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- CHANGE THAT EXISTS IN TODAYS ECONOMY
- OVERVIEW OF RECENT ECONOMIC CRISIS
- RISE OF COMMERSE
- BUREAUCRATIC ORGANIZATIONS
- ALTERNATIVE FORMS OF ORGANIZATION
- CULTURE-EXCELLENCE APPROACH
- LEARNING ORGANIZATION
- STAKEHOLD THEORY
- ASSUMPTIONS: STAKEHOLDERS AND ECONOMIC THEORY
- ANALYSIS AND EVALUATION
- EFFECTS OF CHANGE
- TYPES OF CHANGES
- CHANGE PROGRAM STAKEHOLDERS
- DIFFERENT MODELS OF MANAGEMENT CHANGE
- PRIORITY OUTCOMES
- LINKING THE STRATEGIC PLAN TO THE BUDGET
To develop appropriate models for organizational changes and to plan the implementation using managing changes in organisations
A large part of the organizational development is concerned in transforming the organization. With this transformation is the introduction of organization changes. These changes can vary from relatively simple processes that transform the strategies and design processes of the organization. The change can be considered incremental if it is aimed at the continuous improvement of the quality management that will increase efficiency. Moreover, the change can also be developmental in which case making the already successful situation even more successful. Such can be implemented to expand the number of customers served or to reproduce successful products or services.
However, introducing changes requires careful planning and management. Because of this most organizations are faced with the choice of maintaining the status quo and introducing a change. Members of the organization tend to be invested largely in the status quo and they tend to resist change in the face of uncertain benefits (). Deep organizational changes threaten the existing schemas and the manner in which the members of the organization make sense of their organization. Thus, change initiatives must be focused not only in the managing resistance to change but also increasing readiness to aging support and commitment from the organization members.
Managing Change in Organisations1. Explore the background to change affecting the current organization.
a) Discuss the background to change that exists in today's economy
Ans: - Change that exists in today's Economy:
World appears to be converging economically, politically and culturally. The national borders have become irrelevant, huge developments in information, communication and technology has taken place. Ownership patterns of organizations around the globe have become more complex like joint ventures, cross-border acquisitions etc. global strategies have merged in the production of goods and services, distribution and management of labour. These have had an immense impact on business activities. The world economy is now more closely interlinked and finance has become a global resource.Overview of the recent financial crisis:
The problems with the repayments of subprime mortgages in the US set off the concerns on lending around the world in august 2007.this has now slowly crept and in September 2008 with the fall down of Lehman brothers followed by a bank bailout, including a merger proposal for Lloyds and HBOS the world economy has gone into a credit crunch. A commodity price has risen rapidly. Much of turbulence has created resulting in redundancies, bankruptcies and nationalizations. (Northern Rock nationalized on Feb 2008, Woolworths got bankrupted, IBM layoffs still going down today etc.)
Hence change has brought uncertainties and insecurities in today's economy to a great extent. Clearly all the organizations and management practices.Rise of commerce:
Industrialization was primarily concerned with the transition from a subsistence economy to a money-market economy; the mechanism which triggered off this change was the factory system owing a lot to the merchant class in Britain. Rowntree's along with Cadbury are examples of well-known paternalistic employers back then. The early factory system stresses on its adhoc, trial and error nature and antagonistic relationship between owners and employers based on class which was later analysed by Marx.
British industrial practices, methods and technologies were diffused to other European countries and to USA with similar emphasis on employer-employee relationship. However as the nineteenth century progressed organizations grew more complex in size and number and there was a need to replace the “Rule of thumb” approach to organizations.b) Evaluate the strengths and weaknesses of bureaucratic organizations
Ans: - Max Weber believed that bureaucratic organizations were the dominant institutions of industrial society. He recognized its technical superiority. For Weber, bureaucracy entailed a departure from traditional forms of authority and the focus was on Rational Legalism, to achieve efficiency. By analyzing the organizational innovations in Germany at the turn of 20th century, Weber identified the core elements of bureaucracy as division of labour, merit based recruitment, hierarchy of authority, clearly defined goals etc.
However he also feared it would be a threat to responsible government, unless there was strong political control. Weber identified three types of legitimate authority.
- Rational legal.
Strengths of Bureaucracy
This report highlights little strength of bureaucracy ac follows;
- Bureaucracy serves as a basic establishment for an enhanced understanding and application of newer organizational design approaches.
- Operational efficiency and effectiveness can still be improved despite of the changes in technology and worker attitudes, by the selective application of such bureaucratic principles as the division of labour, hierarchy of authority, consistent rules and procedures, placement on the basis of expertise etc.
- Social researches reveal that many employees academically succeed in bureaucratic environments. According to this research bureaucratic have higher levels of education, personal responsibility, self-direction, and open-mindedness.
