GREAT ZIMBABWE UNIVERSITY

FACULTY OF COMMERCE
MASTER OF SCIENCE DEGREE IN HUMAN RESOURCE
MANAGEMENT

Course Title: Managing Change

Lecturer: A. Munzara

Course Aims
The primary aim of this course is to introduce and acquaint students with the principles and
practices of effective change management relative to the complexities of organisational life. It
takes both a theoretical and a practical approach in an attempt to meet both the academic and
applied needs of the students.
The course aims to:

 Deepen the students’ understanding of the theoretical frameworks of organisational

change;
 Provide an insight into the change process;
 Enable the students to apply the theoretical frameworks in implementing change
programmes; and
 Enable the students to apply appropriate managerial and leadership skills in
implementing organisational change programmes.

Course Objectives
At the end of the course the students should understand the nature of organisational change and
be able to:

 Explain and evaluate the triggers of organisational change.

 Explain and evaluate selected models of organisational change management.

 Use human resource management systems and practices such as reward management and
performance management systems to facilitate effective management of organisational
change programmes.

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  Identify reasons for resisting change and apply appropriate strategies to overcome the
resistance.

 Compare and contrast organisation development (OD) and organisation transformation

(OT).

 Apply appropriate managerial and leadership capabilities to manage change.

 Identify and apply specific interventions to manage organisational change programmes.

Course Content
1. Overview and triggers of change

 Organisational change definitions and perspectives

 External environmental triggers to change
 Internal triggers to change
2. The nature of organisational change

 Contextual issues and their influence in change programmes

 Types / approaches to Organisational Change
3. Change Management Models

 Kotter’s Model
 Kurt Lewin’s Model
 McKinsey 7S Model
 Michael Beer et al model
 Keith Thurley’s five approaches to change management
4. Organisational structure and management of change

 Design perspectives
 Types of organisational structures
 Implications of structural choice to change management
5. Organisational culture and management of change

 Informal and formal aspects of an organisational culture

 Types of cultures
 Dealing with incompatibility between strategy and culture,
 The diversity of national cultures relative to change
 General principles and strategies for managing cultural change

6. Performance management and management of change

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  Purpose and concerns of performance management
 The scope of performance management strategy
 The performance management process
 Contribution of performance management to organisational change
7. Reward management and management of change

 Purpose and characteristics of a reward strategy

 The structure and content of a reward strategy
 Guiding principles in developing a reward strategy
 Effective reward strategies
 Reward strategy and line management capability
 Use of reward strategy in the management of change
8. HRD and management of change

 Human resource development philosophy and strategic aims

 HRD elements
 Creating a learning culture
 Organizational learning strategies
 Relevance of HRD to the management of change
9. Employee relations and management of change

 Employee relations strategic approach

 The HRM model for employee relations
 Policy options and the formulation of employee relations strategies
 Impact of employee relations in managing change
10. Approaches to Planned Change

 Organization Development
 Organizational transformation
 Business Process Engineering (BPR)

11. Resistance to change

 Reasons for resistance to change

 The life cycle of resistance to change.
 Assessing anticipated degree of resistance
 Strategies for dealing with resistance
12. Managing the Change Process

 Identifying the need for change

 Planning and defining responsibilities for the change programme

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  Basic steps to effective change
 Developing a positive change culture
 Imperatives for change management
 Managing change through projects
 Risks of change and managing the transition
13. Management and Leadership Concepts and Competences

 The management process

 Comparison of Management and Leadership
 Leadership theories
 Styles of leadership
 Essential managerial and leadership skills for effective change management

Student Evaluation
Students will be evaluated through coursework and end of semester examination. Coursework
assignments will constitute 30% of the evaluation and the end of semester examination will
constitute 70% of the evaluation.
References
Recommend references include the following:
1. Burnes, B (1992). Managing Change. London, Pitman.
2. Drennan. D. (1992). Transforming Company Culture. London. McGraw - Hill
3. French W. L. and Bell, C. H. (1990) Organisation Development. New Jersey. Prentice
Hall.
4. Grundy, T. (1993), Managing Strategic Change, London, Kogan Page.
5. Hardy.C.(1993) .Understanding Organisations. London. Penguin.
6. Hammer & Champy, (1993) Business Process Engineering, London, Nicholas Brealey.
7. Hofstede G (1993). Culture and Organisations. Beverly Hills. Sage production
8. Jaques, E. (1952.) The Changing Culture of the factory. New York, Dryden.
9. Johnson G, Scholes K & Whittington R (2005). Exploring Corporate Strategy: text and
Cases: London, FT Prentice Hall
10. Senior, B (2002) Organisational Change. London. Perason Publishing
11. Schermerhorn Jr. J.R. (1996). Management and Organisational Behaviour.London. John
Wiley and Sons
12. Strickland A.J. & Thompson Jr A.A. (1996) Strategic Management. Boston. Irwin Mc-
Graw-Hill.
13. Thornhill, A., et al (2000) Managing Change ; A Human Resources Strategy Approach,
London, Financial Times Prentice Hall.
Students are encouraged to also read relevant journal articles

Lecture Notes

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1. Organisations and their changing environment
“There are three kinds of companies: those that make things happen; those that watch
things happen; and those that wonder what has happened.” ( Anonymous).
Organisations exist in a constantly changing business environment. The organisations are
open systems which form part of a bigger system and they are themselves comprised of
sub-systems. A change in the bigger system or any of these subsystems causes an
organisation to realign itself with the change. Such realignment is effected by
continuously scanning the environment for possible changes in the business environment
for possible changes and by choosing new strategies for the organisation (Smit, Cronje &
Vrba, 2007).

The effective management of people takes place in the context of the wider environment
setting, including the changing patterns of organisations and attitudes at work. It is
frequently documented that a global economy, increased business competitiveness, the
move towards more customer-driven markets, advances in scientific knowledge,
especially telecommunications and office automation, have led to a period of constant
change and the need for greater organisational flexibility (Mullins, 2005).

Change management involves the conscious attempt to control, or at least to influence,

the change that is going to happen to an organisation. It involves transforming the
organisation and ensuring that every subsystem is realigned with the change. Faced with
continuing economic pressures and increasing competition, many organizations are at
times forced to radically change and reinvent their processes. Change management is the
process of ensuring that an organization is ready for change and takes action to ensure
that change is accepted and implemented smoothly.
Change is a common thread that runs through all businesses regardless of size, industry
and age. Our world is changing fast and, as such, organizations must change quickly too.
Organizations must have the capacity to adapt quickly in order to survive. Organizations
that handle change well thrive, whilst those that do not may struggle to survive.

The concept of “change management” is a familiar one in most businesses today. How
businesses manage change and how successful they are in instituting the change depend
on the nature of the business, the nature of the change, and the people involved as well as
how far people involved understand the change process.
1.1 Triggers of change
Change can be driven by events in which case the need to change is forced upon the
organization. More proactively, the driver for change may be an innovative strategic plan
or a positive response to environmental trends. Change may be inspired by an energetic
and determined individual who wants to get things done. Continuous improvement
programmes may drive incremental change.
External triggers include:

 Political factors, e.g.

 Government and local legislation

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  Government ideology
 International law
 Universal rights
 Wars
 Trade union activities
 Economic factors, e.g.
 Competitors,
 Suppliers
 Currency exchange rates
 Employment rates
 Wage rates
 Government economic policies
 Other countries economic policies
 Lending policies of financial institutions
 Socio-cultural factors, e.g.
 Demographic trends (customers and employees)
 Lifestyle changes
 Skills availability
 Attitudes to work and employment
 Gender issues
 Concern for the environment
 Business ethics
 Technological factors, e.g.
 Information technology / the Internet
 New production processes
 Computerisation of processes
 Changes in transport technology
Internal triggers include:

 An organisation becoming unionised or de-unionised

 A new chief executive or other senior manager
 A revision of the administrative structures
 The redesign of a group of jobs
 The purchase of new IT equipment
 A new marketing strategy
 A cut in overtime
 Staff redundancies
1.2 Environmental dynamics
The dynamics of any organisation’s environment have also been described in terms of the
degree of environmental turbulence (Senior, 2002). According to Ansoff and McDonnell
(1990) a firm’s performance is optimized when its aggressiveness and responsiveness
match its environment. They propose five levels of turbulence:

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  Level 1:- Predictable. A repetitive environment characterised by stability of
markets; where the challenges repeat themselves; change is slower than the
organisation’s ability to respond; the future is expected to be the same as the past.
 Level 2:- Forecastable by extrapolation. Complexity increases but managers
can still extrapolate from the past and forecast the future with confidence.
 Level 3:- Predictable threats and opportunities. Complexity increases further
when the organisation’s ability to respond becomes more problematic; however
the future can still be predicted with some degree of confidence.
 Level 4:- Partially predictable opportunities. Turbulence with the addition of
global and socio-political changes. The future is only partly predictable.
 Level 5:- Unpredictable surprises. Turbulence increases further with
unexpected events and situations occurring more quickly than the organisation
can respond.


1.3 Change situations*

Stacey (1996) proposes three kinds of change situations, namely:

 Closed change. Management is able to explain with relative certainty the

sequence of events: what happened; why it happened; and are able to explain how
such sequence of events will continue to affect the future course of the business.
There is widespread agreement by the members involved on the explanation of
events.
 Contained change. The sequence of events and actions is less clear-cut and
management are only able to state what probably happened; why it probably
happened; and what the probably consequences were. The impact of such
sequence of events upon the future of the business has similarly to be qualified by
probability statements.
 Open-ended change. The explanations of the causal factors and consequences of
the sequence of events and actions do not command widespread agreement of the
members involved. Hence team members may seek to deal differently with the
situation in accordance with their perception of the causal factors.
The changing situations have significant implications for the actions of managers as they
attempt to choose appropriate strategies to deal with them.
2.The nature of organisational change
Usually the magnitude of the challenge faced in trying to effect change will determine the
type of change required and the wider context in which change is to occur. Typically
change ranges from being adaptive (incremental) to revolutionary (transformational).

There is no right ‘formula’ for the management of change. The success of any attempt at
managing change will be dependent on the wider context in which that change is taking
place. For example, managing change in a small, perhaps relatively new business, where
a motivated team are themselves driving the change would quite different from trying to

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manage change in major corporation or long-established public sector organization with
established routines, formal structures and, perhaps, a great deal of resistance to change.
The contexts are completely different and the approaches to managing change therefore
need to be different. (Johnson et al, 2005).

1.1. Contextual issues and their influence in change programmes

According to Johnson et al, the contextual features to be considered include the
following:
 Time
How quickly is change needed? The time available for change could be
dramatically different. For example, a business facing immediate decline in
turnover or profits from rapid changes in its markets has a quite different context
for change compared with a business where the management may see the for
change coming in the future, perhaps years ahead.
 Scope
What is the degree of change needed? There is need to determine whether change
is required to the entire organisation or some specific sections/departments.
Where change is deemed only needed to certain confines of the organisation,
special attention must be paid to interdependency of departments and activities.
 Preservation
What organisational resources and characteristics need to be maintained? There
may be need for preservation of certain aspects of the organisation, in particular
those that are to do with competences on which changes need to be based.
 Diversity
How homogeneous are the staff groups and divisions with the organisation? If a
company has followed a certain strategy for many years leading to a very
homogeneous way of seeing the world it may be difficult to change the status quo.
Change may however be instituted with relative ease if there is a diversity of
experience, views and opinions within the organisation.
 Capability
What is the managerial and personal capability to implement change? Managers
who have managed change effectively previously, or a workforce that has been
used to and has accepted past changes in their work practices are more likely to
embrace and facilitate successful implementation of change programmes than
those with little experience of change.
 Capacity
Does the organisation have the necessary capacity to undertake the changes?
Change can be costly, not only in financial terms, but in terms of managerial time.
Special skills and competencies may be necessary to facilitate the change.
 Power
What power does the chief executive or change leader have to impose change?
Too often it is assumed that the chief executive or change leader has such power,
but in the face of resistance from below, or perhaps from external stakeholders,
this may not be the case. There may also be assumption that others in the
organisation have power to effect change when they do not.

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When faced with the need for change managers ought to interrogate such issues as they
present varying challenges and limitations to different organisations. Generally the
contextual issues inform the choices about the means by which change can be made and
in some instances the context may need to be changed before the change interventions are
undertaken.

2.2 Types of Organisational Change

There are basically two types of transformation:

 Radical transformation – this involves ‘large-scale, organisation-wide

transformation programmes that involve the rapid and wholesale overturning of
old ways and ideas and their replacement by new and unique ones’ (Burnes,
1992). In this instance the thrust is on achieving a wholesale change and quick
break with the past.
 Incremental transformation – this refers to ‘small-scale, localised projects
designed to solve particular problems or to improve the performance of a
department of an organisation’ (Burnes, 1992).In this instance the changes are
confined to a particular area with the rest of the organisation continuing with its
old ways.
Grundy (1993) observes that there are three varieties of change namely, smooth
incremental change, bumpy incremental change, and discontinuous change.

 Smooth incremental change. This type of change evolves smoothly in a

systematic and predictable way, at a constant rate.
 Bumpy incremental change. This type of change is characterised by periods of
tranquillity punctuated by acceleration in the pace of change. According to
Grundy, the triggers of this type of change are likely to include those from the
environment in which the organisation operates as well as internal changes such
as those instigated to improve efficiency and ways of working, e.g. periodic
reorganisations.
Both types of incremental change are associated more with the means by which
organisations achieve their goals rather than as a change in the goals themselves.
 Discontinuous change. This type of change involves rapid shifts in strategy,
structure or culture, or change involving all three. It is usually triggered by higher
levels of environmental turbulence, e.g. restructuring and reorganisations that are
undertaken to comply with government legislation.
Johnson et al (2005) observe that the types of change can be categorized into four as
follows:

 Adaptation. This is change that can be accommodated within the current

paradigm and occurs incrementally.

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 Reconstruction. This is a type of change that may be rapid and can involve a
good deal of upheaval in an organisation but does not fundamentally change the
paradigm. It may be a turnaround situation where there is need for major
structural changes or major cost-cutting measures to deal with a decline in
financial performance or change in market conditions. Other interventions that
can be undertaken in this type of change include:
 Crisis stabilisation
 Management changes
 Gaining stakeholder support
 Clarifying the target market/s
 Refocusing business operations
 Financial restructuring
 Prioritisation of critical improvement areas.
 Evolution. This is a type of change that requires a paradigm shift over time.
Managers recognise the need for continual organisational transformation. This
approach promotes the concept of learning organisations.

According to Johnston et al, a learning organisation is one that is capable of

continual regeneration from the variety of knowledge, experience and skills of
individuals within a culture which encourages mutual questioning and challenge
around a shared purpose and vision. It emphasises the potential capability of
organisations to regenerate themselves from within, and in this way for strategies
to emerge from within. They state that the advocates of the learning organisation
argue that the aim of management should be to encourage processes which unlock
the knowledge of individuals, and encourage the sharing of information and
knowledge, so that each individual becomes sensitive to changes occurring
around them and contributes to the identification of opportunities and required
changes.
 Revolution. This type of change requires rapid and major strategic and paradigm
change. This could be in circumstances where the strategy has been so bounded to
the existing paradigm and established ways of doing things in the organisation
that even when environmental or competitive pressures require fundamental
change, the organisation has failed to respond.
Armstrong (2009) observes that there are three types of change:

 Strategic change
Strategic change is concerned with broad, long-term and organization-wide
issues involving change. It is about moving to a future state that has been
defined generally in terms of strategic vision and scope. It will cover the
purpose and mission of the organization, its corporate philosophy on such
matters as growth, quality, innovation and values concerning employees and
customers, competitive positioning and strategic goals for achieving and
maintaining competitive advantage and for product-market development.
These goals are supported by policies concerning marketing, sales,
manufacturing, product and process development, finance and human resource
management.

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 Strategic change takes place within the context of the external competitive,
economic and social environment, and the organization’s internal resources,
capabilities, culture, structure and systems. Its successful implementation
requires thorough analysis and understanding of these factors in the
formulation and planning stages.

 Operational change
Operational change relates to new systems, procedures, structures or
technology that will have an immediate effect on working arrangements
within a part of the organization. But its impact on people can be more
significant than broader strategic change and it has to be handled just as
carefully.
 Transformational change
Transformational change takes place when there are fundamental and
comprehensive changes in structures, processes and behaviours that have a
dramatic effect on the ways in which the organization functions.

3 Theories/Models of planned change

3.1 Kotter Model of Change Management
The model is based on research which shows that there are eight critical steps an
organisation or service needs to go through to ensure successful implementation and
sustenance of change programmes.
i. establish a sense of urgency
- examine market and competitive realities
- identify and discuss crises, potential crises or major opportunities
ii. form a powerful, guiding coalition
- assemble a group with enough power to lead the change effort
- encourage the group to work together as a team
iii. create a vision
- create a vision to help direct the change effort
- develop strategies for achieving that vision
iv. communicate the vision
- use every vehicle possible to communicate the new vision and strategies
- teach new behaviours using the guiding coalition as an example
v. empower others to act on the vision
- get rid of obstacles to change
- change systems or structures that seriously undermine the vision
- encourage risk taking and non-traditional ideas, activities and actions
vi. plan and create short-term wins
- plan for visible performance improvements

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 - create those improvements
- recognise and reward employees involved in the improvements
vii. consolidate improvements and produce still more change
- use increased credibility to change systems, structures and policies that don't fit
the vision
- hire, promote and develop employees who can implement the vision
- reinvigorate the process with new projects, themes and change agents
viii. institutionalise new approaches
- articulate the connections between the new behaviours and corporate success
- develop the means to ensure leadership development and succession.
 
These steps are summarised in the diagram below:

Kotter model of change:

http://www.dcsf.gov.uk/everychildmatters/strategy/deliveringservices/servicedirectories/
models/changemanagementmodels/ (25 March 2010)

1. Increase urgency - inspire people to move, make objectives real and relevant.
2. Build the guiding team - get the right people in place with the right emotional
commitment, and the right mix of skills and levels.
3. Get the vision right - get the team to establish a simple vision and strategy; focus on
emotional and creative aspects necessary to drive service and efficiency.

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 4. Communicate for buy-in - Involve as many people as possible, communicate the
essentials, simply, and to appeal and respond to people's needs. De-clutter
communications - make technology work for you rather than against.
5. Empower action - Remove obstacles, enable constructive feedback and lots of
support from leaders - reward and recognise progress and achievements.
6. Create short-term wins - Set aims that are easy to achieve - in bite-size chunks.
Manageable numbers of initiatives. Finish current stages before starting new ones.
7. Don't let up - Foster and encourage determination and persistence - ongoing change
- encourage ongoing progress reporting - highlight achieved and future milestones.
8. Make change stick - Reinforce the value of successful change via recruitment,
promotion, new change leaders. Weave change into culture.
 http://www.businessballs.com/changemanagement.htm
3.2 Kurt Lewin’s Model
One of the cornerstone models for understanding organizational change was developed
by Kurt Lewin back in the 1950s, and still holds true today. His model involves a three
stage process: Unfreeze – Change – Refreeze. Lewin, a physicist as well as social
scientist, explained organizational change using the analogy of changing the shape of a
block of ice.

For example, if you have a large cube of ice, but realize that what you want is a cone of
ice, what do you do? First you must melt the ice to make it amenable to change
(unfreeze). Then you must mould the iced water into the shape you want (change).
Finally, you must solidify the new shape (refreeze).

To begin any successful change process, it is necessary to first understand why the
change must take place. As Lewin put it, “Motivation for change must be generated
before change can occur. One must be helped to re-examine many cherished assumptions
about oneself and one’s relations to others.” This is the unfreezing stage from which
change begins.

Unfreeze

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This stage involves preparing the organisation to accept that change is necessary and
breaking down the existing status quo before a new way of operating is introduced. This
process must take account of the inherent threats change presents to people and the need
to motivate those affected to attain the natural state of equilibrium by accepting change.

Key to this is developing a compelling message showing why the existing way of doing
things cannot continue. This is easiest to frame when you can, for instance, point to issues
such as declining sales figures, poor financial results, worrying customer satisfaction
which show things have to change in order for the organisation to survive.

To prepare the organization successfully, you need to start at its core – you need to
challenge the beliefs, values, attitudes, and behaviours that currently define it. Using the
analogy of a building, you must examine and be prepared to change the existing
foundations as they might not support add-on storeys; unless this is done, the whole
building may risk collapse.

This first part of the change process is usually the most difficult and stressful. When you
start cutting down the “way things are done”, you put everyone and everything off
balance. You may evoke strong reactions in people, and that’s exactly what needs to
done. By forcing the organization to re-examine its core, you effectively create a
(controlled) crisis, which in turn can build a strong motivation to seek out a new
equilibrium. Without this motivation, you won’t get the buy-in and participation
necessary to effect any meaningful change.

Change

The change stage is where people begin to resolve their uncertainty and look for new
ways to do things. People start to believe and act in ways that support the new direction.

The transition from unfreeze to change does not happen overnight: People take time to
embrace the new direction and participate proactively in the change. In order to accept
the change and contribute to making the change successful, people need to understand
how the changes will benefit them. Not everyone will fall in line just because the change
is necessary and will benefit the company. This is a common assumption and pitfall that
should be avoided.
Time and communication are the two keys to success for the changes to occur. People
need time to understand the changes and they also need to feel highly connected to the
organization throughout the transition period. When you are managing change, this can
require a great deal of time and effort and hands-on management is usually the best
approach.

Refreeze

When the changes are taking shape and people have embraced the new ways of working,
the organization is ready to refreeze. The outward signs of the refreeze are a stable

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organization chart, consistent job descriptions, and so on. The refreeze stage also needs to
help people and the organization internalise or institutionalise the changes. This means
making sure that the changes are consistently applied and incorporated into the business
processes and procedures. With a new sense of stability, employees feel confident and
comfortable with the new ways of working.

