Implementing strategic change

Definition of strategic change

Hofer and Schendel: changes in the content of a firms strategy as defined by its scope, resource deployments, competitive advantages and synergy. Process of bringing about relatively enduring alteration in the present state of strategies to compete with the rivals and their differentiated and integrated functions in totality or partially so as to attain greater adaptability and viability in the context of the current and emerging environmental developments.

Types of strategic change

Re-Engineering Re-Structuring Innovation Continuation strategy Routine strategy change Limited strategy change Radical strategy change Organizational redirection

Process of strategic change

Anticipating change Identifying the change Selling the change Assign responsibility Allocate resources Managing the transition state Supporting the change Evaluating the change

Issues in strategic change

Organizational politics Organizational power Organizational conflict

Power and Politics

A Definition of Power
Power A capacity that A has to influence the behavior of B so that B acts in accordance with As wishes. Dependency

Bs relationship to A when A possesses something that B requires.

Contrasting Leadership and Power

Leadership Focuses on goal achievement. Requires goal compatibility with followers. Focuses influence downward. Research Focus Leadership styles and relationships with followers Power Used as a means for achieving goals. Requires follower dependency. Used to gain lateral and upward influence. Research Focus Power tactics for gaining compliance

NATURE OF POWER:
Can be potential or enacted Represents the ability or potential to influence the behaviour of other people Leaders exercise power to accomplish the goals of the organization Judicious mixture of formal and informal

IMPORTANCE OF POWER:
Necessary for coordinated activities Basis for authority and responsibility

Bases of Power: Individual sources of PowerFormal Power/Positional Power

Formal Power Is established by an individuals position in an organization; conveys the ability to coerce or reward, from formal authority, or from control of information. Coercive Power A power base dependent on fear. Reward Power Compliance achieved based on the ability to distribute rewards that others view as valuable

Bases of Power: Formal Power (contd)

Legitimate Power The power a person receives as a result of his or her position in the formal hierarchy of an organization.

Information Power
Power that comes from access to and control over information.

Bases of Power: Personal Power(Informal)

Expert Power Influence based on special skills or knowledge. Referent Power Influence based on possession by an individual of desirable resources or personal traits. Charismatic Power

An extension of referent power stemming from an individuals personality and interpersonal style.

Functional and Divisional Power

Ability to control uncertain contingencies Substitutability Controlling task Controlling knowledge Controlling the contribution of HR Differentiation Centrality Ability to control and generate resources Visibility Dependability

Structural sources of Power

Knowledge as power Resources as power Decision making as power
Authority Power Legally enforced and is derived from Individual and independent and level of position in an organisation originates from charisma and social positioning Formal based upon subordinate relationship superior- Informal and is based upon individual understanding and

Related with position in an Linked with an individual organisation, it has limited scope and is transcends boundaries confined to organizational structure

Just and applied equally

May be used indiscriminately

Power Centers Power Center is a person who is in close vicinity of higher management and whom management trusts and takes feedback from. May not be in very important positions but acts as sources of information to the boss, Not necessarily in the same department How to use Power Centers? Use to advertise your achievements and plans Pass on negative information about your competitors Tell how others are making loss to the company Things to remember while dealing with them Identify and select more than one power center Selectively disclose things Make them feel important Never criticize the boss or the company

Tactics to gain Power

Creating and managing uncertainties Norm of reciprocity Identification with power centres Impression management Pressure building Competition Coalition Cooptation

Dependency: The Key To Power

The General Dependency Postulate
The greater Bs dependency on A, the greater the power A has over B. Possession/control of scarce organizational resources that others need makes a manager powerful. Access to optional resources (e.g., multiple suppliers) reduces the resource holders power.

What Creates Dependency

Importance of the resource to the organization Scarcity of the resource Nonsubstitutability of the resource

Power Tactics
Power Tactics
Ways in which individuals translate power bases into specific actions. Influence Tactics:
Legitimacy
Rational persuasion Inspirational appeals Consultation Exchange Personal appeals Ingratiation Pressure Coalitions

Power Tactics (Influence Tactics)

Legitimacy (authority position requesting in accordance with org policies or rules) Rational persuasion (presenting logical arguments and factual evidence) Inspirational appeals (developing emotional appealing to targets needs, hopes, aspirations) Exchange (reward following a request) Personal appeals (asking for compliance based on friendship or loyalty) commitment by

Consultation (increase motivation, support by involving)

Ingratiation (using flattery, praise to make request)

Pressure (use warning, demands and threats) Coalitions (aid of other people to persuade the target)

Contingency Model of Power Effectiveness

Agents Characteristics: Organizational Position Personality characteristics Response: Resistance Obedience Compliance Conformity Commitment POWER EFFECTIVENESS

Organizational Characteristics: Org. Structure Nature of task Org. culture Performance evaluation & Reward system

Targets Characteristics: Dependency Uncertainty Personality Intelligence Culture

Politics: Power in Action

Political Behavior Activities that are not required as part of ones formal role in the organization, but that influence, or attempt to influence, the distribution of advantages or disadvantages within the organization. Legitimate Political Behavior Normal everyday politics. Illegitimate Political Behavior Extreme political behavior that violates the implied rules of the game.

