Summary Organizational change

Summary Organizational Change
Pre-Msc HRM, January 2016

,Chapter 1
Organizations and their changing environments

1.1 A view or organizations
 Characteristics of an organization:
o People interacting in some kind of structured way to achieve some
defined purpose or goal  as entity
o The activities of individual organizational members and their interactions with one
another imply processes through which work gets done in order to achieve the
organization’s purposes or goals  way of organizing
o Requirement for decision-taking about the processes (means) by which the goals
(ends) are achieved
o Geographic and product/market boundaries


Organization (Daft, 1989) = a social entity that has a purpose, has a boundary, so that some participants are
considered inside while others are considered outside, and patterns the activities of participants into a
recognizable structure.


 Environment: All those influences that may act to disturb organizational life but
are not considered directly part of it (Butler, 1991)
 Formal subsystem: Management, strategy, goals, structure, operations, technology
 Informal subsystem: Patterns of communication, power and influence and norms
(culture, politics, leadership)
 Inputs: Materials & resources
 Outputs: Organizational goal achievement & employee satisfaction


Social action approach (Silverman, 1970) = individuals and groups with multiple different interests, who
construe their actions in many different ways.


 Organization as (Stacey’s, 2003):
- Complex system = notion of unpredictability by emphasizing the multitude of interactions in and
between the individual, social, organizational and environmental domains.
- Open system = transform inputs into outputs and strategies employed are influenced by both
historical and contemporary environmental demands, opportunities and constrains


Mechanistic (Burnes & Stalkers, 1966) = as systems of strict hierarchical structures and lines of control.


Operational environment  3 types of environment  although misses the degree of strength of the winds of
change.


1.2 Historical context for change
1. Historical context of change (figure 1.2) = temporal environment
o Task orientated  with effort being put into increasing production through more effective
and efficient = suppliers market

, o Product/service design time  Command and control – bureaucratic structures – “one best
way” = suppliers market
o Systems/process orientated time  Technological = suppliers market
o Value-orientated time  identifying costumer expectations – production more responsive to
customer – knowledge, intelligence and creative thinking improve competitiveness = buyers’
market


1.3 An uncertain future
 Future organizations would be almost wholly information based  organizations as symphony orchestra.


1.4 Environmental triggers of change
 Environmental triggers of change:
o Melt-down of banking & financial structures
o Election of Barack Obama
o Baby P


Environment (Brooks, 2004) = a general concept which embraces the totally of external environment forces
which may influence any aspect of organizational activity  construction of reality, arise from the following:
1. Characteristics and experiences of the people filtering information from the environment
2. Culture
3. Politics and structures
4. Development of the past
5. How the business sector as a whole interprets the information


2. PESTLE – model  external factors triggers of change = PEST Framework
o Political
o Economic
o Socio-cultural
o Technological
o Legal
o Ecological


3. Internal triggers for change = Internal environment
o Recognize or not recognize a union
o A new chief executive or manager
o Realization that operating structures are performing poorly
o The redesign of jobs and working relationships among a work group
o The redesign of a factory or office lay-out
o Adoption of new technology
o New marketing strategy


1.5 Organizational responses to change
 Five levels of environmental turbulence (Ansoff & McDonnel, 1990):
1. Predictable  future is expected to be the same as the past

, 2. Forecastable by extrapolation  complexity increases, but still extrapolate and forecastable with
confidence
3. Predictable threats and opportunities  complexity increases further; organizations ability to
respond becomes more problematic; future can still be predicted with some degree of confidence
4. Partially predictable opportunities  turbulence increases with addition of global and socio-
political changes; future is partly predictable = far from certainty
5. Unpredictable surprises  Turbulence increases further; unexpected events; organization cannot
respond that quickly = far from certainty


 Three different kinds of change situation (Stacey, 1996):
1. Closed change
2. Contained change
3. Open-ended change = far from certainty


 Strebel (1996):
o Strong change force = substantial decline or improvement in performance
o Moderate force for change = minor impact on performance
o Weak force for change = nature and direction difficult to discern

,Chapter 2
The nature and organizational change

2.1 Types of change
 Model Grundy (1993) “three varieties of change”:
o Smooth incremental = change that evolves slowly, systematic and predictable
 Constant rate
o Bumpy incremental change = periods of relative tranquility punctuated by acceleration in the
pace of change
 Triggers are internal and from the environment
o Discontinuous change = rapid shifts in strategy, structure or culture or in all three
 Higher level of environmental turbulence
 Divergent breakpoint (Strebel, 1996) is a change that results from the discovery of a
new business opportunity, such as new ways of communication
 This model is simplistic and based on observations alone


 Model Balogun & Hope-Hailey’s (2004) “types of change” – change paths:


