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MASTER IN BUSINESS ADMINISTRATIONMASTER IN BUSINESS ADMINISTRATION

Managing Strategic ChangeManaging Strategic ChangeRoyal Dutch Shell Group Royal Dutch Shell Group

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Trilok PURRYAG, 12 Jan 2013 MBA ~ Managing Strategic Change

Royal Dutch Shell Group Royal Dutch Shell Group

T. PURRYAG

12 Jan 2013

Q1. Q1. Shells uniqueness stems from its structure as the Shells uniqueness stems from its structure as the largest largest organisationorganisation in the world, and due to its in the world, and due to its

internationality it has been described as one of the worlds internationality it has been described as one of the worlds

three largest international three largest international organisationsorganisations, the other two being , the other two being

the Roman Catholic Church and the United Nations. It is clear the Roman Catholic Church and the United Nations. It is clear

from the extract that from the extract that organisationorganisation size and internationalitysize and internationality of of

Shell presents potential challenges for top management. With Shell presents potential challenges for top management. With

reference to these reflections plus the use of relevant theory, reference to these reflections plus the use of relevant theory,

critically discuss how Shells senior management could go critically discuss how Shells senior management could go

about handling the following about handling the following organisationalorganisational development development

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about handling the following about handling the following organisationalorganisational development development

issues:issues:

((ii) Strategic change / leadership) Strategic change / leadership

(ii) (ii) OrganisationalOrganisational changechange

(iii) Corporate culture(iii) Corporate culture

(iv) Resistance management(iv) Resistance management

(v) (v) OrganisationalOrganisational transformationtransformation

Five Activities Contributing to Five Activities Contributing to

Effective Change ManagementEffective Change Management

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Five Activities Contributing to Effective Change ManagementFive Activities Contributing to Effective Change Management

1. Motivating Change

2. Creating Vision of

Change

3. Developing Political Effective Effective

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3. Developing Political

Support

4. Managing the

Transition of Change

5. Sustaining Momentum

ChangeChange

ManagementManagement

1.1. Motivating ChangeMotivating Change

Motivating change

Sensitise

organisations to

pressure for

change

Reveal

discrepancies

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Motivating change

and creating

readiness for

change

discrepancies

between current

and desired states

Convey credible

positive

expectations for

the change

Individual ResistanceIndividual Resistance

Individual

Habit

Economic

Factors

Job Security

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Individual

Resistance

Selective

Information

Processing

Job Security

Fear of the

Unknown

Organisational ResistanceOrganisational Resistance

Organisational

Threat to Established

Power Relationship

Threat to Established

Resource Allocations

Structural Inertia

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Resistance

Group Inertia

Limited Focus of Change

Overcoming Resistance to ChangeOvercoming Resistance to Change

Education and

Communication

Participation and

Negotiation

Manipulation Overcoming

Resistance

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Participation and

Involvement

Facilitation and

Support

Manipulation

and Cooptation

Coercion

Resistance

to Change

2. Creating Vision of Change2. Creating Vision of Change

Constructing Constructing

the Envisioned the Envisioned

Bold and Bold and

Valued Valued

Outcomes Outcomes

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the Envisioned the Envisioned

FutureFuture Desired Desired

Future Future

StateState

3. Developing Political Support3. Developing Political Support

Assessing Change Assessing Change

Agent PowerAgent Power

Identifying Key Identifying Key Developing Developing

Political Political

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Identifying Key Identifying Key

StakeholdersStakeholders

Influencing Influencing

StakeholdersStakeholders

Political Political

SupportSupport

4. Managing the Transition 4. Managing the Transition

Current

State

Desired Future

State

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Transition Transition

StateState

Activity PlanningActivity Planning

Change Management TeamChange Management Team

5. Sustaining Momentum5. Sustaining Momentum

Sustaining Sustaining

Providing Resource for

Change

Building a Support System

for Change Agents

Developing New

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MomentumMomentumDeveloping New

Competencies and Skills

Reinforcing New behaviours

Staying the Course

Five Activities Contributing to Effective Change ManagementFive Activities Contributing to Effective Change Management

1. Motivating Change

2. Creating Vision of

Change

3. Developing Political Effective Effective

ChangeChange

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3. Developing Political

Support

4. Managing the

Transition of Change

5. Sustaining Momentum

ChangeChange

ManagementManagement

Leadership FunctionsLeadership Functions

Leadership is one of the four functions of management.

