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Change Management

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Change Management ­MGMT625
VU
LESSON #17
GROWTH RATE OF THE INDUSTRY
The speed at which organisation experiences phases of evolution and revolution is closely related to
the market environment of its industry. Different industries have different growth rates, for example
computers, automobiles and banking all have different growth rates. Evolution can be prolonged,
and revolutions can be delayed. Revolution seems too much more severe and difficult to resolve
when the market environment is poor or going down. Marginal organisation seem to do better
market environment is good or moving up.
Greiner identified five phases of growth ­ each phase of growth is marked by evolutionary progress
and a revolutionary period (or crises). Each evolutionary period is characterised by the dominant
management style used to achieve growth, while each revolutionary period is characterised by the
dominant management problem. Companies in faster growing industries tend to experience all five
phases more rapidly while those in slower growing industries encounter only two or three phases
over many years
It is also important to note that each phase is both an effect of the previous phase and a cause for the
next phase. For e.g. Directive management style in one phase may lead to autonomy crisis (rev.)
and eventually followed by delegation
The principal implication of each phase is that management actions are narrowly prescribed if
growth is to occur. So organisation experiencing crisis of autonomy cannot return to directive
management style for a solution ­ it must adopt a new style of delegation in order to move ahead
PHASE 1: CREATIVITY
At birth stage, emphasis is on creating both product and a market. So the characteristic of the period
of creative evolution are:
·  Founders are usually technically or entrepreneurially driven and disdain management
activities
·  Communication is frequent and informal
·  Long hours of work are rewarded by modest salaries
·  Control ­ comes from market feedback management acts quickly as the customer reacts
·  Leadership crisis occur as individualistic and creative activities help organization to take-
off
1. Leadership Crisis
As company grows, needs larger production, needs specialized knowledge about the efficiencies of
manufacturing, marketing and finance or capital, therefore needs increased number of professional
people in all functional areas. All this cannot be managed at an informal level. Formalization,
Proceduralism and bureaucratization come into play for better financial and managerial control.
Founders found themselves with unwanted managerial responsibilities. They still try to act it in the
past ways. Owners enter into conflict with managers. This issue is cited as agency theory in
corporate governance and strategic management courses. At this point crisis of leadership occurs ­
the first revolution. Founders, often hate to step aside even though they are probably temperament
wise unsuited to be managers. So the developmental choice for founder is to choose strong manager
and step aside for perpetual growth or select week manager and compromise on growth
PHASE 2: DIRECTION
Those who survive by installing strong and capable managers usually embark on a period of
sustained growth under able and directive leadership. The traits of this evolutionary period are:
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Change Management ­MGMT625
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Functional org. structure ­ specialization and division of labour
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System and sub-system get developed ­ Accounting for inventory and purchasing
·
Budgets and work & Job standards, are adopted
·
Communication becomes more formal and impersonal as a hierarchy of title and position
builds
·
Lower and upper level conflict becomes obvious as organization grows and have more
layers of hierarchy
·
Lower level employees find restricted by a cumbersome procedures and centralized
hierarchy.
·
Lower level managers have more direct knowledge of market and machinery than do the
leaders at the top (office-work & govern through paper).
2. Autonomy Crisis
Thus second revolution is imminent as crisis develops from demand for greater autonomy on the
part of lower-level managers. Yet it is difficult for top-managers who were so successful in
developing system, being directive and stay responsible to give-up authority. Moreover lower level
managers are not accustomed to making decisions for them. As a result numerous companies
flounder during this revolutionary period adhering to centralized methods while lower level
managers get disenchanted and leave the organization (turn-over rate)
PHASE 3: DELEGATION
Next era of growth evolves from the successful application of decentralized organization structure
which exhibits the following characteristics:
·  More responsibility is given to the managers of plants and market territories.
·  Profit centres, incentives and bonuses are used to motivate managers.
·  Top executives at headquarters restrain themselves to managing by exception based on
periodic reports from the field
·  Management now focuses on making new acquisitions which can be added to the
corporation as decentralized units
·  Communication from the top is infrequent, usually by correspondence? Or telephonic or
brief field visits.
Of course now IT has made this communication fast, easier and effective. The delegation proves
useful for gaining expansion through motivation of lower level manager, by giving them authority
and incentives, to penetrate larger markets, respond faster to customers and develop newer and
effective managerial practices
3. Control Crisis
Top executives sense they are losing control over a highly diversified field operations (owing to
power-politics, upward mobility of lower level mangers, fear replacement, etc). Autonomous
managers prefer to run their own shows without coordinating plans, resources, technology and
manpower. The revolution become obvious when top management seeks to regain control over the
total company. One solution is re-centralization which usually fails as company's operation have
become diverse and vast. Other solution is to evolve special coordination techniques.
