Managing Strategic Change: Building Learning Organizations ppsx

409 CHAPTER OUTLINE CASE Sony Corporation Introduction Characteristics of Learning Organizations Frequent Rotation of Managers Continual Training of Personnel Decentralization of Decision Making Encouragement of Multiple Experiments High Tolerance for Failure Openness and Diversity of Viewpoints Implementing Change in Static Organizations Resistance to Change in Static Organizations Lack of Awareness Lack of Interest Incompatibility With Cherished Values Fear of Cannibalization Fear of Personal Loss Change Steps Sense the Need for Strategic Change Build Awareness of Need to Change and Learn Foster Debate Create Consensus Assign Responsibility Allocate Resources From Static to Learning Organization Ethical Dimension Using Diversity to Enrich the Firm’s Knowledge Base Helping Employees Cope With Change Summary Managing Strategic Change: Building Learning Organizations WHAT YOU WILL LEARN • Why companies need to think about change • The concept of a learning organization • The key practices found in learning organizations • Why static organizations have difficulty in responding to change • The steps senior managers use in dealing with resistance to change 410 PART 4 Sustaining and Renewing Advantage Sony Corporation is one of the world’s most consistently successful innovators of consumer electronic products. With 1997 revenues of $51.1 billion and $1.682 billion in profits, Sony has surprised and delighted consumers with superbly designed, user-friendly, high-technology products year after year. Many of its innovations—the pocket-sized transistor radio, Walkman portable radio/cassette player, videocassette recorder (VCR), Trinitron system color television set, cam- corder, compact disc (CD) player, and now personal computers and digital cellular phones—have become staples throughout the world. In addition, its most recent innovations, such as the Mini Disc (a miniature version of the portable CD player), the Palmtop (an electronic diary capable of registering information written with a special pen-type stylus on a small screen), Playstation video game system, Cybershot digital filmless cameras (using charged-coupled (CCD) devices and flash memories), and the Data Discman (an electronic book that displays thousands of texts stored on a removable disc), are just beginning to make consumer inroads throughout Europe, the United States, and Japan. Equally important, but less apparent, Sony is also an active supplier and participant in shaping the next generation of office equipment, notebook computers, advanced integrated circuits, ultrathin display materials, and other multimedia technologies currently under development. Sony has benefitted from technological and market-based changes by learning and leading rather than following competitors in the innovation race. In 1989, Sony purchased Materials Research Corporation, a leading U.S. supplier of manufacturing equipment and advanced materials for the semiconductor industry. During the 1990s, Sony has become an important player in the global film and entertainment industry. Its purchase of both Columbia Pic- tures, a longtime U.S. film producer, and CBS Records initially came under financial difficulties in 1993 to 1995, but has now recovered in a major way with the release of blockbuster movies such as “Men in Black.” These investments in both internal innovation and acquisition of content-related assets should help Sony attain its long-term goal of transforming itself into an integrated electronics, entertainment, and content company. How has Sony achieved this success? The answer lies in its use of organizational practices that foster continuous learning. Companies that learn are better able to innovate and build competitive advantage. Successful learning at Sony uses several steps: (1) allocation of resources for innovation and experimentation, (2) extensive decentralization of operations, (3) a bias against overspecialization, (4) frequent rotation of employees, (5) use of multiple product development teams, and (6) a balance between psychological and monetary rewards. Resource Allocation Sony spends more than $1.8 billion annually for new product development (about 4 percent of total revenues), and employs more than 9,000 engineers and scientists devoted to such effort—almost 10 percent of its total work force. Competitors such as Matsushita, Sanyo, Sharp, Motorola, Nokia, and Gen- eral Electric greatly admire its formidable commitment and capability in product R&D. Sony has been able to use its skills to cut significantly the amount of time needed for developing next-generation products. Extensive Decentralization Sony’s operations are divided into 23 separate business groups, each responsible for a particular product line. In addition, the company also supports hundreds of development teams that can cross divisional lines on innovation projects. These teams, typically organized around product development tasks and span- ning across functions, help to bring multiple perspectives and approaches to thinking about and commercializing a new product. Equally important, these teams serve a vital integrative function that helps to unify the company’s many decentralized operations into moving along a central direction. This combination of extensive decentralization and special teams creates many relatively small centers of decision making throughout the company. Bias against Specialists Like other Japanese companies, Sony recruits extensive technical talent at Japan’s major universities. However, it does not necessarily pursue students with the highest