You are on page 1of 16

Master of Business Administration- MBA Sem IV MU0018 Change Management 4 Credits (Book ID: B1339) Assignment Set- 1

Q1. Explain the Greiner's Growth Model of organizational growth in detail. Ans - Greiner's Growth Model describes various phases that organizations go through
as they grow. All kinds of organizations from design shops to manufacturers, construction companies to professional service firms experience these phases. Each growth phase is made up of a period of stable growth that is followed by a "crisis" when there is a need for major organizational change if the company wants to continue growing.

Crisis here means positive turning point or transition. Originally, Larry E. Greiner proposed this model in 1972 with five phases of growth. Later on he added a sixth phase [12] (Harvard Business Review, May 1998). All the six growth phases are described below:

Phase 1: Growth through creativity: This phase is characterized by the following: Technically or entrepreneurially oriented founders. Frequent and informal communication. Long hours and modest salaries. Reactive to marketplace feedback.

Here, the entrepreneurs who have founded the firm will be busy in creating products and opening up markets. There wont be many staff, so informal communication is allowed. Rewards for long hours are through profit share or stock options. However, as more staffs join, production expands and capital is provided then there will be a need for formal communication. The leadership crisis: As the company grows, new systems will be in demand such as manufacturing, accounting, personnel, etc. The founders usually are not experts who manage this new set of systems and cant motivate new employees. This is called Leadership Crisis and phase one ends with this crisis. At this time the company might bring the management that can manage in this new environment or may struggle as founders and try to maintain the old guard. Phase 2: Growth through direction: This phase is characterized by the following: Functional organization structure. Accounting systems. Formal and impersonal communication. Concentrate on directing the new, top managers.

Growth continues in an environment that has formal communications, budgets and that focus on separate activities like marketing and production. As a financial reward, incentive schemes replace stock. However, the situation arises where the products and processes become abundant and there wont be enough hours in the day for one person to manage them all. It is not possible for that one person to know much about all these products or services as that of people in the lower hierarchy. Autonomy crisis: As the company grows further, centralized management becomes inappropriate. Lower level managers gain better knowledge of the marketplace but wont be able to react quickly. The second revolution comes from a demand for greater independence.

By this, the solution to the first phase becomes the crisis for the second phase. The solution to this crisis is to push decision-making responsibility to lower levels. Managers who fail to do this will see their companies being passed by quicker organizations. Phase 3: Growth through delegation: This phase is characterized by the following: More responsibility in the place and field marketing managers Use of profit sharing and bonuses for incentives Managing of exclusion by top managers Activating management through acquisitions Infrequent communication from the top

Control crisis: Field operations will be broadened and inefficiencies come into the system. Top management loses power over planning, money, technology, and manpower. Narrow-mindedness in field operations symbolizes this new revolution. Management must solve it by adopting and implementing special coordination techniques. Phase 4: Growth through coordination and monitoring: This phase is characterized by the following: Merging of decentralized units into product groups. Establishing and reviewing formal planning procedures. Hiring staff at headquarters to initiate company-wide programs. Reviewing and distributing capital expenditures across the organization. Measuring field operations through the criteria of Return-on-Capital. Centralizing technical functions such as data processing. Using stock options and profit sharing to encourage identity with the firm.

Growth continues with the previously isolated business units re-organized into product groups or service practices. Investment finance is owed centrally and managed according to Return on Investment (ROI) and not just profits. Red tape crisis: A lack of confidence starts between the line and the staff, and between the headquarters and the field. Systems begin to survive their usefulness and field managers begin to dislike formalized control by staff managers who do not understand the local markets. Staff personnel dislike the uncooperative line managers. The organization becomes unmanageable and everyone starts disliking the bureaucratic system that has evolved. A new crisis will come into being.

Phase 5: Growth through collaboration: This phase is characterized by the following: Focusing on solving problems through team action. Forming teams for various departments. Reducing and reassigning headquarters staff to teams that consult field units. Developing a matrix organization structure. Simplifying and combining formal systems. Holding conferences for key managers frequently. Utilizing educational programs to train managers. Using real-time information systems in decision making. Equipping with economic rewards for team performance. Encouraging experiments in new practices.

