Professional Documents
Culture Documents
Structure
1.1 Introduction
Objectives
1.2 Understanding Organizational Transformation
Transactional vs. Transformational Organization
Types of Transformation
Phases of Transformation
1.6
1.7
1.8
1.9
1.10
1.11
Caselet
Training in Cross-cultural Understanding for Working with Indian Teams
A US-based Fortune 500 apparel manufacturing company was to begin
engagement with an IT service provider for its business operations in India.
The company has a long standing reputation of employee satisfaction, so it
was eager that the transition of its staff to India would be smooth. It needed
an orientation program to familiarize itself with the cross-cultural environment
and a close interaction with vendors in India. For this purpose, the company
got in touch with Change Management Consulting and Training (CMCT), a
business training and consulting firm. The brief to CMCT was to develop
and deliver an awareness program for its staff that was new to working in a
multicultural business setup.
CMCT counseled that the senior managers of the company take the Working
with India training first. They argued that by doing so they would be in a
better position to appreciate the cross cultural nuances and adaptive skills
of their direct reports engaged in India operations. The training session was
organized at the companys headquarters and was attended by senior
managers and also by the representative of the Indian IT service provider.
Change Management
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Keeping in mind the impact the new outsourcing relationship would have on
various teams in different US cities, this training was extended to them as
well. The CMCT suggested some concrete points on how to integrate cross
cultural awareness into the operational management for the outsourcing
teams. As a result, by taking pre-emptive measures, this company was
able to avoid the usual bottlenecks and snares, which affect the US
companies at the very outset when doing business with their outsourcing
partners in India. Thus, they not only had a head start, but were able to
avoid transition stress for their staff.
Source: Adapted from http://www.cmct.net/case_18.html/9/11/12 (retrieved
on 22 November 2012)
1.1 Introduction
Change is a phenomenon that pushes us out of our comfort zone. It is for the
better or for the worse, depending on how it is viewed. Change has an adjustment
time line that varies from person to person. Change has a negative effect on
those who do not want to let go. Being flexible is the key. For instance, a roller
coaster ride can symbolically be indicative of changeit can be fun if you know
when to lean and create balance. Change is not related to the mantra just hang
in there, but the mantra you can make it. It is not associated with worrying.
Change spurs you to achieve your best. It will help you to learn. Change is
inevitable. It is the managements duty to see that change is managed properly.
Organizations must keep a watch on the environment and incorporate suitable
changes that the situation may demand. Change is a continuous phenomenon.
Organizations must be proactive in effecting change. Even in the most stable
organizations, change is necessary just to maintain a certain level of stability.
The major environmental forces that make change necessary are technology,
market forces and socio-economic factors. Resistance to change is counterproductive for growth and destructive in nature; it is, therefore, undesirable.
Hence, managers must evolve policies to effect change. According to Barney
and Griffin, the primary reason cited for organizational problems is the failure by
managers to properly anticipate or respond to forces for change.
Change management means implementing significant change in an
organized and systematic manner. The main objectives of change management
are:
to ensure that the people and culture are aligned with strategic shifts in
the organization.
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Objectives
After studying this unit, you should be able to:
explain how organizations manage transformation
discuss the strategies and the process of organizational transformation
describe the nature and perspectives of organizational change
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approach. There is no one end point, yet every step taken is a lifesaver for the
organization:
Step 1
Mobilize Executive Leadership
Step 2
Translate Strategy into Tangible Terms
Step 3
Align Business and Support Units
Step 4
Motivate
Rewarding Performance
Strive forby
Perfectionrepeat
the 5 step strategic process
Step 5
Strive for Perfectionrepeat the 5-step strategic process
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train a few employees and then expect them to make a bottom-up change. The
training for development should get support from the top management so that it
flows throughout the organization.
