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part 1.ppt

  1. Dr.Renu IMT CDL IMT 140 Dr.Renu IMT CDL
  2. Dr.Renu IMT CDL
  4. Overview of Business Environment External Forces ECONOMIC Environment Internal Forces BUSINESS Internal Environment Values, Mission & Objectives. Human Resources, Co. Image & Brand Equity TECHNOLOGICAL FACTORS MARKETING INTERMEDIARIES DEMOGRAPHIC FACTORS SOCIAL CULTURAL FACTORS Non - Economic Environment Dr.Renu IMT CDL
  5. Shift in Trend From To networkingn Emphasis on continuity Emphasis on change Industrial era Information era National economy Global economy Technology development Technology sophistication Stability & predictability Sudden change Long term Short term Centralization Decentralisation Hierarchies Networking Dr.Renu IMT CDL
  6. Internal Forces Dr.Renu IMT CDL
  7. Internal forces affecting Organization 1. System Dynamics 2. Structure focused change 3. Technological change 4. Inadequacy of administrative processes 5. Individual group expectation 6. Person forced change 7. Resource constraint Dr.Renu IMT CDL
  8. 8. Profitability issues 9. Strategic flexibility 10. Need of strategic excellence 11. Autonomy & flexibility for employees 12. Safety & security employees 13. Unethical practical by employees Dr.Renu IMT CDL
  9. Example Bata India plans to prune 300 staff through fresh VRS. Bata plan VRS to 300 employees in 2006 to reduce staff & to implement its financial & operational restructuring . Bata has an employee strength of 9500 . Bata offered its VRS package in 2005. Co. plan to open 40 retail stores across the country in 2006 & modernize its 150 existing stores Dr.Renu IMT CDL
  10. Case study Gujarat electricity board makes a turnaround wiping out Rs 2542 crore . Board has announced Rs200 crore for 2005-06. GEB increases revenue through strict supervision of power distribution. GEB restructured loans worth Rs. 4130 crores and has brought down interest rates from 9.51 % to 8.6%. Dr.Renu IMT CDL
  11. External Forces Dr.Renu IMT CDL
  12. External forces •Suppliers of inputs •Workers and their unions •Customers •Market intermediaries •Competitors •Public Dr.Renu IMT CDL
  13. External forces affecting organization Economic policies : . Political Conditions Resources Industrial Policy Political Stability Trade Policy Monetary Policy Fiscal Policy Corruption rule of law and governance including business law and regulations Natural resources Human resources Dr.Renu IMT CDL
  14. Types of changes Change as incremental & intrinsic to organization Change as extrinsic & revolutionary Change as patterned & predictable Dr.Renu IMT CDL
  15. Newman change Tushman calls minor incremental organizational change as Convergence. Goss – reinvention Tushman – strategic change Two types – Reactive , anticipatory All changes are continuous, discontinuous, participative and directive. Dr.Renu IMT CDL
  16. Change 3 levels : Micro level At organization level Macro level Dr.Renu IMT CDL
  17. Primary schools of thoughts 1. Life cycle theory 5 stages of organizational life cycle: Creativity Direction Delegation Coordination Collaboration Dr.Renu IMT CDL
  18. Teleological theory Dialectical theory Evolutionary theory – social cognition theory , cultural theory Dr.Renu IMT CDL
  19. Evolution Variation --- selection ---- retention Dr.Renu IMT CDL
  20. Lifestyle (3) harvest --- (4)terminate --- (1)start up --- grow(2) Dr.Renu IMT CDL
  21. Dialectic Thesis ------ conflict ----- synthesis Antithesis Dr.Renu IMT CDL
  22. Technology dissatisfaction Implement goal search /interact set goal Dr.Renu IMT CDL
  23. Theories at individual level Theory E = changing the economy value of organization Theory O = changes based on organizational capacity Dr.Renu IMT CDL
  24. Goals Leadershi p Focus Process Reward system Use OD consultan ts Theory E Maximise sharehold er top down Manage change from top down Emphasis structure & systems Plan & establish program Motivate through financial incentives Consultan t analyse problems Theory O Develop organizati onl capabilitie s Encourage participati on from bottom up Build up corporate culture : employee’ s behavior & attitudes Experienc e & evolve Motivate through commitm ent use pay as fair exchange Consultan ts support managem ent in shaping their own solutions. Theory E & O Explicitly embrace b/w economic value & org capability Set direction from the top & engage people Focus on structure & system and the soft Plan for spontanei ty Use incentive to reinforce change Consultan ts are expert resources who empower employee s. Dr.Renu IMT CDL
  25. Perspectives on OC 1. Contingency perspective 2 Major dimensions : Specialization, integration Specialization refer as DOL , ( horizontal or vertical) Dr.Renu IMT CDL
  26. Integration : ways & means of coordinating work of individuals in the organization. Ways are direct supervision, systems, goals, plans & targets , rules & procedures. Relation b/w change & environment 2. Components of environment – complexity & stability Dr.Renu IMT CDL
  27. Studies found organization as Mechanistic organization.( rules procedure & clear hierarchy of authority , decision making centralized ) Configurational approach - consider two variables at a time such as environment, size and structure Dr.Renu IMT CDL
  28. Resource dependence perspective Resource allocation Regulate funds Dr.Renu IMT CDL
  29. Population ecology perspective Leaders might not possess adequate information about the environment. Assets of the organization might be suited to the current organizational needs. Political resistance to change Firm may have financial & legal compulsions which may come in the way of its entry or exit from present markets. Dr.Renu IMT CDL
  30. Strategies of resource dependence perspective are: 1. Domain choice 2. Recruitment 3. Environmental scanning 4. Buffering 5. Smoothing 6. Geographical dispersion 7. Advertising 8. Contracting Dr.Renu IMT CDL
  31. 9. Co-opting 10. Coalescing 11. lobbying 3 types of processes : Strategy System Skill , culture Dr.Renu IMT CDL