Growth crisis: Here, Greiner guesses about the solution to this new crisis that comes from employees who turn saturated emotionally. They become exhausted both emotionally and physically by the intensity of teamwork and the heavy pressure for innovative solutions. He illustrates this with a European company that created a structure that allowed employees to include a reflective period in their daily activities. Phase 6: Growth through extra-organizational solutions: Greiner's added this sixth phase recently and it suggests that growth may continue through merger, outsourcing, networks and other solutions involving other companies.

Q2. Explain any two Process based change models. Ans - Process based change models focus on the actual steps as, how of
organizational change process. All the models in this category deal with the sequences of steps that are used to bring about changes in an organization and interventions related to it. Some of the process based models are: Lewins Model of Change. Planning Model. Model of the Change Management Process. Integrative Model for Planned Change. Scheins Model of Change.

Action Research Model.

a) Lewins model of change


This is one of the early models of planned change. It states that organizational change moves from one static state through a progressional shift to another static state. In this model, change affects three levels-individual level, structure and systems level, organizational climate. This model consists of the following three steps to provide a basis for change at all the levels in the organization: 1. Unfreeze: This step involves creating the right situation for the change to occur. By refusing change, people connect to a sense of identity to their environment. In this step, the alternatives though are beneficial, will initially cause discomfort. The challenge here is to move people from this 'frozen' state to 'unfrozen' state. 2. Changing/transition: This transition is considered as a journey at this level and at the psychological level it is considered a period of confusion. The final goal of this stage is to get people to the 'unfrozen' state and keep them there. 3. Refreeze: The goal here is to achieve refreeze, re-establish stability and comfort level of people. It takes people from low productivity in the transitional stage to a productive state.

Lewins model of change

b) Planning model
This model was initially proposed by [5]Lippit et al. (1958) but later modified by Kolb and Frohman (1970). This model proposes seven-steps for change. This plan states that

there should be free sharing of information between the organization and the change agent. This information must be further translated into action.

Planning Model
This model goes through series of steps. In the first step, organization and change agents together explore the need for and the areas that require change. They enter into it. This will be followed by diagnosing of specific goals towards improvement. Changes cannot be made without handling resistance so reasons for resistance will be identified and worked out and then planning will be done for specific improvement. This plan will be put into action which is next step and followed by evaluation and termination of the system or to begin another.

c) Model of the change management process


Galpin (1996) proposed this model and states that a successful organizational change effort should target two levels-the strategic level and the grassroots level. Strategic level refers to up-front, initial effort involving executives, senior managers, few employees, and consultants who provide an outside view. Grassroots level drives changes deeply and stresses on implementation at the local levels. This model involves nine stages: 1. Establishing the need for change. 2. Developing a vision of change. 3. Diagnosing the current situation. 4. Generating change recommendations. 5. Detailing recommendations. 6. Testing of pilot. 7. Preparing recommendations for roll out. 8. Rolling out changes. 9. Measuring, reinforcing, and refining changes. All these stages showcase creating and implementation of changes in the organization.

d) Integrative model for planned change


Bullock and Batten (1985) proposed this model to describe both temporal states and change processes involved in change. It is based on the principle that organization exist in different states at different times. This model involves four

Integrative model for planned change

e) Scheins model of change


Schein (1987) extended Lewins basic model and included newer concepts. This model has been explained next: Unfreezing: According to Schein, unfreezing is a process for creating enthusiasm and readiness for change. Cognitive restructuring/ redefinition: It is a process by which an enthusiastic learner can learn something new that is related to his thought processes, feelings, values, and attitudes. Defensive identification with a role model: When a learner is motivated to change, that person realizes that a concept may be interpreted in different ways than ones own. So one can adopt new perspective that facilitates change. A very good example for this is brainwashing.

f) Action research model


This model is proposed by [9]Cummings and Huse (1989). It is assumed that planned change is a cyclical process. This model proposes that organizations need to undertake research initially to have adequate information that guides in their future action. This model involves eight steps and they are as follows: 1. Identifying the problem. 2. Consulting an expert. 3. Gathering data and diagnosing at preliminary level. 4. Collecting feedback. 5. Diagnosing the problem jointly. 6. Planning of action jointly. 7. Action. 8. Gathering of data after action.

