105181-9780273711759_im

Instructor’s Manual Managing Change Fifth edition

Bernard Burnes

For further lecturer material please visit:

www.pearsoned.co.uk/burnes ISBN: 978-0-273-71175-9

 Pearson Education Limited 2009 Lecturers adopting the main text are permitted to download the manual as required.

Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE England and Associated Companies around the world Visit us on the World Wide Web at: www.pearsoned.co.uk ---------------------------------First published 1992 Fifth edition published 2009 © Pearson Education Limited 1992, 2009 The right of Bernard Burnes to be identified as author of this Work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988. ISBN: 978-0-273-71175-9 All rights reserved. Permission is hereby given for the material in this publication to be reproduced for OHP transparencies and student handouts, without express permission of the Publishers, for educational purposes only. In all other cases, no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without either the prior written permission of the Publishers or a licence permitting restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd, Saffron House, 6-10 Kirby Street, London EC1N 8TS. This book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published, without the prior consent of the Publishers.

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Contents Chapters

Part One: 1.

Pages Introduction

5

The rise and fall of the rational organisation

7

From trial and error to the science of management: the rise of organisation theory

8

2.

Developments in organisation theory: from certainty to contingency

14

3.

In search of new paradigms

18

4.

Critical perspectives on organisation theory: postmodernism, realism and complexity

23

Culture, power, politics and choice

27

Strategy development and change management: past, present and future

30

6.

Approaches to strategy: managerial choice and constraints

31

7.

Applying strategy: models, levels and tools

35

8.

Approaches to change management

38

9.

Developments in change management: the emergent approach and beyond

41

A framework for change: approaches and choices

44

5. Part Two:

10.

Part Three: Managing choice

47

11.

Organisational change and managerial choice

48

12.

Management – roles and responsibilities

51

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Supporting resources Visit www.pearsoned.co.uk/burnes to find valuable online resources For instructors • Complete, downloadable Instructor’s Manual • PowerPoint slides that can be downloaded and used for presentations • Fuller versions of case studies 1 to 10, including a combined and extended version of the two XYZ cases 3 and 8. For more information please contact your local Pearson Education sales representative or visit www.pearsoned.co.uk/burnes

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Introduction

Contents This Instructor's Manual has been prepared to assist you and your colleagues in designing and delivering courses. It provides the following information: Chapter overviews: These give an overview of each chapter, stating its objectives and how it relates to the rest of the book. Essay questions: At the end of each chapter overview, a brief commentary on the essay questions for that chapter is provided. The intention is not to provide full answers to each question but to draw attention to key points which students should address or raise. There is no concomitant commentary on the short answer questions as, by and large, these are there to allow students to show they have understood particular issues and topics raised in the text. Case study questions: As with the essay questions, the intention is not to provide full answers to each question but to draw attention to key points which students should address or raise. In most instances, the case studies may best be used as part of whole-class learning whereby groups are asked to prepare presentations to the class, based on one of the questions. However, they can also be used as coursework or exam questions. Website: www.pearsoned.co.uk/burnes As well as downloadable copy of this Manual, the website also contains: •

PowerPoint slides that can be downloaded.

•

Fuller versions of case studies 1 to 10, including a combined and extended version of the two XYZ cases 3 and 8.

References All references used in this Manual and the extended case studies can be found in the Bibliography section of Managing Change.

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Suggestions I would welcome any observations or suggestions about either the book or the Instructor’s Manual. I am particularly keen to hear what you like or dislike about the book and what you would like to see more or less of. Please send your comments to me at: Bernard Burnes Manchester Business School University of Manchester Booth Street West Manchester M15 6PB UK E-mail: [email protected]

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Part one

The rise and fall of the rational organisation The aim of the five chapters in this section of the book is to provide a comprehensive review of organisation theory and behaviour. The rationale for the presence of these chapters in a book on change management is threefold. Firstly, it is these theories, often unknown to those who run organisations, which drive how organisations are structured and run, and which provide the impetus behind the major, as well as minor, changes that have taken place and are taking place in organisations. Secondly, unless we understand the various theories which guide the structuring and behaviour of organisations, we cannot begin to understand how to change them. Thirdly, as well as providing guidance or prescriptions for structuring organisations, such theories are also, implicitly or explicitly, theories of change management themselves. Therefore, it follows that an understanding of organisation theory is fundamental to an understanding of managing change.

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CHAPTER 1

From trial and error to the science of management: the rise of organisation theory Summary This chapter sets out to explore and discuss the origins of organisations, from the Industrial Revolution to the early years of the twentieth century, when the first detailed and comprehensive organisation theory emerged. The key themes of this chapter are as follows: •

Although industrialisation was primarily concerned with the move from a subsistence economy to a money-market economy, the main enabling mechanism for this was the creation of the factory system.

•

The pattern and purpose of industrialisation varied from country to country. Whilst in Britain and the USA it was very much driven by individuals seeking profit maximisation, in mainland Europe a different approach can be seen. In Germany in particular, but also in France, industrialisation was largely state-sponsored, and aimed more to further the economic and military objectives of the state than to increase the profit-making capacity of individuals.

•

The development of organisation theory was synonymous with the need by managers to legitimate and enhance their authority to initiate change.

The chapter begins by showing how the rapid expansion of national and international commercial activity created the conditions for the British Industrial Revolution, from which emerged the factory system, the precursor of all modern organisations. It is argued that the driving force behind this development was the merchant class. It will also be stressed that two key features of the early factory system were its ad hoc, trial-and-error nature, and the antagonistic relationship between owners and employees, or – to use the terminology of the times – masters and servants. As the nineteenth century progressed, and organisations grew in number and size, trial and error increasingly gave way to more considered and consistent approaches to work organisation. This development was especially pronounced in the USA and continental Europe, as industrial leadership moved away from Britain and towards these areas. What emerged, separately, were three different but complementary attempts by Frederick Taylor in the USA, Henri Fayol in France and Max Weber in Germany to replace the ad hoc, rule-of-thumb approach to organisations with a universally-applicable blueprint or theory for how they should operate. These three approaches, each focusing on different organisational aspects, coalesced into what later became known as the Classical school of organisation theory, the core elements of which are as follows: •

There is a ‘one best way’ for all organisations to be structured and operate.

•

This approach is founded on the rule of law and legitimate managerial authority.

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•

Organisations are rational entities: collectivities consistently and effectively pursuing rational goals.

•

People are motivated to work solely by financial reward.

•

Human fallibility and emotions, at all levels in the organisation, should be eliminated because they threaten the consistent application of the rule of law and the efficient pursuit of goals.

•

For this reason, the most appropriate form of job design is achieved through the use of the hierarchical and horizontal division of labour to create narrowly-focused jobs encased in tight standardised procedures and rules, which remove discretion, dictate what job-holders do and how they do it, and which allow their work to be closely monitored and controlled by their direct superiors.

The Classical approach had many merits: not least in its attempt to replace arbitrary and capricious management with rules and procedures which apply equally to everyone in the organisation. Nevertheless, it has also attracted much criticism. Taylor and his adherents have been criticised both for their lack of scientific rigour and their one-dimensional view of human motivation (Burnes, 1989; Kelly, 1982a and b). Indeed, as Rose (1988) argued, Taylor portrayed human beings as ‘greedy robots’: indifferent to fatigue, boredom, loneliness and pain, and driven solely by monetary incentive. For Taylor, material incentives are the only effective incentives to work. Fayol has been attacked on three fronts: firstly, that his principles are mere truisms; secondly, that they are based on questionable premises; and lastly, that the principles occur in pairs or clusters of contradictory statements (Massie, 1965; Mintzberg, 1973, 1975; Simon, 1947). Weber’s arguments for bureaucracy have also received criticism. For instance, Robbins (1987) pointed out that bureaucracy is most frequently attacked for encouraging goal displacement, in that rules can become ends in themselves rather than means to the ends they were designed to achieve. Robbins (1987) also pointed out that bureaucracy can alienate both employees and customers or clients. One of the main criticisms of the Classical approach as a whole is that its view of people is negative. Bennis (1959: 263) called the Classical perspective one of ‘organisations without people’, because it is founded on the belief that people can be reduced to the level of cogs in a machine. It was as a reaction to the ‘de-humanised’ Classical approach that the Human Relations approach emerged in the 1930s. This, together with Contingency Theory – the third approach to organisations to emerge in the twentieth century – is discussed in Chapter 2.

Essay questions 1. To what extent can the move to the factory system be seen as a clash of cultures as opposed to a clash of economic systems? Key points:

The main point to note is that the move to the factory system can be seen as both. On the one hand, there was certainly a strong rural, agricultural culture with its own strong and long-standing traditions. This stood in stark contrast to the newlydeveloping urban, factory culture which clashed with and sought to supplant traditional values, attachments and beliefs. However, there was also the clash between the money economy and the subsistence economy. The latter tended to

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value leisure, or at least the chance to reduce working hours, more highly than the opportunity to earn more money. The former, though, was driven much more by profit maximisation and wealth accumulation. It was the combination of the clash of cultures and economic systems which made the move to the factory system so unattractive to those in rural communities. 2. Evaluate the case for seeing the work of Taylor, Fayol and Weber as forming a coherent school of thought. Key points:

Taken individually, none of the three authors' work can be seen as presenting a coherent and all-embracing approach to running organisations. However, by combining Taylor's work on individual jobs, Fayol's work on overall organisational and managerial policy and Weber's work on the philosophy of bureaucracy, what emerges is an overarching framework and detailed guidance for structuring and running organisations. Therefore, though Taylor, Fayol and Weber focused on different aspects of organisational life, taken together their work formed the core elements of what became known as the Classical School.

3. Discuss the following statement: The Classical approach was appropriate to the time in which it was developed but it is no longer suitable to the needs of contemporary organisations. Key points:

This argument is associated with the work of Warren Bennis (see the review of the Human Relations approach in Chapter 2). Bennis argued that every age develops an organisational form appropriate to its time. Bureaucracy (the Classical approach) was, in his view, appropriate for the first two-thirds of the twentieth century but not beyond that. He believed that bureaucracy emerged because its order, precision and impersonal nature was the correct antidote for the personal subjugation, cruelty, nepotism and capriciousness that passed for management during the Industrial Revolution. The arguments against Bennis’s view are twofold. The first is that Bennis misunderstood the nature of bureaucracy, which is far more flexible than he assumed; secondly, that bureaucracy, rather than dying out owing to it being unsuitable to the modern age, has grown in the 40 years since Bennis first made his claim.

Case study 1 Nissan’s approach to supplier development The purpose of this case study is to allow students to compare the approach to managing people as advocated by the Classical approach and as used by many modern organisations. In so doing, it should enable students to reflect on their own views of how they and others should best be managed. Students should be asked to read the section on the Human Relations approach in Chapter 2 and on the Japanese approach in Chapter 3. A fuller version of this case study is available on the book’s website.

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Case study questions 1. Compare Nissan’s approach to performance improvement with that advocated by proponents of the Classical approach. The key elements which students should bring out in their answer, and which they need to evaluate critically, are as follows: The Classical Approach

The Nissan (Japanese) Approach

Human Nature

The Classical approach is based on a negative view of human nature which sees workers using their skills and knowledge to reduce their work effort and increase their pay.

