Perspectives Of Strategic Change Management

Perspectives Of Strategic Change Management There is one quote from Heraclitus that people frequently use when talking about business, the only constant is change itself. Change is a key feature to business environment nowadays, the ability to strategically manage change is often perceived as one of the core competencies of flourishing organizations (Burnes, 2004, Okumus and Hemmington, 1998).In the face of globalization, innovation of technology and economic fluctuations (Burnes B. , 2004), new business models and appropriate strategic responses have to be formulated in order to manage uncertainty, variability and ambiguity (Clayton et al., 2005) within the context of what DAveni(1995) called hyper-competition. However, current theories and approaches to change management are massive (Armenakis Bedeian, 1999)and often contradictory, regarding the complexity of change and significant differences in perspectives towards it (Burnes, 2004; By, 2005). Even though, it seems that aconsensushas been reached that internally or externallydriven changes are occurring regardless of shape, form or size (Burnes, 2004; Carnall, 2003; Kotter, 1996; Luecke, 2003),henceinfluence everyorganization in every industry. This articlewill critically review part of the key theories and approaches concerning organizational structure and culture, andtry to apply the frameworks discussedinto a case study to see whether they are consistent with empirical evidences. Diagnosis: Change and Managing Change Definition of Change From the origin of the concept, change is defined by Oxford English Dictionary as the act or instance of making or becoming different. It is often referred to as the movement from a current state toward a future state (George Jones, 1996). In his Management textbook, Robins defines change as an alteration in structure, technology, or people. (1994, p. 381)In this definition, structure refers to alteration in structural variables in terms of complexity, formalization, degree of centralization, etc. Technological aspect of change is related to methods or equipment involved. People, as the third concern in change, looks at theaspect of modification in attitudes, perceptions, values, or behavior (Nagaike, 1997).Taking into account the nature of both strategy and change, strategic change isdescribed as distinctionin organizations alignment with their external environmentin the shape, form, or state over a certain period of timescale(Van de Ven Poole, 1995; Rajagopalan and Spreitze, 1996 ).The alignment here denotes the fundamental pattern of present and planned resource deployments and environmental interactions that indicates how the organization will achieve its objectives(Hofer Schendel , 1978, p. 25). In thestrategic level, Pettigrew (1985)argues that within an organization, changes occurs under different situations, ranging from commercial events,to managerialinsight, options and actions, which indicate a classification both on macro and micro perspective. Managers, see the internal setting of change consists connections with structure, culture, power, and levels of control. The relevant parts of the environment (Schien, 1985)had to be re-evaluated in order to check.Change is a continuous anddistinctivefeature of organizational life, both operationally and strategically (Burnes, 2004).As a result, corporate strategy cannot be taken out fromorganizational change (Rieley Clarkson , 2001). Strategic Change Management The term strategic change management is very popular amongacademic articles together with newspapers and magazines. Joan Magretta and Nan Stone (2002) point out that coping with various changes is one of the most challenging tasks in the management arena. Moreover, comments of influential management gurus such as Peter Drucker who suggest that organizations have to command change, rather than simply reacting to it stimulated much interest in this very topic (1995). Strategic change management is defined as the process of managing the implementation of alteration in organizational strategies,by which an organization achieveseffective changes in objectives, performances, relations, procedures and organisms (Bridges, 1991), gets to its future state and attains its vision for competitive advantage. Via a process characterized as sensegiving (Gioia Chittipeddi), a vision for change is created and then disseminated(Whetten, 1984) to peple whoplay the change agents role to reach the created vision. Everett Rogers (1995) described change agents as figures with one foot in the old world and one in the new creators of a bridge across which others can travel.Strategic change management enables change agents (Weick Quinn, 1999) andother stakeholders of theorganization to access to the effective strategiesand allow for tryouts in redesigning the organization s image and identity (Mintzberg, 1989)and accomplish the new vision. Types of Change How change is perceived varies in related literature: somehas regarded it asexecuted from top-down whileothers bottom-up, some sees it an emergent phenomenon while others think it s planned (Lewin, Field Theory in Social Science, 1951); different scholars have described it as