Organization Transformation and Strategic Change - PowerPoint PPT Presentation

1 / 40
About This Presentation
Title:

Organization Transformation and Strategic Change

Description:

The Revolution at Home Depot that Left Some Behind (part 1 of 2) Home Depot is number-one home-improvement retail chain in U.S. ... – PowerPoint PPT presentation

Number of Views:4416
Avg rating:3.0/5.0
Slides: 41
Provided by: donb175
Category:

less

Transcript and Presenter's Notes

Title: Organization Transformation and Strategic Change


1
Chapter 15
  • Organization Transformation and Strategic Change

2
Learning Objectives (part 1 of 2)
  • Identify and define organization transformation
    in relation to change process.
  • Understand basic strategy-culture matrix and
    other approaches to changing culture to fit the
    strategy.

3
Learning Objectives (part 2 of 2)
  • Recognize importance of corporate culture and its
    relation to strategy.
  • Experience these concepts in management
    simulation.

4
The Revolution at Home Depot that Left Some
Behind (part 1 of 2)
  • Home Depot is number-one home-improvement retail
    chain in U.S.
  • It had unstructured and entrepreneurial culture.
  • Competitor Lowes began taking market share.
  • CEO Bob Nardelli was brought in to turn around
    dysfunctional culture.

5
The Revolution at Home Depot that Left Some
Behind (part 2 of 2)
  • Lack of support for changes from lower levels.
  • Changes resulted in unintended consequences.
  • Nardelli brought in new top management team.
  • Innovation and sense of ownership declined.
  • HR manager said it was revolution, not evolution.

6
Strategy and Transformation
  • Success can work against a company when it looses
    touch with customers.
  • Radical changes may be only choice for
    organization in desperate need of change.

7
Organizational Transformation (part 1 of 3)
  • Refers to drastic changes in how organization
    functions and relates to its environment.
  • OD strategies represent more gradual approaches
    to strategic change.
  • OT approaches are drastic and abrupt change.

8
Organizational Transformation (part 2 of 3)
  • OT may or may not be developmental.
  • OT tends to use directive, not participative,
    approaches to change.
  • Usually top-down, top-management driven.

9
Organizational Transformation (part 3 of 3)
  • Requires shared vision, willingness to clean
    house, restructure, tackle many problems.
  • OT tends to be shaped by use of power rather than
    collaborative approaches.
  • Due to immediate threat, this may be only way for
    organization to survive.

10
Possible Large-Scale Change Strategies
  • Large-scale change approaches are
  • Incremental - long-term planned change.
  • Transformative - immediate, drastic change.

11
Large-Scale Change Model
  • Model based on 3 key dimensions
  • Time frame of changeshort or long.
  • Level of support of organizational culture.
  • Degree of discontinuity with environment.

12
Figure 15.1Strategies for Planned Change
13
Four Change Strategies (part 1 of 2)
  • Participative evolution - incremental
    anticipates change support of culture through
    collaborative means.
  • Charismatic transformation - radical change in
    short time with support of culture.

14
Four Change Strategies (part 2 of 2)
  • Forced evolution - incremental adjustments over
    longer period without support of culture.
  • Dictatorial transformation - used in times of
    crisis major restructuring running counter to
    internal culture.

15
OD in Practice Masters of Transformation (part 1
of 3)
  • Vince Lombardi, coach of Green Bay Packers, and
    Jack Welch, CEO of GE, provide insight into 2
    successful change agents.

16
OD in Practice (part 2 of 3)
  • Lombardi Were not just going to start with a
    clean slate, were going to throw the old slate
    away.
  • Welch I tell people, if this place is stifling
    you shake it, shake it, break it. Check the
    system, because it wants to be a bureaucracy.

17
OD in Practice (part 3 of 3)
  • Lombardi Got rid of players, even those he
    liked, when they did not perform.
  • Welch No leader enjoys making the tough
    decisions. Keeping people around who arent
    going to grow and prosper is false kindness.

18
The Corporate Culture
  • Culture includes shared values and behaviors
    formed by members of organization.
  • CEO and managers actions, not words, produce
    culture.
  • A culture is organizations major strength when
    consistent with strategies.

19
Strategy-Culture Fit
  • Strategy
  • Course of action used to achieve objectives.
  • Relates resources of organization to
    opportunities in environment.
  • Culture
  • Set of values for setting priorities.
  • Critical factor in implementation of strategy.

