Flashcards in ou_mba_b716_copy_20190212125432 Deck (230):
How is Gross Profit calculated?
Sales - Cost of Goods Sold = Gross Profit
What is COGS?
Cost of Good Sold
How is COGS calculated for a trading organisation?
Inventory at Year Start + Product Bought During Year - Residual Inventory at Year End = COGS
How is COGS calculated for a manufacturing organisation?
Year Start Raw Material+ Raw Material bought during year - Year End Raw Material + Year Start Work-in-Progress - Year End Work-in-Progress + Year Start Finished Goods - Year End Finished Goods.= COGS
What does EBIT stand for?
Earnings Before Interest and Tax
What is another term for EBIT
Net Operating Income
How is EBIT calculated?
Gross Profit - Marketing Expenses - Administration Expenses - Depreciation - Other Operating Costs= EBIT
How is Profit before taxes from continuing operations calculated?
EBIT- Results from investments in other companies- Bank Loan interest= Profit before taxes from continuing operations
How is Profit for financial year calculated?
Profit before taxes from continuing operations-Tax payable- Net income from discontinued operations= Profit for financial year
What is Return On Sales?
EBIT as a percentage of sales
How is Return On Sales calculated?
ROS (in %) = (EBIT/Sales) * 100
What does the Asset Utilisation Ration show?
Revenues generated as a proportion of total assets used to generate said revenues
How is AUR calculated?
How is Capital Employed calculated?
Shareholders funds + long-term debt
What is ROCE
Return on Capital Employed.
What is ROS
Return on Sales
How is ROCE calculated?
ROCE (in %) = (EBIT/Capital Employed) * 100orROCE (in %) = (EBIT/Sales) * (Sales/Capital Employed) * 100Which is ROCE = ROS * AUR
Is AUR an effectiveness or efficiency ratio?
Is ROCE an effectiveness or efficiency ratio?
Is ROIS an effectiveness or efficiency ratio?
What is an ORPI?
Output-Related Performance Index
What type of orgnanisation might use an ORPI?
What does the Current Ratio show?
Level of current assets relative to current liabilities.
How is Current Ration calculated?
Current Ratio = current assets / current liabilities.
What does the Quick Ratio show?
Level of current assets relative to current liabilities. ignoring inventory in current assets
How is the Quick Ratio calculated?
Quick Ratio = (current assets - inventory) / current liabilities.
What is Working Capital?
margin of safety between current assets and current liabilities
How is Working Capital calculated?
Working Capital = current assets - current liabilities
What does Leverage show?
Relative dependence on debt and equity
How is Leverage calculated?
Leverage = (short-term debt + long-term debt) / shareholders' funds
What does Gearing show?
European version of debt/ equity ratio
How is Gearing calculated?
((short-term debt + long-term debt) /(short-term debt + long-term debt + shareholders' funds)) * 100
What is Creditor Days?
How long it takes an org. to pay its creditors
How is Creditor Days calculated?
Creditor Days = (Creditors / COGS) * 365 days
What is Stock or Inventory Days
How long stock/inventory takes to become output product/service
How is Stock (or Inventory) Days calculated?
Stock Days = (Stock / COGS) * 365 days
What is Debtor Days?
How long it takes an org to get paid.
How is Debtor Days calculated?
(Debtors / Sales) * 365 days
What is ROE?
Return On Equity
What does ROE show?
Net profit for the year as a proportion of shareholders' funds - shows the organisation's performance taking equity into account.
How is ROE calculated?
ROE (in %) = (Net Profit for Financial Year / Shareholders' Funds) * 100
What does the Payout Ratio show?
Percentage of after-tax profits paid to shareholders as dividends
How is Payout Ratio calculated?
Payout Ratio (in %) = (Dividends / Profit for Financial Year) * 100
What does Interest Cover show?
Interest Cover shows whether an organisation is producing enough operating profit to cover its interest payments.
How is Interest Cover calculated?
Interest Cover = EBIT / Interest Expense
What is the P/E Ratio?
Profit/Earnings Ratio. Shows the market price as a proportion of earnings per share.
How is P/E calculated?
P/E Ratio = Market Price / Earnings Per Share
What are Fayol’s five distinct elements of management?
What did Gulick and Urwick list as management activities?
What did Drucker define as the manager’s role?
Setting objectives,Organising,Motivating and Communicating,Measuring,Developing People.
What are Weber’s three sources of authority within an organisation?
Traditional authority eg monarchs, feudal aristocrats.Charismatic authority eg Gandhi or MandelaRational-Legal authority eg Managers
What where the three areas of flexibility in Atkinson’s flexible firm model?
Functional flexibility: people are given a range of skills and abilities and deployed and redeployed as needed. Opposite of scientific management.Numeric flexibility: uses short term contracts to meet changes in demand.Financial flexibility: people are paid for work done - piece work.
