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Session 6 Developing a Market- oriented Culture and Organisational Strategies for Change The crux session 1 Michael G.Warner Chartered Marketer MBA DipM.

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Presentation on theme: "Session 6 Developing a Market- oriented Culture and Organisational Strategies for Change The crux session 1 Michael G.Warner Chartered Marketer MBA DipM."— Presentation transcript:

1 Session 6 Developing a Market- oriented Culture and Organisational Strategies for Change The crux session 1 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

2 Course Objectives To deliver a coherent and deliverable market oriented internal culture to encourage flexibility which is SMART enough for your employer to understand and give you the go ahead. To follow the CIM guidelines so as not to throw away marks To maximise the LSM on-line resources = SUCCESS Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM2

3 Change Management Organizational change can be regarded as a continuous process of experience and adaptation aimed at matching an organization's capabilities to the needs and dictates of a dynamic and uncertain environment ( Burnes 1996) Change management is the process of planning and implementing change within organisations. 3 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

4 Market orientation An organisational culture where beating the competition through the creation of superior customer value is the paramount objective throughout the business Orientated towards customer Alert to competitive situation Co-operation between functions Emphasis on profit, not turnover Responsiveness to changes 4Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

5 Creating a market oriented culture Intelligence and knowledge Value creation Communication 5Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

6 Organisation Culture …the philosophies, ideologies, values, beliefs, assumptions, attitudes, expectations and norms shared by members of the organisation. Hellreigel et al (1992) It includes the following: Observed behaviour Norms shared by working groups Dominant brand values Employee and Customer policies Rules that newcomers must learn to become accepted Physical environment and interaction with external stakeholders 6Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

7 The Cultural Web J&S The Paradigm Organisational Structures Power Structures Symbols Control Systems Rituals and Routines Stories and Myths External or internal events and/or people that the members of the company talk about indicate organisational values. The type and style of organisational logos, premises, staff facilities, uniforms, dress codes and communications highlight cultural characteristics. The pockets of real power held by individuals that does not necessarily includes members of the management structure but it can rather be any influential individual within the organisation. Formal and informal structural systems that define relationships and activities that, consequently, influence organisational power structures. The adopted control processes and methods such as financial, systems, service and quality underline the perceived importance of specified activities to the organisation. Source: Johnson Gerry (1992) Formal and informal events such as employee of the month competitions or special social gatherings suggest preferred behaviour in the organisation. 7 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

8 Super ordinate goals Shared values Strategy Staff Structure Styles Systems Skills The McKinsey 7s fundamental to apply 8 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

9 In Search of Excellence (Peters and Waterman) Close to customer - learn from their customers and proven to be success though differentiation Productivity through people - consider people as a root for quality and productivity Hands on, value driven - regularly monitor the achievement of the values Autonomy and Entrepreneurship - create many leaders and innovators Simultaneous loose-tight properties - simultaneously are centralised and decentralised. Simple form, lean staff - mostly have simple structures and systems Stick to the knitting - favour their comfort zone A bias for action, active decision making - "Do it, fix it, try it." 9Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

10 Miles and Snows Strategy Typology 1978 The defender – lack of innovation The prospector – first mover advantage The analyser – defend competitive advantage and takes advantages of opportunities The reactor – follows developments 10Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

11 Some factors driving change External issues Sociological Legal Economic Political Technological Competitive Internal issues Retention or gain of competitive advantage Cost-savings New senior management 11 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

12 Characteristics of Change Driving forces. Directors, Stakeholders, opportunities, competitors Restraining forces. Inadequate Cultural change Planning Lack of Employee Involvement Imperfect Communication Strategies 12 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

13 Preparing for change Internal marketing - Current attitude How big a change is needed Who the influencers are How big resistance is likely to be Internal marketing mix - Segmentation, product, price, promotion, place 13Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

14 Creating an environment for change Encourage the right attitude Develop a culture that is based on creativity & innovation Provide appropriate recognition and rewards Encourage flexibility Foster employee involvement 14Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

