Slide 10.1 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 WEEK 5 A framework for change Approaches and choices (Chapter 10)

Slide 10.2 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Lecture 5 Learning outcomes Exploring the varieties of approaches to change Exploring the varieties of approaches to change The contingency approach to change The contingency approach to change The new paradigms of change The new paradigms of change Organisational culture and change Organisational culture and change The Japanese approach to change The Japanese approach to change Organisational Learning and change Organisational Learning and change

Slide 10.3 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 As Stickland (1998: 14) remarks:... the problem with studying change is that it parades across many subject domains under numerous guises…………………….. Change is multi-disciplinary

Slide 10.4 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Varieties of change – 1 Smooth incremental, covering slow, systematic, evolutionary change. Smooth incremental, covering slow, systematic, evolutionary change. Bumpy incremental, pertaining to periods where the smooth flow of change accelerates. Bumpy incremental, pertaining to periods where the smooth flow of change accelerates. Discontinuous change, which is similar to the punctuated equilibrium model. Discontinuous change, which is similar to the punctuated equilibrium model. Senior (2002)

Slide 10.5 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Top-down systemic change aimed at transforming the organisation. Top-down systemic change aimed at transforming the organisation. Piecemeal initiatives devised and implemented by departments or sections in an unconnected fashion. Piecemeal initiatives devised and implemented by departments or sections in an unconnected fashion. Bargaining for change where a series of targets are jointly agreed between managers and workers, but are pursued in a piecemeal fashion. Bargaining for change where a series of targets are jointly agreed between managers and workers, but are pursued in a piecemeal fashion. Systemic jointism where managers and workers agree a total package of changes designed to achieve organisational transformation. Systemic jointism where managers and workers agree a total package of changes designed to achieve organisational transformation. Storey (2002) Varieties of change – 2

Slide 10.6 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 A Contingency approach Turbulent times demand different responses in varied circumstances. So managers and consultants need a model of change that is essentially a ‘situational’ or ‘contingency model’, one that indicates how to vary change strategies to achieve ‘optimum fit’ with the changing environment. (Dunphy and Stace, 1993: 905)

Slide 10.7 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Criticisms of contingency Ignores environmental manipulation Ignores environmental manipulation Ignores managerial choice Ignores managerial choice Ignores the difficulty of changing structures, cultures and managerial behaviour Ignores the difficulty of changing structures, cultures and managerial behaviour Assumes that survival depends on being the best. Assumes that survival depends on being the best.

Slide 10.8 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Figure 10.1 Varieties of change

Slide 10.9 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Figure 10.2 Change continuum

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Figure 10.3 Approaches to change

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Figure 10.4 Speed and focus of change

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Figure 10.5 A framework for change

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Organisational change Summary There are many approaches to change There are many approaches to change All tend to be situation-specific All tend to be situation-specific Managers can influence situational constraints Managers can influence situational constraints Organisations can exercise choice in: Organisations can exercise choice in: What to change What to change How to change it How to change it When to change. When to change.

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 In search of new paradigms (Chapter 3)

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Describing organizational culture ( Senior & Fleming) Artefacts Artefacts Language in the form of jokes, metaphors, stories, myths and legends Language in the form of jokes, metaphors, stories, myths and legends Behaviour patterns in the form of rites, rituals, ceremonies and celebrations Behaviour patterns in the form of rites, rituals, ceremonies and celebrations Norms of behaviour Norms of behaviour Heroes Heroes Symbols and symbolic action Symbols and symbolic action Beliefs, values, attitudes Beliefs, values, attitudes Ethical codes Ethical codes Basic assumptions Basic assumptions History History

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Culture–Excellence Key figures Tom Peters and Robert WatermanTom Peters and Robert Waterman Rosabeth Moss KanterRosabeth Moss Kanter Charles HandyCharles Handy Core concept: Culture determines Performance.

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Organisational culture Why does it matter? Peters and Waterman found a strong link between excellence (good performance) and organisational culture.

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited S framework

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Peters and Waterman Eight key attributes of excellent organisations 1. Bias for action 2. Closeness to the customer 3. Autonomy and entrepreneurship 4. Productivity through people 5. Hands-on, value-driven 6. Stick to the knitting 7. Simple form, lean staff 8. Simultaneous loose–tight properties.