Q3. Describe in detail transformation through McKinseys plan. Ans - The McKinseys Plan gives the ten ways of transformation for an organization.
I. II. III. IV. V. VI. VII. VIII. IX. X. Organize mainly the processes not the task. Minimize the subdivision of processes. Give in charge of the change process to the senior persons. Link the objectives to the customer satisfaction. Focus mainly on the teams rather than the individuals. Focus on combining both the managerial and non managerial activities as much as possible. Focus more on the development of competencies among all the individuals. Inform and train the people without the delay. Increase the supplier and customer contact with all the individuals in the organization. Reward the skill development and team performance rather than the individual performance alone.

Q4. What are the skills and ability required for the role of change agent? Ans - The change agents design and implement the changes to help the organization
to respond to the demands of the dynamic economy. According to [3] Sims the new economic environment gives tremendous demands to the change agents. Change agents play an important role to assist change implementation. They educate, guide, coach and facilitate the employees and management who are a part of change process. They play a helpful role for the organization in bringing the change and in achieving the objectives of the change. According to Balogun and Hope Hailey the roles of the change agent include external facilitation, leadership and good entrustment. Hutton suggests that the role of the change agent is to support top management to bring about determined transformation of the organization. According to Hutton the transformation process: Helps the employees to think different about the work. Change the norms of the organization that includes the usual work practices. Change the organizations systems and procedures to improve and achieve the objectives of the change. According to Spence there are four fundamental and crucial roles of the change agent. They are: Observer: The change agents have to observe the environment, processes, attitudes and behavior of the employees within the organization before implementing the change process. The first and the most important task of the change agent is the observation. Diagnostician: The judgments based opinions are ineffective. Therefore the change agent should analyze the information that they have gathered and should have the idea about the change process. Thus the diagnostic process should be based on sufficient information available. Strategist: The change agent is a policy maker and a planner. The change agent should be strategist in taking many decisions. The action of the strategist is to identify the problem on addition to it the strategist should emphasis the fact that there are many ways of handling a particular problem.

Stimulator: Spence suggests that it is good to stimulate others instead of taking actions alone and this makes the role of the change agent to achieve many objectives of the change process. The advantages are identified below: Encouraging the individuals to participate and that in turn helps the change agent. Avoiding the change agent from going wrong in any areas. Making the change agent to act as both advisor and assessor or evaluator. Increasing the confidence level of the employees. A change agent should be a good sensor of the business environment. Function vertically and horizontally. Have good leadership skills in all the levels. Be a manager as a catalyst. Perform with shorter time-frame perspective. Be a good balancer in work and personal life. Have a good knowledge of information. For an effective change agents need to be an expertise in the following area. They are: Strategy formulation. Human resource management. Marketing and sales. Negotiation or conflict resolution. The change agents are required to follow the steps to achieve successful management of change in an organization.

Generally the most important contribution made by the change agent role is to maintain the organizations present performance and make the future performance effective that includes: Enabling the employees to work effectively to plan, implement and to experience change and managing the future change and increase the employees ability. According to Dave Ulrich the successful change agents had the ability to: Diagnose a problem that is to understand the organization and the business drivers and should

recognize performance issues, analyze the results of impact on short and long term business. For Example, the management consultant Ric Reichard uses an easy method to discuss the issues Trust = (perceived competence + relationship)/RISK. From the above competencies, the skills required for the effectiveness of change agent are to: Communicate effectively in all the directions. Know well about the organization, business, products, services and work processes. Keep a business perspective in both macro and micro, that is to have a vision on how mangers manage. Plan effectively and possess project management skills. Managing resistance and risk. Managing conflict. It is noticeable that the above features are the combination of personal attributes and skill sets that is required for the change agent to be effective.

