A report on the best practice of organisational change.
MBA
(Part-time)
Module Title:
Leadership and Change
Module Code:
BMG 899 J1
Students:
Conor Keown
Niall Evans
Michael Deighan
To: Professor Stan Cromie
From: Michael Deighan
Conor Keown
Niall Evans
Date: 7th December 2003
Re: A report on the best practice of organisational change.
Table of Contents
. Executive Summary.
2. Introduction.
3. A definition of change and its historical context.
4. The nature of organisations.
5. The nature of organisational change.
6. An example of change management in Gypsum Industries.
7. Conclusions.
8. Appendices.
9. Bibliography
. Executive Summary
According to Carnall (1992) "We live in a period of accelerating change". Fundamental changes in society restructure our lives. Advances in new technology means that the impossible becomes commonplace (computer generated animation, robotics, space exploration). It is true to say that change has always been an integral part of the manager's job. This has never been truer than it is in today's environment. The recent bombings in Istanbul in Turkey has only underlined what has occurred in the business environment since the events of September 11th 2001 in New York i.e. that no matter how well you plan or indeed plan for change it is impossible to predict the impact that the events in the external environment will have on your organisation. There is no way that the airline industry, stock markets or governments could have planned or prepared for the effects caused by the World Trade Centre disaster, nor indeed the impact on HSBC banks across the globe after the terrible events in Istanbul recently. These events, as well as the corporate scandals of Enron and WorldCom, have battered the global economy and have made it clear that we need to look at the changed world of management and explore how they impact on the manager's job. Change is all around us and the capacity to manage change effectively is a crucial attribute of the successful manager in today's organisation.(Clarke, 1994)
2. Introduction
The purpose of this report is to depict what the theorists have claimed as "best practice" in the management of organisational change. To report this effectively it is essential that we use actual examples of how organisations manage change. Using these examples we will then analyse this process in the context of today's literature on the subject, which will enable us to compare if the theoretical best practice, as purported by the many authorities on the subject, matches with what actually happens in the "real world."
For this report we will use our collective knowledge of the management of change and apply it to Gypsum Industries. We will begin by defining change and introducing the history behind the management of change, providing some background on the development of the theories. We will then introduce Gypsum Industries and the type of change or changes they have introduced. We will continue the report by providing the analysis between the theoretical best practices, introducing concepts such as Kurt Lewins' "three step process and "Force Field Analysis", Johnson and Scholes' "Cultural Web", Paton and McCalmans' "TROPICS" test, and the actual process used and the consequent results. The conclusion of the report will highlight whether the management of change is a practical concept that is applicable in today's rapidly changing, global and extremely turbulent business environment.
3. A definition of change and its historical context.
Zaltman and Duncan (1977) have defined change as "an alteration in the status quo," however it is argued that "real" change occurs when individuals define a situation as different and feel that they must alter their behaviour to cope with the new situation. Change therefore implies some sort of "relearning on the part of the individual."(Zaltman and Duncan, 1977) Change can be studied in terms of its effects at the individual, group, organisational, society, national or international level.(Doyle, 2002) However because of its pervasive nature, change at any one level is interrelated with changes at other levels and it is difficult to study change in isolation. (Mullins, 2002 :818) For this report however we are concentrating on organisational change and therefore it is necessary to first provide some information on the historical context of change followed by an introduction on the nature of organisations.
For the past 300 years change has been taking place in the industrial world and there have been key phases of economic development during this time. In the mid 1700's the industrial revolution transformed Britain from what Senior (2002) claimed was an "agricultural economy" to "the workshop of the world" by 1880. It was an era of mass production where demand outstripped supply and bureaucracy was the dominant organisational structure. This production prosperity lasted until the end of the Second World War. The post-war era 1945 -1965 was according to Goodman (1995) an extension of the suppliers market. However there was more of an effort to become efficient on production in order to reduce costs based of F.W. Taylor's scientific management ideas. Soon however customers became more discerning and advances in technology increased production. Supply now outstripped demand and organisations were forced to look to overseas markets and to focus more on service, not only service in its own right, but also value added service. (Goodman, 1995)
As the world has moved from the agricultural to the post-industrial eras organisations and the people in them have been forced to make major changes as old skills and managerial mindsets have been replaced with new methods of production and people management.(Nadler et al, 1997) These major changes have provided those managers who understand the forces for change and can successfully exploit them, huge opportunities in a competitive world. This is where the management of change has become a key factor.
One of the reasons that managing change can be uncomfortable and difficult is that, according to Alvin Toffler in his book "Future Shock," there is now "so much of it." (Toffler, 1990) Indeed Peters et al (1982) have written "every change does not have time to change as there is always another change taking place before the first change has been confronted." (Peters et al 1982) Perhaps this is why Handy has called this turbulent time an "age of unreason."(Handy, 1989)
Having explored the historical context of change we will now investigate the nature of organisations.