Workers are seen as having a positive and vital role to play in developing an organisation’s competitiveness. Therefore, their skills, commitment and involvement are not a threat to the organisation but assets which need to be valued and developed.

The Role of Managers

Management can and should collect all the knowledge necessary to design tasks in such a way that workers can learn them quickly and carry them out in the most productive manner.

Managers have the responsibility for designing tasks and processes. However, they have neither the time nor the knowledge to identify and undertake all the subsequent improvement activities necessary for an organisation to develop continuously its competitiveness. Therefore, managers have to train, motivate and support staff to undertake their own improvement activities.

Improvement and Involvement

Once managers have identified the best way of carrying out a task, any further improvements are likely to be infrequent. It is the responsibility of managers and specialist functions such as work study engineers to identify and undertake such improvements. Workers would see productivity improvement activities as a threat to be resisted or undermined, so they should not be involved in improvement initiatives.

Therefore, the people best placed to identify and undertake improvement initiatives are those who are employed to carry out the task. They will not see this as threat because they will recognise that increasing the competitiveness of the organisation will increase their job security.

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2. What are the benefits of Nissan’s bottom-up approach to shopfloor performance improvement compared with the benefits of the Classical approach? The key elements which students should bring out in their answer, and which they need to evaluate critically, are as follows: The Classical Approach

The Nissan (Japanese) Approach

Management Control

The approach enhances managerial control and reduces the workers’ ability to influence the rate and organisation of production and their ability to bargain over wage rates.

It allows managers to devote more attention to controlling the overall organisation by devolving responsibility for day-to-day improvement activities to workers. It also increases workers’ commitment to ensuring that any changes made actually succeed.

Targeting Improvements

It allows managers to decide which improvement activities to undertake. This ensures that resources are targeted at the most beneficial changes.

It ensures that improvement is a continuous process which allows the organisation to outperform its competitors who do not undertake continuous improvement.

3. If Frederick Taylor’s perception of human beings is as ‘greedy robots’, what is Nissan’s? What are the implications of this for how staff should be managed? The key elements which students should bring out in their answer, and which they need to evaluate critically, are as follows: The Classical Approach

The Nissan (Japanese) Approach

Human Nature

The Classical approach is based on a negative view of human nature which sees workers using their skills and knowledge to reduce their work effort and increase their pay.

Workers are seen as having a positive and vital role to play in developing an organisation’s competitiveness. Therefore, their skills, commitment and involvement are not a threat to the organisation but assets which need to be valued and developed.

Human Motivation

Human beings are motivated to work solely for financial gain. They will attempt to gain the maximum reward for the minimum effort.

Human beings are motivated by extrinsic (material) and intrinsic (non-material) rewards. This means they can show a strong loyalty and commitment to their work, above and beyond what might be expected by monetary rewards.

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Managing Employees

Workers are seen as a necessary part of the organisation machine but one which can potentially undermine the effectiveness of the organisation. Management should design tasks that minimise skill content, can be learnt quickly and carried out in the most productive manner. Close supervision and payment by results are necessary to ensure that workers carry out the tasks as prescribed and that they maintain the required level of effort and effectiveness.

Workers are seen as assets to be developed. Regardless of the nature of the tasks being undertaken, managers need to create a working environment which promotes participation and commitment, and which encourages and facilitates staff to develop their skills and abilities in the best interests of the organisation.

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CHAPTER 2

Developments in organisation theory: from certainty to contingency Summary The Human Relations approach is covered in the first half of this chapter. This approach was a reaction against the mechanistic view of organisations and the pessimistic view of human nature put forward in the Classical approach. It attempted to reintroduce the human element into organisational life, and claim for itself the title of the ‘one best way’. In particular, it contended that: •

People are emotional rather than economic-rational beings: human needs are far more diverse and complex than the one-dimensional image that Taylor and his fellow travellers conceded.

•

Organisations are co-operative, social systems rather than mechanical ones: people seek to meet their emotional needs through the formation of informal but influential workplace social groups.

•

Organisations are composed of informal structures, rules and norms as well as formal practices and procedures which can have more influence on individual behaviour and performance, and ultimately on overall organisational performance, than the formal structure and control mechanisms laid down by management.

Like the Classical approach which it sought to supplant, the Human Relations approach has attracted its fair share of criticisms. Many of the criticisms were directed at the ‘questionable’ validity of the findings from the Hawthorne Experiments, including inconsistencies between the various interpretations of these offered by Mayo and his colleagues. However, not all the criticisms were levelled at Mayo and his colleagues. Maslow’s work, a key theoretical cornerstone of the Human Relations approach, was found to lack empirical substance when researchers attempted to validate it, and certainly later theories of motivation seem to adopt a different approach. Similarly, Bennis' views on bureaucracy were attacked. Kelly (1982b) also attacked the proposition that increased job satisfaction leads to increased performance. There is one further criticism of the Human Relations approach, one which it shares with the Classical approach: it claims for itself the title of the ‘one best way’. Yet, the question was posed, how can any approach claim that there is only one method of structuring and managing organisations, and that it holds good for all organisations and for all time? As the second half of this chapter shows, it was in response to this question that Contingency Theory developed in the 1960s. Contingency Theory began by questioning and rejecting the idea that there is a ‘one best way’ for all organisations. Instead, it argued for a ‘one best way’ for each organisation. It did not, therefore, reject the Classical approach and the Human Relations approach; instead it maintained that the optimal structures and practices of an organisation are dependent (i.e. contingent) on the circumstances it faces. The main contingencies it proposed were:

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•

Environmental uncertainty and dependence. It is argued that the management of any organisation is undertaken in circumstances of uncertainty and dependence, both of which change over time. Uncertainty arises because of our inability ever to understand and control events fully, especially the actions of others, whether outside or inside an organisation. Because of this, forecasting is an inexact and hazardous enterprise. Similarly, the dependence of management upon the goodwill and support of others, whether they be internal or external groupings, makes an organisation vulnerable, and may in some circumstances even threaten its very existence. Levels of uncertainty and dependence will vary, but can never be totally eliminated, and must therefore be taken into account – treated as a contingency – when designing organisational structures and procedures.

•

Technology. The argument for technology being a key variable follows similar lines to that of environment. Organisations creating and providing different products and services use different technologies. Given that these technologies can vary from the large and expensive, such as a car assembly line, to the relatively small and cheap, such as a personal computer, the form of organisation necessary to ensure their efficient operation will also vary. If so, there is a need to treat technology as a contingent variable when structuring organisations.

•

Size. Some would argue that this is not just a key variable but the key variable. The case for size being a significant variable when designing organisations has a long antecedence within organisation theory, being first cited by Weber in the early part of the twentieth century when making the case for bureaucracy (Weber, 1947). The basic case is quite straightforward. It is argued that the structure and practices necessary for the efficient and effective operations of small organisations are not suitable for larger ones. For small organisations, centralised and personalised forms of control are claimed to be appropriate, but as organisations grow in size, more decentralised and impersonal structures and practices become more relevant.

The main criticisms of Contingency Theory revolve around: •

The difficulty of defining and achieving compatibility between the various situational variables.

•

Proving that structure is the main determinant of performance.

•

Underestimating the complexity of organisational life and the ability of managers to exercise choice in how to structure their organisations.

In short, therefore, neither of the approaches discussed in Chapter 2 appears to be the solution to all known organisational ills that their proponents seem to claim. They fail to reflect and explain the complexities of day-to-day organisational life which we all experience. In particular, the issue of organisational culture gets short shrift yet, over the last three decades, its importance as both a promoter of and a barrier to organisational competitiveness has become apparent (see Chapters 3 and 5). Nor do they appear to take account of national differences and preferences, or for that matter pay attention to many of the wider societal factors which now impact on our lives, such as the need to show greater social responsibility, whether it be in the area of ‘green’ issues or equal opportunities (see Chapter 12). Yet it is clear that enormous changes are already taking place in the world, and others may be necessary if some of the worst predictions for the future are to be avoided. The next chapter describes three relatively new perspectives on organisational life which have become increasingly influential as the old approaches are perceived to be inadequate.

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Essay questions 1. In what ways can the Human Relations approach be said to be superior to the Classical approach? Key points:

There are three areas where the Human Relations approach can be said to be superior:

•

It recognises and addresses the social side of organisation life. Instead of seeking to reduce or eliminate human initiative and creativity, it sees it as being central to running organisations effectively.

•

The research on which the Human Relations approach is based, whilst susceptible to criticism, is much more rigorous than that on which the Classical approach is based.

•

As a whole, the Human Relations approach is much more cohesive than the Classical approach. It can be seen that those involved, in the main, knew of and sought to build on and incorporate the work of others in the field.

2. In what manner can Contingency Theory be said to incorporate both the Classical and Human Relations approaches? Key points:

It can be argued that the two ends of Burns and Stalker's structural spectrum, i.e. mechanistic and organic, are very similar to the Classical and Human Relations approaches. What Contingency Theory can be seen to argue is that the Classical approach is more suitable to stable environments and the Human Relations more suitable to dynamic environments. Therefore, to a large extent, Contingency Theory does incorporate both approaches by arguing that they are both valid but situation-specific, and by identifying the situations to which they are appropriate.

Case study 2 Volvo’s approach to Job Design One of the main purposes of this case study is to allow students to understand that Job Design is not a one-off or intermittent exercise but a long-term, organisation-wide commitment. In order to appreciate fully this, students should be required to seek out further material on Volvo’s continuing use of Job Design. The fuller version of the Volvo case study, which is on the book’s website, contains additional material which the students will find useful in answering the questions. However, students should also be encouraged to do their own research.

Case study questions 1. To what extent does the Volvo case support the arguments of the Human Relations school in terms of human motivation? The key elements which students should bring out in their answer, and which they need to evaluate critically, are as follows: •

An important factor in Volvo’s decision to move to Job Design was to overcome the problems of the Classical-Fordist approach to designing jobs, especially in terms of worker disaffection and labour turnover.

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•

Volvo consciously drew on the work of leading Human Relations-Job Design advocates to design the new ways of working, especially in terms of extrinsic motivation, semi-autonomous work groups and task variety.

•

Volvo’s commitment to Job Design since the 1970s has shown that they and their employees see it as an effective and humane way to run an organisation.

2. To what extent and why do you agree with the following statement: ‘Job Design at Volvo has now become embedded in the culture of the company?’ The key elements which students should bring out in their answer, and which they need to evaluate critically, are as follows: •

This view has been expressed by a number of external observers of the changes at Volvo (see extended version of the Volvo case study).

•

It can be seen that, over a period of years, and through successive changes, Volvo distanced itself considerably from the Fordist approach to car production adopted by the rest of the auto industry.

•

In the years since it first adopted Job Design, Volvo has given greater control of the assembly process to teams of production workers and, concomitantly, reduced managerial control. Therefore, to a very significant extent, Volvo can be said to have broken with Fordism and adopted a new way of working that has become embedded in the company.

