managing strategic change-sk jaiswal

8/3/2019 Managing Strategic Change-SK Jaiswal

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Paper by

Gerry Johnson

Managing Strategic Change:

Strategy, Culture and Action

Summarized by

S K Jaiswal

(30.10.11)


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The Need

y Insufficient writing on

yLink between Strategy & Culture

y

StrategicInertia in firms

y Need for managers to relate to cultural

issues

yPaper aims atyExplaining the links between Strategy, Org

Culture and Managerial Behaviour.


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Strategy Development- Perspectives

1. Incremental Perspective

yDecisions build one upon another. Past

decisions mould the strategy

yLogically managed by executives , as

yNot possible to know all forces that shape future

y Political trade-offs are necessary. Optimal is not

possible.y Strategies = compromises that take org. forward.

yManagerial Experience as filter of external and

external stimuli.


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Strategy Development- Perspectives

2. Cultural Perspective

y Logical/Incremental perspectives show what

managers shoulddo, rather than howthe strategy

has arrived.

y Seen through cultural, political and cognitive way,

the strategy development cannot be analyzed

logically.y Core Beliefs- Individual and shared among

managers

y Core Beliefs and assumptions = Paradigm.


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What is a paradigm?

y Set of Beliefs + Assumptions = Paradigm

y Paradigm provides:

yRelatively homogeneous approach to

interpretation of complexity faced by organisation.

y It evolves over time. Rooted in history and

environmental factors.

yOffers quick tools to respond to stimuli.

yProvides unique competence and skills to org.,

leads to competitive advantage.

yCan lead to strategic problems as well.


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Paradigm as filter

y Environmental forces and org capabilities affect

org performance, but dont create strategy.

y People only create strategy, through

cognitive/cultural levels called paradigm.

y Changes may happen but managers may tend to

ignore or give a different meaning as per their

paradigm.y Ex.- ignoring market research findings, relying

on existing ways of doing things,

y Paradigms cause resistance to change


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Model of Paradigm

Environmental Forces &

Org Capabilities

Opportunities and Threats

Strengths and Weakness

Paradigm

Paradigm is a set of beliefs andassumptions which fashions an

organizations view of itself andits environment

Strategy

Performance


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Cultural Web

Paradigm

Power

Control

Rituals

Stories &

Myths

Symbols

Organisation


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Culture Audits by Managers

y Cultural Web can be used for Culture Audit

y Managers can themselves draw the web for their own

organization.

yCases considered:y A Menswear Retailer (1980s)

y Consultancy Partnership firm

y A regional newspaper

y

Own Case (for understanding own company)


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ParadigmsCase A

(MensWear Ret.)

Case B

(consultancy)

Case C

(regional

newsppr)

Own Case

We sell to ladsmarket

Retailing Skills

central

Volume is Vital

Loyalty isimportant

We are biggest,safest

Client

satisfaction most

Professionalism

is imp.Avoid risks

We are innewspaper

business.

Our paid daily

will always be

there Readers will pay

for the news

Advertisers

need newspapers

We are thebiggest

Continuous

Production is

must

Loyalty isimportant

Timely delivery

is most important

We serve the

nation


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Power

Case A

(MensWear Ret.)

Case B

(consultancy)

Case C

(regional newsppr)

Own Case

Chairman is all

powerful, but

nicely Division of

power significant

Insider

experience more

powerful

Unclear,

diffused power

base External power

base clearly

important in

parent audit firm

Parent

company- a

newspaper groupAutocratic CEO

Departmental

Rivalry

External power

base govt

StrongDivisional power

centres.

Autocratic

Divisional CEOs

Inter DivisionalRivalry dominant

Within divisions,

functional rivalry

dominant


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OrganizationCase A

(MensWear Ret.)

Case B

(consultancy)

Case C

(regional newsppr)

Own Case

Highly

compartmentalized

operations with

vertical reporting

Every depts. with

a director- heavy

super structure

Paternalistic

Flat and complex

matrix

Decisions through

a networking system

Vertical,

hierarchical system

Little lateral

communication.

Autocratic style

Vertical

compartments

through Divisions

Paternalistic

Autocratic Style

Decisions flow Top

to Bottom

Control Systems Margin Control

Long established

proven rigid and

complex systems

Emphasis on time

control and

utilization of

consultants

Targeting and

Budgeting

Low cost

operations

Tight financial /

systems controls

Manualization


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Rituals and RoutinesCase A

(MensWear Ret.)

Case B

(consultancy)

Case C

(regional newsppr)

Own Case

Long established

sourcing channels

Induction and

attritions as way of

continuing the

practices

Lack of challenging

Emphasis on gradingsystems

Promotions within

functions

Writing and re-

writing of repots

product of the firm

Partners signature

on anything that

goes to clients

Gentlemanly

behaviors' clientsand partners.

Slave to time, to

meet deadlines

Product delivered

in hours and minutes

Long working

hours

Ritualized

executive meetings

Lack of challenging

Long working

hours.


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y Others in the cultural web

y Stories

y Symbols


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Problems of Strategic Change

y Resistance to Change

y Strategic Drift


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Resistance to Change

y Managers face the challenges through cultural, political,

social norms of organizational life.

y Paradigm limits the options, which are difficult to change.

y

They tighten up the existing ways of operatingy Change process needs to be evolutionary, to beat the

paradigm lock. (No example given)


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Strategic Drift

y Strategic Drift = strategy becoming less and less in line with

the environment of the organization.

y Drift may not be identified till the performance loss is

observed.y Reason- Managers may discount information not conforming

to existing paradigm, but readily accept that which is

conforming.


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Implications for Managing Strategic Change

y Traditional Planning Approaches

y Strategic change is considered as planning of the systems andstructures required for achieving the results in line with logic ofthe strategy. It is merely a planning activity.y

Managers clarify the aims and objectives of long termy Analyze factors affecting the strategy

y Make logical choices

y Implement systematically.

y DisadvantagesyIt neglects socio-political processes that are important to strategyformulation.

y They dont address the process of strategic change

y Useful in a stable economic environment.


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Guidelines for managing strategic change

1. If strategy development comes from the taken-for-grantedassumptions (paradigms), the results too shall be such

2. Take a cultural audit of the firm- the 6 factors leading toparadigm of the managers.y It makes explicit what is taken for granted.

y Generates managerial debates on cultural barriers that can come up.y Cultural aspects cannot be changed unless they are made explicit.

3. Create a climate for change- need widely accepted, crisis/threatas major trigger, , fabricate threats, political maneuvers, etc.Though the fabricated moves may backfire some time.

4. Intervention by outsiders- New CEO, independent directorsetc.

5. Providing signals and symbols- logos, uniforms, status symbolsetc.


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Conclusion

y The article provides framework for org change in terms of

social, political, cognitive and cultural processes.

y Strategic inertia and strategic drift can occur

y

Cultural perspectives can be understood in terms of CulturalWeb comprising of Paradigm, Power structures, Control

structures, Organizational structures, Rituals and routines,

Stories and Myths, and Symbols.

y Incremental /logical perspective doesnt offer a complete

picture of strategic change

y Power of paradigm and the path to change are discussed.

managing strategic change-sk jaiswal

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