Scale
Transformation Realignment



EVOLUTION ADAPTION Incremental




REVOLUTION RECONSTRUCTION

Big bang




 Model Tushman, Newman & Romanelli (1988) of “organizational life”
o Fine-tuning  doing better what is already done
o Incremental adaptations  small changes in response to minor shifts in the environment
o Frame-breaking  revolutionary change in that the shifts reshape the entire nature of the
organization


 Frame breaking (Tushman et al., 1988)
o Discontinuous change springs from:
 Industry discontinuities
 Product life cycle shifts

,  Internal company dynamics
o Frame-breaking evolves the following features:
 Reformed mission and core values
 Altered power and status
 Reorganization
 Revised interactions patters
 New executives
o Reasons for rapid, simultaneous implementation:
 Synergy – the need for all units to pull together
 Pockets of resistance
 Pent-up need for change
 Riskiness and uncertainty


 Model Bolagun & Tushman have in common  aim of maintaining the fit between organizational strategy,
structure and processes.


 Model Plowman et al. (2007) “Four types of change”:
1. Continuous & convergent – improving systems and practices – organizational template
2. Episodic & convergent – more quickly – perhaps as result of specific shock or crisis – negative
feedback pushes minor changes
and keeps the template in shape
3. Episodic & radical – quickly – result
of major shock or crisis – template
is altered – new top management,
team or strategy
4. Continuous and radical – arises out
of an accumulation of small
changes – lead to a new template –
if successful new rules, values and
norms




 Model Dunphy & Stace (1993) – scale of change (ch6)
o Type 1: fine tuning
 Fit between organization’s strategy, structure, people
 Departmental/ divisional levels
 Refining policies, methods and procedures for example
o Type 2: incremental adjustment
 Distinct modifications to corporate business strategies, structures and management
processes
 Improved production technology
 Articulating a modified statement of mission to employees

, o Type 4: modular transformation
 Major realignment of one or more divisions
 Major restructuring of particular departments
 Changes in key executives and managerial appointments
 Reformed divisional goals
o Type 5: corporate transformation
 Corporation wide
 Radical shifts in business strategy
 Revolutionary changes throughout the whole organization
 Reformed mission and core values
 Reorganization


Convergent = this is fine-tuning of an existing configuration. The organizational configuration or template is not
itself changed.
Radical = breaking away from position such that a very different position is reached. Organizations or parts of
them can be seen as being transformed from one template or blueprint to another. Also known as frame-
bending.
Planned = deliberate actions designed to move an organization or part of one from one state to another;
discrete beginning and end points. Change is seen as something that managers can control.
Evolutionary = as its name suggest, slow adaptation of existing systems or structures. Also termed in
continuous change. Although small in nature, changes are not trivial and are cumulative. They can trigger
radical change.
Revolutionary = fast paced, which affects all or most of an organization at the same time. Typically a planned
move from one strategy and/or structure to another. It incorporates the idea of episodic change which is
intentional but is infrequent, not continuous.
Emergent = if the organization is seen as an evolving system then changes arises out of experimentation and
adaptation. Change is seen as something that managers create the right climate for.



 Planned vs. emergent change
o Emergent change = the organizational system is constantly sensing its environment in order
to continuously adjust to maintain its purpose and optimum state.
 Emergent change has to be planned
o Planned change = describes situations where a change agent takes deliberate actions with the
aim of moving an organization or part of one from one state to another.
 Planned change can be emergent
 Distinction is not clear cut according to Wilson (1992): the planned systematically view does not take
account of the context in which change must take place; for instance, the cultural and political
components that influence most


Double-edged sword = the habits, patterns of behavior finding out the best way to do things and commitment
to values that have been built up during periods of converging change can contribute significantly to the
success of the organization  can also become a source of resistance

, Paradigm (Johnson, 1988) = describe the core set of beliefs and assumptions held commonly by the managers
of an organization.


 Logic incrementalism: Quinn (1980) criticized the idea of planned change (summarized by Stacy, 2003):
o Effective managers do not manage strategically in a piecemeal manner. The destination is
intended.
o The route to the destination is not intended. They know the environment is uncertain and
ambiguous. They therefore sustain flexibility by holding open the method of reaching the
goal.
o Strategy emerges from interaction between different groups of people. These different
pressures are orchestrated by senior managers. The top is always reassessing, integrating and
organizing.
o The strategy emerges in small incremental steps, opportunistic steps. This evaluation is not
piecemeal or haphazard which provides the logic in incremental action.
o The result is an organization that is feeling its way towards a known goal, opportunistically
learning as it goes.


2.2 Predictable change
 Organizational life cycle (Greiner, 1972)  useful to describe the stages organizations go through as they
grow and develop.
1. Entrepreneurial stage
2. Collective stage (shaping)
3. Formalization stage
4. Elaboration stage (strategic)



 Table 2.1




2.3 Complexity theory
 Burnes (2005)  a set of ideas stemming from the study of natural systems such as weather patterns and
animal behavior and which draws on mathematical principles to help explain how organizations behave, like
natural systems.