4. The Nature of Organisations
Aldrich (1999) defines organisations as "goal directed, boundary maintaining and socially constructed systems of human activity." Even though the nature of organisational goals and their pursuit can be problematic, people act as though they have goals and organisations exist to obtain these goals. Organisations however can have one or many goals and it is argued by many that these goals arise from a bartering process by various stakeholders with a vested interest in the success of the organisation. Not all these stakeholders hold the same amount of power but their support is vital if organisational goals are to be achieved.(Burnes, 1992) Therefore when changes in goals are proposed these stakeholders need to be persuaded to give support to the change. In addition as organisations are social activity systems where people are involved in deciding how to achieve the goals, any proposed change in the way in which goals are to be achieved will have a major impact on the behaviour of the people in the organisation. As Paton and McCalman (1992) have stated "The implementation of strategic change is likely to be problematic. This is especially likely to be the case in situations where this type of change involves people and in which personal relationships and emotional responses are predominant." (McCalman and Paton, 1992:18)
Furthermore, as social activity systems the means for achieving goals in organisations are more times than not pre-planned. Tasks, resources, controls, co-ordination and timings are only some of the parts that are required for organisations to produce something of use, and these do not come together in a haphazard way. The structure of the organisation plays a vital role in the smooth running of these activities as it strongly influences how people behave in them. Indeed because structure has such a powerful and important impact on behaviour managers frequently resort to structural changes as a means of changing behaviour. New work groups, teams, reporting structures, pay and reward systems normally result in new behaviours and managers will therefore plan their structural changes to align new behaviours with the new direction for the organisation.
Goodstein and Burke (1989) view organisations as a "nested set of open, living systems and subsystems dependant upon the environment for survival." This view of organisations as open systems is supported by many including Robbins et al (2003) and Senior (2002) who argues that a system perspective provides a useful insight into the management of change. Senior presents her argument in Figure 1. This perspective gives rise to the "concept of an organisation as a system of interacting subsystems and components set within the wider systems and environments which provide inputs to the system and which receive its outputs." (Senior, 2002) According to Senior the formal systems depicts how things are done and the informal systems determine how things are actually done.
Figure. 1. The organisational system in multidimensional environments.
External Environment
Th
Temporal Environment
Source: Senior, B. (2002, P27) Organisational Change.
According to Robbins et al (2003) as open systems, organisations are affected by the environment as well as impacting upon it. From uncertainty over competitors and customers to changes in economic conditions, laws and regulations and socio-cultural expectations, managers have to be aware of what is happening in the external environment. Furthermore he argues, "If it weren't for organisational change, that is any alterations in people, structure or technology, the manager's job would be relatively easy." (Robbins et al, 2003, p338) But that's not the way it is. Change is an organisational reality. External forces that create the need for change come from various sources such as the marketplace, government and regulations, technology, economy and the labour markets. In addition there are factors internally to the organisation that create triggers for change, such as Strategies, employees, equipment and culture.(Saka,2003)
Senior (2002) uses the PETS idea to consider some key environmental triggers for change and their strength. These are the political, environmental, technological and socio-cultural forces that impact upon the organisation that provides it with the main reasons for change. Organisations tend to change primarily because of external pressure rather than an internal desire or need to change. However managers should be aware of all the potential forces for change and whether they come from the internal, external or temporal environment, which is often very difficult to do. Furthermore it is essential that we do not overlook how ...
This is a preview of the whole essay
Senior (2002) uses the PETS idea to consider some key environmental triggers for change and their strength. These are the political, environmental, technological and socio-cultural forces that impact upon the organisation that provides it with the main reasons for change. Organisations tend to change primarily because of external pressure rather than an internal desire or need to change. However managers should be aware of all the potential forces for change and whether they come from the internal, external or temporal environment, which is often very difficult to do. Furthermore it is essential that we do not overlook how managers interpret their environments as Day (2001) points out; managers interpret these forces in ways that reflect the history and culture of the organisation.
5. The Nature of organisational Change
What are the real issues that must be addressed if managers are to implement change effectively? On the broadest level there are two basic issues: - What the change should be and how the change should be implemented. The process of organisational change according to Nadler and Tushman, (1997) is quite often a complex and dynamic process with many conflicting viewpoints on how to proceed. Paton and McCalman (2000) argue adapting to change is not a simple process but that it can be managed. They interpret the management of change as a complex journey with many twists, challenges, turns and hold-ups. However change can be successfully managed when there is, according to Paton and McCalman:
* Knowledge of the circumstances surrounding a situation
* An awareness of the key variables and their interaction
* An understanding of the likely impact of related variables.
