Organizational Change Organizational Change Part the FirstPart the First

Steven E. PhelanSteven E. Phelan

July 2005July 2005

Images of ManagingImages of Managing

• Controlling… Top-down view of management Fayol’s theory of management: planning,

organizing, commanding, coordinating and controlling.

• Shaping… Participative style of management Improving the capabilities of people within the

organization

Images of Change OutcomesImages of Change Outcomes

• Intended Change: Change is a result of planned action

• Partially Intended Change: Change may need to be re-modified

after it is initially implemented

• Unintended Change: Forces beyond the control of the change

manager

Images of Change ManagersImages of Change Managers

Images of Managing

Controlling . . . (activities)

Shaping . . .(capabilities)

Images of Change

Outcomes

Intended DIRECTOR COACH

Partially Intended NAVIGATOR INTERPRETER

Unintended CARETAKER NURTURER

Images of Change ManagersImages of Change Managers

Director• Based on an image of

management as control and of change outcomes as being achievable.

• Supported by the n-step models and contingency theory.

Coach• Relies upon building in

the right set of values, skills and “drills” that are deemed to be the best ones that organizational members will be able to draw on in order to achieve desired organizational outcomes.

• Related to organizational development approaches.

Images of Change ManagersImages of Change ManagersNavigator• Control is still seen as at the

heart of management action, although a variety of factors external to managers mean that while they may achieve some intended change outcomes, others will occur over which they have little control.

• Supported by the contextualist and processual theories of change.

Interpreter• The manager creates

meaning for other organizational members, helping them to make sense of various organizational events and actions.

• Supported by the sense-making theory of organizational change

Images of Change ManagersImages of Change ManagersCaretaker• The change manager’s

ability to control is severely impeded by a variety of internal and external forces beyond the scope of the manager. The caretaker is seen as shepherding their organizations along as best they can.

• Supported by life-cycle, population-ecology and institutional theories.

Nurturer• Even small changes may

have a large impact on organizations and managers are not able to control the outcome of these changes. However, they may nurture their organizations, facilitating organizational qualities that enable positive self-organizing to occur.

• Related to chaos and Confucian/Taoist theories.

QuestionsQuestions• To what extent are you more comfortable with one or

other of the six images? Why is this the case?

• What are the strengths and limitations of the images that you have identified as most relevant to you?

• What skills do you think are associated with each image? Are there areas of personal skill development that are needed

for you to feel more comfortable in using other images?• Have you ever been in an organization that was

dominated by particular images? What barriers to alternative images existed in this

organization? What strategies could overcome these barriers?

Green Mountain CaseGreen Mountain Case

• An example of a problem that has been dis-solved Which frame does it fit? How does it look through another frame?

Why change?Why change?

• Change is a risky activity – many organizational changes fail or do not realize their intended outcomes. This raises the question of why change is so prevalent?

• Pressure to change comes from: External, environmental pressures Internal, organizational pressures

External, environmental pressuresExternal, environmental pressures

Pressure Examples Description

Fashionpressures

Boeing Co.This is based on mimetic isomorphism – imitating companies that are legitimate and successful

Mandated pressures

Chevron TexacoThis is based on coercive isomorphism – when change is demanded by outside sources.

Geopolitical pressures

3M

This is when global crises greatly impact an organization and change is necessary

for survival.

External, environmental pressuresExternal, environmental pressures

Pressure Examples Description

Market decline pressures

AOL Time Warner

When current markets that the organization operates in begin to decline there is pressure to find newer, more viable markets.

Hypercompetition pressures

Gateway

This affects the way organizations respond to their consumers and their competitors to cater for the increasingly rapid pace of business.

Reputation and credibility pressures

Walt Disney Company

In light of recent corporate governance scandals in organizations, the pressure to maintain a good reputation and high level of credibility has increased.

Internal organizational Internal organizational pressurespressures

Pressure Examples Description

Growth pressures Microsoft

Existing systems and processes in a smaller organization may no longer be applicable when the size of the organization increases.

Integration and collaboration

pressuresEDS

Integration and creating economies of scale can lead to pressure for change in organizations.

Identity pressures Forte Hotel

A common organizational identity and the unified commitment of staff in different areas/departments of an organization can be difficult to manage and may encourage change.

Internal organizational Internal organizational pressurespressures

Pressure Examples Description

New broom pressures

Bank of America

New authority figures in an organization can herald a new era and often signal significant changes an organization in an organization.

Power and political

pressures

Morgan Stanley

Power relationships and politicking can change internal processes and decision making. This has significant flow on effects within the organization.

Change Problems – Five FrictionsChange Problems – Five Frictions• Distorted perceptions

Hubris, cognitive biases etc.

• Dulled motivation Costs of change, cannibalization costs, cross subsidy comforts

• Failed creative response Speed or complexity or vision is lacking

• Political deadlocks Departmental politics creates blockages

• Action disconnects Leadership inaction Embedded routines are sticky Cultural values resist change

QuestionsQuestions

• To what extent can you identify environmental pressures propelling your organization toward change? To what extent do you have influence over whether

and how to change?• Which of the reasons to avoid change have

you experienced or seen? How easy is it to raise issues in your organization

about the rationale for engaging in specific changes? Is there a dominant rationale? Why?

What personal criteria might you adopt for initiating a specific change “for the right reasons”?

Diagnostic toolsDiagnostic tools

• The image of the change manager impacts the types of tools that may be used.

• The different images highlight the range of reasons why tools like these may be utilized – they illustrate the numerous ways change can be interpreted.

Advantages of using diagnostic toolsAdvantages of using diagnostic tools11

• Simplifies a complex situation.• Identifies priorities for attention.• Highlights interconnectedness of various

organizational properties (e.g., strategy and structure).

• Provides a common “language” with which to discuss organizational characteristics.

• Provides a guide to the sequence of actions to take in a change situation.

1 Source: Burke (2002)

Diagnostic modelsDiagnostic models• Six-box organizational

model• 7-S framework• Star model• Congruence model• Burke-Litwin model• Four frame model• Diagnosis by image• PESTEL framework

• Scenario analysis• Gap analysis• Elements of strategy• Strategic inventory• Newsflash exercise• Cultural web• Stakeholder analysis• Forcefield analysis

QuestionsQuestions• Have you improved your knowledge of

available diagnostic tools and models by reading this chapter? Do you feel that you could apply them when

necessary? If you were to select two or three favourite

tools/models, which would they be and why?

• To what extent do your images of change influence which diagnostic tools you are most comfortable using or see as most relevant?

Dennis Hightower CaseDennis Hightower Case

• What does Hightower need to change at Disney?

• Where should he change, when, and how?

• What will be the biggest obstacles to change?

Peter Browning CasePeter Browning Case

• What is Browning’s predicament at White Cap?

• What should his change objectives and time frame be?

• What should he do with White, Lawson, Stark and Green?

• What qualities are most needed to be a successful change agent in this case?