slide 11.1 bernard burnes, managing change, 5 th edition, © pearson education limited 2009 lecture...

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Bernard Burnes, Managing Change, 5th Edition, © Pearson Education Limited 2009

Lecture 3 Learning OutcomesLecture 3 Learning Outcomes

Managing change / managing choiceManaging change / managing choice The trajectory process and changeThe trajectory process and change The assessment process and changeThe assessment process and change From Commitment to decision making and From Commitment to decision making and

riskrisk

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Organisational change and managerial Organisational change and managerial choicechoice

( Source Burnes Ch 11)( Source Burnes Ch 11)

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Managing choice Managing choice Managing changeManaging change

ChoiceChoice What to changeWhat to change When to changeWhen to change How to changeHow to change Whether to change.Whether to change.

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Managing changeManaging changeManaging choice (Continued) Managing choice (Continued)

The choice processThe choice process – which is concerned with – which is concerned with the nature, scope and focus of organisational the nature, scope and focus of organisational decision-making.decision-making.

The trajectory processThe trajectory process – which relates to an – which relates to an organisation’s past and future direction and is organisation’s past and future direction and is seen as the outcome of its vision, purpose and seen as the outcome of its vision, purpose and future objectives.future objectives.

The change processThe change process – which covers approaches – which covers approaches to, mechanisms for achieving, and outcomes of to, mechanisms for achieving, and outcomes of change.change.

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Figure 11.1 The Choice Management–Change Management model

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The choice processThe choice process

Changing the rules Changing the rules Playing to the rules Playing to the rules Ignoring the rules.Ignoring the rules.

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The choice process (Continued)The choice process (Continued)

Organisational Organisational Context Context Focus Focus of choice of choice Organisational Organisational Trajectory.Trajectory.

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Figure 11.2 The choice process

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Figure 11.3 Organisational trajectorySource: Adapted with permission from Mintzberg, H., Patterns in Strategy Formation, Management Science, 24(9), (1978). Copyright 1978, The Institute for Operations Research and the Management Sciences , 7240 Parkway Drive, Suite 300, Hanover, Maryland 21076

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SWOT analysisSWOT analysis

What is a SWOT analysis? What is a SWOT analysis?

SWOTSWOT stands for : stands for :

SStrengths (internal)trengths (internal)

WWeaknesses (internal)eaknesses (internal)

OOpportunities (external) pportunities (external)

TThreats (external) hreats (external)

What does it do?What does it do?

A SWOT analysis enables A SWOT analysis enables managers to identify the key managers to identify the key internal and external issues internal and external issues they need to take into they need to take into account in order to account in order to understand the context in understand the context in which the organisation which the organisation operates. Also, by identifying operates. Also, by identifying key issues, it begins to focus key issues, it begins to focus managers on the areas managers on the areas where they need to make where they need to make choices, and helps to identify choices, and helps to identify some of the constraints and some of the constraints and risks involved.risks involved.

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PESTEL frameworkPESTEL framework(as per lecture 1)(as per lecture 1)

What is the PESTEL What is the PESTEL Framework? Framework?

PESTELPESTEL stands for: stands for:

PPoliticaloliticalEEconomicconomicSSocioculturalocioculturalTTechnologicalechnologicalEEnvironmentalnvironmentalLLegalegal

What does it do? What does it do?

The PESTEL framework is a The PESTEL framework is a rigorous approach to identifying rigorous approach to identifying and understanding the main and understanding the main external environmental factors external environmental factors which affect an organisation. As which affect an organisation. As with the SWOT analysis, it also with the SWOT analysis, it also plays a role in focus organisations plays a role in focus organisations on the choices open to them and on the choices open to them and the constraints and risks involved the constraints and risks involved in these choices. in these choices.

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NoteNote

Different tools look at different things and Different tools look at different things and usually give different answers.usually give different answers.

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Focus of choiceFocus of choice

Limited range of issuesLimited range of issues Short termShort term Medium termMedium term Long term.Long term.

StyleStyle PassivePassive ReactiveReactive ProactiveProactive Co-ordinatedCo-ordinated Piecemeal.Piecemeal.

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Hoshin KanriHoshin Kanri

The word The word hoshinhoshin can be broken into two parts. The can be broken into two parts. The literal translation of literal translation of hoho is is directiondirection. The literal translation . The literal translation of of shinshin is is needleneedle, so the word hoshin could translate , so the word hoshin could translate into into direction needledirection needle or the English equivalent of or the English equivalent of compasscompass. .

The word The word kanrikanri can also be broken into two parts. The can also be broken into two parts. The first part, first part, kankan, translates into control or channeling. The , translates into control or channeling. The second part, second part, riri, translates into reason or logic. , translates into reason or logic.

