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Change Management

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Change Management ­MGMT625
VU
LESSON # 26
STRATEGIC CHANGE
Before going to discuss the concept of strategic change let us first discuss the concept of strategy. What
do we mean by strategy, its components and its usage as a word "strategic" especially? For instance one
may observe its wide usage as strategic investment, strategic management, strategic finance and strategic
planning and strategic marketing etc. Therefore when ever we talk of strategy it is essentially assumed
that we are also dealing with its inalienable components which are as under:
1. Objectives - this may also mean vision, mission, goals and targets
2. Resources ­ financial, human, informational, technological etc.
3. Environment ­ Government, customer, society, economic conditions and specific environment means
particular to industry in which organization operates like vendors, buyers competitors etc. The
environment may be friendly, hostile or neutral.
4. Time orientation ­ short term or long term orientation
5. Competitors ­ strategy or tactics of competitors, nature of competition and rivalry
Therefore for students of business it is important to know the constituent elements of the word strategy
whenever it is referred.
This lecture is based on the chapter of a very popular book on strategic management, comprising of a
comprehensive framework for managing strategic change is given which is as under.
A Framework for Managing Strategic Change
1. Diagnosing the Change situation
· Types of Strategic Change
· The Importance of context
· Organization culture
· Force field analysis
2. Management Styles and Roles
· Styles of managing change
· Change agency roles: Strategic leaders, Middle managers, Outsiders
3. Levers for managing change
· Structure and control
· Routine
· Symbolic processes
· Political processes
· Communication
· Change tactics
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Change Management ­MGMT625
VU
1. Diagnosing the change situation
· Types of Strategic Change
First step in diagnosing the change situation is whether change is needed or not. If the change is needed
then related question would be of what type? Therefore our concern is to identify various types of change.
Balogun and Hailey have given the following typology of strategic change so as to identify the types of
change required. The nature of change in an organization can be incremental or big bang one. Incremental
change is built on skills, routines and beliefs for bringing in efficiency. While the big-bang approach to
change might be needed on occasions, for example if the organization is facing crisis or needs to change
its direction. The scope of the change means whether change can occur within the current paradigm that
is, current organizational beliefs and assumptions, and can be classified further as realignment of strategy
rather than a fundamental change of strategic direction. Or change requires a paradigm change, that is,
transformational change. Combining these two axes we have four types of strategic change, as given in
the figure below:
Scope of Change
Realignment
Transformation
Evolution
Adaptation
Incremental
Nature of Change
Revolution
Reconstruction
Big bang
Adaptation is change which can be accommodated within the current paradigm and occur incrementally.
It is the most common form of change in organizations
Reconstruction is concerned with rapid change and upheaval in  an organization. For example
organization may make structural changes like major cost-cutting programmes to deal with difficult or
changing market conditions.
Evolution is change in strategy which requires paradigm change but over time. Evolution can also
explained in terms of taking organization as learning system continually adjusting their strategies with the
changing environment. This we discussed earlier as learning organization. But the danger in following
incremental and evolutionary and incremental change lies in experiencing strategic drift, as organizations
are based and bounded by the existing paradigm and routines of the organization
Revolution is change which require rapid and major strategic and paradigm change, or where strategic
drift has resulted in developing extreme pressures for change.
· The Importance of Context
There is no one right for the management of change. The success of managing change will also be
dependent on the wider context in which that change is taking place. Balogun and Hailey therefore build a
number of important contextual features that need to be taken into account in designing change
programmes. Some contextual features are:
i) Time - How quick change is needed?
ii) Scope - What degree of change is needed?
iii) Preservation - What characteristics to retain and what combination to change?
iv) Diversity - How homogeneous or heterogeneous the organization is from within?
v) Capability - What is the managerial and personal capability to implement change?
vi) Capacity - What is the degree of change resource available?
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Change Management ­MGMT625
VU
Vii) Readiness - How ready workers and managers at multiple levels are?
Viii) Power - What power does the change leaders have to impose? Who has the power to effect
change?
Organisation Culture as context
·
It is the organization culture which always shape and guide strategy. We will now look more closely at
the process of culture change. Culture change is difficult and time consuming because "culture" is rooted
in the collective history of an organization, and because so much of it is below the surface of awareness.
In general, the process of culture change must include the following steps:
- Uncover core values and beliefs. These may include stated values and goals, but they are also
embedded in organizational metaphors, myths, and stories, and in the behaviours of members.
- Acknowledge, respect, and discuss differences between core values and beliefs of different
subcultures within the organization.
- Look for in-congruencies between conscious and unconscious beliefs and values and resolve by
choosing those to which the organization wishes to commit. Establish new behavioural norms (and
even new metaphor language) that clearly demonstrate desired values.
- Repeat these steps over a long period of time. As new members enter the organization, assure that
they are surrounded with clear messages about the culture they are entering.
- Reinforce desirable behaviour.
- It's clear that culture change is an ongoing process, so it's very hard to identify organizations that
have "completed" a successful culture change.
Force field Analysis
·
We have earlier talked about force field analysis. A force field provides an initial view of change
problems that need to be tackled, by identifying forces for and against change. More relevant questions in
this context can be asked like the followings:
What aspects of the current culture might aid change in the desired direction, and how might these be
reinforced? What aspects of the current culture would block such change, and how can these be
overcome? What needs to be introduced or developed to aid change? Johnson and Johnson have identified
a generic example of force field analysis as pushing forces and resisting forces
Pushing forces
Resisting forces
High quality service
Work load / Overload
Ethos of hard work
Fire fighting
Flexibility
Departmentalism
Devolved services
departmental barons
Formality of management
Stories of good old days
Blame culture
Deference
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