As indicated there are many forces for change in environments and responses can be managed in a variety of ways. Before managers are able to develop responses to these changes and develop strategies for implementing change they must first examine carefully the nature of the change that is being addressed.
As we have shown organisations are open systems and many writers (Lewin, 1951; Genus, 1998; Lawson et al, 2003) argue that there exists a state of equilibrium between the forces forcing change and the forces resisting change. By conducting a force field analysis we can identify those forces for change and their strength and those forces against and their strength. By conducting this analysis we can then implement strategies that can reduce the forces against and increase the forces for, therefore disturbing the equilibrium and allowing the change to be introduced. (see appendix 1) Paton and McCalman (2000) state that it is important to evaluate "the nature of an impending change situation so as to facilitate the marshalling of management expertise in readiness for the transition process." They classify change as lying on a continuum from Hard/Mechanistic change to soft/complex change. These are also referred to as difficulties and messes. (Paton and McCalman.2000, 17) They developed a useful model to steer the change agent or teams in the right direction, known as the TROPICS TEST, (see appendix 2)
Along with the importance of knowing the exact nature of the change you are facing Paton and McCalman advocate using Leavitt's Change model to note that a trigger will have many impacts on tasks, structures, relationships and cultures. (see appendix 3) In essence any change on any of these aspects will have a "knock-on" effect on the other parts, each one acting as a lever for change.
In marshalling the resources necessary to implement the change it is essential to identify the change agent. Changes within an organisation need a catalyst. People who act as catalysts and assume responsibility for managing the change process are called the change agent. Any manager could be a change agent; however it could also be a non-manager e.g. a change specialist from the HR department or outside consulting house. Outside consultants carry distinct advantages and disadvantages. They offer a subjective perspective that an internal agent may lack, however outside agents have an extremely limited understanding of the organisations history, culture, operating procedures and people. As Paton and McCalman stated (2000, p4) "In change situations a little knowledge can be dangerous and limited understanding catastrophic." Outside consultants are also prone to initiate more dramatic change (which can also be an advantage) as they are not left to deal with the subsequent aftermath. In contrast internal managers who act as change agents may be more thoughtful and possibly overcautious because they must live with the consequences of the decisions.
The change agent must recognise that different types of change are required depending on the situation facing the organisation. Grundy (1993) developed a model, which suggests that organisations are faced with three types of change: (see Figure 2.)
Figure 2.
Discontinuous
Rate of smooth incremental
Change
Bumpy Incremental
Time
Adapted from Senior, B. (2002. p38) Source: Grundy , T. (1993), Implementing Strategic Change.
* Smooth incremental change is a response that continuously improves processes and products in a systematic manner. Change may be quite extensive but it happens at a constant rate.
* Bumpy incremental change occurs when the above is interrupted at intervals by a need to make a transformational change. This may be new technology, new entrants or new facilities.
* Discontinuous change occurs when rapid changes are needed in organisational strategy, structure, behaviour and culture. Other writers have called this type of change transformational as it affects all aspects of the organisation. These changes occur when the industry reaches what Strebel (1996) describes as a "divergent breakpoint" i.e. change which results from the discovery of a new business opportunity, such as Amazon.com and book selling.
This model is similar to one developed by Tushman et al (1988) who introduced two types of convergent change; fine-tuning and incremental adjustment. Both these types have the common aim of maintaining the fit between organisational strategy, structure and processes. Generally, stable and incrementally changing environments such as shipbuilding elicit incrementalism. Quinn (1980) argues that through a series of inter-linked stages, senior managers can guide the patterns that lead towards strategic change in organizations.
* Creating awareness and commitment- incrementally
* Solidifying progress - incrementally
* Integration of processes and of interests.
Beckhard and Harris saw the implementation of a change as moving an organisation towards a desired future state. (See figure 3.) They saw changes in terms of transitions. A current state prior to the change and a movement towards a future state and describes how organizations should function after the change. The period between current and future states is the transition state.
Figure 3.
Organisational Change as Transition.
Transition State
According to Nadler and Tushman(1997) the effective management of change involves developing and understanding of the current state, developing an image of the desired future state and moving the organization through a transition period.
The initial awareness of a need to change may be either in response to external or internal pressures for change (reactive), or through a belief in the need for change to meet future competition demands (proactive) Dawson (2003) What is important is how the conception of a need to change can be influenced by factors within the organization such as operational inefficiencies and employee disputes and by factors that emanate from outside the organization e.g. through business press and media reports in the success or failures of other organizations. Once a need for change has been identified the complex non-linear and "black box" process of organisational change begins.