20
Definition of Culture
  • System of shared values held by members that
    distinguishes one organization from another.

21
Core Characteristics of Culture
  • Individual autonomy.
  • Sensitivity to customers and employees needs.
  • Support and assistance provided by managers.
  • Interest in having employees initiate new ideas.
  • Openness of communication channels.
  • Risk-seeking encouraged.

22
Sharing the Vision
  • Many management theorists feel vision is essence
    of leadership.
  • Vision involves several stages
  • Share the vision.
  • Empower the individual.
  • Acknowledge performance.
  • Reward performance.

23
Figure 15.2Sharing the Vision
24
Strong Versus Weak Cultures
  • Strong culture characterized by basic values
    intensely held and widely shared.
  • Weak culture may be seen in young company or one
    with high turnover.
  • Culture product of key components structure,
    systems, people, and style.

25
Figure 15.3Relative Strength of Cultures
26
Strategy-Culture Matrix (part 1 of 3)
  • Four basic alternatives in determining strategy
    changes
  • Manage change (manageable risk)
  • Change important and compatible with culture.
  • Use cultural reinforcement as strategies.

27
Strategy-Culture Matrix (part 2 of 3)
  • Reinforce culture (negligible risk)
  • Forge vision that emphasizes shared values.
  • Reinforce existing culture.
  • Manage around culture (manageable risk)
  • Change important and incompatible with present
    culture.
  • Reinforce value system, reshuffle power, use
    leverage in the organization.

28
Strategy-Culture Matrix (part 3 of 3)
  • Change strategy to fit culture (unacceptable
    risk)
  • Change important but incompatible with culture.
  • Changing culture is explosive, long-term process
    that may be impossible.
  • Determine if strategic change is viable
    alternative or if strategy should be modified to
    fit more closely with existing culture.

29
Figure 15.4Strategy-Culture Matrix
30
Our Changing World All the Information at
Google (part 1 of 2)
  • Google managed by CEO Schmidt and the two
    founders, Page and Brin.
  • Decisions made by 3-way discussions.
  • Engineers migrate to projects that interest them.

31
Our Changing World (part 2 of 2)
  • The VP of engineering, Were encouraging
    creativity and tolerating chaos.
  • Googles strategic moves set them apart from
    competition.
  • One goal is to put all of worlds information
    into Google.

32
Strategic Change Management
  • Seeks to align organizations strategy,
    structure, and human resources to fit with
    environment.
  • Organizations composed of 3 systems
  • Technical Political
    Cultural
  • These systems in perpetual interaction with
    environmental change and uncertainty.

33
Three Steps to Strategic Change
  • Step 1 Develop image of desired organization.
  • Step 2 Separate systems and intervene separately
    in each one.
  • Step 3 Plan for reconnecting three systems.

34
Figure 15.5Environmental Forces and
Organizational Systems
35
Reasons for Large-Scale Cultural Changes
  • Company has strong values that do not fit
    changing environment.
  • Industry very competitive and changes quickly.
  • Company mediocre or worse.
  • Firm about to join ranks of very largest.
  • Firm small but growing rapidly.

36
Cautions in Cultural Change
  • Cultural change can be difficult and time
    consuming.
  • Culture change should be attempted only after
    less-difficult solutions have been ruled out.

37
Key Words And Concepts
  • Culture - reflects organizations past and is
    rooted in firms history.
  • Incremental approach - long-term planned change
    that relies on collaboration.
  • Organization transformation (OT) - drastic,
    abrupt change to structure, management, and
    culture.

38
  • Strategic change management - focuses on
    alignment with strategy, structure and human
    resources systems and a fit with environment.
  • Strategy - course of action used to achieve major
    objectives.
  • Strategy-culture matrix - assess readiness of
    culture for strategic changes.

39
  • Technical, political, and cultural systems -
    Organizational systems of strategic change
    management model.
  • Transformational change - immediate drastic
    change accomplished by directive methods.
  • Vision - a mental image of a possible and
    desirable future state of organization.

40
Preparations for Next Chapter
  • Read Chapter 16.
  • Complete Profile Survey and Profile Form in
    Simulation 16.1, Part A, Step 1.
  • Complete Step 1 of OD Skills Simulation 16.2.
Write a Comment
User Comments (0)
About PowerShow.com