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Change Dynamics Culture, Values and Change

Leadership and Change Wednesday; January 31, 2007 Khurram Aziz SBE UMT, Pakistan

Session Plan

1.

The impact of organizational Culture and reshaping capabilities on Change implementation success: The mediating role of readiness for Change. A new framework for managing Change across Cultures. If you want strategic Change, dont forget to Change your Cultural artifacts. Cultural Leadership organization. in

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SBE - UMT

Culture and Change

2

Some basic Ideas Organizational Culture: Pattern of shared values and norms that distinguishes one organization from another. Indicate what is believed to be important in the organization what is of value to organizational members. Indicate how things are done in the organization. Provide direction and meaning for the organizations members. Energize organizational members in the pursuit of organizational purpose. Culture is organizations personality.(as quoted in Higgins & Mcallaster, 2004)

SBE - UMT

Leadership and Change

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Some basic Ideas cont. Change: Means several things. Sometimes refers to the external world of technology, customers, competitors and such like. Sometimes refers to internal changes such as practices, styles and strategies.(Senge, 2001)

Change can also be the change in shared assumptions, values and practices of organizational factors as they are stimulated by changes in the environment.(as quoted in Higgins & Mcallaster, 2004)

SBE - UMT

Leadership and Change

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The Impact of Organizational Culture and Reshaping Capabilities on Change Implementation Success: The Mediating Role of Readiness for Change

Renae A. Jones, Nerina L. Jimmieson and Andrew Griffiths, Journal of Management Studies 42:2 March 2005

Rationale . R u ready? While the failure of planned organizational change may be due to many factors, few are so critical as employees attitudes towards the change event. Schein (1987, 1988, 1999) has addressed the failure of organizational change programs by arguing that the reason so many change efforts run into resistance or outright failure is traceable to the organizations inability to effectively unfreeze and create readiness for change before attempting a change induction. Organizations often move directly into change implementation before the individual or the group to be changed is psychologically ready. This attracted researchers attention.

SBE - UMT

Leadership and Change

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Readiness for Change Readiness for change is the extent to which employees hold positive views about the need for organizational change and the extent to which employees believe that such changes are likely to have positive implications for themselves and the wider organization.(Armenakis et al., 1993; Holt, 2002; Miller et al., 1994).

SBE - UMT

Leadership and Change

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Theoretical Framework

Employees perception of Human Relation Values Culture Employees perception of Level Of Readiness for Change

Employees perception of Open System Values Culture

CHANGE IMPLEMENTATION SUCCESS

Reshaping Capabilities

SBE - UMT

Leadership and Change

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Theoretical Framework

Employees perception of Human Relation Values Culture

Employees perception of Level Of Readiness for Change

Employees perception of Open System Values Culture CHANGE IMPLEMENTATION SUCCESS

Reshaping Capabilities

SBE - UMT

Leadership and Change

9

Research Hypothesis .. Employees who perceive a human relations cultural environment within their division would report higher levels of user satisfaction and system usage and this relationship would be mediated by their ratings of readiness for change . (H1a) Employees who perceive an open systems cultural environment within their division would report higher levels of user satisfaction and system usage and that this relationship is mediated by their change readiness perceptions (H1b) Employees who report high levels of reshaping capabilities within their divisions would also perceive heightened levels of readiness for change which, in turn, would be predictive of change implementation (H2)

SBE - UMT

Leadership and Change

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The Competing Values FrameworkFlexibility I N T E R N A L Human Relations End Cohesion and Morale Means - Training and Development, Open Communication and Participative Decision-Making. Internal Processes End Stability and control Means - Information management, precise communication and databased decision-making. Open Systems End Innovation and Development Means Adaptability and Readiness, Visionary Communications and Adaptable Decision-Making Rational Goal End Efficiency and Productivity Means - Goal-setting and planning, instructional communication and centralized decision-making. E X T E R N A L

Control

SBE - UMT

Leadership and Change

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Reshaping Capabilities - I Leading organizations in the current and future global markets will be those that can demonstrate timely responsiveness to effectively coordinate and redeploy external and internal competencies (Teece and Pisano, 1994) Penrose (1959); Teece (1982) and Wernerfelt (1984) acknowledged the concept of organizations being flexible in manipulating current capabilities and developing new ones. Recently, researchers have begun to focus on capabilities needed to respond to shifts in the internal and external environment, more concisely, the capabilities needed for change (Teece and Pisano, 1994). Capabilities required for successful change have been specifically addressed by Teece and his colleagues who refer to these capabilities as dynamic capabilities (Teece and Pisano, 1994; Teece et al., 1997). Dynamic capabilities refer to the capacity to renew competences so as to achieve congruence with the changing business environment.

SBE - UMT

Leadership and Change

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Reshaping Capabilities - II Turner and Crawford (1998) discussed organizational capabilities needed for change. Differentiated between operational capabilities and reshaping capabilities. Operational capabilities are required for sustaining everyday performance. Generally do not help organization to manage change effectively. The capabilities needed to achieve change implementation success are very different from those required for current business performance. Proposed a taxonomy consisting of engagement, development, and performance management capabilities.

Engagement is based on informing and involving organizational members in an attempt to encourage a sense of motivation and commitment to the goals and objectives of the organization. Development involves developing all resources and systems needed to achieve the organizations future directions. Performance Management involves proactively managing the factors that drive the organizations performance to ensure it consistently and effectively achieves the intended change.

SBE - UMT

Leadership and Change

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Measures . Organizational Culture; Using Zammuto and Krakower (1991), Instruments asks employees to indicate the extent to which their organizations possesses characteristics associated with each of the four culture types. Along five dimensions. Dimensions include character, leadership, cohesion, emphases and rewards.

Reshaping Capabilities. Ten items were developed for use in the present study based on Turner and Crawfords taxonomy of engagement, development and performance management. Respondents were asked to indicate the existing strength or weakness of each capability for their division on a five-point scale, ranging from 1 to 5.

SBE - UMT

Leadership and Change

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Measures . Readiness for Change: Measured with a 7 item scale designed to assess the extent to which employees were feeling positive about the changes. Scale was constructed ranging from 1 (strongly disagree) to 7 (strongly agree).

User Satisfaction: Measured with the End-UserComputing Satisfaction Instrument (Doll and Torkzadeh, 1988), consisting 34 item designed to measure five aspects of user satisfaction (i.e., accuracy, content, user friendliness, format and timeliness). Participants responded to each item on a five-point scale, ranging from 1 (almost never) to 5 (almost always).

System Usage: Consisted of a single item. Responses were made on a 5point scale, ranging from 1 (never) to 5 (all the time).

SBE - UMT

Leadership and Change

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Methodology State Government department in Queensland Australia. About to implement an end-ser computing system effecting all employees within the organization. Implementation strategy was incremental with three pilot stages and a roll-out to all employees. Temporal study, predictors are measured at Time T1, just prior to implementation.

Outcome variables were assessed at Time 2 (T2), approximately five weeks after collection of T1 data. Questionnaires posted to all employees (N=572), response rate 27%. Multi-item scales were used to ensure adequate measurement of each variable. Reliability was ensured using Cronbachs alpha coefficient.16

SBE - UMT

Leadership and Change

Research Results .. H1b not supported Lack of support for Hypothesis 1b might be explained by a study conducted by Cooper (1994) who examined the compatibility of different types of information systems across the four culture types represented in the CVF. Suggested that implementation of information systems that are incompatible with the cultural values of the organization will result in less than successful change outco