Strategic Change Management. Workbased Assignment for Diploma in Strategic Leadership (DSM/MBA)

Contents

1 Understanding the background to organisational strategic change
1.1 Introduction to the chosen organisation
1.2 Models of strategic change
1.2.1 Lewin’s change management model
1.2.2 Burke-Litwin’s causal change model
1.2.3 Tuckman’s model of team challenge
1.2.4 Kotter’s eight-Step change model
1.2.5 The McKinsey 7-S Model
1.3 The relevance of models of strategic change to organisations in the current economy
1.4 The value of using strategic intervention techniques in organisations

2 Issues relating to strategic change in an organisation
2.1 The need for strategic change in an organisation
2.2 Factors driving the need for strategic change in an organisation
2.2.1 External factors
2.2.2 Internal factors
2.3 Resource implications if the organisation fails to respond to the need for strategic change

3 Leading stakeholders in developing a strategy for change
3.1 Developing systems to involve stakeholders in the planning of change
3.2 Developing a change management strategy with stakeholders
3.3 The systems used to involve stakeholders in the planning of change
3.4 Create a strategy for managing resistance to change

4 Planning to implement models for ensuring ongoing change
4.1 Developing appropriate models for change
4.2 The plan to implement a model for change
4.3 Developing appropriate measures to monitor progress

5 Conclusion

References

Appendix

List of abbreviations

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List of figures

Figure 1: Lewin's Change Management Model (Lauer 2010)

Figure 2: Burke-Litwin Change Model of Organisational Performance (Burke 2013)

Figure 3: Tuckman's Team Challenge (Stevenson 2011)

Figure 4: Kotter's Eight Steps (Kotter 2013)

Figure 5: The McKinsey 7-S Model (Strategic Management Insight 2013)

Figure 6: PEST Factors and Organisational Change (Senior and Swailes 2010)

Figure 7: Power/Interest Matrix (Lynch 2012)

Figure 8: The Six-Step Stakeholder Circle (Based on Balogun and Hailey 2008)

Figure 9: Stakeholder Classification in Relation to Resistance to Change (Brown et al. 2013)

Figure 10: Choosing Strategies for Change (Kotter and Schlesinger 2008)

Figure 11: Force Field Analysis for LPRO

Figure 12: Kotters Eight Steps to Implement Change at LPRO

List of tables

Table 1: Models of strategic intervention techniques (Based on Trendak 2014)

Table 2: Types of needs for strategic change (Based on Yaeger and Sorenson 2009)

Table 3: Factors driving the need for change at LPRO

Table 4: Year-to-year development logistics

Table 5: Resource implication (Based on Johnson et al. 2005)

Table 6: Stakeholder map LPRO

Table 7: Types of resistance to change (Based on Yaeger and Sorensen 2009 and Cumming and Worley 2014)

1 Understanding the background to organisational strategic change

1.1 Introduction to the chosen organisation

LIGAPRODUCTION (LPRO) is a full-service provider which produces and distributes high-quality point-of-sale (POS) items such as shop-window campaigns, in-store elements, store-construction elements or event productions. For our national and international clients, we offer unique custom-made items and prototypes, as well as large series productions with worldwide logistics. The concentration of six different production workshops and an in-house logistics unit under one roof, an ultra-modern infrastructure and integrated processes and information technology (IT) systems guarantee maximum flexibility and reduced transaction costs while ensuring efficient production for our clients. Throughout the project, our project management has been in constant contact with our clients and has managed all production workshops, as well as the logistics and installation unit. As a result of increasing operational fields and responsibilities, as well as the growth in total and dutiable shipments, the current IT system in the logistics department needs to be replaced with a new IT solution based on AEB’s Assist 4.

1.2 Models of strategic change

1.2.1 Lewin’s change management model

In the early 1950s, the psychologist Kurt Lewin developed his change management model in order to explain the change process. Lewin recognised three stages of change (Lynch 2012), which are shown in the figure below.

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Figure 1: Lewin's Change Management Model (Lauer 2010)

1.2.2 Burke-Litwin’s causal change model

According to Burke (2013) and Lauer (2010), the causal model of organisational performance and change – also called the ‘Burke and Litwin model’ after its developers – suggests linkages that hypothesise how performance is affected by internal and external factors, and ranks them in terms of importance. The model provides a framework to assess organisational and environmental dimensions which are keys to successful change; moreover, it demonstrates how these dimensions should be linked causally to achieve a change in performance. The model is focussed on providing a guide for both organisational diagnosis and planned, managed organisational change, and takes account of cause-and-effect relationships (Burke and Litwin 1992).