incremental, punctuated and continuous (Burnes B. , 2004) Different kinds of change call for different strategies to successfully effect and make a difference to the way things are done around here which referred to overcoming resistance to implementing organization change. Before getting into the details of managing change, it s helpful to review the types of change in organizations and then start to look at specific approaches toward change. Planned and Emergent Change Sometimes changeis classified as planned,which isrationally embarked upon and directed by organizations (Burnes B. , 2004). The term of planned change was first mentioned by psychologist Kurt Lewin (1947),to describe change as deliberate,and a product of rational thinking and actions (McGreevy, 2008). Planned change may as well be called blueprint, top-down, rational, linear change with the need for focus on revolutionary or transformational change (Hayes, 2010), and also be referred to as episodic change as opposed to continuous change (Weick Quinn, 1999). Strategically speaking, planned change s more termed second-order change, often encompassessubstitution of certain strategy with another as well as a significant survival of crisis and take into account the multiple consequences of any such changes (Buchanan Boddy, 1992)in order to distinguish from the change of doing better in what we already do (Watzlawick et al., 1974). In contrast, change sometimes is quiteunplanned. Thiskind of change is recognized as emergent change, which is ongoing and is an unpredictable process of aligning and realigning to a turbulent environment (Burnes B. , 2004). Emergent change occurs spontaneously, involving gradual process of continuous adjustment, cumulative effortmodifications in work and social context that people improvise and learn in daily basis (Hayes, 2010). Also indicatedas incremental or first order change, emergent change has an importantfeature that concerns the fact that people frequently adjusting and correcting thoughts and knowledge they obtain from internal or externalenvironments, which can accumulate and amplify then create significant changes (Weick Quinn, 1999). As discussed frequently in organizational development literature, which followed the work of Lewin (Cummings Huse , 1989), the difference between planned and emergent change helps clarify the school of thoughtsondevelopment of organizations and developmentof long-term organizationalgoals (Naderi, 2010), which is agreed with the strategic thinking of change management.Instead of being a fixed, coherent, or well-ordered process, organizational change is chaotic or uncontrolled most of the time (Iles Sutherland, 2001), often involving emergent or non-linear elements and the consequences of uncertainty andchance (Dawson, 1996). The term strategic change then, is the explanation of the magnitude of change in structure, culture, recognizing the second order effects of these changes (Pettigrew, 2000). Developmental, transitional and transformational change Change mayas well be viewed from the perspective of frequency and scope (Iles Sutherland, 2001). Ackerman (1997)outlines three types of most frequentchange in organizational literature: developmental,which is change that augments or modifiespresentfacets of an organization, highlighting on the enhancement of skills or processes in order to maintain competitive; transitional,intrusive as it bring about completely new processes or procedures to the organization. Examples of transitional change includes corporate restructuring, merger, acquisitions, new product or service designs, and instigating new technologies; and transformationalchangewhichrequires a fundamental redefinition of the organization and some of its key features including a innovative definition of the business, a different strategic orientation, oandsignificant change in terms of structure, processes, and corporate culture (Dunphy Stace, 1993). Theories in change literature are more concerned with developmental and transitional change, leaving transformational change as a difficult and unsolved when implementation is under consideration. Burnes(2004) has a slightly different classification of change, in the need to consider strategically concerning the internal and external environment, which includes:incremental, with separateorganizational segments responding progressively and independently to one problem or goal at a time; punctuated equilibrium, with evolution through relatively greater span of time of stability punctuated by shorter bursts of revolutionary change; and continuous transformational change, with the organization continuously aligning to their environment which leads to more organized management of strategic change. Cultural Perspective If real change is to occur in organizations, it has to happen at the cultural level. Culture has long been a key factor in organizational change literature. As early as the 1950s, psychologist Jaques wrote about cultural influence in a changing factory for the first time(1952). Though there is no consensus on definition, the shared values and shared patterns of understanding(Schien, 1985)embedded in the meaning of culture are at the core of organizational change.In fact, Schien