Change can affect all aspects of the operation and functions of the organisation as shown in Leavitt's model. There is an understanding that regardless of planned or incremental approaches common to both is an understanding that the "soft" features of the organization i.e. the people, need to be taken into account. Formal planning techniques have their place but in themselves they are not enough. Recognition of this fact produced what has become known as Organisational Development (OD). The OD approach to change is, above all, an approach which cares about people and which believes that people at all levels throughout an organisation are, individually and collectively, both the drivers and engines of change. Up until the late 1980's managers faced brief distractions in an otherwise calm and predictable business environment. These brief distractions or changes were best handled by using Kurt Lewin's three-step model of the change process. (see figure 4)
Figure 4 LEWIN'S 3 PHASE MODEL
Adapted from Senior, B (2002) Organisational Change.
The first of these phases, unfreezing, consists of creating disruption in the status quo, either by introducing new staff or by more symbolic events. This heightens the awareness for the need to change. The second phase, moving, is essentially the change process itself i.e. making the actual changes, whether they are changes to strategies, structure or culture. The final phase, refreezing, involves cementing the changes in place making sure that the organisation does not slip back into its old habits. This can be achieved by introducing new management directly responsible for stabilising the change.
6. An example of Change Management in Gypsum Industries
The organisation chosen is Gypsum Industries. (see Appendix 4) A number of years ago Gypsum Industries (G.I.) typified what Mintzberg (1991) described as a machine bureaucracy with rules and regulations to maintain tight control of the entire operation. There was high formalisation and standardisation, centralised authority and functional departments. Morgan described this type of structure as rigid bureaucracy suited to a more stable industry, which indeed the building industry was in which G.I. operated in. G.I was a large, mature organisation at the end of Greiner's model (1972) (see appendix 5) However, with increasing competition from abroad, rising production costs due to overtime shifts to meet the high growth Irish construction market, benchmarking with other firms in the group and the diverse needs of customers it was imperative that changes were required. This matches with a proactive organisation scanning its internal and external environments for potential triggers for change as described by Senior (2002). The objective was to create a more flexible, or as Morgan describes "a more organic" organisation, that would be able to cater for the diverse needs of customers and of course exploit all cost advantages to remain competitive in the marketplace.
There was no doubt that changes were being forced upon the organisation but G.I. were in fact taking proactive steps to ensure they maintained the position as market leader in their chosen market. The principal change agent in the programme was the Chief Executive (Mr Kieran Millar), with assistance from an outside consultant to facilitate in the change process. It was recognised as a messy problem characterised by its complexity. To implement effective change in both the formal and informal aspects of the organisation it was fundamental that the change agent identified with the status quo as most individuals had satisfaction with it. Only by doing this would effective change be achieved. (Burnes, 1992)
Focusing on the formal aspects of organisational life, such as structure, gives only part of the explanation of why and how organisations choose to change and if they do so what form that change might take. French and Bell (1990) used the Iceberg Metaphor to illustrate the difference between the overt and covert aspects of organisational life. The more informal or covert aspects of organisational life must be addressed, that is the prevailing value, attributes and beliefs about what should be done and how - the culture which is part of and surrounds organisations, and the politics which are equally important in any examination of organisations and change. (Senior, 2002: Dawson, 2003 ) Morgan (1997) argues that the culture and politics of many organisations constrain the degree of change and transformation in which they can successfully engage, even though such change may be highly desirable for meeting the challenges and demands of the wider environment. In other words regardless how well change is planned in terms of the formal aspects of the organisation it will be the informal aspects that will hinder it. Johnson and Scholes (1999) introduced the concept of the "Cultural Web" to illustrate how the different aspects of the organisation and its culture impacts upon the organisation paradigm. (see appendix 6) It is thought that cultural risk should be assessed in order to ascertain where management are likely to meet resistance in terms of strategy and culture. Remembering that changing a culture can create several problems such as many people may not be as open to change and may display a degree of cynicism towards the new culture. Therefore management should assess the cultural risk and then decide whether they can ignore, change the culture or manage around it.
Beer et al (1990) advocate that trying to change attitudes and beliefs directly are futile. First bring about behavioural change and this will bring about desired changes in attitudes and values. Beer et al (1990) argue for changing organisational context (people's roles, responsibilities) first will result in the desired changes in attitudes. Gypsum Industries were at this time a power culture as described by Handy (1989) which were typical of bureaucratic structures. Rather than radically transform the culture the change agent believed the best way was to take the best aspects and add to it. In other words he wanted to manage around the current culture.
