session 6 developing a market- oriented culture and organisational strategies for change the crux...

Session 6

Developing a Market-oriented Culture and

Organisational Strategies for

Change

The crux session1

Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

Course ObjectivesTo deliver a coherent and deliverable

market oriented internal culture to encourage flexibility

which is SMART enough for your employer to understand and give you the go ahead.

To follow the CIM guidelines so as not to throw away marks

To maximise the LSM on-line resources

=

SUCCESSMichael G.Warner Chartered Marketer MBA DipM FCIM FIDDM 2

Change Management

“ Organizational change can be regarded as a continuous process of experience and adaptation aimed at matching an

organization's capabilities to the needs and dictates of a dynamic and uncertain environment” ( Burnes 1996)

Change management is the process of planning and implementing change within organisations.’

3Michael G.Warner Chartered Marketer

MBA DipM FCIM FIDDM

Market orientation

An organisational culture where beating the competition through the creation of superior customer value is the paramount objective throughout the business

•Orientated towards customer•Alert to competitive situation•Co-operation between functions•Emphasis on profit, not turnover•Responsiveness to changes

4Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

Creating a market oriented culture

• Intelligence and knowledge

• Value creation

• Communication


Organisation Culture “…the philosophies, ideologies, values, beliefs,

assumptions, attitudes, expectations and norms shared by members of the organisation.” Hellreigel et al (1992)

It includes the following:

• Observed behaviour • Norms shared by working groups• Dominant brand values • Employee and Customer policies• Rules that newcomers must learn to

become accepted• Physical environment and interaction with

external stakeholders


The Cultural Web J&S

The Paradigm

Organisational Structures

Power Structures

Symbols

Control Systems

Rituals and

Routines

Stories and

Myths

External or internal events and/or people that the members of the company talk about indicate organisational values.

The type and style of organisational logos, premises, staff facilities, uniforms, dress codes and communications highlight cultural characteristics.

The pockets of real power held by individuals that does not necessarily includes members of the management structure but it can rather be any influential individual within the organisation.

Formal and informal structural systems that define relationships and activities that, consequently, influence organisational power structures.

The adopted control processes and methods such as financial, systems, service and quality underline the perceived importance of specified activities to the organisation.

Source: Johnson Gerry (1992)

Formal and informal events such as employee of the month competitions or special social gatherings suggest preferred behaviour in the organisation.


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Super

ordinate goals

Shared values

Strategy

Staff

Structure

Styles

Systems

Skills

The McKinsey 7s fundamental to apply


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In Search of Excellence (Peters and Waterman)

• Close to customer - learn from their customers and proven to be success though differentiation

• Productivity through people - consider people as a root for quality and productivity

• Hands on, value driven - regularly monitor the achievement of the values

• Autonomy and Entrepreneurship - create many leaders and innovators

• Simultaneous loose-tight properties - simultaneously are centralised and decentralised.

• Simple form, lean staff - mostly have simple structures and systems

• Stick to the knitting - favour their comfort zone

• A bias for action, active decision making - "Do it, fix it, try it."


Miles and Snow’s Strategy Typology 1978

• The defender – lack of innovation

• The prospector – first mover advantage

• The analyser – defend competitive advantage and takes advantages of opportunities

• The reactor – follows developments


Some factors driving change

•External issues

•Sociological•Legal•Economic•Political•Technological•Competitive

Internal issues

•Retention or gain of competitive advantage

•Cost-savings

•New senior management


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Characteristics of Change• Driving forces.

Directors, Stakeholders, opportunities, competitors

• Restraining forces.

Inadequate Cultural change Planning

Lack of Employee Involvement

Imperfect Communication Strategies


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Preparing for change

• Internal marketing -

• Current attitude• How big a change is needed• Who the ‘influencers’ are • How big resistance is likely to be

• Internal marketing mix -

• Segmentation, product, price, promotion, place


Creating an environment for change

• Encourage the right attitude

• Develop a culture that is based on creativity & innovation

• Provide appropriate recognition and rewards

• Encourage flexibility

• Foster employee involvement


Creating major change(Kotter 1996)

• 1. Establish sense of urgency• 2. Create the guiding coalition• 3. Develop a vision and strategy• 4. Communicate the change vision• 5. Empower broad-based action• 6. Generate short term wins• 7. Consolidate gains and produce more change• 8. Anchor new approaches in the culture

V

• Kurt Lewin (1940’s) Unfreeze – Change- Refreeze(http://www.mindtools.com/pages/article/newPPM_94.htm)


Possible Effects of Change on Staff


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Response of Individuals to Change

• Acceptance.

