BENEFITS AND SIGNIFICANCE OF CHANGE MANAGEMENT

<< Introduction to Change Management

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Change Management MGMT625

LESSON # 2

BENEFITS AND SIGNIFICANCE OF CHANGE MANAGEMENT

Benefits and Significance

The subject matter holds a tremendous importance for both individual and organization. Let us discuss

some of the benefits from organization perspective.

1. Understanding environment (society, government, customers)

It is important for organization to understand, assess and gauge the dynamics in its external environment

in order to envisage and establish an appropriate relationship with various actors like government,

customers and society. Therefore managers by knowing the subject of change management can better be

prepared to understand whatever is going on in the environment.

2. Objectives, strategy formulation & implementation (to develop competitive advantage)

Second is consequent upon knowing the impact of change at extraneous level on its own internal

dynamics, and the foremost is objective setting and seeking competitive advantage.

3. Employees (trained, high performing work practices, reliable organisation)

The employees are the recipient of change plan. One such perpetual concern of senior managers is to

make organization highly reliable, therefore employees ought to be trained and high performing one in

today's hyper competitive world.

4. Technology Issues

Technology is considered the engine of growth in today's world. Perhaps the greatest challenge for

contemporary organizations is the acquisition and integration of technology in its strategy, structure and

process. As such the concern of top managers is how to avoid organization being obsolete and how to

cope and absorb the impact of changing information and communication technologies which have

decisively influencing production and consumption behaviour?

5. Globalization

The management of international economic and political forces what is today known as

internationalisation and globalisation is yet another important factor influencing decision making of

organization. No organization or nation can stay independent and indifferent to what ever is happening

at international (political) level. For instance the impact of September 11 events have been tremendous

on the economies and organizations of developing countries like Pakistan. Similarly supra national

institutions are becoming more assertive over nation states not only in political terms but also on social

issues like child labour and gender issues. So government and states are considered somewhat less

sovereign in imposing their will over their subjects (individual and organizations) against the ever

increasing and complex interdependencies amongst states. For example the compulsions and legal

provisions of international treaties like WTO and ISO certification regimes have decisively influenced

the organizations and economies of the developing world. Hence imperative for managers, CEOs and

entrepreneurs from smaller or larger organizations alike, of different sectors of economy, is to

understand the complexities of globalisation and its impact on organization' business.

The Relationship of Management with Change-Management

The relationship can be understood along the following lines. First, we have to consider that change

management is a subject with cross-cutting theme, applicable across various traditional functional areas

like management, marketing, production, finance and comprehensively with more recent strategic

management concepts. For instance, this is related with marketing where the concern might be new

product or market development, or can be related with production like the introduction or acquisition of

new technology or skills. Viz. the finance - budgetary allocations, revisions and cost-cutting strategies,

and for HR the concern is behavioural modification, formation and accumulation of technical and

managerial knowledge, skills and values.

Change Management MGMT625

Traditional management domain

Another way to look at the subject is from traditional management perspective and thinking of

organizational transformation. For instance change in the PODC techniques, thereby following universal

or benchmarked practices. Therefore change means variation in following techniques

Planning

- Setting objectives

- Implementation of policies

- Decision-making

Organizing

- Formal & informal organisation

- Departmentation

- Hierarchy

- Authority- responsibility relationship

- Span of control etc.

Directing

- Leading

- Leadership styles

- Motivation theories

Controlling

- Direct & formal control

- Indirect & informal control

Strategic management domain

Within the strategic domain we have two concerns: One is Strategy formulation, that is formulating

mission, vision and objectives after going through environmental assessment (a key feature of strategic

management), and second pertains to strategy implementation means organisation structure, culture and

politics. While the whole focus of the popular framework of strategic management is the development

and sustenance of competitive advantage of a firm or organization, at multiple levels of strategy making

functional, business, corporate and societal levels.

McKinsey Seven S-Framework

One of the leading management consultants in America, and is widely quoted in management literature,

has following dimensions for change to make organization a highly productive one. These are:

1. Strategy

- sustained competitive advantage

2. Structure

- who reports to whom or how work is divided

3. System

- operations & core processes

4. Style

- leadership style

5. Staff

- employees/ Human resources

6. Shared values

- beliefs, mindsets

7. Skills

- capabilities and competencies

Overview of the subject

Similarly, within the overall context of management, the subject matter can also be understood by

focussing on strategic, process, structural, cultural and political dimensions of organization. To

understand management one must know the dynamics of various approaches.

1. Strategy

2. Process

3. Structure

4. Culture

5. Politics

1. Organisation has an articulated purpose or objective

Change Management MGMT625

There is a kind of constant questioning, verifying, changing and re-defining of organization objectives

by interacting with environment. Once objectives are revised consequently lead to modification of

structure of roles & managerial process. For example the problem for entrepreneur once organization

survives (overcome the entrepreneurial problem) is how to achieve growth which is problematic in the

sense that he has to go for market development , overcome engineering problem so as to produce at

higher level without compromising quality and administrative problem to manage and formalise role

and relationship with increased number of employees. This is not only a problem of entrepreneurship

based organization only but even larger and older well established organization like Multinational

Companies (MNCs) tend to define and renegotiate their objectives. This according to one author is

identified as Strategic Renewal.

2. Organization process

The word process refers to the transformation input to out put. For e.g. production process means

conversion of raw material to finished goods. Such types of processes are technology-driven most of the

time. Broadly speaking viz. a process we have two types of changes; one is known as Total Quality

Management (TQM) which in essence means change on continuous and gradual basis, and is of

marginal or incremental nature while Business Process Restructuring (BPR) means drastic, structural or

fundamental change. The former is working `with in the system' while later is known as `working on

the system'. Similarly in context of organization there are other processes such as decision making,

objective setting, communicating, controlling & coordinating

3. Organisation structure

How authority and responsibility is distributed across the across the organization. Authority pattern in

organization shows who reports whom and who is answerable and accountable to whom. Other

dimensions of structure include departmentation or task grouping, hierarchy layers, span of control and

the extent of formalization (bureaucratic or participative one). Therefore structural change may mean

change in one or more dimension cited above. But most of the time organizations now a day want to

make organization structure more flatter instead of taller, decentralized, participative, and humane or

empowered as it is considered to be more productive and creative.

4. Organization Culture

- Values, beliefs and mind-set of a manager at work

- Cognitive style (thought process)

- Personality (MBTI)

- Behaviour

Hofstede Model

Individualism - Collectivism

Masculinity - Feminism

Power Distance - Low or High

Uncertainty Avoidance - Low or High

Time orientation - Low or High

Organisation Politics

Changes have political consequences

Change disturbs power-distribution in organisation

Organisation are like governments

Managers have interests & groupings

Therefore power may enable or resist change

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