Managing Change Business Essay

Managing Change in a Contemporary Organisation

At the beginning of the 21st century the forms of change within organisations have been innovatory and a widespread conviction has arisen as to the revolutionary nature to such changes as a sign of the times, (Pettigrew & Massini, 2003). While Tushman & O’Reilly III (1996) argue that the industry level of studies has not been helpful in illustrating the path of organisation’s change, Greiner (1972) outlines a corporate growth model in order to provide a useful framework in understanding organisational change. Psychologists believe that learning as a human behaviour can be defined as the relatively permanent change in actions as a result of experience or practice, (Baars, 1986). Reflecting and highlighting this concept in relation to an organisation it is subsequently essential to look at organisational change from a historical perspective as organisations learn from their own experiences. Thus innovations in terms of evolutionary and revolutionary change occur at each organisational growth level as determined by Greiner (1972). To answer these fundamental questions about the nature of organisational change it is vital to distinguish between two levels of change. Similarly the factors that directly influence organisational behaviour and organisational features that determine these factors should be examined in turn need to be considered. In line with Greiner’s (1972) theory each of the organisational elements and processes are shaped by its choices implied in the consciousness of the history of the organisation.

Therefore the obvious features of an organisation can be defined and deduced from the aspects of organisational structure, organisational system and organisational culture of which it is composed, (Salaman & Asch, 2003). Researchers have argued that change that has limited influences on the entire organisational system and culture and which maintain unchanged structures are evolutionary thus the consequences of these changes are predictable and ultimately controllable for the most part by organisations. By contrast revolutionary change can be seen as changes that destroy the established structures of an organisation which have significant impacts on both the organisational processes and culture; such changes are generally unpredictable in their results, (Whittington & Melin, 2003). From an organisational growth perspective, evolutionary change is the way used to maintain smooth organisational growth while revolutionary change is essential for enabling an organisation to enter the next stage of growth in its organisational life cycle. However it needs to be stressed that evolutionary change does not occur automatically and result in revolutionary change so managers need to be aware of the characteristics of those two changes within an organisational context and how their influences and development can be mediated.

Theories of organisational development have been examined extensively by and within different management models yet it has been argued that the nature of organisational development suggests that mismatches exist between theory and practice suggesting flaws within theories concerning the manner in which organisations grow, (Greiner & Cummings, 2004). However the strategic role of understanding the dynamics of evolutionary and revolutionary change in organisations is still vital in analysing organisational growth. Firstly as an example of these dynamics we can look at the case of the dominant Japanese watch producer Seiko as being useful in understanding this concept from a practical point of view rather than a literature-only based analysis. Seiko which was founded in the 1960s was a relatively small player in the global market and focused more on the local Japanese market. A strategic change was initiated by the senior management team in order to transform the company from a merely mechanical watch firm into a quartz and mechanical watch company which would aim at entry into the global market, (Tushman & O’Reilly III, 1996). At this stage incremental innovation implemented strategically by management sought to achieve cost efficiencies in competing in the mature market it traditionally operated in and is associated with revolutionary changes in the products and services field it moved into. It is fair to say that the success of Seiko was a result and drew from the successful management of both evolutionary and revolutionary change. However at the same time it must be remembered that it is argued the failure of an organisation occurs most easily during the process of change, (Greiner, 1972).

This example, one of many which can be made, has proved the portability and reliability of Griener’s (1972) model of the patterns of change by which organisations evolve. Namely this model suggests a period of evolutionary change will end with revolutionary change allowing an organisation to reach a new growth stage if change has been managed successfully. Additionally it is important to mention that in this example the growth rate of the watch industry globally fuelled the drive towards a revolutionary change for the company. This is because according to Griener (1972) in a mature industry where competition is intense evolutionary adjustments eventually result in revolutionary change as a result of external pressures. Linked to this it is obvious that technology played an important role in the continued growth of the organisation which also reflects Greiner’s (1998) argument about the role of technology in determining the process of revolutionary change. When the development of technology is rapid the need for a new organisational structure increases and requires a new system in terms of human resource management to deal with and implement technological innovations.

Strategic staff requirements and training programs are by necessity also employed at this level in order to support the implementation of revolutionary change and adapt the organisation to the changing contexts it finds itself in. In a word a period of evolutionary change is shorter in rapidly growing industries in contrast to longer periods in mature industries with a slower growth rate punctuated by less periods of revolutionary change. Additionally as technology cycles evolve and become more integrated into this process organisations change their strategies and structures to accomplish the new strategic objectives necessary to survive in a new environment which is usually a wave of revolutionary change. Although only revolutionary change is able to push organisations into the next growth stage evolutionary change is essential in terms of providing the base for revolutionary change. It is therefore doubtful that without appropriate evolutionary changes there is no base for the support and facilitation of the following revolutionary changes which occur within an organisation. Thus the long term success of an organisation is marked by the alignment among strategies, structure, human resource and culture through evolutionary changes followed by revolutionary change that require the simultaneous shift in those factors. The critical task for management is to build up a new set of organisational policies and strategies that is able to secure the basis for the next period of evolutionary growth.