• Indifference.

• Passive resistance.

• Active resistance.


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Implementing change

• Pilot scheme

• Incremental changes

• ‘Overnight’ - out with the old and in with the new

• Variations on the above

• Monitor and review


A Programme of Organisational Change

1. Change agent/Champion of Change

2. Inform employees of the purpose.

3. Data-gathering & diagnostic exercise.

4. Strategy development.

5. Secure employee support.

6. Implementation.

7. Control.


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A Marketing Approach to Change

• Tell: people

• Sell: need for change & vision.

• Evolve: attitudes, ideas & learning capacity.

• Involve: people.


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Internal marketing mix

SegmentationSupporters, opposers, non involved.Different levels of management

Product - plan/change Strategy and process of changeJob or function may be internal ‘product’

Price - benefits & psychological costsPsychological price - loss of status, uncertainty, loss of productivity

Promotion - two wayClear communication essentialDifferent mix - noticeboards, meetings, intranet, newsletters, etc

Place - method & timing Information, training etc - channel providing services to the internal customer


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Problems in Change Management

• Failure to identify need.

• Failure to identify objectives.

• Wrong strategy.

• Not enough resources committed.

• Bad method of implementation.

• Bad implementation resulting in non-acceptance.


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Agenda


Main Organisational Market Approaches


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Orientation Characteristics May be found in

Sales Sell what is producedOperational targets expressed as turnover not profitSales function powerful

Volume-driven markets with high fixed costsSmall/‘young’ organisations

Production/Operations Priorities determined by drive for efficiency and internal factors rather than customer needsOperations function powerful

Manufacturing (where investment and set-up times are high)Not-for-profit sectors

Technology Products/services driven by what technology can deliver‘Technical’ function powerfu

Computer and hi-tech markets

Market 5 key characteristics (Narver& Slater -see next slide)

Service or competitive markets where customer preference counts

Business Orientations


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Charles Handy Cultural Types

• Power culture

• Role culture

• Task Culture

• Person Culture


Power Orientation

• Dominating environment• Powerful people strive to maintain control• Work is divided by function or product• Centralisation is paramount• Quick decision making but depends upon the ability of

management• Employees rewarded for effort, success and compliance with

values• Change is determined by central source of power• Organisation generally disregards human values and welfare• Highly competitive, tough and abusive, low morale and high

turnover in middle layers


Role Orientation

• Aspires to be rational and orderly • Built around defined jobs, rules and procedures (bureaucracy) • People are recruited to fit into jobs • Rational and logical, stable and predictable • Strong emphasis on maintaining the hierarchy and status


Task Orientation

• Functions and activities are evaluated in terms of their contribution to organisational goals

• Management is concerned with continuous and successful solution of tasks

• Performance is judged by outputs • Network based approach, organizational fluidity, rapid,

flexible and responsive • Expertise is the major source of individual power and

authority


Person Orientation

Culture exists to serve the needs of its members

Organisation provides a service for individual specialists which they could not provide for themselves

Individuals influence each other through example and helpfulness

Roles are assigned on the basis of personal preferences and the need for learning and growth

The organisation is subordinate to the individuals and depends on the individual for its existence

Most often found in societies, professional assocs.


Inter-relationships between organizational culture, environment and market orientation

• Organizational culture influences and is influenced by the beliefs, values and norms of each individual in the organization.

• Culture is therefore consequently difficult to change

• The environment can get turbulent in a short period of time


Achieving stronger market orientation

• Organizational cultural commitment to market orientation

• Identification of particular organizational members

• Power and control; issues


Shared value

• "The only thing that works is management by values. Find people who are competent and really bright, but more importantly, people who care exactly about the same things you care about.“ - Steve Jobs


Punctuated Equilibrium

EnvironmentalChange

Time

For example changes occurring in the wider economic environment or in the organisation’s industry.

