Alignment And Change Management Framework Business Essay

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In this paper, we will be examining an organization and showing relevance of change practice and theories on the organizational change. This paper will focus specially on alignment and importance of organizations' transformational success.

The Organizational change, key concept, theories, culture, philosophy and psychology Literature will be reviewed in order to develop and test the hypothesis to verify the impact of change management on transformational change at Wipro, India in the year 2004.

Wipro is one of India's most esteemed companies started as a producer of cooking oil in 1945. Today Wipro is a large diversified corporation by Indian standards. Wipro has built three new businesses - enterprise solutions, infrastructure management and business process outsourcing that together account for 30% of total software revenues. These businesses are expected to be the company's major growth drivers in the future. The main challenge that Wipro faced is to develop the necessary human resources. Wipro has little choice but to adapt to the relentless pace of change otherwise they have to face the risk of failure. (Jamali et al., 2006)

Wipro had 23,300 employees with revenues $1,349.8 million, and $230.8 million in profits for the fiscal year ended March, 2004. Sales had increased in Wipro by an average of 25% a year and earnings by 52% annually during the period, 1999-2004. (ICMR, 2004)

Currently, Wipro Ltd (NYSE:WIT) is a global information technology, consulting and outsourcing company with 140,000 employees serving over 900 clients in 57 countries. The company posted revenues of $7.37 billion for the financial year ended Mar 31, 2012. (www.wipro.com)

As 2004 got under way, Wipro's Top Management decided to looked back with Wipro's recent financial performance and they have spent a huge amount to restructured the division completely so that it would start selling end-to-end solutions to customers.

Over the years, Wipro had built a strong and powerful top-management team of professionals. By and large, Wipro filled up senior positions from within, except for some specific specialized requirements.

An "Alignment" definition as per Oxford Dictionaries is "arrangement in a straight line or in correct relative positions". (http://oxforddictionaries.com/definition/english/alignment)

Alignment means that each element consistently supports the competitive strategy and mutually reinforces other elements (Porter 1996).

Executive Summary

Research Methodology

Figure : Full Stream Transformation Process (Reproduced)

In this paper, we will use Full Stream Transformation process as specified in Figure 1. Transformation has an upstream component, a midstream component and a downstream component. All components require to be designed and will lead for transformational success.

The upstream stage is related to planning and foundation for success, mid-stream will more focus on designing and downstream is related to the implementation part.

This methodology can also be easily understood by PDCA cycle (Plan, Do, Check and Act) as specified in figure 2.

Upstream Changes

The changes made by change leaders at Wipro were to assess their organization's capacity and capabilities to succeed in the change. A major key concern for Wipro was employee attrition and the biggest source of attrition was employees with experience ranging from 2 to 4 years' experience, going overseas (US) and employees were working for a couple of years at Wipro, and then leaving company for their studies or other better opportunities.

Figure : PDCA Cycle (Reproduced)

This major concern lead to change at Wipro and they decided to change their strategy, and identify the conditions and infrastructure requirement to support employees and to achieve desired outcome.

There was a requirement of alignment before engaging the rest of organization in the change and it requires positive employee involvement throughout the change. Also during this stage the manpower was fully engaged in this transformational success at Wipro.

Midstream change

The midstream stage of change is required at the time of design development and the design must be developed, clarified, tested and refined including impact studies. The strategy and policy decided in the upstream changes are tailored and establish to support the organization for implementation.

The leaders at Wipro have focused on midstream changes to implement successful downstream changes.

Downstream Change

The downstream changes are related to the implementation including building best practices and dismantling the change infrastructure that is no longer required. The leaders at Wipro have adequately identified and created upstream conditions for transformational success and also completed their designs and tested them for feasibility.

Furthermore, when appropriate upstream and midstream work are accomplished, the downstream i.e. implementation goes efficiently; in such situation the employees are dedicated to create a future state that they can understand and help the design.

Although the "fullstream transformation model" offers a conceptual overview of the process of change. For more success, other advanced models for change process can be discussed.

The basis of change management is the employee's capacity to change that can be influenced by how change is presented to them. Employees' capacity to adapt to change can reduce if they misinterpret or resist the change which will cause barriers and other issues.

Each public sector organization requires considering the best way to approach change based on their specific cultural and stakeholder perceptions.

Factors common to successful change management involve:

Planning

Defined Governance

Committed Leadership

Informed Stakeholders

Aligned Workforce

Alignment and Change Management Framework

Findings in this paper clearly identify organizational alignment as one of the pillars of effective change management; as the organization's strategic alignment to its environment is vital for business success.

Both the information-processing argument (Galbraith and Schendel, 1983) and the population ecology perspective (Aldrich, Mc-Kelvey, and Ulrich, 1984) explicitly proposed that an organization must be capable of accommodating to variability and uncertainty in its environment.

Theory of Change

Change means anything that is different from the norm (Source). And as noted by ()Change has following dimensions:

a) Magnitude: Incremental, Major and Transformational

b) Focus: Strategic, Tactical, Operational

c) Level: Individual, Group, Organization

XXXXX Argues that once an organization distinguishes the nature and type of change and the phases in the change process, the organization requires to describe the mechanisms to measure the outcome of change.