s definition of culture best represents functionalist school of cultural approaches to change. He defines culture of a group as the collective or shared learning of that unit as it develops its capacity to survive in its external environment and to manage its own internal affairs (1990, p. 58). It is stated by scholars that to create effective and powerful change, organizations and individuals have toface, cultivate or challenge core cultural values, thenparticipants of the organization come up against a overwhelming change in perceptionthusturn to another direction(Dunphy Stace, 1993). Then in this sense, two steps have to be taken when we look at culture in terms of change management. First, the resistance of change from the existing culture, which requires anexplicitcomprehension of the corporate culture. The diagnosis of current culture will determine the second step, which how to change the culture and implement change at a strategic level. Johnson and Scholes: Cultural web The cultural web is a good diagnostic tool for ?looking at corporate culture. (See Figure 1) The paradigm in the center of the web is the set of core beliefs, which maintains the unity of the culture. The petals includedsoft aspects such assymbols, routines, political processes and hard counterparts as structures and control systems. They are theculture sexplicitexpressions of the impact of the paradigm(Johnson Scholes, 1999). Cultural web not only recognize current cultural layouts but alsoable to map future culture required by change. But to be critical, environment and contextual factors are more or less ignored in cultural web framework. Figure 1. Cultural web (Johnson and Scholes, 1992) Structural Perspective Opportunity and Resistance Mintzberg(1989)describes structure in a dynamic form. He points out the environmental influence on organizational structure,plus the mannerof its evolvement. It is proposed that complexity plays animportant role in organization s structure, due to its relationship tothe diversity in the environment and the variety of structures in organizations and the pace of change they are confronting. From the practical perspective,both internal and external structural aspects are accountable for organization change in some way(Miller Friesen, 1982).Guth and Ginsberg point out that industry structure affects opportunities for successful new product development(Guth Ginsberg, 1990), thus leads to the innovation and renewal of the product cycle of an organization. From inside, the structures of organizations vary. How individual and team engage and coordinate within an organization influence the ease or challenge of organizational change. It is argued by scholars that there is no perfect approach of organizing an organization (Mintzberg 1989; Drucker 1999). Situational variables involve the environment, objectives, technology, age and size of the organization. For instance,when organization s size increases, structural explanation and dignifiedmechanisms for planning, decision making, and resource allocationwill become more complex(Quinn Cameron, 1983), therefore, are able togenerate progressively greaterconfrontationand inertia to basic change(Tushman Romanelli, 1985).New markets and competitive pressures from the industry call for constant internal innovation and change of prevailing structural dimensions to enable firms to better achieve their strategicobjectives. Restructuring could be a powerful gear for change, in rearrange the resource within the organization and also give strong signals to both customers and employees that things are changing, thus helps to build a innovative image. But sometimes structural change becomes too obvious a choice, without considering other factors such as culture(Clarke, 1994); it can then be at great cost to time, morale, and also ultimately unproductive. So reorganization is not the one solution to every issue.To make it effective, one should always take into account the context of both formal and informal structures, and the bonding alignment of structure and culture, to enable individuals and organizations to cope with uncertainty, variability and ambiguity. Leavitt et al.: Four Levers of Change The organization change can be driven by various factors such as function, structure, and also value and culture alike. Leavitt et al. (1973)suggest that four levers of change constitute the sub-system in an organization, including: structure, which involves hierarchy, authority, centralization and decentralization; task, which indicates work design, uniformity, different levels ofcorporate needs, sovereignty and option; technology, which consists levels of complexity, extent of employee engagement and obligation; and people, which includes cultural aspects such as values, beliefs, attitudes, motives, etc. Force Field Analysis (Kurt Lewin,) Force field analysis provides a framework for checking structural levers in terms of inertia as well as opportunities.By looking at both sides of the organizational driven forces, Lewin s model helps to examine the barriers and resistance of change, and figure out the main facilitators. Figure 2. Force field analysis Model (Lewin, 1951) As shown in Figure 2, one party is attempting to support