What was Ritzer’s McDonaldisation of Society?
Modern version of scientific management. Used in call centres etc. Efficiency driven. Eg having to answer calls within a number of rings.
What six groups did Fayol use to describe organisational activity?
How did Luthans et al define success
Speed of promotion.
How did Luthans et al define effective management?
High levels of satisfaction and commitment by subordinates combined with high quality and quality standards of performance.
What were Luthan’s four main areas of real managers’ activities?
Communication Traditional Management NetworkingHuman Resource Management
What activities did Luthan’s put under the heading ‘communication ‘?
Exchanging information Paperwork
What activities did Luthan’s put under the heading ‘traditional management ‘?
What activities did Luthan’s put under the heading ‘networking ‘?
Interacting with others.Socialising/politicking.
What activities did Luthan’s put under the heading ‘human resource management ‘?
What three sets of management functions did Buchanan and Huczynski describe?
Creating an agendaDeveloping peopleExecution
Sketch the three pulls model, describing pulls on a role.
What were Mintzberg’s management roles?
interpersonalFigureheadleaderliasion informationalmonitordisseminatorspokesperson decisionalentrepreneurdisturbance handlerresource allocatornegotiator
How did Krantz and Maltz describe 'role as given'?
Refers to role as defined by role influencers - the people in the org who define the expectations for what someone in a particular role does.
'role as taken' was described as what by Krantz and Maltz?
Refers to the view of the job holder regarding what is to be done and how.
Sketch Krantz and Maltz's role as given/taken model
What is a product?
Anything that can be bought
What is a customer?
Someone who buys a product.
What is a consumer?
Someone who uses a product
What is marketing
Process of identifying customers and building meaningful exchanges with them.
How do Kotler and Armstrong define marketing?
"the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return."
How did Chartered Institute of Marketing define Marketing?
"Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably."
How did the American Marketing Association define Marketing?
Marketing is the activity, set of institutions, and processes for creating, communications, delivering, and exchanging offerings that have value for customers, clients, partners and society at large."
Who advocated that people buy value and not products?
Philip Cotler and Levitt (1969)
What did Zetihaml include in sacrifice?
Money, time, energy and effort.
What is opportunity cost?
The alternatives forgone to do/buy one specific thing.
How did Zeithaml define perceived value?
The consumer’s overall assessment of the utility of a product based on perceptions of what is received and what is given.
What did Webster say marketing involves in 1997?
Value defining processesValue developing processesValue delivering processes
What are the 4 P’s of the Marketing Mix?What is the fifth?
What were Lauterborn’s four Cs?
Customer needs and wants (product)Cost to the user (price)Convenience (place)Communication (promotion)
What are 5 benefits of market segmentation/targeting?
1) increased knowledge of target audience.2) easier to identify trends and influences.3) more efficient use of resources - expensive activities can be more targeted.4) more effective development and tailoring of marketing activities and features, pricing, comms etc can be tailored.5) increased potential for setting achievable and realistic objectives e.g. sales targets.
What are the five general criteria by which operations performance is measured?
What are the seven forms of waste originally identified by Toyota?
Over-productionWaiting timeTransportationProcess (or over-processing)InventoryMotionDefectives
What is PDCA?
What is 'operations'?
The ops functions of an org. Comprises the resources and processes arranged for production and delivery of good/services to the customers.
What is 'operations management'?
Managerial activity comprising the activities, decisions and responsibilities of designing, managing and improving the production and delivery of goods/services.
Sketch Porter's Value Chain model
What are the five approaches for improvement?
Factory FocusProcess FlexibilityInformation TechnologyIncreased Customer Involvement in the Service ProcessIncreased use of Customer Feedback to improve Service Quality
What did Smith say in shareholder theory?
a manager's primary duty is to maximise shareholder returns
What did Smith say in stakeholder theory?
A manager's duty is to balance the shareholders' financial interest against the interests of other stakeholders such as employees, customers and the local community, even if it reduces shareholder return
How did Sternberg critique stakeholder theory - as cited in Phillips et al?
"effectively destroys business accountability ... because a busines that is accountable to all is actually accountable to none"
Sketch Freeman's Stakeholder view of the firm.
Sketch a stakeholder map of concentric circles
What are weaknesses of the concentric map stakeholders model?
Stakeholders may belong to more than one group: internal, external, primary or secondary. Stakeholder groups tend to be made up of large groups of individuals which may not be homogeneous and may be groups within groups. Power often unequally shared.