Step 5: Strive for perfectionrepeat the 5-step strategic process
The final stage of this transformation is to establish a mindset of striving for
perfection in every section of the organization. The employees should see this
as a continuous process of perfection rather than a one-time activity. The most
important and perhaps also the most difficult thing to do is to get started to
take the first step towards perfection. A strong momentum will motivate change.
The employees would realize how their contributions can make a difference.
The management too would begin to see the positive effect of this significant
contribution. At the end of each of these five-steps, the organization will become
healthier and more stable.
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1. Environment-dependent perspectives
According to this perspective, organizational change is a function of external
environment and acts as a link between an organizations internal practice and
procedures with the external world.
2. Contingency perspective
The contingency perspective focuses on the changes related to the structure of
the organization. The structure has two main dimensions specialization and
integration. The structure breaks down the complex tasks in the organization
into individual activities and integrates these separate activities to achieve its
purpose. Specialization is division of labour. In organizations, there are usually
horizontal and vertical divisions of labour. Specialization brings efficiency in the
organization.
Integration refers to the various ways and means of coordinating the work
of individuals in the organization. It can be achieved through direct supervision,
systems, and goals, plans and targets, rules and procedures. Such coordination
brings uniformity and standardization in organizational activities. Coordination
helps in enhancing quality and productivity of the organization and makes it more
effective.
Contingency perspective has been criticized on the lines that it takes into
consideration one or two variables at a time, such as environment and structure,
size and structure etc. In recent years, configurational approach has been
advanced in order to deal with such criticism, wherein the contingency variables
are clustered together. These clusters, known as configurations, are jointly dealt
with, when deciding upon an appropriate structure.
3. Resource-dependent perspective
As per this perspective, external stakeholders have control over the organization.
The external stakeholders prominence in controlling the organization can be
revealed by looking into the power structure at the highest level. The evidence of
resource dependence is reflected in management control, resource allocation,
regulation, fund raising and so on. The groups and organizations in the
environment that have control over its resources take control and the dependency
on these is high. This, in return, increases the vulnerability as well as the
uncertainty within the organization.
4. Population-ecology perspective
The population perspective advocates studying the population of a multitude of
organizations instead of focusing on only one.
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1.7 Summary
Let us recapitulate the important concepts discussed in this unit:
Change management means implementing change in an organized and
systematic manner.
There are two types of organizational changetransactional or the first
order change is related with continuity in the organization and
transformational change or the second order change, which is
discontinuous in nature, alters the organization from its core.
A well-led and well-orchestrated change strategy and transition plan leads
to organizational transformation.
Organizational transformation challenges the way an individual thinks,
perceives and feels about the organization.
It changes the work culture and value system of an organization.
There is a deep seated adoption of the changes and the associated values,
principles and/or processes.
The three types of organizational transformations are: improved operations,
strategic transformation and corporate self-renewal.
Transformation strategies in organizations can take place through:
o values
o organizational values
o reengineering
o McKinseys plan
o competitive benchmarking
o Six Sigma
o Kaizen principle
Business transformation is an ongoing journey and a continuous process.
Reasons for organizational change may mean introduction of new
technology; restructuring and reengineering; mergers, acquisitions and
alliances; diversification of the business, etc.
Internal and external environmental factors encourage organizational change.
Organizational change has been studied from multiple perspectives at
micro and macro levels.
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1.8 Glossary
Organizational transformation: A collection of activities such as
reengineering, redesigning and redefining of business systems.
Six Sigma: A statistical parameter that is used to describe variation from
set standards.
Kaizen: Kaizen principle involves change through continuous
improvement by taking small, comfortable steps.
1.10 Answers
Self Assessment Questions
1. True
2. (c) Middle-order change
3. Transformational
4. False
5. Mission
6. True
7. Information, technology
8. True
9. Kaizen
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10. Top
11. False
12. False
13. Shareholders
14. Organic
15. Integration
16. Adaptation
Terminal Questions
1. Change management means implementing significant change in an
organised and systematic manner. For more details, refer to Section 1.1.
