According to Burnes (2004) there are two kinds of changes: incremental and continuous. The incremental change includes continuous improvement as a quality management process or implementation of new computer system to increase efficiencies. The continuous change is constant, evolving and cumulative; it is a pattern of endless modifications in work processes and social practice. Corus needs to development of new expertise and new products. The company used continuous improvement to achieve these objectives, therefore the change that Corus done is an incremental.
Crundy (1993) and Senior (2002) distinguish other two types of change: smooth incremental, bumpy incremental and discontinuous change.
Smooth incremental change evolves slowly in a systematic and predictable way at a constant rate. Figure 2 shows:
Figure 2:
Rate of Change
change
Time
Bumpy incremental change occurs during periods of relative quiet interrupted by sudden bursts in the rate of change. Figure 3 shows:
Fig.3 Rate
of change
Time
Discontinuous change includes changes involving crisis, breakthrough, and response to high turbulence. Figure 4 shows:
Fig4. Rate
of change
time
From what we know in our case study, I think that Corus made a discontinuous change. The company was doing great until loses an essential contract with a customer. Before the contract there was a smooth atmosphere after the contract they had to response to customer expectation. Discontinuous change can be seen in the Oticon Spaghetti organisation, too. Oticon is a large, hearing instrument company with a long history. When the market grew, Oticon’s managers understood that the company is too traditional, departmentalized and slow-moving. In order to change that, they created the spaghetti organisation. Oticon changed the whole structure of its organisation. That is a discontinuous change, rapid change.
When it comes to change, Dunphy and Stace (1993) identifies change by scale can be divided into four different characteristics:
Corus used continuous improvements to support its new product. The company invested in research and development in order to meet the new customer’s expectation. Therefore I think that Corus’s change is a modular transformation.
According to Greiner (1972) organisations grow through five evolutionary stages, separated by brief periods of ‘revolution’, or dramatic organizational change. Phase 1 Phase2 Phase3 Phase4 Phase 5
Size of Evolution stages
Organisation Revolution stages
Age of organisation
- Phase 1- Growth through creativity eventually leads to a crisis of leadership. More sophisticated and more formalized management practices must be adopted.
- Phase 2- Growth through direction eventually leads to a crisis of autonomy. Lower level managers must be given more authority if the organisation is to continue to grow. The crisis involves top-level managers’ reluctance to delegate authority.
- Phase 3- Growth through delegation eventually leads to a crisis of control. This occurs when autonomous employees who prefer to operate without interference from the rest of the organisation clash with the business owners and managers who perceive that they are losing control of a diversified company.
- Phase 4- Growth through coordination eventually leads to a crisis of red tape. Coordination techniques like product groups, formal planning processes, and corporate staff become, over time, a bureaucratic system that causes delays in decision making and a reduction in innovation.
- Phase 5- Growth through collaboration, is characterized by the use of teams, a reduction in corporate staff, matrix-type structures, the simplification of formal systems, an increase in conference and educational programs, and more sophisticated information systems.
I think that Corus is in the middle of Greiner’s Phase 1. The company lost one contract; therefore now it is trying to answer to customer’s expectation. That is growth through creativity. If Greiner is right, in the future Corus will experience leadership crisis. In order to escape from this crisis I have mentioned below the most popular leadership styles.
The managerial grid model is developed by Robert Blake and Jane Mouton (1964). This model originally identified five different leadership styles based on the concern for people and concern for production.
Concern High
For people
Low
Low
Low Concern for production High
- Country Club Leadership- High People/Low Production. This style of leader is most concerned about the needs and feelings of members of his/her team. These people operate under the assumption that as long as team members are happy and secure then they will work hard. What tends to result is a work environment that is very relaxed and fun but where production suffers due to lack of direction and control.
- Produce Leadership- High Production/ Low People. People in this category believe that employees are simply a means to an end. Employee needs are always secondary to the need for efficient and productive workplaces.
- Impoverished Leadership- Low Production/ Low People. This leader is mostly ineffective. He/ she has neither a high regard for creating systems for getting the job done, nor for creating a work environment that is satisfying and motivating.
Middle of the Road- Medium Production/ Medium People. This style seems to be a balance of the two competing concerns. It may at first appear to be an ideal compromise. Therein lies the problem, though: When you compromise, you necessarily give away a bit of each concern so that neither production nor people needs are fully met. Leaders who use this style settle for average performance and often believe that this is the most anyone can expect.
Team Leadership- High Production/ High People. These leaders stress production needs and the needs of the people equally highly. The premise here is that employees are involved in understanding organizational purpose and determining production needs. When employees are committed to, and have a stake in the organization's success, their needs and production needs coincide. This creates a team environment based on trust and respect, which leads to high satisfaction and motivation and, as a result, high production.