The Drivers of Change Model as developed by Anderson and Anderson in 2001 and illustrated in, Figure 3 explains the requirement for the success of transformational change.

The model defines seven drivers, four that leaders are most familiar with them and three that are comparatively new to them. The drivers move from external & impersonal i.e. environment, marketplace, organizations and to the internal and personal i.e. culture and people. In case if the leaders do not consider internal changes and adapt the changes by external domains will lead to failure of efforts and vice-versa will also cause transformational success to fail.

The most important discussion here is to consider both external as well as internal drivers to be included in the scope of change and same way Wipro has also considered both factors in order to achieve the actual outcome.

Environment forces include:

Social,

Business and economic,

Political,

Governmental,

Technological,

Demographic,

Legal, and

Natural environment.

Figure : The Drivers of Change Model (Anderson & Anderson 2001)

Marketplace Requirements for Success

The business success determines through its marketplace and meets its customers' needs

The customer requirements not only include product or service need but also requires e.g. quality customer satisfaction etc. Changes in marketplace requirements will cause changes in environmental forces.

Business Imperatives

Business imperatives can be defined as organizations' strategy to be successful. Strategy requires efficient reconsideration and change to the organizations' vision, mission, strategy, goals, products etc. requires to meet its customer requirements.

Organizational Imperatives

Organizational imperatives stipulate changes in the organization's structure, staff, resources, systems, technology, and processes to implement and succeed its strategic business imperatives fruitfully.

Cultural Imperatives

Cultural imperatives represent the collective way of being, working, and teamwork etc. and also team must change to support the business new design, operations, and strategy to drive the strategy faster.

Leader and Employee Behavior

Therefore, leader and employee behavior must support each other to re-create organization culture to implement and sustain new business design profitably.

Leader and Employee Mindset

Leader and Employee mindset straight affects our behavior, conclusions, actions, and results. Transforming mindset is essential to prolonged change in behavior and culture.

Main Findings

The main findings is that Wipro had developed new businesses, generated more revenue and achieved the expected outcome through align their organizations' strategy and achieved the actual outcome.

Main Conclusion and Recommendations:

This research and theories discussed above show the internal and external alignment in an Organization and further research should be done in order to align the best tool and methodology to implement.

It shows that the organization is dependent on few models or framework only and further study is required in order to select the right model and framework as best tool to align the strategy in an Organization.

It is recommended to an Organization to do further research in order to select best tool & methodology to align their strategy.

Organizational Change and Alignment

In this paper, we will discuss all the change drivers which are affecting organizational change and alignment

The Change drivers are as follows:

External alignment and Environmental Change Drivers

Environmental change drivers can be explained by PESTEL structure & analysis.

PESTEL stands for

Political (P) Factor;

Economic (E) Factor;

Social (S) Factor;

Technological (T) Factor;

Environmental (E) &

Legal (L) factors

All factors analyzed in PESTEL may be inter-related and can affect each other. The PESTEL structure supports identification of macro-environmental factors can affect organization performance.

Political factors

Political factor such as Government Strength, Policies, Trade Regulations & Policies etc.

Economic factors

Economic factor such as inflation rates, Credit availability, Unemployment rates and flow of capital.

Social Factors

Social factors such as demographics, Wealth, lifestyle change and Educational levels.

Technological factors

Technological factors such as technological innovations and advancement.

Environmental factors

Environmental factors such as Environmental protection / waste management laws and regulations.

Legal factors

Legal factors such as Health, safety and environmental regulations, product regulations etc.

Industry-level Change Drivers

The elements of the competitor evaluation are Competitor's strategies, objective, assumption and their capabilities.

The market analysis will be based on customer's preferences their strategies and pattern and also it will change through following competitive forces:

New Competitors threat

Substitutes threat

Suppliers bargain power

Buyers bargain power

File:Porters five forces.PNG

Porter's Five Forces (Reproduced; Porter's 1979)

Internal Alignment and Company-level Change Drivers

The forces include:

Customer Perception

Financial Perception

Process Perception

Learning Perception

Models of Strategic Alignment

The Importance of synergy in building the Firms value chain through assuring the perfect correlation between internal and external alignment is clearly shown as we discuss models of strategic alignment:

A Systematic Approach to Transformation

Transformation in an organization requires two types of significant changes.

Macro-level changes

Micro-level changes

Macro-level changes, are implemented at the organizational level and can be easily visible in the market place e.g. marketing changes, direction changes etc.

Micro-level changes, are elusive and rest with teams & individuals include changes in organization's core values & procedures.

Figure : Strategic Planning for transformation (Reproduced)

Strategy by which an organization can build competitive advantage over the competition and achieve its vision. Strategy defines organization structure, policies and programs etc. Organizational targets can be developed from those objectives to meet the SMART (Specific, Measurable, Action Oriented, Realistic, Time bound) criteria. Each goal shall have action plan(s) to ensure the achievement.