Factors That Influence Political Behaviors

Employee Responses to Organizational Politics

Avoiding Action:
Overconforming Buck passing Playing dumb Stretching Stalling

Defensive Behaviors
Avoiding Blame:
Buffing Playing safe Justifying Scapegoating Misrepresenting

Avoiding Change:
Prevention Self-protection

Impression Management (IM)

Impression Management
The process by which individuals attempt to control the impression others form of them.

IM Techniques:
Conformity Excuses Apologies Self-Promotion Flattery Favors

Association

Tactics used to gain Political Power

Bargaining or trade off Competition Control over information Control over communication channels Cooptation (when a group gives some of its important position to members of other groups or includes them in policy making committees)

 The individual level: encompasses the political behaviors that leaders direct toward other individuals through one-on-one relationships, personal self interests are pursued by the individual The coalition level: pact or treaty among individuals or groups, during which they cooperate in joint action, each in their own self-interest, joining forces together for a common cause. This alliance may be temporary or a matter of convenience The network level: association of individuals and groups tied together into an interconnected system. The ties can be characterized as linkages (e.g., affiliation bonds, authority, and task relationships) and/or channels through which resources flow (e.g., information through the grapevine)

Levels of Political Action

Organizational Conflict

Conflict
Conflict Defined
Is a process that begins when one party perceives that another party has negatively affected, or is about to negatively affect, something that the first party cares about.
Is that point in an ongoing activity when an interaction crosses over to become an interparty conflict.

Encompasses a wide range of conflicts that people experience in organizations

Incompatibility of goals Differences over interpretations of facts Disagreements based on behavioral expectations

Transitions in Conflict Thought

Traditional View of Conflict

The belief that all conflict is harmful and must be avoided.

Causes: Poor communication Lack of openness

Failure to respond to employee needs

Transitions in Conflict Thought (contd)

Human Relations View of Conflict

The belief that conflict is a natural and inevitable outcome in any group.
Interactionist View of Conflict

The belief that conflict is not only a positive force in a group but that it is absolutely necessary for a group to perform effectively.

Functional versus Dysfunctional Conflict

Functional Conflict Conflict that supports the goals of the group and improves its performance.

Dysfunctional Conflict Conflict that hinders group performance.

Types of Conflict
Task Conflict Conflicts over content and goals of the work. Relationship Conflict

Conflict based on interpersonal relationships. Process Conflict

Conflict over how work gets done.

The Conflict Process

Stage I: Potential Opposition or Incompatibility

Communication
Semantic difficulties, misunderstandings, and noise

Structure
Size and specialization of jobs Jurisdictional clarity/ambiguity Member/goal incompatibility Leadership styles (close or participative) Reward systems (win-lose) Dependence/interdependence of groups

Personal Variables
Differing individual value systems Personality types

Stage II: Cognition and Personalization

Perceived Conflict
Awareness by one or more parties of the existence of conditions that create opportunities for conflict to arise.

Felt Conflict
Emotional involvement in a conflict creating anxiety, tenseness, frustration, or hostility.

Conflict Definition

Negative Emotions

Positive Feelings

Stage III: Intentions

Intentions Decisions to act in a given way.

Cooperativeness:
Attempting to satisfy the other partys concerns. Assertiveness:

Attempting to satisfy ones own concerns.

Dimensions of Conflict-Handling Intentions

EXHIBIT 142

Stage III: Intentions (contd)

Competing A desire to satisfy ones interests, regardless of the impact on the other party to the conflict. Collaborating

A situation in which the parties to a conflict each desire to satisfy fully the concerns of all parties. Avoiding
The desire to withdraw from or suppress a conflict.

Stage III: Intentions (contd)

Accommodating

The willingness of one party in a conflict to place the opponents interests above his or her own.
Compromising

A situation in which each party to a conflict is willing to give up something.

Stage IV: Behavior

Conflict Management The use of resolution and stimulation techniques to achieve the desired level of conflict.

Conflict-Intensity Continuum

Conflict Management Techniques

Conflict Resolution Techniques Problem solving Superordinate goals Expansion of resources Avoidance Smoothing Compromise Authoritative command Altering the human variable Altering the structural variables
Source: Based on S. P. Robbins, Managing Organizational Conflict: A Nontraditional Approach (Upper Saddle River, NJ: Prentice Hall, 1974), pp. 5989

EXHIBIT 144

Conflict Management Techniques

Conflict Resolution Techniques

Communication
Bringing in outsiders Restructuring the organization

Appointing a devils advocate

Source: Based on S. P. Robbins, Managing Organizational Conflict: A Nontraditional Approach (Upper Saddle River, NJ: Prentice Hall, 1974), pp. 5989

EXHIBIT 144 (contd)

Stage V: Outcomes
Functional Outcomes from Conflict
Increased group performance

Improved quality of decisions

Stimulation of creativity and innovation Encouragement of interest and curiosity Provision of a medium for problem-solving Creation of an environment for self-evaluation and change

Creating Functional Conflict

Reward dissent and punish conflict avoiders.

Stage V: Outcomes
Dysfunctional Outcomes from Conflict
Development of discontent Reduced group effectiveness Retarded communication

Reduced group cohesiveness

Infighting among group members overcomes group goals