Meyerson, D.E. (2001) Radical change the quiet way, Harvard Business Review,
October, pp. 92-100.
- Tempered radicals - they work to effect significant changes in moderate ways. Leadership maybe difficult to recognize.
- To navigate between their personal beliefs and the surrounding cultures, tempered radicals draw principallyon a spectrum of incremental approaches, including:
-disruptive self-expression (an individual simply acts in a way that feels personally right but that others notice, is the most inconspicuous way to initiate change)
-verbaljujitsu (turns an insensitive statement, action, or behavior back on itself: Employees who practice verbal jujitsu react to undesirable, demeaning statements or actions by turning them intoopportunities for change that others will notice)
-variable-term opportunism (spot, create, and capitalize on short- and long-term opportunities for change)
-strategic alliancebuilding (an individual can push through change with more force)
Continuum of choices
- Organizations change primarily in two ways: through drastic action (change may happen quickly and often involves significant pain) and through evolutionary adaptation (gentle, incremental, decentralized, and over time produces a broad and lasting shift with less upheaval).
Lovas, B. & Ghoshal, S. (2000) Strategy as Guided Evolution, Strategic Management Journal, 21(Sept), 875-896.
- In the paper - focus is on intraorganizational and organizational evolutionary and ecological processes.
- Proposed model of guided evolution has 5 main elements. It posits a more active and important role of top management than is implied in organizational ecology.
- Ecological and evolutionary forces are internal and important part in addition to the formal strategies, structures, and systems of the firm.
- Case study – Oticon, Danish Hearing Aid Company.
- Description of the elements;
a)Units of selection:
- ‘strategic initiative’ –a deliberate effort by a firm at creating or appropriating economic value from the environment, which is organized as an independent project with its own profit and loss responsibility. Refer to what the firm plans to do to justify its existence
- human and social capital - represents the resources that will define how the firm plans to do those things.
b)Objective function - reflects top management preferences of the future direction of the firm:
-strategicintent - long-term goals that reflect the preferred future position of the firm, as articulated by its top management; defines the objective function of the strategy process. Top-down process.
c)Administrative systems - include formal structures and organizational routines, which serve to facilitate the replication of a natural selection environment inside the firm (exogenous to the model);the basic way in which tasks are divided and work is organized in the firm.
d)Sources of variation - those who come up with and suggest new ways of doingthings. Inthe strategic processes in principle include everyone who may have relevant knowledge of the issues in question
e)Agents of selection and retention are multiple, and effectively include everyone who works on a strategic initiative (endogenous variables):
-agents of selection - those who decide which of these suggestions will be acted on;
-agents of retention - those who decide which of the existing ways will be continued, and which will be discontinued.
- Link to RBV theory:
-many of the ‘dynamic capabilities’ that underlie a firm’s competitive advantage are grounded in people and their relationships.
-the most important way in which a firm develops its human capital is as a by-product of the work people do, in the normal course of their day-to-day activities.
Conclusion: process of deployment and development of human and social capital lies at the heart of a firm’s competitive advantage (as in RBV)
- General conclusion: firms that are able to choose strategic initiatives which effectively exploit its existing human and social capital while, at the same time, facilitating the development of new, valuable human and social capital, will perform better in the long run than those that are not able to achieve this synergy between exploitation and creation.
Pettigrew, A.,M., 1987, Context and Action in the Transformation of the Firm, Journal ofManagement Studies, 24(6), 649-670.
- Formulating the content - ”what?” (refers to the particular areas of transformation under examination) of any new strategy inevitably entails managing its context
and process.
- Context - “why?”:
-outer context refers to the social, economic, political, and competitive environment in which the firm operates.
-inner context refers to the structure, corporate culture, and political context within the firm through which ideas for change have to proceed.
- The process -”how?” of change refers to the actions, reactions, and interactions from the various interested parties as they seek to move the firm from its present to its future state.
- Case: the study ICI's attempts to change its strategy, structure, technology, organizational culture, and the quality of union-management relationships.
- Real change requires crisis conditions, otherwise hard to overcome inertia.
- Important feature of managerial action in strategic change is the necessity to alter the structural context in which strategy changes are being articulated.
Van de Ven, A. H. & Poole, M. S. (1995) Explaining development and change in organizations, Academy of Management Review, 20(3), 510-540.
1.Four ideal type development theories:
a)Life-cycle theory: change is imminent, development is programmed (company’s DNA), progression of change events in a life-cycle model is a unitary sequence.
b)Teleological theory: goal is the final cause, development of an organizational entity proceeds toward a goal or an end state; development is viewed as a repetitive sequence of goal formulation, implementation, evaluation, and modification of goals based on what was learned or intended by the entity. Recognizes limits of actions, constrains of environment and resources.
c)Dialectical theory: organization exists in a pluralistic world of events, forces, or contradictory values that compete with each other for domination and control. This opposition may be external or internal. Stability and change depend on the balance among entities.
d)Evolutionary theory: explains change as a recurrent, cumulative, and probabilistic progression of variation (new forms of organizations just happen), selection (occurs principally through the competition for scarce resources, and the environment selects entities that best fit the resource base of an environmental niche), and retention (counteract loop between selection and variation) of organizational entities.
