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Mac4863 2021 TL 506 0 B
Mac4863 2021 TL 506 0 B
Mac4863 2021 TL 506 0 B
Strategic control
MAC4863/506
CONTENTS
TOPIC 2: Change management – the role of the leader in managing change .... 9
References ................................................................................................................... 14
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PART E: Strategic control (23%)
Introduction
Implementing a chosen strategy involves evaluating the tools and techniques involved with
change management, which is what we are going to discuss in Part E. We begin with topic 1,
which looks at some of the factors that may trigger change, the types of change an organisation
may go through, what effects the organisational culture can have on the change process and how
to deal with resistance to change. In topic 2 we will discuss the following:
It is important that you go through all the “test your understanding” exercises in the prescribed
book.
Learning outcomes
After studying this topic, you should be able to
Strategic control
Topic 1: Understanding the Topic 2: Change management –
impact and context of change the role of the leader in managing
change
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For an organisation the question is not whether or not there will be change but rather the
following:
How to change
What to change? What to change to?
successfully?
The change process usually starts with a change trigger. Change may be required due to external
developments and/or internal organisational issues. These triggers may indicate why change is
required but not what needs changing.
External triggers can be divided into two, general environment (indirect- action) and task
environment (direct action) of organisations. Change in both of these sectors need to be
monitored and responded to.
The general environment of an organisation can normally be categorised under the PEST
framework. The task environment covers all stakeholders who can influence and be influenced
by the organisation's direct actions. Porter's five forces model can be used to describe this.
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2.2 Internal triggers
Internal triggers for change could result from the continued search for efficiency, or they
could arise as a result from a new leader in the organisation, a change in organisational
structure, new IT system, etc.
Study the information on this topic in your prescribed textbook topic and do the “Test your
understanding” exercises.
When an organisation faces a possible change, it has to examine the nature of the change in
order to identify the most suitable way of managing the change.
Change can be classified in relation to the extent of the change necessary and the speed with
which that change needs to be completed.
The speed of change can range from all-at-once, big bang, step-by-step or incremental
changes. The extent of change can range from transformation or realignment. Transformation
involves changing an organisation’s culture, it’s a fundamental change. Realignment does not
involve a fundamental change to organisational culture or beliefs.
Study the information on this topic in your prescribed textbook topic and do the “Test your
understanding” exercises.
An organisation’s culture will influence the organisation’s strategy, it is the way of doing business
and the way it responds to change. Understanding the connection between an organisation’s
culture and its (changing) environment significantly helps the organisation in managing change.
Some aspects of an organisation’s culture are obvious, and many others will be less tangible
but more significant. See below the organisational iceberg.
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http://www.slidesh are .ne t/JLu ke r/wee k-2-o rganisation al-beh aviour-p resen ta tion
(Accessed on 31 May 2015)
The cultural web is useful for mapping out change and assists organisations in identifying
which elements of culture need to change.
Study the information on this topic in your prescribed textbook topic and do the “Test your
understanding” exercises.
Just like the cultural web, this model is a useful way of looking at organisations facing
organisational change. It points out seven internal aspects of an organisation that need to be
aligned if change is to be successful. This model shows how the different aspects of an
organisation relate to one another, and how change will affect both the organisation as a whole,
people and functions within it.
Study the information on this topic in your prescribed textbook topic and do the “Test your
understanding” exercises.
The failure to embrace change is known as resistance to change. This resistance can come
from employees, suppliers, customers, or any other stakeholders of the organisation. People
resist change because they fear the unknown.
Study the information on this topic in your prescribed textbook topic and do the “Test your
understanding” exercises.
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Activity:
Solution:
(i) Change may be expensive, particularly if major innovations in working procedures are
planned. There may be a tendency to assume that the present methods are working
satisfactorily and that any marginal improvement will not be worth the cost.
(ii) Change involves planning in advance, consultation and negotiation. Managers who are
thinking of introducing change may be daunted by the administrative hurdles that need
to be overcome.
(iii) Policies and procedures become fixed and inflexible. It can be difficult for people
who have become accustomed to them to understand that alternative methods are
possible to achieve the same aims.
(iv) Employees often resist change which:
(1) alters the pay or status of an individual relative to that of other individuals
(2) lessens the value of their experience
(3) causes disruption to their social life (e.g. shift-working or relocation)
(4) is associated with job insecurity (e.g. technological innovation)
Organisations need to change and adapt to change in order to improve their performance and
results. In order for change to be successfully implemented organisations need to overcome
resistance to change. Change management counts 23% of the syllabus and it is important that
you know this part of the syllabus.
Relevant articles:
CIMA website:
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Once it has been decided to make the change it is important that the change is successfully
implemented. There are a number of theorists who have identified issues and possible
approaches to managing the change process, these will be discussed in this topic. The importance
of always considering ethics in the change process is also discussed here.