2. Transactional or the first order change is related with continuity in the
organization while transformational change or the second order change
is discontinuous in nature and is related with altering the organization from
its core. For more details, refer section 1.2.1.
3. There are various strategies to deal with transformation in organizations.
For further details, refer section 1.3.
4. The change process is always initiated from the top level, affects the lower
levels and finally integrates into the entire organization. There are internal
and external environmental factors which contribute to organizational
transformation. For more details, refer section 1.5.1.
5. Organizational change has been studied from multiple perspectives at
micro and macro level. For more details, refer section 1.6.
6. Process-oriented changes are changes that could lead to efficiencies and
are achieved through replacing or retraining personnel, reducing investment
in heavy capital equipment etc. People-oriented changes are focused on
performance improvement, team work and commitment to the
organization. For more details, refer section 1.2.2.
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of management that it was not capable of making quick decisions and thus
letting many opportunities pass by. He made sweeping changes in almost
every aspect of the company. He eliminated several layers of management
and decreased the corporate staff from 1700 to less than 1000 and reduced
the workforce to 100,000 workers nearly 25 percent of the total workforce.
The productivity per man hour of the company is one of the highest in the
industry.
For years, GE sat at the top of the marketplace as the worlds most valuable
and most admirable company. When Jack Welch retired, Jeffrey Immelt
took over as CEO. An economic downturn and corporate scandals affected
GE as well. In the latest report, the revenues for GE were flat and the CEO
gave a cautious outlook. The shares of GE plunged by 10 percent, on that
statement. Since October 2000, GE stock has been slashed by almost
half. Jeffrey Immelt faced a lot of criticism and even though he tried his best
to calm fears among employees and investors, he admitted that he did not
expect such intense criticism and especially when comparisons were made
with management style of Jack Welch. It did not matter to the investors that
the economy was down in the late 1990s and early 2000s.
Immelt is determined to reshape GE for the next generation. Since the year
2000, he has already launched several initiatives. He makes sure that
customer satisfaction is considered the top priority. He measures managers
mostly by how much they improve their customers bottom line. He wants
GE to take the Six Sigma quality programme and other innovations deep
into a clients operations. He wants more globalization, more business via
the Web, more diverse senior staff and more extensive research and
development. Due to policy of change, more than 50 per cent of new
executives have been hired from the ranks of women, minorities and persons
from other countries. Immelt has devoted himself completely to making GE
one of the top companies again.
Discussion Questions
1. How did Jack Welch make GE the most valuable company in the market
after he joined?
2. What steps did Jeffrey Immelt take in order to ensure that GE retains its
position as the most admirable company in the world?
Source: Compiled by author
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References
Barney, J.B. and Griffin, Ricky W. (1992). The Management of Organizations:
Structure, Strategy and Behaviour. Houghton Miffling Publishing, p. 753.
Bechard, Richard (1969). Organizational Development: Strategies and
Models. Addison Wesley, 1969.
Bennis, Warren (1969). Organization Development: Its Nature, Origin and
Prospects. Addison Wesley.
Coch, Lester and French Jr.,John R.P. (1968). Overcoming Resistance
to Change, Human Relations, Vol. 1, No. 4, p. 512.
French, Wendell, Organization Development: Objectives, Assumptions
and Strategies, California Management Review, Vol. 12, pp. 2324.
French, Wendell, L. and Bell, Cecil H. (1973). Organization Development,
Prentice Hall, pp. 6572.
Greiner, Larry E. Patterns of Organizational Change, Harvard Business
Review, MayJune 1967, pp. 119130.
Havelock, R.G. and M. Shaskin (1983). Help Scores: A Guide to Promoting
Change in Groups and Organizations, in H.H. Blumerg et al. (eds), Small
Groups and Social Interactions, Wiley (UK), Vol. 2.
E-References
http://www.cmct.net/case_18.html/9/11/12 (retrieved on 22 November
2012)
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