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Effective Leadership ~ Forms of PowerEffective Leadership ~ Forms of Power

Power the ability to get others to do what you want them to do

Reward Power The capacity to offer something of value as a means of

influencing other people

Coercive Power The capacity to punish or withhold positive outcomes as a

means of influencing other people.

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means of influencing other people.

Legitimate Power The capacity to influence other people by virtue of formal

authority or the rights of office.

Expert Power The capacity to influence other people by virtue of specialised

knowledge.

Referent Power The capacity to influence other people because of their desire to

identify personally with you

Effective Leadership ~ Managerial PowerEffective Leadership ~ Managerial Power

Managerial Power = Position Power + Personal PowerManagerial Power = Position Power + Personal Power

Power of the POSITION:

Based on things managers can offer to others.

Rewards: "If you do what I ask, I'll give you a reward."

Coercion: "If you don't do what I ask, I'll punish you."

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Coercion: "If you don't do what I ask, I'll punish you."

Legitimacy: "Because I am the boss; you must do as I ask."

Power of the PERSON:

Based on how managers are viewed by others.

Expertiseas a source of special knowledge and information.

Referenceas a person with whom others like to identify.

Leadership StylesLeadership Styles ~ Lewins Theory~ Lewins Theory

Leadership Style

The recurring pattern of behaviours exhibited by a leader

Autocratic Style

Acts in unilateral command and control fashion

Human Relation Style

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Emphasises people over tasks

Democratic Style

Encourages participation with an emphasis on both task

accomplishments and development of people

Lassize-faire Style

Is low on both tasks and people

Leadership Styles ~ Fiedlers Contingency TheoryLeadership Styles ~ Fiedlers Contingency Theory

Suggests that the best leadership style depends on the

situation

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Leadership Theory ~ McGregorsLeadership Theory ~ McGregors

Theory X and Y

THEORY X

The average employee dislike work and will avoid it if at all possible

People must be controlled and directed and punished, if necessary, to put in a real effort at work

The typical worker wants to avoid responsibility and has little ambition

Employees look for security above all else at work

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Employees look for security above all else at work

THEORY Y

Working is as natural as play or rest for the average employee

The typical worker does not have an in-built dislike for work

Other means exist to motivate workers rather than control and punishment

In the right circumstances, workers seek responsibility

Most employees have imagination and creativity that may be used to help organisations achieve their goals

Q2. Q2. OrganisationalOrganisational conflict can arise within and outside the conflict can arise within and outside the various units that comprise an various units that comprise an organisationorganisation for many for many

reasons. Identify an reasons. Identify an organisationorganisation that is deeply entrenched in that is deeply entrenched in

both internal and external conflict matters and both internal and external conflict matters and utiliseutilise relevant relevant

theories to critically theories to critically analyseanalyse the sources of conflict and the sources of conflict and

provide means through which managers can provide means through which managers can minimiseminimise such such

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provide means through which managers can provide means through which managers can minimiseminimise such such

conflict.conflict.

Definition of ConflictDefinition of Conflict

A process in which one party perceives that its interests

are being opposed or negatively affected by another

party. (Kreitner & Kinicki, 2001)

Conflict is a disagreement between two or more

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Conflict is a disagreement between two or more

parties. (Cook & Hunsaker, 2001)

Functional & Dysfunctional ConflictFunctional & Dysfunctional Conflict

Functional conflictFunctional conflict serves the organisations interests

Dysfunctional conflictDysfunctional conflict threatens the organisations

interests.

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interests.

Functional conflict is beneficial to the company as it stimulate

creative resolution of problems and corrective actions and

keeps the people and the organisation from slipping into

complacency (Cook & Hunsaker, 2001)

Optimal level of Optimal level of

conflictconflict

Pe

rfo

rma

nc

eHighHigh

Effect of Conflict onEffect of Conflict on

Organisational PerformanceOrganisational Performance

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Pe

rfo

rma

nc

e

LowLow HighHighConflictConflict

(Jones & George, 2003)

Sources of ConflictSources of Conflict

Goal incompatibility

Structural design

Personal differences

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Different role expectations

Role ambiguity

Role conflict

Role overload

Degenerative Climate

Conflict Management StylesConflict Management Styles

Competing Collaborating

Compromising

Assertive

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Avoiding Accommodating

Compromising

Uncooperative Cooperative

Unassertive

(K. Thomas cited in Robbibs, 2001)

Q3. Q3. Identify an Identify an organisationorganisation you are familiar with that is you are familiar with that is currently going through change and using relevant theories, currently going through change and using relevant theories,

discuss the possible OD intervention strategies for the discuss the possible OD intervention strategies for the

successful implementation of the change program.successful implementation of the change program.