Taken altogether, Taken altogether, hoshin kanrihoshin kanri means management means management and control of the organization’s direction needle or and control of the organization’s direction needle or focus.focus.

Total Quality Engineering Inc (2003)Total Quality Engineering Inc (2003)

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Figure 11.4 Types of decisionSource: Adapted from Rollinson (2002: 254)

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The trajectory processThe trajectory process

The organisation’s career path:The organisation’s career path: Where it has beenWhere it has been Where it isWhere it is Where it wants to go. Where it wants to go.

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The trajectory process (Continued)The trajectory process (Continued)

VisionVision StrategyStrategy Change.Change.

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Figure 11.5 The trajectory process

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Trajectory processTrajectory process

CoherenceCoherence

Past SuccessPast Success

Present AppropriatenessPresent Appropriateness

Agreement on Future.Agreement on Future.

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Constructing a visionConstructing a vision

The four elements of a visionThe four elements of a vision1.1. MissionMission. This states the organisation’s major strategic purpose or . This states the organisation’s major strategic purpose or

reason for existing. It can indicate such factors as products, markets reason for existing. It can indicate such factors as products, markets and core competencies.and core competencies.

2.2. Valued outcomesValued outcomes. Visions about desired futures often include . Visions about desired futures often include specific performance and human outcomes the organisation would specific performance and human outcomes the organisation would like to achieve. These can include types of behaviour and levels of like to achieve. These can include types of behaviour and levels of skill as well as more traditional outcomes such as turnover and profit. skill as well as more traditional outcomes such as turnover and profit.

3.3. Valued conditionsValued conditions. This element of creating a vision involves . This element of creating a vision involves specifying what the organisation should look like to achieve the specifying what the organisation should look like to achieve the valued outcomes. valued outcomes.

4.4. Mid-point goalsMid-point goals. Mission and vision statements are by nature quite . Mission and vision statements are by nature quite general and usually need to be fleshed out by identifying more general and usually need to be fleshed out by identifying more concrete mid-point goals. These represent desirable organisational concrete mid-point goals. These represent desirable organisational conditions but lie between the current state and the desired future conditions but lie between the current state and the desired future state. state.

Cummings and Huse (1989)Cummings and Huse (1989)

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The change processThe change process

Objectives and outcomes Objectives and outcomes Planning the change Planning the change People.People.

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Figure 11.6 The change process

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The triggerThe trigger

Vision/StrategyVision/Strategy

Current performanceCurrent performance

OpportunitiesOpportunities

ThreatsThreats

ActionAction: Assessment.: Assessment.

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The assessment remitThe assessment remit

ReasonsReasons ObjectivesObjectives ConsequencesConsequences Who to involveWho to involve How to involveHow to involve TimescaleTimescale Resources.Resources.

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The assessment processThe assessment process

ClarificationClarification AlternativesAlternatives Data collectionData collection Data analysisData analysis FeedbackFeedback RecommendationRecommendation Decision:Decision:

– – Yes / Yes / No / Maybe / Something else / No / Maybe / Something else / Somewhere else.Somewhere else.

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The five characteristics of an effective The five characteristics of an effective activity planactivity plan

1.1. Relevance: activities are clearly linked to the Relevance: activities are clearly linked to the change goals and priorities.change goals and priorities.

2.2. Specificity: activities are clearly identified rather Specificity: activities are clearly identified rather than broadly generalized.than broadly generalized.

3.3. Integration: the parts are closely connected.Integration: the parts are closely connected.

4.4. Chronology: there is a logical sequence of Chronology: there is a logical sequence of events.events.

5.5. Adaptability: there are contingency plans for Adaptability: there are contingency plans for adjusting to unexpected forces.adjusting to unexpected forces.

(Beckhard and Harris, 1987: 72)(Beckhard and Harris, 1987: 72)

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A commitment planA commitment plan

A A commitmentcommitment planplan is a strategy, described in a series of action is a strategy, described in a series of action

steps, devised to secure the support of those [individuals and steps, devised to secure the support of those [individuals and

groups] which are vital to the change effort. The steps ingroups] which are vital to the change effort. The steps in

developing a commitment plan are:developing a commitment plan are:

• Identify target individuals or groups whose commitment is Identify target individuals or groups whose commitment is necessary.necessary.

• Define the critical mass needed to ensure the effectiveness of Define the critical mass needed to ensure the effectiveness of the change.the change.

• Develop a plan for getting the commitment of the critical mass.Develop a plan for getting the commitment of the critical mass.• Develop a monitoring system to assess the progress.Develop a monitoring system to assess the progress.

