations learned from natural disasters (e.g., Bhopal
disaster).
Disasters make explicit organizational policies on safety measures (Bowman
and Kunreuther 1988).
As nations become more concerned with the ecological environment, and as
new laws and statutes are enacted to protect the natural environment,
organizations need to develop new rules, behaviors and business practices to
abide by the “green” laws (Mylonadis 1994).
Organizations also need to learn to cope with new regulation following
changes in political leadership and regimes (Godkin and Montano 1991).
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Triggers of Change - External
Changes in socioeconomic values
Jurgen Kadtler discusses how „social movements‟ and „interest groups‟ act as
Triggers for organizational learning.
Some organizations are forced to adapt to surrounding social, environmental,
or Regulational factors (Dierkes, Antal, Child, & Nonaka, 2003).
Often these factors are outside their control and they must react to them.
“Whether the organization acquires the capacity to manage the crisis and
deal with the concern of social movements or interest groups is determined by
organizational learning.
This refers to the tension between and analytical and a normative perspective
on organizational learning” .
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Triggers of Change - Other
Technological Visions
Although visions have been heralded as an all important component of
organizational leadership, there has been – up till now, little research
conducted to better understand the concept of visions.
New insight, however, confirms that visions facilitate vicarious learning and
serve as “points of orientation…based on core values and shared perceptions
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Triggers of Change - Other
Creativity as a Trigger
Cunha, Cunha and Kamoche (2002) suggest that an open minded and, indeed,
creative approach to errors may serve as the trigger for organizational
improvisation and learning.
Rather than simply rewarding employees and managers for fixing problems,
we should encourage their use as stimuli for further learning.
Consider, “an example from Nordstrom's department store where employees
are encouraged to "respond to unreasonable customer requests." Stories
circulate about an employee paying a customer's parking ticket when the
store's gift wrapping took too long”.
This type of accommodation should be rewarded and viewed as a departure
point for a learning journey aimed at discovering what caused the process to
fail to produce the desired result.
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Triggers of Change - Other
Anxiety as a Trigger
Edgar Schein, as cited in Coutu, (2002), provides a useful and realistic view of
the essential triggers of organizational learning. He maintains that anxiety is
necessary as a trigger for learning.
Adopting a distinctly unpopular stance, Schein maintains that learning is
coercive. He believes that anxiety, or more correctly, “learning anxiety” occurs
when we are afraid of trying something new out of fear of failure,
embarrassment, or the desire not to give up old paradigms.
Conversely, “survival anxiety” is the realization that survival of the individual
or the organization depends on change.
Schein tells us that “the evidence is mounting that real change does not begin
to occur until the organization experiences some real threat of pain that in
some way dashes its expectations or hopes” .
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Ford Motor Company – Case Study
Ford Motor Company has been advertising in gay and lesbian magazines, recently.
Some in the special interest evangelical movement has strongly objected to Ford‟s advertising practices and see it as a promotion of a lifestyle to which they object.
They have sought to use boycotts to convince Ford to change it advertising policies.
How Ford responds can have negative financial implications on either side.
However Ford reacts in the above situation will be a learning organization challenge.
In whatever direction it goes, “new organizational competencies have to be acquired if critical issues are to be addressed successfully”
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“Twenty years from now we‟ll look back
and say this was the embryonic period.
The Web is only going to get more
revolutionary”
Tim Berners-Lee, 2006
The Role of Web in Change
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The Web is
a bigger megaphone
The Web is a
fundamentally new
way of getting
things done
The Role of Web in Change
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Laurie J Mullins (2007) Management and Organisational behaviour, 7th edition
Richard L Daft (2007) Organization theory and design, 8th edition
John Pearson and Robinson (2005) Strategic management; Formulation,
implementation and control, 7th edition
IAM Diploma in Administrative Management: Study guide
References
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