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Rosabeth Moss Kanter (1989) When giants learn to dance: mastering the challenges of strategy, management, and careers in the 1990s Kanter’s Post-entrepreneurial model Restructuring to find synergies Restructuring to find synergies Opening boundaries to form strategic alliances Opening boundaries to form strategic alliances Creating new ventures from within – encouraging innovation and entrepreneurship. Creating new ventures from within – encouraging innovation and entrepreneurship.

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Charles Handy (1989) The age of unreason The world is changing, therefore, organisations must change. In future, organisations must be Knowledge-based Knowledge-based Run by a few smart people Run by a few smart people Populated by a host of smart machines. Populated by a host of smart machines.

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Charles Handy Emerging organisations The Shamrock organisation The Shamrock organisation 3 distinct groups of staff 3 distinct groups of staff Core, Contractual Fringe, Flexible Labour Force Core, Contractual Fringe, Flexible Labour Force The Federal organisation The Federal organisation Network of individual organisations allied to achieve a common purpose Network of individual organisations allied to achieve a common purpose The Triple I organisation. The Triple I organisation. Information, Intelligence, Ideas = added value Information, Intelligence, Ideas = added value

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Changing organizational culture to bring about organizational change ( Senior & Fleming) Assessing cultural risk Assessing cultural risk The relevance of culture change to organizational change The relevance of culture change to organizational change (1) Ignoring the culture (1) Ignoring the culture (2) Managing around the culture (2) Managing around the culture (3) Changing the culture (3) Changing the culture (4) Changing the strategy to match the culture (4) Changing the strategy to match the culture

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Summary Organisations must promote Strong, flexible cultures Strong, flexible cultures Innovation and entrepreneurship Innovation and entrepreneurship Teamwork and individual enterprise and development Teamwork and individual enterprise and development Reward systems based on contribution and not position Reward systems based on contribution and not position Brain power and not muscle power Brain power and not muscle power Flat, anti-hierarchical structures Flat, anti-hierarchical structures Small corporate and middle management staffs Small corporate and middle management staffs Tight control of a few key measures Tight control of a few key measures Continuous, radical change. Continuous, radical change.

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Criticisms Empirical evidence does not stand up Empirical evidence does not stand up Back to ‘one best way’ Back to ‘one best way’ Assumes all organisations face the same problems and opportunities Assumes all organisations face the same problems and opportunities People are the chief asset but... People are the chief asset but... are easily discarded are easily discarded compete with each other compete with each other not all are treated the same way not all are treated the same way Culture is the great cure-all Culture is the great cure-all What about the Japanese? What about the Japanese?

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The Japanese approach Distinct features Personnel policies (soft) Personnel policies (soft) Business practices and work systems (hard) Business practices and work systems (hard) Effectiveness comes from the ability to combine soft and hard practices.

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The Japanese approach (Continued) Personnel policies (soft) Lifetime employment Lifetime employment Internal labour market Internal labour market Seniority-based promotion and rewards Seniority-based promotion and rewards Teamwork and bonding Teamwork and bonding Enterprise unions Enterprise unions Training and education Training and education Company welfarism. Company welfarism.

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The Japanese approach (Continued) Designed to promote: Loyalty and gratitude Loyalty and gratitude Commitment Commitment Sense of security Sense of security Hard work and improvement Hard work and improvement Co-operation not conflict Co-operation not conflict Self-development. Self-development.

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The Japanese approach (Continued) Long-term planning Long-term planning 15 years 15 years Market growth Market growth Low dividends Low dividends Low profits. Low profits. Business practices and work systems (hard)

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The Japanese approach (Continued) Timeliness Fast product development Fast product development JIT JIT Right first time. Right first time.Quality Total quality approach Total quality approach Continuous improvement. Continuous improvement.

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The Japanese approach Summary Values and promotes loyalty Values and promotes loyalty Slow promotion Slow promotion Seniority principle Seniority principle Lifetime employment Lifetime employment Paternalistic and deferential Paternalistic and deferential Slow, collective decision-making Slow, collective decision-making Change is continuous, incremental, bottom-up but within an overall company vision.