3. Does the Volvo case support or undermine the arguments of the Contingency theorists in terms of aligning structures and practices with the situational variables the organisation faces? There is no definitive answer to this question, however, the key elements which students should bring, out and which they need to evaluate critically, are as follows: •

Volvo was facing multiple and conflicting contingencies, e.g. Fordism was the dominant way of working for the motor industry but the host society in which Volvo was located favoured a more Human Relations-Job Design approach to the organisation of work.

•

The Fordist approach was and is the dominant mode of car production but it is not applied uniformly. For example, Japanese companies still adhere to the moving assembly line but they also adopt many of the Human Relations practices and perspectives in how they involve and develop workers.

•

The concept of equifinality (see Chapter 6) maintains that different sorts of internal arrangements are perfectly compatible with identical contextual or environmental states. This appears to be the case at Volvo. It faces the same external conditions as other car companies but has responded to them in a different fashion. This shows, as critics of Contingency Theory have argued, that managers have a great deal more choice over how to structure their internal arrangements than the proponents of Contingency Theory allow.

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CHAPTER 3

In search of new paradigms Summary This chapter examines the three proto-paradigms that have come to dominate Western managerial thinking and writing since the 1980s: the Culture-Excellence approach, the Japanese Management approach and the Organisational Learning approach. Culture-excellence is very much an attempt to counter Japanese competitiveness by drawing on and re-shaping the American and British traditions of individualism and free market liberalism. It emerged in the early 1980s, and its principal exponents (Tom Peters and Robert Waterman, 1982; Rosabeth Moss Kanter, 1989; and Charles Handy, 1989) have attempted both to predict and to promote the ways in which successful (excellent) companies will and should operate in the future. Peters and Waterman, Kanter, and Handy argue that organisations are entering a new age, where familiar themes are taking on different meanings and are being expressed in a new language. Contrasting the old with the new, they argue that: •

Muscle power is being supplanted by brain power: the ability to make intelligent use of information to create ideas that add value and sustain competitiveness.

•

Organisation structures will be flatter and hierarchical and bureaucratic controls will be replaced by cultures that stress the need for, and facilitate, flexibility and adaptation.

•

Above all, organisations will need to develop open, flexible, pragmatic and strong cultures, which help to maintain a learning environment that promotes creativity, entrepreneurship, ownership and teamwork amongst all employees.

The Japanese Management paradigm is a very different animal. It has been developed in Japan over the past 60 years, and not only is it being extensively practised there, but, at least until recently, its success was not disputed. The Japanese approach, like the Peters and Waterman’s Culture-Excellence approach, revolves around the so-called ‘Seven Ss’ – Strategy, Structure, Systems, Staff, Style, Shared Values, and Skills. However, it is not simply the merits of each of the individual Ss which has given the Japanese their competitive edge. Rather it is that they are devised and adopted in such a way that they are integrated and mutually supportive of each other. Because of the success of the Japanese economy and Japanese companies from the 1960s onwards, the Japanese approach attracted much interest in the West, especially in the UK, where Japanese inward investment (by household names such as Honda, Nissan and Toyota) generated a great deal of debate regarding the impact and merits of ‘Japanisation’. This was also the case in the USA, where Japan and Japanese methods were seen, in turn, as either a threat or a lifeline to American industrial pre-eminence.

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Organisational learning came to the fore in the early 1990s. Leading management thinkers, in particular Chris Argyris (1992), have been interested in organisational learning for over forty years. However, it is only in the last decade that the concept has become popularised as an engine for organisational competitiveness through the work of Senge (1990) in the USA and Pedler, Boydell and Burgoyne (1989) in the UK. One of the key benefits claimed for organisational learning is that it is a universal approach which draws on, and is consistent with, both Western and Japanese organisational traditions (Hedlund and Nonaka, 1993; Nonaka, 1988; Ouchi, 1988; Whitehill, 1991; Probst and Buchel, 1997). The core characteristics of organisational learning which most writers would agree upon are that: •

An organisation's survival depends on its ability to learn at the same pace as or faster than changes in its environment.

•

Learning must become a collective and not just an individual process.

•

There must be a fundamental shift towards systems thinking by an organisation's members.

•

This gives an organisation the ability to adapt to, influence and even create its environment.

Needless to say, none of the three approaches is without its drawbacks or criticisms. In particular, there are five concerns which should be highlighted, relating to ‘one best way’, people, politics, culture and change management. One best way: Much of Part 1 of this book is concerned with approaches to managing and structuring organisations. The one clear message which emerges from it is to be wary of any theory or proposition which claims that it is the ‘one best way’ for all situations and all organisations. Yet all three of the approaches discussed in this chapter appear to advocate just that. People: The Culture-Excellence and the Japanese approaches also leave much to be desired with regard to people. Both approaches rely on a workforce split into a privileged core and a relatively unprivileged periphery. Under both approaches there is a strong emphasis on commitment to the organisation taking precedence over all else, even family life. Therefore, long hours and short holidays are the norm under both systems. The Japanese approach appears at least to offer more job security, if only for the privileged core. Politics: The issue of organisational power and politics has received extensive attention over the last 20 years (Buchanan and Badham, 1999; Dawson, 2003; Huczynski and Buchanan, 2001; Kotter, 1982; Minett, 1992; Pfeffer, 1981 and 1992; Willcocks, 1994; Yammarino and Dansereau, 2002) and is explored in Chapter 5. Given that organisations are social entities and not machines, power struggles and political in-fighting are inevitable. However, the three approaches discussed in this chapter do not appear adequately to acknowledge or incorporate this into their perspectives. Culture: This brings us to the next concern to which these three approaches give rise. Proponents of all three approaches treat culture in a rather subordinate fashion and leave themselves open to the accusation that they gloss over the difficulty of changing culture. The role of organisational culture will be examined in Chapter 5. Change management: The Culture-Excellence approach has little to say about how change should be achieved, despite acknowledging the radical transformation it is advocating. Peters (1993) advocated a ‘Big Bang’ approach to change – ‘change radically and do it quickly’ seems 19 © Pearson Education Limited 2009

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to be his advice. Handy (1986), on the other hand, seemed to adopt a more gradualist approach to change – big changes over long periods. Kanter et al. (1992) advocated a combination of both; they argue that major changes, especially in behaviour, can only be achieved over time. Though organisational learning is explicitly directed at enabling organisations to change, its proponents are vague and inconsistent in specifying how one leads to the other. The Japanese approach, however, is more specific. It advocates creating a vision of the future and moving towards it in incremental steps (Kaizen) at all levels of the organisation. The Japanese are extremely able at this process, which has given them the reputation as a nation which makes ambitious long-term plans which are slowly, relentlessly and successfully achieved. However, it is debatable whether this approach could work in many Western countries. Therefore, though the organisational learning, Japanese, and Culture-Excellence approaches have their strong points, they also have their drawbacks, at least as far as Western companies are concerned. The final two chapters in Part 1 round off the review of organisation theory by examining the postmodern, realist and complexity perspectives on organisations and the role of culture, power and politics in constraining and enabling organisational choice.

Essay questions 1. What are the main similarities and differences between the Culture-Excellence approach and Japanese Management? Key points:

As Chapter 3 shows, though the Culture-Excellence and Japanese approaches have some similarities, for example the resemblance between the Japanese passion for quality and the Culture-Excellence school's fervent advocacy of the pursuit of excellence, the two also have significant differences, especially in their treatment of people. Whilst the Japanese approach has clearly influenced the Culture-Excellence thinkers, there is little indication that the reverse has been the case. The two may be competing approaches in the West, but certainly not in Japan. Nevertheless, both are dynamic and developing paradigms, with some common elements, and consequently, a merging or a blending of the two in the West is not beyond all possibilities.

2. What are the core tenets of organisational learning and what difficulties might an organisation encounter in introducing it? Key points:

The core tenets of organisational learning which most writers would agree upon are that:

•

An organisation's survival depends on its ability to learn at the same pace as or faster than changes in its environment.

•

Learning must become a collective and not just an individual process.

•

There must be a fundamental shift towards systems thinking by an organisation's members.

•

This gives an organisation the ability to adapt to, influence and even create its environment.

The main difficulties in applying organisational learning lie in the inability of its main advocates to agree on what it is or to provide guidance on how to develop organisational learning.

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Case study 3 The transformation of XYZ construction phase 1 – culture change The main purpose of this case study is to allow students to understand that organisational transformation is neither a quick nor a one-dimensional process. In particular, the cultural elements of such a change tend to be multi-faceted and multi-layered. In order to appreciate this, students should be required to read on the topic of culture change. The sections on culture and organisational power and politics given in Chapter 5 should make a good starting point. In guiding students, Instructors may find it useful to read the fuller version of the XYZ case study which is on the book’s website.

Case study questions 1. Evaluate and comment upon the extent to which XYZ can be said to have adopted the Culture-Excellence approach to running its business. In approaching this question, students should: •

Use the review of the Culture-Excellence approach given in this chapter to construct a checklist against which the actions of XYZ can be judged.

•

Identify which changes can be said to be consistent with the Culture-Excellence approach and whether any are not consistent with the approach.

•

Address the extent to which XYZ encountered or overcame the drawbacks of CultureExcellence listed in this chapter.

2. The transformation of XYZ appears to have taken place with very little resistance or opposition from staff and managers. Discuss why this should be so. The main points which students should address are: •

The organisation’s readiness for change and its past record of resistance and opposition.

•

The Managing Director’s personality and the support/direction he received from the parent company.

•

The steps the Managing Director took to open up the management team and the organisation and the extent to which these created greater transparency in the organisation.

•

The extent to which the changes the Managing Director initiated broke up existing power relations in the organisation.

3. To what extent and why do you agree with the following statement: the new Managing Director has not changed the culture of XYZ but has merely introduced a new management style. The main points which students should address are: •

The differences in the managerial style of the new Managing Director in comparison with his predecessor.

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•

The various initiatives the Managing Director took to develop management and staff, and the extent to which these went beyond a change in management style.

•

The extent to which the changes in XYZ between 1996 and 1999 could be considered as a change of culture. In addressing this, students should find it helpful to use Cummings and Huse’s (1989) model of culture shown in Figure 5.1 in Chapter 5.

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CHAPTER 4

Critical perspectives on organisation theory: postmodernism, realism and complexity Summary Chapters 1–3 described the development of organisations and organisation theory from the Industrial Revolution through to the present day, in order to show the various approaches to and options for designing and running organisations so as to meet the challenges they face. What has emerged is a somewhat confusing picture of theories which claim, each in their own way, to be the answer to all organisational ills, yet which are all open to potentially damning criticisms. All the theories claim to give practical and coherent advice to managers on how to structure and run their organisations. Yet it is in their limited applicability to the range and complexity of situations found in everyday organisational life that these theories are most open to criticism. The main criticisms are as follows: •

The tendency to assume a unitary frame of reference, in which the interests of workers and managers, blue-collar and white-collar staff, and people of different genders, ethnicity and religions either coincide or can be easily reconciled, is a clear shortcoming in all these theories.