Sketch a stakeholder relationship map
Describe 9 C's stakeholder checklist
Commissioners Those who pay the organisation to do thingsCustomers Those who acquire and use the organisation’s productsCollaborators Those with whom the organisation works to develop and deliver productsContributors Those from whom the organisation acquires content for productsChannels Those who provide the organisation with a route to a market or customerCommentators Those whose opinions of the organisation are heard by customers and othersConsumers Those who are served by the organisation’scustomers, e.g. end usersChampions Those who believe in and will actively promote the projectCompetitors Those working in the same area who offer similar or alternative services
Name one big weakness of all the stakeholder map models
The assume that stakeholders positions are fixed whereas in reality they are dynamic and change according to the issue at hand, level of interest and level of influence.
What did Bryson say was the main purpose of stakeholder analysis?
Identify stakeholders and their interestClarify stakeholder views of the organisationIdentify key strategic issuesBegin the process of identifying colaitions of support and opposition
Sketch Johnson et al's power interest grid.
Which quadrant of his power interest grid did Johnson say was the most difficult to plan for - and why?
Quadrant C - the 'keep satisfied' group who have low interest but high power. They may appear passive but the level of interest can change suddenly, moving them to quadrant D - key players.
Why should stakeholders in quadrant B - keep informed - of Johnson's power interest grid be careful management?
They may be vital allies in a broader lobbying strategy to influence more powerful stakeholders.
Sketch Price's power versus interest grid.
How did Price describe low interest/low power stakeholders?
How did Price describe high interest/low power stakeholders?
onlookers - interested in the changes taking place but have very little power or influence.
How did Price describe high interest/high power stakeholders?
Intruders - have the power to support or undermine change and are sufficiently interested to take action if they wish.
How did Price describe low interest/high power stakeholders?
Monitors - individuals or groups that have the power to support or influence your change effort, but not necessarily the interest to do so.
What is a key weakness of the power interest grids?
As with the maps, they assume that groups are static whereas in real life they are dynamic and may be in different positions according to the issue at hand.
What does Scholes caution against in stakeholder analysis?
Ascribing stakeholders more power than they actually posess Being too simplistic or generic in selection of stakeholders to plot Being too detailed in selection of stakeholders to plot, leading to analysis being too complex and diffiicult to analyse.
Sketch out an exampe of the stakeholder disposition model
What are Johnson's sources and indicators of power for internal stakeholders?
Status (e.g. position in the organisational hierarchy)Representation (e.g. committees they may be on)Involvement in strateigc decision makingReputationInformal InfluenceExpertiseGrade or SalaryClaim on resources (e.g. size of budget or number of staff)Symobl of power (e.g. size and location of office or secretarial support)
What are Johnson's sources and indicators of power for external stakeholders?
Control of strategic resourcesRelative size of shareholdings or loansDependence on small number of customersReliance on small number of customersNegotiating arrangementsStatus (e.g. is the customer or supplied wined and dined)At what level is the customer or supplier 'managed' by the organisation?
What are primary stakeholders?
Those stakeholders most vital to an organisation - without whom the organisation cannot survive.
What are secondary stakeholders?
Those on whom the organisation does not rely on directly for its existence.
What are the first two steps of stakeholder analysis?
1 - identify the stakeholders to be mapped2- consider which strategies might be appropriate ina range of given circumstances.
Sketch Schole's nine stakeholders maps
Describe "the political battleground" stakeholder map from Schole's 9 stakeholder maps models.
many key stakeholders divided in support and resistance to the issue. Potential strategies include facilitating the dominance of supporters, breaking down resistance or "divide and rule".
Describe "the lone champion" stakeholder map from Schole's 9 stakeholder maps models.
One powerful supporter. Big threat is the loss of the champion. Strategies include extending the support base.
Describe "the worthy cause" stakeholder map from Schole's 9 stakeholder maps models.
high level of interest from stakeholders with little power. Strategies include empowering the stakeholders and facilitating the creation of alliances.
Describe "The dream ticket" stakeholder map from Schole's 9 stakeholder maps models.
Several powerful champions and no powerful opponents. Danger is complacency so strategy is to keep stakeholders satisfied.
Describe "The dogged opponent" stakeholder map from Schole's 9 stakeholder maps models.
One powerful opponent. Strategies include breaking down their resistance or enlisting the support of a more powerful champion.
Describe "The political time bomb" stakeholder map from Schole's 9 stakeholder maps models.
Several opponents with low power. Danger is underestimating their ability to gain support or build their own power base. Strategy is to keep them informed.
Describe "the potential lost cause" stakeholder map from Schole's 9 stakeholder maps models.
Lots of powerful opponents. May have to abandon proposal. Main strategy is to break down resistance e.g. by building a coalition of support.
Describe "the political trap" stakeholder map from Schole's 9 stakeholder maps models.
Low levels of interest among all powerful stakeholders. Strategies include raising levels of interest, keeping them satisfied or encouraging emergence of a lone champion.
Describe "the autocrats dream" stakeholder map from Schole's 9 stakeholder maps models.
stakeholders have little interest and little power. Guard against complacency by monitering stakeholder reactions.