Mabey and Salaman (1995) consider a number of perceptions about the management of change that will affect reactions to it. Amongst these factors is whether change is perceived as "deviant or normal" and "threatening or desirable." (Mabey and Salaman, 1995:73) Change judged as deviant will be perceived as imposed and outside prevailing cultural norms. This is likely to generate resistance at various levels. Change seen as threatening is also likely to meet resistance and this will require careful implementation to overcome the fear associated with the perception. (Thornhill et al, 2000) Perceptions about the nature of change and the need for it will therefore affect reactions to it. The methods used to implement change will have an important role in affecting the nature and strengths of those reactions. By methods we refer to whether change is implemented as a top-down or bottom-up approach, whether its intention is transformational or incremental and whether it is a rapid or gradual process. There are clearly links between these facets of the implementation of change. Choice between these approaches will affect perceptions about the degree to which change is accepted or resisted and whether it is seen as imposed or controlled or, to some extent, participative. . Top-down change is associated with the strategic planning approach designed and driven by the organisations senior management. Lupton (1971) argues that this approach is best used to bring about a radical change in an organisation. Mabey and Salaman (1995:105) suggest another advantage of this approach linked to the provision of a "clear, sustained direction that is well resourced and co-ordinated." However where this approach is associated with a transformational approach to change its impact and effectiveness are frequently criticised.
Beer (1980) and Pettigrew and Whipp (1991:176) are amongst those who criticise this type of approach to change because they believe that its use is not effective. They do not believe that simply changing organisational structures and imposing new systems will generate intended change. The change that is realised will not be that which was intended.
The bottom-up approach is associated with the emergent or processual approach. (Dawson, 2003) It is bottom-up in the sense that, according to Beer et al (1990) the change process commences in an operational part of an organisation away from its corporate centre and is led by the operating of its general manger rather than the corporate management. This in turn spreads out to other functions creating a new learning organisation. This process is less likely to create resistance to change as it is created and driven by the actual operators of the new systems as well as developing commitment through ownership and involvement. Quinn (1993) refers to incremental change as a continuous process, without any discernible beginning or end. Quinn also states that there is likely to be influences from the top in what is apparently a bottom-up and incremental approach to strategic change, in order to affect its direction.
To implement change incrementally was viewed by the change agent as being too slow for Gypsum Industries in relation to the Celtic Tiger pace of activity. For this reason, a transformational approach was regarded as the only alternative to gain momentum
As we know individuals by their nature actively resist change, having a sense of belonging with what they are used to. There are many reasons why people resist major changes in organisations according to Connor (1995). (see appendix 7) In Gypsum Industries case the employees in the manufacturing plant were refusing to accept any change in their working patterns being supported by the unions. To create dissatisfaction and unrest (Lewin's unfreeze phase), the change agent decided to stop supplying the Northern Ireland market with products from Cavan and began to service it from one of the plants in England. This of course greatly reduced the level of demand for the Cavan plant that led to reduction in overtime and levels of staffing. Although this was a dramatic event it created the necessary unrest among employees that the organisation could in fact still function and service their markets. The fear factor caused by this action and the potential loss of the Southern market (which was never in mind) resulted in employees realising that they would have to accept some form of change. Of course, from a top management perspective this was only the starting point on a continuous journey to ultimately creating a learning organisation, which was flexible to adapt to ongoing change.
There were various symbolic events that took place such as relocation of the head office. The old offices were based in a large Victorian house in an upmarket area of Dublin. This was viewed as giving the wrong impression to customers and offices were moved to an Industrial Park more representative of an organisation in the building industry. In addition reserved parking slots at the factory were removed and all levels of staff, from top management to floor operatives used the same canteen. The symbolic gestures spoke volumes, as individuals would interpret them differently without management actually stating anything formally.
The results of the change process are continuing to surface but can be measured in certain aspects. Absenteeism in G.I has fallen dramatically from 16% in 1980 to now only 7%. The structure has moved to a more organic, fluid one with decentralised authority and empowerment with new pay and reward systems in place to recognise performance.
7. CONCLUSIONS
We have illustrated through the literature and a real-life organisational example that the management of change is a complex and dynamic concept. It is debateable that it is a practical tool given the extreme turbulence in today's business environment. (Bennis et al, 1974) It could well be argued that organisational change is a constant, continuous process that happens sub-consciously and deliberately trying to plan change is a futile exercise as organisations are already changing just by existing in their environments.
Only if people and organisations learn from the experience of change, can effectiveness be achieved and sustained. Only if transitions are managed effectively can learning and change occur. This also acts as a constructive constraint on the politics of change which can so easily run out of control. (Carnall, 1990) Hamlin et al (2001) argue that all too often, organisational change programmes fail "because management fails to rise to the challenge which change brings." From the weight of evidence one must conclude that the process issues associated with organisational change and development are far more complex and difficult to manage successfully than is often supposed, and that managers are generally insufficiently skilled in change agency. (Mento et al, 2002)
That such a high proportion of organisational change programmes fail is somewhat surprising given the plethora of "best practice" advice and guidance on the "how to" of change management available in the management literature. These range from straightforward, plainly written "practical guides" and handbooks written by consultants from their everyday practical experiences as practitioners, through to textbooks written by academics mainly for the education market. Bennis et al (1974) has contemplated that the reasons for this are reflected in the leadership of the organisation. Managers are not trained to be leaders. Bennis et al (1974) states "... most organisations are under led and over managed......" Due to the very complex nature of change, this is not enough. The ability to develop a new shared vision, to get it accepted and implemented takes leadership, not management. To be effective at planning organisational change, a leader must be able to draw others to them, not because they have a vision but because they can effectively communicate it and hold peoples attention.