change driving forces and the other seeking to hold things back restraining forces. In Lewin s model, organizations are more as a dynamic balance of forces effecting in opposite ways. If change is to occur, the equilibrium has to be broken by the driving forces exceeding the restraining forces. Strategy to Change: Contextual Features and Implementation Options Organizational change is often triggered by outside driving force, so the circumstances that form the setting for change cannot be neglected in understanding and assessing strategic change management. Figure 3. Change Kaleidoscope Model (Balogun Hope Hailey , 2002) A change kaleidoscope model is discussed in regard to diagnosis of the context for change (Balogun Hope Hailey , 2002). The authors presents a framework derived from a kaleidoscope metaphoras shown in Figure3, that encompassesan outer ring which illustrate the key change context featureswhich either facilitate or confine change, as well as an inner ring concerning to options openwhen implementing a change.They carry out an analysis of needs, using judgment on what is most critical, and decide which interventions to implement and the orders to be taken. The design choices consist change start-point, change path, change style, change targetand change roles. It is notcontextual feature s impact on the design choices that matters (Balogun Hope Hailey, 2002), they need to work together in a systematic and consistent way. It is argued that the organization mechanisms such as strategy, structure, and peopleshould be aligned with each other to make an effective organization; in this sense, good strategic alignment is crucial to change (Tichy, 1985). Approaches to Change: Models and Frameworks Lewin: Three-Stage Process of Change Most theories on planned change stem from the three-phase model Lewin (1951)developed in describing how an organization undergoes change as following: * Unfreezing: readiness or willingness to accept change. * Moving: choosing appropriate strategies for change itself. * Refreezing: acceptance and stabilization of new behavior. Figure 4. Three-Stage Process of Change(Lewin, 1951) This social-psychological approach to management is about how people in an organization go about changing. First, the members of the organization have to be convinced of the necessityand demand for change, have a sense of urgency, or else nobody will be willing to move and the management will be the only ones believing in the reorganization. Second, the change has to be carried out. And finally the new situation after the second stepneed to be institutionalized, organizational members, have to embed new behavioral patterns, new working methods, new values and norms, otherwise people will soon return to their old habits prior to the change.Later descriptive models all followed this basic outline in how an organization will change. Kotter: Eight-stage Process of Creating Major Change Based on studies of why organizational change so often fails, Kotter (1996)developed the following conditions for successful change in anorganization. i. Establish a sense of urgency ii. Create the guiding coalition iii. Develop a vision and strategy iv. Communicate the change vision v. Empower employees for broad-based action vi. Generate short-term wins vii. Consolidate gains and produce more change viii. Anchor new approaches in the culture. In textbooks and journal articles on managing change numerous other multi-stage models of change management are presented (Burnes, 2009; Carnall, 2003).All of these models provide organizations with a road map for change; they illustrate what steps the organization must take for change initiatives to be adopted within their organization. Application: A Case Studyof Strategic Change Management Introduction and Background Emirates is one of the biggest international aviation service providers. Not satisfied with just being a successful airline company, it aims to evolve into a globally influential travel and tourism conglomerate. In this case, Emirates plans to open the very first Emirates Hotels and Resorts (EHR).This section first focus on the change context for EHR (which uses part of kaleidoscope framework) and followed by an analysis of the cultural dimensions of change using the cultural web framework. And then identify the implementation of change options by applying the rest of the change kaleidoscope model. Finally, a conclusion and recommendations are provided concerning the change management process at EHR. Context of Change Successfully dealt with the change problem in the beginning of its operation, the context which EHR is in should be firstly illustrated. Launched in 2006, Emirates Hotels and Resorts (EHR) isthe premier hospitality management divisionof Emirates Group. Here EHR is facing the problem of opening its flagship property within a short timescale and incongruous force on its side (Carmazzi, 2008). Time, scope, readiness, diversity and capability are identified as contextual features of particular importance in this case. Figure 5.Context of Change in EHR Resource: by author, adapted from the kaleidoscope model Time. The hotel will be welcoming its first customer in 4 weeks time so everyone is extremely busy