Effective leadership is critical in times of change. Who is the best person to be the
change leader? Normally the CEO is the best person. What does the change leader have to
do?
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http://blogs.ubc.ca /e tec530leading chan ge/lea rning -topics/ko tters-model/
(Accessed on 1 June 2015)
It is important for the change leader to form a group within the organisation that can help with
the change process, and that he or she is able to manage the group. There is a difference
between a group and a team, and there are advantages and disadvantages of having teams
helping with the change process. Study the information on this section in your prescribed
textbook.
This is a good model to use when dealing with how to overcome resistance to change. Please
make sure you know how to use it and apply it to a given scenario. Note that manipulation and co-
optation involve distorting facts to support the proposed change to be made. This would breach
CIMA’s Code of Fundamental Ethics.
Study the information on this topic in your prescribed textbook topic and do the “Test your
understanding” exercises.
A convenient way of looking at successful change has been proposed by Lewin, who suggests a
three-step model.
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http://www.slideshare.net/oeconsulting/change-management-models-by-operational-excellence-
consulting
(Accessed on 27 May 2015)
Study the information on this topic in your prescribed textbook topic and do the “Test your
understanding” exercises.
Change will only happen if driving forces (pushing change forward) are greater than the
restraining forces (pushing against change). Therefore, it is vital that managers:
Beer and Nohria’s theory proposes that although each organisation’s change is unique, each
change is eventually a variant of two underlying approaches. However, the objective should
be to integrate the two theories. See below.
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Dimensions of Theory E Theory O Both theories
change combined
Goals Maximise shareholder Enhance Embrace differences
wealth organisational between economic
capabilities value and
organisational
capabilities
Leadership Top-down approach Encourage Set direction from the
participation – top, engage people
bottom up down below
Focus Structure and systems Build corporate Focus on structure,
culture systems & culture
Process Plan and establish Experiment and Plan for spontaneity
programmes evolve
Rew ard system Motivate through Motivate through Use incentives to
financial incentives commitment reinforce change but
not to drive it
http://i.ytimg.com/vi/yuw9ebh8jcg/hqdefault.jpg
(Accessed on 27 May 2015)
Study the information on this topic in your prescribed textbook topic and do the “Test your
understanding” exercises.
A change agent is an individual or group that assists to bring about strategic change in an
organisation. The role of the change agent is to act as a catalyst for the process of change. The
change agent can be sourced from inside the organisation or externally. A change agent will
need to exhibit various skills.
➢ define the problem and its cause – identify restraining forces and help management
understand the root causes
➢ diagnose solutions and select appropriate courses of action – help management select the
most appropriate course of action
➢ implement change – take a lead in implementing change
➢ transmit the learning process – document the change process and spread this information
throughout the company.
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Study the information on this topic in your prescribed textbook topic and do the “Test your
understanding” exercises.
Once the change process has been implemented it is important to manage the change, by
mentoring and coaching employees.
Mentoring Coaching
Has no specific period Tends to be one-to-one
Does not have to be a formal process Has a formal, set purpose
Seeks to help the mentee apply skills and Tends to have a planned programme that is
experience to new situations followed over a set period
Study the information on this topic in your prescribed textbook topic and do the “Test your
understanding” exercises.
Study the information on this topic in your prescribed textbook topic and do the “Test your
understanding” exercises.
The process of change can raise serious questions about ethics. As you know, organisational
change affect people and therefore it is important that potential ethical implications are assessed
before the change is undertaken.
Organisational change can often lead to job losses, changes in individual job roles, and new
organisational or departmental strategies.
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➢ What will the impact be on stakeholders (e.g. redundancies)?
➢ Management motivation/approach used – are they acting out of personal interest
➢ Release of information – manipulation approach adopted?
In the exam you must always be aware of any ethical issues which may be implied in the question,
and you should also ensure that any recommendations you make are ethically sound.
Many theorists, such as Kanter and Peters, say that change should become the culture of the
organisation; change should be an ongoing process.
Kanter – Change-adept organisations, looked at the skills and attributes of companies that were
successful in their change process.
Peters – Thriving on chaos, this theory states that organisations must be making continual
changes as the business environment is so competitive.
Study the information on this topic in your prescribed textbook topic and do the “Test your
understanding” exercises.
The change process is not an easy task and success is not guaranteed. However, the following
aspects will make the change process more likely to succeed:
The successful management of change is a very important issue facing any manager and
organisation. In this topic a number of theories on the various aspects of change were discussed.
It is important to know them for exam and assignment questions.
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References:
Kaplan Publishing. 2019. CIMA Strategic Management (E3) Study Text. 1st ed
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