What new challenges (or changes) are confronting management since the beginning of the 21st century? Please refer to your readings this week. Post should use in-text citations.

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New challenges confronting management

What new challenges (or changes) are confronting management since the beginning of the 21st century?

Please refer to your readings this week. Post should use in-text citations.

Introduction: Three Questions

Management of a work unit is not a question of whether or not you will direct change efforts, but is an issue of when and how. Here are three questions to consider for being an effective change manager. Each question goes beyond operational steps to help you deepen understanding of "why" this change at this time and how you can offer more effective interaction with those reporting directly to you.

â?¢ How do customers and their needs drive organizational change?
â?¢ What is the role of direct reports for innovation within a company or work unit?
â?¢ When developing a strategy or plan to roll out important company changes, how should a manager view existing organizational structure?

At-a-glance Definitions:

â?¢ Organizational change: A plan or set of new ideas and behaviors desired by leaders; change is likely to include culture, but it is only within the past five years that culture has been widely discussed as central to effective change. Organizational change is usually undertaken with the intention of developing or expanding company markets, products and services (i.e. organizational development is a subset of organizational change).

â?¢ Organization development: A set of plans and actions which enable company and work unit changes in culture. These tasks and interactions focus on human and social aspects to improve capacities for adapting and solving problems. OD interventions are participatory at multiple levels within a company, government or nonprofit organization.

â?¢ Organizational culture: Core values, rituals, and expected activities of a company, nonprofit or business. These factors answer the questions: What`s important to the company and how is work done in this unit? Group norms reflect a work unit`s culture. In comparison to national culture, some organizational cultures are stronger and some are not. The balance between organization and country culture is an emerging area of research and tensions between cultural values can increase during the stress of change. (See Module 6 for more information on the impact or role for an organization`s culture).

â?¢ Organizational culture change: Often overlaps use of term, "organizational development". Strategy specifically shifts how work is done in the organization to increase commitment and empowerment of employees, as well as it provides stronger ties between the company and its customers. Culture change of a work unit or company is difficult because it challenges established ways of thinking and embedded values which frame attitudes. Team building is a specific activity of an organizational culture change.

â?¢ Transformation: A significant change which cannot be accomplished easily or quickly, but is viewed as needed and worthwhile. A transformational change should be attentive to the culture of the business.

What Needs to Change: How to "see" those Factors

Organizational leaders will continue to face change management problems of innovation, performance and accountability, but the pace and complexity are at a magnitude never before experienced. As a result of the appetite for change to develop or expand products and services, it becomes important to consider how to cluster or group organizational change activities. Here are two (2) important categories for helping you to frame and see changes necessary to management.

â?¢ Incremental Change - Incremental change is improving existing structure, products and/or processes. Technology software and hardware often spark these types of change and much of the management activity takes place at the work unit level.

â?¢ Radical Change - Radical change is introducing new products, processes, and structures (re-structuring or re-engineering). Radical changes can include mergers or the introduction of a whole new organization in conjunction with (or replacement for) the existing organization.

Who Leads Organizational Change: The Role for "Agents"

Change comes about because people lead--they initiate the plans, describe the expectations and then direct accountability. When guiding change, a manager takes on the role of being an agent or exerts leadership among direct reports. Often, change agents build upon technological innovations such as new software. Other change agents start a change effort from the awareness of need for new products and services. And sometimes, a manager exerts leadership based on perceptions about the organization`s culture and a need to change it in order to survive. Certain department functions often become the spark for acting. For instance, research and development, marketing or senior level planning units can be change agents, too.

Another way to examine agency for change within an organization is to consider the change as driven by internal factors or external factors. Technology, a major force to for change and development, is primarily external because the innovations usually occur separately and are then purchased as a business service. In contrast, development of new products and services, or altering organizationalstructure, or developing organizational culture are internal agents because they are driven by recognition of the need for an internal response. The use of these categories can blend,but internal change often stems from the organization`s external environment. It`s important to understand that there are departments within an organization which serve an intrinsic internal function of promoting change. These departments include research and development, marketing and planning.

Mechanics of Change

Daft writes in detail about the mechanics of change and you may to review some of that information more closely. Often, managers want to consider the pros and cons of approaches to organizational or work unit change. But as you think about the change tools you will need as a manager, consider that the "techniques" of change are fairly constant. In contrast the "tools" of change (especially use of technology and particularly information technology) are not nearly so stable. For instance, more and more work units now apply group software practices, a more recent technology innovation, to refine, customize changes in products or services.