As Greiner (1972) defined it the later phases of organisational growth is a process for an organisation with a centralised structure moving into a decentralised system then followed by a coordination phase related to these new structural implementations. This is a process of resolution of evolutionary adjustments ending with a revolutionary change due to the conflicts that appear in each phase such as a crisis of autonomy which presents barriers for the organisational expansion at the next stage. In this sense then the decentralised structure which is a resolution of former evolutionary changes and problems afterwards as a result of these processes generates a new crisis of control because of the loss of authority at the top levels held by the management team. As a result the next phase is suggested to be by Greiner (1972) as a coordination phase which provides a solution for the tensions created by evolutionary change in the last process but which is also a result of the revolution which occurs at the end of phase growth. In addition a popular concern on the matter of a collaboration structure for organisations which is similarly a concern highlighted in turn by Greiner’s (1972) assumption regarding the processes involved in the last growth stage for an organisation. He also believed that social control and the role of team working and other integral human resource factors are essential elements at this stage for organisations in that most successful international corporations are those based on successful strategic human resource management. To illustrate this more concretely an organisation Johnson & Johnson can be given. Johnson & Johnson competes in the mature segment of the global drug market successfully through the usage of continuous revolutionary innovation and at the same time in emerging markets through efficient development of technologies through revolutionary innovations reliant on skilled and motivated human resource elements to achieve these strategic goals, (Greco, 1996).

The engagement of Johnson & Johnson in both evolutionary and revolutionary changes is not an automatic result of business dynamics but is reflective of the desire for the organisation’s survival firstly rather than growth. This is because organisational solutions for present conflicts create problems for the next stage of growth hence understanding the nature of change is the significant element. Accordingly this reflects the psychological basis for organisational behaviour in that organisational actions presumed in the past determine much of what will happen in the future which addresses the need then for a historical understanding of organisational change. Additionally Johnson & Johnson operates as a highly decentralized company and has over 165 separate operating units, (Weber, 1992). This approach places a strategic emphasis on the autonomous groups while the CEO of the organisation also provides a sense of ownership and responsibility for the business overview. In likewise fashion skilful leadership is significant in the control of each of the business units as it might arguably also provide obstacles for the growth of the company particularly in terms of possible organisational conflicts. According to Greiner (1972) when analysing the changing process of both evolutionary and revolutionary changes organisational age and size as well as culture are critical factors in determining the outcomes and process of these changes. In the case of Johnson & Johnson, the comparatively huge and complex structure requires a skilled management group which is good at exploiting the power of control and encouraging innovation at lower level business units. However there is a potential risk of a bureaucratic system developing for Johnson & Johnson which would lower responsiveness and adaptability to the vagaries of revolutionary and evolutionary change.

To a large extent successful implementation of change depends on effective human resource management strategies including employee career plans, training program and rewards, (Beaumont, 1992). Furthermore the leverage of a brand name into different product ranges requires each business group adapt their business level strategies correspondingly to the corporate strategies implementing the necessary evolutionary changes for the company. It is believed that incremental innovations are fundamental in reinforcing a company’s competitiveness thus they are strategic competence enhancing ones, (Cleland-Huang, Chang & Christensen, 1996). As a result the direction of revolutionary change for the growth of Johnson & Johnson remains unclear yet it is useful to be aware of the new characteristics of the economy and market in which it operates. For example there is an increasing role for political factors in determining the evolvement and the shape of the global economy in relation to pharmaceutical products, (O’Brien & Williams, 2004). This might have a potential impact on the evolutionary process for Johnson & Johnson due to the changing rules restructured by industrial regulations due to political reasons such as regulations in operating in developing countries. It is doubtful as to whether this will be a driving force for a revolutionary change but it will possibly require evolutionary adjustments in competing in global markets. This also reflects Greiner’s (2000) framework in which it is argued evolutionary assumption is a product of minor adjustment fuelled by temporal, spatial and environmental forces. The political influences on economic performance are largely addressed at the strategic decision making level for organisations so Johnson & Johnson needs to e aware of the increased involvement of government through regulatory actions, (Heracleous, 2003).

Based on Greiner’s (1972) outlining the nature of evolutionary and revolutionary changes in an organisation’s growth phases and the analysis of practical experiences of organisations, the differences between evolutionary and revolutionary changes are obvious. Evolutionary innovation is a relatively quiet period for an organisation with modest changes related to the accomplishment of growth. It is closely related to the organisational structure, systems and culture as well as external environment in which the organisation operates. Revolution in turn happens at the end of each discrete growth phase determining whether an organisation is able to move into the next growth stage successfully which is largely influenced in turn by the internal evolutionary innovations and external dynamics in particular the technology cycle which factor into the growth processes of the organisation. However within this model different organisations have unique strengths and weaknesses thus there are mini phases with the five norms defined by Greiner (1972) in various organisations. However in considering these characteristics such as the internationalisation and globalisation of business and the resultant intense competition for organisations from these trends have created new dynamics within all companies, (Chesher & Kaura, 1999). Both organisations and individuals have been to be subject to an unprecedented rate of change in the way they pursue and are involved in business and commercial opportunities in the 21st century, (Kalakota, 1999).

