MGT-521: Managing Dynamic Environment - Module 03: Critical Thinking

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SEU_MGT521_Mod03_PPT_Ch03.pptx

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Chapter 3: What to Change in an Organization: Frameworks

Chapter Overview

Change leaders must understand both the HOW and the WHAT of change. The focus here is on WHAT needs to change

Open systems organizational frameworks are valuable assessment tools of what needs to change. Nadler and Tushman’s Congruence Model is explored in detail

The non-linear and interactive nature of organizations is explored to make sense of their complexity

Quinn’s competing values model is used to create a bridge between individual and organizational levels of analysis

Organizational change over time is discussed

The Change Path Model

Use Diagnostic Frameworks in Ch.3 to better understand:

How to Change &

What to Change

Awakening

Chapter 4

Acceleration

Chapter 9

Institutionalization

Chapter 10

Mobilization

Chapters 5 through 8

Open Systems Perspective

Organizations exchange information, material & energy with their environment. They are not isolated

A system is the product of its interrelated and interdependent parts

It represents a complex web of interrelationships, not a chain of linear cause–effect relationships

Dynamic Complexity because Systems are:

Constantly changing

Tightly coupled

Governed by feedback

Nonlinear

History-dependent

Self-organizing

Adaptive

Characterized by trade-offs

Counterintuitive

Policy resistant

Open Systems Perspective (cont.)

A system seeks equilibrium and one at equilibrium will only change if energy is applied

Individuals within a system may have views of the system’s function and purpose that differ greatly from those of others

Things that occur within and/or to open systems should not be viewed in isolation. See them as interconnected, interdependent components of a complex system

Nadler & Tushman’s Organizational Congruence Model

Input

Environment

(PESTEL)

Resources

History / Culture

Output

Systems

Unit

Individual

Informal Organization

Work

Formal Organization

People

Strategy

Transformation Process

Nadler & Tushman’s Organizational Congruence Model

Input

Environment

(PESTEL)

Resources

History / Culture

Output

Systems

Unit

Individual

Informal Organization

Work

Formal Organization

People

Strategy

Transformation Process

Environmental Pressures for Change

Analyzing Organizations Using Nadler and Tushman’s Model

Use the congruence model to describe your organization or an organization you are familiar with. Categorize the key components (environment, strategy, tasks, etc.). What outputs are desired? Are they achieved?

Is the strategy in line with organization’s environmental inputs? Are the transformation processes aligned well with the strategy? How do they interact to produce the outputs?

When you evaluate your organization’s outputs, are there things your organization should address?

Are there aspects of how your organization works that you have difficulty understanding? If so, what resources could you access to help with this analysis?

Linear Event View of the World

Goal

Situation

Gap / Problem

Decision / Action

Results

Issues & Problems with the Linear View

Time delays and lag effects related to variables and outcomes you are trying to manage (e.g., inventory stocks and flows, customer satisfaction and purchase decisions)

Complexity makes cause–effect relationships difficult to predict and track

Attribution Errors and False Learning often result from the above

A Feedback Model

Decisions

Environment

Decisions

But Feedback Models are Messier

Goals

Decisions

Environment

Goals of Others

Action of Others

Side Effects

Quinn’s Competing Values Framework

Flexibility

Control

Internally Externally Focused Focused

Quinn’s Competing Values Framework (cont.)

Flexibility

Control

Internally Externally Focused Focused

Human Resources View

Open Systems View

Internal Processes View

Rational Economic View

Quinn’s Competing Values Framework (cont.)

Flexibility

Control

Internally Externally Focused Focused

Human Resources View

How to work with individuals and groups

Teamwork and HR dept.

Mentor and group facilitator roles

Open Systems View

How to use power and manage change

The challenge of change

Innovator and broker roles

Internal Processes View

How to understand & control the work unit

Consolation and continuity

Internal monitor and coordinator roles

Rational Economic View

How to stimulate individual and collective achievement

Maximization of output

Producer and director roles

Greiner’s Five Phases of Organizational Growth

Stacy’s Complexity Theory and Organizational Change

Organizations are webs of nonlinear feedback loops that are connected with individuals and organizations through similar webs

These feedback systems operate in stable and unstable states of equilibrium, even to the point at which chaos ensues

Organizations are inherently paradoxes, pulled by forces of stability and instability

Stacy’s Complexity Theory and Organizational Change (cont.)

If organizations give into forces of stability, they become ossified and change impaired

If organizations succumb to forces of instability, they will disintegrate

Success is when organizations exist between frozen stability and chaos

Stacy’s Complexity Theory and Organizational Change (cont.)

Short-term dynamics (or noise) are characterized by irregular cycles and discontinuous trends, but long-term trends are identifiable

A successful organization faces an unknowable specific future because things can and do happen

Agents can’t control the long-term future—they can only act in relation to the short term

Long-term development is a spontaneous, self-organizing process that may give rise to new strategic directions

It is through this process that managers create and come to know the environments and long-term futures of their organizations

Summary

When assessing organizations, think of them as open systems—webs of interconnected and interdependent relationships that interact with the environment

Change often originates in the external environment.

Change upsets the internal equilibrium in an organization and thus may be resisted.

Both evolutionary and revolutionary change is needed for organizational growth

We need to understand the WHY and WHAT of change.

Models in this chapter have focused on the WHAT of change

Change is not clean and linear—it is messy

Evolution stages

Revolution stages

Size of

organization

LARGE

SMALL

YOUNG

Age of Organization

MATURE

1: Growth through

CREATIVITY

1: Crisis of

LEADERSHIP

2: Growth through

DIRECTION

2: Crisis of

AUTONOMY

3: Growth through

DELEGATION

4: Growth through

COORDINATION

5: Growth through

COLLABORATION

3: Crisis of

CONTROL

4: Crisis of

RED TAPE

5: Crisis of ?

PHASE 1

PHASE 2

PHASE 3

PHASE 4

PHASE 5