The Management 1.0 is primarily based upon two major tools "Command and Control". It originated while managers were confronted with problem of converting independent farmers into productive industrial labor. The work on the farm was not strictly regulated by the clock while everything on a industrial production was made run on a clock to synchronize all the production activities. The "Command and Control" model of organizing was borrowed from the older organizing principle of organizing armies to fight wars.
= ability to locate new ideas and to incorporate them into an organization‘s processesAbility to evaluate and utilize external knowledge sources depends on prior internal knowledge (skills, language, knowledge)While absorptive capacity certainly begins with individuals, it is the organizational ability to acquire and apply new knowledge that is of primary interesta diverse background provides a more robust basis for learning because it increases the prospect that incoming information will relate to what is already known.A firms absorptive capacity depends on communication with external environment as well as between subunits depends on the individuals who stand at the interface of eitherthe firm and the external environment or at the interface betweensubunits within the firm „gate-keeping“ or „boundary-spanning“-rolesAnd depended on the individudals to whom the gatekeeper transfers the information knowledge base of the group importantIf too high overlap of internal expertise might result in „not-invented-here-syndrom“
ExternalMore permeable in public sectorBonus of personal contacts and professional linksSyntactic, semantic & pragmatic approach to knowledge transferSyntactic: transfer of data through information technologySemantic: translation of language & creation of shared meaningPragmatic transforming knowledge through political efforts and negotiation of practices
Point out how important implementation (execution) is…
The costs of strategic planning:Resources consumed in planningLeadership attention is diverted to strategy and away from fixing operational problems
Organizational sensemaking as the core of failed attempts - The extent of such resistance is predictedto be positively related with the extent to which change recipients need to revise organizational meaning
Key results (sensemaking efforts are continuous)
Since strategic change depends on the cognition of organizational employees, the impact of managerial sensegiving efforts is measured by their effect on employee sensemakingdestructive aspects of reorganizing that must take place if change is to be successful
the literature broadly suggests that top management sensegiving often plays the central role in guiding planned change efforts and directs the employee sensemaking processes constituting the shared interpretive schemeWe require a shift in the cognitive template for successful change
For us it is important that you understand the implications and resulting effects of organizational change and it levels to overcome the perceived barriers in order to successfully induce change… thus, we focus on the framework and will give you a short overview of the study itself
A few slides ago we heard that we need to have sensebreaking…what can we now conclude?
the success of strategic change will dependnot only on an organization’s ability to implement new structures and processes, but also onthe organization’s ability to convey the new mission and priorities to its many stakeholders
Managers, Corporations & Strategy The HOW of becoming a big (= successful, happy) fish by Eva Eisele Franziska Becker
What the blockbook says…Today at Manager @ work
What is Strategy?Mintzberg’s Assessment of daily strategyHeading towards Management 2.0• Moon Shot• Absorptive Capacity• Reversal ChangeImplications for education in/and Management 2.0Conclusion & ReferencesAGENDA
How do we get there?AGENDA TODAY:STRATEGIC DEVELOPMENT OF MANAGEMENT 2.0
How would you define and describe the term strategy?Mintzberg‘s 5 P‘sforstrategy(1987)Plan: developedconcsiously to determinecourse of action in advancePloy: maneuverintented to outwit a competitorPattern: consistency in behaviorwhetherornot intentedPosition: a means of locating an organization in an "environment“Perspective: an ingrained way of perceiving the world shared bymembers of an organization through intentions and actions
Function of strategy? (Pfeffer& Sutton 2006) 2 assumptions-Organizations will bebetter suited doing somethings but not others-Resources (money, time)are limitedStrategy providesfocus, helps settingpriorities and allocateresources
Strategic Planning in Business schools (Pfeffer & Sutton 2006) Rise in the 1960s/1970s 1980s: Research on whetherornotstrategyaffectscompanyperformancedissappeare dlargely Importance of strategytakenforgrantedquality But: empiricalevidenceshowsweak and inconsistentplanning- performancefindings Emphasizing on strategy just one method - and probably not the best - to promote performance
