Conflict and Change Management Night 1 Dr. Roy Philip

Rapidly Changing World Change is accelerating Power shifting from sellers to buyers The power of the Internet Unlimited substitution over competition Leadership and management domain is worldwide now Knowledge age New world

Why Firms Fail Allowing Too Much Complacency Failing to Create Sufficiently Powerful Guiding Coalition Underestimating the Power of Vision Undercommunicating the Vision by a Factor of 10 (or 100, or even 1,000) Permitting Obstacles to Block the New Vision Failure to Create Short-Term Wins Declaring Victory Too Soon Neglecting to Anchor Changes Firmly in the Corporate Culture

Consequences of Errors New Strategies aren’t implemented well Acquisitions don’t achieve expected synergies Reengineering takes too long and costs too much Downsizing doesn’t get costs under control Quality programs don’t deliver hoped-for-results

Forces driving the need for major change Technological Change Faster and better communication Faster and better transportation More information networks connecting people globally McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc. All rights reserved.

Forces driving the need for major change Technological Change International Economic Integration Faster and better communication Faster and better transportation More information networks connecting people globally Fewer tariffs (GATT) Currencies linked via floating exchange rates More global capital flows McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc. All rights reserved.

Forces driving the need for major change Technological Change International Economic Integration Maturation of markets in developed countries Faster and better communication Faster and better transportation More information networks connecting people globally Fewer tariffs (GATT) Currencies linked via floating exchange rates More global capital flows Slower domestic growth More aggressive exporters More deregulation McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc. All rights reserved.

Forces driving the need for major change Technological Change International Economic Integration Maturation of markets in developed countries Fall of communist and socialist regimes Faster and better communication Faster and better transportation More information networks connecting people globally Fewer tariffs (GATT) Currencies linked via floating exchange rates More global capital flows Slower domestic growth More aggressive exporters More deregulation More countries linked to the capitalist system More privatization McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc. All rights reserved.

Forces driving the need for major change The Globalization of Markets and Competition More Hazards More competition Increased speed More Opportunities Bigger markets Fewer barriers More Large-scale change in organizations To avoid hazards and/or capitalize on opportunities, firms must become stronger competitors. Typical transformation methods include: Reengineering Mergers and acquisitions Restructuring Strategic change Quality programs Cultural change McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc. All rights reserved.

Kotter’s Eight-Stage Change Process Establishing a Sense of Urgency Communicating the Change Vision Consolidating Gains and Producing More Change Creating the Guiding Coalition Empowering Broad-based Action Anchoring New Approaches in the Culture Developing a Vision and Strategy Generating Short-term Wins

Kotter’s Eight-Stage Change Process Defrost Hardened Status Quo Anchoring New Approaches in the Culture Establishing a Sense of Urgency Communicating the Change Vision Consolidating Gains and Producing More Change Generating Short-term Wins Empowering Broad-based Action Developing a Vision and Strategy Creating the Guiding Coalition Introduce New Practices Grounds and Sticks the Change

Management The process of achieving organizational goals by engaging in the four major functions of planning, organizing, leading, and controlling. It characterizes the process of planning, leading, and directing all or part of an organization, through the deployment or manipulation of resources

Leadership Leadership is the ability to influence others towards the achievement of goals

Management vs. Leadership Planning and budgeting Organizing and staffing Controlling and problem solving Establishing direction Aligning people Motivating and inspiring Produces a degree of predictability and order and has the potential to consistently produce the Short-term results expected by various stakeholders (e.g. for customers, always being on time, for Stock-holders, being on budget) Produces change, often to a dramatic degree, and has the potential to produce extremely useful change (e.g. new products that customers want, new approaches to labor relations that help make a firm more competitive)

Management vs. Leadership -1 Management aims to give consistency and order to organizations Leadership seeks to provide constructive and adaptive change Management is directed toward coordinating activities in order to get the job done Leadership is concerned with the process of developing mutual purposes. McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc. All rights reserved.

Management vs. Leadership -2 Management relies more on a one-way authority relationship Leadership relies more on a multidirectional influence relationship Managers are people who do things right Leaders are people who do the right things McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc. All rights reserved.

Three Competencies of Leadership DIAGNOSIS ADAPTING COMMUNICATING McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc. All rights reserved.

Need for Management Skills Managerial Skills and Life Success Managerial Skills and Hiring The Need for Management Skills Managerial Skills in the New Work Environment

16 Basic Skills Employees Need Knowing How to Learn Reading Writing Mathematics Listening Oral Communication Problem Solving Creative Thinking Self-Confidence Motivational Goal Setting Personal and Career Development Interpersonal Skills Negotiation Teamwork Organizational Effectiveness Leadership

Ranking of HR Managers’ Perceptions of Criteria for Evaluating Business Graduates

Managerial Skills in the New Work Environment Growth in Management Positions Entrepreneurship Demand for Managerial Skills Hiring for the Second Job Downsizing and Delayering Self-Managed Work Teams Job Enrichment and Empowerment

Managerial Skills Top-Level Managers Middle-Level Managers First-Level Managers Conceptual Human Technical

Lewin’s Model REFREEZE UNFREEZE CHANGE

3. Sequence of change Change typically involves a three step process that follows the sequence: Unfreezing the restraining forces that maintain the status quo UNFREEZE MOVE REFREEZE Moving the organisation to a new state Refreezing to consolidate the change

3. Sequence of change - Example Freezing in order to take stock, identify patterns and highlight what is happening FREEZE REBALANCE UNFREEZE Rebalancing – reinterpreting history, identifying and amplifying best practice and re-sequencing patterns Unfreezing to enable patterns of activity to resume with fewer blockages.