•

The belief of the Classical school and the Human Relations movement that contextual factors – the external environment, size, technology, etc. – are either irrelevant or easily accommodated is another obvious flaw.

•

Similarly, the assumption by both the Contingency theorists and the proponents of Culture – Excellence that managers are powerless to change the situational variables they face, and have no choice but to accept the prevailing recipe for success, is not borne out in reality.

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In addition, there is a growing scepticism regarding the ability of rational, objective science to provide an explanation for the many and fundamental changes taking place in organisations and the wider society.

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One of the most serious drawbacks is that only the Culture–Excellence school, and to a lesser extent the Organisational Learning and Japanese approaches, give any importance to the role of organisational culture – and even then it is treated in a simplistic fashion.

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None of the theories give serious consideration to the role of power and politics in influencing decision-making in organisations. Not only does this go against a great deal of research that has been produced over the last 30 years, but it also runs counter to most people's own experience of organisational life.

•

Lastly, these theories explicitly or implicitly reject the notion of choice. Their basic argument is that organisations need to follow ‘their’ recipe for success or they will fail. Yet, if we look at the population of organisations, we can see a vast variety of approaches to their design and management. Some, for periods of time at least, may seem more successful than others, but most organisations appear capable of surviving whether they adopt the current recipe in full, in part or totally reject it. 23 © Pearson Education Limited 2009

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This, and the following chapter which is devoted to an examination of culture, power and politics, will address these issues, especially the final three points. This chapter examines three important and critical perspectives on organisations: postmodernism, realism, and complexity. Postmodernism is a loosely-defined philosophical movement which, though originally based in the arts, has become increasingly influential in the social sciences over the last 30 years. It is a way of looking at the world that rejects rationality. Instead, it concentrates on the ways in which human beings attempt to shape reality and invent their world. The realist perspective on organisations, like the postmodernist, is a philosophical doctrine that was first applied to the arts but has in recent years been taken up by organisation theorists. Also like postmodernists, realists do believe that reality is socially constructed. But, unlike the postmodernists, realists reject the notion of multiple realities. The essence of realism is that there is only one reality and it exists even if we have not yet discovered it. It sees both the natural and social worlds as consisting of complex structures which exist even if we are not aware of them or how they influence our behaviour. For realists, events and patterns of events are generated or caused by mechanisms and powers that exist independently of the events they generate. Therefore, realists do not deny the ability of human beings to shape their world, but they see this ability as being limited by an ensemble of real and concrete structures, practices and conventions in society. Complexity, in contrast to the former two perspectives, arose from the natural sciences before being taken up by social scientists. Complexity theories are concerned with how order is created in dynamic non-linear systems. In particular, those applying this approach to organisations maintain that successful organisations need to operate at the ‘edge of chaos’ and can only maintain this position by the presence of appropriate order-generating rules. The chapter concludes by arguing that, whilst these three approaches differ significantly, what they have in common is that they open up the prospect that organisations have choices in what they do and how they do it. Rather than being the prisoners of organisational theories or contingencies, managers (potentially) have considerable, though by no means unconstrained, freedom of choice over the structure, policies and practices of their organisations, and even over the environment in which they operate. This then leads on, in Chapter 5, to an examination of the role of culture, power and politics in the identification, shaping and pursuit of choices.

Essay questions 1. What are the implications for organisations of differences between postmodernists and realists in terms of how they view reality? Key points:

As Chapter 4 shows, postmodernism has many competing and conflicting definitions. This makes it difficult to identify an agreed position regarding its impact on organisations. Many of its proponents argue that postmodernism will drive organisations more down the Culture-Excellence/post-Fordist route in terms of flattening hierarchies, becoming more participative and forming alliances with other organisations. Others go beyond this and see postmodernism as facilitating the greater democratisation of organisations. Nevertheless, given that postmodernists argue that organisations are social constructions which emerge from power struggles within them, the possibility is that organisations could become less democratic and more authoritarian. Realists, like postmodernists, believe that reality is socially constructed. But, unlike the postmodernists, realists reject the notion of multiple realities. The essence of realism is that there is only 24 © Pearson Education Limited 2009

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one reality and it exists even if we have not yet discovered it. Therefore, realists do not deny the ability of human beings to shape their world, but they see this ability as being limited by an ensemble of real and concrete structures, practices and conventions in society. 2. What are ‘simple order-generating rules’, and how might an organisation identify and modify these? Key points:

In complex systems, the emergence of order is seen as being based on the operation of simple order-generating rules which permit limited chaos whilst providing relative order. MacIntosh and MacLean (2001) provide evidence of the existence and importance of order-generating rules, based on a case study of a long-established manufacturing company. They identified the inappropriate ordergenerating rules (such as ‘don’t innovate unless it leads to cost reduction’) and developed more appropriate ones (such as ‘better, faster, cheaper’).

Case study 4 File sharing and the music industry One of the main purposes of this case study is to allow students to evaluate the extent to which the different perspectives on organisational life discussed in Chapter 4, can lead to distinct insights into the opportunities and threats an organisation faces and can provide it with a unique recipe for action. The case study questions can be used as the basis of comparative group work. Each group should take on the role of one of the three management consultancies. Each group’s remit is to prepare a presentation for their ‘client’ which addresses each element of the question. After all the presentations have been completed, the class should address the following questions: •

What were the main differences in the three groups’ analysis of the music company’s situation?

•

How did the recommendations of the groups differ?

•

To what extent could any differences in the analyses and recommendations be seen to be brought about by the perspective they were adopting?

Case study questions 1. Imagine that you are a consultant with Postmodern Perspectives, a management consultancy which offers its clients a postmodern approach to strategy. You have been asked by a major record label to provide it with advice on how to maximise income and minimise piracy from the Internet. What advice would you offer, why and what would be specifically postmodern about it? One way to approach this question would be to generate a range of future scenarios or realities for the music industry and to evaluate these against the music company’s aims of maximising income and minimising piracy.

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2. Imagine that you are a consultant with Realist Consultants, a management consultancy which offers its clients a realist approach to strategy. You have been asked by a major record label to provide it with advice on how to maximise income and minimise piracy from the internet. What advice would you offer, why, and what would be specifically realist about it? One way to approach this question would be to try to identify the most realistic future for the music industry and then to identify how individual companies could maximise income and minimise piracy. 3. Imagine that you are a consultant with Complexity Management, a management consultancy which offers its clients a complexity-based approach to strategy. You have been asked by a major record label to provide it with advice on how to maximise income and minimise piracy from the Internet. What advice would you offer, why, and what would be specifically complexity based. One way to approach this question would be to try to identify the current order-generating rules for the music industry and show what new order-generating rules would need to emerge in order for music companies to maximise income and minimise piracy from the Internet.

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CHAPTER 5

Culture, power, politics and choice Summary As identified in Chapter 4, two of the main drawbacks of existing organisation theories are that they treat culture in a simplistic fashion and fail to give sufficient attention to the role of power and politics. Chapter 5 seeks to address these shortcomings by examining culture, power and politics and showing how they open up options for organisational choice. This chapter begins with a review of organisational culture. It is shown that many organisations lack a cohesive culture which binds them together in a common purpose. However, contrary to the arguments of the Culture–Excellence school, even where strong cultures exist, they may not always be appropriate; they may also be undermined owing to the absence of clear or uncontested organisational goals. The review of culture concludes that, firstly, although organisational culture may have important implications for organisational performance, there is little agreement about the nature of culture, whether it can be changed, or the benefits to be gained from attempting to do so. Secondly, instead of culture being seen as an all-important and malleable determinant of performance, organisational life in many cases is dominated by political power battles which may be more influential than culture in shaping key decisions. Consequently, the review of culture leads on to an examination of the nature and role of power and politics in organisations. This view of organisations maintains that they are essentially political entities whose decisions, actions and major developments are influenced and determined by shifting coalitions of individuals attempting to protect or enhance their own interests. In summing up the implications of culture and power-politics for organisations, it is argued that, rather than being the prisoners of organisational theories or contingencies, managers (potentially) have considerable, though by no means unconstrained, freedom of choice over the structure, policies and practices of their organisations, and even over the environment in which they operate. In exercising choice, managers are influenced less by organisational theories than by their concern to ensure that the outcome of decisions favours, or at least does not damage, their personal interests. This does not necessarily mean that the various theories and their attendant structures and practices we have discussed so far in this book are invalid, unhelpful or inapplicable. It does, however, mean that it may be possible, within limits, for organisations, or rather those who control organisations, to decide upon the structure and behaviours they want to promote, and then shape the conditions and contingencies to suit these, rather than vice versa. If organisations are not the prisoners of situational variables, as most organisation theories maintain, if those who manage them do have a degree of leeway in what they do, one then has to ask what factors do influence the actions of decision-makers. The review of the powerpolitics literature showed organisations as shifting coalitions of groups and individuals seeking to promote policies and decisions that enhanced or maintained their position in the organisation. From the literature, a persuasive argument is mounted for seeing politics and power – usually promoted under the cloak of rationality, reasonableness and the organisation's best interests – as a central, though not exclusive, determinant of the way organisations operate. In particular, though political behaviour appears to be an ever-present feature of organisational life, politics

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comes to the fore when major issues of structural change or resource allocation are concerned. Such decisions have crucial importance for achieving and maintaining power or position, or even – when the chips are down – for keeping one's job when all around are losing theirs. Therefore, it is surprising that much of organisation theory, which after all is primarily concerned with major decisions concerning structure and resource allocation, seems to dismiss or gloss over power and politics. Nevertheless, what is clear from this chapter is that managers, despite the constraints they face, have a far wider scope for shaping decisions than most organisation theories acknowledge, and that the scope for choice and the deployment of political influence is likely to be most pronounced when change, particularly major change, is on the managerial agenda.

Essay questions 1. Discuss the following statement: ‘Organisational culture is the prime determinant of organisational performance’. Key points:

The main points to note are that culture is a contentious and nebulous concept, and that there is a great deal of dispute about its role in organisations, the link between culture and performance and whether culture can be manipulated. Though culture undoubtedly does have a powerful influence on organisational performance, so too do other factors such as structure, organisational politics, managerial style and behaviour, products and markets, and the general environment, not to mention luck.

2. Explain the concept of dominant coalitions, and discuss how these can prevent organisations dividing into warring factions with individuals and groups pursuing their own personal agendas. Key points:

The ability to exert influence (power) over key decisions and the possession of position (authority) tend to lie within dominant coalitions rather than being spread evenly across organisations. These coalitions may comprise, for example, all the senior managers of an organisation, or be an alliance of some senior managers and other groups who possess power over scarce resources, such as technical or financial know-how. Because dominant coalitions have the power to take decisions which can reward or favour some groups and initiatives over others, they also have the power to influence either directly or indirectly the behaviour of others. This allows dominant coalitions to act as a force for encouraging co-operation and discouraging the pursuit of personal and destructive behaviours.

Case study 5 GK Printers Limited One of the main purposes of this case study is to allow students to explore the extent to which the perspective and self-interest of an individual can influence how they see a situation and the recommendations they make. The case study questions can be used as the basis of comparative group work. Each group should take on the role of one of the three people involved, i.e. the consultant, the Managing Director or the Marketing and Design Manager. The group’s remit is to prepare a presentation for the class which addresses each element of the question they have been given.

