Navigating Organizational Change - Essay Example

? STRATEGIC MANAGEMENT ASSIGNMENT …………………. College/ ………….. …………. Introduction In recent years, business organizations around the world have been facing large scale changes and it has necessitated that business organizations are to undergo strategic re-orientation and strategic changes. Business environments, both its internal and external, are tremendously changing due to a number of factors, mainly technological advancement, changes in customer requirements and attitudes, severe competition between market players etc. Most businesses use different strategies to ensure greater efficiencies and organizational success. Out of various strategies that businesses use for ensuring business success, change itself is a strategy that the business needs to take careful attention in implementing of it, managing it and managing its resistance as well. First part of this piece of research paper presents a brief discussion on organizational success and analyzes how Cadbury’s organizational structure will have to change especially in relation to Mintzberg’s theory of organizational structure. Second part of the paper discusses strategic change and how effectively it can be implemented and managed in Cadbury. Organizing for Success Organizational strategy and organizational structure are closely interrelated. Organizational strategy refers to a special way that the organization positions itself in relation to its stakeholders, given the organization’s resources, capabilities and mission etc (Stonehouse, Campbell, 2004, p. 354). Strategic choices of a firm influences the structure and design of the organization as well. As argued by Alfred Chandler, the structure follows the strategy mainly because the decision maker in a firm develops managerial and growth strategies that become the basis for designing the structure of the organization (Stonehouse, Campbell, 2004, p. 354). The structure of an organization is defined as the sum total of the ways in which it divides its people in to different tasks and then achieves coordination among them. This definition is based on Mintzberg’s view on organizational structure (Balmer and Greyser, 2003, p. 111). Organizations find different strategies most appropriate to them at different times and they implement accordingly. The strategy being implemented influences the structure and design of the firm. For instance, if a firm implements customer focus strategy or customer relationship strategy, it will have to focus on delivering greater values to customers by concentrating on value propositions and the whole organization attempts to gain attractions from the customers. Strategy thus affects organization’s structure. Though there are various approaches to organizational structure, Mintzberg’s theory of organizational structure seems to have gained considerable attention in recent years as many researchers have widely studied its significance in organizational behaviour. According to his theory, there are two basic approaches to the formation of organizational structure, they are contingency approach and configuration approach (Stonehouse, Campbell, 2004, p. 364). Contingency approach has been described as a structure that the organization depends largely on various factors like the nature of its business, nature of its strategy, its size, geographical span of its activities, its age and history etc. according to Mintzberg’s view, it is better for an organization to base its structure on configuration approach rather than basing on contingency approach because factors like span of control, need for formalization, centralization or decentralization etc are to be logically configured in to internal consistent groups (Stonehouse and Campbell, 2004, p. 364). Contingency approach and configuration approach are considered to be the main determinants of organizational structure according to Mintzberg’s theory. According to Mintzberg’s organizational structure theory, an existing organization will be fit in to any one of the six basic configurations and each of them are idealized. These configurations are clearly indicators of the leading tendencies of the organization too (Balmer and Greyser, 2003, p. 112). The six configurations are entrepreneurial organization, Machine organization, Professional organization, Diversified organization, innovative organization and missionary organization (Griffin and Moorhead, 2005, p. 450- 452). Six Organizational Structure in relation to Kraft When it comes the example of Kraft as an organization, it can basically take six configurations mentioned above. The first one is entrepreneurial organization, in which there are one or few top managers and one of them dominates by the pull to lead factor. There will be a group of operators who does the work. When Kraft is considered as an entrepreneurial organization, it would be fast, flexible and lean and it would seem to be a model that other small companies would like to follow its routes. Its top manager or team dominates by ‘pull to lead’ drive. But, when the company becomes larger, this configuration may not be appropriate as decision making may not be effective. Machine bureaucracy is a typical of large and well established companies in simple and stable environments (Griffin and Moorhead, 2005, p. 452). The mechanistic type of organization emphasizes vertical specialization and control. This type of organizations stresses rules, policies and procedures, specify techniques for taking decisions, emphasizes well documented developing systems etc (Schermerhorn, Hunt and Osborn, 2003, p. 299). When Kraft is viewed as Mechanistic organization, it would certainly require large techno-structure mainly to design and maintain its systems of standardization (Mintzberg, Lampel, & Quinn, 2003, p. 221). The third configuration is Professional organization or professional