2.Differences among theories:
a)Cycles and motors of change:
- a life-cycle model depicts the process of change in an entity as progressing through a necessary sequence of stages.
-teleology views development as a cycle of goal formulation, implementation, evaluation, and modification; emerges through the purposeful social construction among individuals within the entity.
-in dialectic models, conflicts emerge between thesis and anti-thesis. Confrontation and conflict between opposing entities generate this dialectical cycle.
-competition for scarce environmental resources between entities inhabiting a population generates this evolutionary cycle.
b)Unit of change:
-life-cycle – single entity; environment is secondary, organization – the most important.
-teleology – single entity and its goals.
-evolutionary – multiple entities.
-dialectic – multiple, at least 2.
c)Mode of change (whetherchange is prescribed or not):
-life-cycle – prescribed mode of change.
-teleology – constructive (generates unprecedented, novel forms, often discontinuous from the past).
-evolutionary – prescribed.
-dialectical – constructive.
Teece, D.J. (2007) Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28: pp. 1319-1350.
- Dynamic capabilities as a source of sustainable competitive advantage: include difficult-to-replicate enterprise capabilities required to adapt to changing customer and technological opportunities. Especially relevant to multinational business, its characteristics:
-environment is open to international commerce and technological change
-technological change as efficient tool to address customer needs
-there are well-developed global markets
-business environment is characterized by poorly developed markets in which to exchange technological and managerial know-how
- Two types of capabilities: ‘technical’ fitness (how firm performs its function) and ‘evolutionary’ fitness (how well the capability enables a firm to make a living). Dynamic capabilities (DC) part of evolutionary fitness. Coordination/integrating, learning and reconfiguring—as core elements of dynamic capabilities. Past plays important role.
- Building capabilities:
a)Sensing opportunities and threats:
-To identify and shape opportunities, enterprisesmust constantly scan, search, and explore acrosstechnologies and markets. Requires access to info and ability to recognize/ shape developments.
-Advantage in more decentralized organizations. Open innovation (not only inside of organization).
-Critique of Porter’s Five Forces: it ignores many aspects of the competitive environment including the role of complementarities, path dependencies, and supporting institutions. Is weak in dynamic environment. Ignores importance of innovations. Dynamic capabilities – opposite recognize change and innovation as major impact on competition.
b)
Sizing opportunities:
-New opportunity must be addressed through new products, processes, or services.
-Investment strategy: in what? how much?
-Too much routines and risk aversion might slow down decision-making towards innovations.
-Task of making astute project- and enterprise-level investment decisions is quite challenging because of co specialization, and irreversibility.
-Model makes assumptions about the behavior of revenues and costs, and likely customer and competitor behavior.
-Steps towards successful business model:
- Selecting enterprise boundaries
- Managing complements and ‘platforms’. End user demand is for the system not for the platform.
- Avoiding bias, delusion, deception, and hubris.
c)
Managing threats and reconfiguration:
- Threat: success leads to path-dependent way, routines.
-Decentralization must be favored because it brings top management closer to new technologies, the customer, and the market.
The model itself contains every part of foundations of dynamic capabilities (3 figures mentioned above): sensing and seizing, which are related to exploration and exploitation; and managing threats/ reconfiguration.- Dynamic capabilities – relevant to Resource-based view consideration of strategies for developing new capabilities in RBV, although it is static.
O’Reilly III, C.A., Harreld, J.B. & Tushman, M.L. (2009) Organizational Ambidexterity: IBM and Emerging Business Opportunities, California Management Review, 51 (4), pp 75-99
- a) Evolutionary research (Darwinism): organizations don’t adapt, natural selection, competition in better fit to environment.
Change occurs over time to support best fit to the environment. Most important: variation, selection and retention. Group-level adaptation, not individual one.
b) Two perspectives on evolutionary thinking:
- Evolution is about the replacement of existing forms by those more suited to the changed environment; structural inertia.
- Emphasis on group-level selection in which changes in relative fitness help organizations survive.
c) Conditions for adaptation and natural selection applicable to organization:
- There must be a struggle for existence so that not all individuals survive (competition);
- There must be variation such that some types are more likely to survive than others (achieving competitive advantage);
- The variation must be heritable so that the advantage can be passed on (set up of new businesses/ units).
d) Two views in evolutionary theory:
- Dynamic capabilities are reflected in the organization’s ability to maintain ecological fitness and, when necessary, to reconfigure existing assets and develop the new skills needed to address emerging threats and opportunities.
- The ability of senior leaders to reconfigure assets to compete in emerging and mature businesses, to be ambidextrous.
- IBM case: example for how multilevel selection can operate to help an organization adapt over time development of EBOs – Emerging Business Organization – ambidextrous approach.
- Conclusion: ambidexterity as a dynamic capability. Organizations that are able to both explore and exploit are more likely to adapt than organizations that can do only one or the other.