What Changes in Organizations
PERTEMUAN 7
Readiness To Change
SI-FASILKOM
What Changes in Organizations
What Changes in Organizations http://gsme.sharif.edu/~change/Scale of Change Scale of Change Scale of Change:
st
- nd
1 order First-order change:
- 2 order
Incremental st ◦ ◦ Maintains and develops the organization
Between 1 & nd
- – adjusting systems, processes,
2 Order Change
structures, but not strategies and values E.g. continuous and smaller changes to ◦ the structure of an organisation
Types of Change:
Second-order change:
Downsizing
- ◦ Transformational
Technological
- Mergers
- Key Change
◦ Fundamentally changes the way an
- Challenges
organization functions
◦ E.g. downsizing
Scale of Change Scale of Change Scale of Change:
st 1 order
- nd
First-order change:
2 order
- st
◦ Taking of individual initiatives
Between 1 & nd ◦ Development of local routines
2 Order Change
Second-order change:
◦ Move from entrepreneurial to
Types of
professional management structure
Change: Downsizing
- Technological
◦ Revitalization of already-established
- company
Mergers
- Key Change
- Challenges
◦ Visionary change in the business
st nd st nd Beyond 1 & 2 Order Change Beyond 1 & 2 Order Change
Scale of Change: st
- nd
1 order Mid-range changes
- 2 order
◦ Overcomes inertia but is not st revolutionary Between 1 & nd
◦ Avoids the alarming implications of
Change large scale change
Punctuated equilibrium
Types of ◦ Long periods of stability followed by Change:
short bursts of change and instability
Downsizing
- Technological
Robust transformation
- Mergers
- Key Change
◦ Considers environmental conditions
- Challenges
as being temporary and requiring
robust responses including the enactment of new capabilities.
Types of Change Types of Change
Scale of Change: st 1 order
- nd
DOWNSIZING
2 order
st Approaches to downsizing:
Between 1 & nd
◦ Retrenchment
2 Order Change
◦ Downscaling
◦ Downscoping Types of
Change:
Does not necessarily lead to Downsizing
increased productivity
- Technological
- Mergers
-
Can be an excessively costly
Key Change
- Challenges
exercise
Types of Change Types of Change
Scale of Change: st 1 order
- nd
TECHNOLOGICAL CHANGE
2 order
st There are a variety of new
Between 1 & nd technologies being used, for
2 Order
example:
Change
◦ Customer relationship management (CRM) systems
Types of Change: ◦ Enterprise resource planning (ERP)
Downsizing
- Wireless technology
◦ Technological
- Mergers
- Key Change
◦ Business process reengineering
- (BPR)
Challenges
◦ Six Sigma
Types of Change Types of Change
Scale of Change: st MERGERS AND ACQUISITIONS nd 1 order
- st
- Between 1 & nd an accelerated rate
- Technological
- ◦ New product or market investment
- Key Change
- Challenges
- 1 st
- 2 nd
- Downsizing
- Technological
- Mergers
- Key Change Challenges
- interconnectedness.
-
- Advantages
- – The key focus here is on six variables – purpose,
- Organization
- –
- components that affect organizational effectiveness – structure, systems, style, staff, skills, strategy and
- –
- Components
- Readiness for Change
- Components
- Readiness for Change
- Components
- Readiness for Change
- – task, individuals, formal organizational arrangements and informal organisation. This is influenced by the
- environment, mission and strategy, leadership and
- organizational culture - and transactional sources of change.
- Components
- Readiness for Change
- Components
- Readiness for Change
- ◦ This is a tool used for reviewing the organization’s
- position based on where they are and where they want to get to.
- and routines, stories, symbols, control systems,
-
- Organization
- Components
2 order
Enable organizational growth at
2 Order
Change
Types of mergers and
acquisitions: Types of◦ Excessive capacity
Change:
Downsizing
◦ Neighbouring market expansion
Mergers
◦ Research and development
◦ Leveraging to create industries
Key Change Challenges Key Change Challenges
Scale of Change:
order
Avoiding “hard landings”.
Choice of technology Cultural adjustment. Minimizing political behavior and loss of teamwork.
Identifying political
barriers.
Balancing change and continuity.
Cultural adjustment. Contingency planning Power structure. Choice of restructuring technique
Communication This table outlines the key change challenges for the three types of change. These issues need to be addressed when managing change:
Downsizing New Technologies Mergers & Acquisitions Employee retention. Goal synthesis. Cost savings.
order Between 1 st &
2 nd Order Change
Types of Change:
Survivor syndrome The IT team. Due diligence. Communication Communication Employee retention Due diligence Time frame. Contingency planning.