  32. Institutional perspective • Refers to social norms, values & culture • More importance to organization environment than market or competitors. Called symbolic elements. ( conform to lawful norms, standards ) Fr ex: kinetic Dr.Renu IMT CDL
  33. Types of Isomorphism 1. Coercive 2. Mimetic 3. normative Dr.Renu IMT CDL
  34. Evolutionary Perspective 1. Ecological Model 2. Adaptation Model 3. Transformational Model Dr.Renu IMT CDL
  35. Process oriented Perspectives Change affect cultural and human systems Different conceptualization of how change affect organization Dr.Renu IMT CDL
  36. Process based Model Content based Model Integrated Models Dr.Renu IMT CDL
  37. Process based change Model 1. Lewin’s Model of Change 2. Planning Model 3. Galpin’s Model 4. Bullock & Batten’s Integrative Model 5. Schein’s Model of Change 6. Action Research Model 7. Isabella Model Dr.Renu IMT CDL
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  45. Managing Organisation Change • Kurt Lewin: Two Theories – Status QUO/ Equilibrium Point – Resultant of opposing forces – Three step model: Unfreezing (The status Quo) Movement (To new status/ Changing) Refreezing (The new change) Dr.Renu IMT CDL Unfreezing Movement Refreezing
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  53. Planning Model Initially proposed by Lippit et. al. (1958), the planning model was later refined after modifications by Kolb and Frohman (1970). This model has often been employed in bringing about planned change in organizations. The planning model proposes seven-steps for change. That is, there should be free and open sharing of information between the organization and the change agent and this information must be such which can be translated into action. In this model planned change goes through a series of steps. As the first step organization and change agents jointly explore the need for and the areas that require change. Thereafter, they develop mutual expectations. This is followed by identification of specific goals toward improvement. As change cannot proceed effectively without handling resistance, identification of the actual and possible reasons of resistance to change are worked out and planning is done for specific improvement goals. Dr.Renu IMT CDL
  54. The planning model Exploring Entry Diagnosis Planning Action Stabilization and Evaluation Termination Dr.Renu IMT CDL
  55. Implementation of steps identified in planning is the next stage followed by decision – making for termination of the system or to begin another. Model of the Change Management Process Galpin (1996) proposed the model of the change management process which provides guidance for successfully implementing change. In his view a successful organizational change effort must target two levels-the strategic level and the grassroots level. Strategic change refers to the up-front, initial effort involving executives, senior managers, a small cadre of employees and often consultants, who provide an outside view (Gaplin, 1996). This kind of change is broad and organization wide and involves two primary goals – a technical or analytical goal (involving generation of recommendations for change) and a “soft side” goal (involving creation of momentum for change). Dr.Renu IMT CDL
  56. Grassroots change is the effort that drives change deep into an organization by stressing implementation at the local level. The primary goal here is to implement and sustain desired changes. Change does not occur in one leap but often entails several key stages along the way. The nine stages require management within an organization to understand and apply the characteristics of both strategic and grassroots changes. The early stages require greater application of the changes characterised by strategic nature. During the early stages, senior management establishes a need and develops a vision for change and a select few analyse the current organization, formulate recommendations, and detail them for testing. The later stages call for a greater application of characteristics of grassroots change. Dr.Renu IMT CDL
  57. More people horizontally and vertically across the organization are involved during pilot testing and roll out, as middle managers and supervisors are needed continually to measure and reinforce the changes being tested and rolled out in order to ensure successful implementation. Dr.Renu IMT CDL
  58. Integrative Model for Planned Change Bullock and Batten (1985) gave forward the integrative model to describe both the temporal states and the change processes involved in planned change. The integrative model for planned change is based on the principle that organizations exist in different states at different times. In view of this, planned change can take place from one state to another. There are four phases in this model ranging from exploration phase to integration. Exploration Phase In this phase, the organization explores whether it is prepared for specific change and whether it can commit its resources toward such change. This change process is often initiated by organizational members who are aware of the need for change. Dr.Renu IMT CDL
  59. Hereby a search process begins wherein organization development resources and assistance are sought followed by consultation of an organization development expert. The change requirements are then assessed mutually by the consultant and the organizational members. The members make an assessment about the expert’s capabilities and the consultant assesses the organization’s sense of commitment and readiness for change, and the availability of necessary resources. During this phase both sides settle the terms of the work and clarify mutual expectations, cost and time factors and the rules of the consulting relationship so as to develop a collaborative relationship. Dr.Renu IMT CDL
  60. Exploration Phase Planning Phase Action Phase Integration Phase Checking preparedness of the organization for change Diagnosis of the problem designing action plan Implementatio n of change with focus on transition Consolidation & integration of initiative in orgn. Bullock and Batten’s integrative Model of Change Dr.Renu IMT CDL