Mintzberg on StrategyWidely held view Reality - Managers are strongly Manager as oriented to action - reflective systematic - hectic pace & lot of planner interruptions - architect of - Decomposition of organizational purpose information due to analysis
Mintzberg on Strategy Emergent strategies, Strategic informal planning learning Successful strategists bounce back and forth between theconcrete & conceptual
“MANAGEMENT IS ONE OFHUMANKIND’S MOST IMPORTANTINVENTIONS”
Article in a NutshellObjective Road map for reinventing management Conference of 35 management scholars &Method practitioners, May 2008Keyresu 25 challenging moon shots for Management 2.0 lts
Management Management 2.0 1.0 From prod. from indep. Industrial labor Farmers to to Information/ productive Knowledge industrial labor Worker Scientific Management Era 1. semiskilled employees toperform: McCullum’s Idea of Danielrepetitive activities Management How in a creative economycompetently, diligently, labor, Discipline, Division of where entrepreneurialand efficiently description, Detailed job genius is the secret to success promotion and pay-based do you inspire employees to2. Coordinating efforts in on merit bring the gifts of initiative,efficient ways: imagination, and passion toenableing complex goods and “Henry Ford understood work every day?services to bethe power of exploited produced inlarge quantities. productivity”
TESTING THE 25 MOON SHOTS FORMANAGEMENT FOR APPLICABILITY
Article in a Nutshell Further development of a “process perspective” on absorptiveObjective capacityMethod Case study approach: WebCo, HealthCo, ChemCo - Episodic power is crucial for the adaption and utilization of external knowledgeKeyfindi - To increase the ability to absorb knowledge across boundaries ngs organizations progress from syntactic to pragmatic modes of knowledge transfer
Absorptive Capacity (Cohen & Levinthal, 1990)= the ability to locate new ideas and to incorporate them into anorganization‘s processesbegins with individuals, but it is the organizational ability to acquire andapply new knowledge that is of primary interest • prior internal knowledge • diverse background beneficial • „gate-keeping“ or „boundary- spanning“-roles • too high overlap of internal expertise „not-invented-here- syndrom“ (Mintzberg, p.75)
Internal Processes of ACAP (Zahra & George 2002)External sources:Aquisitions, licencing,inter-organizationalrelationsInternal sources:- Past experience- Learning bydoing Org. Crisis, Social networks, technological shifts, coordinators, etc. policy changes etc.
Individual agency and ACAP (Jones 2006)Boundaries Boundary Change Spanners / Gatekeepers Agents Power Top Management / Strategic Choice
2) The general manager of HealthCo claimsthat „we are a copying organization basedon what‘s happening in Northumbria,rather than us copying a model andlearning from that model and changing it..“Do you think copying the strategy of asuccessful organization is a wise strategy ingeneral?What may cause failure rather than success?Pfeffer and Sutton (2006)„What actually provides competitive successand what is difficult to copy is not so muchknowing what to do – deciding on the rightstrategy – but instead having the ability todo it“
3) In the case of ChemCo the head officeinitially rejected ProjectIvan because it didnot fit the current strategic priorities of thecompany.In your opinion, is strategy destiny or might Sutton and Pfeffer:a• strategic focus also has its downsides and Resourcesconsumed in planning – Averageplanning of budgetingconsumes 4-5 monthspitfalls? – Consumes 20-30% of senior executives and financialmanagers time – Ford motor: $ 1.2 billion per annum forplanning and budgeting• Leadershipattentiondivertedfromsolving fundamental problems to strategic and analytical issues• Focus createsblinders – incubentsgetreplacedbynewcomersdue to lack of knowledge&skills
What didwetake away from it for Management 2.0?We conclude:1. Competitive Advantage2. Unclear if suitable for soft-changes3. Proactivity & Pragmatic communication ABSORPTIVE CAPACITY AS A CHANGE MANAGEMENT STRATEGY
Management in thechangecurve??? Uncertainty Sense- Communic aka making lost ation Resistance to change Re- sense- making
Article in a Nutshell Deepening the understanding of sensemakingObjective history in an organization to fully explain the success and failure of strategic change efforts Case Study: A (failed) governmental office merger Method (IT, accounting, office service, statistics). Strategy0 accepted Strategy1 rejected The dependence of change episodesKeyresu The importance of communication in strategic lts change Balancing sensebreaking and symbolic Mngmt.