The rationale for creating a new sense of stability in our every changing world is often
questioned. Even though change is a constant in many organizations, this refreezing stage
is still important. Without it, employees get caught in a transition trap where they aren’t
sure how things should be done, so nothing ever gets done to full capacity. In the absence
of a new frozen state, it is very difficult to tackle the next change initiative effectively.
How do you go about convincing people that something needs changing if you haven’t
allowed the most recent changes to sink in? Change will be perceived as change for
change’s sake, and the motivation required to implement new changes simply won’t be
there.

As part of the Refreezing process, make sure that you celebrate the success of the change
– this helps people to find closure, thanks them for enduring a painful time, and helps
them believe that future change will be successful.

Practical Steps for Using the Framework:

Unfreeze
 Determine what needs to change
Survey the organization to understand the current state
 Understand why change has to take place.
 Ensure there is strong support from upper management
Use Stakeholder Analysis and Stakeholder Management to identify and win the
support of key people within the organization
 Frame the issue as one of organization-wide importance. 
 Create the need for change
Create a compelling message as to why change has to occur
Use your vision and strategy as supporting evidence
Communicate the vision in terms of the change required
Emphasize the “why”.
 Manage and understand the doubts and concerns
Remain open to employee concerns and address in terms of the need to change.

Change
 Communicate often
Do so throughout the planning and implementation of the changes
Describe the benefits
Explain exactly how the changes will affect everyone
Prepare everyone for what is coming.
 Dispel rumours

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 Answer questions openly and honestly
Deal with problems immediately
Relate the need for change back to operational necessities.
 Empower action
Provide plenty of options for employee involvement
Have line managers provide day–to–day direction.
 Involve people in the process
Generate short-term successes to reinforce the change
Negotiate with external stakeholders as necessary (such as employee organizations).

Refreeze

 Anchor the changes into the culture

Identity what supports the change
Identify barriers to sustaining change.
 Develop ways to sustain the change
Ensure leadership support
Create a reward system
Establish feedback systems
Adapt the organizational structure as necessary.
 Provide support and training
Keep everyone informed and supported.
 Celebrate success!

3.3. McKinsey 7S Model

The 7S model is a strategic model that can be used for any of the following purposes:
 Organizational alignment or performance improvement
 Understanding the core and most influential factors in an organization’s strategy
 Determining how best to realign an organization to a new strategy or other organization
design
 Examining the current workings and relations an organization exhibits
 
The model, made famous by the McKinsey consulting company, is good for a thorough
discussion around an organizations activities, infrastructure, and interactions.
-The model and its usage-
Here is the 7S model that portrays seven elements of an organization.

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I define the elements as follows:
Strategy – This is the organization’s alignment of resources and capabilities to “win” in
its market.
Structure – This describes how the organization is organized.  This includes roles,
responsibilities and accountability relationships.
Systems – This is the business and technical infrastructure that employees use on a day to
day basis to accomplish their aims and goals.
Shared Values – This is a set of traits, behaviours, and characteristics that the
organization believes in.  This would include the organization’s mission and vision.
Style – This is the behavioural elements the organizational leadership uses and culture of
interaction.
Staff – This is the employee base, staffing plans and talent management.
Skills – This is the ability to do the organization’s work.  It reflects in the performance of
the organization.
 
To assess each of these elements, here are some questions to ask:
Strategy –
 What is the organization’s strategy seeking to accomplish?
 How does the organization plan to use its resources and capabilities to deliver that?
 What is distinct about this organization?
 How does the organization compete?
 How does the organization adapt to changing market conditions?
Structure –
 How is the organization organized?

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 What are the reporting and working relationships (hierarchical, flat, silos, etc.)?
 How do the employees align themselves to the strategy?
 How are decisions made? Is it based off of centralization, empowerment, decentralization
or other approaches?
 How is information shared (formal and informal channels) across the organization?
Systems –
 What are the primary business and technical systems that drive the organization?
 What and where are the system controls?
 How is progress and evolution tracked?
 What internal rules and processes does the team utilize to maintain course?
Shared Values –
 What is the mission of the organization?
 What is the vision to get there?  If so, what is it?
 What are the ideal versus real values?
 How do the values play out in daily life?
 What are the founding values that the organization was built upon?

Style –
 What is the management/leadership style like? How do they behave?
 How do employees respond to management/leadership?
 Do employees function competitively, collaboratively, or cooperatively?
 Are there real teams functioning within the organization or are they just nominal groups?
 What behaviours, tasks and deliverables does management/leadership reward?
Staff –
 What is the size of the organization?
 What are the staffing needs?
 Are there gaps in required capabilities or resources?
 What is the plan to address those needs?
Skills –
 What skills are used to deliver the core products and/or services? Are these skills
sufficiently present and available?
 Are there any skill gaps?
 What is the organization known for doing well?
 Do the employees have the right capabilities to do their jobs?
 How are skills monitored, assessed, and improved?
 
Once the questions are answered, the data should be examined.  The analysis should look
for the following aspects:
 Consistency
 Alignment
 Conflicts
 Gaps
 Support
 Strengths

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 Weaknesses
The uses of the model can be as a static picture to determine how effectively the
organization is implementing its strategy.  Also, it can be used two-fold with a current
state and an intended future state.  By comparing the current and future states, gaps can
be assessed, which lead to improvement and action plans.  That latter case makes enables
the model to be used for large scale change.

3.3 Richard Beckhard model

Richard Beckhard (1969) explained that a change programme should incorporate the
following processes:
• Setting goals and defining the future state or organizational conditions desired after the
change.
• Diagnosing the present condition in relation to these goals.
• Defining the transition state activities and commitments required to meet the future
state.
• Developing strategies and action plans for managing this transition in the light of an
analysis of the factors likely to affect the introduction of change.

3.4 Keith Thurley

Keith Thurley (1979) described the following five approaches to managing change:
1. Directive – the imposition of change in crisis situations or when other methods have
failed. This is done by the exercise of managerial power without consultation.
2. Bargained – this approach recognizes that power is shared between the employer and
the employed and that change requires negotiation, compromise and agreement before
being implemented.
3. ‘Hearts and minds’ – an all-embracing thrust to change the attitudes, values and beliefs
of the whole workforce. This ‘normative’ approach (i.e. one that starts from a definition
of what management thinks is right or ‘normal’) seeks ‘commitment’ and ‘shared vision’
but does not necessarily include involvement or participation.
4. Analytical – a theoretical approach to the change process using models of change such
as those described previously. It proceeds sequentially from the analysis and diagnosis of
the situation, through the setting of objectives, the design of the change process, the
evaluation of the results and, finally, the determination of the objectives for the next stage
in the change process. This is the rational and logical approach much favoured by
consultants – external and internal. But change seldom proceeds as smoothly as this
model would suggest. Emotions, power politics and external pressures mean that the
rational approach, although it might be the right way to start, is difficult to sustain.
5. Action-based – this recognizes that the way managers behave in real life bears little
resemblance to the analytical, theoretical model. The distinction between managerial
thought and managerial action blurs in practice to the point of invisibility. What
managers think is what they do. Real life therefore often results in a ‘ready, aim, fire’
approach to change management. This typical approach to change starts with a broad
belief that some sort of problem exists, although it may not be well defined. The
identification of possible solutions, often on a trial and error basis, leads to a clarification

19
of the nature of the problem and a shared understanding of a possible optimal solution, or
at least a framework within which solutions can be discovered.

3.5 Michael Beer et al model

Michael Beer and colleagues (1990) suggested that most change programmes are guided
by a theory of change that is fundamentally flawed. This theory states that changes in
attitudes lead to changes in behaviour. ‘According to this model, change is like a
conversion experience. Once people “get religion”, changes in their behaviour will surely
follow’. They believe that this theory gets the change process exactly backwards.
In fact, individual behaviour is powerfully shaped by the organisational roles people play.
The most effective way to change behaviour, therefore, is to put people into a new
organizational context, which imposes new roles, responsibilities and relationships on
them. This creates a situation that in a sense ‘forces’ new attitudes and behaviour on
people. They prescribe six steps to effective change, which concentrate on what they call
‘task alignment’ – reorganizing employees’ roles, responsibilities and relationships to
solve specific business problems in small units where goals and tasks can be clearly
defined. The aim of following the overlapping steps is to build a self-reinforcing cycle of
commitment, coordination and competence. The steps are:
1. Mobilise commitment to change through the joint analysis of problems.
2. Develop a shared vision of how to organize and manage to achieve goals such as
competitiveness.
3. Foster consensus for the new vision, competence to enact it, and cohesion to move it
along.
4. Spread revitalization to all departments without pushing it from the top – don’t force
the issue, let each department find its own way to the new organization.
5. Institutionalise revitalisation through formal policies, systems and structures.
6. Monitor and adjust strategies in response to problems in the revitalization process.
According to Beer and colleagues (1990), this approach is fundamental to the effective
management of change. But account should be taken of the likelihood of resistance to
change and what can be done about it.

3.6 Bandura (1977)

A helpful analysis of the ways in which people change was made by Bandura (1977). He
stated that:
1. People make conscious choices about their behaviours.
2. The information people use to make their choices comes from their environment.
3. Their choices are based upon the things that are important to them, the views they have
about their own abilities to behave in certain ways, and the consequences they think will
accrue to whatever behaviour they decide to engage in.
In essence, this explanation of how people change suggests that change management
approaches should spend time explaining the benefits of change to individuals on the
grounds that people are more likely to behave in certain ways if they believe that they can
alter their behaviour and that the outcome of that behaviour will produce a desirable
outcome for them.

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4 Organisational structure and management of change
Organisational structure affects the way people are organised and coordinated, the nature
of their relationships, and the manner in which they carry out their work. The structure
may either facilitate or inhibit the fulfilment of the goals of an organisation.
Potential organisational consequences that may arise from structural deficiencies include:

 Poor quality and delayed decision making

 Ineffective coordination within groups or between functions
 Conflict within groups or between functions
 Lack of adaptability to changing circumstances
 Unclear lines of accountability
 Weak performance management
Such deficiencies affect the scope and nature of change in an organisation.
4.1 Design perspectives
There are basically three perspectives on the design of organisational structures (Thornhill et al,
2000).

 Classical universal approach

In this perspective it is claimed that there is a universal set of principles which can be
used in the design of the structure of any organisation. This suggests that there is an ideal
form of structure which, if attained, would restrict, if not eliminate, the need to alter the
structure in response to changing environmental changes. These principles include
structural changes related to leanness, de-layering, downsizing, decentralisation,
autonomy, team-working and flexibility.

 Contingency approach
This perspective relates to the contingency theory and suggests that organisational
strategy and structure are contingent on the circumstances confronting an organisation.
Thus, as the circumstances change there will be a need to alter both the strategy and
structure. The contingency variables include:
 The growth, size and diversity of an organisation
 The nature and impact of environmental factors that act upon the organisation
 The level of complexity of technologies that the organisation uses
Mintberg (1993) identifies four environmental dimensions that interact between
themselves thereby affecting the type of organisational structure that will be appropriate
in a particular combination of circumstances.

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  Stability. Stability refers to the level of certainty or predictability that is evident,
with a dynamic or variable environment being characterised by uncertainty or low
predictability.
 Complexity. Complexity refers to the number of environmental factors that
confront the organisation, with a complex environment being characterised by the
presence of numerous external factors.
 Diversity. Diversity relates to the range of activities of an organisation, so that an
organisation would be likely to face greater uncertainty where it had diversified
into a number of different markets.
 Hostility. Hostility refers to the level of competition faced by an organisation, as
well as the presence of other threats to its competitive position.
Structural types related to the interaction between environmental complexity and stability
can be illustrated as indicated in the table below.
Structural types related to the interaction between environmental complexity and stability.

Stable vs. non-complex environment Stable vs. complex environment

The stable environment promotes a The stable environment promotes a
bureaucratically based structure and the bureaucratically based structure and the
non-complex environment encourages complex environment requires
centralised decision making. decentralised decision making linked to a
divisional structure.
Dynamic vs. non-complex environment Dynamic vs. complex environment
A dynamic environment requires a A dynamic environment requires a
structure that encourages flexibility, structure that encourages flexibility,
adaptability and responsiveness. A non- adaptability and responsiveness. However,
complex environment makes centralised environmental complexity also requires
decision making possible whilst the decentralised decision making. This will
dynamic nature of this environmental niche result in an organisational structure with a
means that this is also desirable. high level of internal complexity.
Source: Adapted from Thornhill et al (2000)

 Consistency approach
This perspective relates to the need to achieve consistency between the various facets of
organisational design within a particular organisation. It places greater emphasis on the
fit between the various elements of an organisation’s structure in order to achieve
operational effectiveness than on its fit to the external environment. The essence of this
approach to choosing or changing structure is that whichever form is chosen there will
need to be a high degree of internal consistency between the elements of the structure in
order to promote organisational effectiveness.
4.2 Types of organisational structures

 Simple organisational structures

The simple organisational structure is suitable for small organisations supplying a single
product or a set of related products within a defined market. It is inherently centralised,

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 with one person or a small number of people exercising control over the direction and
operation of the organisation.
Response to change is relatively high, particularly where the organisation is customer
focused and is based on an entrepreneurial approach.

 Functional organisational structure

A functional structure is comprised of a number of specialised managerial roles and
departments that typically include areas such as production or service provision, sales and
marketing, finance and human resources. This structure is designed to overcome the
inability of a simple structure to respond to an organisation’s increasing internal
complexity arising from its growth and is characterised by standardisation and
formalisation. It is, however, often criticised for not being sufficiently responsive to
complex environmental circumstances.
 Divisional organisational structure
In a divisional structure different products or groups of products or service areas are
organised into separate operating divisions. Different regions supplied by an organisation
may also be organised into separate operating divisions. This type of structure enables an
organisation to respond to a complex or diverse operating environment. It involves some
decentralisation with the managers of the semi-autonomous divisions being able to focus
on the particular issues face by their operating units and take more rapid action. However,
within the divisions forms of a centralised bureaucratic structure exist.

 Matrix forms of organisational structure

The matrix structure combines a functional, hierarchical form with a product;
market; or project centred structure. It involves the establishment of both project
and functional managers, thus combining the efficiency derived from a functional
approach with the responsiveness characteristic of a product or project centred
approach. Such an arrangement may result in some confusion and interpersonal
conflict between the different managers as well as the other personnel involved.
 Project-based organisational structure
This structure is a variation of the matrix structure. The project element of the
structure is, however, created on an ad hoc basis to help bring about
organisational change through project teams. Proponents of this approach argue
that it is beneficial in that:
 Participants develop an understanding of the problems facing their part of
the organisation and ‘own’ the resultant solutions
 Participants, through involvement and subsequent ‘ownership’ of the
solutions are highly committed to the change
 Participants develop the necessary competencies to contribute
 Change of this nature blends top-down and bottom-up approaches to
change, rather than only being driven from one direction
Matrix and project-based structures are more suited to environmental conditions
characterised by both complex and variable or dynamic conditions.

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  Network forms of organisation
There are basically three types of networks, namely internal networks, vertical or
stable networks, and dynamic or loosely coupled networks.
 Internal networks. Internal networks are essentially strategic business
units or profit centres that use market pricing as the basis for supplying
components or services from one part of an organisation to another. This
arrangement is used to promote organisation efficiency and innovation.
(Thornhil et al, 2000).
 Vertical or stable networks. Vertical or stable networks involve different
organisations, centred on a core organisation, working together to produce
or supply a good or service. …. These types of network generally remain
stable for long periods. For the core organisation in such a network, this
has the benefit of spreading the costs of investment and their exposure to
risk and controlling their supply costs. For the organisations that supply
parts or distribute the final product, this should generally ensure a steady
flow of work and income. For the core organisation, this type of
organisation arrangement is also known as outsourcing. (Thornhill et al,
(2000).
 Dynamic or loosely coupled networks. This type of arrangement is
essentially a cooperative one between a number of organisations to
develop and exploit a perceived commercial opportunity, perhaps where
none is large enough or has sufficient resources to achieve this in
isolation. … larger organisations that cooperate to pool their resources in
some way, in relation to a particular opportunity, may prefer to develop a
more permanent organisational arrangement. This may point to the
creation of a strategic alliance or joint venture. (Thornhill et al, 2000).

4.3 Implications of structural choice and change

The choice of an organisational structure has fundamental implications for managerial control,
organisational efficiency and responsiveness to external conditions and intended markets. An
organisational structure impacts upon the following, inter alia:

 The nature and fulfilment of organisational strategy

 Organisational responsiveness to external change and competitiveness
 Scope for innovation and capability to cope with uncertainty
 Organisational performance and effectiveness
 Nature and effectiveness of coordination
 Organisation of work, job design, career path and development
 Location and exercise of power and control
 Cooperation and conflict
 Communication, involvement, motivation and individual performance
 Formal and informal relationships
 Group processes, team-working and network relationships
 Organisational culture

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  5 Organisational culture and management of change
Organisations behave in a certain fashion because of their deeply ingrained cultures, that is, their
collectively held values that are upheld tacitly in any given circumstance. Organisational culture
can constrain the degree of change and transformation even though such change might be
desirable for meeting the challenges and demands of the wider environment. Schemerhorn
(1996:94) says, for an organisation to achieve and maintain competitive advantage there has to
be a tight fit between the organisation’s strategy, structure and culture. A work environment with
an adaptive culture, enables good strategy execution, it provides a system of informal rules and
employee interactions that contribute to the internal conduct of the business. Strong strategy,
supportive cultures nurture and motivate employees to excel in their given tasks and promote
strong company identification within employees, whereas an unhealthy culture can undermine
the company’s business performance.

5.1 Definition of organisational culture

Organisational culture is said to be a set of largely tacit understandings or meanings shared by a
distinctive group of people. These meanings are passed on to new group members. Jaques
(1952:251) says that organisational culture covers habits of managerial behaviour, the value
placed upon different types of work, its way of doing business and the less conscious convictions
and taboos. According to Drennan (1992:3) organisational culture is “how things are done
around here”. It is what is typical of that organisation, its habits, prevailing attitudes and
expected behaviour.
Handy (1993:183) refers to organisational culture as atmosphere, ways of doing things, levels of
energy and levels of individual freedom – or collectively, the sets of values and norms and
beliefs – reflected in different structures and systems. He presented a structural view and
categorised organisational culture into four dimensions:

 Power culture, where individual persons or a group tend to dominate on the basis of
personal charisma or control of resources. This type of culture is seen as, essentially,
political as decisions are taken on the basis of influence rather than through a logical
rational process, e.g. in family businesses and small enterprises. The strength of this
culture lies on the strength of the central person or persons and Handy likened this to
a web in the sense that the spider in the centre determines what happens throughout
the organisation.
 Task culture, where emphasis is put on the channelling of available resources to
accomplish the work efficiently and effectively and not personal power. Decision
making is devolved to the project groups. This type of culture is said to flourish
where creativity and innovation are desirable particularly in such organisations
concerned with such activities as research and development, marketing, advertising
and new ventures.

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  Person culture that exits only to service the needs of the participating members there
is no overarching objective as in convectional structures. Examples of person cultures
include law firms, doctor and small consultancy firms have this culture.
 Role culture that works on logic and rationality. In the role culture activity is
controlled by rules and regulations rather than the personal directive from above.
Emphasis is on defined roles and occupants are expected to fulfil these but not
overstep them. Normally role culture flourishes in stable situations and in the seller’s
market.
According to Brown (1998: 9) cited in Senior (2002), organisational culture refers to the patterns
of beliefs, values and learned ways of coping with experience that have been developed during
the course of an organisation’s history, and which tend to be manifested in its material
arrangements and in the behaviours of its members.
Particular patterns of beliefs, values and behaviours will have proven valid and useful for the
organisational group(s) that use it and will therefore have shared been shared with new group
members (Schein, 1992b in Thornhill et al, 2000). It therefore follows that the culture will need
to change when the beliefs, values and behaviours no longer work or when the external
environment necessitates different responses. (Thornhill et al, 2000).

5.2 Informal and formal aspects of an organisational culture

Organisations are made up of the informal and formal aspects. (artefacts (visible) and basic
underlying assumptions (invisible) – Schein, 1992; symbols, heroes, rituals (practices) and
values – Hofstede (1994). The success of any business depends on how well the formal and
informal aspects of the organisation are interlinked as the informal always influences the formal.
French and Bell (1990:18) gave an analogue of an iceberg that what is seen in any organisation is
just but the tip of organisational life that only becomes apparent when one collides with them
unwittingly.