8. APPENDICES
Appendix 1. FORCE FIELD ANALYSIS
FORCES AGAINST FORCES FOR
Appendix 2. THE TROPICS TEST
Adapted from Professor Stan Cromie's lecture notes.
Appendix 3. LEAVITT'S CHANGE MODEL
Task
People Technology
Structure
Appendix 4.
Gypsum Industries are Ireland's leading supplier and foremost authority on gypsum-based plasters and dry lining systems and products. They are part of the BPB group who are the world leader in the manufacture of gypsum based building materials, operating more than 90 plants and serving markets in over 50 countries. The company mines gypsum rock from a deposit at Knocknacran, Co. Monaghan and from this raw material the company manufactures an extensive range of building plasters and plasterboards in Kingscourt, Co. Cavan. All products are specifically designed and formulated for the Irish construction industry; both north and south of the border (www.british-gypsum.bpb.com/main1.htm). Various groups in the building industry, namely builders, plasterers and dry lining contractors, use the company's products. Despite the user, products are used to achieve the same desired outcome, for example, fire resistance, acoustic insulation and thermal conductivity. The company is committed to delivering complete solutions for partitions, walls, ceilings, steel encasements and floor requirements, not just a limited selection of unrelated products (www.gypsum.ie).
Appendix 5.
Greiner's organisational life-cycle model.
Source: www.mardon-y2k.com
Written in 1972, Larry Greiner's Harvard Business Review article, "Evolution and revolution as Organisations Grow," is as relevant today as it was originally. His article outlined the stages, management crisis and general solutions that a company goes through from its inception to maturity. In the 1972 timeframe, most companies were growing for two or three years and then decaying for one or two years. The transition times between each of the Greiner growth phases were lengthy and, in most cases, orderly. Being over thirty years old, the Greiner model might seem irrelevant today. Technology, such as the Internet and E-commerce, has completely transformed the business world since 1972 and as a result of these companies will move through the phases in a much shorter time than they would have done back then. What is still true though is that a company moves through the five phases regardless of time frames. The problems and solutions still tend to change in-line with Greiner's model as the number of employees, customers and sales volume increase. What is needed today is the ability to move to the mature organization in the shortest time.
Appendix 6.
The Cultural Web
Source: Adapted from Johnson, G. and Scholes, K. (1999) exploring Corporate Strategy, Texts and Cases, 5th Edition).
This section suggests how the elements of the cultural web might be analysed as a means of understanding the cultural context within which new strategies may be developed. This is an important background against which an assessment of future choices can be made, both in relation to options which might be possible within the current paradigm and for those which require more significant change. Where change is likely to be required, the analysis provides a background against which to assess how change might be achieved. Each of these various facets of the cultural web will be discussed separately in the sections that follow. However it is essential to appreciate that it is often the interrelationships between these various issues, which is of most importance.
The Paradigm.
Senior (2003) when writing about the organizational paradigms (i.e the beliefs and assumptions of the people making up the organization) highlighted the fact that Johnson and Scholes(1999) draw attention to the influence of prevailing paradigms in any attempt to bring about any significant and effective change. Whereas it is easy to talk about culture in vague and generalized terms, the need is to analyse and understand culture in much more precise terms. It is therefore useful to conceive of the paradigm as consisting of three layers:
* Values may be easy to identify in an organization, and are often written down as statements about the organisation's mission, objectives or strategies. However, these tend to be vague-such as "service to the community" or "equal employment opportunities".
* Beliefs are more specific, but again they are issues which people in the organization can surface and talk about: for example, a belief that the company should not trade with Iraq, or professional staff should not have their professional actions appraised by managers.
* Assumptions are the real core of the organizations culture. They are the aspects of organizational life that are taken for granted and which people find hard to identify and explain. For example, in a regional newspaper company, it was assumed that people were prepared to pay for local news and that the newspaper was a key part of the local community. Advertising revenue, which accounted for a large part of the newspaper's income, was seen necessary but not as the core of the business.
This taken-for-grantedness can be very difficult to surface. Nonetheless unless these beliefs and assumptions are surfaced and challenged very little will change in the organization. The assumptions are likely to override the logical, explicit statements of the organisation's preferred strategies.
Insights into the paradigm can be gained by analyzing the elements of the cultural web. Johnson and Scholes (1993, p61) have stated
"It would be a mistake to conceive of the paradigm as merely a set of beliefs and assumptions removed from organisational action. They lie within a cultural web which bonds them to the day-to-day action of organizational life."