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successful implementation of the change program.successful implementation of the change program.

Definition of Organisational Development (OD)Definition of Organisational Development (OD)

Mitchell (1978) defines OD as a long-term attempt to

bring about greater levels of personal and interpersonal

effectiveness in an organisation.

Porras and Robertson (1992) defines OD as change

interventions built on humanistic democratic

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Trilok PURRYAG, 12 Jan 2013

interventions built on humanistic democratic

values that seek to improve organisational

effectiveness and employee well-being

MBA ~ Managing Strategic Change

Characteristics of Organisational DevelopmentCharacteristics of Organisational Development

(Harvey & Brown (2006))(Harvey & Brown (2006))

1. Change

OD is a planned strategy to bring about organisational

change. Obviously, the change is designed to meet

some objective and is dependent on the inputs from the

diagnosis of the problem.

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2. Collaborative

OD includes the involvement and participation of the

organisation members affected by the changes. It is

thus a corroborative approach. The input of staff

members affected by change is important to instil a

sense of ownership of the process.



(Harvey & Brown (2006))G(Harvey & Brown (2006))G

3. Performance

OD programmes include ways to improve the

performance and efficiency of the organisation. After an

effective OD programme the organisation must become

more competitive and efficient.

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4. Humanistic

OD programmes rely on a set of humanistic values

about people and organisations with the objective of

opening up opportunities for the increased use of

people so that the organistaion can become more

effective.



(Harvey & Brown (2006))G(Harvey & Brown (2006))G

5. Systems

OD programmes are concerned with the socio technical

system which focuses on interrelationships between

divisions, departments, individuals, groups and

processes as interdependent subsystems of the total

organisation.

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organisation.

6. Scientific

OD programmes are based on scientific principles and

approaches to increase the effectiveness of

organisations.


Characteristics of Organisational Development (OD)Characteristics of Organisational Development (OD)

or Underlying Values of OD, or Underlying Values of OD, Robbins (2002)Robbins (2002)

1. Respect for people

OD recognises that employees should be treated with

dignity and respect. Employees are after all the most

valuable assets of the company.

2. Trust and support

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2. Trust and support

Healthy organisations are characterised by trust,

openness, integrity, empathy and a supportive climate.

An organisation operates like a family, where these

value systems are important.



or Underlying Values of OD, or Underlying Values of OD, Robbins (2002)GRobbins (2002)G

3. Power equalisation

Effective organisations de-emphasise hierarchical

authority and control, devolving some authority to lower

levels as part of employee empowerment.

4. Confrontation

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4. Confrontation

Problems should be confronted and solved promptly.

Ignoring them, or pretending that they do not exist does

not make them go away.



or Underlying Values of OD, or Underlying Values of OD, Robbins (2002)GRobbins (2002)G

5. Participation

People that will be affected by a change initiative should

be actively involved in the decisions affecting that

change initiative. This will improve acceptance and

commitment to the change initiative.

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Types of OD InterventionsTypes of OD Interventions

Intervention Objective Examples

Diagnostic

Activities

To determine the current state of the

organisation or the parameters of a

problem

Interviews

Questionnaires

Surveys

Meetings

Individual

Enhancement

To improve understanding of an

relationships with others in the

Sensitivity training (T-

groups)

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Enhancement

Activities

relationships with others in the

organisation Behaviour modeling

Life and career

planning

Team Building To improve team operation, abilities,

cohesiveness

Diagnostic meetings

Role analysis

Responsibility charting

Intergroup

Activities

To improve cooperation between groups Intergroup team

building

MBA Managing Strategic Change

Types of OD InterventionsTypes of OD Interventions

Intervention Objective Examples

Technostructural

or Structural

Activities

To find solutions to problems through

the application of technological and

structural changes

Job enrichment

Management by

objectives

New technology

introduction

Process To disseminate information concerning Agenda setting

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Process

Consultation

To disseminate information concerning

the future diagnosis and management

of human processes in organisations

including communication, leadership,

problem solving and decision making,

and intra- and intergroup relationships

Agenda setting

Feedback and

observation

Coaching and

counseling

Structural change

suggestions

Source: Adapted from Wendell L. French and Cecil H. Bell Jr., Organisation Development: Behavioural Science Interventions for Organizational

Improvement, 5th ed. (Upper Saddle River, NJ: Prentice Hall, 1995), p. 165.

MBA Managing Strategic Change

TTHHAANNKK YYOOUU

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