bureaucracy which is found in a complex and stable environment. It requires standardization of skills and experiences of its people as the basic way of better coordination. As Kraft is viewed as Professional bureaucrat, the structure of the organization itself requires or heavily relies on standardization of skills rather than relying on outputs or work processes for the coordination. The structure within Kraft will be therefore most seemingly ‘pull to professionalize’ and people are mainly required to be highly specialized, standardized and professional in the particular functional areas of their work. As compared to the mechanistic structure, Kraft has relatively little need for technostructure as its people are required to be trained and developed and thus to become more specialized and standardized in their respective work-processes. The fourth configuration is the diversified organization which is basically a characteristic of old and very large firms in relatively simple and stable environment with many different diversified markets. The business organization and its structure has been thus divided in to groups or departments according to various markets it serves to (Griffin and Moorhead, 2005, p. 452). As Kraft is considered to be a diversified organization, it may not be an integrated form of organization, but rather, independent entities might have coupled together with a flexible and loose administrative style (Mintzberg, Lampel, & Quinn, 2003, p. 222). Kraft to be a diversified organization needs to have different products line, different departments to deal with different goods or market and it must operate through diversified markets. Fifth configuration is Innovative Organization that thrive on innovation. As Rosinski (2003) noted, innovative organizations are those that prosper bringing changes. Innovative organization or adhocracy is generally found in young companies engaged in advanced technical fields where the environment is complex and dynamic. As Kraft is viewed as an innovative or adhocracy organization, its decision making will be spread throughout the organization. But, power and supreme control is in the hands of experts (Griffin and Moorhead, 2005, p. 452). Mintzberg, Lampel and Quinn (2003, p. 223) found that an organization with innovative configuration would depend on coordination on mutual adjustments among the highly trained, developed and highly specialized experts being encouraged by the extensive use of the liaison devices. This structure emphasizes delegation of authority and therefore the organizational structure itself become decentralized in both horizontal and vertical dimensions. The sixth configuration is missionary organization which focuses on standardization of norms and sharing of values and beliefs among members. When Kraft is viewed as a missionary organization, it has relatively little techno structure and external professional training is not considered. As a missionary structured firm, Kraft will have an unstructured numbers of members being relatively little specialized in to jobs. Managing Strategic Change Change in an organization can occur in different nature like merger, acquisition, extension of existing product lines, technology advancement, customer orientation, implementing anew strategy, product differentiation etc. Projecting a change, conveying messages about it to the people and integrating people, process and technology for implementing the change are some of the critical stages in developing a strategic change. In order to ensure greater efficiency in implementing the change, the change management must be able to manage the change effectively mainly by managing resistance to it. Change Project in Kraft Kraft is experiencing a challenge to expand its business to outside North America and grab better opportunities of marketing in other countries (Pearce and Robinson, 2004, p. 22). Expanding the existing business is thus a challenge as well as an opportunity. Implementing a change is a challenge, but by managing it effectively adds greater values of opportunities to the company. Kraft is currently facing severe competition from major global players like Nestle, Unilever and Group Danone etc. Its competitors has dominated in almost all fast-growing markets gaining around 30 percentage of their sales in developed countries (Pearce and Robinson, 2004, p. 22). Kraft is just eighth largest food company in Britain and it is still looking for growing its markets. Expanding its markets in to other countries to ensure stronger market share in developed countries is thus a top task of Kraft’s management and it is the change that its management is facing as a challenge to implement. Force Field analysis When it comes to implementing a change and managing its resistance, it is highly important to understand and evaluate the basic and useful forces for and against the change. There can be positive and negative factors and these are required to be evaluated in order to understand the nature of the change. Force Field analysis has been developed by Kurt Lewin in order to provide a practical way for assessing a range of factors that influence a situation or decision (Bossons, Kourdi and Sartain, 2009, p. 122). Lewin has developed freezing and unfreezing model as one of the best model for change management. This technique of analysis is basically based on a physical science technique. A change process that an organization is looking for is viewed as having three major stages. The organization in such case requires to be unfrozen from its stable state so that change can be successfully implemented. If the firm remains to be stable always, the change most probably cannot be implemented. ‘unfrozen’ is thus the first stage and this necessarily involves training and making people ready for accepting new roles, rules and ways as and when the change is being implemented. Force