The process by which this analysis might be undertaken can vary, from listening to people talk about their organization to asking managers to undertake the analysis themselves using the cultural web as a checklist. Observing the organisation's day-to-day operation and building a picture of the web in that way can also do it
Stories.
The stories in organizations provide valuable insights into the core beliefs and assumptions of the organization. Stories arise and develop over time through the experiences of individuals and groups undertaking the day-to-day tasks of the organisation, and typically deal with the heroes and villains, successes, disasters and mavericks. They distill the essence of the company's past and legitimize types of behaviour of those individuals and groups currently within the organisation, and attitudes of outsiders towards that company. They are the means of telling people what is important in the organization.
Routines and Rituals.
The routines of an organization represent the way in which the value activities are carried out in delivering the organisations strategies. Routines are the mundane aspects of organizational life which often become taken for granted as "the way we do things around here". Indeed, the outsider might be able to discern the elements of the organisation's paradigm by listening to the way that managers describe the routines of their organization.
Rituals are of a higher order than routines. They are the special events or circumstances through which the organization highlights or emphasizes something important. Examples of rituals are training, meeting, or union negotiations. Rituals reinforce "the way we do things around here" and signal what is important and valued. (Senior, 2002)
Symbols.
The importance of symbols and symbolic behaviour is often underplayed both in understanding organizational culture and also in assisting strategic change. They can be an important means of understanding the types of behaviour which are expected and rewarded in the organisation. For example, the symbols of hierarchy such as office size, carpets and car-parking spaces are useful clues to the extent to which the organization is rooted to its established way of doing things. Although symbols are shown separately in the cultural web, it should be remembered that many elements of the web are symbolic in the sense that they convey messages beyond their functional purpose. Routine, control and reward systems and structures are symbolic in so far as they signal the type of behaviour that is valued in the organization.
Organisational Structure.
These preserve the core beliefs of the organization and are legitimized by its power structure. It is therefore important to understand how the structure relates to the paradigm of the organization, and how easy or difficult it will be to change in support of new strategies. The way in which responsibility and authority are distributed within the organizational structure is also an important part of the culture. For example an organization, which is structured and managed as a series of separate and competitive units, is likely to have a cohesive culture at the level of these subunits, which makes collaborative ventures between units difficult. Indeed in many organisations the systems of control and reward are also likely to have developed in a way, which encourages and supports competitive, rather than collaborative behaviour. It is not surprising; therefore that individuals and groups are likely to favour strategies, which can be pursued in a devolved rather than integrated way. As devolution sweeps through he large organizations there is considerable danger that one casualty will be the ability to co-ordinate joint ventures between businesses, divisions or departments as the culture at subunit level strengthens at the expense of a cohesive corporate culture.
Control Systems.
Observing the types of control system in the organization, and the issues that are the most closely monitored or promoted can assist understanding of an organisation's paradigm. Reward systems are important indicators of what behaviours are encouraged within the organization, and can prove to be a major barrier to the success of any change. For example an organization that has individual based bonus schemes will find it very difficult to introduce team based reward systems based on quality rather than quantity.
In a more general sense it is useful observing whether control systems are geared to reward or punishment, since this will influence the dominant attitudes to risk taking.
Power Structures.
Power is a key force that shapes organizational culture, and also a means whereby some expectations influence change more strongly than others. Power often accrues to those perceived most able to reduce uncertainty in organizations. Since the paradigm is the set of assumptions by which people reduce their personal uncertainty, change may require an attack on the power structures that protect and legitimize the paradigm. Therefore an important issue to assess is the strength of belief among the most powerful individuals and groups; in other words, whether they are idealists or pragmatists.
Appendix 7.
Reasons Why People Resist Organisational Change
. Lack of Trust
2. Belief that Change Is Unnecessary
3. Belief that the Change Is Not Feasible
4. Economic Threats
5. Relative High cost
6. Fear of Personal Failure
7. Loss of Status and Power
8. Threat to Values and Ideals
9. Resentment of Interference
Source: Yukl, G (2002). Leadership in Organisations. Prentice Hall.
9. BIBLIOGRAPHY
Aldrich, H. (1999) Organisations Evolving. London. Sage.
Beer, M. (1980) Organisation Change and Development, Scott Foresman and Company.
Beer, M., Eisenistrat, P. A. and Spector, B. (1990) Why Change Programs Don't Produce Change. Harvard Business Review. November/Decembe pp 158-166.
Bennis,W., Benne, K D. & Chin, R (1974) The Planning of Change, Holt, Rinehart & Winston.
Burnes, B, (1992) Managing Change, London, Pitman Publishing.