Q5. Describe managing change during turbulent times and setting clear expectations. Ans - Due to an unhealthy economy, all of us are working in turbulent times and
organizations are under deep pressure, and reacting with aggressive thriftiness measures such as reducing, restructuring, rescheduling, and merging with competitors or strategic alliances. They are also closing unprofitable facilities, moving managers to open work environment from private offices. Effective working is very important when few employees are present in an organization, it is seen that in the current world only the strongest organization survives for a longer period. During the turbulent times the leaders focus on managing a balance between cost cutting and supporting the employees to serve in a better way to the organization. The enterprises that emerge from considerable organizational changes are stronger and more competitive and are more focused on the effectiveness of the employee this is done by increasing productivity through teamwork and collaboration, rising organizational innovation, enforcing responsibility at all levels, making the workplace to attract, inspire and to retain talent and to accommodate the needs of multigenerational workforce.

Economic and world events brought unexpected changes inflation, productivity challenges, technology shifts, and global competition all hit the business world at about the same time and made the classical planning methods suddenly outdated. For example, Siemens organization has successfully beaten their competition by significantly increasing their productivity of capital or resources. Another effective method of managing in turbulent times is strategic assignment of critical resources. The managers need to be smart about selecting areas of potential results and allocating resources consequently. In chaotic times, there is a natural tendency to use resources to solve current problems, but the top priority should be given to the areas of potential opportunities. Drucker suggested managers to avoid working on problems that were important in the past and that was not expected to be beneficial in the future. To manage the change in the organization effectively setting clear expectation or goals are necessary within the organization. The organization should provide clarity about the most critical elements of the change by explicitly bringing out the implications and expectations for the employees. It is important to focus on employees to do the work that is required and it is essential for the organization to be clear about the employees needs and to ensure that the needs of the employees are satisfied. The managers set their expectations and follow them. The managers or the leaders should: Demonstrate strong ethics. Ensure confidentiality in the organization. Show empathy for the emotional and personal effects of change and be available and listen to the employees concerns. Ensure the communication of key event and activities, that is to provide details on who, what, when, and where as known. Programme regular updates for all team members in the organization. Communicate the decisions and justify and to recognize that individual have various communication needs. Manage the change and undertake the obstacles to bring effective change in the organization. Focus on delivering value in running and changing the business. Stick to fated timelines and processes and act according to the agreements.

Q6. What are the five disciplines associated with the organizational learning? Ans - There are mainly five disciplines associated with the organizational learning.
They are:

The five core disciplines in the organization learning can be explained as follows: Systems thinking: This is an art which mainly focuses on relationship of many parts of the system. This helps to work with the system rather than against the system. It also helps to learn something about the systematic behaviors. Team learning: This happens when the people are working together in a group on something. The people can learn more when they are working in a team rather than individually since different people will have different ideas in the team. Shared vision: This will only happen when all the individuals in the organization know the vision of the organization and know what the company is doing. This needs the commitment of all the individuals to work towards achieving the goals. Mental models: These associate with how the world works and these include the beliefs and assumptions. This totally involves the decisions we make at every stage of life. Personal mastery: This involves the name you have to make in the lifetime. This helps you to achieve your personal goals by making use of the personal mastery in an honest way. There need to be willingness from the heart to make efforts and take risks. Apart from the disciplines which are core to the organizational learning there are also some of other disciplines which are helpful. They can be explained as follows:

Corporate culture: This influences the environment in which we work every day. This includes the factors like policies, beliefs, activities and rituals that define the personality of the organization. The culture of the company can increase or decrease the capacity to learn, encourage the creativity and so on. This can be well maintained by carefully maintaining the behaviors with everyone in the organization. Corporate social responsibility: This explains how the business world affects the society around it. The social responsibility of the corporate mainly focuses on these interconnections. Dialogue: This is the discipline which plays an important role in the communication. This provides the tools and techniques, which is difficult to follow at first and becomes easy as it is practiced. Leadership: This mainly focuses on the roles of managers and leaders for the success of the change process in the organization. This involves the movement of an organization leadership from the traditional to the more flexible, self organizing leadership. Sustainability: This mainly focuses on the sustainability of an organization in regard to the resources of the organization. If we continuously use the resources there may be depletion of resources. So the sustainability helps us to manage the human needs with the natural cycle. Work/life balance: It mainly concentrates on how to balance both the work and non work life. This requires the proper decision to be taken to set the priorities both for the work and non work lives.