Transcript Lecture 32.ppt
Advance Topics in Change Management Lecture 32 Basic Concepts in Change Management
MASS PRODUCTION AND C.I.M
Mass Production C.I.M.
Structure Supervisor spans of control Hierarchical Levels Supervisor Role Tasks Specialization Operator discretion Formalization Human Resources Interactions Training Expertise Wide Many Controller Routine, simple High Low High Narrow Few Facilitator Complex, adaptive Low Considerable Limited Low Narrow, limited Standardized, manual/technical Considerable Broad, frequent Cognitive and social, developing, problem solving Inter-organizational Customer demand Suppliers Stable, predictable Many, arm’s length Changing Few, interdependent
CHARACTERISTICS OF SERVICE AND PRODUCT ORGANIZATIONS SERVICE BOTH PRODUCT Boundary Roles Geographical Dispersion Technical Expertise of Operators Skill Emphasis Few Considerable High Some Some Moderate Many Low Low Centralization Formalization Examples Broad and interpersonal Low Low Airlines, hotels Narrow and broad Medium Medium Fast food, real estate Narrow and technical High High Steel, cars
SERVICE BUSINESSES
CUSTOMER INTERACTION AND CUSTOMIZATION LOW HIGH LOW AIRLINES HOTELS LABOUR INTENSITY ratio of labour cost to plant and equipment HIGH MASS RETAILING FAST FOOD RESTAURANTS HOSPITALS MACHINERY REPAIRS PROFESSIONAL SERVICES ACCOUNTANTS LAWYERS
VARIETY OF TASKS AND PROBLEMS
1. How many of your tasks are the same from day to day?
2. Do you do the same job in the same way most of the time?
3. How different are the problems you have to deal with on a daily basis?
ANALYSABILITY OF TASKS AND PROBLEMS 1. To what extent is there a clearly known way to do your major tasks?
2. To what extent is there a clearly defined body of knowledge that can be followed in your work?
3. How often do you have to deal with unforeseen problems and difficulties?
4. How much can you rely on established procedures and practices to do your job effectively?
DEPARTMENTAL TASKS AND TECHNOLOGIES
An Apprentice Contestant CALL-CENTRE WORKERS
Mechanistic
Technology and Interaction
• Technology can also be thought of as ways in which groups of individuals interact.
Interdependence and Co-ordination Mechanisms
DEPARTMENTAL GROUPING OPTIONS
Functional Structure with Geographical Sub-Divisions
Functional Structure with Functional Sub-Divisions
FUNCTIONAL GROUPING
CONTEXT
• ENVIRONMENT: • TECHNOLOGY: • SIZE: • GOALS: LOW UNCERTAINTY, STABLE ROUTINE, LOW INTERDEPENDENCE SMALL TO MEDIUM INTERNAL EFFICIENCY, TECHNICAL SPECIALISATION AND QUALITY
STRENGTHS
1. ECONOMIES OF SCALE WITHIN FUNCTIONS 2. IN-DEPTH SKILL DEVELOPMENT 3. BEST WHEN ONLY ONE OR A FEW SIMILAR PRODUCTS
WEAKNESSES
1. SLOW RESPONSE TIME TO ENVIRONMENTAL CHANGES 2. DECISIONS MAY PILE ON TOP, HIERARCHY OVERLOAD 3. POOR INTERUNIT CO-ORDINATION 4. LESS INNOVATION 5. RESTRICTED VIEW OF ORGANISATION GOALS.
Divisional Structure
DIVISIONAL GROUPING
• • • •
CONTEXT
ENVIRONMENT: TECHNOLOGY: SIZE: GOALS: MODERATE TO HIGH UNCERTAINTY NON-ROUTINE, HIGH INTERDEPENDENCE LARGE EXTERNAL EFFECTIVENESS, ADAPTATION, CLIENT SATISFACTION
STRENGTHS
1. SUITED TO FAST CHANGE IN UNSTABLE ENVIRONMENT 2. CLIENT SATISFACTION BECAUSE PRODUCT RESPONSIBILITY AND CONTACT POINTS ARE CLEAR 3. HIGH CO-ORDINATION ACROSS FUNCTIONS 4. UNITS ADAPT TO DIFFERENCES IN PRODUCTS, REGIONS, CLIENTS 5. BEST WHEN SEVERAL DIFFERENT KINDS OF PRODUCTS
WEAKNESSES
1. LOSE ECONOMIES OF SCALE IN FUNCTIONAL DEPARTMENTS 2. POOR FUNCTIONAL CO-ORDINATION ACROSS PRODUCT LINES 3. LOSE IN-DEPTH COMPETENCE AND TECHNICAL SPECIALISATION 4. INTEGRATION AND STANDARDISATION ACROSS PRODUCT LINES IS DIFFICULT
DEPARTMENTAL GROUPING OPTIONS Finance Personal Computers Business Computers Business Services HR
MULTI-FOCUSED GROUPING
CONTEXT
• ENVIRONMENT: • TECHNOLOGY: • SIZE: • GOALS: MODERATE TO HIGH UNCERTAINTY, CHANGING CUSTOMER DEMANDS ROUTINE OR NON-ROUTINE, WITH INTERDEPENDENCIES ACROSS BOTH FUNCTIONS AND PRODUCT LINES MEDIUM TO LARGE EXTERNAL EFFECTIVENESS AND ADAPTATION PLUS EFFICIENCY WITHIN SOME FUNCTIONS
STRENGTHS
1. ORGANISATION CAN ACHIEVE ADAPTABILITY AND CO ORDINATION IN SOME AREAS AND EFFICIENCY IN OTHERS 2. BETTER ALIGNMENT BETWEEN CORPORATE LEVEL AND DIVISION LEVEL GOALS 3. ACHIEVES CO-ORDINATION BOTH WITHIN AND BETWEEN PRODUCT LINES
