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Change Management

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Change Management ­MGMT625
VU
LESSON # 2
BENEFITS AND SIGNIFICANCE OF CHANGE MANAGEMENT
Benefits and Significance
The subject matter holds a tremendous importance for both individual and organization. Let us discuss
some of the benefits from organization perspective.
1. Understanding environment (society, government, customers)
It is important for organization to understand, assess and gauge the dynamics in its external environment
in order to envisage and establish an appropriate relationship with various actors like government,
customers and society. Therefore managers by knowing the subject of change management can better be
prepared to understand whatever is going on in the environment.
2. Objectives, strategy formulation & implementation (to develop competitive advantage)
Second is consequent upon knowing the impact of change at extraneous level on its own internal
dynamics, and the foremost is objective setting and seeking competitive advantage.
3. Employees (trained, high performing work practices, reliable organisation)
The employees are the recipient of change plan. One such perpetual concern of senior managers is to
make organization highly reliable, therefore employees ought to be trained and high performing one in
today's hyper competitive world.
4. Technology Issues
Technology is considered the engine of growth in today's world. Perhaps the greatest challenge for
contemporary organizations is the acquisition and integration of technology in its strategy, structure and
process. As such the concern of top managers is how to avoid organization being obsolete and how to
cope and absorb the impact of changing information and communication technologies which have
decisively influencing production and consumption behaviour?
5. Globalization
The management of international economic and political forces what is today known as
internationalisation and globalisation is yet another important factor influencing decision making of
organization. No organization or nation can stay independent and indifferent to what ever is happening
at international (political) level. For instance the impact of September 11 events have been tremendous
on the economies and organizations of developing countries like Pakistan. Similarly supra ­ national
institutions are becoming more assertive over nation states not only in political terms but also on social
issues like child labour and gender issues. So government and states are considered somewhat less
sovereign in imposing their will over their subjects (individual and organizations) against the ever
increasing and complex interdependencies amongst states. For example the compulsions and legal
provisions of international treaties like WTO and ISO certification regimes have decisively influenced
the organizations and economies of the developing world. Hence imperative for managers, CEOs and
entrepreneurs from smaller or larger organizations alike, of different sectors of economy, is to
understand the complexities of globalisation and its impact on organization' business.
The Relationship of Management with Change-Management
The relationship can be understood along the following lines. First, we have to consider that change
management is a subject with cross-cutting theme, applicable across various traditional functional areas
like management, marketing, production, finance and comprehensively with more recent strategic
management concepts. For instance, this is related with marketing where the concern might be new
product or market development, or can be related with production like the introduction or acquisition of
new technology or skills. Viz. the finance - budgetary allocations, revisions and cost-cutting strategies,
and for HR the concern is behavioural modification, formation and accumulation of technical and
managerial knowledge, skills and values.
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Change Management ­MGMT625
VU
Traditional management domain
Another way to look at the subject is from traditional management perspective and thinking of
organizational transformation. For instance change in the PODC techniques, thereby following universal
or benchmarked practices. Therefore change means variation in following techniques
Planning
- Setting objectives
- Implementation of policies
- Decision-making
Organizing
- Formal & informal organisation
- Departmentation
- Hierarchy
- Authority- responsibility relationship
- Span of control etc.
Directing
- Leading
- Leadership styles
- Motivation theories
Controlling
- Direct & formal control
- Indirect & informal control
Strategic management domain
Within the strategic domain we have two concerns: One is Strategy formulation, that is formulating
mission, vision and objectives after going through environmental assessment (a key feature of strategic
management), and second pertains to strategy implementation means organisation structure, culture and
politics. While the whole focus of the popular framework of strategic management is the development
and sustenance of competitive advantage of a firm or organization, at multiple levels of strategy making
­ functional, business, corporate and societal levels.
McKinsey Seven S-Framework
One of the leading management consultants in America, and is widely quoted in management literature,
has following dimensions for change to make organization a highly productive one. These are:
1. Strategy
- sustained competitive advantage
2. Structure
- who reports to whom or how work is divided
3. System
- operations & core processes
4. Style
- leadership style
5. Staff
- employees/ Human resources
6. Shared values
- beliefs, mindsets
7. Skills
- capabilities and competencies
Overview of the subject
Similarly, within the overall context of management, the subject matter can also be understood by
focussing on strategic, process, structural, cultural and political dimensions of organization. To
understand management one must know the dynamics of various approaches.
1. Strategy
2. Process
3. Structure
4. Culture
5. Politics
1. Organisation has an articulated purpose or objective
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Change Management ­MGMT625
VU
There is a kind of constant questioning, verifying, changing and re-defining of organization objectives
by interacting with environment. Once objectives are revised consequently lead to modification of
structure of roles & managerial process. For example the problem for entrepreneur once organization
survives (overcome the entrepreneurial problem) is how to achieve growth which is problematic in the
sense that he has to go for market development , overcome engineering problem so as to produce at
higher level without compromising quality and administrative problem to manage and formalise role
and relationship with increased number of employees. This is not only a problem of entrepreneurship
based organization only but even larger and older well established organization like Multinational
Companies (MNCs) tend to define and renegotiate their objectives. This according to one author is
identified as Strategic Renewal.
2. Organization process
The word process refers to the transformation input to out put. For e.g. production process means
conversion of raw material to finished goods. Such types of processes are technology-driven most of the
time. Broadly speaking viz. a process we have two types of changes; one is known as Total Quality
Management (TQM) which in essence means change on continuous and gradual basis, and is of
marginal or incremental nature while Business Process Restructuring (BPR) means drastic, structural or
fundamental change. The former is working `with in the system' while later is known as `working on
the system'. Similarly in context of organization there are other processes such as decision making,
objective setting, communicating, controlling & coordinating
3. Organisation structure
How authority and responsibility is distributed across the across the organization. Authority pattern in
organization shows who reports whom and who is answerable and accountable to whom. Other
dimensions of structure include departmentation or task grouping, hierarchy layers, span of control and
the extent of formalization (bureaucratic or participative one). Therefore structural change may mean
change in one or more dimension cited above. But most of the time organizations now a day want to
make organization structure more flatter instead of taller, decentralized, participative, and humane or
empowered as it is considered to be more productive and creative.
4. Organization Culture
- Values, beliefs and mind-set of a manager at work
- Cognitive style (thought process)
- Personality (MBTI)
- Behaviour
Hofstede Model
-
Individualism - Collectivism
-
Masculinity - Feminism
-
Power Distance - Low or High
-
Uncertainty Avoidance - Low or High
-
Time orientation - Low or High
·
Organisation Politics
­ Changes have political consequences
­ Change disturbs power-distribution in organisation
­ Organisation are like governments
­ Managers have interests & groupings
Therefore power may enable or resist change
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