The case study that I have for Corus, explains that every employee is included in the organizational change. The steel company employees can contribute ideas for improving their working practice. The empowerment of employees and managers helps them to feel valued and gives them job satisfaction. So from that we know about Corus we can conclude that the company uses Team leadership to overcome the leadership crisis.
During our module we have studied a lot and different views on how to manage change:
- Stace and Dunphy (2001) - four approaches to managing change based on the degree to which employees are involved.
- Kotter (1996)- according to him the direction of the change in one company should be decided by the senior managers.
- Beer and Nohria (2000)- identify two theories of change. Theory O (improving the organizational performance) and Theory E( maximise shareholder’s value)
- And many others theory for change.
The framework from all this theories is below:
Turbulent Environment; Large- scale transformation
Small scale transformation; Stable Environment
Like we can see at the one end is the slow change, where the focus is on behavioural and cultural change. At the other end is a rapid change, where the focus is on major changes in structures and processes. The figure shows 4 quadrants, each of which has a distinct focus in terms of change. Quadrants 1 and 2, represents situations where organisations operating in a turbulent environment need to make large-scale, organisation- wide change to either their culture or structure. Quadrants 3 and 4, represents situations where organisations operating in a stable environment need to make small-scale, piecemeal and localized adjustments to attitudes and behaviours or tasks and procedures. Corus is in the quadrant 3, the company needs new machinery and procedures in order to become more competitive. Quadrant 3 represents organisation operating in a relatively stable environment where changes to the technical side of the organisation tend to be relatively small-scale and piecemeal and with few implications for behaviour and attitudes. Such changes take place at the individual and group level rather than at the level of the entire company. How these are managed will depend on the culture of the organisation:
- In a traditional, bureaucratic organisation- Tayloristic approach (specialist managers and engineers will identify the ‘best way of working’ and impose it.
- In a more particular culture, such as Japanese company, a more collaboratively approach may be appropriate, such as a Kaizen initiative that brings together a team comprising workers and specialists.
Kaizen which means ‘good change’ is a Japanese approach for change. Kaizen encompasses a solid commitment to never-ending, steady improvement for everyone, management and employees alike. Weaknesses are actively sought out documented, and remedied via dedicated discussion and actions that are part of the normal workday, rather than being occasional or external. Kaizen has two major aspects:
- To maintain current managerial operating and technological standards
- To simultaneously seek to improve those standards.
After mastering the current standards, higher ones are set, creating an impetus for improvement. Kaizen must be part of a sustainable culture; it cannot be easily set aside, and it must empower and include all concerned individuals.
Corus used the Kaizen method to make small improvements across the company. For example: Kaizen helped to minimise the cost for waste. These improvements helped the company to add lean production. Lean production is an approach to production that seeks to minimise waste and inefficiency and uses fewer resources more efficiently. Lean production increases productivity which improves profitability.
Another aspect of lean production that helps to save costs of stock is the just-in-time principle. Just-in-time means producing and supplying goods at the time they are needed. This reduced costs and helped to improve the return on investments for shareholders. The just-in-time approach also carries risks- if the business has no stock it could be less able to cope if suppliers fail to deliver. Risk is a combination of the probability of an event and its consequences. In order Corus to overcome this risk, I recommend to invest in supply chain systems. Supply chain systems is a network of organisations and business processes for procuring raw materials, transforming these materials into intermediate and finished products to customers. It links suppliers, manufacturing plants, distribution centers, retail outlets, and customers to supply goods and services from source through consumption. Whirlpool invested in such system and the results were great. Even before the project was completed, it had already produced huge improvements in customer service and reduced supply chain costs.
I think that Corus made the right choice to begin a drastic change in the way the company works. In order to do that, the organisation needed people. According to the Kurt Lewin’s theory- in one organisation exists drivers and resistors for change. Resistors and drivers can be people and factors in the organisation.
Drivers for change Resistors for change
Drivers in Corus are:
- Need for a new product
- People
- Need for a bigger market share
- Need for competitive advantage
- Etc
Resistors for change are:
- Risk from the change
- People
In Corus the drivers for change were more than the resistors that is the reason the organisation to except the need for change.
According to Burnes (2004) change is an ever-present feature of organizational life, both at an operational and strategic level. Therefore, there should be no doubt regarding the importance to any organisation of its ability to identify where it needs to be in the future, and how to manage the changes required getting there. Consequently, organizational change cannot be separated from organizational strategy, or vice versa (Burnes, 2004; Rieley and Clarkson, 2001). Corus is an example for organizational change that is successful. I think that they should continue to use continuous improvements and Kaizen even after implemented at the highest because that will increase the company’s efficiency.
REFERENCE:
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Burnes, B.B., 2004 Managing change. 4th ed. Essex: Prentice Hall
