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Change Management

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Change Management ­MGMT625
VU
LESSON #8
LIFE CYCLE THEORY
Life cycle theory
It is one of the most common explanation theories in change management literature. It is a metaphor of
organic growth to explain org. development in an org. entity from its initiation to its termination. Entity
may mean individual's job, a work group, a programme, strategy, product, or overall organisation. Like
individual organisations also have a life, mean age and stage, and associated characteristics like birth,
growth, maturity, decline and death ­ exhibits certain traits at a particular stage of their life. Now, if we
apply theory in context of organizations in Pakistan, the question is what is the average life of a typical
organisation in Pakistan (be it public sector organization or private sector). I believe multinational have
evolved themselves as excellent high performing organization because they have a perpetual life, and
have over come through Product Life Cycle (PLC), in case or Organization Life Cycle (OLC).
According to this theory, "Change is imminent; that is the developing entity has with in it an underlying
form, logic, program or code that regulates the process of change and moves the entity from a given
point of departure toward a subsequent end that is prefigured in the present state... Similarly, to Ven &
Poole, "External environmental events and processes can influence how the entity expresses itself, but
are always mediated by the immanent logic, rules, or programs that govern the entity's development"
Characteristics of a Life Cycle Theory:
1.  The progression (order + sequence) of change events in this model is a unitary sequence
(follows a single sequence of stage or phases) and is cumulative (earlier stage traits are retained
in later stages).
2. There is such a progression to the final end state which is pre-figured and requires a specific
historical sequence of events.
3. Each of these events contributes a piece to the final product, occurs in a prescribed order, and
sets the stage for the next. Each stage of development is seen as a necessary precursor of
succeeding stages.
The author referred to Nisbet who worked on the philosophy of developmentalism, and has stated,
"Organisation development is driven by some genetic code or pre-figured program within the
developing entity". Rogers is quoted to have posited five stages of innovation: need recognition,
research on problem, development of idea into useful form, commercialisation, and diffusion and
adoption".
Life cycle theories explain development in terms of institutional rules or programs that requires
developmental activities to progress in a prescribed sequence. For example in International Business we
talk of the specific application in context of product development and marketing known as International
Product Life Cycle (IPLC). This depicts how a product having birth in the Western country like USA
receives growth, goes international reaches maturity and eventually is in a decline in subsequent stage,
in the form of importing the same product from external economies. Similarly Western business
practices exhibit life cycle management model.
Unit of Change: Life cycle theories operate on a single entity, development as a function of potentials
immanent with the entity ­ environment and other entities are considered secondary.
Mode of change: It is important to know the sequence of change events is prescribed by either
probabilistic or deterministic laws. There are two modes of change: prescribed mode and constructive
mode.
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Change Management ­MGMT625
VU
Prescribed Mode: A prescribed mode of change channels the development of entities in a pre-specified
direction. Watzlawick termed this as first-order change, routinized or pre-established programme.
Variation is first-order change.
Constructive Mode: A constructive mode of change generates unprecedented novel forms, often are
discontinuous and unpredictable departures from the past. Watzlawick termed this as a second-order
change, as it breaks with the past basic assumption or framework.
So going by the traits of life cycle theory above we come to know that life cycle (and evolutionary)
theory operates in a prescribed modality. Let us now see some other examples of life cycle theory.
According to Hollman, organisational change such as MBO can be best understood by viewing change
as systematically moving through distinct developmental stages rather than as either an evolutionary or
revolutionary process. This developmental process consists of three phases or life cycle: Missionary,
Modification and Maturity
·
Missionary phase: When organisational member goes through MBO training programme reads
book or article or is in business education programme and tries to introduce the same in his own
organization with at least one high level sponsor in the organization (may be politically driven
as to seek legitimacy and credibility)
·
Modification Phase: After birth the problem of acceptance is there; primarily from three
sources: interpersonal (lack of support, hostility, learning new terminology, skills and values,
altering superior-subordinate relationships) organisational (authority-responsibility pattern,
budgetary allocations, training/procedural revision needed) & environmental (government
regulation or competitive pressure). Out of such pressures ­ customised version come out
through negotiating and bargaining amongst multiple forces.
·
Maturity phase: When the change introduced becomes org. routine, or when the new
programme gets merged with the existing organization processes and loses its unique and
special status as management tool in organization process in budgetary allocation or
compensation mechanism. This is considered death phase change in one sense. It can fail as
well, and death can occur at any stage on missionary - maturity continuum.
Application:
1. Viable time-oriented framework used by organisation to diagnose, evaluate and adjust new
programme (like MBO)
2. Evolution of MNCs: How MNC evolves themselves? Sales agent, regular export,
franchise/license, Wholly Owned subsidiary)
3. Though many consider OLC as static and deterministic yet some consider strategic choices at
each stage can affect (shorten or prolong) the development, rate and direction of OLC stage.
4. Introduction of new technology or application of new managerial concepts in an organisation.
For e.g. MBO can be examined in terms of its introduction, growth and effectiveness in
organization
Miller & Freisen (1984) came up with a similar model
1. Birth
2. Growth
3. Maturity
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Change Management ­MGMT625
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4. Revival
Baird & Meshoulam (1988) described stages four stages in OLC of an international organization. It is
important to note that OLC for domestic firm is distinct from OLC for international firm
1. Organisation initiation
2. Functional growth
3. Controlled growth
4. Strategic Integration
Stage 1: Organisation Initiation
A typical start up organization survives on the basis of strong entrepreneurship skills and values.
Management and leadership are informal in nature, and managed on the basis of convenience.
Organization at this stage offers limited range of highly specialized products to restricted markets.
Management culture remains ethnocentric, and the objective is short term survival with in domestic
market.
Stage 2: Functional growth
Once organization maintains its existence it starts to look for diversification. Therefore firm looks for
new export markets. Informal ways of management is replaced by formalisation by focussing on
functional and technical specialization and production efficiency. Managerial confidence of a firm
begins to increase owing to dynamic growth.
Stage 3: Controlled Growth
The firms' overseas market moves into maturity phase, with its focus on efficient structure and
management practices. The firm now wants to control its overseas market through tight operations so as
to achieve economies in production and other functional areas.
Stage 4: Strategic Integration
The firm now seeks greater with local market through localisation and adaptation of resources.
Moreover synergy is sought to optimise in operations through network and interdependencies of
resources and responsibilities across subsidiaries. Ethnocentrisms is replaced by polycentricism and
geo-centricism resulting in increasing influence of foreigners and evolution of universal management
character
Organisation death or extinction is another important concept which needs attention. The death of an
organization occur when it value stability too much and avoid uncertainty and risk taking. This means
organization is unable to innovate, and incapacity to appraise their own performance. It believes in
stable programming and reluctant to deviate. All this happens when executives have narrow and
parochial view of external reality, and resistance for change is very high. Therefore either it is
organization's inability for adaptation or the hostility of environment leads the organization for
extinction. For example take the case of sick units in textile sector, the industry booms under
government supports and collapses with the withdrawal of concessions and subsidies.
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