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Change Management

Change Management ­MGMT625
Lesson # 25
A state of adaptation, in a biological sense describes a sate of survival for an organism. Analogously, a
state of adaptation for a business organization is one in which it can survive the conditions of its
environment. There may be several niches available to a firm for surviving the conditions of its
Simon gives us a three modes that are open to a system
1. Passive insulation (Defender)
2. Reactive negative feed back (Analyzer)
3. Predictive or Proactive adaptation (Prospector)
Three states of adaptation are given by Chakravorti. He used the terms as unstable state, stable state and
neutral state. All three states of adaptation are viable. The unstable state is the most vulnerable to changes
in the firm's environment, a neutral state is the most vulnerable, and a stable state vulnerable only to
certain environmental changes
In the unstable state, a firm tries to buffer itself from its environment, as it is extremely susceptible to
environment to environmental changes. The manager of such a firm, concerned with the fragility of the
firm's adaptation is continuously on the lookout for new buffering arrangements. These firms are called
defenders and have narrow product-market domains, and they seldom seek to make major adjustments
in their technology, structure or methods of operations. To Miles and Snow such an organization adapts
by simply ignoring the environmental events or demands.
A stable state describes the state of adaptation in which instead of buffering itself from the environment,
the firm is open to it and, in fact offers a reactive move in keeping with every move of the environment.
The firm reacts to environmental changes and complies with environmental mandate. Called an analyzer
, by Miles & Snow, such a firm has a buffered core like the defender, but unlike the defender it also has
extensive market surveillance mechanism that enable it to imitate the best of products and markets by
Change Management ­MGMT625
In a neutral state, a firm can withstand most environmental changes because they have been anticipated
before their occurrence and the firm has invested in the requisite adaptive ability. For Miles and Snow
such types of organizations are called "prospectors" which are in continuous search for market
opportunities. They often create changes in their environment, to which their competitors must respond.
"A true prospector is almost immune from the pressures of a changing environment since this type of
organization is continually keeping pace with change, and...frequently creating change itself", accords
to Miles & Snow.
All the three states of adaptation are viable ways of coping with the environment. Defender, Prospector
and Analyzer are all "stable" form of organizations, and manager chooses to pursue either of these
strategies to cope effectively with its competitors. "If management chooses to pursue one of these
strategies, and designs the organization accordingly, then the organization may be an effective
competitor in the particular industry over a considerable period of time"
All state of adaptations does not have the same immunity from environmental changes. The neutral state
has the highest immunity, followed by the stable and unstable states. A firm seeking to ensure its future
should prefer a neutral state of adaptation over the other two states. But then the fundamental question
arises: Why do not all firms show for the preference for such an ideal option? (Similar to the teacher-
student environment metaphor, why cannot all students get the same grade or a grade?). The answer has
two parts:
1. The state of adaptation depend on the firm's resources that it commands ­ (adaptive ability)
2. The nature of management processes within these firms (process of adaptation) influences the state of
adaptation sought
Determinants of Adaptive ability
How can adaptability be improved? Lawrence & Lorsch gave the concept as differentiation and
integration. Improving on firm's differentiation and integration would increase its adaptability.
Christenson called this as level of organization ­ which again is composed of differentiation and
integration, and then relabeled as Organizational Capacity.
The organization capacity measures the information processing ability of firm, and is an aggregate
measure of the human resources of that firm. Andrew suggests that adaptation is measure by the nature
and extent of the firm's material resources. Miles and Cameroon defines the same as Environmental
Receptiveness Cluster which influences the state of adaptation. The cluster includes two things:
1. Resource scarcity the extent to which elements in the input of an org. lean in needed resources
2. Internal resources defined as the generalizability of a firm's core technology and expertise, and the
extent of its slack. Material resources include inputs like finance and technology.
The Process of Adaptation
The process of adaptation consists of two sub-processes: Adaptive generalization and Adaptive
Adaptive Generalization
It is the process of improving the goodness of fit in a given state of adaptation. It refers to the
rationalization of processes and structure using Material Capacity (MATCAP) and Organizational
Capacity (ORGCAP) for moving to the nearest adaptive fit. Adaptive generalization refers to the process
that improves the survival potential of the organization. Managing slack is the key to adaptive
generalization. This requires that an old fit be consciously disturbed for the sake of new and higher fit.
Change Management ­MGMT625
Adaptive Specialization
This involves the choice of strategy appropriate to the environment and resources of the firm, and the
design of a matching structure. An important part of strategic management is adaptive specialization,
which involves:
1. Managing the choice of purpose for the firm so as to exploit its material and organizational capacities
2. Minimizing the misfit, in the match between the chosen purpose and the firm's ORGCAP and
Adaptive specialization involves formulation of strategy keeping in view firm's resources. Adaptive
generalization and adaptive specialization follow each other in a cyclical pattern.
The above lecture notes are essentially prepared from the following articles; excerpts and clippings are
also taken from the same:
Chakravarthy Balaji S, "Adaptation: A Promising Metaphor for Strategic Management," The Academy
of Management Review, Vol. 7, No. 1 (Jan., 1982), pp. 35 ­ 44
Miles, Raymond E, Snow Charles C et al, Organization Strategy Structure and Process, The Academy
of Management Review, Vol. 3, No. 3 (Jul. , 1978), pp. 546-562