field analysis is thus a different model for looking at the factors that can assist change management in implementing the change. The factors or forces pushing for the change are driving forces and those forces that work against the implementation of change are restraining forces. Following are the basic steps involved in conducting a force field analysis: Step-1- The problem should be defined well, by getting individuals to do it first and sharing these definitions among the people to be involved. Step-2- Find out restraining forces and add them to the figure or fact-seets, indicating the relative strength of each factor by using a consistent format, Step- 3- Do step 2 for driving forces as well, Step- 4- If both driving and restraining forces have been assessed, it will depict the outcome clearly. It will show measure between driving and restraining forces and management can take decision regarding whether to implement the change or not (Palmer?Dunford?Akin,2009, p. 151). Figures of force field given alongside depict how both driving and restraining forces help management take decision regarding change to be implemented or not. When it comes to Kraft’s example, the company is looking for expanding its business to various other countries and then to make use of greater opportunities of marketing for developed countries. The change management team is required to analyze both driving and restraining forces so that management take decision regarding how effectively it can implement the change and how successful it will be with cooperation from its people. Managing Resistance to Change Perhaps, one of the most challenges that a manager generally and in particular change management team faces is resistance to change from the people in the organization. An organizational function can be successful only when there is an integration and cooperation between people, process and technology. But, when management proposes a change and people shows resistance to the change, management team often get stuck with the change and fail to implement it successfully. When the management or the organization at large thrives for a change, people show different Reponses to it, may be in way of support, apathy, passive resistance, active resistance, dislike etc (Spector, 2010, p. 9). Getting people accepted of the change or making them positively involved in the change process is thus critical to the success. The management team being responsible to implement change is therefore required to focus on strategic planning and strategic thinking so that they can be aware of the resistance that is more likely to occur in the organization and the way it can be handled as well. Many researchers and management experts have come to a general consensus that ‘people do resist inherently’ as inclination to resist or oppose change is more likely to be offset by factors like their desire to experience a breaking away from their routine and reward or values that they perceive in their positions etc (Saiyadain, 2009, p. 213). Some experts argued that resistance to change occurs because people fear some thing and therefore managers should convey messages to them that the particular change does not make trouble on them. For instance, Dijk and Dick (2009, p. 144) argued that people do not resist for it is a change, but rather they fear loss of pay, loss of safety, or loss of comfort etc. No matter how or why people resist, it is extremely important that resistance to change must be managed effectively to ensure that change is implemented successfully. Managing resistance to change is thus at the heart of managing change. As resistance is the major obstacle to implementing change, managing it is almost the way to managing the change as well. There are ,any factors that increase the level of resistance, including poor leadership, lack of better support for change, no trust between people, internal conflict, lack of reward and recognition etc (Gilley, Godek and Gilley, 2009, p. 5). An effective change management should be able to evaluate these factors and take measures to avoid these circumstances so that resistance can be up to an extent reduced or managed. Palmer, Dunford and Akin (2009, p. 172) stressed that resistance to change can be managed through a six methods model, they are a) education and communication, b) participation and involvement, c) facilitation and support, d) negotiation and agreement, e) manipulation and cooperation and f) explicit and implicit coercion. Kraft’s Change and making it work Kraft’s change proposal is expanding its business domain to more numbers of countries, with an emphasis on grabbing greater marketing opportunities from developed countries in order to ensure increased market share. This change proposal is less likely to raise resistance issues, but still, if any member among its people shows dislike to it, management team should communicate all the positive sides of the change and how it is going to impact the business and people positively in the future so that resistance can be avoided. Conclusion Change itself is a strategy. Implementing a change successfully is a challenge because most people in an organization do resist the change as well as an opportunity because successfully implementing it adds greater values to the organization. In recent business literatures, the word strategy, organizational structure and change have almost placed significant positions as they are of greater importance in today’s business contexts. This piece of paper has highlighted inter-relation between strategy and organizational structure and has analyzed how Mintzberg’s organizational structure details six different organizational’ configurations. This paper has also highlighted change management and its significant in relation to implementing a growth change to Kraft. 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