Diagnosis for Change
Diagnosis for Change
http://gsme.sharif.edu/~change/Advantages of Diagnostic Tools Advantages of Diagnostic Tools
Advantages Help understand what to change, how and why. of diagnostic
Simplify a complex situation. tools
Identify priorities for attention.
Diagnostic Highlight various organizational properties (e.g. Models:
strategy and structure) and their
Organization
Components
Provide a common “language” with which to
Readiness for discuss organizational characteristics. Change
Provide a guide to the sequence of actions to take in a change situation.
Help us be more efficient and rational as we attempt to understand and change an organization.
Diagnostic Models: Organization Diagnostic Models: Organization
Six-box organizational model:
of diagnostic
structure, rewards, helpful mechanisms, relationship and
tools
leadership. This model is useful to maintain awareness of all areas for consideration even though one variable
Diagnostic may be identified as the main area for attention. Models:
The 7-S framework: this focuses on seven key
Components
Readiness for
superordinate goals. The interconnectedness of these
Change variables is vital to the success of change.
Star model:
An organization is effective when the five components of organizational design – strategy, structure, processes and later capability, reward systems and people practices – are in alignment.
Diagnostic Models: Organization Diagnostic Models: Organization
Six-box
Advantages
organizational
of diagnostic tools model
Diagnostic Models: Organization
Diagnostic Models: Organization Diagnostic Models: Organization
Advantages
of diagnostic tools
Diagnostic Models: Organization
Diagnostic Models: Organization Diagnostic Models: Organization
Advantages
Star model
of diagnostic tools
Diagnostic Models: Organization
Diagnostic Models: Organization Diagnostic Models: Organization
Congruence model:
Advantages
◦ The organization is broken down into four components
of diagnostic
tools
context where the strategy is formulated and the output is then the performance of the organization.
Diagnostic
Burke-Litwin model: Models:
◦ This model identifies the transformational – external Organization
Components
Readiness for
Four frame model:
Change ◦ This offers four frames for the managers to
conceptualize how the organization operates. These frames are structural, human resource, political and symbolic frames.
Diagnosis by image:
◦ This technique allows organizational members to use images to describe the organizations and this can be used as a basis for discussion.
Diagnostic Models: Organization Diagnostic Models: Organization
Advantages
Congruence model
of diagnostic tools
Diagnostic Models: Organization
Diagnostic Models: Organization Diagnostic Models: Organization
Burke-Litwin
Advantages
model
of diagnostic tools
Diagnostic Models: Organization
Diagnostic Models: Components Diagnostic Models: Components
PESTEL Framework
Advantages
◦ This analyses the external environment in terms of six
of diagnostic
factors – political, economic, social, technological,
tools environmental and legal.
Scenario analysis
Diagnostic ◦ Creates stories of possible future scenarios that are considered to be vital to the future of the organization.
Models:
Gap analysis
Organization
Components
Readiness for
Elements of strategy
Change
◦ These are five elements of strategy that are considered mutually reinforcing – arenas, vehicles, differentiators, staging and lowest costs through scale advantage. Any misalignment of these signifies the need for change.
Strategic inventory
◦ This aims to identify the strategic assumptions of managers and determine their consistency with the business environment. This determines whether the strategy should be a focal point for change.
Diagnostic Models: Components Diagnostic Models: Components
Newsflash exercise:
Advantages
◦ This is an exercise that encourages managers to be
of diagnostic
very specific and succinct about change and clearer
tools about the intended outcomes.
Cultural web:
Diagnostic ◦ This provides a way of mapping the organizational
Models: culture through seven elements – paradigm, rituals
Organization
Components power structures and organizational structure.
Structural dilemmas:
Readiness for
◦ Six possible structural dilemmas that can be
Change
encountered during change are diagnosed so areas that have been “traded-off” during the change process can be identified
The Boundaryless Organization:
◦ Success is arguably achieved only if four types of organizational boundaries are diagnosed and reduced. These are vertical, horizontal, external and geographical boundaries.
Readiness for Change Readiness for Change
Assessing the organization's readiness to change can be a mediating variable between change management strategies and the outcomes of desired strategies.
A perchance audit of the readiness of an organization for change can provide an indication of the likely outcome of a change initiative at a particular point in time. Some ways of doing this include:
◦ Questionnaires ◦ Stakeholder analysis: This focuses on the position of stakeholders in the change process and allows the manager to be better informed of how to confront potential issues.
◦ Force-field analysis: This identifies factors that are driving forces for change as well as restraining forces.
Advantages of diagnostic tools Diagnostic Models:
Readiness for Change