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The Japanese approach Criticisms Two-tier labour markets Two-tier labour markets Lifetime employment = slavery Lifetime employment = slavery Teamwork = coercive pressure Teamwork = coercive pressure Enterprise unions = exploitation Enterprise unions = exploitation Cannot accommodate globalisation and workforce diversity Cannot accommodate globalisation and workforce diversity Threatened by economic shocks. Threatened by economic shocks.

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Organisational learning Some definitions Organizational learning is the process by which the organization’s knowledge and value base changes, leading to improved problem-solving ability and capacity for action (Probst and Buchel, 1997: 15).Organizational learning is the process by which the organization’s knowledge and value base changes, leading to improved problem-solving ability and capacity for action (Probst and Buchel, 1997: 15). A learning organization is an organization skilled at creating, acquiring and transferring knowledge, and at modifying behavior to reflect new knowledge and insights (Garvin, 1993: 80).A learning organization is an organization skilled at creating, acquiring and transferring knowledge, and at modifying behavior to reflect new knowledge and insights (Garvin, 1993: 80).

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Organisational learning (Continued) Organizational learning means the process of improving actions through better knowledge and understanding (Fiol and Lyles, 1985:803). Organizational learning means the process of improving actions through better knowledge and understanding (Fiol and Lyles, 1985:803). An entity learns if, through its processing of information, the range of its potential behaviors is changed (Huber, 1991: 89). An entity learns if, through its processing of information, the range of its potential behaviors is changed (Huber, 1991: 89). Organizational learning occurs through shared insight, knowledge and mental models and builds on past knowledge and experience, that is, on memory (Stata, 1989: 64). Organizational learning occurs through shared insight, knowledge and mental models and builds on past knowledge and experience, that is, on memory (Stata, 1989: 64).

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Positives A rich, multi-dimensional concept affecting many aspects of organisational behaviour. A rich, multi-dimensional concept affecting many aspects of organisational behaviour. An innovative approach to learning, to knowledge management and to investing in intellectual capital. An innovative approach to learning, to knowledge management and to investing in intellectual capital. A new set of challenging concepts focusing attention on the acquisition and development of individual and corporate knowledge. A new set of challenging concepts focusing attention on the acquisition and development of individual and corporate knowledge. An innovative approach to organisation, management and employee development. An innovative approach to organisation, management and employee development. Innovative use of technology to manage organisational knowledge through databases and internet or intranets. Innovative use of technology to manage organisational knowledge through databases and internet or intranets. Organisational learning (Continued)

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Organisational learning (Continued) Negatives A complex and difficult set of practices, difficult to implement systematically. A complex and difficult set of practices, difficult to implement systematically. An attempt to use dated concepts from change management and learning theory, repackaged as a management consulting project. An attempt to use dated concepts from change management and learning theory, repackaged as a management consulting project. A new vocabulary for encouraging employee compliance with management directives in the guise of ‘self-development’. A new vocabulary for encouraging employee compliance with management directives in the guise of ‘self-development’. An innovative approach for strengthening management control. An innovative approach for strengthening management control. A technology-dependent approach that ignores how people actually develop and use knowledge in organisations. A technology-dependent approach that ignores how people actually develop and use knowledge in organisations. (From Huczynski and Buchanan, 2001: 135)

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Organisational learning Summary Survival depends on the organisation learning (adapting) at the same rate or faster than the environment changes. Survival depends on the organisation learning (adapting) at the same rate or faster than the environment changes. Learning must become a collective and not just an individual process. Learning must become a collective and not just an individual process. There must be a fundamental shift towards systems (or triple-loop) thinking by an organisation’s members. There must be a fundamental shift towards systems (or triple-loop) thinking by an organisation’s members. This gives an organisation the ability to adapt to, influence and even create its environment. This gives an organisation the ability to adapt to, influence and even create its environment. Change comes from learning and learning comes from change.

Slide Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Organisational learning Criticisms No agreed definition No agreed definition Scarcity of rigorous empirical evidence Scarcity of rigorous empirical evidence Organisations do not learn – people learn Organisations do not learn – people learn It requires the creation of organisational diversity and consensus at the same time. It requires the creation of organisational diversity and consensus at the same time.