Transparency in vision, mission understanding, capabilities awareness, limitations, market forces & environment and agreement on core values result in commitment lead to transformational success.

Frameworks that can helpful in strategic planning include the followings:

SWOT analysis

Balanced Score Card

Mckinsey‟s 7 S framework

COSO ERM framework

Project Management Framework

Six-Sigma

Identifying alignment requirements through SWOT Analysis - A Harbinger of Transformation

SWOT Analysis (Strength-Weakness-Opportunities-Threats) is helpful and important as well in the analysis of the above mentioned change drivers. It facilitates the organization case for transformational success and supports in strategy formulation.

Strength

Resources and capabilities can be considered as organizations' strength which can be utilized for developing a competitive advantage e.g. patents, reputation of product in market etc.

Weakness

Weakness of an organization can be defined as the absence of certain strength e.g. poor reputation, unpatented products etc.

Opportunities

Environmental analysis will be required to reveal opportunities for organizational growth and profit e.g. advancement in technologies.

Threats

Threats may be present due to change in the environmental driver e.g. new regulations

Figure : SWOT - Strategy matrix (Reproduced)

If the strategies are balanced and disciplined with SWOT analysis, it will lead to opportunities for transformational success of an organization.

After completion of SWOT analysis the firm should be able to conduct a TWOS analysis which aligns External Threats with Internal Strengths and Internal Weakness with external Opportunities as shown in Table 1.

S

S1,S2…Sn

O

O1,O2…On

T

T1,T2,…Tn

S1/T1

O1/T1

W

W1,W2…Wn

S1 / W1

O1 / W1

Table : TOWS Analysis

Balanced Scorecard

Another approach to assure balanced alignment of multiple perspectives of internal and external alignment was proposed by Norton & Kaplan in 1996 through the introduction of Balance Scorecard which translates organization's strategy into four perspectives with a balance between the following:

Non-financial and financial measures;

Short and long term objectives;

Performance results, and

Drivers of future growth

Figure : Balance Score Card (Reproduced; Norton & Kaplan 1996)

Balanced Scorecard is utilized in order to align activities to the vision and strategy, improvement in internal and external communications and observe organizational performance against organization goals.

McKinsey 7S framework:

McKinsey 7S framework was developed by Tom Peters and Robert Waterman in 1982, the basic concept of this model consists of seven internal interdependent aspects of an organization which require to be aligned for transformation success.

The seven factors are:

Strategy statements;

Organization Structure;

Systems and Processes;

Shared Values;

Staff;

Skills, &

Style of Leadership

Figure : McKinsey 7S framework (Reproduced; Peter & Waterman 1982)

Alignment of these elements is required for organizational transformational success. Whatever the type of change, this model can be utilized to understand the organizational elements interrelation, consideration for wider impact of changes & achieve the desired outcome.

COSO ERM framework

Figure : COSO Enterprise Risk Management (ERM) Framework (Reproduced, Moeller 2007)

The COSO Enterprise Risk Management (ERM) Framework explains all aspects required for effective risk management. (Moeller 2007)

This model has the following components:

Internal environment

Objective setting

Event identification

Risk assessment

Risk response

Control activities

Information and communication

Monitoring

Portfolio /Project Management Methods

A portfolio is a group of projects & together it can facilitate the transformational success of an organization. The components of portfolio can also be measured, ranked, risk-managed and prioritized. Project management competence can be defined in nine knowledge areas:

Integration Management,

Scope Management,

Time Management,

Cost Management,

Quality Management,

Human Resource Management,

Communications Management,

Risk Management and

Procurement management

Organization transformation requires breakthrough performance in change management. This in turn requires that changes are identified, evaluated, prioritized and authorized using portfolio management; relationships, interdependencies and benefits of changes are identified and managed using program management methodology and changes are delivered on time with quality using project management guidelines (Plan-Do-Check-Act - PDCA ) and techniques.

Figure : Portfolio Management (Reproduced; Levine 2005)

Lean Six-Sigma:

The following Steps for Six Sigma (Pande & Holpp. 2001) are:

1. DEFINE

2. MEASURE

3. ANALYZE

4. IMPROVE

5. CONTROL

LEAN Six Sigma is more effective & efficient with LEAN principles:

1. Eliminate wastes (non-value adding activities)

2. Rationalize (Simplify) & Standardize

3. Maintain the workplace using 5S and Visual Controls

4. Train, Assign, Self-check, Mistake-proof, Work together, Monitor, Empower

5. Improve processes continuously (Kaizen)

Figure : Six-Sigma / Lean Six Sigma (Reproduced; Pande & Holpp. 2001)

Conclusion & Recommendations:

Conclusion:

This research and theories discussed above show the internal and external alignment in an Organization and further research should be done in order to align the best tool and methodology to implement.

It shows that the organization is dependent on few models or framework only and further study is required in order to select the right model and framework as best tool to align the strategy in an Organization.

Recommendations

It is recommended to an Organization to do further research in order to select best tool & methodology to align their strategy.

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