One of the most important new businesses forms is e-commerce and this will arguably continue to be a principal dynamic for organisations as the use of the Internet spreads. This provides a consideration that due to this new development of specifically e-commerce organisations which is highly related to the development of technology patterns of evolutionary and revolutionary change might display significant differences compared with traditional organisations due to the new territory being explored by such organisations. This is because by using intranet communication channels creates more effective and leads to the result of a flatter organisational structure. A free information flow provides advantages for evolutionary change and avoids communication barriers which might arise during the process of change. It is reasonable to believe that the performance of successful evolutionary change will be enhanced. However new form of organisational structures will shorten the structural changing processes as mentioned before and will require effective strategic management at the early stages of growth. Therefore structural revolution might not happen step by step but start from phase 3 or phase 4. In this sense the emergent crisis which occurs in the first stage may be the same as traditional organisations and the decreasing organisational structural problems might unduly influence response and adaptability to revolutionary changes.

While revolutionary change is considered the most risky and stressful for management, Henderson, McAdam and Parkinson (2005) also argue that the stresses present within an evolutionary change is crucial for an organisations’ later adaptation. This is largely related to the organisational culture which provides certain values, beliefs and rules of both managerial behaviour and employee performance, (Jones, Jimmieson & Griffiths, 2005). Therefore the reshaping of culture is also an important driving force for revolutionary change. In relation to the requirement of the final growth phase in terms of social control and self-discipline defined in Griener’s (1972) framework the role of culture in shaping organisational change has become increasingly significant and will continue to do so.

References

Baars, B.J. (1986) The Cognitive Revolution in Psychology, The Guildford Press, New York USA.

Beaumont, P.B. (1992) The US Human Resource Management Literature, in Salaman et al (eds) Human Resource Strategies, Sage, London UK.

Chesher, M. & Kaura, R. (1999) Electronic Commerce and Business Communications, Springer-Verlag London Limited, UK.

Cleland-Huang, J, Chang, C.K & Christensen, M. (1996) Event-Based Traceability for Managing Evolutionary Change, IEEE Transactions on Software Engineering, Sep. Vol. 29 Issue 9.

De Simone, M. (2002) Evolutionary, not Revolutionary, Changes Seen for Financial Services, National Underwriter/ Life Health/Financial Services edition, Nov. Vol. 106 Issue 45.

Greiner, L.E. (1972) Evolution and Revolution As Organizations Grow, Harvard Business Review, July/August.

Greiner, L.E. (1998) Revolutions Still Inevitable, Harvard Business Review, May-June.

Greiner, L.E. (2000) Patterns of Organization Change, Harvard Business Review, May/June, Vol. 45 Issue 3.

Greiner, L.E. & Cummings, T.G. (2004) Wanted, Journal of Applied Behavioral Science, Dec. Vol. 40 Issue 4.

Greco, J. (1996) Stories for Executive Development, Journal of Organizational Change Management, Vol. 9 Issue 5.

Heracleous, L. (2003) Strategy and Organization: Realizing Strategic Management, Cambridge University Press, UK.

Henderson, J., McAdam, R. & Parkinson, S. (2005) An Innovative Approach to Evaluating Organisational Change, International Journal of Technology Management, Vol. 30 Issue 1/2.

Jones, R.A., Jimmieson, N.L. & Griffiths, A. (2005) The Impact of Organizational Culture and Reshaping Capabilities on Change Implementation Success: The Mediating Role of Readiness for Change, Journal of Management Studies, March Vol. 42 Issue 2.

Kalakota, R. (1999) E-business: Roadmap for Success, Addison-Wesley, UK.

O’Brien, R. & Williams, M. (2004) Global Political Economy: Evolution and Dynamics, Palgrave Macmillan, UK.

Pettigrew, A.M. & Massini, S. (2003) Innovative Forms of Organizing: Trends in Europe, Japan and the USA in the 1990s, in Pettigrew et al (eds) Innovative Forms of Organizing, Sage Publications, London UK.

Tushman, M.L. & O’Reilly III, C.A. (1996) Ambidextrous Organizations: Managing Evolutionary and Revolutionary Change, California Management Review, Vol. 38, No.4 Summer.

Salaman, G. & Asch, D. (2003) Strategy and Capability: Sustaining Organizational Change, Blackwell Publishing Ltd, UK.

Weber, J. (1992) A Big Company That Works, Business Week, May 4.

Whittington, R. & Melin, L. (2003) The Challenge of Organizing/ Strategizing, in Pettigrew et al (eds) Innovative Forms of Organizing, Sage Publications, London UK.

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