15 Creating major change (Kotter 1996) 1. Establish sense of urgency 2. Create the guiding coalition 3. Develop a vision and strategy 4. Communicate the change vision 5. Empower broad-based action 6. Generate short term wins 7. Consolidate gains and produce more change 8. Anchor new approaches in the culture V Kurt Lewin (1940s) Unfreeze – Change- Refreeze (http://www.mindtools.com/pages/article/newPPM_94.htm) 15Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

16 Possible Effects of Change on Staff 16 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

17 Response of Individuals to Change Acceptance. Indifference. Passive resistance. Active resistance. 17 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

18 Implementing change Pilot scheme Incremental changes Overnight - out with the old and in with the new Variations on the above Monitor and review 18Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

19 A Programme of Organisational Change 1.Change agent/Champion of Change 2.Inform employees of the purpose. 3.Data-gathering & diagnostic exercise. 4.Strategy development. 5.Secure employee support. 6.Implementation. 7.Control. 19 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

20 A Marketing Approach to Change Tell: people Sell: need for change & vision. Evolve: attitudes, ideas & learning capacity. Involve: people. 20 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

21 Internal marketing mix Segmentation Supporters, opposers, non involved. Different levels of management Product - plan/change Strategy and process of change Job or function may be internal product Price - benefits & psychological costs Psychological price - loss of status, uncertainty, loss of productivity Promotion - two way Clear communication essential Different mix - noticeboards, meetings, intranet, newsletters, etc Place - method & timing Information, training etc - channel providing services to the internal customer 21 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

22 Problems in Change Management Failure to identify need. Failure to identify objectives. Wrong strategy. Not enough resources committed. Bad method of implementation. Bad implementation resulting in non-acceptance. 22 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

23 23 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

24 Agenda Main organisational market approaches and Organisational culture Fit between strategy and culture Inter-relationships between organizational culture, environment and market orientation Creating a market oriented culture and communicating shared values Environmental Uncertainty and causes of strategic uncertainty Drivers of change Change management and model of change process Characteristics of change Preparing for change Implementing change Evaluating change management Problems in change management International Influences on Management/ Globalisation 24Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

25 Main Organisational Market Approaches 25 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

26 OrientationCharacteristicsMay be found in SalesSell what is produced Operational targets expressed as turnover not profit Sales function powerful Volume-driven markets with high fixed costs Small/young organisations Production/OperationsPriorities determined by drive for efficiency and internal factors rather than customer needs Operations function powerful Manufacturing (where investment and set-up times are high) Not-for-profit sectors TechnologyProducts/services driven by what technology can deliver Technical function powerfu Computer and hi-tech markets Market5 key characteristics (Narver& Slater -see next slide) Service or competitive markets where customer preference counts Business Orientations 26 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

27 Charles Handy Cultural Types Power culture Role culture Task Culture Person Culture 27Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

28 Power Orientation Dominating environment Powerful people strive to maintain control Work is divided by function or product Centralisation is paramount Quick decision making but depends upon the ability of management Employees rewarded for effort, success and compliance with values Change is determined by central source of power Organisation generally disregards human values and welfare Highly competitive, tough and abusive, low morale and high turnover in middle layers 28Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

29 Role Orientation Aspires to be rational and orderly Built around defined jobs, rules and procedures (bureaucracy) People are recruited to fit into jobs Rational and logical, stable and predictable Strong emphasis on maintaining the hierarchy and status 29Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

30 Task Orientation Functions and activities are evaluated in terms of their contribution to organisational goals Management is concerned with continuous and successful solution of tasks Performance is judged by outputs Network based approach, organizational fluidity, rapid, flexible and responsive Expertise is the major source of individual power and authority 30Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

31 Person Orientation Culture exists to serve the needs of its members Organisation provides a service for individual specialists which they could not provide for themselves Individuals influence each other through example and helpfulness Roles are assigned on the basis of personal preferences and the need for learning and growth The organisation is subordinate to the individuals and depends on the individual for its existence Most often found in societies, professional assocs. 31Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

32 Inter-relationships between organizational culture, environment and market orientation Organizational culture influences and is influenced by the beliefs, values and norms of each individual in the organization. Culture is therefore consequently difficult to change The environment can get turbulent in a short period of time 32Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

33 Achieving stronger market orientation Organizational cultural commitment to market orientation Identification of particular organizational members Power and control; issues 33Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