((Beckhard and Harris, 1987: 93)Beckhard and Harris, 1987: 93)

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PeoplePeople

Creating a willingness to changeCreating a willingness to change Awareness : FeedbackAwareness : Feedback

Involving peopleInvolving people Communication & InvolvementCommunication & Involvement

Sustaining momentum.Sustaining momentum. Resources : change agents: new competenciesResources : change agents: new competencies

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Choice and changeChoice and change

Choice is constrained but it exists Choice is constrained but it exists Change can open up choices Change can open up choices Change can close off choices Change can close off choices Change has to be managed Change has to be managed Choice has to be managed.Choice has to be managed.

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An overview of Decision Making themesAn overview of Decision Making themes

Figure 7.1 Overview of decision making in organisations

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How decisions affect valueHow decisions affect value

People make choices about limited resourcesPeople make choices about limited resources Inputs (where to raise capital, who to employ)Inputs (where to raise capital, who to employ) Transformation (how to make a product)Transformation (how to make a product) Outputs (what price to charge)Outputs (what price to charge)

These choices affect the value added (if any)These choices affect the value added (if any) Significant choices are usually opaque, ambiguous Significant choices are usually opaque, ambiguous

and shaped by subjective interpretationsand shaped by subjective interpretations

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Decision-making conditionsDecision-making conditions

CertaintyCertainty all info. available (interest rates example)all info. available (interest rates example)

RiskRisk enough info. to estimate (loans example)enough info. to estimate (loans example)

UncertaintyUncertainty goals clear, but lack info. to decide actiongoals clear, but lack info. to decide action

(e.g. competitors’ reactions)(e.g. competitors’ reactions) AmbiguityAmbiguity

goals AND how to reach them unclear (e.g. broad strategic goals AND how to reach them unclear (e.g. broad strategic issues where people disagree over mission)issues where people disagree over mission)

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Degree of uncertaintyDegree of uncertaintyand decision-making type and decision-making type

Figure 7.6 Degree of uncertainty and decision-making typeSource: Adapted from Daft (2000), p.271

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Vroom and Yetton’s decision treeVroom and Yetton’s decision tree

Figure 7.8 Vroom and Yetton’s decision treeSource: Reprinted from Vroom and Yetton (1973), p. 188 by permission of the University of Pittsburgh of the University of Pittsburgh Press,copyright © 1973 by University of Pittsburgh Press..

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Case StudyCase Study

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Supplementary MaterialSupplementary Material

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(Iterative) tasks in making decisions (Iterative) tasks in making decisions

Figure 7.2 Tasks in making decisions

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Types of decision and Types of decision and organisational level organisational level

Figure 7.4 Types of decision, types of problem and level in the organisationSource: Robbins, Stephen p., Coulter, Mary, Management, 8th edition, © 2005. Reprinted by permission of Pearson Education, Inc. Upper Saddle River, NJ

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Dependent or independent Dependent or independent

Figure 7.5 Possible relationships between decisionsSource: Cooke and Slack (1991), p.24

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Programmed and non-Programmed and non-programmedprogrammed

Programmed decisions (Simon, 1960) Programmed decisions (Simon, 1960) Familiar, structured problems, info. knownFamiliar, structured problems, info. known Resolve by procedures, rules, policies, quantitative Resolve by procedures, rules, policies, quantitative

analysisanalysis Non-programmed decisionsNon-programmed decisions

Unfamiliar, unique problem, info. unclear and open to Unfamiliar, unique problem, info. unclear and open to interpretationinterpretation

Resolution depends on judgement, intuition, Resolution depends on judgement, intuition, negotiation, creativity – e.g. Deutsche Banknegotiation, creativity – e.g. Deutsche Bank

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Biases in making decisionsBiases in making decisions

Complex decisions mean we use shortcuts – rules Complex decisions mean we use shortcuts – rules which simplify complexity. These lead to biases:which simplify complexity. These lead to biases:

Prior hypothesisPrior hypothesis Select information which supports previous beliefsSelect information which supports previous beliefs

RepresentativenessRepresentativeness Generalise from small sampleGeneralise from small sample

Illusion of controlIllusion of control Overestimate chances of favourable outcomeOverestimate chances of favourable outcome

Escalating commitmentEscalating commitment Put in more resources despite evidence of failurePut in more resources despite evidence of failure

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Participation in decision makingParticipation in decision making

Vroom and Yetton (1973) developed a contingency Vroom and Yetton (1973) developed a contingency model of decision making – i.e. the extent to which it model of decision making – i.e. the extent to which it is wise to involve subordinates in decision depends on is wise to involve subordinates in decision depends on the circumstancesthe circumstances

Section 7.7 outlines the five decision styles,Section 7.7 outlines the five decision styles,and eight situational factors – Fig. 7. 8and eight situational factors – Fig. 7. 8

slide 11.1 bernard burnes, managing change, 5 th edition, © pearson education limited 2009 lecture...

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