and everyone has urgent deadlines ahead to accomplish his or her task. Scope. asks the question of what degree of change is needed. EHR has various choice for managing this change, and since the desired type of service should be cohesive with the Emirates philosophy, so top-down, transformational change is required. Readiness. Apparently, the workforce is not ready to change, employees are performing as individuals, and a cohesive way of working is then needed. Diversity. The people involved are quite diversified, but the different background will bring about conflict in service style as well as working values. Capability. Leader of this change is the administration manager, who has his own routine of work. So consultancy was hired to help manage the change. Organizational Culture As discussed in the literature review, organization s culture concerns the shared values and beliefs within it. The cultural web provides a useful perspective to assess what is happening within the company. Figure 6.The Cultural Webof EHR Before the consultancy started working, EHR was more or less in a mess: everyone was running around to get their own business done. The paradigm of EHR shows that in the situation of only 4 weeks left, there are no recognized vision, and lack of unified identity and cohesive force. Though the top and senior management did create a vision for what should be like in the future, but the power of doing their own task is still held by line managers. For example, spa manager has her distinctive view of what are the priorities from the accommodation manager. The status of work and terminologies used at work varies from group to group, individual to individual. Although managers tried hard to communicate the Emirates philosophy to formulate an exclusive service style, the busy, stressed workforce, trained in absolutely diverse background, whose running towards their own deadlines have low interest of what other people are doing, and are not buying in what is forced upon them. Change Choices The outer ring of the kaleidoscope model has been discussed above as to identify the contextual features of the change environment of EHR. That left us with the inner ring of the model, which provides a menu of design options. When change is under consideration, management, as well as other change agents, can find help within this framework.In order to cope with the change effectively, the approach the consultant agency follows can be summarized using the change choices ring in the model. Change path. The change path can range from adaption, reconstruction, evolution or revolution. In EHR s case, the consultancy think it needs a quick win due to the time limit but still not wise to carry out a major transformational turnaround. Change start-point. To start with, the consultants seek for management commitment to the result from a top-down perspective. Then by identifying real issues and key influencers within the company Change target. The attitude and behavior is the major targets of the change process. By group working and sharing, both middle managers and employees expand their psychological foundations by themselves, which lead to a more voluntary transition in attitude and way of doing things. Change style. The changing process is more of a participation style rather than direction or education, with the effort of the consultancy of bringing management and employees together. Change levers. The driven force of the change is interpersonal rather than technological or political. The concept of ownership and self-leadership is conveyed and ignites change in culture from within. Change roles. It is emphasized that every staff is responsible for the change. The key influencers perform as change agents and share with others, so other employee can relate to their own experience at work. Conclusion and Recommendation The subsystems of organizations shown in the culture web are all to do withthe levers of change. Transformational change requiresthe alignment of considerably softer levers within anorganization as well as the hardcore gears ;it is easier to succeed if paying more attention to subtle mechanisms in regard to people (Balogun Hope Hailey, Exploring Strategic Change, 1999). Here are some recommendations on the change management implication of EHR within a short timescale such as 4 weeks to 3 months. 1. Identification process of both the context and change itself should always be carried out carefully. What is happening in the environment has great influence on the nature and type of change. 2. Alignmentof individual factors of the organization should be examined to check whether a fundamental change is required to assure the change undergoes toward the strategic goals. 3. Interventions requireconscientiouslyplanningin order to eliminate the inertia and barriers to change as shown in the cultural web, to create new subsystems including structures, systems, routines, rituals, symbols, and stories. 4. Seen the weakness of an organization, in order to fix it,support from other sort of leaning such as training is required. Individuals need to go through additionalpreparation and be exposed to extra initiatives before they can accept the vision of organizational change.