- Benefit of Bureaucracy for employees also includes job security, retirement pension, disability coverage etc.
Weakness of Bureaucracy
The main demerit of bureaucratic organizations includes lack of innovation. All the processes and tasks are so much fixed that the innovation process is almost eliminated in bureaucratic organizations. Employees get demotivated because of lesser employee participation and involvement. HR can't be utilized in the fullest manner by optimizing creativity which is the prime disadvantage in bureaucratic structure of the organizations.
Advantages include the increased control and monitoring of upper level management. The success of the organizations depends upon the wise decisions of top management. If the top management is good, then results can be favourable and if the top management is not good then it can result in disaster.c):- Alternative forms of organisation development-In search of new paradigms:
Since 1970's there has been a major conceptual shift in the organizations of work and production. As some writers claims, the era of “Post Fordism” began.Japanese Model: Lean Production
The model by Japanese corporations (1970's and 1980's), does not fit Weber's ideal type of Bureaucracy. Particular focus was given on shop floor practices and quality. (Quality circles, Total quality management, W.E. Deming) Some of the characteristics include:
- Bottom- up decision making
- Less specialization
- Job security
- Merging of lives and private lives
- Consensus decisions
- Zero inventories
- System of Just in time etc.
Usually “culture” is seen as the key element in accounting for the growth of Japanese firms.
Examples: Honda, Nissan, Toyota.
Culture- Excellence Approach:
Culture is viewed as a pervasive factor which shapes the entire environment of business. Attempted by Tom Peters & Robert Waterman, 1982; Rosabeth Moss Kanter, 1989, and Charles Handy, 1989, to predict and promote the ways in which companies operate in the future in order to become successful.
Geert Hofstede (1991) identified a number of key cultural values that can be used to explain differences in business practices and worker behaviour.
The work of Peters and Waterman challenged and rational theories of management. According to him, the main attributes of excellent companies are identified by flatter structures, innovation, entrepreneurship, middle management staff, reward systems etc.
Hence, the importance on culture, individual achievement and all-round excellence was emphasized throughout this distinct approach.
It is believed that Mintzberg's “Adhocracy” (1988), comes into useful practice. Committees are formed then and there to handle matters as and when a matter arises, also called the “Learning Organization”, there is less vertical hierarchy and more delayering.Develop systems to involve appropriate stakeholders in the introduction of change
Stakeholder theory :
Pioneering work in the area of stakeholder management was provided by Freeman (1984), who outlined and developed the basic features of the concept in a book entitled Strategic Management: A Stakeholder Approach. Freeman's work, even though it formally recognizes the importance of corporate constituents in addition to shareholders, leaves the status of the stakeholder concept as theory unclear.
Donaldson and Preston pointed out that Freeman, individually and with various colleagues (Evan & Freeman, 1993; Freeman & Gilbert, 1987; Freeman & Reed, 1983), has incorporated all three types of theory into the stakeholder concept. Proponents of stakeholder theory strive to describe what managers actually do with respect to stakeholder relationships, what would happen if managers adhered to stakeholder management principles, and what managers should do vis-a-vis dealing with firm stakeholders. Donaldson and Preston (1995) concluded that normative concerns underpin stakeholder theory in all of its forms. Although quality scholarship on the normative facets of stakeholder theory is indeed needed, instrumental and descriptive/empirical aspects need attention as well. Thus, this article focuses on the instrumental realm. It should be noted that the term instrumental theory is used here in a manner that differs from its historical usage. Traditionally, in the philosophy of science literature, instrumental theories were deemed useful for explaining certain phenomena regardless of their truth or falsehood (Angeles, 1992). In short, they worked, albeit (perhaps) for the wrong reasons.The theories themselves were used as instruments to achieve some ends. The usage of instrumental theory employed in this article follows that used by Donaldson and Preston (1995), which appears to be original. For these authors, instrumental theory establishes (theoretical) connections between certain practices and certain end states. There is no assumption that the practices will be followed or that the end states are desirable. In instrumental theory, statements are hypothetical-if X, then Y or if you want Y, then do X. In this sense, X is an instrument for achieving Y. The truth or falsehood of instrumental theories of this latter type is an important issue.
