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Change Management: Managers, Corporations & Strategy -


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Maastricht University 2012, useful for anybody studying change managment, HR, leadership or is generally curious about this topic.

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Change Management: Managers, Corporations & Strategy -

  1. 1. Managers, Corporations & Strategy The HOW of becoming a big (= successful, happy) fish by Eva Eisele Franziska Becker
  2. 2. What the blockbook says…Today at Manager @ work
  3. 3. 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
  5. 5. 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
  7. 7. Function of strategy? (Pfeffer& Sutton 2006) 2 assumptions-Organizations will bebetter suited doing somethings but not others-Resources (money, time)are limitedStrategy providesfocus, helps settingpriorities and allocateresources
  8. 8. 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
  9. 9. 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
  10. 10. Mintzberg on Strategy Emergent strategies, Strategic informal planning learning Successful strategists bounce back and forth between theconcrete & conceptual
  12. 12. 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
  13. 13. 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”
  15. 15. The new man on the moon in Management can…
  16. 16. The new man on the moon in Management can…
  18. 18. 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
  19. 19. 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)
  20. 20. 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.
  21. 21. Individual agency and ACAP (Jones 2006)Boundaries Boundary Change Spanners / Gatekeepers Agents Power Top Management / Strategic Choice
  22. 22. 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“
  23. 23. 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
  24. 24. 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
  26. 26. Management in thechangecurve??? Uncertainty Sense- Communic aka making lost ation Resistance to change Re- sense- making
  27. 27. 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.
  28. 28. 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
  30. 30. Change Management explained…• Organizational Sensebreaking• Meaning Void (unfreezing)• Sensegiving• Acceptance of Strategy (Nascent freezing)• Sensegiving Residuals• Sensebreaking Residuals
  31. 31. “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”
  32. 32. 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
  33. 33. 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
  34. 34. What could schools and other educationalinstitutions do to develop curricula the betterhandling of change?The Independent (2010)
  35. 35. 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
  36. 36. 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 1938358.html• Zahra, S. A., & George, G. (2002). Absorptive Capacity: A Review, Reconceptualization, and Extension. The Academy of Management Review, 27(2), 185-203.