Butcher, D and Atkinson, S. (2001) Stealth, Secrecy and Subversion: The Language of Change. Journal of Organisations change Management Vol 14 Number 6 2001 pp 554-569
Carnall, C. (1992) Managing Change. London, Routledge.
Clarke, L. (1994) The Essence of Change . Hemel Hempstead. Prentice-Hall.
Dawson, P. (2003) Reshaping change. London. Routledge.
Dawson, P. (2003) Understanding Organisation Change. Sage.
Day, J. (2001) Organising for Growth. The McKinsley Quarterly
Doyle, M (2002) From Change Novice to Change Expert. Personnel Review Vol 31 Number 4 pp 465-481.
French, W. H. and Bell, C. H. (1984) Organisational Development. Prentice Hall.
Genus, A. (1998) The Management of Change - Perspectives and Practice. Thompson Press.
Goodman, M. (1995) Creative Management. Hemel Hempstead. Prentice Hall.
Goodstein, L & Burke, W (1989) Creating Successful Organizational Change, Organizational Dynamics.
Greiner, L. (1972) Evolution and Revolution as Organisations Grow. Harvarb Business Review.
Grundy, T (1993) Managing Strategic change. London. Kogan Page.
Handy, C. (1989) The Age of Unreason. Arrow.
Hamlin, B., Keep, J., and Ash, K. (2001) Organisational Change and Development. Prentice Hall
Johnson, G., and Scholes, K. (1999) Exploring Corporate Strategy. 5th Ed. London: Prentice Hall.
Lawson, G and Price C. (2003) The Psychology of Change Management. The McKinsley Quarterly Number 2.
Lewin, K. (1951) Field Theory in Social Science. Harper and Row.
Lupton, T. (1971) Organisational Change "Top-down" or "Bottom-up" Management?. Personnel Review, Autumn, pp 22-28.
Mabey, C. and Salaman, G. (1995) Strategic Human Resource Management. Blackwell.
McCalman, J., and Paton, (2000) Change Management. Sage.
McCalman, J. and Paton, R.A. (1992) Change Management: A Guide To Effective Implementation. Paul Chapman.
Mento, A, J, Jones, Rl M and Dirndoffer. W. (2002) A Change Management Process: Grounded in Both Theory and Practice. Journal and Change Management, August Vol 3 Issue 1. pp 45-60
Mintzberg, H. (1991) The Effective Organisation: Forces and Forms. Sloan Managerial Review,
Winter 1991, Vol 32 Part 2 p 55
Morgan, G. (1997) Images of Organisations. Sage.
Mullins, L,J,. (2002) Management and Organisational Behaviour. 6th Edition. Prentice Hall.
Nadler, P, A. and Tushman, M, T. (1997) Competing By Design. A Blueprint For Organisational Architecture. Oxford. Oxford University Press.
Peters, T. J., and Waterman, R. H. (1982) In Search of Excellence. Lessons From Americas Best Run Companies. Harper and Row.
Quinn, J. B. (1980) Managing Strategic Change. Sloan Management Review, Summer pp3-20.
Quinn, J. B. (1993) Managing Strategic Change in Mabey, C and Mayon-White, B (Eds) Managing Change. London. Paul Chapman.
Robbins, S., and Coulter, M. (2003) Management. 7th Edition. Prentice Hall.
Saka, A (2003) Internal Change Agents' View of the Management of Change Problem. Journal of Organisational change Management. Vol 16 Number 5 pp 480-496.
Senior, B. (2002) Organisational Change, 2nd Edition. Financial Times/Pitman Publishing.
Strebel, P. (1996) Breakpoint, How to Stay in the Game, Mastering Management, Part 17. Financial Times
Thornhill, A., Lewis, P., Millmore, M., and Saunders, M.(2000) Managing Change. A Human Resource Strategy Approach. Prentice Hall.
Toffler, A. (1990) Future Shock. Blackwell Press.
Tushman, M. L., Newman, W. H. and Romanelli, E. (1988) "Convergence and Upheaveal: Managing the Unsteady Pace of Organisational Evolution" In M. L. Thushan and W. L. Moore (Eds) Readings in the Management of Innovation. New York. Ballinger.
Tushman, M.L. and Anderson, P. (1997) Managing Strategic Innovation and Change. Oxford University Press.
Yukl, G, (2001) Leadership in Organizations, New Jersey, Prentice-Hall Inc.
Zaltman, G & Duncan, R (1977) Strategies for Planned Change, London, Wiley.
ELECTRONIC SOURCES
www.british-gypsum.bpb.com/main1.htm
www.british-gypsum.bpb.com
www.gypsum.ie
www.managementfirst.com.change
www.mardon-y2k.com
OTHER REFERENCES
BPB Annual Reports 2001 and 2002.
BPB Western Europe News, Winter 2002.
BPB World.
Keynote Market Report, Building Materials Industry, 2001.
2