OrganizationalStrategic Change Sensemakingeither a redefinition The managerial of organizational communication of The success lies in the mission or a So why do we need new beliefs and ability to substantial shift in destructive communicate and meanings to staffoverall priorities and sensemaking for support of the shiftedgoals to reflect new successful change? direction emphasis or PSYCHOLOGY: "a motivated, continuous direction effort to understand connections
DESTROYING, CREATING,RECONSTRUCTINGFOR THE RADICAL CHANGE PROCESS
Change Management explained…• Organizational Sensebreaking• Meaning Void (unfreezing)• Sensegiving• Acceptance of Strategy (Nascent freezing)• Sensegiving Residuals• Sensebreaking Residuals
“Recent research suggests that managers can avoid creating sensebreaking residuals 1. What were the main problems for the employees after the merger cancellation?by avoiding sensebreaking altogether. External events make way for new meaningeven without managerial sensebreaking”
What the article says: It depends…. S0 1. The time elapsed between successive change episodes 2. Extent of organizational sensebreaking used 3. Extent of realized structural changes 4. Degree of staff acceptance and commitment to previous change S1
What did you take away from it for Management 2.0?We conclude:1. great importance of communication and transparency3. Rising importance of symbolic Management SENSEMAKING AS A CHANGE MANAGEMENT STRATEGY
What could schools and other educationalinstitutions do to develop curricula the betterhandling of change?The Independent (2010)
What to do aboutstrategic Management 2.0? (Pfeffer & Sutton 2006)• Find also alternative ways of figuring out what to do (e.g. Listen to customers & employees)• Don‘t confuse operational or implementation problems with the need for changing strategy• Keep it simple and actionable• Learn as you go• Balance attention to strategy with attention to the details of implementation
References• Covey, Stephen R., 2004, The 7 Habits of Highly Effective People, Free Press: New York• Cohen, W. M, & Levinthal, D. A. (1990)Absorptive Capacity: A New Perspective on Learning and Innovation. Administrative Science Quarterly, 35(1), 128-152.• Easterby-Smith, M., Graca, M., Antonacopoulou, E., & Ferdinand, J. (2008). Absorptive Capacity: A Process Perspective. Management Learning, 39(5), 483-501.• Hamel, G. (2009). Moon Shots for Management. Harvard Business Review, Febuary, 1-9.• Jones, O. (2006). Developing Absorptive Capacity in Mature Organizations. The Change Agent’s Role. Management Learning, 37(3), 355–376.• Mantere, S., Schildt, H. A., & Sillince, J. A. A. (2012). Reversal of strategic change. Academy of Management Journal, 55(1), 172-196.• Mintzberg, H. (1987). The strategy concept I: Five Ps for Strategy. California Management Review, Fall 1987, 11-24.• Mintzberg, H. (2011). Managing. Prentice Hall, San Francisco.• Pfeffer, J., & Sutton, R. (2006). Hard Facts, Dangerous Half-Truths and Total Nonsense: Profiting from Evidence-Based Management. Harvard Business Press, Boston MA.• Symonds (2012). The Art of being a good Manager. retrieved at May 3rd, 2012 from http://www.independent.co.uk/student/postgraduate/mbas-guide/the-art-of-being-a-good-manager- 1938358.html• Zahra, S. A., & George, G. (2002). Absorptive Capacity: A Review, Reconceptualization, and Extension. The Academy of Management Review, 27(2), 185-203.
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