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After all the presentations have been completed, the class should address the following questions: •

What were the main differences in the three groups’ analysis of the company’s situation?

•

How did the recommendations of the groups differ?

•

To what extent could any differences in the analyses and recommendations be seen to be brought about by the perspective from which they were viewing the issues?

A fuller version of this case study is available on the book’s website.

Case study questions In addressing these questions, the main points that students need to bear in mind are that: •

They have to put themselves in the shoes of the individuals concerned and take on their concerns and objectives.

•

They have to understand the collective and individual agendas of those involved.

•

They have to appreciate the group dynamics of the situation.

1. Imagine that you are an outside consultant brought in to advise the Managing Director: a. What are the key issues he needs to address or resolve? b. What are the main steps he needs to take to agree and implement a solution? c. What obstacles might he expect to encounter and how might he overcome these? 2. Imagine that you are the Managing Director. You have decided to take direct charge of resolving the situation without the aid of any outside assistance: a. What is your analysis of what has gone wrong so far and who is to blame? b. What are the main steps you need to take to agree and implement a solution successfully? c. What obstacles might you expect to encounter and how might you overcome these? 3. Imagine that you are the Marketing and Design Manager. The Managing Director has asked you to reflect on the response of your colleagues and produce a revised and acceptable plan for resolving the company’s problems. a. What is your analysis of why the first proposal was so strongly rejected? b. What are the main steps you need to take to develop a proposal acceptable to your colleagues? c. What are the main obstacles to achieving an acceptable proposal?

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Part Two

Strategy development and change management: past, present and future This comprises five chapters, examining the literature on Strategic Management and Change Management. Chapters 6 and 7 examine the dominant approaches to strategy and the main tools and techniques available to organisations for its development and implementation. In particular, the two chapters draw attention to the differences between the Prescriptive and Analytical schools of strategy, and they highlight the importance of the relationship between organisational strategy and organisational change. Chapters 8, 9 and 10 review, and go beyond, the two dominant approaches to organisational change: the Planned approach and the Emergent approach. The chapters show that neither approach is applicable to all change situations but that both can be used within the same organisations. Chapter 10 concludes by arguing that, though organisations face significant constraints on their freedom of choice, these constraints can be influenced and changed in order to allow organisations to choose the particular approach to strategy and change which best suits them.

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CHAPTER 6

Approaches to strategy: managerial choice and constraints Summary This chapter examines the development and shortcomings of the main approaches to strategy which have been put forward in the last 50 years. It is shown that, since the end of the Second World War, organisations have begun to take a strategic perspective on their activities. They have increasingly sought to take a long-term view in order to plan for and cope with the vagaries of the future. In many respects, the development of strategic management has tended to mirror the development of organisational theory. In the 1940s and 1950s, the strategic literature only considered one aspect of an organisation's activities – the external environment. It tended to seek rational, mathematical approaches to planning. With the passing of time, more intuitive and less rational approaches to strategic management have been developed which claim to incorporate the totality of organisational life. Chapter 6 reviews the main perspectives on strategy. In seeking to understand and define strategy formulation, it identifies two streams of thought, the Prescriptive and Analytical. As the name implies, the Prescriptive stream comprises approaches which seek to ‘prescribe’ how organisations should undertake strategy but, in so doing, tends to ignore or downplay the irrational and highly-convoluted nature of organisational life. The Analytical stream, on the other hand, rather than telling organisations how they should build strategy, seeks to analyse – to understand and describe – the complexity and range of forces which affect how organisations do build strategy. This divergence is reflected in their respective views of strategy. The Prescriptive stream, which was the first on the scene and is very much practitioner-orientated, sees strategy formulation as an economic-rational process based on mathematical models. The Analytical stream, which appeared in the 1970s, represents the more sceptical and more academically-orientated face of strategy. It views strategy not as a process, but as an outcome of a process. Its proponents' emphasis is not on the construction of detailed plans, which in any case they believe to be an unworkable approach, but on the organisational, social and political aspects of strategy formulation. The two streams represent markedly different perspectives on strategy formulation and whilst the Analytical stream has tended to win the academic arguments over the last 20 years, the Prescriptive one has had considerably more impact and influence on the practice of strategy. The move towards a new, more emergent, perspective on strategy has been brought about by the mounting criticisms against the Classical or Prescriptive approach to strategy. The main criticisms are that it is mechanistic, inflexible, and reliant on quantitative tools and techniques of dubious validity. The result is that organisations who attempt to construct strategies using the Prescriptive approach fall foul of what Peters and Waterman (1982) described as ‘Paralysis Through Analysis’ and ‘Irrational Rationality’. In effect, organisations contort themselves in a vain attempt to make the real world fit the constraints and limitations of their mathematical models, rather than vice versa.

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The alternative view, and one that is gaining adherents, is that organisations should move away from exclusive reliance on mathematical models. Instead, human creativity should be brought into play. Senior managers should create a vision of the organisation's future – establish its ‘Strategic Intent’. This should then be pursued relentlessly by the organisation. In the process of doing so, the strategy emerges from the decisions that are taken with regard to resource allocation, organisation structure and the other key areas of operation. From different perspectives, a number of writers have come to the same conclusion. For successful companies, strategy does not appear to be a pre-conceived and detailed set of steps for achieving a coherent package of concrete goals within a given timescale. Neither does it seem to be a rational process which is amenable to mathematical modelling. Rather, it is the outcome of a process of decision-making and resource allocation that is embarked upon in pursuit of a vision (though even here there is disagreement about how conscious this process is). Such an approach is inherently irrational, inherently unplannable – it cannot be modelled or quantified, though it can and must be pursued with rigour and determination. Despite the merits of the ‘emergent’ view of strategy, this chapter suggests a third approach, one which sides with neither the quantitative nor qualitative schools of thought. Instead, it argued that the approach to strategy which organisations adopt is or can be the outcome of managerial choice and preference. However, choice in this respect, as in most others, is constrained. The key constraints identified were societal, sectoral, environmental and organisational. Therefore, the chapter concludes by arguing that, rather than managers being the prisoners of mathematical models and rational approaches to decision-making, they have considerable freedom of action and a wide range of options to choose from. However, they are not totally free agents; their freedom of action is seen as being constrained or shaped by the unique set of organisational, environmental and societal factors faced by their particular organisation. Fortunately, these constraints are not immutable. As argued in Part 1, it is possible for managers to manipulate the situational variables they face with regard to structure. Similarly, managers can also exert some influence over strategic constraints and, potentially at least, can select the approach to strategy which best suits their preferences. Nevertheless, to choose an approach to strategy is one thing; to apply it is an entirely different matter. Therefore, just as this chapter reviewed the main arguments with regard to strategy, so the remaining chapters in Part 2 review the strengths and weaknesses of the main approaches to applying strategy and implementing change.

Essay questions 1. How do Whittington's four generic approaches to strategy relate to the Prescriptive and Analytical schools of strategy? Key points:

Whittington postulates that there are four generic approaches to strategy: the Classical, Evolutionary, Processual and Systemic. Though in theory all four approaches could fall in both the Prescriptive and Analytical camps, in practice, it is the Classical approach which is nearest to the approach to strategy favoured by the Prescriptive school. However, as it has become more popular in the West, the Systemic approach has also developed a Prescriptive wing. The Evolutionary and the Processual approaches, though, still remain very much the property of the Analytical school.

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2. Discuss the following statement: Strategy development and implementation can never be a rational process. Key points:

Strategy development and implementation revolve around factors such as uncertainty, human judgment, experience, ability, information-processing and selfinterest. There are elements in this process, such as data gathering and analysis, technology assessments etc, which are more amenable to rationality than others. However, this is countered by the presence of uncertainty, and the fact that individuals and groups may and do interpret the same situation and the same information in very different ways. Thus the overall strategy development process itself, depending as it does on human judgment and fallibility, can never be a totally, or even predominantly, rational affair.

Case Study 6 The rise and fall of Marconi One of the main purposes of this case study is to enable students to understand the implications for organisations of different types of strategy. The three case study questions allow students to examine strategy from the rational and emergent perspectives, and from the viewpoints of Michael Porter and Henry Mintzberg. In class, the case study questions can form the basis of comparative group work where three groups are each given the task of preparing a class presentation on one of the questions. After the three presentations, the class as a whole can discuss the various perspectives on strategy and come to understand that the strategy an organisation follows may have less to do with the objective conditions it faces and more to do with the perspective on strategy held by its senior managers. It follows that there are no ‘right’ answers to the three questions, rather students need to understand the different perspectives and attempt to apply them to Marconi’s situation. A fuller version of this case study is available on the book’s website.

Case study questions 1. Analyse the Marconi case study from both the rational and emergent perspectives on strategy. What does Marconi tell us about these two perspectives? In addressing this question, the three main steps students will need to take are: •

To develop a definition of rational strategy and emergent strategy and use these as tools to examine the Marconi case.

•

To examine the development and robustness of the vision for Marconi which Simpson stated as: ‘The old GEC had had it and everyone told us that focus was what was needed. Telecoms was the obvious industry to expand into.’

•

To examine how Marconi implemented its vision of the new Marconi and the extent to which this showed evidence of rational or emergent strategy.

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2. Imagine you are Michael Porter. What advice would you have offered to George Simpson when he took over GEC-Marconi in 1996? How would his advice have changed the fate of Marconi when the dotcom bubble burst in 2000? In addressing this question, the main issue is for students to identify the core elements of Porter’s approach to strategy and apply them to Marconi’s situation. In particular, students should pay attention to Porter’s five competitive forces model described in Chapter 6 and Chapter 7 (see figure 7.1) and his three generic strategies (see Figure 7.2). 3. Imagine you are Henry Mintzberg. What advice would you have offered to George Simpson when he took over GEC-Marconi in 1996? How would his advice have changed the fate of Marconi when the dotcom bubble burst in 2000? In addressing this question, the main issue is for students to identify the core elements of Mintzberg’s approach to strategy and apply them to Marconi’s situation. In particular, students should pay attention to Mintzberg’s views on emergent strategy as discussed in Chapter 6 (see Figure 6.3).