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The Organisational Iceberg
FORMAL ORGANISATION
Goals, Strategy
Systems and procedures. Management
Products and services, Financial Resources

INFORMAL ORGANISATION

Values, Attitudes and Beliefs

Leadership style and behaviour
Organisational culture and norms of behaviour
Power, Politics and Conflicts, Informal Groupings

Adapted from French and Bell (1990)

The above illustration of the iceberg metaphor depicts the overt and covert aspects of corporate
culture in organisations. The formal aspects (visible) are composed of easy-to-see or overt
aspects like systems, the strategy and products of the organisation. The core or covert aspects
(invisible) are composed of the corporate themes such as innovation, performance excellence and
social responsibility.
The outward manifestations of culture are clearly visible and relatively easy to discern.
Unfortunately, if only these are considered we cannot be certain that the less visible underlying
values or basic assumptions have really changed. Yet for real cultural change to occur we need to
ensure that not only the practices or artefacts, such as messages provided through training

27
sessions changed, but that they are also internalised as values or basic assumptions by individual
employees (Mabey and Mallory,1994/5).
An organisation may have subcultures in which case consensus may only be found within as
opposed to between groups. Martin (1992) terms this perspective ‘cultural differentiation’. She
perspective to organisational culture: integration (single) where members of an organisation
share a common culture and there is consensus regarding beliefs held and behaviours expected;
differentiation in which case consensus may only be found within as opposed to between
groups; and fragmentation where very little consensus can be detected and only occurs on
around specific issues which rise and fall in their importance leading to ambiguity, uncertainty
and difficulty in comprehending the culture.
5.3 Types of cultures
Unhealthy and Supportive/Adaptive Cultures
Some elements of the organisational culture can be unhealthy and work against change, or could
be supportive and adaptive thereby facilitating change. Supportive or adaptive aspects of the
organisational culture allow for the introduction of new Strategy and organisational practices that
would see companies achieve superior performance at all times.
Strong and Weak Cultures.
Culture is said to be the glue that holds the organisation together. Senior (2002:159) says that a
strong culture implies a commonly understood perspective on how organisational life should
happen with most organisational members subscribing to it. She goes further and says the
greater the intensity of the organisation’s culture, the greater will be the degree it will influence
people’s attitudes, their values and basic assumptions and beliefs in the attainment of the
organisational strategic objectives.
On the other hand, a weak organisational culture will manifest in fragmented subcultures, some
of which will be in conflict with each other. Functional managers in an organisation can fail to
consolidate their activities so that the organisational goals are successfully attained.
The strength and weakness of an organisational culture can influence the manner in which the
workers will perform and how management would execute their duties. Strong cultures promote
shared values and purpose within the employees, whereas weak cultures promote uncoordinated
efforts which are detriment to the attainment of organisational goals.
The best corporate cultures are those that are sensitive to the effects of the operating environment
and allow for continuous improvement in the company operations through the modification of
the corporate strategy. A corporate culture can become a major competitive advantage if it
supports and if it is properly aligned with challenges in the organisational environment. However
if not, it can impinge the successful management of a business entity.
This fit between strategy and culture can only be attained when management adopt certain
management options that will assess and address the risk involved in dealing with the resistance
to change.

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The strength or weaknesses of the organisational cultures is important in that it performs a
number of functions which include the following:

 Conflict resolution: culture can be a force for integration and consensus. Knowing
‘how things are done around here’ can help avoid conflict.
 Coordination and control: strongly held values and beliefs will ensure that all
concerned will pull together in the same direction.
 Reduction of uncertainty: for new recruits to an organisation, the more quickly they
learn the norms of behaviour, the more confident they will become in their
assumptions about how others will behave and the way in which organisational
processes are carried out. This has the advantage of reducing complexity of the
organisational world, neutralising uncertainties so that any actions taken are in tune
with the organisational rationalities as seen by the majority of organisational
members.
 Motivation: while extrinsic motivation such as pay, bonuses and promotions can
motivate to perform well, a culture can offer employees a means of identification with
their work, which can foster loyalty and assist their belief that they are valued, will
add to their motivation and presumably the overall organisational performance.
A strong culture is said to improve organisational performance. Peters and Waterman
(1982) and Kanter (1983) argue that the more closely an organisation sticks to their
particular recipe, the greater the probability that it will be a high performer. It is
debatable, however, whether a strong culture, even of the supportive kind, necessarily
links to increased competitive advantage.
In some organisations, the existence of a weak dominant culture with multiple sub-
cultures may be an advantage. Strong, all-pervasive cultures can be a disadvantage when
they become so controlling that there is little potential for the nonconformity which
brings motivation and the capacity to adapt to change.
5.4 Dealing with incompatibility between strategy and culture,
Successful organisational change can be attained when values and culture are properly aligned
with corporate strategy. This involves changing people’s attitudes and values and this is no
mean feat. Senior (2002:163) purports that when management envisage resistance to change
because of incompatibility between strategy and culture, they can adopt the following options;

 Ignore the culture and carry on with their planned strategic change. This option is not
recommended as it requires the organisation to have adequate resources to draw on to
weather the storm and the possibility of a downturn in business
 Manage around the culture: this calls for strategic changes without necessarily
attempting to change the culture. Once the strategic option has been identified, the
appropriate approaches to effect the change must be identified and specific
implementation approaches that may be used relative to the existing cultural barriers such
as centralised power, highly individualised operations, etc.
 Change the prevailing culture: This can be a difficult and lengthy process if the culture
is strong and mature. Eisenstat and Spector quoted in Senior (2002) say the only way to

29
 bring about organisational change is to first change behaviour, which will in turn bring
about the desired change in attitudes and values. This could be through
i) Education and communication - this involves informing the workers of the
implications of the change to
ii) Participation and involvement – this allows for contribution by the workers in the
design of the intended change
iii) Manipulation and cooptation- covertly influencing others by providing
information selectively and structuring events in favour of the desired change
iv) Coercion

 Change the strategy to match the culture: As organisational politics and the politics of
change are deeply embedded in organisations sometimes it can be desirable to alter or
change the strategy so that it is compatible with the existing culture of the organisation.
This is similar to managing around the culture.

Corporate culture serves as a background force that has the potential to shape behaviour,
reinforce common beliefs, and motivate employees to apply their efforts to accomplish
important organisational objectives. The implementation of any strategies in an organisation
can be affected by the organisation’s culture.
The nature of the culture present in an organisation, whether it is a power, task, person or role
culture would dictate the management style in that organisation. If it is power dominated,
then individual persons or a group tend to dominate on the basis of personal charisma or
control of resources. Task power would see management being concerned about production
and not staff welfare. In person culture the emphasis is to service the needs of the
participating members. In the last structural view of role culture, management is concerned
about how well the rules and procedures are being followed.
5.5 The diversity of national cultures relative to change
Here are six basic dimensions which describe the cultural orientation of societies:

 People’s qualities as individuals in terms of whether people are seen as basically

good or basically bad. Societies that consider people good tend to trust people while that
those that consider people bad tend to start from a premise of mistrust and suspicion.
 People’s relationships to their world. Some societies believe they can dominate their
environment while others believe the environment and themselves to be inseparable and,
therefore, they must live in harmony with it.
 People’s relationships in terms of individualism and collectivism. Some societies
encourage individualism and the notion of being self-supporting and achievement is
based on individual worth, while others are more group oriented, where people define
themselves as members of clans or communities (which might be the work of
organisation) and consider the group’s welfare to be more important than the individual.
 An orientation of either doing or being. Societies which are doing and action oriented
stress accomplishments which are measurable by standards believed to be external to the

30
 individual; societies oriented to being are more passive, believing that work should be
enjoyed and live more for the moment.
 People’s orientation to time. Some societies are past oriented, believing that current
plans and actions should fit with the customs and traditions of the past while future-
oriented societies justify innovation and change in terms of future pay-offs, believing
radical change to be desirable as well as acceptable.
 People’s use of space. Societies differ in such matters as offices in relation to status, the
designation of public space compared to private space, the separation of managers from
subordinates.

5.6 General principles for managing cultural change

 Accepted and appropriate patterns of behaviours within organisations are defined by

values and underlying assumptions.
 Successful organisations tend to be those where values and underlying assumptions
encourage practices and behaviours which match the organisation’s strategies.
 Where values and underlying assumptions are incompatible with an organisation’s
strategy successful cultural change may difficult to achieve.
 If an organisation is contemplating change it first needs to establish whether the strategy
necessitates a shift in values and basic assumptions or if change can be achieved some
other way.
 Prior to any culture change, management must understand the implication of the new
culture for their own practices, artefacts and espoused values and be involved in all the
main changes.
 Adequate resources need to be allocated to support culture change and maintain it once
it has been achieved.
 Culture change programmes must pay careful attention to the organisations’ power
bases and opinion leaders such as trade unions and employee associations.
 Culture change programmes must take into account an organisation’s practices and
artefacts such as recruitment, selection and retention, training, performance management
and employee relations.
 In order to create a change in culture, organisations need to decide how practices and
artefacts will be amended to support the new espoused values and contradictory
practices removed.
 Every opportunity should be taken to reinforce the practices or artefacts and restate the
espoused values of the new culture’s values and underlying assumptions.
5.7 Strategies for creating cultural change
Strategies for creating cultural change are often divided into two alternative approaches,
namely top-down approach and bottom-up approach.

 Top-down approach

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 This approach is associated with programmatic change initiated by senior
managers and typically focuses on company-wide consensus. The senior
managers often rely on the human resources function to manage the symbols of
cultural change such as organisation-wide human resource development
programmes to enhance quality excellence or empowerment. Often the
interventions, such as training to manage poor performance, simply address the
artefacts and fail to get to the underlying assumptions and values. Consequently
such programmatic change has difficulty in fostering:
 Coordination through team work
 Commitment
 New competencies
If the values espoused by senior management are discordant with employees’
sense of reality the new culture may be acted out cynically and without being
internalised into employees’ basic underlying assumptions.

 Bottom-up approach
In contrast to the programmatic approach or top-bottom up approach, this
approach change is led by general rather than senior managers. Once the change
has been initiated from the bottom, the role of senior management is to specify the
general direction and provide a climate of change as well as to spread lessons
from both successes and failures. The general managers, rather than creating
formal structures and systems, they focus on solving concrete business problems.
Beer et al (1990) termed this process ‘task alignment’ for which they have
outlined the following steps.
i. Start to ensure commitment to the change by involving people in defining
the problems
ii. Work jointly to develop a vision for the future of the organisation
iii. Work towards common agreement of the vision, and skills and actions to
carry it forward. HR initiatives such as training and management
development programmes can be used.
iv. Spread the changes to other areas of the organisation. Transfers and
secondments of key people can be used to spread the culture change to
other parts of the organisation.
v. Confirm changes by ensuring that policies, procedures and structures
support them. Performance appraisal systems need to be tailored to
emphasise the basic underlying assumptions of the new culture. job roles,
reward systems etc. should be aligned to the new culture.
vi. Evaluate outcomes of changes and amend vision and actions as necessary
6 Performance management and the management of change
An appropriate performance management system leads to better results from the
organisation, team and individuals by understanding and managing performance within
an agreed framework of planned goals, standards and attributes/competence requirements
(Armstrong, 1994).

32
Strategies for managing performance exist to develop a high-performance culture and
achieve increased organizational effectiveness, better results for individuals and teams,
and higher levels of skill, competence, commitment and motivation.
Managing performance strategies need to recognize in the words of Purcell (1999) that, in
circumstances of lean production, employees increasingly come to possess knowledge
and skills that management lacks: ‘Employees need to be motivated to apply these skills
through discretionary effort. And it is often the case that the firm’s business or production
strategy can only be achieved when this discretionary effort is contributed.’
Performance management processes have come to the fore in recent years as means of
providing a more integrated and continuous approach to the management of performance
than was provided by previous isolated and often inadequate merit rating or performance
appraisal schemes. Performance management is based on the principle of management by
agreement or contract rather than management by command. It emphasizes the
integration of individual and corporate objectives as well as the initiation of self-managed
learning development plans. It can play a major role in providing for an integrated and
coherent range of human resource management processes that are mutually supportive
and contribute as a whole to improving organizational effectiveness.

6.1 Performance management defined

Performance management can be defined as a strategic and integrated approach to
delivering sustained success to organizations by improving the performance of the people
who work in them and by developing the capabilities of teams and individual
contributors.
Performance management is strategic in the sense that it is concerned with the broader
issues facing the business needed to function effectively in its environment, and within
the general direction in which it intends to go to achieve longer-term goals. It is
integrated in four senses:
1) vertical integration – linking or aligning business, team and individual objectives;
2) functional integration – linking functional strategies in different parts of the business;
3) HR integration – linking different aspects of human resource management, especially
organizational development, human resource development and reward, to achieve a
coherent approach to the management and development of people;
4) the integration of individual needs with those of the organization, as far as this is
possible.

6.2 Purpose of performance management

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Performance management strategy aims to provide the means through which better
results can be obtained from the organization, teams and individuals by understanding
and managing performance within an agreed framework of planned goals, standards and
competence requirements. It involves the development of processes for establishing
shared understanding about what is to be achieved, and an approach to managing and
developing people in a way that increases the probability that it will be achieved in the
short and longer term. It must be owned and driven by line management.

6.3 Performance management concerns

Performance management strategy is basically concerned with performance improvement
in order to achieve organizational, team and individual effectiveness. Organizations, as
stated by Lawson (1995), have ‘to get the right things done successfully’.
Secondly, performance management strategy is concerned with employee development.
Performance improvement is not achievable unless there are effective processes of
continuous development. This addresses the core competences of the organization and the
capabilities of individuals and teams. Performance management should really be called
performance and development management.
Thirdly, performance management strategy is concerned with satisfying the needs and
expectations of all the organization’s stakeholders – owners, management, employees,
customers, suppliers and the general public. In particular, employees are treated as
partners in the enterprise whose interests are respected and who have a voice on matters
that concern them, whose opinions are sought and listened to. Performance management
should respect the needs of individuals and teams as well as those of the organization,
although it must be recognized that they will not always coincide.
Finally, performance management strategy is concerned with communication and
involvement. It aims to create a climate in which a continuing dialogue between
managers and the members of their teams takes place to define expectations and share
information on the organization’s mission, values and objectives. Performance
management can contribute to the development of a high-involvement organization by
getting teams and individuals to participate in defining their objectives and the means to
achieve them.
Performance management strategy aims to provide the means through which better
results can be obtained from the organization, teams and individuals by understanding
and managing performance within an agreed framework of planned goals, standards and
competence requirements.

6.4 The scope of performance management strategy

Performance management strategy focuses on what is involved in managing the
organization. It is a natural process of management, not a system or a technique (Fowler,

34
1990). It is also about managing within the context of the business (its internal and
external environment). This will affect how performance management processes are
developed, what they set out to do and how they operate. The context is important, and
Jones (1995) goes as far as to say ‘manage context not performance’.
Performance management strategy concerns everyone in the business – not just
managers. It rejects the traditional assumption that only managers are accountable for the
performance of their teams and replaces it with the belief that responsibility is shared
between managers and team members. In a sense, managers should regard the people
who report to them as customers for the managerial contribution and services they can
provide.
Managers and their teams are jointly accountable for results and are jointly involved in
agreeing what they need to do and how they need to do it, in monitoring performance and
in taking action. Performance management processes are part of a holistic approach to
managing for performance that is the concern of everyone in the organization.
6.5 The performance management process
Performance management strategy has to focus on developing a continuous and flexible
process that involves managers and those whom they manage acting as partners within a
framework. This should set out how they can best work together to achieve the required
results.
Performance management focuses on:
 Future performance planning and improvement rather than on retrospective
performance appraisal.
 Provides the basis for regular and frequent dialogues between managers and
individuals or teams about performance and development needs.
 Individual performance and development but it can also be applied to teams.
 Targets, standards and performance measures or indicators. But it also deals with
inputs – the knowledge, skills and competencies required to produce the expected
results. It is by defining these input requirements and assessing the extent to
which the expected levels of performance have been achieved by using skills and
competencies effectively that developmental needs are identified.
Performance management is a strategic process because it is forward-looking and
developmental. It provides a framework in which managers can support their team
members rather than dictate to them, and its impact on results will be much more
significant if it is regarded as a transformational rather than as an appraisal process.
Organisational Performance Management Methods

 Balanced Scorecard
Uses four perspectives to track and evaluate an organisation’s performance:

35
 the financial perspective which is concerned with financial results usually
expressed in financial metrics such as profitability, value creation, and share price
 the customer perspective, which focuses on the manner in which the enterprise
delivers value to its customers as measured in terms of customer satisfaction,
customer loyalty, market share, customer acquisition, etc.
 the internal perspective which considers performance in terms of the
effectiveness of the key internal business processes in delivering the required
service or products to the customer;
 the innovation and learning perspective which is concerned with the efficacy
with which the enterprise equips the people with the requisite knowledge, skills,
systems, and tools necessary for them to attain the performance levels that are
dictated by the organisation’s objectives

 Performance Prism
The performance prism seeks to measure and manage organisational performance
using five aspects namely, stakeholder satisfaction, stakeholder contribution,
strategies, processes, and capabilities (Neely et al., 2002).
 Stakeholder satisfaction is concerned with identifying the stakeholders and
understanding their needs with the objective of establishing strategies to
satisfy their needs.
 The stakeholders are prioritised in terms of their influence to the organisation
and appropriate measures to track and evaluate the organisation’s performance
in satisfying their respective needs are put in place.
 Stakeholder contribution involves understanding what the organisation wants
and expects from the stakeholders, e.g. loyalty and profitability from
customers; flexibility and multiple skills from employees; capital growth and
willingness to take risks from the investors.
 Strategies are the grand plans on the basis of which an organisation expects to
satisfy the needs of its stakeholders and outperform its competitors. Key
elements that need to be monitored and evaluated are identified and
appropriate measures to assess their performance in delivering the required
value to the stakeholders are then established. Assessment measures also serve
to communicate the strategies themselves within the organisation, to
encourage organisation’s members to implement the strategies and to ensure
that the strategies continue to be relevant.
 Processes are the means by which companies create value. Key processes that
need to be monitored and evaluated are identified and appropriate measures to
assess their performance in delivering the required value to the stakeholders
are then established.
 Capabilities comprise the people, practices, infrastructure and technology that
facilitate the operation of the processes. They represent the resources required
in order to execute the processes in a manner that will enable the organisation

36
 to outperform its rivals. Appropriate measures to assess how well the
capabilities are operating must be established.


How performance management may contribute to organisational change

 Communicating the organisation’s mission
 Making employees more effective by linking their performance objectives to
those of the organisation
 Involving employees in decision making
 Assisting restructuring through devolvement of decision making
 Making managers manage
 Linking employee rewards to individual performance
 Reducing trade union influence
 Developing employees in line with organisational goals

7 Reward management and the management of change

7.1 Reward strategy defined
Reward strategy is a declaration of intent that defines what the organization wants to do in the
longer term to develop and implement reward policies, practices and processes that will further
the achievement of its business goals and meet the needs of its stakeholders. Reward strategy
provides a sense of purpose and direction and a framework for developing reward policies,
practices and processes. It is based on an understanding of the needs of the organization and its
employees and how they can best be satisfied. It is also concerned with developing the values of
the organization on how people should be rewarded and formulating guiding principles that will
ensure that these values are enacted. Reward strategy is underpinned by a reward philosophy that
expresses what the organization believes should be the basis upon which people are valued and
rewarded. Reward philosophies are often articulated as guiding principles.

7.2 Why have a reward strategy?

Overall, in the words of Duncan Brown (2001): ‘Reward strategy is ultimately a way of thinking
that you can apply to any reward issue arising in your organization, to see how you can create
value from it.’ More specifically, there are four arguments for developing reward strategies:
1. You must have some idea where you are going, or how do you know how to get there, and
how do you know that you have arrived (if you ever do)?
2. Pay costs in most organizations are by far the largest item of expense – they can be 60 per cent
and often much more in labour-intensive organizations – so doesn’t it make sense to think about
how they should be managed and invested in the longer term?
3. There can be a positive relationship between rewards, in the broadest sense, and performance,
so shouldn’t we think about how we can strengthen that link?
4. As Cox and Purcell (1998) write, ‘the real benefit in reward strategies lies in complex linkages
with other human resource management policies and practices’. Isn’t this a good reason for
developing a reward strategic framework that indicates how reward processes will be linked to
HR processes so that they are coherent and mutually supportive?

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7.3 Characteristics of reward strategy
As Murlis (1996) points out: ‘Reward strategy will be characterised by diversity and conditioned
both by the legacy of the past and the realities of the future.’ All reward strategies are different,
just as all organizations are different. Of course, similar aspects of reward will be covered in the
strategies of different organizations but they will be treated differently in accordance with
variations between organizations in their contexts, strategies and cultures.
Reward strategists may have a clear idea of what needs to be done but they have to take account
of the views of top management and be prepared to persuade them with convincing arguments
that action needs to be taken.
They have to take particular account of financial considerations – the concept of ‘affordability’
looms large in the minds of chief executives and financial directors, who will need to be
convinced that an investment in rewards will pay off. They also have to convince employees and
their representatives that the reward strategy will meet their needs as well as business needs.

7.4 The structure of reward strategy

Reward strategy should be based on a detailed analysis of the present arrangements for reward,
which would include a statement of their strengths and weaknesses. This, as suggested by the
Chartered Institute of Personnel and Development (2004), could take the form of a ‘gap
analysis’, which compares what is believed should be happening with what is happening and
indicates which ‘gaps’ need to be filled. A diagnosis should be made of the reasons for any gaps
or problems so that decisions can be made on what needs to be done to overcome them. It can
then be structured under the headings set out below:
1. A statement of intentions – the reward initiatives that it is proposed should be taken.
2. A rationale – the reasons why the proposals are being made. The rationale should make out the
business case for the proposals, indicating how they will meet business needs and setting out the
costs and the benefits. It should also refer to any people issues that need to be addressed and how
the strategy will deal with them.
3. A plan – how, when and by whom the reward initiatives will be implemented. The plan should
indicate what steps will need to be taken and should take account of resource constraints and the
need for communications, involvement and training. The priorities attached to each element of
the strategy should be indicated and a timetable for implementation should be drawn up. The
plan should state who will be responsible for the development and implementation of the
strategy.
4. A definition of guiding principles – the values that it is believed should be adopted in
formulating and implementing the strategy.