WEAKNESSES
1. POTENTIAL FOR EXCESSIVE ADMINISTRATIVE OVERHEAD 2. CONFLICT BETWEEN DIVISION AND CORPORATE DEPARTMENTS
Matrix: Advantages
According to Bartlett and Ghoshal (1993): • Decrease bureaucracy • Create ‘distributed entrepreneurship’ • Delegation of responsibilities • Thinning out of corporate (HO) staff (<100) • Aligning and supporting initiatives • Integrating resources and capabilities
Matrix: Disadvantages
• Lack of clarity over who is responsible for decisions • Lack of clarity over how much time should be spent on different tasks • In-fighting between two line managers • Decision-making process could be lengthened • Excessive demands placed on senior managers to cope with information
MATRIX STRUCTURES
• • • •
CONTEXT
ENVIRONMENT: TECHNOLOGY: SIZE: GOALS: HIGH UNCERTAINTY NON-ROUTINE, MANY INTERDEPENDENCIES MODERATE, A FEW PRODUCT LINES MULTIPLE, CUSTOMER RESPONSIVENESS, PRODUCT INNOVATION AND TECHNICAL SPECIALISATION
STRENGTHS
1. ACHIEVES CO-ORDINATION NECESSARY TO MEET DUAL DEMANDS FROM ENVIRONMENT 2. FLEXIBLE USE OF HUMAN RESOURCES ACROSS PRODUCTS 3. SUITED TO COMPLEX DECISIONS AND FREQUENT CHANGES IN UNSTABLE ENVIRONMENT 4. PROVIDES OPPORTUNITY FOR FUNCTIONAL AND PRODUCT SKILL DEVELOPMENT
WEAKNESSES
1. PARTICIPANTS EXPERIENCE DUAL AUTHORITY, WHICH CAN BE FRUSTRATING AND CONFUSING 2. PARTICIPANTS NEED GOOD INTERPERSONAL SKILLS; EXTENSIVE TRAINING REQUIRED 3. TIME CONSUMING - FREQUENT MEETINGS AND CONFLICT-RESOLUTION SESSIONS 4. WILL NOT WORK UNLESS PARTICIPANTS UNDERSTAND IT AND ADOPT COLLEGIAL RATHER THAN VERTICAL-TYPE RELATIONSHIPS 5. REQUIRES DUAL PRESSURE FROM ENVIRONMENT TO MAINTAIN POWER BALANCE
THE PROJECT-BASED FIRM
• • •
Advantages Reduces overhead costs Improves speed and efficiency Increases adaptability
• • •
Disadvantages Time-consuming and difficult to identify and manage processes Limited organisational learning Threat to management (downsizing and deskilling)
•
Applicability Sectors and Firms that meet the following criteria:
– – –
Workforce generally highly skilled and well-motivated Sector undergoing major change (from competition and/or technology change) High level of consensus
Separation and Stability of Work Roles
Types of Project-Based Firms
Low Singularity (‘Uniqueness’) of Goals and Outputs Low Organisational
PBFs producing multiple and varied outputs with different and changeable skills and roles. E.g. strategic consultancy, enterprise software, innovative business services
.
High Precarious
PBFs producing risky, unusual outputs with varied and changeable skills and roles. E.g. some dedicated biotechnology firms, internet software firms, such as Vermeer Technologies, many Silicon Valley companies
High Craft
PBFs producing multiple, incrementally related outputs with distinct and stable roles and skills. E. g. some business and professional services including London advertising firms, Danish furniture and machinery firms, some IT consulting.
Hollow
PBFs producing single outputs and coordinating tasks through standardised, separate and stable roles and skills. E. g. complex construction projects, many feature films in the UK and USA
DEVELOPING ORGANISATIONAL KNOWLEDGE
MANAGERIAL NEEDS AND INFORMATION MEDIA
Formal Management Control Systems
System Content
Budget Statistical Reports Financial data Non-financial data Performance appraisal Standard operating procedures Evaluation on basis of goals Rules, regulations and policies
Organisational Control Strategies
Type of Control Output/ Market-based Bureaucratic Normative Personal and Direct Characteristics of the Control System
Behaviour Control Low Formalisation High Subordinate Involvement Limited Scope and variety of Information Low
Requirements (Features of the Organization/Task)
Standard outputs External benchmark of performance (e.g. price) Yes Yes Process knowledge Employee commitment Stable environment No No No High High Low Medium No No Yes No Yes Unclear Low High High No No No Yes No High Low Low High No No Yes No No
Culture: Two Definitions
Drennan (1992: 3):
Culture is ‘how things are done around here’. It is what is typical of the organization, the habits, the prevailing attitudes,
the [established] pattern of accepted and expected behaviour.