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CHAPTER 7

Applying strategy: models, levels and tools Summary This chapter reviews the main models, tools and techniques that organisations use when formulating strategy. It begins by examining the three basic types or models of strategy which organisations tend to adopt: the Competitive Forces model; the Strategic Conflict model; and the Resource-Based model. The chapter then moves on to look at the three levels of strategic decision-making in organisations: corporate, business and functional. This is followed by a review of the main strategic planning tools. The chapter ends by arguing that one of the principal reasons for the dominance of prescriptive approaches to strategy has been the alliance between leading consultancies and business schools in America to develop, market and update these. In so doing, the Prescriptive school has established itself as the orthodox, safe and practical approach to strategy formulation. Nevertheless, with the take-up of more analytically-based types of strategy, this is beginning to change. As Chapter 6 maintained, the model or type of strategy an organisation should adopt, and the associated planning tools which accompany it, are dependent upon the constraints the organisation faces. However, organisations do not have to fit themselves and their strategies to these constraints. Rather, they have a choice; they can seek to influence or mould the constraints they face in order to make them more amenable to the type or model of strategy they wish to pursue. Therefore, the approach to strategy an organisation adopts may have less to do with the merits of the different models on offer and more to do with the type of organisation it is and the orientation of its managers. Nevertheless, choosing the type or model of strategy to pursue is one thing; implementing it is an entirely different matter. This is especially so if one recognises that the Prescriptive and Analytical streams of strategy have distinctly different, indeed almost opposite, perspectives on implementation. For the former, implementation flows from the organisation's strategic plan. For the latter, the strategy emerges from and is given shape by the actions and decisions organisations make on a day-to-day basis to change and adapt themselves to their circumstances. But no matter which model of strategy one subscribes to, it is only when organisations implement changes that strategies come alive. This highlights the crucial importance of organisational change. Consequently, just as this chapter and Chapter 6 reviewed the main arguments with regard to strategy, so the next two chapters review the strengths, weaknesses and implications of the main approaches to change management.

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Essay questions 1. Contrast and compare the strengths and weaknesses of quantitative and qualitative approaches to strategy. Key points:

The quantitative approach:

Strengths:

i)

Relatively easy to use and apply.

ii)

Produces relatively unambiguous answers.

iii)

Makes decision-making easier.

i)

Many of the propositions underlying the quantitative approach are dubious, e.g. that there is a straightforward relationship between profit and market share.

ii)

The amount of data used and information generated makes it very difficult for managers to understand the premises on which recommendations are made. In effect, managers become prisoners of the process rather than masters of it.

iii)

The quantitative approach is too mechanistic, overly complex, based on unreliable data, and cannot cope adequately with dynamic and unpredictable environments.

Weaknesses:

The qualitative approach: Strengths:

Weaknesses:

i)

Takes into account the complexities of organisational life.

ii)

Can cope with uncertain, ambiguous and dynamic situations.

iii)

Puts managers in charge of the process.

i)

The interpretation of data and the outcome of the process are very subjective.

ii)

Decisions tend to be based on retrospection, i.e. projecting the past into the future.

iii)

Open to manipulation by individuals and groups seeking to promote and protect their own self-interests.

2. To what extent can vision-building be seen as a realist approach? Key points:

Though realists acknowledge that organisations and their environments are socially constructed, this does not mean that they can be reconstructed at will or that all options for change are equally achievable. Realists argue that both the structure of an organisation and the structures that exist in its environment have enabling and constraining properties. The ability to develop a new vision for an organisation’s future which breaks with its past traditions will depend upon the strengths and malleability of these enabling and constraining properties. As Easton (2000: 207) comments, the essence of realism ‘…is that there is a reality…’. Therefore, inasmuch as most approaches to vision-building recognise that there are some constraints which cannot be overcome, or which have to be worked with, vision-building can be seen as a realist approach. However, as the case study of Marconi in Chapter 6 shows, not all vision-builders recognise these constraints. Where they do not, as the Marconi study shows, the result can be disastrous.

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Case study 7 Process Control Inc. One of the main purposes of this case study is to enable students to understand the implications of the different viewpoints of those who seek to apply strategy (the Prescriptive stream) and those who seek to study its application (the Analytical stream). The three case study questions allow students to examine strategy from these two viewpoints. The questions can be used in a number of ways, e.g., exam questions, coursework and so on. However, one of the most effective in terms of developing students’ learning, is to use the questions as the basis of comparative group work. Each group should be given one of the questions to address and asked to prepare a presentation to the class. After the three presentations, the class as a whole can discuss the two approaches to strategy and how, through the lens of the Process Control case study, they can help us to understand how organisations implement strategy.

Case study questions In addressing each question, the key step for students is to develop a definition of the Prescriptive and/or the Analytical view of strategy which can be used as a tool to be applied to the case study. 1. Analyse the case study from the perspectives of the Prescriptive and Analytical streams of strategy. Which perspective, if any, offers the best insight into PCI’s failure to implement its strategy? The key points to note in terms of the two approaches are that the Prescriptive view is likely to focus on the whether or not PCI choose the ‘right’ strategy. On the other hand, the Analytical view is likely to focus on how the strategy was developed and implemented. Therefore, in terms of understanding the failure to implement the strategy, it is likely that the Analytical approach may be most useful. 2. Imagine that you are a consultant for Prescriptive Strategy Inc. What advice would you offer the CEO in terms of how he should evaluate and decide upon the three options? The key issue is for students to demonstrate that they understand the Prescriptive approach and that they can apply it to the case study company. 3. Imagine that you are a consultant for Analytical Strategy Inc. What advice would you offer the CEO in terms of how he should evaluate and decide upon the three options? The key issue is for students to demonstrate that they understand the Analytical approach and that they can apply it to the case study company.

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CHAPTER 8

Approaches to change management Summary This chapter follows on from the discussion of approaches to strategy in the two previous chapters. Chapters 6 and 7 were essentially concerned with approaches to determining and charting an organisation's strategic direction. Underpinning both chapters was the division between the Prescriptive stream of strategy, whose members seek to tell organisations how they should formulate strategy, and the Analytical stream of strategy, whose members seek to understand what organisations actually do to formulate strategy. The former tend to see strategy as a formal, rational and pre-planned process. The latter tend to see strategy as a more messy, less rational, emergent process. Therefore, for the Prescriptive stream, organisational change flows from, and is concerned with implementing, an organisation's predetermined strategy. For the Analytical stream, organisational change is not an outcome of strategy but the process by which it is created and given form. For both streams, change management is vitally important, whether it be for strategy implementation or development. Consequently, Chapters 8, 9 and 10 focus on the approaches to planning and implementing the changes required to achieve, or shape, strategic objectives. Chapter 8 begins by describing the theoretical foundations of change management. In particular, it is shown that the three main schools of thought that underpin approaches to change management can be distinguished by their respective concentration on individual, group and organisation-wide issues. This leads on to an examination of the Planned approach, which was developed by Kurt Lewin in the 1940s. This approach dominated both the theory and practice of change management from then until the 1980s, when it met with increasing levels of criticism, especially from those questioning its suitability for organisations operating in dynamic and unpredictable environments. After the death of Lewin in 1947, the Planned approach to change was taken up by and became the central focus of the Organization Development movement in the USA. In its origins, it is an approach to change which focuses upon improving group performance by bringing together managers, employees and a change consultant. Through a process of learning, those involved gain new insights into their situation and are thus able to identify more effective ways of working together. Advocates of Planned change, especially the earlier ones, believe that group learning and individual development are at least as important as the actual change process itself. This, in part, arises from the humanist and democratic values that underpin Planned change and which derive from Kurt Lewin's background and beliefs. Under the auspices of Organization Development, however, the influence of these values has lessened. The focus of Planned change has moved from conflict resolution to performance enhancement, as Organization Development has grown into a thriving consultancy industry aimed almost exclusively at resolving problems within client organisations. Therefore, as was the case with the approaches to strategy discussed in Chapters 6 and 7, it is possible to draw a distinction between those proponents of Planned change, especially Lewin and early pioneers, who take an analytical approach, and those who take a more prescriptive approach, especially those whose livelihood depends upon their selling their services as change consultants.

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The chapter then proceeds to examine the criticisms of the Planned approach to change, especially its perceived unsuitability in situations requiring organisation-wide change or to organisations operating in fast-moving and uncertain environments. Following this, it goes on to examine the main perspectives on the nature of organisational change: the Incremental, Punctuated Equilibrium, and Continuous Transformation models. The chapter concludes by arguing that as a consequence of the criticisms of the Planned approach, and in the context of newer perspectives on change such as the Punctuated Equilibrium and Continuous Transformation models, new approaches to change have been gaining ground in recent years, one of which in particular has come to dominate the literature. Though aspects of it have been given a number of different labels, such as continuous improvement or organisational learning, it is more often referred to as the Emergent approach to change. This approach is reviewed in Chapter 9.

Essay questions 1. What was Kurt Lewin's main contribution to change management and how relevant is it for contemporary organisations? Key points:

Any examination of Lewin's influence on change theory must take into account his development of Field Theory, Group Dynamics, Action Research, the 3-Step model of change and the establishment of an ‘ethical’ agenda for change. However, his major contribution was bringing these together in a unified model of change which, though it has been somewhat fragmented and watered down over the years, laid the basis for, and still lies at the centre of, Organization Development.

2. How has the OD movement sought to update its approach to organisational change? To what extent has it been successful? Key points:

The main areas in which the OD movement has attempted to update its approach relate to the move from group-based change to organisation-wide issues such as systems, culture, learning and transformation. In the USA at least, this has allowed the OD movement to maintain its standing as the main body for change practitioners and the main custodian of the tools and techniques for managing change. However, it has been much less successful in winning the intellectual argument for seeing OD as the prime approach to change, as Chapter 9 shows.

Case Study 8 The transformation of XYZ construction: phase 2 – change of structure The main purpose of this case study is to allow students to gain a greater insight into the strengths, weaknesses and applicability of Planned change. It follows that students need to understand the nature of Planned change and especially the aspects of it which apply to the particular question they are addressing. As with previous questions, these can be used in a variety of ways. However, one of the most effective in terms of developing students’ learning is to use the questions as the basis of comparative group work. Each group should be given one of the questions to address and asked to prepare a presentation to the class. After the three presentations, the class as a whole can discuss the effectiveness and appropriateness of the Planned approach to change and develop a better understanding of its elements. A fuller version of the case study can be found on the book’s website.

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Case study questions 1. Compare and discuss XYZ’s approach to change with Lewin’s Three-Step model. Students should describe and evaluate the Three-Step model and apply it to XYZ. Each of the three steps of the change process at XYZ should be examined in detail. The main task is to evaluate the extent to which the Three-Step model can be applied to and explain, the changes which took place at XYZ. In particular, can the model help to explain how XYZ managed to accept the need for change (Unfreeze) relatively quickly? And can it identify the steps the company took to ensure that the changes would be sustained (i.e. Refreezing)? 2. Undertake a Force Field Analysis (Figure 8.1) of XYZ prior to the change of structure. Identify and discuss which of the forces were changed, why they needed to be changed and how the changes were achieved. Students should describe and evaluate the nature and purpose of Force Field Analysis. They should show how the Driving forces and Restraining forces worked in XYZ to maintain the status quo. In particular, they need to identify whether the company attempted to change the Driving or Restraining forces (or both), how they went about this and how successful they were. 3. Use the Coping Cycle, Figure 8.4, to analyse and discuss why the change of structure appeared to be accepted with such little resistance. Students should describe and evaluate the Coping Cycle and apply it to XYZ. Though all elements of the Coping Cycle should used to examine the XYZ experience of change, the key issues revolve around the first two stages – Denial and Defence - and why the company seemed to pass through these relatively quickly.