7.5 The content of reward strategy

Reward strategy may be a broad-brush affair simply indicating the general direction in which it
is thought reward management should go. In addition or alternatively, reward strategy may set
out a list of specific intentions dealing with particular aspects of reward management.
 Broad-brush reward strategy

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Abroad-brush reward strategy may commit the organization to the pursuit of a total rewards
policy. The basic aim might be to achieve an appropriate balance between financial and non-
financial rewards. A further aim could be to use other approaches to the development of the
employment relationship and the work environment that will enhance commitment and
engagement and provide more opportunities for the contribution of people to be valued and
recognized.
1. A total reward approach is adopted that emphasizes the significance of both financial and non-
financial rewards.
2. Reward policies and practices are developed within the framework of a well-articulated
designed to support the achievement of business objectives and meet needs of stakeholders.
3. A job evaluation scheme is used that properly reflects the values of the organization, is up to
date with regard to the jobs it covers and is non-discriminatory.
4. Equal pay issues are given serious attention. This includes the conduct of equal pay reviews
that lead to action.
5. Market rates are tracked carefully so that a competitive pay structure exists that contributes to
the attraction and retention of high-quality people.
6. Grade and pay structures are based on job evaluation and market rate analysis appropriate to
the characteristics and needs of the organization and its employees, facilitate the management of
relativities, provide scope for rewarding contribution, clarify reward and career opportunities, are
constructed logically, operate transparently and are easy to manage and maintain.
7. Contingent pay schemes reward contribution fairly and consistently, support the motivation of
staff and the development of a performance culture, deliver the right messages about the values
of the organization, contain a clear ‘line of sight’ between contribution and reward, and are cost-
effective.
8. Performance management processes contribute to performance improvement, people
development and the management of expectations, operate effectively throughout the
organization and are supported by line managers and staff.
9. Employee benefits and pension schemes meet the needs of stakeholders and are cost-effective.
10. A flexible benefits approach is adopted.
11. Reward management procedures exist that ensure that reward processes are managed
effectively and that costs are controlled.
12. Appropriate use is made of computers (software and spread-sheets) to assist in the process of
reward management.
13. Reward management aims and arrangements are transparent and communicated well to staff.
14. Surveys are used to assess the opinions of staff about reward, and action is taken on the
outcomes.
15. An appropriate amount of responsibility for reward is devolved to line managers.
16. Line managers are capable of carrying out their devolved responsibilities well.
17. Steps are taken to train line managers and provide them with support and guidance as
required.
18. HR has the knowledge and skills to provide the required reward management advice and
services and to guide and support line managers.
19. Overall, reward management developments are conscious of the need to achieve affordability
and to demonstrate that they are cost-effective.
20. Steps are taken to evaluate the effectiveness of reward management processes and to ensure
that they reflect changing needs.

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Examples of other broad strategic aims include:
1) introducing a more integrated approach to reward management – encouraging continuous
personal development and spelling out career opportunities;
2) developing a more flexible approach to reward that includes the reduction of artificial barriers
as a result of overemphasis on grading and promotion;
3) rewarding people according to their contribution;
4) supporting the development of a performance culture and building levels of competence;
5) clarifying what behaviours will be rewarded and why.

 Specific reward initiatives

The selection of reward initiatives and the priorities attached to them will be based on an analysis
of the present circumstances of the organization and an assessment of the needs of the business
and its employees. The following are examples of possible specific reward initiatives, one or
more of which might feature in a reward strategy:
 the replacement of present methods of contingent pay with a pay-for contribution
scheme;
 the introduction of a new grade and pay structure, e.g. a broad-graded or career family
structure;
 the replacement of an existing decayed job evaluation scheme with a computerized
scheme that more clearly reflects organizational values;
 the improvement of performance management processes so that they provide better
support for the development of a performance culture and more clearly identify
development needs;
 the introduction of a formal recognition scheme;
 the development of a flexible benefits system;
 the conduct of equal pay reviews, with the objective of ensuring that work of equal value
is paid equally;
 communication programmes designed to inform everyone of the reward policies and
practices of the organization;
 training, coaching and guidance programmes designed to increase line management
capability (see also the last section of this chapter).

7.6 Guiding principles

Guiding principles define the approach an organization takes to dealing with reward. They are
the basis for reward policies and provide guidelines for the actions contained in the reward
strategy. They express the reward philosophy of the organization – its values and beliefs about
how people should be rewarded.
Members of the organization should be involved in the definition of guiding principles, which
can then be communicated to everyone to increase understanding of what underpins reward
policies and practices.
However, employees will suspend their judgement of the principles until they experience how
they are applied. What matters to them is not the philosophies themselves but the pay practices
emanating from them and the messages about the employment ‘deal’ that they get as a
consequence. It is the reality that is important, not the rhetoric. Guiding principles should
incorporate or be influenced by general beliefs about fairness, equity, consistency and
transparency. They may be concerned with such specific matters as:

40
  developing reward policies and practices that support the achievement of business goals;
 providing rewards that attract, retain and motivate staff and help to develop a high-
performance culture;
 maintaining competitive rates of pay;
 rewarding people according to their contribution;
 recognizing the value of all staff who are making an effective contribution, not just the
exceptional performers;
 allowing a reasonable degree of flexibility in the operation of reward processes and in the
choice of benefits by employees;
 devolving more responsibility for reward decisions to line managers.

7.7 Developing reward strategy

The formulation of corporate strategy can be described as a process for developing and defining
a sense of direction. The Chartered Institute of Personnel and Development (2004) suggests the
following key development phases:
1. the diagnosis phase, when reward goals are agreed, current policies and practices assessed
against them, options for improvement considered and any changes agreed;
2. the detailed design phase, when improvements and changes are detailed and any changes
tested (pilot testing is important);
3. the final testing and preparation phase;
4. the implementation phase, followed by on-going review and modification.

In practice, however, the formulation of reward strategy is seldom as logical and linear a process
as this. Reward strategies evolve; they have to respond to changes in organizational
requirements, which are happening all the time. Reward strategists need to track emerging trends
in reward management and may modify their views accordingly, as long as they do not leap too
hastily on the latest bandwagon.
It may be helpful to set out reward strategies on paper for the record and as a basis for planning
and communication. But this should be regarded as no more than a piece of paper that can be
torn up when needs change – as they will – not a tablet of stone.

7.9 Effective reward strategies

Components of an effective reward strategy
Duncan Brown (2001) has suggested that effective reward strategies have three components:
1. They have to have clearly defined goals and a well-defined link to business objectives.
2. There have to be well-designed pay and reward programmes, tailored to the needs of the
organization and its people, and consistent and integrated with one another.
3. There need to be effective and supportive HR and reward processes in place.
Criteria for effectiveness
The questions to be answered when assessing the effectiveness of a reward strategy are:
1. Does it support the achievement of the organization’s business and HR strategies?
2. Will it reinforce organizational values?
3. Is there a convincing statement of how the business needs of the organization will be met and
how the needs of stakeholders will be catered for?
4. Is it based on a thorough analysis and diagnosis of the reward situation in the organization?

41
5. Has a realistic assessment been made of the resources required to implement the strategy and
the costs involved?
6. Is it affordable in the sense that the benefits will exceed any costs?
7. Have steps been taken to ensure that supporting processes such as performance management,
communication and training are in place?
8. Is the programme for implementation realistic?
9. Have steps been taken to ensure that it is supported and understood by line managers and
staff?
10. Will HR and line managers be capable of implementing and managing the strategy in
practice?

7.10 Reward strategy and line management capability

HR can initiate new reward policies and practices but it is the line that has the main
responsibility for implementing them. The trend is, rightly, to devolve more responsibility for
managing reward to line managers. Some will have the ability to respond to the challenge and
opportunity; others will be incapable of carrying out this responsibility without close guidance
from HR; some may never be able to cope. Managers may not always do what HR expects them
to do, and if compelled to, they may be half-hearted about it.
This puts a tremendous onus on HR and reward specialists to develop line management
capability, to initiate processes that can readily be implemented by line managers, to promote
understanding by communicating
what is happening, why it is happening and how it will affect everyone, to provide guidance and
help where required, and to provide formal training as necessary.

7.11 Use of reward strategy in the management of change

 Reward management values and structures

According to Lawler (1995), an inconsistency between what an organisation says and
does in its reward strategy may lead to employee discontent. Values that may be
considered include:
 Paying for performance
Individual performance related pay has considerable potential for inculcating a
performance-oriented culture. It has considerable potential to change the
organisation’s culture due to its symbolic significance (Schein, 1992).
Team-based performance related pay may encourage employees to work more
closely in teams through giving the members a clearer focus on the teams
objectives and what needs to be done to achieve them.

 Equity
The value of equity may be a major contributor to the promotion of changed
employee behaviours. If employees feel their pay to be inequitable then the
change that the reward strategy is expected to bring about may not materialise.
Consideration should be given to both the internal and external equity.

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  Employees sharing in the organisation’s success
An element of sharing the company’s success may be built into the reward
strategy, e.g. profit-related pay as well as gain-sharing and other schemes where
employees obtain shares in their employing organisation.
 Combining financial and non-financial rewards
Individuals require more for their efforts than pecuniary reward. Areas where
non-financial rewards may be applied resulting in sustainable change in
behaviour include achievement, recognition, responsibility, influence and
personal growth.
There must be appropriate structures to promote the reward values. Such structures must
make a clear distinction between basic pay and variable pay; individual performance-
related pay; team-based pay; profit-related pay; gain-sharing; skill-based pay; etc.
If the reward strategy is to be effective in contributing to a change in employee
behaviours there must be meaningful employee involvement in the design and
implementation of the reward strategy. Effective communication plays an important role
in this regard.

8 Human resource development (HRD) and the management of change

HRD strategies ensure that the organization has the talented and skilled people it needs and that
individuals are given the opportunity to enhance their knowledge and skills and levels of
competence.

8.1 Strategic HRD

Strategic HRD is defined by Walton (1999) as follows: ‘Strategic human resource development
involves introducing, eliminating, modifying, directing, and guiding processes in such a way that
all individuals and teams are equipped with the skills, knowledge and competences they require
to undertake current and future tasks required by the organization.’ As described by Harrison
(2000), strategic HRD is ‘development that arises from a clear vision about people’s abilities and
potential and operates within the overall strategic framework of the business’. Strategic HRD
takes a broad and long-term view about how HRD policies and practices can support the
achievement of business strategies. It is business led, and the learning and development
strategies that are established as part of the overall strategic human resource development
approach flow from business strategies, although they have a positive role in helping to ensure
that the business attains its goals.

8.2 Strategic HRD aims

Strategic HRD aims to produce a coherent and comprehensive framework for developing people
through the creation of a learning culture and the formulation of organizational and individual
learning strategies. Its objective is to enhance resource capability in accordance with the belief
that a firm’s human resources are a major source of competitive advantage. It is therefore about

43
developing the intellectual capital required by the organization as well as ensuring that the right
quality of people are available to meet present and future needs. The main thrust of strategic
HRD is to provide an environment in which people are encouraged to learn and develop.
Although it is business led, its specific strategies have to take into account individual aspirations
and needs. The importance of increasing employability outside as well as within the organization
should be one of the concerns of strategic HRD.

8.3 Human resource development philosophy

The philosophy underpinning strategic HRD is as follows:
 Human resource development makes a major contribution to the successful attainment of
the organization’s objectives, and investment in it benefits all the stakeholders of the
organization.
 Human resource development plans and programmes should be integrated with and
support the achievement of business and human resource strategies.
 Human resource development should always be performance related – designed to
achieve specified improvements in corporate, functional, team and individual
performance and make a major contribution to bottom-line results.
 Everyone in the organization should be encouraged and given the opportunity to learn –
to develop their skills and knowledge to the maximum of their capacity.
 The framework for individual learning is provided by personal development plans that
focus on self-managed learning and are supported by coaching, mentoring and formal
training.
 The organization needs to invest in learning and development by providing appropriate
learning opportunities and facilities, but the prime responsibility for learning and
development rests with individuals, who will be given the guidance and support of their
managers and, as necessary, members of the HR department.

8.4 Elements of human resource development

The key elements of human resource development are:
 Learning – defined by Bass and Vaughan (1966) as ‘a relatively permanent change in
behaviour that occurs as a result of practice or experience’. As Kolb (1984) describes it,
‘Learning is the major process of human adaptation.’
 Training – the planned and systematic modification of behaviour through learning events,
programmes and instruction that enable individuals to achieve the levels of knowledge,
skill and competence needed to carry out their work effectively.
 Development – the growth or realization of a person’s ability and potential through the
provision of learning and educational experiences.
 Education – the development of the knowledge, values and understanding required in all
aspects of life rather than the knowledge and skills relating to particular areas of activity.

8 Strategies for creating a learning culture

A learning culture is one in which learning is recognized by top management, line managers and
employees generally as an essential organizational process to which they are committed and in
which they engage continuously. It is described by Reynolds (2004) as a ‘growth medium’ that
will ‘encourage employees to commit to a range of positive discretionary behaviours, including
learning’ and that has the follo.5 wing characteristics: empowerment not supervision, self-

44
managed learning not instruction, and long-term capacity building not short-term fixes.
Discretionary learning according to Sloman (2003) happens when individuals actively seek to
acquire the knowledge and skills that promote the organization’s objectives. It is suggested by
Reynolds (2004) that to create a learning culture that acts as a growth medium it is necessary to
develop organizational practices that raise commitment amongst employees and ‘give employees
a sense of purpose in the workplace, grant employees opportunities to act upon their
commitment, and offer practical support to learning’. He proposes the following steps:
1. Develop and share the vision – belief in a desired and emerging future.
2. Empower employees – provide ‘supported autonomy’: freedom for employees to manage their
work within certain boundaries (policies and expected behaviours) but with support available as
required. Adopt a facilitative style of management in which responsibility for decision making is
ceded as far as possible to employees.
3. Provide employees with a supportive learning environment where learning capabilities can be
discovered and applied, e.g. peer networks, supportive policies and systems, protected time for
learning.
4. Use coaching techniques to draw out the talents of others by encouraging employees to
identify options and seek their own solutions to problems.
5. Guide employees through their work challenges and provide them with time, resources and,
crucially, feedback.
6. Recognize the importance of managers acting as role models: ‘The new way of thinking and
behaving may be so different that you must see what it looks like before you can imagine
yourself doing it. You must see the new behaviour and attitudes in others with whom you can
identify’ (Schein, 1999).
7. Encourage networks – communities of practice.
8. Align systems to vision – get rid of bureaucratic systems that produce problems rather than
facilitate work.

8.6 Organizational learning strategies

Organizations can be described (Harrison, 2000) as continuous learning systems, and
organizational learning has been defined by Marsick (1994) as a process of: ‘Co-ordinated
systems change, with mechanisms built in for individuals and groups to access, build and use
organizational memory, structure and culture to develop long-term organizational capacity.’
Organizational learning strategy aims to develop a firm’s resource-based capability. This is in
accordance with one of the basic principles of human resource management, namely that it is
necessary to invest in people in order to develop the human capital required by the organization
and to increase its stock of knowledge and skills. As stated by Ehrenberg and Smith (1994),
human capital theory indicates that: ‘The knowledge and skills a worker has – which comes from
education and training, including the training that experience brings – generate a certain stock of
productive capital.’
Harrison (1997) has defined five principles of organizational learning:
1. The need for a powerful and cohering vision of the organization to be communicated and
maintained across the workforce in order to promote awareness of the need for strategic thinking
at all levels.
2. The need to develop strategy in the context of a vision that is not only powerful but also open-
ended and unambiguous. This will encourage a search for a wide rather than a narrow range of
strategic options, will promote lateral thinking and will orient the knowledge-creating activities

45
of employees.
3. Within the framework of vision and goals, frequent dialogue, communication and
conversations are major facilitators of organizational learning.
4. It is essential continuously to challenge people to re-examine what they take for granted.
5. It is essential to develop a conducive learning and innovation climate.

 Single- and double-loop learning

Argyris (1992) suggests that organizational learning occurs under two conditions: first, when an
organization achieves what is intended and, second, when a mismatch between intentions and
outcomes is identified and corrected. But organizations do not perform the actions that produce
the learning; it is individual members of the business who behave in ways that lead to it,
although organizations can create conditions that facilitate such learning. Argyris distinguishes
between single-loop and double-loop learning.

Single-loop learning organizations define the ‘governing variables’, i.e. what they expect to
achieve in terms of targets and standards. They then monitor and review achievements, and take
corrective action as necessary, thus completing the loop. Double-loop learning occurs when the
monitoring process initiates action to redefine the ‘governing variables’ to meet the new
situation, which may be imposed by the external environment. The organization has learnt
something new about what has to be achieved in the light of changed circumstances and can then
decide how this should be achieved.

 Learning organization strategy

The process of organizational learning is the basis for the concept of a learning organization. It
has been described by Pedler, Boydell and Burgoyne (1989) as ‘an organization which facilitates
the learning of all its members and continually transforms itself’. Senge (1990) calls the learning
organization: ‘An organization that is continually expanding to create its future’. As Burgoyne
(1994) has pointed out, learning organizations have to be able to adapt to their context and
develop their people to match the context. Wick and Leon (1995) have defined a learning
organization as one that ‘continually improves by rapidly creating and refining the capabilities
required for future success’.
Garvin (1993) defines a learning organization as one that is ‘skilled at creating, acquiring, and
transferring knowledge, and at modifying its behaviour to reflect new knowledge and insights’.
He has suggested that learning organizations are good at doing five things:
1. Systematic problem solving, which rests heavily on the philosophy and methods of the quality
movement. Its underlying ideas include relying on scientific method, rather than guesswork, for
diagnosing problems – what Deming (1986) calls the ‘plan–do–check–act’ cycle and others refer
to as ‘hypothesis-generating, hypothesis-testing’ techniques. Data rather than assumptions are
required as the background to decision making – what quality practitioners call ‘fact-based
management’ – and simple statistical tools such as histograms, Pareto charts and cause-and-
effect diagrams are used to organize data and draw inferences.
2. Experimentation – this activity involves the systematic search for and testing of new
knowledge. Continuous improvement programmes – ‘kaizen’ – are an important feature in a
learning organization.
3. Learning from past experience – learning organizations review their successes and failures,
assess them systematically and record the lessons learnt in a way that employees find open and

46
accessible. This process has been called the ‘Santayana principle’, quoting the philosopher
George Santayana who coined the phrase: ‘Those who cannot remember the past are condemned
to repeat it.’
4. Learning from others – sometimes the most powerful insights come from looking outside
one’s immediate environment to gain a new perspective. This process has been called SIS for
‘steal ideas shamelessly’. Another, more acceptable word for it is ‘benchmarking’ – a disciplined
process of identifying best practice organizations and analysing the extent to which what they are
doing can be transferred, with suitable modifications, to one’s own environment.
5. Transferring knowledge quickly and efficiently throughout the organization by seconding
people with new expertise, or by education and training programmes, as long as the latter are
linked explicitly with implementation. One approach, as advocated by Senge (1990), is to focus
on collective problem-solving within an organization. This is achieved using team learning and a
‘soft systems’ methodology whereby all the possible causes of a problem are considered in order
to define more clearly those that can be dealt with and those that are insoluble.

A learning organization strategy will be based on the belief that learning is a continuous process
rather than a set of discrete training activities (Sloman, 1999). It will incorporate strategies for
organizational learning as described above and individual learning as discussed below.

 Individual learning strategies

The individual learning strategies of an organization are driven by its human resource
requirements, the latter being expressed in terms of the sort of skills and behaviours that are
required to achieve business goals. The starting point is the approach adopted to the provision of
learning and development opportunities, bearing in mind the distinction between learning and
development made by Pedler et al (1989), who see learning as being concerned with an increase
in knowledge or a higher degree of an existing skill, whereas development is more towards a
different state of being or functioning.
Sloman (2003) contends that: Interventions and activities which are intended to improve
knowledge and skills will increasingly focus on the learner. Emphasis will shift to the individual
learner (or team). And he or she will be encouraged to take more responsibility for his or her
learning. Efforts will be made to develop a climate which supports effective and appropriate
learning. Such interventions and activities will form part of an integrated approach to creating
competitive advantage through people in the organization.
The learning strategy should cover:
 how learning needs will be identified;
 the role of personal development planning and self-managed learning;
 the support that should be provided for individual learning in the form of guidance,
coaching, learning resource centres, mentoring, external courses designed to meet the
particular needs of individuals, internal or external training programmes, and courses
designed to meet the needs of groups of employees.

8.7 Relevance of HRD to the management of change

The leverage provided by HRD encompasses the following:

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  Sound HRD strategy enables the organisation to adapt to whatever challenges that
may arise and to turn threats into opportunities owing to the HR’s innovative
capacity and responsiveness to change. HRD through, inter alia, multi-skilling
and continual self-improvement, and in collaboration with other HR strategies
enables the organisation to create new work practices and behaviours.
 HRD facilitate development of a flexible and autonomous workforce necessary to
implement and sustain the changes.
 HRD reduces over-reliance on external resources to drive the change.
 HRD facilitates restructuring / job re-design.
 HRD facilitates development of managers.
 HRD promotes existence of a learning organisation.

9.1 Employee relations strategy defined

Employee relations strategies define the intentions of the organization about what needs to be
done and what needs to be changed in the ways in which the organization manages its
relationships with employees and their trade unions. Like all other aspects of HR strategy,
employee relations strategies will flow from the business strategy but will also aim to support it.
For example, if the business strategy is to concentrate on achieving competitive edge through
innovation and the delivery of quality to its customers, the employee relations strategy may
emphasize processes of involvement and participation, including the implementation of
programmes for continuous improvement and total quality management. If, however, the strategy
for competitive advantage, or even survival, is cost reduction, the employee relations strategy
may concentrate on how this can be achieved by maximizing cooperation with the unions and
employees and by minimizing detrimental effects on those employees and disruption to the
organization.
Employee relations strategies should be distinguished from employee relations policies.
Strategies are dynamic. They provide a sense of direction and give an answer to the question
‘How are we going to get from here to there?’ Employee relations policies are more about the
here and now. They express ‘the way things are done around here’ as far as dealing with unions
and an employee is concerned. Of course they will evolve but this may not be a result of a
strategic choice. It is when a deliberate decision is made to change policies that a strategy for
achieving this change has to be formulated. Thus if the policy is to increase commitment, the
strategy could consider how this might be achieved by involvement and participation processes.