Sketch Stacey's model of political activity and conflict
What did Stacey mean by "divergent objectives" in his model of political activity and conflict?
Individuals and departments can have different agendas and want different things from each other.Depts are rewarded for achieving different things.Leads to conflict.Competition promoted rather an co-operation - differennt depts and people cannot all achieve their aims as they can be contradictory or opposing.
What did Clegg et al claim about power?
"power is to organisations as oxygen is to breathing""it concerns the ways that social relations shape capabilities, deisions, change"
What were the key points from the discussion on Toyata in terms of power/politics/conflict, just after the description of Stacey's model of political activity and conflict?
* Different departments had different, conflicting aims.
* Marketing/Ops rewarded for speed and quantity of sales
* Quality dept rewarded based on few cars leaving factory with faults.
* Objectives diverge
* Marketing want quick sales
* Quality depts less focused on quantity, more on quality
* Problems when they obstruct each other - quality dept refuse to sign off on poor quality cars, marketing trying to push cars out the door. Political activity....
* Marketing attempted to get Quality to turn a blind eye.
* Quality dept could get pedantic
* Objectives now diverge more. Toyota - 2009-2011 big recalls
* push ot be top autmobile company had warped management decisions
* cars were not being produced in the "Toyota Way"
* 20 million cars recalled
* increased passenger and driver deaths
* drop in public trust
* $1.1b settlement to US Dept. of Justice.
What were the characteristics of power described as?
It is relational
* it's not something one has in an absolute sense
* one's power to influence another depends on the relationship between them It derives from difference
* Some groups are marginalised It involves beliefs and perceptions
* our power is shaped by our beliefs and those of the people around us
* depends on resources, sanctions etc. controlled
* we often make ourselves feel intimidated by attributing excessive power to others. It is never one sided
* Master is nothing without the slave
* managers have managers too It is contextual
* depends on context of relationship
* once out the building, the CEO has no more power than the cleaner
What are French & Ravens sources of power?
* Legitimate Power
* Reward Power
* Coercive Power
* Expert Power
* Referent Power
What did French and Raven mean by Legitimate Power?
Maps to Max Weber's rational-legal power.Based on agreed power based on agreeing that those ocupying a specific role can expect and request certain behaviours from others.Depends on sustained only as long as people agree to respect agreement.
What did French and Raven mean by Reward Power?
Derived from the person's ability to control allocation of rewards - and remove sanctions.eg. pay, promotions, time off and work assignments. Employees have this through 360 feedback processes.
What did French and Raven mean by Coercive Power?
Ability to achieve an outcome through applying punishment.Reprimanding, disciplining, demoting, firing.Unions can also have this power - strikes, working to rule etc. Team members have it through sarcasm, ostracism etc. to ensure co-workers confirm to team norms.
What did French and Raven mean by Expert Power?
Based on the particular knowledge/skills of the individual.In theory, the greater and rarer these skills are, the greater power the holder has.Staff have this more and more in the knowledge economy.
What did French and Raven mean by Referent Power?
People have referent power when other people identify with them, like them or respect them.Associated with the person rather than the role.Function of person's interpersonal skills.dynamic and precarious, can be destroyed quickly.
What are Morgan's resource-based views of power?
* Position or formal authority
* Control of scares resources
* Use of organisational structure, rules and regulations
* Social connections
* Control of knowledge and information
* Control of counter-organisations
* Interpersonal alliances, networks and control of "informational organisations"
* Personal power/power one already has
All inter-related.Power/influence are not simply top-down, often more fluid.
What is "Position or formal authority" in Morgan's resource-based views of power?
position that a person holds entitles them to do cetain things.backed by rules of organisationmost orgs limit this power to certain tasks. eg. doctor can tell a nurse to take a patiant's temperature but not to clean their car.
What is "control of scarce resources" in Morgan's resource-based views of power?
orgs depend on adequarre supply of resources for continued existence.Control over these can be source of power.keys are dependence and scarcity
What is "Use of org structure, rules and regulations" in Morgan's resource-based views of power?
jobsworths - useing rules of org to obstruct others or to obscure their own lack of knowledge.use of buereaucratic red tape.However:structure of org should be set out to promote fairness by treating all cases the same, so rules can support this.A way of passing the buck - the rules "say so".
What is "Social Connections" in Morgan's resource-based views of power?
"It's not what you know, it's who you know"
What is "Expertise" in Morgan's resource-based views of power?
Use of expert knowledge to influence others.In a meritocracy, expertise is one of the most readily acceptable bases of power.What is legitimate power can be contentiousPeople guard knowledge jealously, to enhance their own indispensibility and undermine others.two important sources:technical knowledge.process knowledge.
What is "Control of knowledge and information" in Morgan's resource-based views of power?
Control of information is increasingly a source of power. eg a gatekeeper could be a secretary controlling access to speak to their boss.