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CHAPTER 9

Developments in change management: the emergent approach and beyond Summary As Chapter 8 demonstrated, for many years, the Planned approach was considered to be the best way of managing change. However, this chapter shows that, from the early 1980s onwards, the Planned approach faced a torrent of criticisms as to its suitability in a world of rapid and unpredictable change. In the light of these criticisms of the Planned approach, the chapter describes the Emergent approach and makes the case for its being the best way to manage change. The Emergent approach sees organisational change as an ongoing process of adaptation to an unpredictable and ever-changing environment. For proponents of this view, change is a messy, unpredictable, open-ended and political affair. In such a situation, it is impossible for a few managers at the top of an organisation to identify and implement all the changes necessary to keep the organisation aligned with its environment. Consequently, successful change is a bottom-up, emergent, response to events. However, just as the Planned approach to change can be criticised as limited and flawed, similar criticisms can be made of the Emergent approach. In particular, it seems less a coherent approach to change and more a label for a collection of approaches critical of Planned change. Its proponents appear to disagree about key elements of Emergent change such as culture, organisational learning and the role of managers. In addition, the Emergent approach is criticised for its over-emphasis on the political dimension of change and its view that all organisations operate in a dynamic and unpredictable environment. It is also clear that Emergent change is limited in terms of both the types of organisational change to which it can be applied, and how it can be applied. Therefore, though it has apparent advantages over the Planned approach, or rather it is applicable to situations for which Planned change may not be considered suitable, an examination of the Emergent approach reveals that there are serious question marks over its coherence, validity and general applicability. The chapter then goes on to examine the different perspectives on and the role of change agents. It challenges both the ‘it is everyone’s responsibility’ and the ’one best way’ schools and shows the need to identify the behaviours and competences necessary for each type of change situation. The chapter concludes by arguing that even taken together, neither the Planned nor Emergent approach cover the broad spectrum of change events organisations encounter. Though both Planned and Emergent change have important theoretical and practical benefits, their dominance of the change literature appears to have led to a neglect of other approaches to change. In order to address this neglect, the next chapter will examine the change situations faced by organisations, and will construct A Framework for Change which identifies the range of change situations and a matching range of approaches to change.

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Essay questions 1. Discuss and evaluate the following statement: Emergent change does not offer a coherent alternative to Planned change but merely provides an umbrella for those who oppose it. Key points:

There are distinct differences between Planned and Emergent change. The Planned approach focuses almost exclusively on groups and behavioural change and adopts a participative, democratic and ethical frame of reference. Though Emergent change does provide an umbrella under which those who oppose Planned change can shelter, it is more than that. Proponents of the Emergent approach do find common ground in their focus on transformational change, often of a structural nature, their agreement on the political and power aspects of change, and their implicit rejection of a democratic or ethical approach to change. There are, of course, some significant differences between them as well. However, what they hold in common is more than just a rejection of Planned change.

2. To what extent and how do Caldwell’s four models of the change agent undermine Buchanan and Boddy’s generic model of the expertise of the change agent? Key points:

Buchanan and Boddy’s approach promotes the view that there is a distinct set of skills and competences which all change agents need to possess. Caldwell takes a more contingency-based approach. He identifies four distinct models of change agent who, in the main, have different skills and competencies which are appropriate to different change situations. These four models of change agent are not interchangeable, perhaps with the exception of the consultancy model. Caldwell rejects the notion of a generic approach to the change agent in favour of a more contingent type of approach.

Case study 9 Midshires college of midwifery and nursing Proponents of the Emergent view maintain that change is a messy, unpredictable, open-ended and political affair. If this is the case, there are obvious dangers associated with accepting the view of one person or one group as to what needs to be done in a change situation. One of the main purposes of this case study is to allow students to appreciate the extent to which different participants can interpret the same situation in differing ways according to their own interests and position. In turn, this can lead to very different recommendations for action. The case study questions can be used as the basis of comparative group work. Each group should take on the role of one of the three individuals mentioned in the questions. Each group’s remit is to prepare a presentation for the Steering Committee which addresses each element of the question. After all the presentations have been completed, the class should address the following questions: •

What were the main differences in the three groups’ views of Midshires’ situation and what it should do?

•

How did the recommendations of the groups differ?

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•

To what extent could any differences in the analyses and recommendations be seen to be brought about by the interests and perspective of the person whose role they were adopting?

•

Do the presentations support the view that all views are partial and that a multi-dimensional perspective is necessary in order to get an accurate view of the situation at Midshires? What steps need to be taken to merge the colleges?

A fuller version of the case study can be found on the book’s website.

Case study questions In addressing these questions, the main points that students need to bear in mind are that: •

They have to put themselves in the shoes of the individuals concerned and take on their concerns and objectives.

•

They have to understand the collective and individual agendas of those involved.

•

They have to appreciate the group dynamics of the situation.

1. Imagine that you are the new Chair of the Steering Committee. You have decided to take direct charge of the merger process yourself without the aid of any outside assistance: a. What is your analysis of what has gone wrong so far and who is to blame? b. What are the main steps you need to take to merge the colleges successfully? c. What obstacles might you expect to encounter and how might you overcome these? 2. Imagine that you are an outside consultant brought in to advise the new Chair of the Steering Committee: a. What are the key issues he needs to address/resolve? b. What are the main steps he needs to take to merge the colleges successfully? c. What obstacles might he expect to encounter and how might he overcome these? 3. Imagine that you are the Project Leader. The new Chair of the Steering Committee has asked you to produce a report on the current state of the merger and plans for successfully completing the merger within the 24-month timetable. The report should include: a. An analysis and explanation of the slow progress to date. b. The main steps that need to be taken to complete the merger on time. c. The main obstacles to achieving the merger and how they can be overcome.

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CHAPTER 10

A framework for change: approaches and choices Summary Chapters 8 and 9 reviewed the two dominant approaches to managing change, identifying their strengths, weaknesses and the situations they are designed to address. It has become clear that, even taken together, neither the Planned nor Emergent approach covers the broad spectrum of change events that organisations encounter. Though both Planned and Emergent change have important theoretical and practical benefits, their dominance of the change literature has led to a neglect of other approaches. In order to address this neglect, this chapter seeks to identify the range of change situations organisations face and match these to a wider group of approaches. This enables the construction of a Framework for Change that allows different change situations to be matched to appropriate approaches to managing change. It is argued that, by manipulating key variables in this framework, it is possible for organisations to have genuine choices in what to change, how to change and when to change. The concept of a Framework for Change which allows approaches to change to be matched to environmental conditions and organisational constraints is clearly attractive. The fact that it incorporates the potential for managers, and others, to exercise some choice or influence over their environment and other constraints allows the model to move beyond the limitations of mechanistic and rational perspectives on organisations, and into the heartland of organisational reality. In addition, though not by accident, it is in harmony with the approach to strategy developed in Chapters 6 and 7.

Essay questions 1. What are the arguments for and against Pettigrew's (2000: 245–6) comment that: 'The duality of planned versus emergent change has served us well as an attention director but may well now be ready for retirement'? Key points:

The main point in favour of Pettigrew’s comment is that whilst the debate between Planned and Emergent change has helped to identify the range of change situations to which each is applicable and the areas of their respective strengths and weaknesses, it has also shown that there are change situations and approaches for which neither appears suitable. The argument against Pettigrew’s comment is that both the Planned and Emergent approaches are ‘broad churches’ and can accommodate a wider range of situations than perhaps even many of their proponents envisage.

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2. Use the Framework for Change, Figure 10.5, to analyse change in one of the case studies which appear at the end of each chapter in this book or in a case of your own choosing. In particular, identify the type of change or changes involved, the selection and suitability of the approach to change and the degree to which the approach was aligned with the management style of the organisation. Key points:

Given that students can choose any of the 12 case studies in Managing Change, or even a case of their own choosing, it is not possible to give anything other than general guidance on what to look for in the answers. The main point is to ensure that the Framework is used to identify the type of change (behavioural vs. structural) and the magnitude of the change (small vs. large) and identify the most appropriate approach to change for the organisation concerned. This can then be used to compare what the organisation did as opposed to what the Framework suggests they should have done and the consequences which flowed from the decision.

Case study 10 Oticon – The disorganised organisation One of the main purposes of this case study is to allow students to appreciate the extent to which there is range of choice available to organisations as to what to change and how to change, and that these choices are filtered through the views and experience of the different participants. The case study questions can be used as the basis of comparative group work. Each group should take on the role of one of the three individuals mentioned in the questions. Each group’s remit is to prepare a presentation for the class which addresses each element of the question. After all the presentations have been completed, the class should address the following questions: •

What were the main differences in the three groups’ views of Oticon’s situation and what it should do?

•

How did the choices identified by the groups differ?

•

To what extent could any differences in the analyses and recommendations be seen to be brought about by the interests and perspective of the person whose role they were adopting?

•

Do the presentations support the view that organisations have a far wider range of choices available than many commentators acknowledge?

A fuller version of the case study can be found on the book’s website.

Case study questions In addressing these questions, the main points that students need to bear in mind are that: •

They have to put themselves in the shoes of the individuals concerned and take on their concerns and objectives.

•

They have to understand the collective and individual agendas of those involved.

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•

They have to appreciate the group dynamics of the situation.

1. Imagine that you are Lars Kolind. The changes you have made have been far more successful than you could have imagined. The company is profitable, producing innovative products and the workforce is pleased with the new arrangements. a. What are the advantages and disadvantages of allowing the company to regain a more formalised structure? b. What are the advantages and disadvantages of once again ‘disorganising’ the company? c. Which course of action do you intend to take and why? 2. Imagine that you were formerly a senior manager with Oticon and are now one of its most successful project leaders. Lars Kolind has shared his concerns with you and asked you to produce a report on the options for future organisation of the company from your perspective. In particular, he wishes you to address the following questions: a. What are the advantages and disadvantages of allowing the company to regain a more formalised structure? b. What are the advantages and disadvantages of once again ‘disorganising’ the company? c. Which course of action would you recommend and why? 3. Imagine that you are an outside consultant brought in to advise Lars Kolind. He wishes you to address the following questions: a. What are the advantages and disadvantages of allowing the company to regain a more formalised structure? b. What are the advantages and disadvantages of once again ‘disorganising’ the company? c. Which course of action would you recommend and why?

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Part Three

Managing choice This comprises the concluding two chapters of the book. Chapter 11 presents the Choice Management – Change Management model of organisational change. This model, which comprises three interlinked processes – choice, trajectory and change – provides an understanding of how managers and organisations can and do exercise choice and manage change. Given the importance attached to the role of managers in developing strategy and managing change, Chapter 12 reviews what managers do and how they in particular, the role of leadership and management development is examined. The chapter and the book conclude that if, as argued, managers have considerable choice over what to change and how to change it, then this lays a considerable responsibility on their shoulders. How organisations change and develop has enormous consequences, not just for their employees and owners but for society at large. In order to minimise social fragmentation and exclusion, and the destruction of the natural environment, managers need to act in the broader interests of all their stakeholders – employees, shareholders, themselves and the wider community.