9.2 Concerns of employee relations strategy

Employee relations strategy will be concerned with how to:
 build stable and cooperative relationships with employees that minimize conflict;
 achieve commitment through employee involvement and communications processes;
 develop mutuality – a common interest in achieving the organization’s goals through the
development of organizational cultures based on shared values between management and
employees.

9.3 Strategic directions

The intentions expressed by employee relations strategies may direct the organization towards
any of the following:

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  changing forms of recognition, including single union recognition, or de-recognition;
 changes in the form and content of procedural agreements;
 new bargaining structures, including decentralization or single-table bargaining;
 the achievement of increased levels of commitment through involvement or participation
– giving employees a voice; deliberately bypassing trade union representatives to
communicate directly with employees;
 increasing the extent to which management controls operations in such areas as
flexibility;
 generally improving the employee relations climate in order to produce more harmonious
and cooperative relationships;
 developing a ‘partnership’ with trade unions, recognizing that employees are stakeholders
and that it is to the advantage of both parties to work together (this could be described as
a unitarist strategy aiming at increasing mutual commitment).

9.4 Approaches to employee relations strategies

Four approaches to employee relations have been identified by Industrial Relations Services
(IRS, 1993):
1. Adversarial: the organization decides what it wants to do, and employees are expected to fit in.
Employees only exercise power by refusing to cooperate.
2. Traditional: a good day-to-day working relationship but management proposes and the
workforce reacts through its elected representatives.
3. Partnership: the organization involves employees in the drawing up and execution of
organization policies, but retains the right to manage.
4. Power sharing: employees are involved in both day-to-day and strategic decision making.
Adversarial approaches are much less common than in the 1960s and 1970s. The traditional
approach is still the most typical, but more interest is being expressed in partnership. Power
sharing is rare.

Against the background of a preference for one of the four approaches listed above, employee
relations strategy will be based on the philosophy of the organization on what sort of
relationships between management and employees and their unions are wanted, and how they
should be handled. A partnership strategy will aim to develop and maintain a positive,
productive, cooperative and trusting climate of employee relations.

9.5 The HRM approach to employee relations

The philosophy of HRM has been translated into the following prescriptions, which constitute
the HRM model for employee relations:
 a drive for commitment – winning the ‘hearts and minds’ of employees to get them to
identify with the organization, to exert themselves more on its behalf and to remain with
the organization, thus ensuring a return on their training and development;
 an emphasis on mutuality – getting the message across that ‘we are all in this together’
and that the interests of management and employees coincide (i.e. a unitarist approach);
 the organisation of complementary forms of communication, such as team briefing,
alongside traditional collective bargaining, i.e. approaching employees directly as
individuals or in groups rather than through their representatives;
 a shift from collective bargaining to individual contracts;

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  the use of employee involvement techniques such as quality circles or improvement
groups;
 continuous pressure on quality – total quality management;
 increased flexibility in working arrangements, including multi-skilling, to provide for the
more effective use of human resources, sometimes accompanied by an agreement to
provide secure employment for the ‘core’ workers;
 emphasis on teamwork;
 harmonisation of terms and conditions for all employees.

9.6 Policy options

There are a number of policy options that need to be considered when developing employee
relations strategy. The following four options have been described by Guest (1995):
1. The new realism – a high emphasis on HRM and industrial relations. The aim is to integrate
HRM and industrial relations. This is the policy of such organizations as Nissan and Toshiba. A
review of new collaborative arrangements in the shape of single-table bargaining (IRS, 1993)
found that they were almost always the result of employer initiatives, but that both employers
and unions seem satisfied with them. They have facilitated greater flexibility, more multi-
skilling, the removal of demarcations and improvements in quality. They can also extend
consultation processes and accelerate moves towards single status.
2. Traditional collectivism – priority to industrial relations without HRM. This involves retaining
the traditional pluralist industrial relations arrangements within an eventually unchanged
industrial relations system. Management may take the view in these circumstances that it is
easier to continue to operate with a union, since it provides a useful, well-established channel for
communication and for the handling of grievance, discipline and safety issues.
3. Individualized HRM – high priority to HRM with no industrial relations.
According to Guest, this approach is not very common, excepting North American-owned firms.
It is, he believes, ‘essentially piecemeal and opportunistic’.
4. The black hole – no industrial relations. This option is becoming more prevalent in
organizations in which HRM is not a policy priority for management but where they do not see
that there is a compelling reason to operate within a traditional industrial relations system. When
such organizations are facing a decision on whether or not to recognize a union, they are
increasingly deciding not to do so.

9.7 Formulating employee relations strategies

Like other business and HR strategies, those concerned with employee relations can, in
Mintzberg’s (1987) words, ‘emerge in response to an evolving situation’. But it is still useful to
spend time deliberately formulating strategies and the aim should be to create a shared agenda
that will communicate a common perspective on what needs to be done. This can be expressed in
writing but it can also be clarified through involvement and communication processes. A
partnership agreement may well be the best way of getting employee relations strategies into
action.

 Partnership agreements
Defined

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In industrial relations a partnership arrangement can be described as one in which both parties
(management and the trade union) agree to work together to their mutual advantage and to
achieve a climate of more cooperative and therefore less adversarial industrial relations. A
partnership agreement may include undertakings from both sides; for example, management may
offer job security linked to productivity and the union may agree to new forms of work
organization that might require more flexibility on the part of employees.

Key values
Five key values for partnership have been set down by Roscow and Casner- Lotto (1998):
1. mutual trust and respect;
2. a joint vision for the future and the means to achieve it;
3. continuous exchange of information;
4. recognition of the central role of collective bargaining;
5. devolved decision making.
Their research in the United States indicated that, if these matters were addressed successfully by
management and unions, then companies could expect productivity gains, quality improvements,
a better-motivated and committed workforce, and lower absenteeism and turnover rates.

The impact of partnership

The Department of Trade and Industry and Department for Education and Employment report on
Partnerships at Work (1997) concludes that partnership is central to the strategy of successful
organizations. A growing understanding that organizations must focus on customer needs has
brought with it the desire to engage the attitudes and commitment of all employees in order to
meet those needs effectively, says the report. The report was based on interviews with managers
and employees in 67 private and public sector organizations identified as ‘innovative and
successful’. It reveals how such organizations achieve significantly enhanced business
performance through developing a partnership with their employees.
There are five main themes or ‘paths’ that the organizations identified as producing a balanced
environment in which employees thrived and sought success for themselves and their
organizations:
1. Shared goals – ‘understanding the business we are in’. All employees should be involved in
developing the organization’s vision, resulting in a shared direction and enabling people to see
how they fit into the organization and the contribution they are making. Senior managers in turn
receive ideas from those who really understand the problems – and the opportunities.
2. Shared culture – ‘agreed values binding us together’. In the research, ‘organization after
organization acknowledged that a culture has to build up over time… it cannot be imposed by
senior executives but must rather be developed in an atmosphere of fairness, trust and respect
until it permeates every activity of the organization’. Once achieved, a shared culture means that
employees feel respected and so give of their best.
3. Shared learning – ‘continuously improving ourselves’. Key business benefits of shared
learning include an increasing receptiveness to change, and the benefits of increased organization
loyalty brought by career and personal development plans.
4. Shared effort – ‘one business driven by flexible teams’. Change has become such an important
part of our daily lives that organizations have learnt that they cannot deal with it in an
unstructured way, says the report. The response to change cannot be purely reactive, as business
opportunities may be missed. While team working ‘leads to essential co-operation across the

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whole organization’, care must be taken to ensure that teams do not compete with each other in a
counterproductive way. It is essential that the organization develops an effective communication
system to ensure that the flow of information from and to teams enhances their effectiveness.
5. Shared information – ‘effective communication throughout the enterprise’.
While most organizations work hard at downward communication, the most effective
communication of all ‘runs up, down and across the business in a mixture of formal systems and
informal processes’. Many organizations with unions have built successful relationships with
them, developing key partnership roles in the effective dissemination of information,
communication and facilitation of change, while others have found representative works councils
useful in consulting employees and providing information.

9.8 Moving on
An important point that emerged from the research is that there are three levels, or stages, within
each of these five paths. These are the levels ‘at which certain elements of good practice must be
established before the organization moves forward to break new ground’.

9.9 Employee voice strategies

As defined by Boxall and Purcell (2003), ‘Employee voice is the term increasingly used to cover
a whole variety of processes and structures which enable, and sometimes empower employees,
directly and indirectly, to contribute to decision-making in the firm.’ Employee voice can be seen
as ‘the ability of employees to influence the actions of the employer’ (Millward, Bryson and
Forth, 2000). The concept covers the provision of opportunities for employees to register
discontent and modify the power of management. It embraces involvement and, more
significantly, participation.

The framework for employee voice

The framework for employee voice strategies identifies two dimensions of voice: 1) individual
employees; and 2) collective – union and other representation. The shared agenda of involvement
and partnership is a form of upward problem solving. This is on the same axis as the contested
agenda of grievances and collective bargaining. But these are not absolutes. Organizations will
have tendencies towards shared or contested agendas just as there will be varying degrees of
direct and indirect involvement, although they are unlikely to have partnership and traditional
collective bargaining at the same time. As Kochan, Katz and McKenzie (1986) point out,
amongst the strongest factors affecting the choice of employee voice strategy are the values of
management towards unions.

Planning for voice

The employee voice strategy appropriate for an organization depends upon the values and
attitudes of management and, if they exist, trade unions, and the current climate of employee
relations. Strategic planning should be based on a review of the existing forms of voice, which
would include discussions with stakeholders (line managers, employees and trade union
representatives) on the effectiveness of existing arrangements and any improvements required. In
the light of these discussions, new or revised approaches can be developed but it is necessary to
brief and train those involved in the part they should play.

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9.10 Managing change through employee relations
The linchpin to managing change through employee relations is employee involvement.
Employee involvement strategies usually seek to develop a unitary workforce through which
organisational change may be facilitated. Employee involvement generally seeks to foster direct
interaction with the employees as opposed to through employee representatives.

 Effects of employee involvement

It has been claimed that employee involvement should:
 Improve employee’s business awareness
 Generate employees’ commitment to the objectives of the organisation
 Foster trust by employees towards management
 Create a more customer focused approach and improve customer service
 Improve product quality
 Promote greater acceptance of organisational change
 Lead to employee flexibility
 Encourage more effective working relationships
 Generate employee empowerment
 Improve employee relations
 Improve job satisfaction and employee morale

 Main categories of employee involvement

 Downward communication
Methods involved include team and other group briefings; use of corporate
newspapers, journals, and reports aimed at employees; e-mail and recorded
telephone briefings. The rationale of such involvement is to provide information,
uniform messages and to be educative or re-educative.
 Problem solving and upward communication
This includes use of quality circles, quality action teams, quality improvement
teams, suggestion schemes, and employee surveys. The method seeks to gain
explicit access to employees’ experience and skills; as well as their cooperation
and opinions.
 Consultation
The method includes use of joint consultation committees, working parties or
groups, staff forums and works councils. This enables management to provide
information test reactions.
 Structural changes at job or work level
This includes job design, job enlargement and job enrichment; work
reorganisation; team working; autonomous working groups. The aim is to be re-
educative; provide greater levels of motivation and satisfaction; and to empower
the employees.
 Financial involvement
This includes employee share ownership plans; profit related pay; performance
related pay; and bonus schemes. The method aims to be re-educative; providing
incentives and promoting effort.
 Managerial style and leadership

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 This involves participative managerial style; being visible, accessible and
informal; creating credibility; and ensuring that actions are in line with key
messages. The method aims to provide support; encourage positive working
relationships and trust; and reduce barriers.

10 Approaches for implementing planned change

10.1 Organization Development
Organization development (OD) is about taking systematic steps to improve
organizational capability. It is concerned with process and people – how things get done
by those who work in the organization.
10.1.1 Organization development defined
Organization development is defined by Cummins and Worley (2005) as: ‘The system-
wide application and transfer of behavioural science knowledge to the planned
development, improvement and refinement of the strategies, structures and processes that
lead to organizational effectiveness’. Organization development aims to help people to
work better together, improve organizational processes such as the formulation and
implementation of strategy, and facilitate the transformation of the organization and the
management of change. As expressed by Beer (1980), OD operates as ‘A system-wide
process of data collection, diagnosis, action planning, intervention and evaluation’.

OD is based on behavioural science concepts, but during the 1980s and 1990s the focus
shifted to a number of other approaches. Some of these, such as organizational
transformation, resemble OD. Others, such as change management, are built on some of
the basic ideas developed by writers on organization development and OD practitioners.
Yet other approaches, such as high-performance work systems, total quality management
and performance management, can be described as holistic processes that attempt to
improve overall organizational effectiveness from a particular perspective. More recently,
as noted by Cummins and Worley (2005), the practice of OD has gone ‘far beyond its
humanistic origins by incorporating concepts from organization strategy that complement
the early emphasis on social processes’.

10.1.2 Assumptions and values of organization development

OD is based upon the following assumptions and values:
 Most individuals are driven by the need for personal growth and development as
long as their environment is both supportive and challenging.
 The work team, especially at the informal level, has great significance for feelings
of satisfaction and the dynamics of such teams have a powerful effect on the
behaviour of their members.
 OD programmes aim to improve the quality of working life of all members of the
organization.
 Organizations can be more effective if they learn to diagnose their own strengths
and weaknesses.

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  However, managers often do not know what is wrong and need special help in
diagnosing problems, although the outside ‘process consultant’ ensures that
decision-making remains in the hands of the client.
 The effective implementation of change involves paying close attention to the
people and processes involved.

10.1.3 Organization development strategies

OD strategies concentrate on how things are done as well as what is done. They are
concerned with system-wide change and are developed as programmes with the
following features:
 The strategies are managed (or at least strongly supported) from the top
management, but may make use of third parties or ‘change agents’ to diagnose
problems and to manage change by various kinds of planned activities or
interventions.
 The plans for organization development are based upon a systematic analysis and
diagnosis of the strategies and circumstances of the organization and the changes
and problems affecting it.
 They use behavioural science knowledge and aim to improve the way the
organization copes in times of change through such processes as interaction,
communications, participation, and conflict management.
 They focus on ways of ensuring that business and HR strategies are implemented
and change is managed effectively.

10.1.4 Action Research model for OD process

This is an approach developed by Lewin (1951), which takes the form of systematically
collecting data from people about process issues and feeding it back in order to identify
problems and their likely causes. This provides the basis for an action plan to deal with
the problem, which can be implemented cooperatively by the people involved. The
essential elements of action research are data collection, diagnosis, feedback, action
planning, action and evaluation.

Stage one: Anticipating need for change.

 Someone, usually a key manager, recognizes the need for change.
 There must be a felt need for change.
Stage two: Developing the practitioner-client relationship.
 The OD practitioner enters the system.
 Good first impressions and a match between the practitioner and client system are
important.
 The practitioner attempts to establish a pattern of open communication, a
relationship of trust, and an atmosphere of shared responsibility.
Stage three: Diagnostic phase.
 The practitioner and the client begin to gather data about the system.
 The objective is to better understand the client system’s problems, identify forces
causing the situation, and to provide a basis for selecting change strategies.

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 
Stage Four: Feedback to a Key Client or Group
 Because of the collaborative approach the data gathered is fed back to the client or
group.
 Consultant in this process will protect confidential sources.
Stage Five: Joint diagnosis of the problem
 Members here discuss feedback and decide whether they want to work on the
identified problems.
Stage Six: Joint action planning
 OD practitioner and members agree on actions to be taken. This is compared to
the moving process of Lewin’s model of change. Action to be taken will depend
on the culture, technology, environment of the organisation, the diagnosis of the
problem, and the time and expense of the intervention.
Stage Seven: Action plans, strategies, and techniques.
 A series of interventions, activities, or programs aimed at resolving problems and
increasing organization effectiveness.
 These programs apply OD techniques such as team building, intergroup
development, goal setting, and job design.
Stage Eight: Self-renewal, monitor and stabilize.
 As the OD program stabilizes, the need for the practitioner should decrease.
 Gather data and monitor the results.
 Stabilize the change.
 Gradual disengagement of OD practitioner.

10.1.5 Process consultation

As described by Schein (1969), this involves helping clients to generate and analyse
information that they can understand and, following a diagnosis, act upon. The
information will relate to organizational processes such as inter-group relations,
interpersonal relations and communications. The job of the process consultant was
defined by Schein as being to ‘help the organization to solve its own problems by making
it aware of organisational processes, of the consequences of these processes, and of the
mechanisms by which they can be changed’.
10.1.6 Group dynamics
Group dynamics (a term coined by Lewin, 1951) are the processes that take place in
groups that determine how they act and react in different circumstances.

10.1.7 Team-building interventions

Team building interventions can deal with permanent work teams or those set up to deal
with projects or to solve particular problems. Interventions are directed towards an
analysis of the effectiveness of team processes such as problem-solving, decision-making
and interpersonal relationships, a diagnosis and discussion of the issues, and joint
consideration of the actions required to improve effectiveness.

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 10.1.8 Inter-group conflict interventions
As developed by Blake et al (1964), these aim to improve inter-group relations by getting
groups to share their perceptions of one another and to analyse what they have learnt
about themselves and the other group. The groups involved meet each other to share what
they have learnt and to agree on the issues to be resolved and the actions required.

10.2 Integrated strategic change methodology

Integrated strategic change methodology is a highly participative process conceived by
Worley et al (1996). The aim is to facilitate the implementation of strategic plans. The
steps required are:
1) Carry out strategic analysis – a review of the organization’s strategic
orientation (its strategic intentions within its competitive environment) and a
diagnosis of the organization’s readiness for change.
2) Develop strategic capability – the ability to implement the strategic plan
quickly and effectively.
3) Integrate individuals and groups throughout the organization into the
processes of analysis, planning and implementation to maintain the firm’s
strategic focus, direct attention and resources to the organization’s key
competencies, improve coordination and integration within the organization, and
create higher levels of shared ownership and commitment.
4) Create the strategy, gain commitment and support for it and plan its
implementation.
5) Implement the strategic change plan, drawing on knowledge of motivation,
group dynamics and change processes, dealing with issues such as alignment,
adaptability, teamwork and organizational and individual learning.

10.3 Organizational transformation

Organizational transformation is defined by Cummins and Worley (2005) as ‘A process
of radically altering the organization’s strategic direction, including fundamental changes
in structures, processes and behaviours’. Transformation involves what is called ‘second-
order’ or ‘gamma’ change, involving discontinuous shifts in strategy, structure, processes
or culture.
Transformation is required when:
 Significant changes occur in the competitive, technological, social or legal
environment;
 Major changes take place to the product life cycle, requiring different product
development and marketing strategies;
 Major changes take place in top management;
 Financial crisis or large downturn occurs;
 An acquisition or merger takes place.

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Transformation strategies
Transformation strategies are usually driven by senior management and line managers
with the support of HR. They do not rely on an external ‘change agent’ as did traditional
OD interventions, although specialist external advice might be obtained on aspects of the
transformation such as strategic planning, reorganization or developing new reward
processes. The prerequisite for a successful programme is the presence of a
transformational leader who, as defined by Burns (1978), motivates others to strive for
higher-order goals rather than merely short-term interest. The key roles of management
as defined by Tushman et al (1988) are envisioning, energizing and enabling.

Organizational transformation strategic plans may involve radical changes to the

structure, culture and processes of the organization. They may involve planning and
implementing significant and far-reaching developments in corporate structures and
organization-wide processes. The change is neither incremental (bit by bit) nor
transactional (concerned solely with systems and procedures).

Transactional change, according to Pascale (1990) is merely concerned with the alteration
of ways in which the organization does business and people interact with one another on
a day-to-day basis and ‘is effective when what you want is more of what you’ve already
got’. He advocates a ‘discontinuous improvement in capability’ and this he describes as
transformation.

Types of transformational strategy

Four types of strategies for transformational change have been identified by Beckhard
(1989):
1. A change in what drives the organization – for example a change from being
production driven to being market-driven would be transformational.
2. A fundamental change in the relationships between or among organizational
parts – for example decentralization.
3. A major change in the ways of doing work – for example the introduction of
new technology such as computer-integrated manufacturing.
4. A basic, cultural change in norms or values – for example developing a
customer-focused culture.

The transformation programme

The eight steps required to transform an organization have been summed up by Kotter
(1995) as follows:
1. Establishing a sense of urgency – examining market and competitive realities;
identifying and discussing crises, potential crises, or major opportunities.
2. Forming a powerful guiding coalition – assembling a group with enough
influence and power to lead change.
3. Creating a vision – to help direct the change effort, and developing strategies
for achieving that vision.

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 4. Communicating the vision – using every vehicle possible to communicate the
new vision and strategies, and teaching new behaviours by the example of the
guiding coalition.
5. Empowering others to act on the vision – getting rid of obstacles to change;
changing systems or structures that seriously undermine the vision and
encouraging risk-taking and non-traditional ideas, activities and actions.
6. Planning for and creating short-term wins – planning for visible
performance improvement; creating those improvements and recognizing and
rewarding employees involved in the improvements.
7. Consolidating improvements and producing still more change – using
increased credibility to change systems, structures and policies that don’t fit the
vision; hiring, promoting and developing employees who can implement the
vision and reinvigorating the process with new projects, themes and change
agents.
8. Institutionalizing new approaches – articulating the connections between the
new behaviours and corporate success and developing the means to ensure
leadership development and succession.

10.4 Business Process Engineering (BPR)

BPR is the fundamental rethinking and radical redesign of business processes to achieve
dramatic improvements in critical, contemporary measures of performance, such as cost,
quality, service and speed. (Hammer & Champy, (1993).

