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Change Management

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Change Management ­MGMT625
VU
LESSON# 6
TRANSACTIONAL VS. TRANSFORMATIONAL LEADERSHIP
Transactional
This means an approach going by legal contract or agreement, job-description, and hence no concern
with employees or managers beyond contract. It is considered a bureaucratic or mechanistic way of
organizational life, essentially a fragmented approach followed by most of the developed world states,
and societies are known as litigious societies.
Transformational
Organizational life goes beyond legality and bureaucratic administrative values. Effective organizations
are those where leadership is inspirational, role model, learning & grooming of followers. Individuals
feel involved because of humane concern of their leaders and hence become more productive. Contrary
to the transactional style of management this is considered organic, holistic & more comprehensive
approach, to leadership and management. Asiatic style of management and learning is considered
transformational while that of Western is more transactional. For example viz. role of teacher should he
be bound by his legal contract and a role which is just limited to class room or he is considered an
overall role model, inspiring leadership and ethical values.
Continuous or First - order change
Two frameworks in which change can occur; continuous or first order change and the other is
discontinuous or second order change. Change that occurs in a stable system that itself remains
unchanged. These changes and variations are necessary for business to grow and thrive in a competitive
environment. Evolution theories describe the first-order changes that industries experience. Natural
selection mechanism views the entry and exit of firms in an industry as the primary method of
evolution. (Changes within particular stage of organisational life cycle). In other words this refers to
gradual changes in organization such as refining existing processes and procedures
Discontinuous or second-order change
Change that occurs when fundamental properties or system itself has changed, for example, the fall of
communism in Europe and former Soviet Union. Or revolutionary changes in technology, competition,
socio-economic conditions like in telecommunication, banking, health-care, and electronics are
considered discontinuous change as it leads restructure these industries, relocate industries and change
the bases of competition. Change of stage on organisational life cycle is a discontinuous one. Quantum
change is perceived better to make organizations High Performing Organization (HPO)
Middle order change
It is defined by one author as a compromise between the two; the magnitude of change is greater than
first-order, yet it neither affects the critical success factors nor is strategic in nature
Micro-changes
Another practical classification is owing to the difference in degrees e.g. modifications, improvements,
enhancements & upgrades
Mega-changes
These refer to the differences in kind ­ a structural one, for example when we refer to a new system.
Human Capital
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Change Management ­MGMT625
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Is learning (knowledge creation) a personal or individual phenomenon or is it a social/collective
phenomenon (discourse/dialogue)? Its answer will lead to the definition of human and social capital.
Human capital refers to the full range of knowledge, skills & abilities an individual can use to produce a
given set of outcomes. Practically at upper echelon manager are able to scan internal/external
environment, solve problem, seize opportunities, etc. Firm-specific human capital means knowledge of
one's own operation, strengths, weaknesses, tacit knowledge, operational personnel and communication
styles etc. General human capital deals with knowledge of and about larger environment, competitors,
suppliers, customers, stake holders, and about dealing with human capital
Social capital
Is learning essentially a social phenomenon? It refers to the linkages between social actors, the strengths
of those linkage, and resources that flow from them (networking). The key dimensions include structural
(relationship pattern among actors), relational (trust, norms, obligations, ethics that thru the relationship
flow), and cognitive (shared beliefs and languages). Linkage between upper echelon and Board of
Directors (BOD) in the form of information, advice, trust, and other organization processes like
problem-solving, decision-making, coordinating. A very thought provoking and interesting question
would be what if organization has human capital minus social capital, and vice-versa?
Four types of organisational change
1. Power culture
Following are the attributes of power culture. In such organizations individual is told what to do, power
is exercised by leaders about changing behaviour, extraneous pressures to perform role and extrinsic
motivation results are focussed.
2. Role culture
Where individual acts within the limits of job-description. For e.g. stenographer in public sector refuse
to learn or do the job such as fax or e-mail as per his job-description (narrower interpretation of a job)
3. Task/ achievement culture
Individual acts in a suitable way to complete tasks. People are motivated intrinsically (autonomy and
sense of satisfaction
4. Person/Support culture: Individual uses own initiative
Organisation Development
OD is a system wide process of data collection, diagnosis, action planning, intervention, and evaluation
aimed at:
1. Enhancing congruence between organisation structure, process, strategy people and culture;
2. Developing new and creative organizational solutions;
3. Developing the organization's self-renewal capacity
The difference between OD and change management is difficult to delineate as it is overlapping but OD
context essentially deals with internal aspects of organization while change management tends to be
broader in its scope and concerns with both internal and external aspects of organization.
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Change Management ­MGMT625
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Organisational meme
Definition:  Any of the core elements of organisational culture, like basic assumptions, norms,
standards, and symbolic systems that can be transferred by imitation from one human mind to the next.
In simpler words it is the replicating or copying behaviour. It is very fundamental way of learning
borrowed from child psychology. Individual learns from other by following him as a role model. For
example students getting admissions in any one popular subject or profession at any given time; be it
medical, engineering, information technology, just because of imitating behaviour. This is also known
as band wagon effect or mass movement. In consumer behaviour the same thing known as life style or
fashion. Bench marking at organisational level represents mimicry especially when one organization
(industry leader) does something new and all tend to follow the same. Even states follow other states in
terms of economic and development policies considered successful such as export promotion, FDI,
trade-liberalisation, nationalisation, import-substitution policy, or entrepreneurship promotion etc.
Scholars have different opinions in advocating the efficacy of mimetic process as some believe in
favour and for others the process could be imperfect in transferring knowledge, and hence lead to
genetic distortion.
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