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Lecture 10

ADMS 1000 Lecture Notes - Lecture 10: Broken Windows Theory, Critical Role, Organizational Culture


Department
Administrative Studies
Course Code
ADMS 1000
Professor
Shahab Modirmassihai
Lecture
10

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AP/ADMS 1000 – Lecture # 10 – Confronting Change
Chapter 12: Confronting Change
Forces for Change
1. Economic Changes
Organizations have to adapt to changing economic conditions
Downsizing is more likely happens in lean times then in rich
2. Competitive Changes
Competitive processes do evolve, and understanding what to expect and what drives
evolution along the lifecycle of an industry is critical for surviving turbulent times
The major phases that mark an industry’s evolutionary path are emergence and
shakeout to maturity and decline
At each phase organizational skills and capabilities must survive and grow
Domestic and foreign competition certainly has demanded an acceleration in
innovation among firms in many industries
Organizations must constantly create new and better ways to serve costumers
3. Technological Changes
Both a continuously changing variable and one that permits and demands
organizational change
Double-edge sword for business—bringing benefits and threats
Can create new industries and destroy old ones
Replaces workers with technology
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4. Global Changes
Most pervasive force that has a huge impact globally
“Borderless corporation” suggests the increasing ability of multinational corporations
to move freely across borders and set up business just about anywhere
Globalization has influenced profound changes in the relationship of business to its
external stakeholders
Globalization has changed the nature of business and communities
5. Legal/Political Changes
Deregulation and privatization are clear examples of the importance of considering
governmental changes on business strategy
Legal environment can dictate changes in how business competes as well as what
services it offers and how they can be offered
We have witnessed an increasing emphasis on organizational related matters (i.e.
how employees are treated) which created more laws governing fairness in the
workplace
6. Societal Changes
Business must respond to society: consumer tastes change
Increasing education level of the workforce has generated changes to the nature of
work
Generate jobs that demand employees to be multi-skilled in order to handle more
challenging and enriched work
Changes in demographics will result in consumer demand
Types of Change
1. Developmental Change
Attempts to improve upon what the business is currently doing, rather than do
something completely new
Example: Apple improving its smart phone and coming out with a new model with
additional features
2. Transitional Change
Replaces what already exists with something completely new
Requires the organization to depart from old methods of operation while new state is
being established
Example: a retail company completely changing its customer “return policy”. So, the
old policy is discontinued and a brand new one is implemented
3. Transformational Change
Hardest type of change
Transforms the future state from the current state dramatically
Outcomes are unknown, unpredictable, and uncertain
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Achieved through trial and error
Employees and their mindsets, behaviour, and culture must change to successfully
implement this type of change
Methods of Change
Theory E
Theory O
Organizations often respond to the challenges of change with a variety of programs that might
include:
Structural change: e.g., mergers, acquisitions, etc.
Cost cutting: e.g., eliminating nonessential activities
Process change: e.g., re-engineering
Cultural change: e.g., change approach to doing business or change the relationship
between management and employees
Theory E has as its purpose that creation of economic value, often expressed as share-holder
value. Its focus is on formal structure and systems”
Central goal of change is based on maximizing shareholder value
To achieve goal we change organizational structure and systems
Methods to employ change: performance bonuses, asset sales, personnel reductions,
strategic restructuring of business
Theory O has as its purpose the development of the organization’s human capability to
implement strategy and to learn from actions taken about the effectiveness of changes made”
Goal is to develop organizational capabilities
Focus is on developing an organizational culture that supports learning and a high-
performance employee population
Methods to employ change: “flatter” structure, reduce “bureaucracy” and give employees
more power
Conclusion
Theory E and theory O must combine to survive in the long run
What is a Learning Organization?
An organization that facilitates the learning of all its members and consciously transforms itself
and its context
Learning involves an organization:
Adapting to its environment
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