What is "Control of counter-organisations" in Morgan's resource-based views of power?
Where an employee can draw on expert, legitimate or other sources of power from counter orgs. e.g. ones whose aims are different or in opposition to the org. e.g. a trade union using the press to strengthen its own position.
What is "Interpersonal alliances, networks and control of 'informal organisations'" in Morgan's resource-based views of power?
Friends in high places, sponsors, mentors, people willing to trade support for favours etc Patroage, ability to ride on the coat-trails etc. Informal networks such as lunching together, meeting in the smoking corner or gym.
What is "Personal power/the power one already has" in Morgan's resource-based views of power?
personal qualities and characteristics.Referent power in French and Raven. Limitation: can give too much credence to the individual rather than the system.
What is Luke’s first dimension of power?
power is seen as overt.consists of winning or prevailing over others.organisation is seen as one dimension or unitarist where:common goals are persuedauthority of mgt is automaticlegitimacy is upheld through rules, procedures and hierarchy. power is observable: hammer and nail analogy.Essentially about exercising power in the ways indicated by French and Raven.
What is Luke’s second dimension of power?
More covet than first dimension.Pluralistic - recognising that different agendas are pursued.structure of the org leads to conflict though differing priorities.person B has less power than person A and so makes fewer demands on them. Fear of confrontation or reprisals. Not as well defined as first dimension.more concerned with deciding debates does/doesn't get on the decision making agenda.About controlling the org agenda to present as normal and not subject to negotiation.
What is Luke’s third dimension of power?
Views organisations as systems of domination.Organisational discourses limited to the elite who control them.Common phrases:"work hard, play hard""you're either part of the solution or part of the problem"Assumes all members of an org have to be part of a given solutionThey may not agree with the solutionDiscourse is phrased so a person can only fit one of two contrasting choices, and only one is "safe" In Luke's view - the most insidious form of power, compliance maintained by norms that are taken for granted.Focuses on language and defing basic discourses. Usually entails etablishing strong links between an orgs values and identities and dominant values and ideologies of wider society.
What was Cynthia Hardy's criticism of Luke's three dimensions of power model?
It still illustrates power is contructed as property of the individual - something one has.
How did Hardy extend Luke's three dimensions of power model?
She added a fourth dimension:The relational view. Power can never be absolute It is rooted in taken for granted dynamic systems. Always in relation to others. Chess board analogy: Pawns are weakest But under certain circumstances - ie the begining of the game - they have all the power as no other pieces can move until they do. Each piece will exercise different forms of power according to how it can move
Hardy says that power circulates through the entire system and isn't simply the property of an individual person.
What did Kanter say about change?
Change is disturbing when it is done to us, exhilerating when it is done by us.
What three circumstances did Zajac suggest where change can become excessive?
1) A company changes despite suggestions that it might not be required.2) One element is changed rightly, but other affected parts are changed badly.3) Change for the sake of change.
How did Strange distinguish types of change?
1) By rate of occurence2) By scale3) By how change happens
What categories did By identify in the "rate of occurence" characteristic?
1) Discontinuous ChangeLarge changes separated by periods of stability 2) Incremental ChangeThe ability to adapt strategies to meet demands of internal and external market 3) Bumpy Incremental ChangePeriods of relative quiet followed by acceleration in pace of change at org level 4) Continuous ChangeAbility at dept/org level to constantly react to internal/external pressure to changeKaizenContinuous Improvement5) Bumpy Continuous ChangePeriods of relative quiet followed by acceleration in pace of continual change
What categories for "change characterised by scale" did Dunphy and Stace propose?
1) Fine-tuningOngoing process Change takes place at dept level to adapt to orgs overall strategy 2) Incremental changeOccurs on gradual, predictable basisCan include distinct changes to processDoes not include radical change at org level. 3) Modular TransformationMajor shift if one or more depts 4) Corporate Transformation.Radical change to corporate business strategy.
How is "how change occurs" split out?
1) Planned2) Unplanned
Sketch Lewins Unfreeze-Change-Refreeze model
What are the criticisms of Lewin's model?
Adopts a static view of how organisations operate.Weick and Quinn suggested it should be relabelled "freeze, rebalance, unfreeeze" due to modern continuous change.Balogun & Hope Haily recommended removing ideas of organisations ever being frozen.
Sketch Balogun and Hope Haily's iterative model of change.
Describe how Balogun & Hope Haily's model moves on from Lewin's unfreeze-change-refreeze model.
the linear and unidirectional idea is replaced showing the stages as an iterative process rather than linear or sequential
What are common critiques of all change models?
They assume change is requiredThey assume that all stakeholders are committed to making change happenThey close down conversation about whether the change is requiredThey assume all members of an org are working towards the same outcome
What three general factors should we consider when choosing an approach for change?
1) Scale2) Speed3) Direction...of proposed changes.
