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Slide 11.1 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Lecture 3 Learning Outcomes Managing change / managing choice.

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Presentation on theme: "Slide 11.1 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Lecture 3 Learning Outcomes Managing change / managing choice."— Presentation transcript:

1 Slide 11.1 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Lecture 3 Learning Outcomes Managing change / managing choice Managing change / managing choice The trajectory process and change The trajectory process and change The assessment process and change The assessment process and change From Commitment to decision making and risk From Commitment to decision making and risk

2 Slide 11.2 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Organisational change and managerial choice ( Source Burnes Ch 11)

3 Slide 11.3 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Managing choice Managing change Choice What to change What to change When to change When to change How to change How to change Whether to change. Whether to change.

4 Slide 11.4 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Managing change Managing choice (Continued) The choice process – which is concerned with the nature, scope and focus of organisational decision-making. 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 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. The change process – which covers approaches to, mechanisms for achieving, and outcomes of change.

5 Slide 11.5 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Figure 11.1 The Choice Management–Change Management model

6 Slide 11.6 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The choice process Changing the rules Changing the rules Playing to the rules Playing to the rules Ignoring the rules. Ignoring the rules.

7 Slide 11.7 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The choice process (Continued) Organisational Context Organisational Context Focus of choice Focus of choice Organisational Trajectory. Organisational Trajectory.

8 Slide 11.8 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Figure 11.2 The choice process

9 Slide 11.9 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 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 Slide 11.10 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 SWOT analysis What is a SWOT analysis? 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 Slide 11.11 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 PESTEL framework (as per lecture 1) What is the PESTEL Framework? PESTEL stands for: Political Economic Sociocultural Technological Environmental Legal What 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 Slide 11.12 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Note Different tools look at different things and usually give different answers.

13 Slide 11.13 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Focus of choice Limited range of issues Limited range of issues Short term Short term Medium term Medium term Long term. Long term. Style Style Passive Passive Reactive Reactive Proactive Proactive Co-ordinated Co-ordinated Piecemeal. Piecemeal.

14 Slide 11.14 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Hoshin Kanri The 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 Slide 11.15 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Figure 11.4 Types of decision Source: Adapted from Rollinson (2002: 254)

16 Slide 11.16 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The trajectory process The organisation’s career path: Where it has been Where it has been Where it is Where it is Where it wants to go. Where it wants to go.

17 Slide 11.17 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The trajectory process (Continued) Vision Vision Strategy Strategy Change. Change.

18 Slide 11.18 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Figure 11.5 The trajectory process

19 Slide 11.19 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Trajectory process Coherence Coherence Past Success Past Success Present Appropriateness Present Appropriateness Agreement on Future. Agreement on Future.

20 Slide 11.20 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Constructing a vision The four elements of a vision 1. Mission. This states the organisation’s major strategic purpose or reason for existing. It can indicate such factors as products, markets and core competencies. 2. 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. 3. Valued conditions. This element of creating a vision involves specifying what the organisation should look like to achieve the valued outcomes. 4. 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 Slide 11.21 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The change process Objectives and outcomes Objectives and outcomes Planning the change Planning the change People. People.

22 Slide 11.22 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Figure 11.6 The change process

23 Slide 11.23 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The trigger Vision/Strategy Vision/Strategy Current performance Current performance Opportunities Opportunities Threats Action: Assessment. Threats Action: Assessment.

24 Slide 11.24 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The assessment remit Reasons Reasons Objectives Objectives Consequences Consequences Who to involve Who to involve How to involve How to involve Timescale Timescale Resources. Resources.

25 Slide 11.25 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The assessment process Clarification Clarification Alternatives Alternatives Data collection Data collection Data analysis Data analysis Feedback Feedback Recommendation Recommendation Decision: Decision: – Yes / No / Maybe / Something else / Somewhere else.

26 Slide 11.26 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 The five characteristics of an effective activity plan 1. Relevance: activities are clearly linked to the change goals and priorities. 2. Specificity: activities are clearly identified rather than broadly generalized. 3. Integration: the parts are closely connected. 4. Chronology: there is a logical sequence of events. 5. Adaptability: there are contingency plans for adjusting to unexpected forces. (Beckhard and Harris, 1987: 72)

27 Slide 11.27 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 A commitment plan A commitment plan is a strategy, described in a series of action steps, devised to secure the support of those [individuals and groups] which are vital to the change effort. The steps in developing a commitment plan are: Identify target individuals or groups whose commitment is necessary. Identify target individuals or groups whose commitment is necessary. Define the critical mass needed to ensure the effectiveness of the change. 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 plan for getting the commitment of the critical mass. Develop a monitoring system to assess the progress. Develop a monitoring system to assess the progress. ( Beckhard and Harris, 1987: 93)

