This is a comprehensive and detailed note on Chapter 11; organizational change for Mgmt 310.
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11-1 Introduction
- Organizational Change: The processes and activities that organizations go through to
align themselves with internal and external changes in the business environment and to
prepare for future potential opportunities.
11-2 The Case for Change
- Reasons for beginning a change initiative
- To compete more effectively
- To improve performance
- To survive
11-2a The Role of the External Environment in Driving Change
- Influence on the competitive landscape
- New entrants in the marketplace
- Substitute of products
- Increased competitive intensity
- Growing bargaining power of customers and suppliers
- Most prominent drivers of change are globalization and technological innovation
- Globalization
- Decline of trade barriers and concomitant increase in the extent of cross-border
trade
- No longer rely on a few variations that are sold around the world, have to tailor
products and services
- Build foundational products that can be produced efficiently and can easily be
reconfigured to fit local preferences
- Gain competitive advantage through extensive knowledge of local culture,
political environment, available resources.
- Technology
- Affects individuals, corporations, and countries
- Three major technological changes that affected the world’s competitive
environment
- The massive installation of undersea fiber-optic cable and bandwidth that
have made it possible to globally transmit and store huge amounts of data
for almost nothing
- The diffusion of PCs around the world
- The convergence of a variety of software applications from email, to
Google, to Microsoft Office, to specially outsourcing programs, that when
combined with all those PCs and bandwidth, made it possible to create
global work-flow platforms
- Open source innovation where companies invite the community to help solve
certain challenges
11-2b The Role of the Internal Environment in Navigating Change
- Inertia: The inability of organizations to change as rapidly as the environment.
- Greater the inertia, the greater the distance between the environment and
organizational practices
- Internal changes include
, - Restructuring the organization
- Development of training programs
- Need to add resources with particular skill sets
11-3 Key Aspects of Organizational Change
-
11-3a Triggers of Change: Reactive vs Proactive
- Reactive Change: A process in which change is initiated in response to some known
external threat or opportunity. (Top-down)
- Notice lagging performance indicators first
- Seek to identify the problem
- Analyze the issue and seek to find its underlying causes
- Design different options for closing the gap or solving the problem
- Proactive Change: A process in which change is initiated based on some anticipatory
event or opportunity on the horizon.
- Envision new possibilities for an organization
- Leads to designing what should be, rather than simply focusing on what is
11-3b Origination of Change: Planned vs Organic
- Planned Change: A process where change efforts are predetermined and driven from
corporate strategy departments or top-down directives.
- Based on a scan of the competitive horizon, an analysis of their control cycle, or
through a strength, weakness, opportunity, threat (SWOT) analysis
- Create a better fit between the organization’s capabilities and its current
environmental demands, or promote changes that help the organization to better
fit predicted future environments.
- Organic Change: A process by which change emerges from individuals or teams as
they innovate, solve problems, seek more effective ways to accomplish their work, react
to large environmental shifts, or interact with others in cross-functional positions.
- Continuous adjustments can cumulate and create substantial change
- Employee empowerment
- Harnessing the collective genius
11-3c Magnitude of Change: Incremental vs Transformative
- Incremental Change: A process in which small improvements or changes are made to
processes and approaches on an ongoing basis.
- Sustainable technologies: Innovative forces that improve the performance of
established products, along the dimensions of performance that mainstream customers
in major markets have historically valued.
- Disruptive technologies: Innovative forces that include a different set of attributes than
those valued by mainstream customers.
- Frame-breaking changes triggered by
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