Adopting a process based approach to organisation implies first identifying what the key
processes (value-adding connected activities) of the organisation are. These in turn
control the number, nature and content of jobs which leads to the definition of structure.
From the new expectations concerning desirable outputs (the results of processes) and the
activities of employees, it is possible to define the management and measurements
systems necessary for performance. With the other linkages in place, the values and
beliefs of the members of the organisation will be modified. …. The organisation having
successfully re-engineered, its culture should be supportive of aspirations to further
development. …. BPR is about embracing the hidden potential for change by recognising
that incremental change only improves what is already done, while BPR may
fundamentally change what is done. If a procedure or part of a process is redundant, in
the sense that it adds no value to a product or service, improvement in its efficiency is
false gain. (Beckford 2002).

11 Managing the change process

11.1 Identifying the need for change

A positive change culture provides the environment in which change can take place. But
there is much to be done to manage change successfully. The first step in a change
programme is to identify the need for change and to define why it is necessary. Effective
reasons for change are those that are likely to be accepted by stakeholders – top

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management, middle management, employees generally and their trade union
representatives. They must be persuaded that the change is necessary.

Strategic planning activities provide the most comprehensive basis for identifying the
need for change. They can develop an integrated, coordinated and consistent view of the
route the organization wishes to take and the changes needed to follow that route.
Strategic planning also facilitates the adaptation of the organization to environmental
change, which can be manifested in such aspects as the company’s position in the market
(leading the market, maintaining or losing market share), competitors’ tactics, customer
behaviour and government policies. Identifying this need means environmental tracking –
noting what is happening and what is likely to happen, exploring the implications and
deciding how the issues should be addressed. Proposals for changes because of
environmental factors are more likely to be accepted if it can be demonstrated that the
changes must take place and are appropriate and relevant. The need for change may also
emerge because of internal imperatives. This may be a proactive step arising from a
review of areas for improvement. Or it may be a result of a systematic process of
‘benchmarking’ – finding out how other organizations are performing in certain
areas – when it becomes evident that the organization is falling behind in such areas as
profitability, productivity, cost management, quality or levels of customer service.

Reactive or remedial change may be required to respond to internal problems, even

crises. In this case the need for change is determined by events. A proactive approach to
anticipating the need for change has not happened and something has to be done in a
hurry (often a recipe for disaster). The identification process should generate hard
evidence and data on the need for change. These are the most powerful tools for its
achievement, although establishing the need for change is easier than deciding how to
satisfy it.

11.2 Planning the change programme

The basis for a change programme will be the business case. This defines the broad aims
of the change, the benefits of the change and how it is to be achieved. In more detail, the
programme needs to cover the following points.
 Objectives
The goals to be achieved by the change should be discussed and agreed, wherever
possible in quantified terms in the form of targets. If precise targets cannot be defined,
then more generalized statements of the expected outcomes may have to be made, but
these should be as specific as possible. It is often helpful to draw up success criteria so
that everyone knows what they are striving to achieve and the extent to which the results
have been achieved can be monitored and evaluated. A success criterion can be expressed
in the form: ‘This project (or aspect of the project) will be deemed to be successful if it
delivers the following outcome…’ It is important to involve as many people as possible
in setting the objectives. This will increase their identification with the project and
enhance their commitment.

 Assessment of barriers to change

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 The main barrier to change may be the sheer difficulty of planning and implementing a
radical departure from the present way of doing things. The difficulties have to be
anticipated – no surprises later on – and approaches to dealing with them decided in
advance. A major barrier to change may well be the objections of those exposed to it.
Kurt Lewin (1951) produced a methodology for analysing change, which he called ‘field
force analysis’. This involves:
 Analysing the restraining and driving forces that will affect the transition to the
future state – the restraining forces will include the reactions of those who see
change as unnecessary or as constituting a threat.
 Assessing which of the driving or restraining forces are critical.
 Taking steps both to increase the critical driving forces and to decrease the critical
restraining forces.

11.3 Imperatives for change management

The following guidelines indicate how the effective management of change can best be
accomplished:
 The achievement of sustainable change requires strong commitment and visionary
leadership from the top.
 It is necessary to understand the culture of the organization and the levers for
change that are most likely to be effective in that culture.
 Hard evidence and data on the need for change are the most powerful tools for its
achievement, but establishing the need for change is easier than deciding how to
satisfy it.
 Change is more likely to be successful if there is a ‘burning platform’ to justify it,
i.e. a powerful and convincing reason to change.
 Those concerned with managing change at all levels should have the temperament
and leadership skills appropriate to the circumstances of the organization and its
change strategies.
 It is important to build a working environment that is conducive to change.
 Although there may be an overall strategy for change, it is best tackled
incrementally (except in crisis conditions). The change programme should be
broken down into actionable segments for which people can be held accountable.
 People support what they help to create. Commitment to change is improved if
those affected by the change are allowed to participate as fully as possible in
planning and implementing it. The aim should be to get them to ‘own’ the change
as something they want and will be glad to live with. Change will always involve
failure as well as success. The failures must be expected and learnt from.
 It is easier to change behaviour by changing processes, structure and systems than
to change attitudes or the corporate culture.
 A coalition of support is needed to achieve change.
 There are always people in organizations who can act as champions of change.
They will welcome the challenges and opportunities that change can provide.
They are the ones to be chosen as change agents.
 The inept management of change will guarantee that it will be resisted.
 Every effort must be made to protect the interests of those affected by change.

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 Success in managing change depends largely on thinking through the reasons for change,
project planning, allocating the right resources, finding the right people to act as change
agents and anticipating and dealing with problems, especially resistance to change. It is a
good idea to positively encourage those concerned to articulate their reservations. It is
better for these to come out into the open so that they can be dealt with than to allow
them to fester. It is advisable to bear in mind the comments of Pettigrew and Whipp
(1991) that change implies streams of activity across time and ‘may require the enduring
of abortive efforts or the build-up of slow incremental phases of adjustment’. It is
necessary to focus on short-term goals as well as longer-term deliverables. An
incremental approach may well get better results in the long run than a ‘big bang’
approach. However, although flexible responses to new situations are important, it is
necessary not to lose sight of long term goals.
Success in change management often depends on a climate in which innovation is
fostered. As Drucker (1985) pointed out: ‘change always provides the opportunity for the
new and the different’. He went on to comment that: ‘Systematic innovation therefore
consists in the purposeful and organized search for changes, and in the systematic
analysis of the opportunities such changes make for economic or social innovation’ and
that ‘successful innovations exploit change’. But innovation involves risk and successful
innovators define risks and confine them. Ultimately successful change depends upon
successful people management. It is necessary to understand and show empathy with
people’s needs, feelings and motivation.

11.4 Basic steps to effective change

Michael Beer and colleagues (1990) suggested that most change programmes are guided
by a theory of change that is fundamentally flawed. This theory states that changes in
attitudes lead to changes in behaviour. ‘According to this model, change is like a
conversion experience. Once people “get religion”, changes in their behaviour will surely
follow’. They believe that this theory gets the change process exactly backwards.
In fact, individual behaviour is powerfully shaped by the organizational roles people play.
The most effective way to change behaviour, therefore, is to put people into a new
organizational context, which imposes new roles, responsibilities and relationships on
them. This creates a situation that in a sense ‘forces’ new attitudes and behaviour on
people. They prescribe six steps to effective change, which concentrate on what they call
‘task alignment’ – reorganizing employees’ roles, responsibilities and relationships to
solve specific business problems in small units where goals and tasks can be clearly
defined. The aim of following the overlapping steps is to build a self-reinforcing cycle of
commitment, coordination and competence. The steps are:
1. Mobilize commitment to change through the joint analysis of problems.
2. Develop a shared vision of how to organize and manage to achieve goals such as
competitiveness.
3. Foster consensus for the new vision, competence to enact it, and cohesion to move it
along.
4. Spread revitalisation to all departments without pushing it from the top – don’t force
the issue, let each department find its own way to the new organization.
5. Institutionalize revitalisation through formal policies, systems and structures.
6. Monitor and adjust strategies in response to problems in the revitalisation process.

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 According to Beer and colleagues (1990), this approach is fundamental to the effective
management of change. But account should be taken of the likelihood of resistance to
change and what can be done about it.

11.5 Managing change through projects

Project planning:
 Identifies all the activities in the project and the order in which they have to be
done – the aim is to break the change programme down into actionable segments
for which people can be held accountable;
 Estimates the time for each activity, the total length of the project and the time
when each activity must be finished;
 Finds out how much flexibility there is in the timing of activities and which
activities are critical to the completion time;
 Estimates costs and schedules activities so that overall cost is minimized;
 Allocates and schedules resources;
 Anticipates problems and takes the actions required to avoid them.
Monitoring and evaluating progress
Reporting systems should be set up so that progress can be measured against the plan.
Milestones that can be used to monitor the project should be identified. Progress should
be evaluated against the agreed objectives. Checks should be made after the change has
been implemented to ensure that it is providing the expected benefits. These may indicate
the need to reinforce the change or to make minor modifications.

11.6 Defining responsibilities for managing change

The responsibility for managing change may be given to individual managers. In this
role, as defined by Pugh (1993):
An effective manager anticipates the need for change as opposed to reacting after the
event to the emergency; diagnoses the nature of the change required and carefully
considers a number of changes that might improve organizational functioning; and
manages the change process over time so that it is effective and accepted as opposed to
lurching from crisis to crisis.
Project teams or task forces can be set up to plan and implement change, the members of
which would probably include managers and other people affected by the proposed
change as well as specialists. Ultimately, however, someone has to be made accountable
for the whole project. The task force can contribute to planning and decision-making but
cannot assume the final responsibility for making change happen.
It is often useful to identify people in the organization who welcome the challenges and
opportunities that change can provide and can become ‘champions for change’. They can
act as ‘change agents’ with the role of facilitating change by providing advice on its

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introduction and management to project teams or individuals. This role can also be
fulfilled by management consultants, who have the advantage of being independent and
should therefore be able to take a fresher and more objective point of view. Their ideas
may be more acceptable because they should have expertise in the area in which change
is to take place and, as consultants, are in the business of introducing change. But their
position as outsiders may be a drawback. They may not appreciate the subtleties of the
organization’s culture and needs, they may try to impose their own preconceived ideas
and nostrums, and their ideas may be rejected simply because they are perceived to be
‘not one of us’.
Organizations sometimes use process consultants as change agents. The role of the
process consultant as defined by Schein (1969) is to ‘help the organization to solve its
own problems by making it aware of organizational processes, or the consequences of
those processes and of the mechanisms by which they can be changed’. Processes such as
inter-group or interpersonal relations and communications might be covered. Process
consulting is one of the approaches that may be used in organization development (OD)
programmes in which ‘interventions’ are made to increase the effectiveness of
organizational processes. However, the massive and all-embracing OD programmes of
the 1970s and 1980s have now largely been replaced by interventions that focus on more
specific processes such as strategic management, total quality management, performance
management or customer relations management.

11.7 Developing a positive change culture

A positive change culture is one in which the values of the organization emphasize the
importance of innovation and change and the norms of behaviour support the
implementation of change. The existence of such a culture will assist in overcoming the
problems associated with change, but the culture cannot be taken for granted. It will have
been developed over time but can easily be damaged by an inept change management
programme.
Change cultures result from the experiences of people who have undergone change. If
they felt good about what happened they are more likely to embrace change in the future.
And the opposite applies if change has consistently been mishandled. People embrace
change when they are prepared to welcome it or at least judge it on its merits rather than
resisting it automatically. Some people are more likely to embrace change than others
because of their dispositions or their experiences. Others may be inherently suspicious of
change but can be persuaded to accept it if the culture is right and they are dealt with
properly.

For anyone to feel good about change, they must feel that they own the change – it hasn’t
been imposed upon them – and that they have benefited or at least not been harmed by it.
They must be able to trust the organization because management have ‘delivered the
deal’ – their promises of what change would involve and how people would benefit have
been kept. They must understand that organizations cannot stay still – change is
inevitable – but at the same time appreciate that management is aware of the needs of the
members of the organization as well as those of the organization itself.

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11.9 Risks of change
There is a downside to change. It can go wrong because it is inappropriate or badly
managed. Change can upset well-established and effective practices. The premise for
change may be that if something is new it must be better, and this is by no means
inevitable. There is such a thing as change for change’s sake. Organizations can adopt the
latest fashions or fads without thinking through their value or relevance. Failed changes
can create a climate in which people become suspicious of any new ideas and unwilling
to adopt them.

11.10 Managing the transition

Strategies need to be developed for managing the transition from where the organization
is to where the organization wants to be. This is the critical part of a transformation
programme. It is during the transition period of getting from here to there that change
takes place. Transition management starts from a definition of the future state and a
diagnosis of the present state. It is then necessary to define what has to be done to achieve
the transformation. This means deciding on the new processes, systems, procedures,
structures, products and markets to be developed. Having defined these, the work can be
programmed and the resources required (people, money, equipment and time) can be
defined. The strategic plan for managing the transition should include provisions for
involving people in the process and for communicating to the people about what is
happening, why it is happening and how it will affect them. The aim is to get as many
people as possible committed to the change.

‘What is’ ‘Should be’ Action ‘By Performance

whom’ criteria
Culture Production Customer Customer
oriented focused care w/shops,
team
building &
intergroup
interventions
Structure Centralised, Decentralised, Appoint
functional regional
managers,
appoint key
account
managers
Behaviours Silo-
operations;
inspecting-in
quality

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11.11 The benefits of change
Clearly, the main benefit of effective change is an improvement in organizational
performance. Organizations can stagnate or decay. They may only revive or survive if
radical changes take place to their ways of doing things. Change can be stimulating.

Resistance to change may be a matter of a reaction to the ‘shock of the new’, but there is
also such a thing as ‘the challenge of the new’. Fortunately, most organizations will have
people who, if they wanted a motto, would quote Horace – carpe diem (seize the day).
They will be stimulated by the opportunity presented by change to the benefit of the
organization and their own career. As Peter Drucker (1985) wrote: ‘Opportunity is the
source of innovation’.

12 Resistance to change
Change management programmes have to take account of the fact that many people resist
change. There are those who are stimulated by change and see it as a challenge and an
opportunity. But they are in the minority. It is always easy for people to select any of the
following 10 reasons for doing nothing (Armstrong, 2009):
1. It won’t work.
2. We’re already doing it.
3. It’s been tried before without success.
4. It’s not practical.
5. It won’t solve the problem.
6. It’s too risky.
7. It’s based purely on theory.
8. It will cost too much.
9. It will antagonize the customers/management/union/workers/shareholders.
10. It will create more problems than it solves.
12.1 Reasons for resistance to change
People resist change when they see it as a threat to their established and familiar life at work.
They are used to their routines and patterns of behaviour and may be concerned about their
ability to cope with new demands. They may believe that the change will affect their status,
security or earnings. They may not believe statements by management that the change is for their
benefit as well as that of the organization – sometimes with good reason. They may feel that
management has ulterior motives, and sometimes the louder the protestations of managements,
the less they will be believed.
Joan Woodward (1968) looked at change from the viewpoint of employees and wrote:
When we talk about resistance to change we tend to imply that management is always rational in
changing its direction, and that employees are stupid, emotional or irrational in not responding in
the way they should. But if an individual is going to be worse off, explicitly or implicitly, when

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the proposed changes have been made, any resistance is entirely rational in terms of his best
interest. The interests of the organization and the individual do not always coincide.

When the changes are on a large scale and involve many individuals and subunits, there
are often significant problems and challenges. People are the focus of some of the most
serious challenges.
 On a personal level, change represents the alteration of:
 Set patterns of behaviour.
 Defined relationships with others.
 Work procedures, and job skills.

 On an organizational level, change means that the following will no longer be the
same:
 Policies.
 Procedures.
 Organization structures.
 Manufacturing processes.
 Work flows.

12.2 The life cycle of resistance to change.

The response to change tends to move through a life cycle.
Phase 1, Change Introduced.
 There are only a few people who see the need for change and take
the reform seriously.
 Resistance appears massive.
Phase 2, Forces Identified.
i. The forces for and against the change become identifiable.
ii. The change is more thoroughly understood.
iii. The novelty and strangeness of the change tends to disappear.
Phase 3, Direct Conflict.
i. There is a direct conflict and a showdown between the forces pro and con.
ii. This phase will probably mean life or death to the change effort.
Phase 4, Residual Resistance.
i. If the supporters of the change are in power, the remaining resistance is
seen as stubborn and a nuisance.
ii. There is still a possibility that the resisters will mobilize enough support to
shift the balance of power.
Phase 5, Change Established.
i. The resisters to the change are as few and as alienated as were the
advocates in the first phase.

12.3 Assessing anticipated degree of resistance

Two major considerations in assessing anticipated degree of resistance are the degree of
change and the impact on the organization’s culture. The diagram below indicates the

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 relationship between these two variables.

Quadrant 1: Minor change, low impact on culture.

When the change is minor and the impact on the culture is small, resistance will be at
the lowest level and success will be most probable.
Quadrant 2: Minor change, high impact on culture.
When the change is minor but the impact on the culture is high, some resistance can
be expected.
Quadrant 3: Major change, low impact on culture.
When the change is major, but the impact on existing culture is minor, some
resistance is likely.
Good management can probably overcome it.
Quadrant 4: Major change, high impact on culture.
When the change is large and the impact on the existing culture is high, the greatest
resistance can be predicted.
The probability of success is low.

12.4 Overcoming resistance to change

Because resistance to change is natural and even inevitable, it is difficult to overcome.
But the attempt must be made. This starts with an analysis of the likely effect of change
and the extent to which it might be resisted, by whom and why. Derek Pugh (1993) points
out that: ‘It is not enough to think out what the change will be and calculate the benefits

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 and costs from the proposer’s point of view. The others involved will almost inevitably
see the benefits as less and the costs as greater.’ He recommends ‘thinking through’ the
change and systematically obtaining answers to the following questions:

 Will the change alter job content?

 Will it introduce new and unknown tasks?
 Will it disrupt established methods of working?
 Will it rearrange group relationships?
 Will it reduce autonomy or authority?
 Will it be perceived to lower status?
 Will it be established without full explanation and discussion?
 On the other side, it is necessary to answer the question: ‘What are the benefits in
pay, status, job satisfaction and career prospects that are generated by the change, as
well as the increase in performance?’
12.5 Strategies for dealing with resistance encompass the following

 Education and communication.

One of the most common ways of reducing change is to communicate and educate
employees beforehand. Nadler (1993) suggests that the first and most critical step for
managing change is ‘to develop and communicate a clear image of the future’. He
believes that: ‘Resistance and confusion frequently develop in an organizational
change because people are unclear about what the future state will be like. Thus the
goals and purposes of the change become blurred, and individual expectancies get
formed on the basis of information that is frequently erroneous.’
Communications should describe why change is necessary, what the changes will
look like, how they will be achieved and how people will be affected by them.
Communication can minimize the uncertainty and fear of the unknown associated
with change. Lack of reliable information leads to rumours and uncertainty.
Information concerning the “what and why” of the change program should be
provided to all organization members. The aim is to ensure that unnecessary fears are
allayed by keeping people informed using a variety of methods – written
communications, the intranet, videos and, best of all, face-to-face briefings and
discussions.
Communication of the intended change helps the employees to see the logic of the
change and to clear uncertainty and fears that may be associated with the change. The
education process may involve one-on-one discussions, presentations to groups or
circulation of notices and reports.
Education and communication programmes are ideal when resistance is due to
misunderstanding the change and its implications. Employees may resist change if
they do not understand it and its implications. They may wrongly assume that the
change will cost them much more than they will gain. Such situations often occur
when there is lack of trust between management and the employees.

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 Cole (1996) states that for this method to be successful, the communication should be
effective. He mentioned individual bias and selectivity, ‘hearing and seeing what one
wants to hear and see’, fear and emotional overtones, status differences, when
subordinates read more than was intended in a message and the lack of trust of the
intentions as barriers to effective communication which could undermine the change
process.
Although this intervention is time consuming, its major advantage is that once the
employees are persuaded and the potential infiltration of unreliable information has
been eliminated, uncertainty and mistrust will be quashed and the employees will be
motivated to help implement the change.

 Participation and involvement.

One of the effective ways of reducing resistance is to ensure that employees,
particularly those that are affected by the change, are involved and allowed to share in
the decision process rather than being forced or manipulated. Involvement in the
change process gives people the chance to raise and resolve their concerns and make
suggestions about the form of the change and how it should be introduced. The aim is
to get ‘ownership’ – a feeling amongst people that the change is something that they
are happy to live with because they have been involved in its planning and
introduction – it has become their change. Involvement is important because people
are more likely to own something they helped to create. The participation of
employees in matters that concern them increases the probability that they will find
the program acceptable. If there is a union, it needs to be involved and supportive of
the change program.
Participation and involvement is most ideal when change relates to areas that
employees have intimate knowledge and information while management do not have
all the information they need to design the change, such as in technical matters. When
employees are aware that they poses the vital information necessary to make a
successful change and yet they are not involved in the change initiatives, this
becomes a source for resistance, Walton (1999).
Management should genuinely listen and seriously consider contributions of the
participating employees lest the exercise loses credibility. This, for instance, can be
achieved through worker participation in project teams that are mandated with
sufficient authority to make recommendations direct to top management and, where
deemed appropriate, to institute the necessary changes.
The major strength of this method is its potential for enlisting total commitment from
everyone and that any relevant information they have is readily available. However it
can be very time consuming particularly if the participants come up with an
inappropriate design for the change.

 Facilitation and support.