grades. Instead, Sony seeks people who are neyaka—which roughly translates as “open-minded, optimistic, and wide-ranging in interests”— because Sony managers believe these traits foster continual learning and innovation. Conversely, they believe an overly specialized orientation hampers innovation. As company founder Ibuka puts it, “Specialists are inclined to argue why you can’t do something, while our emphasis has always been to make something out of nothing.” Sony’s commitment to openness to new ideas depends on a diversity of backgrounds (Case) Sony Corporation 1 CHAPTER 12 Managing Strategic Change: Building Learning Organizations 411 INTRODUCTION As demonstrated in the cases and examples given in this text, most industries and their competitive environments are rapidly changing. Rapid change is not confined to high- technology or knowledge-intensive industries such as semiconductors, computers, health care, financial services, entertainment, software, biotechnology, and advanced materials. Many once stable industries such as automobiles, banking, insurance, steel, retailing, pub- lishing, food processing, and even hospitals now face the need to adapt to change quickly. With change comes the necessity of learning new skills and developing new sources of competitive advantage. Thus, all types of firms—large and small, established and new entrant, diversified and single-business—cannot rely on their existing sources of competitive advantage for survival; they must be able to learn and create new ones as their environments change. Building and sustaining competitive advantage in the midst of rapid change requires the organization to learn new technologies, new markets, and new ways of managing. In the future, the only truly sustainable source of competitive advantage will be the organization’s ability to change and learn new skills. 2 Successful organizational learning demands management’s focused effort. Often, learning new skills and technologies can be a traumatic experience. The large-scale, ongoing restructurings of firms such as AT&T, IBM, Citicorp, Fidelity Investments, JC Penney, United Technologies, and Eastman Kodak are just a few examples in which one can see among its personnel. This diversity provides the fertile learning ground for Sony to test and commercialize new product concepts. Frequent Rotation of Staff Engineers in the company may seek new assignments anywhere in the organization, often without first notifying their supervi- sor. If an individual locates an attractive new position, the employee’s boss is expected to cooperate in the transfer. This practice, which Sony refers to as “self-promotion,” causes fairly frequent movement of technical talent within Sony’s organization. Such movement infuses development teams with periodic new arrivals who bring fresh ideas and heightened enthusiasm. Multiple Experiments Sony often assigns several teams, each pursuing a different technology, to work on the same development problem. For example, five teams worked at various times on the company’s CD player and later the MiniDisc project. The use of multiple experiments adds an element of healthy competition to the development process. It increases the likelihood that Sony will emerge as a leader in successful new technologies. Moreover, working with different technologies helps Sony learn which products are more likely to be easily manufactured and improved over time. By working with different designs and see- ing how a customer will likely use a product from different angles, Sony can continuously improve its products over time by incorporating new features and streamlined designs. This additional development information gives Sony a market edge over its competitors. Balance of Psychological and Monetary Rewards Sony avoids paying monetary rewards such as bonuses and salary increases for technical achievement. Instead, it relies pri- marily on nonmonetary rewards in a variety of forms to inspire creative effort. Perhaps most important, Sony gives engineers a great deal of leeway in selecting the development projects they will work on. The excitement of development work then provides its own psychological reward. Sony also allows individuals who originate new product ideas to supervise the teams formed to conduct the development work. This practice some- times produces project leaders who are younger and less highly paid than the team members they supervise. Yet, it supplies a powerful incentive toward creative effort by enabling the company’s most creative engineers to lead the development effort. Another device Sony uses to foster creativity is a technical fair sponsored annually by its corporate research department. The three-day event, open only to company employees, provides engineers and scientists an opportunity to display projects to their peers and the company’s most senior executives, who make a point of visiting each display. This practice provides substantial psychological rewards for creative efforts and helps cross-pollinate ideas among project teams and business groups. 412 PART 4 Sustaining and Renewing Advantage the dramatic effects of rapid environmental change. However, bringing about organizational change that facilitates learning is not an easy task. Managers and employees at all levels frequently resist the process of change, since it may alter their existing practices and web of relationships. Senior managers who seek to induce organizational changes that promote the learning of new skills and distinctive competences must therefore be sensitive to potential resistance. Their challenge is to take steps that encourage lower-level managers and employees to join and facilitate needed changes. We explore this challenge in the pres- ent chapter. The first part of this chapter focuses on how top managers can help their firms become learning organizations. 