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BUSINESS STRATEGYBUSINESS STRATEGY
51110 / MKT300251110 / MKT3002
LECTURE Twelve
Topic 12: Managing strategicchange
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Module 12Module 12
Managing strategic changeanaging strategic changeq Learning outcomes- at the conclusion of this
module, students should be able to:
Describe the main types of strategic change processes; Define a learning organisation; Undertake a forcefield analysis based on cultural web
mapping;
Describe the main styles of managing change; Describe how political processes and change tacticsmight facilitate change; Undertake the role of a change agent and the roles of
others in managing strategic change; and
Understand how effective strategic change relates towider aspects of strategic management.
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Key words and conceptsKey words and conceptsq Transformational change
q Learning organisation
q Forcefield analysis
q Zone of uncomfortable debate
q Education and communicationq collaboration
q intervention
q Direction
q
Coercionq Routines
q Symbols
q Change agent
q Middle managers
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IntroductionIntroduction
q The success of strategic change in anorganisation depends on the extent towhich people change the beliefs andassumptions that they hold and theirbehaviour in their organisational lives.
q Main focus A clear view within an organisation of the
strategy to be followed.
Commitment to change in the organisation.
Managing strategic change is contextdependent.
Paradigm and cultural web.
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Understanding types ofUnderstanding types of
strategic changestrategic change
q Types of strategic change
Incremental change:q Build on skills, routines, and beliefs of organisation.q Change is efficient and likely to win commitment.
q Realignment of strategy based on existing paradigm.
Transformational change:
q Change which cannot be handled within the existingparadigm and organisational routines.
q Make changes to the way of doing things.
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Understanding types ofUnderstanding types of
strategic change (Cont)strategic change (Cont)
Incrementalchange
Transformationalchange
Proactive Tuning Plannedtransformational
Reactive Adaptation Forcedtransformational
Nature of change
Manage
ment
role
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Change and the learningChange and the learning
organisationorganisationq Learning organisation: is capable of benefiting
from the variety of knowledge, experience andskills of individuals through a culture whichencourages mutual questioning and challengearound a shared purpose or vision.
(Johnson & Scholes 1999, p. 498)
q Changes in the business environment need alearning oriented approach.
q Instigate the share of knowledge and information.
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Managed changeManaged change
Unfreezing and the management of change
Unfreezing mechanism
Organisational anticipation
Organisational flux
Information building
Experimentation
Refreezing Sustaining change
Organisational symptoms Stages Pressures for conformity
Questions and challenges
Felt need for change
Competing views of causes
of problems and remedies
Information collection and
political testing of support
New ideas tested out
Early signals made sense
of within paradigm
Political pressures not to
rock the boat
Attempts to reconcile competing
views within current paradigm
Information made sense of
within the paradigm
Resistance to new ideas
or
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Imposed (Forced)Imposed (Forced)
changechange
q Imposed change can be either because of:
changes in the industry environment (eg.Competition, technologies); or
some external agency forces change (eg.
government impose regulation, GST, quality
control).
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Diagnosing strategicDiagnosing strategic
change needschange needs
q Key issues:
Why strategic change is needed; The basis of the strategy (purpose);
Specific directions and methods of strategy
development; and
Changes in strategic architecture required.
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Detecting strategic driftDetecting strategic drift
q Strategic drift: occurs when the organisationsstrategy gradually moves away from relevance tothe forces at work in the environment.
q Symptoms: Little toleration of questioning or challenge in the
organisation;
Major power blockage to change;
An organisation with little focus on the externalenvironment; and
Deteriorating relative performance.
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Identifying forces blockingIdentifying forces blocking
and facilitating changeand facilitating change
q Cultural web
Stories, symbols, power, organisation,controls, rituals and routines, and
paradigm.
q Forcefield analysis
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An openness to changeAn openness to change
q Zone of uncomfortable debate (ZOUD):
encompasses sensitive aspects of the
organisation and managerial attitudes and beliefs
which tend to be avoided in open discussion.
(Johnson & Scholes 1999, p. 498)
q Managers have to enter the ZOUD to discuss and
tackle issues formally to overcome those
blockages to change.
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Managing strategicManaging strategic
change processchange process
q Changes in structure and control systems
(chapter 9 and 10)
q Styles of managing change (differ betweencontexts and circumstances)
Education and communication
Collaboration
Intervention
Direction
Coercion
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Managing strategicManaging strategic
change process (Cont)change process (Cont)
q Changes in organisational routines
q Symbolic processes in managing change
The creation and manipulation of symbols has impact to
reshape beliefs and expectations (eg. uniforms,
information and control system)
q Power and political processes in managing
change
Reconfiguration of power, acquiring additionalresources, building alliances.
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Managing strategicManaging strategic
change process (Contchange process (Contq Communicating change
Change in strategic direction is complex;
Communicate the priorities of the strategy; Gathering feedbacks;
Involvement of staff members; and
The need of knowing what will happen from the staffmembers perspective.
q Change tactics Timing.
Job losses and de-layering.
Visible short-term wins.
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Roles in the changeRoles in the change
processprocessq Three key categories
The change agent;
Middle managers; and
Other organisational members (eg. External
stakeholders, outsiders).
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The change agentThe change agent
q The change agent: is the individual or group that
effects strategic change in an organisation.
(Johnson & Scholes 1999, p. 530)
q Characteristics:
Sensitive to internal and external context of change (eg.
values & beliefs of organisation, environmental factor
-competition)
Understand the required strategic architecture.
Employ appropriate style of managing change.
Have visionary capacity, good at team building and
playing, self-analytical.
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Middle managersMiddle managers
q Middle managers are implementors of
strategy and their roles include:
Allocation and control of resources;
Monitoring performance and behaviour of
staff members
Explaining strategy to their subordinates.
q
They could also be blocking the changeprocess.
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Other organisationalOther organisational
membersmembersq External stakeholders
Influences will be based on their level of interest andpolitical power.
Approaches to managing change will differ from
different stakeholders.
q Outsiders A new CEO brings a fresh perspective on the
organisation.
New middle and senior executives require adequatesupport from the CEO to manage the change processeffectively.
Consultants the symbolic importance of the changeprocess.
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Managing strategic changeManaging strategic change
and strategic managementand strategic managementq Environmental assessment
Managers and staff in the organisation should
continually monitor the environment to determine the
effectiveness of the changed process.q Leading change
Managing change is not just a concern of following a set
of activities.
Changes should be made on the basis of organisationalcontext and the values and beliefs within the
organisation.
q Linking strategic and operational change
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Managing strategic changeManaging strategic change
and strategic managementand strategic management
(Cont)(Cont)
q Strategic human resources management
Integrating HR policies with the strategies and the strategic
change process. Eg. Training, salary packages.
q Coherence in managing change.
Consistency between the intended strategy. Eg. Strategic
objectives, staff members behaviour in reinforcing the
strategy. Strategic change is consistent with the environmental
changes.
The strategy is feasible (the organisation has the required
resources).
Strategic direction aims to achieve competitive advantage.
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Lectureecture 122 reviewreviewq Understanding types of strategic change
q
Diagnosing strategic change needsq Managing strategic change processes
q Roles in the change process
q Managing strategic change and strategic
management
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Next lecture and tutorialNext lecture and tutorial
qUnit revision.
q
Exam preparation.qNo tute
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