Resistance to change can also be reduced through facilitation and support. This
method involves providing support to everyone involved in the change process. It is

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 most appropriate where employees who are less tolerant to change would resist
because of adjustment problems.
Change may usher in new demands in terms of new skills and behaviors. Employees
may therefore resist change because they fear that they would not be able to develop
new skills and behaviours that would be required. At times employees would be less
tolerant if change involved them giving up certain aspects of the current situation. For
example, flattening or delayering an organizational structure may result in job
enrichment, promotion and relocation for some employees. The prospect of retraining
and having to develop new and different relationships may make the employees
concerned less tolerant to the change notwithstanding that it is for their own good in
the long run. Pickford (2003) stated that employees could be resistant to change
simply because of the desire to remain in their comfort zones that have worked for
them over the years.
Facilitation and support interventions such as training and coaching could be used to
reduce resistance emanating from such adjustment problems. For example, all
employees whose jobs would be enriched could be placed on a retraining programme
to equip them with the required new skills while those who would be promoted could
receive the necessary coaching from their line managers. Relocation support could be
in the form of allocating relocation allowance to the affected employees.
Reinforcing the change by providing rewards and support for those involved can
increase support for the change. Rewards include promotions, financial, and public
recognition. Financial rewards include profit-sharing, knowledge-based pay, gain
sharing, and stock-ownership plans.
Although this method is the best to use in instances where adjustment problems are
the source of resistance its attendant interventions such as training may be very costly
and time consuming.

 Negotiation and agreement.

Another method to use is negotiation with potential or active resistors. Management

may offer incentives in return of acceptance to change or may simply enter into some
binding agreement with the employees concerned.

Employees could resist the introduction of change if they thought they would lose
something of value if the change was implemented. This is largely because people
tend to focus on their best interests as opposed to the organisation’s interests.
Cummings and Dunhum (1989) posited that as long as the change subordinated their
interests to the company’s interests even if the envisaged change is necessary to
company’s viability and survival employees would resist the change. For example, if
the change concerns restructuring from a centralised to a decentralised structure in
order to streamline communication and improve customer contact and service

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 delivery, the head office staff may perceive it as a loss of power and control as well as
a depletion of their ‘empire’. The resistance might take the form of subtle politicking
and lobbying for the maintenance of the status quo. To address such resistance,
management could negotiate and agree with the head office staff that,
notwithstanding their reduced span of control, their jobs would not be down graded
nor their fringe benefits altered.

Accommodation with the positions of resistors may be possible and could improve
the change program. Building a coalition of people who hold divergent points of
view; compromise, reciprocity, and trade-offs may be necessary in building political
alliances.
This method of negotiation and agreement could also be applied by way of giving a
union a higher wage rate in return for a work rule change or increase an employee’s
pension benefits in exchange for early retirement.

While negotiation and agreement is a relatively easy way of avoiding resistance, it

could be too expensive to implement particularly if all the individuals or groups
decide to negotiate for similar or some other kind of concessions in return for
supporting the change.

 Manipulation and co-optation.

Where other methods will not work or are too expensive management may covertly
lead individuals or groups away from resistance to change through manipulation or
co-optation. They may manipulate employees by controlling information or by
structuring the sequence of change. They may also co-opt key persons within a group
by giving them a leading role in designing or carrying out the change process. Co-
optation is however not the same as participation. In this instance management do not
want the advice of the co-opted employees, but merely want their endorsement.
The advantage of this method is that it can be a relatively quick and inexpensive way
of reducing resistance. However its drawback is that it can lead to future problems if
people feel that they were manipulated.

 Explicit and implicit coercion.

In this method, management may force employees to go along with change by
explicit or implicit threats involving issues such as loss of jobs, loss of promotion,
and salary increases. In some cases management may also dismiss or transfer
employees who refuse to accept change.

Employees may resist change if they believe that the change does not make sense for
the organization. They may assess the situation differently from management and see
the change bringing more costs than benefits, not only for themselves but for the
company as well. This is usually caused by the fact that they will be unknowingly
basing their assessment of the situation on the basis of information that is different
from that held by management. For example the employees might resist
management’s effort to increase production by making employees work twelve hours

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 every day opting for the introduction of two shift system. Their resistance could be
based purely on the increased wage bill without considering the added administrative
costs that the extra shift would bring along or the urgency with which the change
must be implemented in order to attain the desired results. In such instances
management could simply coerce employees to comply with change particularly if
management is relatively powerful.

This method is favoured where speed in executing change is essential and

management possess considerable power as well as in situations where change will
not be popular regardless of how it is introduced. However its major disadvantage is
that people strongly resist forced change and what management end up getting is just
compliance without commitment.

Resistance can provide functional conflict that contributes to the quality of the change
program. Absence of resistance may indicate a degree of disengagement and an
indication of future problems. Climate and culture of organisations are decisive in
sustaining organisational change. Attitudes of respect and understanding will help to
break a cycle of reciprocal threat and aggressiveness. Managers need to articulate a clear
vision for the teams, division, and organization that describes the desired future state. The
vision helps to give direction to a change program and to provide a bench mark to
evaluate the success of the change. Effective leadership as well as loyal followers is
critical to the success of a change programme.

12.7 Holding the gains

Perhaps the biggest challenge in change management is not deciding what changes
should take place and introducing the changes, or even overcoming initial resistance to
change. The ultimate and most difficult task is to ensure that the impetus provided by the
change programme is maintained. There may be immediate gains but is it possible to hold
on to them? Ensuring that this happens is one argument for incremental change, which
provides time for reinforcement at each step without leaping too far ahead. But
incremental change is not always possible. In these circumstances, holding the gains is a
matter of first planning the change with implementation in mind – that is, with a clear
idea of how it is going to be introduced and, importantly, how it is going to be
consolidated. Careful monitoring of the process of bedding down the change is also
required so that action can be taken in good time to deal with any

13 Management and Leadership

The key purpose of management and leadership as described by the Management
Standards Centre (2004) is to ‘provide direction, facilitate change and achieve results
through the efficient, creative and responsible use of resources’. Effective management is
the process of harmonizing individual endeavour to the common good.

Management is the process of deciding what to do and then getting it done through the
effective use of resources. It is about what managers do to make things happen. They

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define goals, determine the resources – people, finance, work systems and technology –
required to achieve the goals, allocate those resources to opportunities and planned
activities and ensure that those activities take place as planned in order to achieve
predetermined objectives. All this adds up to managing for results.

To lead is to inspire, influence and guide. Leadership is the process of getting people to
do their best to achieve a desired result. It involves developing and communicating a
vision for the future, motivating people and gaining their engagement. Other definitions
(there are many) include:
• Ivancevich et al (2008): Leadership is ‘the process of influencing people to enable the
achievement of relevant goals’.
• Goleman (2000): ‘A leader’s singular job is to get results’.
• House et al (2004): ‘Leadership is the ability to motivate, influence and enable
individuals to contribute to the objectives of organizations of which they are members’.

13.1 Purpose of management

The primary function of management in profit-making firms is to satisfy a range of
stakeholders. This means making a profit and creating value for shareholders, producing
and delivering valued products and services at a reasonable cost for customers, and
providing rewarding employment and development opportunities for employees. In the
public sector, management is there to ensure that the services the community requires are
delivered effectively. In the voluntary sector, management is there to ensure that the
purposes of the charity are achieved and also to keep the faith of the community and
donors.

13.2 The processes of management

The overall process of management as defined above is divided into a number of
individual processes, which are methods of operation designed to assist in the
achievement of objectives. Their purpose is to bring as much system, order,
predictability, logic and consistency to the task of management as possible in the ever-
changing, varied and turbulent environment in which managers work.
These processes were defined by the classical theorists of management such as Henri
Fayol (1916), who stated that: ‘All undertakings require planning, organizing, command,
coordination and control to function properly’. But this classical view has been
challenged by the empiricists such as Henry Mintzberg (1973) and Rosemary Stewart
(1967). They believed that management could not be treated as a group of formal
activities as defined by Fayol and other classical writers. Based on their research into
what managers actually do, the empiricists regarded management as a process involving a
mix of rational, logical, problem-solving, decision- making activities, and intuitive,
judgemental activities. It was therefore both science and art. However, the classical
theorists were defining the main processes of management; they were not attempting to
describe how managers actually spend their time.

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13.3 The Process of Leadership
• Stogdill (1974): ‘Leadership is an influencing process aimed at goal achievement’.
• Dixon (1994) ‘Leadership is no more than exercising such an influence on others that
they tend to act in concert towards the achievement of a goal that they might not have
achieved so readily had they been left to their own devices’.

13.4 Leadership theories

There are many theoretical explanations and descriptions of the process of leadership.
Three of the more important ones are summarized below.
 Contingent leadership
The theory of contingent leadership developed by Fiedler (1967) states that the type
of leadership exercised depends to a large extent on the situation and the ability of the
leader to understand it and act accordingly. This is sometimes called situational
leadership. Fiedler wrote: ‘Leadership performance… depends as much on the
organization as on the leader’s own attributes. Except perhaps for the unusual case, it
is simply not meaningful to speak of an effective leader or an ineffective leader. We
can only speak of a leader who tends to be effective in one situation and ineffective in
another.’
The performance of a group, as Fiedler pointed out, is related both to the leadership
style and to the degree to which the situation provides the leader with the opportunity
to exert influence. He referred to the concepts originated by Halpin and Winer (1957)
on the basis of their research into how aircraft captains acted as leaders. Two
dimensions of leadership were identified: (1) initiating structure, a task-orientated
approach that focuses on defining the task and how it should be carried out, and (2)
consideration, a people-orientated approach where the emphasis is on maintaining
good relations through behaviour indicative of trust, respect and warmth.

Fiedler’s research revealed that an initiating structure approach worked best for
leaders in conditions where the leader has power, formal backing and a relatively
well-structured task. Considerate leaders do better in unstructured or ambiguous
situations or where their power as a leader is restricted.

 The path-goal model

The path-goal model first developed by Robert House (1971) states that leaders are
there to define the path that should be followed by their team in order to achieve its
goals. It is the leader’s job to guide and help team members to select the best paths
towards achieving their own goals and those of the group. A leader’s behaviour is
acceptable to subordinates when viewed as a source of satisfaction, and it is
motivational when need satisfaction is contingent on performance, and the leader
facilitates, coaches and rewards effective performance. Leaders have to engage in
different types of leadership behaviour depending on the nature and the demands of a
particular situation. It is the leader’s job to assist followers in attaining goals and to
provide the direction and support needed to ensure that their goals are compatible
with the organization’s goals. Path-goal theory identifies four leadership styles:
achievement-oriented, directive, participative and supportive.

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 Achievement-oriented – the leader sets challenging goals for followers, expects
them to perform at their highest level, and shows confidence in their ability to
meet this expectation. This style is appropriate when the follower suffers from a
lack of job challenge.
 Directive – the leader lets followers know what is expected of them and tells them
how to perform their tasks. This style is appropriate when the follower has an
ambiguous job.
 Participative – the leader consults with followers and asks for their suggestions
before making a decision. This style is appropriate when the follower is using
improper procedures or is making poor decisions.
 Supportive – the leader is friendly and approachable and shows concern for the
psychological well-being of followers. This style is appropriate when the
followers lack confidence.

 Leader-member exchange theory (LMX)

The leader-member exchange theory of leadership as formulated by Graen (1976)
focuses on the two-way relationship between supervisors and subordinates. It is
linked to social exchange theory, which explains social change and stability as a
process of negotiated exchanges between parties. Leaders usually have special
relationships with an inner circle of assistants and advisors, who often get high levels
of responsibility and access to resources. This is called the ‘in-group’, and their
position can come with a price. These employees work harder, are more committed to
task objectives, and share more administrative duties. They are also expected to be
totally committed and loyal to their leader. Conversely, subordinates in the ‘out-
group’ are given low levels of choice or influence and put constraints on the leader.
These relationships start very soon after a person has joins a team and follow these
three stages:
1. Role-taking: The member joins the team and the leader evaluates their abilities and
talents. Based on this, the leader may offer opportunities to demonstrate capabilities.
2. Role-making: In the second phase, the leader and member take part in an
unstructured and informal negotiation whereby a role is created for the member and
the unspoken promise of benefit and power in return for dedication and loyalty takes
place. Trust-building is very important in this stage, and any feelings of betrayal,
especially by the leader, can result in the member being demoted to the out-group.
This negotiation includes relationship factors as well as purely work-related ones, and
a member who is similar to the leader in various ways is more likely to succeed.
3. Routinisation: In this phase, a pattern of on-going social exchange between the
leader and the member becomes established. Being a successful or in-group member
usually requires being similar in many ways to the leader. These members work hard
at building and sustaining trust and respect. They are often empathetic, patient,
reasonable, sensitive, and good at seeing the viewpoint of other people, especially
their leader. Aggression, sarcasm and a self-centred view are qualities seen in the out-
group.
The quality of the LMX relationship varies. It is better when the challenge of the job
is extremely high or extremely low. The size of the group, financial resource

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 availability and the overall workload are also important. The theory can work
upwards as well. Leaders can gain power by being members of their manager’s inner
circle, which they can then share with their subordinates.

13.5 The problem with defining leadership concept

In spite of all the research and theorizing, the concept of leadership is problematic. As
Meindl et al (1985) commented: ‘It has become apparent that, after years of trying,
we have been unable to generate an understanding of leadership that is both
intellectually compelling and emotionally satisfying. The concept of leadership
remains elusive and enigmatic’. In The Arts of Leadership, Keith Grint (2000) made
the case that leadership is not accessible to scientific approaches because it is
essentially a constitutive process (ie leaders shape and are shaped by the situation
they are in). Instead, he suggests we should think of leadership as an art because: ‘It
appears to have more to do with invention than analysis, despite claims to the
contrary; it operates on the basis of indeterminacy, whilst claiming to be
deterministic; it is rooted in irony, rather than the truth; and it usually rests on a
constructed identity but claims a reflective identity’. These problems may arise
because, as a concept, leadership is difficult to pin down. There are many different
types of situations in which leaders operate; many different types of leaders and many
different leadership styles. Producing one theory that covers all these variables is
difficult if not impossible. All that can be done is to draw on the various theories that
exist to explain different facets of leadership, without necessarily relying on any one
of them for a comprehensive explanation of what is involved. Perhaps leadership is
best defined as being what leaders do.

13.6 Types of leaders

Leaders get things done through people. They set the direction and get other people to
follow them. As Ted Johns (2008) says: ‘A leader takes people where they want to go. A
great leader takes people where they don’t necessarily want to be, but ought to be.’

Leaders have been classified into a number of different types as described below.
 Autocratic leaders
Autocratic leaders impose their decisions, using their position to force people to do as
they are told.
 Democratic leaders
Democratic leaders encourage people to participate and involve them in decision-
taking.
 Charismatic leaders
Charismatic leaders have compelling personalities and the ability to rouse people to
follow them through the sheer force of the impression they make. As originally
described by Weber (1947), charismatic leaders are achievement orientated,
calculated risk-takers and good communicators. They achieve motivational outcomes
through four mechanisms: (1) changing follower perceptions of the nature of work
itself; (2) offering an appealing future vision; (3) developing a deep collective identity
among followers; and (4) heightening both individual and collective self-efficacy

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 (people’s belief in themselves and what they can do). There is a strong affinity
between the charismatic and the transformational leader.
 Situational leaders
As originally described by Hersey and Blanchard (1969), a situational leader is one
who can adopt different leadership styles depending on the situation. The behaviour
of leaders towards their followers can take the following forms:
 Directing leaders define the roles and tasks of their followers, and
supervise them closely. Decisions are made and announced by the leader,
so communication is largely one-way.
 Delegating leaders are still involved in decisions and problem-solving, but
control is with the follower. The follower decides when and how the
leader will be involved.
 Coaching leaders still define roles and tasks, but seek ideas and
suggestions from the followers. Decisions remain the leader’s prerogative,
but communication is much more two-way.
 Supporting leaders pass day-to-day decisions, such as task allocation and
processes, to followers. Leaders facilitate and take part in decisions, but
control is with the follower.
Effective leaders are versatile in being able to move between the styles according to
the situation, so there is no one right style. However, people tend to have a preferred
style and should understand what that is.

 Transactional leaders
Transactional leaders, as originally described by Burns (1978), identify the
expectations of their followers and respond to them by establishing a close link
between effort and reward. Power is given to the leader to evaluate, correct and train
subordinates when performance needs to be improved and to reward effectiveness
when the required outcomes are achieved.
 Transformational leaders
Transformational leaders, as defined by Bass (1985), empower their followers and
encourage them to ‘do more than they originally expected to do’. Transformational
leaders motivate followers to perform at higher levels, to exert greater effort, and to
show more commitment. Bass identified three principal leadership processes for
achieving such outcomes: (1) heightening followers’ awareness about the importance
and value of designated goals and the means to achieve them; (2) inducing followers
to transcend their self-interests for the good of the group and its goals; and (3)
meeting followers’ higher-order needs. Transformational leaders provide
encouragement and support to followers, assist their development by promoting
growth opportunities, and show trust and respect for them as individuals. They build
self-confidence and heighten personal development.

Research conducted by the consulting firm Hay McBer (as reported by Goleman, 2000)
identified six leadership styles:

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  Coercive: Demands immediate compliance – ‘do what I tell you’.
 Authoritative: Mobilizes people towards a vision – ‘come with me’.
 Affiliative: Creates harmony and builds emotional bonds – ‘people come first’.
 Democratic: Forges consensus through participation – ‘what do you think?’
 Pacesetting: Sets high standards for performance – ‘do as I do’.
 Coaching: Develops people for the future – ‘try this’.

13.7 Key leadership roles

Leaders have three essential roles. They have to:
 Define the task – they must make it clear what the group is expected to do.
 Achieve the task – that is why the group exists. Leaders ensure that the group’s
purpose is fulfilled. If it is not, the result is frustration, disharmony, criticism and
perhaps eventually disintegration of the group.
 Maintain effective relationships – between themselves and the members of the
group, and between the people within the group. These relationships are effective
if they contribute to achieving the task. They can be divided into those concerned
with the team and its morale and sense of common purpose, and those concerned
with individuals and how they are motivated.

John Adair (1973), the leading British expert on leadership, explained that these demands
are best expressed as three areas of need that leaders are there to satisfy. These are:
 Task needs – to get the job done
 Individual needs – to harmonize the needs of the individual with the
needs of the task and the group
 Group maintenance needs – to build and maintain team spirit.
He models these demands as three interlocking circles depicting the task needs; group
maintenance needs; and individual needs.

Adair’s model suggests that the task, individual and group needs are interdependent.
Satisfying task needs will also satisfy group and individual needs. Task needs, however,
cannot be satisfied unless attention is paid to individual and group needs, and looking
after individual needs will also contribute to satisfying group needs and vice versa. There
is a danger in becoming so task orientated that individual and group or team needs are
ignored, and it is just as dangerous to be too people orientated, focusing on meeting
individual or group needs at the expense of the task. The best leaders are those who keep
these three needs satisfied and in balance according to the demands of the situation.

An extensive survey conducted by the Industrial Society, now the Work Foundation
(1997), revealed that what good leaders do is to make the right space for people to
perform well without having to be watched over. The top 10 requirements for leader
behaviour as ranked by respondents were:
1. Shows enthusiasm.
2. Supports other people.
3. Recognizes individual effort.

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 4. Listens to individuals’ ideas and problems.
5. Provides direction.
6. Demonstrates personal integrity.
7. Practises what they preach.
8. Encourages teamwork.
9. Actively encourages feedback.
10. Develops other people.

13.8 Leadership and emotional intelligence

Emotional intelligence is a combination of skills and abilities such as self-awareness,
self-control, empathy and sensitivity to the feelings of others. The four components of
emotional intelligence are:
 Self-management – the ability to control or redirect disruptive impulses and moods
and regulate your own behaviour, coupled with a propensity to pursue goals with
energy and persistence. The six competencies associated with this component are
self-control, trustworthiness and integrity, initiative, adaptability (comfort with
ambiguity), openness to change, and a strong desire to achieve.
 Self-awareness – the ability to recognize and understand your moods, emotions and
drives as well as their effect on others. This is linked to three competencies: self-
confidence, realistic self-assessment and emotional self-awareness.

The self-awareness matrix can be illustrated using the ‘Johari Window’ model
which was propounded by Joseph Luft and Harry Ingham in 1955

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 JOHARI WINDOW( Adapted from Joseph Luft & Harry Ingham 1955)

SEL
F

KNOWN UNKNOWN

1 2
K
N Open Area Blind Area
W (Feed Back)
O
O
N (self disclosure)
T
H
E
E U
R N 3 4
S K Hidden Window Unknown Area
N
O
W
N

Quadrant 1 : Open Window

Area of free activity, known by self and also known by others: behaviour, attitudes,
feelings, emotions, knowledge, skills and views. Individuals are most effective and
productive when operating from within this window. There is open communication that is
free from conflict, confusion and mistrust.
View can be extended by feed-back solicitation.
Quadrant 2 : Blind Window
Unknown by self but known by others: through aspects of one’s behaviour and body
language, also issues that others deliberately withhold from person.
View can be extended by being receptive to feedback.
Quadrant 3 : Hidden Area/ fac`ade
Known to self but unknown by others: one choose not to share with others their secrets,
fears, shame, guilt, feelings, manipulative intentions, ‘skeletons in the cupboard’

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 Through self-disclosure and exposure process hidden information can be moved into the
Open Area.
Quadrant 4 : Unknown Area
Unknown by self and others: latent abilities, information, feelings and traumatic
experiences that are rooted in the unconscious mind.
Through self-discovery Hidden Area is increased. Through shared discovery /others’
observations this window can be minimised and Open Area increased hence self-
awareness attained.

 Social awareness – the ability to understand the emotional makeup of other people and
skill in treating people according to their emotional reactions. This is linked to six
competencies: empathy, expertise in building and retaining talent, organizational
awareness, cross-cultural sensitivity, valuing diversity, and service to clients and
customers.
 Social skills – proficiency in managing relationships and building networks to get the
desired result from others and reach personal goals, coupled with the ability to find
common ground and build rapport. The five competencies associated with this component
are leadership, effectiveness in leading change, conflict management,
influence/communication, and expertise in building and leading teams.