Daft (2007: 239):
Culture is the set of values, norms, guiding beliefs, and understandings that is shared by members of an organization and is
taught to new members.
Describing Organizational Culture
Brown (1995: 8): • Artefacts • Symbols and symbolic action • Language in the form of jokes, metaphors, stories, myths and legends • Norms of behaviour • Heroes • Ethical codes • Basic assumptions • History – and advertising • Behaviour patterns in the form of rites, rituals, ceremonies and celebrations • Beliefs, values, attitudes
STRENGTH OF ORGANISATIONAL CULTURES
Intensity of Commitment to Organisational Beliefs and Norms
Low High
Proportion of Employees Sharing Organisational Beliefs and Norms
Low High
Weak Diffuse Elitist Strong
Types of Organisational Cultures
Autocracy Task Role Professional
Delegation of discretion and involvement in problem solving Conformity to established rules and procedures Flexibility Sources of innovation and learning Ability to integrate different knowledge and skills Typical control system Low Limited High Limited Low High High Owner manager Limited High Project teams of specialists High Low Managers Limited to managerial hierarchy Personal Normative and output Bureaucratic High Considerable Limited Professionals Limited to professional groups Normative and some bureaucratic
Contrasting Organisational Practices I a) Process-oriented vs.
Results-oriented
Extent of focus on outputs and results
b) Employee-oriented vs.
Job-oriented
Extent to which managers focus on employee development rather than immediate task performance
c) Parochial vs.
Professional
Extent of staff identification with organisational unit and company or occupation and skill
Contrasting Organisational Practices II d) Open system vs.
Closed system
Extent to which organisation is internally focused and separate from environment
e) Loose control vs.
Tight control
Extent to which staff are expected to conform to organisational norms of behaviour
f) Normative vs.
Pragmatic
Extent of commitment to meeting customer needs
An Example of Open vs Closed Systems?
•
Sanofi chief lays out distinctive strategy
• http://www.ft.com/cms/s/0/1b23c578-d7d0-11de-b578 00144feabdc0.html 03 December 2009 • In a swipe at Gerard Le Fur, his predecessor and former head of research and development, who was appointed chief executive and ousted within months, he said: "We had really a scientific organisation that really lived within its own walls; not a lot of external partnerships, virtually no contact with our commercial organisations." • … • Mr Viehbacher also criticised the "ridiculous" Sanofi Aventis name in China, where he said most company names have just three syllables. It would be shortened to Sanofi, he said. "We have to be much more adapted to our markets and customers and fight globalisation," he said.
Question
• How are organizational cultures created?
Distinctive Organisational Cultures
Depend on: • Selection • Training • Rituals, Symbols and Legends • Reward Systems • Promotion and Career Structures • Top Management Behaviour
MOTHER-DAUGHTER STRUCTURE
MNCs WITH AN INTERNATIONAL DIVISION
WORLDWIDE FUNCTIONAL STRUCTURE
WORLDWIDE FUNCTIONAL STRUCTURE
• Similar advantages and disadvantages to domestic functional structures (economies of scale within functions, skill development, but slow response and decision-making).
• But less effective in many MNCs: inability to adapt readily to the greater local diversity of business environments.
• Typically found in firms with
narrow product ranges
in relatively
stable
technical environments where crucial.
technical excellence
is
WORLDWIDE GEOGRAPHIC GROUPS
Question
• What sort of industry characteristics might lead MNCs to establish world-wide geographic groups?
WORLDWIDE GEOGRAPHIC GROUPS
• Typically found in
low technology
industries where sales and marketing are key functions and vary regionally.
Product range diversity
tends to be limited in such MNCs and products are often modified extensively to suit local markets.
WORLDWIDE GEOGRAPHIC GROUPS
An Example: Unilever
• • • •
Unilever Executive
• is responsible for managing profit and loss, and delivering growth across our regions, categories and functions.
Paul Polman James A Lawrence Sandy Ogg Chief Executive Officer Chief Financial Officer Chief HR Officer
• •
Professor Geneviève Berger - Chief Research & Development Officer Manvinder Singh (Vindi) Banga - President Foods
• • •
Douglas Anderson Baillie Europe Harish Manwani Michael B. Polk President of Western President, Asia Africa President, Americas
Worldwide Product Structure
Worldwide Product Structure
• Often found in large MNCs that have a variety of
diverse product ranges
that need little adaptation for different markets, and where technological scale economies are important.
Worldwide Product Structure
An Example: Lafarge
• Chairman and Chief Executive Officer • Chief Financial Officer • Vice-President Organization and Human Resources • Vice-President Strategy, Business Development and Public Affairs • Vice-President Communications • Co-President of the Cement Business * 3 • Co-President of the Aggregates and Concrete Business * 2 • President of the Gypsum Business