ASSUMPTIONS: STAKEHOLDERS AND ECONOMIC THEORY
Before any theory of stakeholder management can be advanced in a convincing manner, certain assumptions must be made regarding the economic and social conditions that provide context for the model. Assumptions appropriate for the purpose of this article have been drawn mainly from economic theory and the stakeholder concept. Collectively, they give a picture of the firm and its relationship to its environment. In this article, top managers and the firm will be considered as a single entity. Although top managers are technically stakeholders, their primary role is one of contracting on behalf of the firm (directly or indirectly) with other stakeholders as well as with themselves. Top managers are at the centre of a "hub and spoke" stakeholder model of the firm because they contract with all other stakeholders. Relationships between or among nonmanagement stakeholder groups surely exist as well; in some cases, memberships in these groups may overlap. However, in this article, the focus is on the bilateral relationships between managers and stakeholders. Further, the term stakeholder applies not only to groups easily characterized by words such as customers or employees but also to subgroups of customers (e.g., buyers of over-the-counter medicine and buyers of shampoo) and employees (e.g., shop workers and middle managers) who may have distinct (and competing) interests. Terms like customers and employees are used here for heuristic purposes only. Markets are characterized by a tendency toward equilibrium, as postulated by the Austrian school (Jacobson, 1992; Kirzner, 1979), not equilibrium, as assumed in neoclassical microeconomics. Collectively these assumptions describe the relationship between the modern corporation and its environment.1. Firms have relationships, called contracts, with many stakeholders.
2. Firms are run by professional managers.
3. Firms exist in markets in which competitive pressures do influence behaviour but do not necessarily penalize moderately inefficient behaviour.
b) Analyse and evaluate these systems
Development of the SIA technique was as an enhancement to the stakeholder aspects of PISO. Although PISO advocates the involvement of stakeholders in the redesign of a system it did not specify a means for identifying who is a stakeholder within the area of improvement, relying on users to know who to involve, and in many cases identification was limited to those stakeholders appearing on the data flow diagrams. PISO gave suggestions for stakeholder analysis but no tool or technique for this either. The technique was therefore initially developed to aid identification of stakeholders and to assess the likely impact of stakeholders upon a systems redesign. The outline of this initial development was presented at the SCI Conference 2002, but will not be discussed fully here.
Improvement for Strategic Objectives, a method developed at the University of Sunderland. A stakeholder identification and analysis (SIA) technique also developed at the University, was employed to assess the influence stakeholders bring to bear on a system and to give focus to the effect of potential system changes on those stakeholders. This case study took place within the Tees and North East Yorkshire National Health Service Trust in the UK, and involved the introduction of a direct booking appointment system for mental health patients, which was the result of a Government initiative. The study discusses the changes required within the administrative and clinical areas, the impact on those involved in the change and the lessons learned during the process.
The following sections of this paper will view aspects of organisational change and its impact within information systems redesign, give a brief overview of PISO and the social aspects of its framework, and then describe the SIA technique and how it was developed to consider the impact of system change on stakeholders. Consideration will also be given to the use of case studies to aid research. Full discussion of the reengineering of the system will not be discussed here, the emphasis being upon how the SIA technique aided in the successful change situation within the case study.
THE EFFECTS OF CHANGE :
Change is a normal part of social and organisational life; “in a changing world the only constant is change”. However, within an organisational setting it can be “any alteration to the status quo in an organisation initiated by management, that impacts either or both the work and the work environment of an individual”, therefore change has a far reaching effect. For Mullins change within an organisation is inevitable due to;â™¦ Demand for quality and a high degree of customer service and satisfaction
â™¦ Flexibility in organisational structure and management patterns
â™¦ Changing nature and composition of the workforce.
Change is, therefore, the accepted result of external requirements for speed and quality in services and goods and the internal pressure for economy and efficiency in providing those services and goods. There may even be increased turnover in critical staff.
3(a) Develop and adopt appropriate models for change.
The only thing that is permanent on the face of the earth is change; and this is also applied into different varieties of business. The change is somehow important if it is intended to begin the improvement. Every organization needs change in improving the business environment or managerial aspect. The change depends unto what extent it should reach and what difficulties it will cross. Sometimes, organization takes the changes to align in the economic variations and it is truly hard to pulse the wave of economic climate.
Organizational change is defined as the process by which organizations reach the desired goals. Organizational revolutions occur when an organization restructures resources to raise the capability to make value and improve efficiency. A deteriorating organization seeks way to get back to consumers; a rising company designs new stuff. A well-planned organizational change creates value for stakeholders.
In a business manner, the change in companies is about a important modification in the organization, such as restructuring or adding up a main new manufactured goods or service. This is in dissimilarity to slight modifications, such as maintaining a new computer procedure. Managerial change can appear similar to such a unclear phenomena that it is helpful.
Types of Changes:
There are different overall types of organizational change, which includes planned and unplanned changes, organization-wide vs. change first and foremost to one part of the organization, incremental vs. transformational. Knowing which types of change the business is undertaking is useful to all participants to preserve possibility and perception throughout many complexities and regular frustrations during this modification. One form of organizational change and development will be discussed below.
Unplanned change takes place unexpectedly like when the company's director is away.
Planned change takes place when superiors in the company identify the requirement of a most important change and aggressively manage a plan to complete the change.
Change Program Stakeholders
For an organizational change program to succeed, the business will build upon a variety of people. These people can be categorised into five stakeholder groups.
