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8/3/2019 Managing Strategic Change-SK Jaiswal
1/20
Paper by
Gerry Johnson
Managing Strategic Change:
Strategy, Culture and Action
Summarized by
S K Jaiswal
(30.10.11)
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The Need
y Insufficient writing on
yLink between Strategy & Culture
y
StrategicInertia in firms
y Need for managers to relate to cultural
issues
yPaper aims atyExplaining the links between Strategy, Org
Culture and Managerial Behaviour.
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Strategy Development- Perspectives
1. Incremental Perspective
yDecisions build one upon another. Past
decisions mould the strategy
yLogically managed by executives , as
yNot possible to know all forces that shape future
y Political trade-offs are necessary. Optimal is not
possible.y Strategies = compromises that take org. forward.
yManagerial Experience as filter of external and
external stimuli.
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Strategy Development- Perspectives
2. Cultural Perspective
y Logical/Incremental perspectives show what
managers shoulddo, rather than howthe strategy
has arrived.
y Seen through cultural, political and cognitive way,
the strategy development cannot be analyzed
logically.y Core Beliefs- Individual and shared among
managers
y Core Beliefs and assumptions = Paradigm.
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What is a paradigm?
y Set of Beliefs + Assumptions = Paradigm
y Paradigm provides:
yRelatively homogeneous approach to
interpretation of complexity faced by organisation.
y It evolves over time. Rooted in history and
environmental factors.
yOffers quick tools to respond to stimuli.
yProvides unique competence and skills to org.,
leads to competitive advantage.
yCan lead to strategic problems as well.
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Paradigm as filter
y Environmental forces and org capabilities affect
org performance, but dont create strategy.
y People only create strategy, through
cognitive/cultural levels called paradigm.
y Changes may happen but managers may tend to
ignore or give a different meaning as per their
paradigm.y Ex.- ignoring market research findings, relying
on existing ways of doing things,
y Paradigms cause resistance to change
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Model of Paradigm
Environmental Forces &
Org Capabilities
Opportunities and Threats
Strengths and Weakness
Paradigm
Paradigm is a set of beliefs andassumptions which fashions an
organizations view of itself andits environment
Strategy
Performance
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Cultural Web
Paradigm
Power
Control
Rituals
Stories &
Myths
Symbols
Organisation
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Culture Audits by Managers
y Cultural Web can be used for Culture Audit
y Managers can themselves draw the web for their own
organization.
yCases considered:y A Menswear Retailer (1980s)
y Consultancy Partnership firm
y A regional newspaper
y
Own Case (for understanding own company)
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ParadigmsCase A
(MensWear Ret.)
Case B
(consultancy)
Case C
(regional
newsppr)
Own Case
We sell to ladsmarket
Retailing Skills
central
Volume is Vital
Loyalty isimportant
We are biggest,safest
Client
satisfaction most
Professionalism
is imp.Avoid risks
We are innewspaper
business.
Our paid daily
will always be
there Readers will pay
for the news
Advertisers
need newspapers
We are thebiggest
Continuous
Production is
must
Loyalty isimportant
Timely delivery
is most important
We serve the
nation
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Power
Case A
(MensWear Ret.)
Case B
(consultancy)
Case C
(regional newsppr)
Own Case
Chairman is all
powerful, but
nicely Division of
power significant
Insider
experience more
powerful
Unclear,
diffused power
base External power
base clearly
important in
parent audit firm
Parent
company- a
newspaper groupAutocratic CEO
Departmental
Rivalry
External power
base govt
StrongDivisional power
centres.
Autocratic
Divisional CEOs
Inter DivisionalRivalry dominant
Within divisions,
functional rivalry
dominant
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OrganizationCase A
(MensWear Ret.)
Case B
(consultancy)
Case C
(regional newsppr)
Own Case
Highly
compartmentalized
operations with
vertical reporting
Every depts. with
a director- heavy
super structure
Paternalistic
Flat and complex
matrix
Decisions through
a networking system
Vertical,
hierarchical system
Little lateral
communication.
Autocratic style
Vertical
compartments
through Divisions
Paternalistic
Autocratic Style
Decisions flow Top
to Bottom
Control Systems Margin Control
Long established
proven rigid and
complex systems
Emphasis on time
control and
utilization of
consultants
Targeting and
Budgeting
Low cost
operations
Tight financial /
systems controls
Manualization
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Rituals and RoutinesCase A
(MensWear Ret.)
Case B
(consultancy)
Case C
(regional newsppr)
Own Case
Long established
sourcing channels
Induction and
attritions as way of
continuing the
practices
Lack of challenging
Emphasis on gradingsystems
Promotions within
functions
Writing and re-
writing of repots
product of the firm
Partners signature
on anything that
goes to clients
Gentlemanly
behaviors' clientsand partners.
Slave to time, to
meet deadlines
Product delivered
in hours and minutes
Long working
hours
Ritualized
executive meetings
Lack of challenging
Long working
hours.
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y Others in the cultural web
y Stories
y Symbols
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Problems of Strategic Change
y Resistance to Change
y Strategic Drift
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Resistance to Change
y Managers face the challenges through cultural, political,
social norms of organizational life.
y Paradigm limits the options, which are difficult to change.
y
They tighten up the existing ways of operatingy Change process needs to be evolutionary, to beat the
paradigm lock. (No example given)
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Strategic Drift
y Strategic Drift = strategy becoming less and less in line with
the environment of the organization.
y Drift may not be identified till the performance loss is
observed.y Reason- Managers may discount information not conforming
to existing paradigm, but readily accept that which is
conforming.
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Implications for Managing Strategic Change
y Traditional Planning Approaches
y Strategic change is considered as planning of the systems andstructures required for achieving the results in line with logic ofthe strategy. It is merely a planning activity.y
Managers clarify the aims and objectives of long termy Analyze factors affecting the strategy
y Make logical choices
y Implement systematically.
y DisadvantagesyIt neglects socio-political processes that are important to strategyformulation.
y They dont address the process of strategic change
y Useful in a stable economic environment.
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Guidelines for managing strategic change
1. If strategy development comes from the taken-for-grantedassumptions (paradigms), the results too shall be such
2. Take a cultural audit of the firm- the 6 factors leading toparadigm of the managers.y It makes explicit what is taken for granted.
y Generates managerial debates on cultural barriers that can come up.y Cultural aspects cannot be changed unless they are made explicit.
3. Create a climate for change- need widely accepted, crisis/threatas major trigger, , fabricate threats, political maneuvers, etc.Though the fabricated moves may backfire some time.
4. Intervention by outsiders- New CEO, independent directorsetc.
5. Providing signals and symbols- logos, uniforms, status symbolsetc.
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Conclusion
y The article provides framework for org change in terms of
social, political, cognitive and cultural processes.
y Strategic inertia and strategic drift can occur
y
Cultural perspectives can be understood in terms of CulturalWeb comprising of Paradigm, Power structures, Control
structures, Organizational structures, Rituals and routines,
Stories and Myths, and Symbols.
y Incremental /logical perspective doesnt offer a complete
picture of strategic change
y Power of paradigm and the path to change are discussed.