What are the three parts of Beer & Noriah's model?
Theory E - hardTheory O - SoftCombined E&O
What are the dimensions of change considered in Beer & Noriah?
GoalsLeadershipFocusProcessReward SystemUse of Consultants
What did Theories E, O and Combined say about Goals in Beer & Noriah?
* Maximise Shareholder value
* Develop organisational capabilities
* Explicity embrace the paradox beteeen economic value and organisational capability.
What did theories E, O and combined say about "Leadership" in Beer and Noriah's model?
* Manage change from top down
* Encourage participation from bottom up
* Set direction from the top and engage the people below.
What did Theories E, O and Combined from Beer and Noriah's model say about "Focus"?
* Emphasise structure and systems
* Build up corporate culture: employee's behaviour/attitudes
* Focus simultaniously on the hard (structure and systems) and soft (corporate culture)
What did Theories E, O and Combined from Beer and Noriah's model say about "Process"?
* Plan/establish programs
* Experiment and evolve
* Plan for spontaneity
What did Theories E, O and Combined from Beer and Noriah's model say about "Reward System"?
* Motivate through financial incentives
* Motivate through commitment (pay as faiar exchange)
* Use incentives to reinforce change but not drive it
What did Theories E, O and Combined from Beer and Noriah's model say about "Use of consultants"?
* Consultants analyse problems/shape solutions
* Consultants support management in shaping solutions
* Consultants are resources who may empower employees
What does 'E' stand for in Theory E?
What does 'O' stand for in Theory 'O'?
What do Beer and Noriah claim is increasingly the only legitimate measure of corporate success
What are the main criticisms of Theory E/O?
Dualistic - it assumes either/or approach.Orgs may have good reasons for choosing one approach over another - contradictions/tensions involved in decisions, sometimes a combinatory approach appears impossible.Assumes change is always good - Sturdy and Grey disagree. change is often carried out in the interests of management rather than other stakeholders.
What are the 6-step, Kanter et al's 10 commandments, Kotter's 8 stage process for organisational transformation and Lueke's Seven steps collectively known as?
The N*Step models.
Who compared Kanter's, Kotter's and Lueke's models?
What was Kanter's model called?
Ten Commandments for Executing Change
What was Kotter's model called?
Eight-Stage Process for Successful Organisational Transformation
What was Lueke's model called?
What are Kanter's Ten Commandments?
* Analyse the organisation and it's need to change
* Create a vision and common direction
* Separate from the past
* Create a sense of urgency
* Support a strong leader role
* Line up political sponsorship
* Craft an implementation plan
* Develop enabling structures
* Communicatie, involve people and be honest
* Reinforce and institutionalise
What are Kotter's eight stages?
* Establishing a sense of urgency
* Createng a guiding coalition
* Developing a vision and strategy
* Communicating the change vision
* Empowering broad based action
* Generating short term wins
* Consolidating gains and producing more chang
* Anchoring new approaches in the culture
What are Lueke's seven steps?
* Mobilise energy and commitment through joint identification of business problems and their solutions
* Develop a shared ision of how to organise and manage for competitiveness
* Identify the leadership
* Focus on results, not activities
* Start change at the periphery, then let it spread to other units without pushing it from the top
* Institutionalise success through formal policies, systems, and structures
* Monitor and adjust strategies in response to problems in the change process
What is the six step model outlined in the course text?
* Establish a sense of urgency
* Create a guiding coalition
* Develop a vision and strategy
* Address cultural issues
* Manage the transition
* Sustain momentum
rinse & repeat.
Six-step model: Why might a sense of urgency be required?
* Poor feedback mechanisms from customers, users and suppliers
* Bad news covered up
* Excellent past record
* Fear of rocking the boat
* Decision makers isolated from the grass roots
* 'happy talk' among senior managers
* top team unable to confront realities
* aversion to risk/too comfortable
* knowledge/skills that have dated and aren't applicable to new reality
What are the key tactics for organisations responding to pressure for change?
* Change projects and skill requirements are linked to existing busines planning processes. More likely to get buyin from a senior level.
* The need for investment is put in language that is understandable by and persuasive of those unfamiliar with the focus of the change.
* Pay-offs of previous change initiatives can be used to build support for this one.
List external triggers for change
* Economy - eg collapse of currency
* Government policies
* Financial community franchisees
* The public
List internal triggers for change.
* New staff
* Lost sales
* Drop in profit
* Skills gaps
* Loss of key staff
* A fire/flood
* Product and or process innovation
* Acquisition or merger
What are the vision, mission and values questions that Weiss identified?
* Vision - what are we? Who shall we become?
* Mission - What is our strategic purpose for operating?
* Values - What do we stand for and believe? What standards can be used to evaluate and judge us?
Six-step model: What is creating a guiding coalition about?
