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Session 6

Session 6. Developing a Market-oriented Culture and Organisational Strategies for Change The crux session. Course Objectives. To deliver a coherent and deliverable market oriented internal culture to encourage flexibility

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Session 6

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  1. Session 6 Developing a Market-oriented Culture and Organisational Strategies for Change The crux session Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  2. Course Objectives To deliver a coherent and deliverable market oriented internal culture to encourage flexibility which is SMART enough for your employer to understand and give you the go ahead. To follow the CIM guidelines so as not to throw away marks To maximise the LSM on-line resources = SUCCESS Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  3. Change Management “ Organizational change can be regarded as a continuous process of experience and adaptation aimed at matching an organization's capabilities to the needs and dictates of a dynamic and uncertain environment” ( Burnes 1996) Change management is the process of planning and implementing change within organisations.’ Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  4. Market orientation An organisational culture where beating the competition through the creation of superior customer value is the paramount objective throughout the business •Orientated towards customer •Alert to competitive situation •Co-operation between functions •Emphasis on profit, not turnover •Responsiveness to changes Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  5. Creating a market oriented culture Intelligence and knowledge Value creation Communication Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  6. Organisation Culture  “…the philosophies, ideologies, values, beliefs, assumptions, attitudes, expectations and norms shared by members of the organisation.” Hellreigel et al (1992) It includes the following: • Observed behaviour •   Norms shared by working groups •   Dominant brand values •   Employee and Customer policies •   Rules that newcomers must learn to become accepted •   Physical environment and interaction with external stakeholders Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  7. The Cultural Web J&S External or internal events and/or people that the members of the company talk about indicate organisational values. Stories and Myths Formal and informal events such as employee of the month competitions or special social gatherings suggest preferred behaviour in the organisation. The type and style of organisational logos, premises, staff facilities, uniforms, dress codes and communications highlight cultural characteristics. Rituals and Routines Symbols The adopted control processes and methods such as financial, systems, service and quality underline the perceived importance of specified activities to the organisation. The Paradigm The pockets of real power held by individuals that does not necessarily includes members of the management structure but it can rather be any influential individual within the organisation. Control Systems Power Structures Organisational Structures Formal and informal structural systems that define relationships and activities that, consequently, influence organisational power structures. Source: Johnson Gerry (1992) Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  8. Structure Strategy Systems Super ordinate goals Shared values Styles Skills Staff The McKinsey 7s fundamental to apply Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  9. In Search of Excellence (Peters and Waterman) • Close to customer - learn from their customers and proven to be success though differentiation • Productivity through people - consider people as a root for quality and productivity • Hands on, value driven - regularly monitor the achievement of the values • Autonomy and Entrepreneurship - create many leaders and innovators • Simultaneous loose-tight properties - simultaneously are centralised and decentralised. • Simple form, lean staff - mostly have simple structures and systems • Stick to the knitting - favour their comfort zone • A bias for action, active decision making - "Do it, fix it, try it." Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  10. Miles and Snow’s Strategy Typology 1978 The defender – lack of innovation The prospector – first mover advantage The analyser – defend competitive advantage and takes advantages of opportunities The reactor – follows developments Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  11. External issues Sociological Legal Economic Political Technological Competitive Internal issues Retention or gain of competitive advantage Cost-savings New senior management Some factors driving change Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  12. Characteristics of Change Driving forces. Directors, Stakeholders, opportunities, competitors Restraining forces. Inadequate Cultural change Planning Lack of Employee Involvement Imperfect Communication Strategies Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  13. Preparing for change • Internal marketing - • Current attitude • How big a change is needed • Who the ‘influencers’ are • How big resistance is likely to be • Internal marketing mix - • Segmentation, product, price, promotion, place Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  14. Creating an environment for change • Encourage the right attitude • Develop a culture that is based on creativity & innovation • Provide appropriate recognition and rewards • Encourage flexibility • Foster employee involvement Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  15. Creating major change(Kotter 1996) • 1. Establish sense of urgency • 2. Create the guiding coalition • 3. Develop a vision and strategy • 4. Communicate the change vision • 5. Empower broad-based action • 6. Generate short term wins • 7. Consolidate gains and produce more change • 8. Anchor new approaches in the culture V • Kurt Lewin (1940’s) Unfreeze – Change- Refreeze (http://www.mindtools.com/pages/article/newPPM_94.htm) Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  16. Possible Effects of Change on Staff Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  17. Response of Individuals to Change Acceptance. Indifference. Passive resistance. Active resistance. Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  18. Implementing change • Pilot scheme • Incremental changes • ‘Overnight’ - out with the old and in with the new • Variations on the above • Monitor and review Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  19. A Programme of Organisational Change Change agent/Champion of Change Inform employees of the purpose. Data-gathering & diagnostic exercise. Strategy development. Secure employee support. Implementation. Control. Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  20. A Marketing Approach to Change Tell: people Sell: need for change & vision. Evolve: attitudes, ideas & learning capacity. Involve: people. Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  21. Internal marketing mix Segmentation Supporters, opposers, non involved. Different levels of management Product - plan/change Strategy and process of change Job or function may be internal ‘product’ Price - benefits & psychological costs Psychological price - loss of status, uncertainty, loss of productivity Promotion - two way Clear communication essential Different mix - noticeboards, meetings, intranet, newsletters, etc Place - method & timing Information, training etc - channel providing services to the internal customer Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  22. Problems in Change Management Failure to identify need. Failure to identify objectives. Wrong strategy. Not enough resources committed. Bad method of implementation. Bad implementation resulting in non-acceptance. Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  23. Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  24. Agenda • Main organisational market approaches and Organisational culture • ‘Fit’ between strategy and culture • Inter-relationships between organizational culture, environment and market orientation • Creating a market oriented culture and communicating shared values • Environmental Uncertainty and causes of strategic uncertainty • Drivers of change • Change management and model of change process • Characteristics of change • Preparing for change • Implementing change • Evaluating change management • Problems in change management • International Influences on Management/ Globalisation Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  25. Main Organisational Market Approaches Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  26. Business Orientations Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  27. Charles Handy Cultural Types • Power culture • Role culture • Task Culture • Person Culture Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  28. Power Orientation • Dominating environment • Powerful people strive to maintain control • Work is divided by function or product • Centralisation is paramount • Quick decision making but depends upon the ability of management • Employees rewarded for effort, success and compliance with values • Change is determined by central source of power • Organisation generally disregards human values and welfare • Highly competitive, tough and abusive, low morale and high turnover in middle layers Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  29. Role Orientation • Aspires to be rational and orderly • Built around defined jobs, rules and procedures (bureaucracy) • People are recruited to fit into jobs • Rational and logical, stable and predictable • Strong emphasis on maintaining the hierarchy and status Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  30. Task Orientation • Functions and activities are evaluated in terms of their contribution to organisational goals • Management is concerned with continuous and successful solution of tasks • Performance is judged by outputs • Network based approach, organizational fluidity, rapid, flexible and responsive • Expertise is the major source of individual power and authority Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  31. Person Orientation Culture exists to serve the needs of its members Organisation provides a service for individual specialists which they could not provide for themselves  Individuals influence each other through example and helpfulness Roles are assigned on the basis of personal preferences and the need for learning and growth The organisation is subordinate to the individuals and depends on the individual for its existence Most often found in societies, professional assocs. Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  32. Inter-relationships between organizational culture, environment and market orientation • Organizational culture influences and is influenced by the beliefs, values and norms of each individual in the organization. • Culture is therefore consequently difficult to change • The environment can get turbulent in a short period of time Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  33. Achieving stronger market orientation • Organizational cultural commitment to market orientation • Identification of particular organizational members • Power and control; issues Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  34. Shared value "The only thing that works is management by values. Find people who are competent and really bright, but more importantly, people who care exactly about the same things you care about.“ - Steve Jobs Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  35. Punctuated Equilibrium Environmental Change For example changes occurring in the wider economic environment or in the organisation’s industry. Strategic Fit Strategic Wear out Strategic Drift Continuous stage Incremental stage Flux stage Transformational stage Time Stability and certainty Instability and uncertainty Adapted from Johnson, Scholes and Whittington (2005) Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  36. Environmental Uncertainty Rate and scope of change in environment Unstable Stable Simple Complex Complexity of environment (number of elements and dissimilarity) Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  37. Causes of strategic uncertainty Our understanding of the world we inhabit High Low High Low Quality of our information Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  38. What Creates Organisational Change? Influential organisational players usually initiate change when they become conscious of a performance gap – some disparity between actual and desired performance. External environment Macro-environment Competitive environment Internal environment 5 Ms (men, money, machinery, materials & markets) Contexts: Objectives, Technology, Business processes, Financial resources, Structure, People, Culture & Power. Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  39. Perspectives on change - political Change often threatens established interests, who will oppose it Success depends on Building power sources Creating alliances and coalitions Manipulating information to support position A political process: Suited to which conditions? Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  40. Critical Dimensions of Change Novel 4 1 Margin Core 3 2 Familiar Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  41. External Consultants for Managing Change Benefits Specialist knowledge. Previous experience. Independent referee. Neutral. Not tied by status or rank. Objective. Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  42. External Consultants for Managing Change Disadvantages Viewed as top management spies. Standard solution. Too academic. Need time to learn. Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  43. Globalisation Globalisation of markets (Levitt, 1983) “needs and desires irrevocably homogenised” Implied standard production and marketing Or going local? Local tastes vary, local brands outsell global Much variation to suit diverse tastes (e.g. Starbucks, Coke, Nestle´) Globalisation of production High-wage countries outsourcing supply to cheaper sources – India, China, eastern Europe Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  44. Themes in the international context Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  45. Evaluating Change Management Has change contributed to overall objectives? Has the problem been solved? Have the behavioural changes happened? The reaction of people. Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  46. International Influences on Management/ Globalisation Changes in consumer expectations Technological change. Deregulation. Regional forces. Markets. Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  47. Model of Change Process Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  48. Models of Change Life cycle perspective. Change goes through a series of steps. A rational approach Emergent perspective. Change takes place in an uncertain context Participative perspective. Change relies on those affected being willing to cooperate with the change Political perspective. Change often threatens established interests, who will oppose it Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  49. Perspectives on change – life-cycle Change goes through a series of steps Success depends on managing these efficiently objectives, responsibilities, deadlines, budgets focus on planning and control Many established tools and techniques A rational process: suited to which types of project or conditions? Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

  50. Perspectives on change - emergent Change takes place in an uncertain context, and unrealistic to expect outcomes to be close to plan Success depends on Learning during the project Adapting to changing conditions Managing interest groups Plan, but be ready to change See emergent perspective on strategy Michael G.Warner Chartered Marketer MBA DipM FCIM FIDDM

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