However, there are several key concepts on which you should aim to understand in order to be effective in your management of a work unit or organizational change. These concepts help recognize change, when it`s needed and how to introduce it:

â?¢ "Incremental change" and "radical change" are not mutually exclusive.
Each may incorporate the aspects of the other. Radical change, once introduced, often incorporates the aspects of incremental change. A new product, division, or process, once introduced, may then be rolled out via incremental changes, with priority given to resources in one department or work unit, then another. Incremental change such as adaptation of a software upgrade may provide important new information about customer desires, which in turn develops awareness of radical change, especially when improvement does not occur.

â?¢ Change is driven by IDEAS and by NEEDS.
One of the easier ways to keep the interconnections between ideas and needs in mind is to take a moment and review the University Art Museum case (Daft pp. 81-84). The original museum came about as a result of an idea of the founder further embellished by the ideas of Ms. Kirfoff, who led the museum for many years. However, over the course of those years, the art department, the art history students and the faculty came to rely on the museum for many things, such as exhibits and their catalogues. As a result of student, faculty and administrator reliance, decisions were driven by needs.

â?¢ Once a change is identified, it goes through three primary stages:
Adoption of the change (agreement as to what to do);
Implementation of the change (agreement as to how to do it);
Allocation of the resources necessary to effect the change (both fiscal and human resources).
Within these stages of change, certain techniques stand out. These include: a) attention to urgency when launching the change; b) finding task subsets of the adoption plan that are seen as highly "do-able" and then focus on those tasks to gain wins; c) detailed attention to ongoing communication supportive of implementation.

â?¢ Change can be administratively driven or it can be technically driven.
A decision by management to expand into new geographic markets as part of long range planning is an administratively driven change. Other administrative decisions could be decisions to emphasize certain brands or products, or give priority to particular services, such as the development expansion of a financial service operation. Technology often influences change in management of schedules and time. The decision of a brokerage sales force to shift from the traditional "9-5, Monday through Friday" workweek to a "24/7" workweek took advantage of the Internet`s ability to provide real time information on the fluctuations of foreign stock markets. Historically, most change was administratively driven, with attention to effective "top/down bottom/up" vertical communication. But with advances in technology, co-location of work units in many geographic settings, attention to 24/7 demands for services and products, technology will likely support devolved, lateral, team decision making and diversity of viewpoints for change strategy.

Change Requires Attention to Organizational Structure

There continues to be two basic forms for organizing work. (Consider returning to Module 2 and p 154 of Daft for another look at structure)

1. The mechanistic structure where the focus is concentrated on reporting relationships and control. These organizations are primarily hierarchical and vertical in form.
2. The organic structure, which is more horizontal and non-hierarchical, to allow for freer flow of ideas and for innovation.

However, as you learned in Module Two, there can be a blending of facets of the mechanical with the organic. Daft identifies this blending as an ambidextrous structure, which has a mechanistic structure but is sufficiently flexible to allow or encourage organic units within the organization. Often, such units result in a parallel approach: employees may work in teams or on projects that cut across organizational lines while simultaneously retaining their function and position within the hierarchical structure. The matrix and hybrid organizational structures are examples of ambidextrous structures.

But these structures need additional thinking when approaching specific change plans and activities. It can be important to your management success to take another analytical step. Daft (p. 428) refers to a dual core approach to organizational change. It is attentive to the administrative core (i.e., management and supervision) and the technical core (those activities that actually produce goods or services). Both functional cores can bring about change -- or obstruct it, making worklife very challenging to your management.

It may be the administrative core needs to be more responsive (e.g., the structure must be changed with likely re-organization in departments or work units as well as their reporting/management accountability) or it may be the technical core needs to be responsive (e.g., the processes, products or services need to be changed). For example, when Daimler Benz merged with Chrysler Corporation, decisions as to which country would serve as the headquarters, in what currency would employees be paid, which approach to executive compensation to adopt, etc., were driven by the administrative core. However, how much emphasis was to be placed on innovation v. reliability and whether or not to develop a "cross platform" vehicle were driven by the technical core. In fact, the ability of the technical core to develop a cost-effective cross platform vehicle eventually overrode the decision by the administrative core not to pursue that strategy. Evolving from the changes in strategies, Chrysler later became the leader in certain vehicle designs.

In the Chrysler example, you can perceive that changes require adjusting of priorities. Many -- but not all -- changes require re-setting goals by both administrative and technical cores concurrently or sequentially.