Gain the support of key power groupings.Take account of org structure - how hierachical or flat is the structure - which layers need to be involved? Will mgt want to impose change or will they feel threatened by change from below?Also partly about identifying who opposes the change and deciding how to respond to them. Don't assume that resistance is to be overcome - they may be right or the cost of overcoming the resistance may be too great.Appeal to the interests of key stakeholders.Use stakeholder analysis to assist this stage, make sure the right people are involved.
What key questions should an organisation be asking regularly?
* What business are we in?
* Who is our customer?
* What are our core competencies?
* What is our product/service?
Six-step model: why is it important to develop a vision and strategy?
Need to engage people with the change so that it has a chance of success.Needs to inspire.
Six-step model: What can be barriers to individuals identifying with the strategic vision and intent of a change project?
* Insufficent personal benefit
* Implication of personal loss
* Scepticism of success
* It fails to connect with everyday activities and roles
* Heavy commitment to past history and traditions
* It fails to inspire or secure involvement
* Change imposed without adequate consultation
* Staff may disagree with direction and objectives
Six-steps model: What questions might you consider to develop a vision and strategy?
Does the vision grab the attention of everyone involved? Will it stretch them to the limit?
* If not, ..... business as usual Is it feasible? Can it be done with the time, resources and people available?
* If not, people may give up. Is it specific enough?
* If the project is not focused, you may not get the required commitment Is it flexible? Is there room to manoeuvre if key players, corporate goalposts or circumstances change?
* If no, people may well feel cheated and thwarted. Is it memorable?
* If not misperceptions, misinterpretations, wooliness and confusion may creep in Is it stimulating?
* People don't want to do boring things
Six-step model: What might need to be considered as part of addressing cultural issues?
Changes to visible culture - eg clocking in/out and phasing out separate canteens for different ranks.Changes to less visible aspects of the org. These require investment in education, comms, training etc. If culture doesn't change, the change will be cosmetic and behaviour will return to "normal".
Six-step model: Why might organisational culture be resistant to change?
* Culture is a major factor in past/current success
* It has taken a long time to form currrent culture
* It is taken for granted
* It is genuinly unique and importing methods from elsewhere will not work
* It is rarely spelled out and therefore difficult to argue with
* It takes courage to question past heroes, who are part of cultural folklore
* It goes deep
What approaches to cultural change did Bate identify?
In Bate's model of approaches to cultural change, how did he describe "aggressive"?
* Rapid change
* Dismantles traditional values
* New culture is non-complex
* Top-down and monitored
* Detailed plans/actions
* Lead to a strong integrated culture
* Suite a situation where there is a simple source of authority
But it usually:
* Mobilises dissent
* Is politically naive
* Lacks skills or breadth of support and leads to crisis or change
In Bate's model of approaches to cultural change, how did he describe "Conciliative"?
* Reasonable and quiet
* Slow grafting onto new values
* Deals with means not ends
* Collusion not confontation
* Continuous development
* Perceived lack of power
* Lead to a 'common sense' welcoming of the new culture
* Disarm opposition
But it usually:
* Loses sight of its radical intent
* Gets seduced back to the status quo
In Bate's model of approaches to cultural change, how did he describe "Indoctrinative"?
* Eplicit learning process
* Unified logical framework
* Advocates one world view
* Lead to wide-scale changes at an informational-technical level
But it usually:
* Does not suceeed in bringing about fundamental cultural change
In Bate's model of approaches to cultural change, how did he describe "Corrosive"?
* Uses informal networks
* Unseen manipulation
* High participation
* Act first, legitimise later
* Planned and programmed
* Lead to genuine and large-scale change initiated by small-scale network
But it usually:
* Is used to defend existing order and oppose unwanted change initiators.
When does Bates suggest using the "aggressive" approach?
* As an unfreezing device - to kick-start things.
* Re-structuring responsibilities
* Introducing new performance reviews/reward systems
When does Bates suggest using the "Conciliative" approach?
To facilitate a period of consultation and ownership.And then....At the end to give enduring form and shape to new order.
When does Bates suggest using the "Indoctrinative" approach?
* Pulling emerging ideas together
* Emphasis is to be on learning rather than teaching
When does Bates suggest using the "corrosive" approach?
Once the change parameters have been set, use the networking and alliance building of the corrosive approach.Best achieved by on-the-job reinforcement.
What route through the approaches to cultural change does Bates suggest?
Aggressive -> Conciliative -> Indoctrinative -> Corrosive -> Conciliative
What is the aim of Bate's model of approaches to cultural change?
Uncover assumptions that are embedded in the part of the org being changed in order to uncover potential issues.
Six-step model: manage the transition, what are the typical problems?
1) Confusion abuot roles, responsibilities and decision making channels2) Unavoidable tendancy for people to hold onto the past3) Special resources required to plan, measure and control standards of performance.