34 Shared value "The only thing that works is management by values. Find people who are competent and really bright, but more importantly, people who care exactly about the same things you care about. - Steve Jobs 34Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

35 Punctuated Equilibrium Environmental Change Time For example changes occurring in the wider economic environment or in the organisations industry. Continuous stage Incremental stage Flux stage Transformational stage Strategic Fit Strategic Drift Strategic Wear out Adapted from Johnson, Scholes and Whittington (2005) Stability and certainty Instability and uncertainty 35 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

36 Moderate-high uncertainty E.g. Fashion industry High uncertainty E.g. high technology & aerospace firms Low uncertainty E.g. Confectionery manufacturers Low-moderate uncertainty E.g. Chemical industry Rate and scope of change in environment Complexity of environment (number of elements and dissimilarity) Stable Unstable SimpleComplex Environmental Uncertainty 36Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

37 Known knowns We know what we know Known unknowns We know what we dont know Unknown knowns We dont know what we know Unknown unknowns We dont know what we dont know Causes of strategic uncertainty Our understanding of the world we inhabit Quality of our information Low High 37Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

38 What Creates Organisational Change? Influential organisational players usually initiate change when they become conscious of a performance gap – some disparity between actual and desired performance. External environment Macro-environment Competitive environment Internal environment 5 Ms (men, money, machinery, materials & markets) Contexts: Objectives, Technology, Business processes, Financial resources, Structure, People, Culture & Power. 38 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

39 Perspectives on change - political Change often threatens established interests, who will oppose it Success depends on – Building power sources – Creating alliances and coalitions – Manipulating information to support position A political process: – Suited to which conditions? 39 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

40 Critical Dimensions of Change Novel Familiar Core Margin Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

41 External Consultants for Managing Change Benefits Specialist knowledge. Previous experience. Independent referee. Neutral. Not tied by status or rank. Objective. 41 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

42 External Consultants for Managing Change Disadvantages Viewed as top management spies. Standard solution. Too academic. Need time to learn. 42 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

43 Globalisation Globalisation of markets (Levitt, 1983) – needs and desires irrevocably homogenised – Implied standard production and marketing Or going local? – Local tastes vary, local brands outsell global – Much variation to suit diverse tastes (e.g. Starbucks, Coke, Nestle´) Globalisation of production – High-wage countries outsourcing supply to cheaper sources – India, China, eastern Europe 43 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

44 Themes in the international context 44 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

45 Evaluating Change Management Has change contributed to overall objectives? Has the problem been solved? Have the behavioural changes happened? The reaction of people. 45 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

46 International Influences on Management/ Globalisation Changes in consumer expectations Technological change. Deregulation. Regional forces. Markets. 46 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

47 Model of Change Process 47 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

48 Models of Change Life cycle perspective. Change goes through a series of steps. A rational approach Emergent perspective. Change takes place in an uncertain context Participative perspective. Change relies on those affected being willing to cooperate with the change Political perspective. Change often threatens established interests, who will oppose it 48 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

49 Perspectives on change – life-cycle Change goes through a series of steps Success depends on managing these efficiently – objectives, responsibilities, deadlines, budgets – focus on planning and control Many established tools and techniques A rational process: – suited to which types of project or conditions? 49 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

50 Perspectives on change - emergent Change takes place in an uncertain context, and unrealistic to expect outcomes to be close to plan Success depends on – Learning during the project – Adapting to changing conditions – Managing interest groups Plan, but be ready to change See emergent perspective on strategy 50 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

51 Perspectives on change - participative Change relies on those affected being willing to cooperate with the change Success depends on – developing ownership and commitment – consulting widely for ideas – seeking consensus A democratic process: – suited to which conditions? 51 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

52 Dimensions of Change Projects Core/Marginal Novel/Familiar 52 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

53 Business Orientations 53 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

54 Internal Marketing Mix Product: plan/change Price: benefits & psychological costs. Place: method & timing of announcements. Promotion: two way 54 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

55 Principles of Internal Marketing Plan implementation. Consider staff needs & present benefits. Identify influencers. Package & promote. Utilise formal & informal communication networks. 55 Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM


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