TRANSFORMATIONAL CHANGE

Learning Objectives To explore a framework that categorizes different types of organizational change efforts with emphasis on the features of transformational change To understand three kinds of interventions against the background of transformational change, integrated strategic change, organization design, and culture change.

Characteristics of Transformational Change Triggered by Environmental and Internal Disruptions Industry discontinuities Product life cycle shifts Internal company dynamics Change is aimed at Competitive Advantage Uniqueness Value Difficult to imitate

Characteristics of Transformational Change Systemic and Revolutionary Change Evolutionary growth – Incremental change Revolutionary growth – Radical change Demands a New Organizing Paradigm

Characteristics of Transformational Change Driven by Senior Executives and Line Management Envisioning Energizing Enabling Change involves Significant Learning & Innovation

Integrated Strategic Change (ISC) Integrated Strategic Change ……… is a deliberate coordinated process that leads to gradually or radically systemic realignments between the environment and a firm’s strategic orientation resulting in improvement in performance and effectiveness.

Integrated Strategic Change (ISC) ~ Key Features Strategic Orientation(strategy & design) Creating the Strategic Plan (strategic change capability) Integrating Individuals and Groups into the Process

The Integrated Strategic Change Process Strategy S1 Strategy S2 Strategic Change Plan Organization O1 Organization O2 Implementation Strategic Analysis Strategic Choice

ISC Application Stages Strategic Analysis Assess the readiness for change and top management’s ability to carry out change Diagnose the Current Strategic Orientation Strategic Choice Top management determines the content of the strategic change Designing the Strategic Change Plan Development of a comprehensive agenda to achieve the change Implementing the Strategic Change Plan

Organizational Design Conceptual Framework Strategy Structure Work Design Human Resources Practices Management and Information Systems Key Point Fit, Congruence, Alignment among Organizational Elements

Organization Designs

Organization Design Application Stages Clarifying the Design Focus Create the overall framework, begins with examining strategy and objectives and determining organization capabilities needed Designing the Organization Results in an overall design for the organization, detailed designs for the components, and preliminary plans for how to implement Implementing the Design Puts the new structures, practices and systems into place, draws heavily leading and managing change methods

The Concept of Organization Culture Artifacts Norms Values Basic Assumptions

Diagnosing Organization Culture Behavioral Approach Pattern of behaviors (artifacts) most related to performance Competing Values Approach Pattern of values emphasis characterizing the organization Deep Assumptions Approach Pattern of unexamined assumptions that solve internal integration and external adaptation problems well enough to be taught to others

Competing Values Approach Flexibility & Discretion Clan Adhocracy External Focus & Differentiation Internal Focus & Integration Hierarchy Market Stability & Control

Culture Change Application Stages Establish a clear strategic vision Get top-management commitment Model culture change at the highest level Modify the organization to support change Select and socialize newcomers; downsize deviants Develop ethical and legal sensitivity