Continuousstage

Incrementalstage

Fluxstage

Transformationalstage

StrategicFit

StrategicDrift

StrategicWear out

Adapted from Johnson, Scholes and Whittington (2005)

Stability and certainty

Instability and uncertainty


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Moderate-high uncertainty

E.g. Fashion industry

High uncertainty

E.g. high technology & aerospace firms

Low uncertainty

E.g. Confectionery manufacturers

Low-moderate

uncertainty E.g. Chemical industry

Rate and scope of change in environment

Complexity of environment(number of elements and

dissimilarity)

Sta

ble

Unst

able

Simple Complex

Environmental Uncertainty


‘Known knowns’

We know what we know‘

‘Known unknowns’

We know what we don’t know‘

‘Unknown knowns’

We don’t know what we know

‘Unknown unknowns’

We don’t know what we don’t know

Causes of strategic uncertainty

Our understanding

of the world we inhabit

Quality of our information

Low

Low

High

High


What Creates Organisational Change?

Influential organisational players usually initiate change when they become conscious of a performance gap – some disparity between actual and desired performance.

• External environment• Macro-environment• Competitive environment• Internal environment• 5 Ms (men, money, machinery, materials & markets)• Contexts: Objectives, Technology, Business processes, Financial

resources, Structure, People, Culture & Power.


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Perspectives on change - political

• Change often threatens established interests, who will oppose it• Success depends on

– Building power sources– Creating alliances and coalitions– Manipulating information to support position

• A political process:– Suited to which conditions?


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Critical Dimensions of Change

Novel

Familiar

Core Margin

4

23

1


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External Consultants for Managing Change

Benefits• Specialist knowledge.• Previous experience.• Independent referee.• Neutral.• Not tied by status or rank.• Objective.


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External Consultants for Managing Change

Disadvantages• Viewed as top management spies.• Standard solution.• Too academic.• Need time to learn.


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Globalisation

• Globalisation of markets (Levitt, 1983) – “needs and desires irrevocably homogenised”– Implied standard production and marketing

• Or going local?– Local tastes vary, local brands outsell global– Much variation to suit diverse tastes (e.g. Starbucks, Coke, Nestle

´)• Globalisation of production

– High-wage countries outsourcing supply to cheaper sources – India, China, eastern Europe


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Themes in the international context


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Evaluating Change Management

• Has change contributed to overall objectives?• Has the problem been solved?• Have the behavioural changes happened?• The reaction of people.


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International Influences on Management/ Globalisation

• Changes in consumer expectations• Technological change.• Deregulation.• Regional forces.• Markets.


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Model of Change Process


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Models of Change

• Life cycle perspective. Change goes through a series of steps. A rational approach

• Emergent perspective. Change takes place in an uncertain context

• Participative perspective. Change relies on those affected being willing to cooperate with the change

• Political perspective. Change often threatens established interests, who will oppose it


MBA DipM FCIM FIDDM

Perspectives on change – life-cycle

• Change goes through a series of steps• Success depends on managing these efficiently

– objectives, responsibilities, deadlines, budgets– focus on planning and control

• Many established tools and techniques • A rational process:

– suited to which types of project or conditions?


MBA DipM FCIM FIDDM

Perspectives on change - emergent

• Change takes place in an uncertain context, and unrealistic to expect outcomes to be close to plan

• Success depends on– Learning during the project– Adapting to changing conditions– Managing interest groups

• Plan, but be ready to change• See emergent perspective on strategy


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Perspectives on change - participative

• Change relies on those affected being willing to cooperate with the change

• Success depends on– developing ownership and commitment– consulting widely for ideas– seeking consensus

• A democratic process:– suited to which conditions?


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Dimensions of Change Projects

• Core/Marginal• Novel/Familiar


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Business Orientations


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Internal Marketing Mix

• Product: plan/change• Price: benefits & psychological costs. • Place: method & timing of announcements. • Promotion: two way


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Principles of Internal Marketing

• Plan implementation.

• Consider staff needs & present benefits.

• Identify influencers.

• Package & promote.

• Utilise formal & informal communication networks.


MBA DipM FCIM FIDDM

session 6 developing a market- oriented culture and organisational strategies for change the crux...

Documents

success michael g

organisational culture

organisational values

organisation culture

market oriented culture

organisational strategies

management structure

simple structures