3 Managing choice Managing change What to changeWhen to changeHow to changeWhether to change.
4 Managing change Managing choice (Continued) The choice process – which is concerned with the nature, scope and focus of organisational decision-making.The trajectory process – which relates to an organisation’s past and future direction and is seen as the outcome of its vision, purpose and future objectives.The change process – which covers approaches to, mechanisms for achieving, and outcomes of change.
5 Figure 11.1 The Choice Management–Change Management model
6 The choice process Changing the rules Playing to the rules Ignoring the rules.
7 The choice process (Continued) Organisational ContextFocus of choiceOrganisational Trajectory.
9 Figure 11.3 Organisational trajectory Source: Adapted with permission from Mintzberg, H., Patterns in Strategy Formation, Management Science, 24(9), (1978). Copyright 1978, The Institute for Operations Research and the Management Sciences , 7240 Parkway Drive, Suite 300, Hanover, Maryland 21076
10 SWOT analysis What is a SWOT analysis? What does it do? SWOT stands for :Strengths (internal)Weaknesses (internal)Opportunities (external)Threats (external)What does it do?A SWOT analysis enables managers to identify the key internal and external issues they need to take into account in order to understand the context in which the organisation operates. Also, by identifying key issues, it begins to focus managers on the areas where they need to make choices, and helps to identify some of the constraints and risks involved.
11 PESTEL framework (as per lecture 1) What is the PESTEL Framework?PESTEL stands for:PoliticalEconomicSocioculturalTechnologicalEnvironmentalLegalWhat does it do?The PESTEL framework is a rigorous approach to identifying and understanding the main external environmental factors which affect an organisation. As with the SWOT analysis, it also plays a role in focus organisations on the choices open to them and the constraints and risks involved in these choices.
12 Note Different tools look at different things and usually give different answers.
13 Focus of choice Limited range of issues Style Short term Medium term Long term.StylePassiveReactiveProactiveCo-ordinatedPiecemeal.
14 Hoshin KanriThe word hoshin can be broken into two parts. The literal translation of ho is direction. The literal translation of shin is needle, so the word hoshin could translate into direction needle or the English equivalent of compass.The word kanri can also be broken into two parts. The first part, kan, translates into control or channeling. The second part, ri, translates into reason or logic.Taken altogether, hoshin kanri means management and control of the organization’s direction needle or focus.Total Quality Engineering Inc (2003)
15 Figure 11.4 Types of decision Source: Adapted from Rollinson (2002: 254)
16 The trajectory process The organisation’s career path:Where it has beenWhere it isWhere it wants to go.
17 The trajectory process (Continued) VisionStrategyChange.
19 Trajectory process Coherence Past Success Present Appropriateness Agreement on Future.
20 Constructing a vision The four elements of a vision Mission. This states the organisation’s major strategic purpose or reason for existing. It can indicate such factors as products, markets and core competencies.Valued outcomes. Visions about desired futures often include specific performance and human outcomes the organisation would like to achieve. These can include types of behaviour and levels of skill as well as more traditional outcomes such as turnover and profit.Valued conditions. This element of creating a vision involves specifying what the organisation should look like to achieve the valued outcomes.Mid-point goals. Mission and vision statements are by nature quite general and usually need to be fleshed out by identifying more concrete mid-point goals. These represent desirable organisational conditions but lie between the current state and the desired future state.Cummings and Huse (1989)
21 The change processObjectives and outcomesPlanning the changePeople.
23 The trigger Vision/Strategy Current performance Opportunities Threats Action: Assessment.
24 The assessment remit Reasons Objectives Consequences Who to involve How to involveTimescaleResources.
25 The assessment process ClarificationAlternativesData collectionData analysisFeedbackRecommendationDecision:– Yes / No / Maybe / Something else / Somewhere else.
26 The five characteristics of an effective activity plan Relevance: activities are clearly linked to the change goals and priorities.Specificity: activities are clearly identified rather than broadly generalized.Integration: the parts are closely connected.Chronology: there is a logical sequence of events.Adaptability: there are contingency plans for adjusting to unexpected forces.(Beckhard and Harris, 1987: 72)
27 A commitment planA commitment plan is a strategy, described in a series of actionsteps, devised to secure the support of those [individuals andgroups] which are vital to the change effort. The steps indeveloping a commitment plan are:Identify target individuals or groups whose commitment is necessary.Define the critical mass needed to ensure the effectiveness of the change.Develop a plan for getting the commitment of the critical mass.Develop a monitoring system to assess the progress.(Beckhard and Harris, 1987: 93)
28 People Creating a willingness to change Involving people Awareness : FeedbackInvolving peopleCommunication & InvolvementSustaining momentum.Resources : change agents: new competencies
29 Choice and change Choice is constrained but it exists Change can open up choicesChange can close off choicesChange has to be managedChoice has to be managed.
30 An overview of Decision Making themes Figure 7.1 Overview of decision making in organisations
31 How decisions affect value People make choices about limited resourcesInputs (where to raise capital, who to employ)Transformation (how to make a product)Outputs (what price to charge)These choices affect the value added (if any)Significant choices are usually opaque, ambiguous and shaped by subjective interpretations
32 Decision-making conditions Certaintyall info. available (interest rates example)Riskenough info. to estimate (loans example)Uncertaintygoals clear, but lack info. to decide action (e.g. competitors’ reactions)Ambiguitygoals AND how to reach them unclear (e.g. broad strategic issues where people disagree over mission)
33 Degree of uncertainty and decision-making type Figure 7.6 Degree of uncertainty and decision-making typeSource: Adapted from Daft (2000), p.271
39 Dependent or independent Figure 7.5 Possible relationships between decisionsSource: Cooke and Slack (1991), p.24
40 Programmed and non-programmed Programmed decisions (Simon, 1960)Familiar, structured problems, info. knownResolve by procedures, rules, policies, quantitative analysisNon-programmed decisionsUnfamiliar, unique problem, info. unclear and open to interpretationResolution depends on judgement, intuition, negotiation, creativity – e.g. Deutsche Bank
41 Biases in making decisions Complex decisions mean we use shortcuts – rules which simplify complexity. These lead to biases:Prior hypothesisSelect information which supports previous beliefsRepresentativenessGeneralise from small sampleIllusion of controlOverestimate chances of favourable outcomeEscalating commitmentPut in more resources despite evidence of failure
42 Participation in decision making Vroom and Yetton (1973) developed a contingency model of decision making – i.e. the extent to which it is wise to involve subordinates in decision depends on the circumstancesSection 7.7 outlines the five decision styles, and eight situational factors – Fig. 7. 8