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Table of Contents:
  1. COURSE ORIENTATION:Course objectives, Reading material, Scope of the subject
  2. BENEFITS AND SIGNIFICANCE OF CHANGE MANAGEMENT:Traditional management domain
  3. KURT LEWIN MODEL: ASSUMPTIONS AND IMPLICATIONS:Change Movement, Refreeze
  4. IMPLICATIONS OF KURT LEWIN MODEL:Sequence of event also matters, A Critical Look
  5. SOME BASIC CONCEPTS AND DEFINITIONS:Strategic change, Logical incrementalism
  6. TRANSACTIONAL VS. TRANSFORMATIONAL LEADERSHIP:Micro-changes, Organisation Development
  7. THEORIES OF CHANGE IN ORGANISATIONS
  8. LIFE CYCLE THEORY:Unit of Change, Mode of change, Organisation death
  9. TELEOLOGICAL THEORIES OF CHANGE:Unit of change, Mode of Change, Limitations
  10. DIALECTICAL THEORIES OF CHANGE:Unit of Change, Strategic planning
  11. A DIALECTICAL APPROACH TO ORGANISATIONAL STRATEGY AND PLANNING:
  12. LIMITATION OF DIALECTICS; DA AND DI:Overview of application of dialectics
  13. THEORIES OF CHANGE IN ORGANISATIONS
  14. APPLICATION OF EVOLUTIONARY THEORY:Managerial focus
  15. FURTHER APPLICATION OF EVOLUTIONARY THEORIES:Criticism
  16. GREINER’S MODEL OF ORGANISATIONAL– EVOLUTION AND REVOLUTION
  17. GROWTH RATE OF THE INDUSTRY:CREATIVITY, DIRECTION, DELEGATION
  18. COORDINATION:COLLABORATION, The Crisis
  19. ORGANISATION ECOLOGY:Structural Inertia, Internal Structural Arrangements, External Factors
  20. CLASSIFICATION OF ORGANIZATIONAL SPECIES:Extent of Environmental Selection, Determinants of Vital Rates,
  21. FOOTNOTES TO ORGANISATIONAL CHANGE:Stable Processes of Change, Rule Following, Conflict
  22. SOME COMPLEXITIES OF CHANGE:Superstitious Learning, Solution Driven Problems
  23. ORGANIZATIONAL ADAPTATION:The Entrepreneurial problem, The Administrative Problem
  24. PROSPECTORS:Analyzer, Reactors, Adaptation and Strategic Management
  25. SKELETAL MODEL OF ADAPTATION:Determinants of Adaptive ability, The Process of Adaptation
  26. STRATEGIC CHANGE:Nature of Change, The Importance of Context, Force field Analysis
  27. Management Styles and Roles:Change Agent Roles, Levers for managing strategic Change
  28. SYMBOLIC PROCESSES:Political Processes, COMMUNICATING CHANGE, Change Tactics
  29. STRATEGIC CHANGE:Pettigrew & Whipp’s Typology, Context on X-axis (Why of change)
  30. STRATEGIC CHANGE:Attributes of SOC Model, Implications for Management
  31. STRATEGIC CHANGE:Flow of Information, Recruitment, SOC Process
  32. Determinants of a Successful Change Management:Environmental, Management Orientation, Management Orientation
  33. Higgins 08 S Model – An Adaptation from Waterman’s Seven S model:Strategy, Systems and Processes, Resources
  34. IMPLEMENTATION AND STRATEGIC CHANGE: CONSTRAINING FORCES IN THE IMPLEMENTATION OF STRATEGIC CHANGE (CASE STUDY OF XYZ COMPANY)
  35. IMPLEMENTATION AND STRATEGIC CHANGE: CONSTRAINING FORCES IN THE IMPLEMENTATION OF STRATEGIC CHANGE (CASE STUDY OF XYZ COMPANY)
  36. WHY IMPLEMENTING STRATEGIC CHANGE IS SO DIFFICULT?:Change Typology, Technical Change
  37. IMPLEMENTATION APPROACHES:Attributes of incremental change,
  38. IMPLEMENTATION: RADICAL OR TRANSFORMATIVE CHANGE
  39. IMPLEMENTATION: RADICAL OR TRANSFORMATIVE CHANGE:Definition of Leadership, Follower Work Facilitation
  40. IMPLEMENTATION: RADICAL OR TRANSFORMATIVE CHANGE:Recognize the challenge
  41. IMPLEMENTATION: RADICAL OR TRANSFORMATIVE CHANGE
  42. IMPLEMENTATION: PUNCTUATED EQUILIBRIUM MODEL:Features of Radical Change, Theory of P-E model
  43. CHANGE IMPLEMENTATION: OD MODELS:The Transactional Factors
  44. CULTURE, VALUES AND ORGANIZATIONAL CHANGE:Significance and Role of Values, Values Compete
  45. ORGANIZATIONAL VALUES, CULTURE AND ORGANIZATIONAL CHANGE:Issues in Change Management