A stakeholder is a kind of person with an curiosity in the development or the result of the planned managerial change. There are five stakeholder group given, together with each description and examples of duty.1. Change Recipients are the proposed recipients' of the goods of change or change outcomes. Example: They are the last part users of new software, such as new secretarial offers, workforce of two combined organizations.
2. Decision Makers are the people that accept a change attempt and come to a decision in its scope and direction. Examples: Steering Committee Members, Project Sponsor, or Chief Executive Officer.
3. Resource Holders are the people approved to release financial and HR requires by a change effort.
Examples: bank or a Line Manager.
4. Program Implementers are the people charge with the authority to bring the change. Examples: Program Manager, Project Manager, or Project Team Members.
5. External Parties are the people that are not the wished recipient but who are impacted by the modification.
Once the business had identified the stakeholders, consider the key messages that a business will be required to bring each group in order to get their help and support. Once the business had settled on the key messages for each stakeholder group, start the communication.
Different Models for Management change:
There are several well-ordered accesses (or models) from which they have to handle a change effort. Strategic Management Models, Action Research Model, Plan Do Check Act Model, Lewin's Change Management Model, and Mckinsey 7S Model
Lewin's Change Management Model:
Lewin's Model for change which also called the Freezing Models has three phases; the Unfreeze, Transition, and the Refreezing.5 Unfreeze is where the problem should be thawed into pieces and needed to study each part. The transition steps in when the process is on-going to face the solution and transformation changes. And the last, the refreezing takes the place when the organization is already absorbing the new process. Kurt Lewin exampled this is the cube of ice; on how will you change the form of the cube of ice in to another type by not letting it evaporate.
Strategic Management Model:
This model also one of the assured model for success of change effort. Strategic planning determines what the company's position in the next year or more. The strategic plan usually focuses on the entire organization, while the business plan is usually focussed on a particular product, service or program.
There are variety of methods and approaches used in strategic planning. The development of a strategic plan depends on the nature of the organization's management, culture of the organization, involvedness of the organization's environment, size and planning experts etc.
The two kinds of models are very effective tools for the managerial change. If the models are going to apply on the stakeholders of the company, the proper assessment is needed to apply the models. The models for organizational change are presented as the basis on how to make the change in the management possible as the economic environment asks for change.b) Plan the implantation process and outcomes.
Ans: - strategic planning is a systematic process to identify the future outcomes an organization wants to achieve, how the outcomes will be achieved, and how success will be measured and evaluated. the results of this process are detailed in each of the strategic issue areas. to achieve the outcomes, and organization must use the strategic plan to align its operation and budget structure with its mission, priorities and objectives.
in an increasingly competitive economic environment, when budgets are learner and local governments are being asked to do more with less, it is more important than strategic in its approach to delivering top-quality public services. while the outcomes and strategies identified through the strategic planning process are all important to realize its vision and fulfil its mission, responsible stewardship of the county's resources necessitates setting priorities. Through careful deliberation, the outcomes were assigned priority levels.
Priority outcomes are those that directly target the most pressing issues currently facing or can expect to face in the coming years, as highlighted in the data and trends and the public input. They represent new and innovative ways county government can, given greater resources, address a broader range of issues and further enhance the quality of life of its citizens. While there may be instances of strategies with in outcomes being pursued through the general course of county business.
Linking the strategic plan to the budget
Critical to the success of any outcome based strategic plan in the link between the plan and an organization's budget. While there are some functions that must carryout to fulfil basic government obligations. The core of the department plans or work programs should be geared towards that tie back achieving the strategic outcomes, and the department budget should reflect that plan or work program.
For each of the strategic outcomes a lead department is identified. Lead departments are most responsible for providing the services, programs and events that will directly affect the achievement of a particular outcome. the lead department is necessarily expected to carry out every strategy identified within an outcome, but it will be responsible for coordinating the strategies and ensuring that its department plan or work program targets, as much as possible, the achievement of the strategic outcomes. in most instances, the leading department will also be responsible for monitoring the success in achieving the outcomes.
For each of the strategic outcomes a set of performance measures are identified. These are measurable indicators that can be tracked to assess progress made in achieving an identified outcome. in many instances, departments are already collecting data and tracking the performance measures. in most cases, the lead department will be responsible for tracking the performance measure. It is anticipated that the key performance measures will be reported on an annual basis.
Hence development of appropriate models for organizational changes and to plan the implementation using managing changes in organisations has been done and concluded.
Anonymous (n.d) about.com- Managing changes
in organizations : strategy
Anonymous (n.d) about.com- Managing changes
in organizations : Bureaucracy
Anonymous (n.d) about.com- Managing changes
in organizations : implementation process
Anonymous (n.d) about.com- Managing changes
in organizations : stakeholders