Six-step model: Manage the transition, what must you ensure?
1) Carry out audit of work-groups participating2) Understand groups for and against change - eg force-field analysis3) Position is maintained and behaviour doesn't revert back to pre-change
Siz-step model: sustain momentum, list important points
1) Sometimes it is advisable to cut losses and stop a change program2) Measure impact because:a) Positive feedback maintains momentumb) Early success stories help build expectancyc) May indicate need to revisit earlier steps3) Change sponsor will need to be kept informed
Critiques of N*-Step models
1) Over-simplified2) Acontextual and apolitical - assume that change takes place in a bubble3) Don't reflect the messy reality of organisations4) Often weak as they rely on description and prescription5) "One best way" approach is flawed because reality isn't that simple
What should we consider when critiquing an N*-Step model?
1) The sequence of the steps2) The number of steps3) The timing of steps4) Resourcing of steps5) Whether all steps are possible or desirable.
Describe Dunphy and Stace's contingency model of leadership and change
What is the main value of Dunphy and Stace's contingency model of change and leadership?
It converys dyamic interdependence, an understanding of the importance of incorporating more than one dimension and how it offers a potential diagnosis for planning, implementing and evaluating change.
What are weaknesses of Dunphy and Stace's contingency model of change and leadership?
Prescriptiveness may be unrealistically mechanical and linear, assuming all situations fit into a 2x2 matrix - assuming a "one best way" within each segment. Privileges leadership style over other factors such as history.Use of different change styles at different times may raise questions about credibility of change leaders.Change leaders have to be able to change their styleContingency models assume a great deal about the capacity of those leading change to plan, control and predict the outcomes of change strategies.
What are Stacey's eight basic assumptions about manager's ability to be in control?
What do the "Processual" models of change need to consider?
* All contexts (past, present and future) in which the organisation functions and to take into account all factors which are both internal and external to the organisation
* The process associated with the transition –decisions, timings, order,tasks
* The substance of the change
* Political activity within and external to the organisation
* How all of the above interact.
What 3 separate components of change did Pettigrew and Whipp's three components of change model say you should pay attention to?
Sketch Pettigrew and Whipp's three-component processual model of change
What success factors in change procgrams did Oakland and Tanner identify?
The agenda for change was driven by external events
* External driver makes change more likely to be successful
Leaders set a clear direction and manage risks
* Critical that leaders assessed alternatives, were clear about direction selected and didn't switch direction
The need for change should be aligned to the operational issues
* Enables people to understand what change is required from them.
A process approach is central
* Processes involved need to be properly understood, managed and adjusted for change to be successful
Performance measurement has a key role in supporting change
* Need to measure performance before and after change to understand the impact
A project based approach increases chance of success
* Need to identify clear objectives and keep focus throughout the process to ensure main benefits are delivered
External support adds value in managing change and the transfer of knowledge
* Use of external consultants in controversial when resources are tight
* External perspective could be invaluable
* Essential that consultants skills are passed on to the org
Aligning the culture to support changes in people's behaviour
* People need to act differently
* change found to be most effective when aligned with existing culture
* Change more successful when those leading the change continually review progress and assumptions about the change process.
Sketch Oakland and Tanner's organisational change framework
State some weaknesses of Oakland and Tanner's model
* It implies an order to be gone through to achieve successful change
* Assumes members' objectives are aligned with those of the organisation
* Assumption that change can be managed, controlled and predicted
* Assumes external events impinge on an org - orgs don't exist in a vaccum waiting to be impinged on
Why might people resist change?
* Dislike of change
* Discomfort with uncertainty
* Perceived negative effects of interests
* Attachment to the organisational culture/identity
* Perceived breach of psychological contract
* Lack of conviction that change is required
* Lack of clarity as to what change is required
* Belief that the specific change being proposed is inappropriate
* Belief that the timing is wrong
* Excessive change
* Cumulative effects of other changes in one's life
* Perceived clash with ethics
* Reaction to the experience of previous changes
* Disagreement with the way the change is being managed
Sketch the basic model of force field analysis
What is the basic idea behind Lewin's force field analysis?
By exploring driving and resisting forces for a particular change, we are better able to overcome resistance.
Sketch Lewin's force field analysis
What is the strength of Lewin's force field analysis?
It gives you a useful, clear pictoral view of the forces pushing for and against a change.
What are difficulties of Lewin's force field analysis?
* It provides a snapshot at a point in time and is not dynamic
* Change is more dynamic Constrainsts can also be drivers
* eg an org with long history can be less receptive to change but belief in the orgs survival can be a driver for change, so both a driver and constraint
* Assumes that the desired state is shared by all
* One person's drivers might be another person's constraints
What did Fleming and Spice suggest about power relations?
They ought to be viewed as ongoing and mutually implicated interplay between subordinates and superordinates.