13.9 Significance of followers

Successful leaders depend on followers who want to feel that they are being led in the
right direction. They need to know where they stand, where they are going and what is in
it for them. They want to feel that it is all worthwhile. They have three requirements of
their leaders:
 Leaders must fit their followers’ expectations – they are more likely to gain the
respect and cooperation of their followers if they behave in ways that people
expect from their leaders. These expectations will vary according to the group and
the context but will often include being straight, fair and firm – as a nineteenth
century schoolboy once said of his headmaster: ‘He’s a beast but a just beast’.
People also appreciate leaders who are considerate, friendly and approachable but
don’t want them to get too close – leaders who spend too much time courting
popularity are not liked.
 Leaders must be perceived as the ‘best of us’ – they have to demonstrate that they
are experts in the overall task facing the group. They need not necessarily have
more expertise than any members of their group in particular aspects of the task,
but they must demonstrate that they can get the group working purposefully
together and direct and harness the expertise shared by group members to obtain
results.
 Leaders must be perceived as ‘the most of us’ – they must incorporate the norms
and values that are central to the group. They can infl uence these values by
visionary powers but they will fail if they move too far away from them.

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 Kelley (1991) suggested that the role of the follower should be studied as carefully as that
of the leader. Leaders need effective followers and one of the tasks of leaders is to
develop what Kelley calls ‘followership’ qualities. These include the ability to manage
themselves well, to be committed to the organization, to build their competence and to
focus their efforts for maximum impact. Keith Grint (2005) points out that ‘the trick of
the leader is to develop followers who privately resolve the problems leaders have caused
or cannot resolve, but publicly deny their intervention’.

13.10 Management and leadership compared

Some commentators link leadership closely with the idea of management, some regard
the two as synonymous, others consider management a subset of leadership and yet
others praise leadership and demonise management. Hersey and Blanchard (1998)
claimed that management merely consists of leadership applied to business situations; or
in other words, management forms a subset of the broader process of leadership. They
put it this way: ‘Leadership occurs any time one attempts to influence the behaviour of an
individual or group, regardless of the reason. Management is a kind of leadership in
which the achievement of organizational goals is paramount’. Abraham Zaleznik (2004)
saw leaders as inspiring visionaries, concerned about substance; while managers are
planners who are concerned with process.

Bennis and Nanus (1985) wrote that: ‘there is a profound difference between
management and leadership and both are important’. They went on famously to explain
that ‘Managers do things right, leaders do the right things’. This aphorism owes a lot to
Peter Drucker’s distinction (1967) between efficiency and effectiveness, which was taken
up by Bill Reddin (1970), who wrote that concentrating on efficiency rather than
effectiveness meant that managers ‘do things right rather than do right things’. But
Drucker and Reddin (not acknowledged by Bennis and Nanus) were focusing on
managers, not making invidious comparisons between managers and leaders. And it
seems to be perfectly possible that managers often do the right things, while leaders often
get things right.
In his role as a demoniser of managers, Bennis (1989) identified 12 invidious
distinctions between managers and leaders:
1. Managers administer, leaders innovate.
2. Managers ask how and when, leaders ask what and why.
3. Managers focus on systems, leaders focus on people.
4. Managers do things right, leaders do the right things.
5. Managers maintain, leaders develop.
6. Managers rely on control, leaders inspire trust.
7. Managers have a short-term perspective, leaders have a longer-term perspective.
8. Managers accept the status quo, leaders challenge the status quo.
9. Managers have an eye on the bottom line, leaders have an eye on the horizon.
10. Managers imitate, leaders originate.
11. Managers emulate the classic good soldier, leaders are their own person.
12. Managers copy, leaders show originality.

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 Paul Birch (1999) also saw a distinction between leadership and management and,
without denigrating management, gave pre-eminence to leadership. He observed that,
as a broad generalization, managers concerned themselves with tasks, while leaders
concerned themselves with people. However, one of the main things that characterize
great leaders is the fact that they achieve. The difference is that leaders realize that
tasks are achieved through the goodwill and support of others (influence), while
managers may not. This goodwill and support originates in the leader seeing people
as people, not as another resource for use in getting results. The manager has the role
of organizing resources to get something done. People form one of these resources,
and poor managers treat people as just another interchangeable factor of production.

Management is concerned with the effective use of all resources, including people,
while leadership concentrates on getting the best out of people. However, both are
needed. As Mintzberg (2004) commented, ‘instead of isolating leadership we need to
diffuse it throughout the organization… It’s time to bring management and leadership
down to earth’.
Perhaps the most familiar definition of management was made by Mary Parker Follett
(1924), a pioneering writer on management. She defined it as ‘the art of getting
results through people’, thus combining the concepts of management and leadership.

14 Basic / Essential managerial and leadership skills

14.1 Communication
The manager’s role can be said to be 20 per cent doing and 80 per cent putting it across,
that is, communicating. People recognize the need to communicate but find it difficult.
There basically are two forms of communication:
1. Intra-personal communication, which takes place when we converse with ourselves.
We ask ourselves questions, reflect on events and our involvement in them, consider the
actions we have taken or not taken, and interpret the factors affecting the decisions we
have made in different circumstances.
2. Inter-personal communication, which takes the form of conveying or exchanging
information, instructions, observations or comments to and between people. In inter-
personal communications words are used that may sound or look precise, but they are
not. All sorts of barriers exist between the communicator and the receiver. Unless these
barriers are overcome, the message will be distorted or will not get through. It will fail to
persuade or convince. The main barriers and methods of overcoming them include the
following:

 Hearing what we want to hear

What we hear or understand when someone speaks to us is largely based on our own
experience and background. Instead of hearing what people have told us, we hear
what our minds tell us they have said. To communicate effectively managers need to

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adjust to the world of the receiver and try to predict the impact of what they are going
to write or say on the receiver’s feelings and attitudes; tailor the message to fit the
receiver’s vocabulary, interests and values.

 Ignoring conflicting information

We tend to ignore or reject communications that conflict with our own beliefs. If they
are not rejected, some way is found of twisting and shaping their meaning to fi t our
preconceptions.

 Non-use feedback
Ensure that you get a message back from the receiver that tells you how much has
been understood.

 Perceptions about the communicator

It is difficult to separate what we hear from our feelings about the person who says it.
Non-existent motives may be ascribed to the communicator. If we like people we are
more likely to accept what they say – whether it is right or wrong – than if we dislike
them.

 Non-use face-to-face communication

Whenever possible talk to people rather than write to them. That is how you get
feedback. You can adjust or change your message according to reactions. You can
also deliver it in a more human and understanding way – this can help to overcome
prejudices. Verbal criticism can often be given in a more constructive manner than a
written reproof, which always seems to be harsher.

 Influence of the group

The group with which we identify influences our attitudes and feelings. What a group
hears depends on its interests. People are more likely to listen to their colleagues, who
share their experiences (their reference group), than to outsiders such as managers.
Get the group involved in the discussion so that feelings can be brought out into the
open.

 Words meaning different things to different people

Essentially language is a method of using symbols to represent facts and feelings.
Strictly speaking, we can’t convey meaning: all we can do is to convey words. Do not
assume that because something has a certain meaning to you, it will convey the same
meaning to someone else.

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  Failure to use direct, simple language
This seems obvious. But many people clutter up what they say with jargon, long
words and elaborate sentences.

 Emotions
Our emotions colour our ability to convey or to receive the true message. Try to make
your communication as unemotional as possible. Appeal to reason.

 Non-verbal communication
When we try to understand the meaning of what people say we listen to the words,
but we also use other clues that convey meaning. We attend not only to what people
say but to how they say it. We form impressions from what is called body language.

 Misinterpretation
People can easily misinterpret information for any of the reasons given above.

14.2 Report writing

A report should be structured in a way that ensures the reader is taken through a sequence
of sections that are clearly linked to one another and proceed logically from the
introduction to the recommendations and conclusions. An executive summary may be
included.
14.3 Making presentations
The three keys to effective speaking are:

 thorough preparation;
 good delivery;
 overcoming nervousness.
14.4 Motivating
Leadership is about getting people into action and ensuring that they continue taking that
action in order to complete the task. It is therefore very much about motivation.
Motivation can be defined as the process of getting people to move in the direction the
leader wants them to go. The aim is to get people to exert the maximum amount of
positive discretionary effort – they often have a choice about how they carry out their
work and the amount of care, innovation and productive behaviour they display.
Discretionary effort makes the difference between people just doing a job and people
doing a great job.

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14.5 Coaching
Coaching is a personal (usually one-to-one), on-the-job approach used by managers and
trainers to help people develop their skills and levels of competence. The need for
coaching may arise from formal or informal performance reviews, but opportunities for
coaching will emerge during normal day-to-day activities. Every time you delegate a new
task to someone, a coaching opportunity is created to help the individual learn any new
skills or techniques that are needed to do the job. Every time you provide feedback to an
individual after a task has been completed, there is an opportunity to help that person do
better next time.
Coaching can be carried out in the following stages:
1. Identify the areas of knowledge, skills or capabilities where learning needs to take
place to qualify people to carry out a task, provide for continuous development, enhance
transferable skills or improve performance.
2. Ensure that the person understands and accepts the need to learn.
3. Discuss with the person what needs to be learnt and the best way to undertake the
learning.
4. Get the person to work out how they can manage their own learning while identifying
where they will need help from you or someone else.
5. Provide encouragement and advice to the person in pursuing the self-learning
programme.
6. Provide specific guidance as required where the person needs your help.
7. Agree how progress should be monitored and reviewed.
Coaching enables a manager to provide motivation, structure and effective feedback as
long as you have the required skills and commitment. As coaches, good managers believe
that people can succeed and that they can contribute to their success. They can identify
what people need to be able to do to improve their performance.
14.6 Decision-making
Good managers are decisive. They can quickly size up a situation and reach the right
conclusion about what should be done about it.
Decision-making is about analysing the situation or problem, identifying possible courses
of action, weighing them up and defining a course of action. Peter Drucker (1967) says:
‘A decision is a judgement. It is a choice between alternatives. It is rarely a choice
between right and wrong. It is at best a choice between almost right and probably wrong
– but much more often a choice between two courses of action neither of which is
probably more nearly right than the other.’ You should not expect or even welcome a
bland consensus view. The best decisions emerge from conflicting viewpoints. This is
Drucker’s first law of decision-making: ‘One does not make a decision without

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disagreements’. You can benefit from a clash of opinion as it prevents people falling into
the trap of starting with the conclusion and then looking for the facts that support it.
Ten approaches to being decisive
1. Make decisions faster – Jack Welch, when heading General Electric, used to say: ‘In
today’s lightning-paced environment, you don’t have time to think about things. Don’t sit
on decisions. Empty that in-basket so that you are free to search out new opportunities…
Don’t sit still. Anybody sitting still, you are going to guarantee they’re going to get their
legs knocked from under them.’
2. Avoid procrastination – it is easy to put an e-mail demanding a decision into the ‘too
difficult’ section of your actual or mental in-tray. Avoid the temptation to fill your time
with trivial tasks so that the evil moment when you have to address the issue is
postponed.
3. Expect the unexpected – you are then in the frame of mind needed to respond
decisively to a new situation.
4. Think before you act – this could be a recipe for delay, but decisive people use their
analytical ability to come to swift conclusions about the nature of the situation and what
should be done about it.
5. Be careful about assumptions – we have a tendency to leap to conclusions and seize on
assumptions that support our case, ignoring the facts that might contradict it.
6. Learn from the past – build on your experience in decision-making; what approaches
work best. But don’t rely too much on precedents. Situations change. The right decision
last time could well be the wrong one now.
7. Be systematic – adopt a rigorous problem-solving approach, as described later in this
chapter. This means specifying objectives (what you want to achieve), defining the
criteria for judging whether they have been achieved, getting and analysing the facts,
looking for causes rather than focusing on symptoms, developing and testing hypotheses
and alternative solutions, and evaluating possible causes of action against the objectives
and criteria.
8. Talk it through – before you make a significant decision talk it through with someone
who is likely to disagree so that any challenge they make can be taken into account (but
you have to canvass opinion swiftly).
9. Leave time to think it over – swift decision-making is highly desirable but you must
avoid knee-jerk reactions. Pause, if only for a few minutes, to allow yourself time to think
through the decision you propose to make. Confirm that it is logical and fully justified.
10. Consider the potential consequences – McKinsey, the management consultants, call
this ‘consequence management’. Every decision has a consequence and you should
consider very carefully what that might be and how you would manage it. When making

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a decision it is a good idea to start from where you mean to end – define the end result
and then work out the steps needed to achieve it.
14.7 Delegating
You can’t do everything yourself, so you have to delegate. It is one of the most important
things managers do. At first sight delegation looks simple. Just tell people what you want
them to do and then let them get on with it. But there is more to it than that. It is not easy.
It requires courage, patience and skill. And it is an aspect of your work in which you have
more freedom of choice than in any other of your activities. What you choose to delegate,
to whom and how, is almost entirely at your discretion.
Delegation takes place when you deliberately give someone the authority to carry out a
piece of work that you could have decided to keep and carry out yourself. Bear in mind
that what you are doing is delegating authority to carry out a task and make the decisions
this involves. You are still accountable for the results achieved.

 Advantages of delegation include:

 It enables you to focus on the things that really matter in your job – those aspects
that require your personal experience, skill and knowledge.
 It relieves you of routine and less critical tasks.
 It frees you from being immersed in detail.
 It extends your capacity to manage.
 It reduces delay in decision-making – as long as authority is delegated close to the
scene of the action.
 It allows decisions to be taken at the level where the details are known.
 It empowers and motivates your staff by extending their responsibilities and
authority and providing them with greater autonomy.
 It develops the knowledge and skills of your staff and increases their capacity to
exercise judgement and make decisions.

 Difficulties of delegation
The main problem is that delegation often involves risk. You cannot be absolutely
sure that the person to whom you have delegated something will carry out the work as
you would wish. The temptation therefore is to over-supervise, breathe down people’s
necks and interfere. This inhibits their authority, makes them nervous and resentful
and destroys their confidence, thus dissipating any advantages the original act of
delegation might have had.
Another difficulty is that many managers are reluctant to delegate because they want
to keep on top of everything. They really think they know best and cannot trust
anyone else to do it as well, never mind better.
Finally, some managers are reluctant to delegate simply because they enjoy what they
are doing and cannot bear the possibility of giving it away to anyone else.

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  Choosing who does the work
When delegating to individuals the person you choose to do the work should ideally
have the knowledge, skills, experience, motivation and time needed to get it done to
your satisfaction. It is your job as a manager or team leader to know your people –
their strengths and weaknesses, what they are good at or not so good at, those who are
willing to learn and those who, without good cause, think that they know it all.
14.8 Facilitating
Facilitation is defined in the Oxford English Dictionary as to ‘make easy, promote, help
to move forward’. Managers act as facilitators in relation to their team members when
they make it easier for them to develop by promoting their skills and capabilities, thus
helping them to move forward. Managers may also be involved in facilitating the work of
groups of people assembled to carry out a task jointly.

 Facilitating individual learning

The process of facilitating individual learning involves focusing on the learners and
helping them to achieve agreed learning objectives. Facilitators work alongside
learners – they do not act like ‘trainers’, delivering learning on a plate. Working with
people means encouraging learners to participate in the learning process so that it
becomes largely self-managed learning, with the manager as facilitator providing
support, guidance and help, but only as required.
Facilitators ask questions but do not provide ready-made answers to them. They help
people to learn from their experience, listen to them and respond encouragingly.
Facilitators may use coaching skills but always take account of the learner’s views on
what to learn and how best to learn it.

 Facilitating groups
A group facilitator is there to help the group reach conclusions in the shape of ideas
and solutions. Facilitators do not exist to ‘chair’ the meeting in the sense of
controlling the discussion and pressurizing the group to agree to a course of action.
The group is there to make up its own mind and the facilitator helps it to do so. The
help is provided by asking questions that encourage the group members to think for
themselves. These can be challenging and probing questions but the facilitator does
not provide the answers – that is the role of the group. Neither do facilitators allow
their own opinions to intrude – they are there to help the group marshal its opinions,
not to enforce their own ideas. However, by using questioning techniques carefully,
facilitators can ensure that the group does thoroughly discuss and analyse the issues
and reaches conclusions by consensus, rather than allowing anyone to dominate the
process.
Facilitators ensure that everyone has their say and that they are listened to. They step
in quickly to defuse unproductive arguments. They see that the group defines and

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 understands its objectives and any methodology they might use. They summarize
from time to time the progress made in achieving the objectives without bringing
their own views to bear. Facilitators are there to ensure that the group makes progress
and does not get stuck in fruitless or disruptive argument. But they encourage the
group rather than drive it forward.

14.9 Giving feedback

People need to be informed – to be provided with feedback – about how well they are
doing in order to carry on doing it to good effect or to understand what they need to do to
improve. They take action and then they learn through information that is fed back to
them on how effective that action has been. Thus they complete the feedback loop by
making any corrections to their behaviour on the basis of the information they have
received.
Ideally, feedback should be built into the job. Individuals should be able to keep track of
what they are doing so that they can initiate speedy corrective action. But that is not
always feasible and then the manager has the responsibility of providing the feedback.
This can and should be done regularly, and especially after a particular task has been
carried out or a project has been completed. But it can also be provided in more formal
performance review meetings.
Feedback should be based on facts, not subjective judgements. The following are
guidelines on giving feedback:

 Build feedback into the job. Individuals or teams should be able to find out easily
how they have done from the control information readily available to them. If it
cannot be built into the job it should be provided as quickly as possible after the
activity has taken place, ideally within a day or two.
 Provide feedback on actual events. Feedback should be provided on actual results
or observed behaviour, not based on subjective opinion.
 Describe, don’t judge. The feedback should be presented as a description of what
has happened. It should not be accompanied by a judgement.
 Refer to specific behaviours. The feedback should be related to specific items of
behaviour; it should not transmit general feelings or impressions.
 Ask questions rather than make statements: ‘Why do you think this happened?’,
‘On reflection, is there any other way in which you think you could have handled
the situation?’, ‘What are the factors that influenced you to make that decision?’
 Get people to work things out for themselves. Encourage people to come to their
own conclusions about what they should do or how they should behave. Ask
questions such as: ‘How do you think you should tackle this sort of problem in the
future?’, ‘How do you feel you could avoid getting into this situation again?’
 Select key issues and restrict the feedback to them. There is a limit to how much
criticism anyone can take. If it is overdone, the shutters will go up and the
discussion will get nowhere.

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  Focus on aspects of performance that the individual can improve. It is a waste of
time to concentrate on areas that they can do little or nothing about.
 Show understanding. If something has gone wrong, find out if this has happened
because of circumstances beyond the individual’s control and indicate that this is
understood.
14.10 Networking
Increasingly in today’s more fluid and flexible organizations, people get things done by
networking. Networks are loosely organized connections between people with shared
interests. Networking takes place within them when people exchange information, enlist
support and create alliances – getting agreement with other people on a course of action
and joining forces to make it happen. It occurs outside the usual formal communication
channels. It is an essential way of getting things done in organizations – it ensures that
the informal organization works.

 Steps to network effectively:

1. Identify people who may be able to help.
2. Seize any opportunity that presents itself to get to know people who may be useful.
3. Have a clear idea of why you want to network – to share knowledge, to persuade
people to accept your proposal or point of view, or to form an alliance.
4. Know what you can contribute – networking is not simply about enlisting support,
it is just as much if not more concerned with developing knowledge and
understanding and joining forces with like-minded people so that concerted effort can
be deployed to get things done.
5. Show interest – if you engage with people and listen to them, they are more likely
to want to network with you.
6. Ask people if you can help them as well as asking people to help you.
7. Put people in touch with one another.
8. Operate informally but be prepared to call formal meetings when necessary to
reach agreement and plan action.
9. Make an effort to keep in touch with people.
10. Follow up – check with members of the network on progress in achieving
something, refer back to conversations you have had, discuss with others how the
network might be developed or extended to increase its effectiveness.

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14.11 Problem-solving
Peter Drucker (1967) wrote that ‘In every area of effectiveness within an organization,
one feeds the opportunity and starves the problem’. It is indeed often said that ‘there are
no problems, only opportunities’. This is not universally true of course, but it does
emphasize the point that a problem should lead to positive thinking about what is to be
done now. It is not the time for recriminations. If a mistake has been made, the reasons
for it should be analysed so that it does not happen again. The following are 10 steps for
effective problem-solving:
1. Define the situation – establish what has gone wrong or is potentially going to go
wrong.
2. Specify objectives – define what is to be achieved now or in the future to deal with
an actual or potential problem or a change in circumstances.
3. Develop hypotheses – come up with theories about what has caused the problem.
4. Get the facts – find out what has actually happened and contrast this with an
assessment of what ought to have happened. Obtain information about internal or
external constraints that affect the situation. However, remember what Nietzsche
(1883) wrote: ‘There are no facts, only interpretations’. Try to understand the attitudes
and motivation of those concerned. Remember that people will see what has happened
in terms of their own position and feelings (their framework of reference).
5. Analyse the facts – determine what is relevant and what is irrelevant. Diagnose the
likely cause or causes of the problem. Do not be tempted to focus on symptoms rather
than root causes. Test any assumptions. Dig into what lies behind the problem.
6. Identify possible courses of action – spell out what each involves.
7. Evaluate alternative courses of action – assess the extent to which they are likely to
achieve the objectives, the cost of implementation, any practical difficulties that might
emerge and the possible reactions of stakeholders.
8. Weigh and decide – determine which alternative is likely to result in the most
practical and acceptable solution to the problem. This is often a balanced judgement.
9. Plan implementation – timetable, project management, and resources required.
10. Implement – monitor progress and evaluate success. Remember that a problem has
not been solved until the decision has been implemented. Always work out the
solution to a problem with implementation in mind.

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