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CHAPTER 11

Organisational change and managerial choice Summary Change comes in a wide variety of shapes and sizes. It can be a complex, ambiguous and openended phenomenon; it can also be relatively straightforward with understandable and limited objectives. However, in order to cope with the wide variety of types of change, there is a need for a corresponding variety of approaches to strategy development and change management. Nevertheless, this does not make change a mechanical process of matching approaches to situations. Managers can exercise choice in what to change, when to change and how to change. The implications of managerial choice for the nature and focus of change management are significant. Change management need not be seen as a mechanism for achieving a specified and predicted outcome (the Planned approach). Nor need it be conceived of as a continuing process of aligning and realigning the organisation with its environment (the Emergent approach). Instead, as this chapter will show, by linking managerial choice to the management of change, organisations can open up a much wider spectrum of options. These range from focusing on achieving radical internal change to align an organisation with its external constraints, doing the same in an attempt to restructure such constraints, to influencing or changing external constraints in order to avoid internal upheavals. In exercising choice in such as way, not only are managers trying to make sense of their situation for themselves and others, but they are also seeking to construct a more favourable reality as well. The chapter begins by presenting an overview of the Choice Management – Change Management model for understanding and implementing organisational change. This is followed by a detailed description of the three components of the model: •

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

•

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

•

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

Though the Choice Management – Change Management model offers significant theoretical avenues for understanding how organisations and managers operate, it also offers considerable practical benefits as well. It shows that organisations need not radically restructure themselves, but could seek to influence the constraints they face to bring them more in line with their existing organisational arrangements. It also raises fundamental questions about what managers can do and what they do do in terms of running and shaping their organisations. In particular, it raises questions about the way that managers can make sense of their situation for themselves and others and, in so doing, construct alternative scenarios or realities for their organisation's future.

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The chapter concludes by maintaining that though organisations may choose to restructure their internal operations and practices in order to align them with the external circumstances they face, they can also choose to change or modify external and internal conditions and constraints in order to avoid extensive internal upheaval and/or to bring the constraints into line with their preferred modus operandi. Whatever choices are made, it is the role of managers consciously to explore and identify all the available options, however improbable they seem, rather than assuming that they have no, or only limited, choice in the matter.

Essay questions 1. Critically evaluate the key linkages between the three processes which make up the Choice Management – Change Management model. Key points:

Answers to this question should draw attention to the fact that the Change process forms part of the Trajectory Process and that this, in turn, forms part of the Decision process. However, the linkages are not uni-directional but, for example, change can influence an organisation's trajectory, and the trajectory can influence the changes that take place. Also, these can be happening at the same time.

2. Use the Choice – Change model to assess one of the case studies in this book or another organisation of your choice. Key points:

Given that students can apply the model to any of the case studies in this book, or can choose a different organisation entirely, it is difficult to give anything other than general guidance on what to look for in the answers. However, the main point is to ensure that they seek to apply all three processes identified in the model and, especially, to recognise the complex relationship between these.

Case study 11 Fabrication International (FI) Plc One of the main purposes of this case study is to help students to appreciate that, despite appearances, change projects are rarely one-off events which are related solely to a particular aspect or area of an organisation’s activities. In essence, they are influenced by the organisation’s past success in managing change, its expectations of future success, and its current practices and procedures, not to mention the interpersonal relations and dynamics between groups. The case study questions can be used in a variety of ways, including as exam questions or coursework assignments. However, they will also prove effective as the basis of comparative group work. Each group should take on the role of one of the three individuals mentioned in the questions. Each group’s remit is to prepare a presentation for the class which addresses each element of the question. After all the presentations have been completed, the class should address the following questions: •

What were the main reasons why FI experienced so many difficulties when introducing the CWS?

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•

What changes would FI need to make in order to avoid such difficulties in the future?

•

How useful is the Choice Management-Change Management model as a guide to understanding and executing change?

Case study questions Use appropriate elements of the Choice Management-Change Management model to address the following questions: 1. Critically evaluate the extent to which FI’s investment-appraisal process aids it in making strategic investment decisions. Two of the key issues in addressing this question are: •

The extent to which the investment-appraisal process is constrained by short-term financial and political considerations.

•

The extent to which the process unites or divides the key players in the organisation.

2. What went wrong with the CWS introduction and how could it have been avoided? In addressing this question, students need to recognise that there were number of points at which FI and the individuals concerned could have taken a different route: e.g. the initial decision to cut the budget; the senior engineer’s decision that the CWS could be introduced with a reduced budget; the Managing Director’s decision that ‘heads must roll’. The students need to identify the key decision points, decide why the decisions were taken and what would have needed to change for different decisions to have been made. 3. Imagine that you are the senior engineer. What would you have done to make the CWS a success when faced with the decision by the Board to cut the original budget? Once the decision to cut the budget was made, the CWS was never going to be a success unless the decision was reversed, which, on a piecemeal basis, was what happened. The key issue, therefore, for the senior engineer then becomes one of avoiding the blame for the time and cost overruns. In essence, this question revolves around commitment planning: •

Who are the key individuals whose support is necessary?

•

How can they be won over?

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CHAPTER 12

Management – roles and responsibilities Summary Many writers have made a case for visionary leadership being the key to an organisation's success. Certainly, the transactional, steady-as-she-goes type of manager is very much out of favour. However, the case for transforming managers, as well as organisations, tends to be based on a biased view of what managers need to do and, often, only a shallow understanding of what they actually do. In order to come to grips with the nature of managerial work, and the extent to which a rethink of how managers operate is required, the concluding chapter of this book examines the literature on what managers are supposed to do and what they really do. The chapter begins by examining the implications of globalisation, especially in terms of sustainability, workforce diversity and business ethics. This highlights the need for managers not just to acquire appropriate skills and competences but also to adopt appropriate behaviours. This leads on to a review of the literature on what managers are supposed to do and what they really do. This shows that, despite what leading thinkers such as Fayol and Weber believed and advocated, most managers are driven by expediency and operate in a responsive mode. The chapter then moves on to discuss the main approaches to leadership in organisations: •

The Personal Characteristics Approach to Leadership

•

The Leader–Follower Situation Approach

•

The Contextual Approach to Leadership.

The aim is to identify the characteristics and contexts which make for effective leadership. Arising from this, the leadership role played by managers in the case studies is explored. This is followed by an examination of the education and development of managers. This shows that managers can broaden their outlook and develop the creative, inductive and questioning side of their personalities through more formal learning situations, in addition to learning from experience. The chapter then proceeds to construct a Framework for Management, Leadership and Change which links the Framework for Change developed in Chapter 10 to the approaches to management identified in this chapter. The result is a framework which brings together both approaches to managing change and approaches to managing organisations. The chapter and the book conclude by arguing that managers have an important responsibility to identify and exercise choice, when faced with situations which require change. Though choice can be determined on a very narrow basis of short-term financial return, increasingly managers will have to take into account wider organisational and societal factors. Especially important in this respect is that managers should be prepared to question trends and advice which seem designed to increase organisational and societal instability and fragmentation, as the interests of society in general and their own organisations in particular may be better served by seeking stability. If followed widely, this would have two effects. Firstly, the result of many organisations seeking stability would be to reduce the overall level of turbulence in the environment. This is because organisations and their environment are not separate entities, but part of the same system. If organisations become more stable, so too does the environment.

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Burnes, Managing Change, Fifth edition, Instructor’s Manual

Conversely, if – as recommended by Tom Peters – organisations adopt internal chaos to cope with external chaos, this merely acts to increase the overall turbulence in the system : in effect, a vicious spiral of increasing chaos is created. The second consequence of organisations seeking stability is that it increases the stability in society that is jobs and communities, become more stable. Therefore, as a final note: organisations face many challenges and choices. Some organisations will find that their room for manoeuvre is very limited. Others may find that there is considerable scope for discretion. It is the role of managers to ensure that all available options and choices are identified, and that the choices made take account of both the short- and longterm interests of all their stakeholders whether these be shareholders, employees, the managers themselves or the community at large. The worst managers may not be those who make poor choices; it may be those who fail to recognise that there are choices to be made.

Essay questions 1. How can the Framework for Management, Leadership and Change (Figure 12.3) be used to guide organisational change? Illustrate your answer with reference to one of the case studies in this book or by using an organisation of your choice. Key points:

The main advantage of the Framework is that it allows the user to identify the type of change being contemplated, and to link this to an appropriate approach to managing the change and the management style which is likely to achieve the best results. It also allows users to identify where there might be conflict between these, and offers a way of resolving them.

2. How can the concept of managerial choice help managers to reconcile the needs of their organisation with the wider needs of society? Key points:

The concept of managerial choice argues that organisations face a wide range of constraints, many of which conflict. It also argues that, in many cases, organisations can manipulate or change the constraints they face, rather than having to adapt to them. This means that managers have choices about which constraints to align themselves with and which to change. In this situation, rather than seeing themselves as caught between the needs of their main stakeholders and the needs of society, it may be possible to shape the constraints to address and draw benefits from both.

Case Study 12 Jobs International (India) Ltd One of the main purposes of this case study is to help students to appreciate that managers have different leadership styles which are not always successfully transferred from one setting to another. Where a successful manager is replaced by someone with a very different style, issues which were previously dealt with easily may become major problems. This may particularly be the case, as in JI’s situation, where personal relationships and business needs conflict. As with previous case studies, the questions can be used in a variety of ways, including as exam questions or coursework assignments. However, they will also prove effective as the basis of comparative group work. Each group should take on the role of one of the three individuals mentioned in the questions. Each group’s remit is to prepare a presentation for the class which addresses each element of the question. 52 © Pearson Education Limited 2009

Burnes, Managing Change, Fifth edition, Instructor’s Manual

After all the presentations have been completed, the class should address the following questions: •

What were the main issues faced by JI and how might they be resolved?

•

What were the main differences between the three sets of recommendations and why?

•

What can we learn about leadership and leadership succession from the JI case study?

Case study questions In addressing these questions, the main points that students need to bear in mind are that: •

They have to put themselves in the shoes of the individuals concerned and take on their concerns and objectives.

•

They have to understand the collective and individual agendas of those involved.

•

They have to appreciate the group dynamics of the situation.

1. Imagine you are the consultant: a. What would your recommendations be as to how Mr Jacobs should proceed? b. What obstacles would you expect Mr Jacobs to meet in implementing your recommendations and how should these be overcome? In addressing this question, students need to be aware that though the consultant does not have to be constrained by political or family considerations, he does have to be aware that these are issues which have to be taken into consideration if his recommendations are to be introduced successfully. 2. Imagine you are Mr Jacobs and you have just received the consultant’s report: a. What action would you take and why? b. What obstacles would you expect to meet and how would you overcome them? In addressing this question, students need to be aware that Mr Jacobs will have to take into account how his family will react to any decision he takes which adversely affects his cousin’s position in the organisation. 3. Imagine you are the Managing Director of JI (India). Mr Jacobs has just informed you of the contents of the consultant’s report. He has asked you to produce an action plan for turning the situation round within six months and preparing the ground for the introduction of the Australian and North American business: a. What actions would you propose and why? b. What obstacles would you expect to meet and how would you overcome them? In addressing this question, students need to bear in mind how the Managing Director might react to the consultant’s report, how this might affect her relations with her staff and whether she is capable of changing her management style. 53 © Pearson Education Limited 2009