Organisational Change Chapter 2

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Organisational Change
Chapter 2 The Nature of Change

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Introduction
The chapter:  Discusses a number of frameworks for categorising change.  Explains why, in order to be effective, it is necessary to understand the differences between various types of change. 2

Objectives
To:

 Emphasise the complex nature of organisational change;  Describe and discuss the multi-dimensional nature of organisational change;  Analyse change situations in order to choose appropriate methods of managing and implementing change;  Recognise that there are limitations to the ‘common-sense’ approach to managing change that assumes that change can be planned as a logical. Step by step, sequence of activities.  This because of cultural, political and leadership dynamics. 3

Background: A definition of strategy

Strategy is:

the direction and scope of an organisation over the long term which achieves advantage for the organisation through its configuration of resources within a changing environment to meet the needs of markets and to fulfill stakeholder expectations. Source: Johnson, G. & Scholes, K. (1993) Exploring Corporate Strategy, London, Prentice Hall, p. 10.

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Environmental turbulence






Ansoff & McDonnel (1990) (recap) – Level 1. Predictable – Level 2. Forecastable by extrapolation – Level 3. Predictable threats & opportunities – Level 4. Partially predictable opportunities – Level 5. Unpredictable surprises Strebel (1996) – Weak forces – Moderate forces – Strong forces Stacey (1996) (recap) – Close to certainty – Far from certainty 5

Varieties of change (overview)






Grundy (1993) – Smooth incremental – Bumpy incremental – Discontinuous Tushman et al (1986) – Converging (fine-tuning) – Converging (incremental) – Discontinuous or frame-breaking Dunphy & Stace (1993) – Fine tuning – Incremental adjustment – Modular transformation – Corporate transformation 6

Varieties of change (Grundy)
Smooth incremental – evolves slowly, in a systematic and predictable way.  Bumpy incremental – periods of relative quiet interrupted by sudden bursts in the rate of change (e.g. re-organisations).  Discontinuous – ‘divergent breakpoint’, changes involving crisis, breakthrough, response to high turbulence. 

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Major Types of Change (Grundy)

Discontinuous

Rate of change
Smooth incremental Bumpy incremental

Time

Source: Grundy, T. (1993) Implementing Strategic Change, Kogan Page, p. 25

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Varieties of change (Tushman et al)





Converging (fine-tuning) - trying to do better what is already being done well. Converging (incremental adaptation) - small changes in response to small shifts in the environment. Discontinuous or frame-breaking – major, rapid (spread over 18-24 months) and revolutionary changes in strategy, structure, people & processes in order to meet radically new or different circumstances. Also termed ‘upheaval.’  Most organisations follow a pattern of convergence/upheaval cycles. This pattern can apply at all levels (department, unit, corporation). 9

Pressures for Frame-breaking Change





Industry discontinuities, e.g. sharp changes in the legal, political or technological conditions which shift the basis of competition Product life-cycle shifts, i.e. strategic change to fit the next stage of the cycle Internal dynamics, e.g. new management team, with different strategy preferences

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Examples of Frame-breaking Change

   

Change of mission or core values Power shifts, resource reallocation Total reorganization New workflow procedures New CEO coming from outside

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Scale of change (1) (Dunphy & Stace)
1.

1. Fine Tuning.
 At departmental level.  Making re-alignments to ensure that there is a match between strategy, structure, people and processes.

2.

2. Incremental Adjustment.
 Bit by bit changes to match the changing environment.  Minor modifications to strategies or structures….. 12...
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