MGT5313 Chap.9 Organizational Change and Change Management
Organizational Change and Change Management
Four levers, two speeds
The course material states that managing or changing a corporate culture is hard precisely because four factors interact to produce it: the characteristics of the people and particularly the founder and top managers, organizational ethics, structure, and the property rights system.
A change programme is an attempt to move one or more of those, and the four do not respond on the same timescale. People and ethics are the outcome of years of selection and example, and neither is editable by instruction. Structure and property rights are single decisions with visible effects inside a quarter.
Most programmes that fail have aimed at the two that move slowest and have left the two that a named person could change this month.
Three roles, and the gaps between them
One reading sets out the roles of a leader carrying out a transformation as recognising the need for revitalisation, creating a new vision, and institutionalising change. The value of the list is in the gaps.
A diagnosis without a vision produces an organization that agrees it has a problem and does nothing. A vision without institutionalisation produces eighteen months of enthusiasm followed by the observation that nothing was ever measured differently. Both failures are invisible while the programme runs, because visible activity continues in each case.
The second account of formation in the same material adds a usable item: culture forms around critical incidents, the moments from which lessons about desirable and undesirable behaviour are learnt.
An incident is where the organization visibly chooses, and what it chooses is remembered far longer than anything it publishes.
Four published accounts, read as four lever choices
The material works through four corporate examples and they are more useful as lever choices than as stories.
A software firm's culture is built from its founding through people, then structure, then property rights: founder values set the selection filter, a flat organic structure with small teams reinforced risk taking, and stock options and bonuses made the value pay.
A computer manufacturer rebuilds an innovative culture by acquisition, buying a small specialist firm and placing its engineers alongside existing product teams, which imports carriers of a culture rather than describing one.
A carmaker recovering from rising recalls pulls structure and process, with fifty expert functional managers reviewing every decision in their function, retraining in rules and standard procedures, and a mock production line built to resocialise long serving employees as well as new hires.
A technology group renews its culture around growth, inclusion, innovation and feedback through company wide conversations, an annual engagement survey and direct input to the chief executive, which works on ethics and example through consultation. Three of the four are carried by something a person could point at.
The fourth is the outlier and the one to treat most carefully, because consultation produces a great deal of visible activity and leaves the question of what changed to the reader.
Adaptation against design
The reading set supplies two change cases with almost nothing in common.
One firm adapted an existing organization to a forced change in where work happens, moving to sixty per cent hybrid, twenty per cent remote contracts and twenty per cent office based, using a crowdsourced manifesto rather than an issued policy, a declared working pattern recorded on the personnel system, and performance managed on trust and outputs.
Every one of those is a structure or property rights move, and the outcomes it claims carry no figures, so it evidences a design rather than an effect.
The other is a vehicle manufacturer described by a commentator through ten management innovations, including mission worked backwards from a stated purpose, minimal job descriptions and career ladders, budgets reallocated in real time through an application, impromptu teams rather than stable ones, and a claim that the firm can make up to sixty part changes a day to its production line where other makers change parts every three to five years.
Its central operational claims trace to a single podcast interview and the piece is editorial commentary rather than a study, so it describes a model to be tested.
Two questions that must be kept apart
That commentary makes a distinction worth carrying into any case work on a controversial organization.
One question is what the facts about the firm and its chief executive actually are, where conduct that has been criticised is highly relevant. A separate question is how far the management model is replicable elsewhere, where that same conduct may not be relevant at all.
Keeping the two apart lets you analyse such a firm without either defending it or refusing to learn from it, and both of those failures are common in presentations.
The practical conclusion of the chapter is to reverse the usual sequence: change what the organization rewards and who may use its resources first, change the structure if it contradicts the intended behaviour, and describe the new culture last, once there is something to describe.
What this chapter covers
- 01
The four factors that produce a culture, and how fast each one moves
- 02
Three roles of a transforming leader, and the two gaps between them
- 03
Critical incidents as the change manager's cheapest instrument
- 04
Four published change accounts read as four lever choices
- 05
Why the consultation case is the one to treat most carefully
- 06
An adaptation case and a firm designed around its model
- 07
Separating the facts about a firm from the replicability of its model
- 08
Reversing the usual sequence so the values statement comes last
A values launch that changed nothing
- 2Name which of the four factors the programme addressed.
- 4Read the ranking and the promotion route as cultural instruments.
- 2Read the office arrangement as a component.
- 2Give the alternative sequence.
Key terms
- Critical Incident
- An event from which members of an organization learn what behaviour is desirable or undesirable. The course material treats such incidents as one of the ways a culture forms.
- Institutionalising Change
- The third role of a transforming leader: embedding a new direction in what is measured, rewarded and reviewed, without which a vision leaves no trace.
- Resocialisation
- Retraining existing members in the rules, procedures and values of a culture, as in the published account of a carmaker rebuilding quality with a mock production line.
- Real Time Reallocation
- Reassigning budget during a period rather than at a planning cycle, described in the commentary case as budgets moved multiple times an hour through an application.
Organizational Change and Change Management FAQ
Why do culture change programmes so often fail?
Because they aim at the two factors that move slowest. A culture is produced by the people, the ethics, the structure and the property rights system, and a values launch with training addresses the first two, which are the outcome of years of selection and example.
The two factors a named person could change this quarter, structure and what the organization rewards, are usually left exactly as they were, so behaviour is still being priced the old way.
Is a consultation exercise a real change instrument?
It can be, and it is the hardest of the four published accounts to evaluate, because consultation produces a great deal of visible activity. The test is whether anything downstream of it changed: what is measured, what is rewarded, who decides. If a consultation reshaped a promotion criterion it was an instrument; if it produced four themes and an engagement survey, the question of what changed is still open.
Can a firm copy practices from an organization that was built around them?
Rarely as practices, and sometimes as a sequence. Real time budget reallocation and minimal job descriptions are outputs of a flat decentralised structure with information flowing directly to individuals. Transplanting them into a tall centralised organization gives people authority without the information that makes it usable.
The workable version changes the information flow and the decision rights in one area first, and treats the whole thing as a pilot with a stated measure.
Assessment move
For your project organization, write one sentence naming the last thing it visibly chose in a moment when everyone was watching, and one sentence naming what it currently measures its managers on. Those two sentences will tell you more about whether a proposed change can take than any statement of values, and they are usually obtainable from public material.
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