What are radical or revolutionary changes?

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• LECTURE 38

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• What are radical or revolutionary changes?
• Changes associated with strategy or Strategic
  changes are considered revolutionary changes.
• E.g. restructuring, privatisation of a state
  owned unit, merger, take-over, acquisition or
  joint-ventures.
• Similarly changes pertaining to product
  development or market development and the
  strategies how to engage customers through
  differentiation, technology or cost leadership.
• Exit or Entry decision of product, market, R D
  etc
• Other changes could be down-sizing, cost-cutting
  but these are related to structural changes as
  well.

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• Why Radical Change?
• Debate between effectiveness of continuous and
  discontinuous change? Which one is more
  effective?
• Rational adaptation theorist believe organisation
  change can easily and speedily be managed given
  the various types of exogenous changes.
• Natural selection theorist view organisation as
  complex systems severely constrained by exogenous
  forces that create and institutionalise strong
  web of commitments.
• From this perspective organisations are
  inherently inflexible to respond to external
  opportunities and threat, and rarely engage in
  transformations.

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• Orlikowski challenged the concept that changes
  must be planned, technology is the primary cause
  of technology based organisational
  transformation, and that radical changes always
  occur rapidly and discontinuously.
• Change cannot be anticipated and is discontinuous
  in nature
• Organisational transformation is an ongoing
  improvisation enacted by organisational actors
  trying to make sense of and act coherently with
  the world.

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• 2. Radical or Transformative changes
• Related concepts are quantum change,
  discontinuous change or radical change.
• Caution Strategic change defined as variation
  in organizations long term goals and mission
  and may occur in either incremental or
  revolutionary manner
• -Increment view holds that organization
  experiences large scale strategic changes quite
  slowly while revolutionary view suggests long
  periods of organization experience brings very
  little strategic variation instead punctuated by
  short intense periods of change.
• -organization change vary little through
  incremental change
• Incrementalism fail to account for large scale
  organizational transitions which are related
  with total structures, management processes and
  corporate cultures.

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• Where the theme is
• Restructuring
• Repositioning
• Revitalization or Renewal
• Assumptions of incrementalism
• Senior managers have the capacity to fully
  anticipate the environmental forces (opportunity
  Threat) and future conditions for further
  development. The assumption may be valid for
  stable times and age of continuity.
• 2. Organization is run by intelligent and
  proactive managers.
• In fact organization and societal selection
  process is such that majority of managers are
  mediocre and have limited information, limited
  experience to the industry and cannot judge
  complex information outside their industry and
  organization so cannot scan the environment
  effectively.

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• 3. Third assumption is that large scale
  organization change can always be accomplished
  incrementally.
• Fact is managers have little control over
  economic fluctuation, political intervention,
  industry restructuring and on other
  discontinuities in technological developments
  which destroy whole market and organization
  processes and structures.
• These discontinuities are often beyond the
  control of managers because managers are members
  of a dominant coalition with a historical
  conditioned model of reality .
• Their culture is fixed mindset , reactive , rule
  based and precedence.

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• It is difficult to have internally motivated
  change
• The need is to have externally imposed change.
• Revolutionary Change Theorist view organization
  as having deep structures (Gersick 1991) or
  coherent configuration of strategy, structure,
  systems, controls ideologies which are highly
  stable limit the range of options available to
  manager contemplating change.
• Deep structures initiate inertia and power
  commitments of organization members to existing
  conditions preclude departure from change.

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• What causes Revolutionary change
• Revolutionary changes can result from well
  defined trigger events that can overcome
  organization inertia or deep structure
• Basic categories
• 1. Leader
• 2. New Strategy expansion or diversification,
  product process development , BPR very popular
  in mid 1990s.
• 3. Gestalt phenomenon
• 4. Prolonged lack of fit between organization
  its environment
• 5. Technological innovations
• 6. Dramatic shift in governmental policies
• 7. Re-engineering