Page 246 - Managing Change in Organizations

CarnCh13v3.qxd 3/30/07 4:31 PM Page 229

Managerial skills for effective organizational change
3 Learning can be encouraged in a climate which encourages risk taking, doing
things and trying out new ideas.
4 Learning requires the expression of deeply held beliefs and will involve conflict.
Only then can ideas emerge and be properly assessed before being incorpo-
rated into new systems, products, strategies, etc.
5 Learning can be helped by recognizing the value of people and ideas, developing
learning styles which encourage individuals rather than close off discussion
(see Argyris and Schon, 1974).
By 1983, company A had reduced staffing, improved the organizational structure,
introduced a quality control system for the first time, achieved labour flexibility
and developed new products. The leadership challenge faced successfully in this
case was that of achieving change in the ways described, while maintaining the
business through very difficult times. ‘Selling’ the solution to the group and
‘buying’ time were central to this and part of the politics of change, a matter to
which we turn below.

Dealing with organizational culture: a major financial institution
Company B is a large financial institution with hundreds of branches in major
towns and cities in its home country. It operates internationally. In recent years
it has been very successful, with growth in profitability and turnover. Yet it
faces major challenges. Deregulation, new technology, competition and grow-
ing complexity of the services it provides, to both private and corporate cus-
tomers, are among the challenges that it faces. The company is involved in a
major programme of branch rationalization. Some branches are being closed,
others remodelled to provide either private or corporate services, others are
being expanded as key branches. Early on in this programme of change it
became clear that the company’s property management department needed
attention. Its property management performance was poor and outmoded. Its
capacity to plan and carry through the branch rationalization programme
seemed doubtful.

Property management was the responsibility of a central department employ-
ing 250 professional staff, mainly architects and surveyors, managed by a general
manager. The general manager was drawn from the senior management team on
a two-year posting. All general managers at that time had mainstream finance
backgrounds. Indeed, the culture of company B powerfully sustained the belief
that the only important work was finance. All other work, whether property,
computing or marketing, was secondary. Career paths for non-finance people
were limited, departments being managed by people with finance backgrounds.
The extent to which non-finance staff were undervalued may be seen by noting
that in the property management department no one could remember anyone
having any training and development since the day of their appointment. The
morale of the property management department was low and the level of inter-
departmental conflict (between the surveyors’ group and the architects’ group)
was very high.

229