Considering Barriers, Consequences and Options

A mechanistic structure does not readily lend itself to change. On the other hand, organic structures become less effective as these organizations grow, which then sparks difficult transitions to more maturity and expansion.
Change does not come without effort and there are barriers consistently present for you as a manager to address. As Daft notes on p. 435, change in an organization can be slowed down, diverted or even thwarted by:

1. Excessive focus on the costs involved
2. Failure to perceive (or appreciate) the potential benefits of the change
3. Lack of coordination or cooperation, especially in those circumstances where two or more systems or structures (the old approach, an interim approach and a new approach, etc.) must coexist at certain points in time.
4. Avoiding uncertainty or risk
5. Fear of loss -- of power, of status and up to and including a fear of loss of employment itself.

Unintended Consequences and Development

Things go wrong. As much as 80% of new products fail upon introduction and an additional 10% disappear by the five year point; that is an "unintended consequence," unless you`re really looking for a tax write off! Even more serious unintended consequences can occur: product defect (Dell had to recall thousands of laptops because the batteries might explode), poor market reception (good-bye Oldsmobile and Plymouth), etc. How the organization responds to these unintended consequences and your role in managing unexpected consequences are important. Reactions and adaptations are also dependent in part on its structure:

1. A mechanistic structure will probably take longer to respond to an unintended consequence and will be slower in making the changes necessary. On the other hand, once the organization has determined its response, a mechanistic structure will probably be better able to sustain that response over an extended period of time.

2. An organic structure should be able to respond more quickly; however, it may not be as able to sustain that response over the long term because then there can be serious gaps in the administrative core.

3. The ambidextrous approach would appear to be, at first glance, "the best of both worlds." However, since it is in reality a hybrid organization, the balance between its mechanistic structure and the ability of the organic units to function quickly and independently would face an intense sorting out of priorities, and as a result, push and pull its management to respond well.

However, all is not lost. There are ways in which the culture of an organization, no matter how large or how old, can be altered to encourage change. As Daft notes on p. 431, some of the current encouraging factors are:

â?¢ Re-engineering is the commitment to radical redesign of organizational processes. Everything is open for discussion; there are (or should be) no "sacred cows" and no protected turf. This is one of the most radical approaches to organizational change. It needs particular and sustained management commitment.

â?¢ Diversity-- diversity of every type: ethnic, cultural, lifestyle, etc. -- is a fact of life for organizations, both in terms of their workforce and in terms of their customer base and potential customers. Diversity brings a wider range of viewpoints and perspectives for new ideas and innovation. This forces management to re-evaluate not only how they do things but also what they produce. Just consider the differing significance that the color red plays in Asian cultures (happiness, celebration) and in western cultures (danger, excitement) and its impact on virtually every aspect of marketing from product design to advertising.

â?¢ The Learning Organization is one that has developed an organizational culture that encourages the pursuit of information, especially attention to external trends and an organizational mindset for sharing of information freely.

Research Trends:

There are several fields and multiple themes describing organizational change, organization development, multinational growth, and influence of cultural dynamics. By far the larger field of research centers on the topic of organizational change (approximately 7400 published articles, 2005-09, with more than 2900 being peer reviewed). Of particular interest are a) diffusion methods across multiple work groups and b) metrics such as Return on Investment (ROI) applications.

â?¢ With the growth of multinational corporations, there a subset of studies, which emphasizes change processes more useful to large businesses. A recurring theme is strategic change for a multi-national must not only focus on what change, but also pay particularly attention to diffusion. A second theme is the role for research and development teams/groups, work units which appear to hold more skill and less resistance in larger, global companies. These units may informally be inclusive without much attention to the ways they address diversity and multi-culturalism, with more research needed as to how they adapt specifically.

â?¢ As attention to change research has increased, ideas have also expanded around topics of success, development and adaptation results. More than 60 research studies have been published in the past five years. One theme within the studies suggests that because organizations and workers have faced so many rounds of change, there`s the need to look at lessons learned within the company about past change efforts in order to avoid pitfalls and better assure success, particularly in terms of worker and manager turnover during more intense phases of organizational redesign (change) efforts.

â?¢ A second theme of study focuses on local markets and countries expanding their economies. In examining strategic business change, several case studies reported on the dynamics of China and Brazil in which there is workforce change. The results of these case studies suggest additional attention and resources needed for management.
Curious? Want to Know More?

Consider the UMUC online Library using these search words:
â?¢ Organizational Change
â?¢ Multinational and Organizational Change
â?¢ Transformation and the Organization
â?¢ Strategy Change and Development
â?¢ Strategy Change and Adaptation

Websites with research papers
â?¢ http://www.wmbridges.com
â?¢ http://www.beyondresistance.com
â?¢ http://www.ccl.org/leadership/research/sharing/index.aspx#whitePapers, website of the Center for Creative
Leadership, a research and practice center, focused on both the science and art of leading
â?¢ "Google" Rosabeth Kanter Ross, and use Harvard Business School link>Publications

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