Presentation OutlinePart – I : Theoretical FrameworkPart – II : Case Study and the Link tothe Model Presented in Part IPart III :Conclusion
Punctuated Equilibrium Model Tushman and Romanelli (1985) Two Types of Changes – Rapid and Incremental MODEL - Rapid Changes are relatively shorter periods of time sandwiched between relatively long time spans of incremental changes and adaptation.
Domains of Organizational Activity Firm’s Strategic Orientation can be categorized into five domains –1. Organization Culture2. Strategy3. Structure4. Power Distributions5. Control Systems
Punctuated Equilibrium Model(Contd..)• Double Loop Learning Process• Four Types of Organization Change – – Fine Tuning – Incremental Adjustment – Modular Transformation – Corporate Transformation
Unexplored Issues• Shapes of Organizational Change• Role of the Top and Middle Management
Issue 2 – Role of Management• According to Tushman and Romanelli – Top management is the only one which can bring the “Radical Change” While middle management brings about the “Incremental Change”
Heineken• 1940’s Radical CEO decision – Controlled , Rational Adaption theory• 1980’s -Changing Preferences – Executive Myopia – Snoep –The Outsider – Oostra – The outsider part 2 – Van Soest –Ivory Tower – Strobos – green book • Internal Politics
The CEO search• Management By Edict• Status Quo Tendency• Self cloning – Homosocial reproduction• Heir InfluencerFrom the familiar to more universal
Change in Distribution System – Radical Change followed by incremental changes• New distribution strategy targeting supermarkets as well as pubs post 2nd World War. Wholesalers were given importance.• Strategy as a response to environmental changes viewed as an opportunity.• Middle management carried out & fine tuned the change initiated by top management• Resistance from commercial managers, lower management & sales people• Observed, unexpected challenge triggers initial radical change succeeded by incremental changes
Structural Inertia & CEO succession: Incremental Change followed by Radical Change • Environmental changes in 1990s necessitated changes, which were blocked by incumbent CEO Freddy Heineken. • All subsequent general directors were unable to change the organization due to inertia. • Retirement of CEO Freddy Heineken provided an opportunity for change. • His successor Van Schaik couldnt implement the changes as he was viewed as transitory & Freddy had a huge background influence. • Schaik’s successor Vuursteen was able to radically change the organization. His success was attributed to the fact that his appointment was approved by Freddy & also the latter’s influence had become less prominent.