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Figure 2: Burke-Litwin Change Model of Organisational Performance (Burke 2013)

1.2.3 Tuckman’s model of team challenge

A model of team change was first published by Dr Bruce Tuckman in 1965. This consists of the following four stages (Stevenson 2011):

- Forming: Individual roles and responsibilities are unclear, and team members are highly dependent on leaders for guidance and direction;
- Storming: This process defines and enables the common understanding of purpose and roles to be achieved;
- Norming: Agreement and consensus is largely formed within the team. Roles and responsibilities are clear and accepted; and
- Performing: The team works in a collective and mature manner to achieve organisational goals.

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Figure 3: Tuckman's Team Challenge (Stevenson 2011)

1.2.4 Kotter’s eight-Step change model

An eight-step model was developed by and named after Harvard Business School professor John P. Kotter, comprising overlapping steps. The first three have to do with creating the climate for change. The following three engage and enable the change in organisation. Finally, the last two steps involve implementing and sustaining change (Kotter 2007 and Lynch 2012).

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Figure 4: Kotter's Eight Steps (Kotter 2013)

1.2.5 The McKinsey 7-S Model

The McKinsey 7-S Model was created by former McKinsey consultants Tom Peters and Robert Waterman in 1978. This model includes seven different factors, as follows:

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Figure 5: The McKinsey 7-S Model (Strategic Management Insight 2013)

According to Johnson et al. (2005) the 7-S model is a framework for analysing organisations and their effectiveness. It assesses the seven key elements shown in Figure 5, which are instrumental in whether or not the organisation is successful.

Following Burke (2013) this model provides a holistic view of the organisation and the many interconnected variables, which make change complex. An effective change effort must address many issues simultaneously.

1.3 The relevance of models of strategic change to organisations in the current economy

In the past few decades, the world of business – and therefore the economy – has passed through several transitions. Globalisation links countries and organisations, and speeds up the way in which business is done. Lean management, empowerment of employees and collaboration are only a few keywords which can be used to describe the current economy. When it comes to managing a strategic change in an organisation, not all of the models considered in section 1.2 are suitable in the current economy; therefore, they must be evaluated to determine which is the most appropriate (Johnson et al. 2005).

Following Cummings and Worley (2014) as well as Lauer (2010) Lewin developed his model in the 1950s, and therefore did not consider most current management approaches. Rather, it is debatable whether there is any freezing in the current rapidly changing economy; moreover, the model does not discuss the empowerment of employees. Lewin treats people as objects of manipulation who are not actively involved in the change process.

Tuckman’s model is not much more recent than Lewin’s, but it is still valid and in use in the current economy; however, it focuses on change in teams rather than change in organisations as a whole. Therefore, it is not a strategic management tool.

The Burke–Litwin model, the 7-S model and Kotter’s eight steps are still used in the current economy. This is mostly because all of them consider organisations in the context of the larger environment. On the other hand, due to the use soft factors, these analytical models are not as precise as those of Lewin and Tuckman (Balogun and Hailey 2008).

1.4 The value of using strategic intervention techniques in organisations

According to Stevenson (2011) and Balogun and Hailey (2008) planning strategic change is the key to an organisation’s successful future performance, but there are various challenges to implementing such strategic planning. Adopting strategic intervention techniques (SITs) helps to create cooperation between managers and workers as teammates. The use of SIT models is directly linked to the management style in an organisation; there are models matching autocratic, participatory, proactive and reactive styles. Some SITs are listed in the following table.

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Table 1: Models of strategic intervention techniques (Based on Trendak 2014)

2 Issues relating to strategic change in an organisation

2.1 The need for strategic change in an organisation

Strategic change is changing the organisations vision, mission and the deducted targets. By planning a strategic change the organisation realises that there are possibilities to meeting new challenges and to prepare the organisation on these challenges rather to wait what will be.

Following Yeager and Sorensen (2009) and Johnson et al. (2005) needs for change can be various, starting by changes in different markets and economic downturns and ending with legal and social changes and new technologies. Also new theoretical and practical approaches like the Total Quality Management (TQM) program can link to an increased need for change. In every organisation the need for change is the need to stay competitive in an global market and therefore to gain competitive advantage.

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Table 2: Types of needs for strategic change (Based on Yaeger and Sorenson 2009)

2.2 Factors driving the need for strategic change in an organisation

There are various factors driving the need for strategic change in an organisation. Some of them are created and managed by organisations themselves, but most are not influenced easily. In the widest scope, these factors can be classified in two categories, namely external and internal factors.

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