28 Slide 11.28 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 People Creating a willingness to change Creating a willingness to change Awareness : Feedback Awareness : Feedback Involving people Involving people Communication & Involvement Communication & Involvement Sustaining momentum. Sustaining momentum. Resources : change agents: new competencies Resources : change agents: new competencies

29 Slide 11.29 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Choice and change Choice is constrained but it exists Choice is constrained but it exists Change can open up choices Change can open up choices Change can close off choices Change can close off choices Change has to be managed Change has to be managed Choice has to be managed. Choice has to be managed.

30 Slide 11.30 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 An overview of Decision Making themes Figure 7.1 Overview of decision making in organisations

31 Slide 11.31 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 How decisions affect value People make choices about limited resources People make choices about limited resources Inputs (where to raise capital, who to employ) Inputs (where to raise capital, who to employ) Transformation (how to make a product) Transformation (how to make a product) Outputs (what price to charge) Outputs (what price to charge) These choices affect the value added (if any) These choices affect the value added (if any) Significant choices are usually opaque, ambiguous and shaped by subjective interpretations Significant choices are usually opaque, ambiguous and shaped by subjective interpretations

32 Slide 11.32 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Decision-making conditions Certainty Certainty all info. available (interest rates example) all info. available (interest rates example) Risk Risk enough info. to estimate (loans example) enough info. to estimate (loans example) Uncertainty Uncertainty goals clear, but lack info. to decide action (e.g. competitors’ reactions) goals clear, but lack info. to decide action (e.g. competitors’ reactions) Ambiguity Ambiguity goals AND how to reach them unclear (e.g. broad strategic issues where people disagree over mission) goals AND how to reach them unclear (e.g. broad strategic issues where people disagree over mission)

33 Slide 11.33 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Degree of uncertainty and decision-making type Figure 7.6 Degree of uncertainty and decision-making type Source: Adapted from Daft (2000), p.271

34 Slide 11.34 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Vroom and Yetton’s decision tree Figure 7.8 Vroom and Yetton’s decision tree Source: Reprinted from Vroom and Yetton (1973), p. 188 by permission of the University of Pittsburgh of the University of Pittsburgh Press, copyright © 1973 by University of Pittsburgh Press..

35 Slide 11.35 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Case Study

36 Slide 11.36 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Supplementary Material

37 Slide 11.37 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 (Iterative) tasks in making decisions Figure 7.2 Tasks in making decisions

38 Slide 11.38 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Types of decision and organisational level Figure 7.4 Types of decision, types of problem and level in the organisation Source: Robbins, Stephen p., Coulter, Mary, Management, 8th edition, © 2005. Reprinted by permission of Pearson Education, Inc. Upper Saddle River, NJ

39 Slide 11.39 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Dependent or independent Figure 7.5 Possible relationships between decisions Source: Cooke and Slack (1991), p.24

40 Slide 11.40 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Programmed and non-programmed Programmed decisions (Simon, 1960) Programmed decisions (Simon, 1960) Familiar, structured problems, info. known Familiar, structured problems, info. known Resolve by procedures, rules, policies, quantitative analysis Resolve by procedures, rules, policies, quantitative analysis Non-programmed decisions Non-programmed decisions Unfamiliar, unique problem, info. unclear and open to interpretation Unfamiliar, unique problem, info. unclear and open to interpretation Resolution depends on judgement, intuition, negotiation, creativity – e.g. Deutsche Bank Resolution depends on judgement, intuition, negotiation, creativity – e.g. Deutsche Bank

41 Slide 11.41 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 Biases in making decisions Complex decisions mean we use shortcuts – rules which simplify complexity. These lead to biases: Prior hypothesis Prior hypothesis Select information which supports previous beliefs Select information which supports previous beliefs Representativeness Representativeness Generalise from small sample Generalise from small sample Illusion of control Illusion of control Overestimate chances of favourable outcome Overestimate chances of favourable outcome Escalating commitment Escalating commitment Put in more resources despite evidence of failure Put in more resources despite evidence of failure

42 Slide 11.42 Bernard Burnes, Managing Change, 5 th Edition, © Pearson Education Limited 2009 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 circumstances 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 circumstances Section 7.7 outlines the five decision styles, and eight situational factors – Fig. 7. 8 Section 7.7 outlines the five decision styles, and eight situational factors – Fig. 7. 8


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