3 Learning organizations are firms that view change as a positive opportunity to learn and create new sources of competitive advantage. We focus on various organizational practices that promote this kind of proactive, change-oriented learning. Although instilling new forms of learning can be a difficult task, companies that are successful in doing so can better adjust and thrive in a rapidly changing environment. The second part of the chapter examines the difficulty of implementing change in firms that have not yet become full-blown learning organizations. Not all firms in every industry face the same degree of rapid change, and change can occur at varying rates across different industries. Yet, it is likely that all firms in all industries will inevitably face the need to learn and create new sources of competitive advantage or, at a minimum, understand how to improve their existing sources of competitive advantage. Thus, senior management must tackle the challenge of promoting and implementing change in an increasing number of industries and must often do so in the face of manager and employee resistance to such efforts. We examine some sources of resistance to change and discuss how senior managers can muster support for organizational change. CHARACTERISTICS OF LEARNING ORGANIZATIONS Some firms possess characteristics that greatly enhance their capabilities to adapt to rapid change. Exhibit 12-1 highlights key organizational practices that contribute to a firm’s potential for learning: (1) frequent rotation of managers, (2) continual training of personnel, (3) decentralization of decision making, (4) encouragement of multiple experiments, (5) high tolerance for failure, and (6) openness and diversity of many viewpoints. These practices encourage managers to be truly open to ideas that identify trends and generate choices. Under these conditions, adapting to the environment becomes easier and more likely to succeed. Frequent Rotation of Managers Managers new to their positions are less likely to be wedded to a particular set of values or way of operating than individuals who have held the same position for many years. Long-standing managers of a department are likely to be proponents of their department’s current strategy and, therefore, emotionally tied to its success. Over time, these individuals have a tendency to become less accepting of new strategies, approaches, and ways of doing things. For example, at both Timex and Eastman Kodak (in Chapter 5), managers who stayed with their respective lines of business were often unable to understand the nature of the changes facing their products and technologies; change became more difficult when managers were locked into a particular “lens” and functional perspective through which they defined and solved problems. One organizational practice that enhances a firm’s ability to change is periodic rotation of managers throughout the firm. Rotating managers across business lines exposes them to learning organizations: firms that view change as a positive opportunity to learn and create new sources of competitive advantage. CHAPTER 12 Managing Strategic Change: Building Learning Organizations 413 experiences, perspectives, functional skills, and competences that were developed else- where. Managerial rotation also promotes the building of interrelationships and synergies that cross departmental and divisional lines. At Sony, managerial rotation infuses managers with new insights and ideas and gives them greater awareness of a wide range of technologies and products that consumers may want. Managers are thus able to see how employees from other departments work together smoothly to get new products to market fast. In turn, they become more aware of their own competitive environment. Frequent managerial rotation greatly enhances Sony’s ability to adapt to environmental change. General Motors’ Saturn operation practices managerial rotation to encourage its people to visit other parts of the factory. Rotating both managers and employees throughout Sat- urn’s many work areas helps convince people of the need to do their best in producing quality products. This system enables Saturn employees to see how their efforts and work contribute to the entire car’s production and assembly. Managers and employees also learn multiple sets of skills that are used in auto manufacturing and assembly. In turn, the quality of the car improves, and people learn and share manufacturing insights and skills throughout the factory. 4 Continual Training of Personnel An insidious source of resistance to change is fear that change will render obsolete many managers’ and employees’ current skills, promotion opportunities, and career paths. Reg- ular training and development through which managers and employees learn new skills lessen such fears and thus reduce resistance to change. Many researchers and analysts have Management Practices of Learning Organizations Frequent rotation of managers Openness and diversity of ideas Multiple experiments High tolerance for failure Continual training Decentralization Learning Organization exhibit(12-1) 414 PART 4 Sustaining and Renewing Advantage noted that continuous training is one key pillar of Japanese firms’ success in learning new technologies to develop new products quickly. 5 Sony and many other Japanese firms view training as an ongoing investment in corporatewide continuous improvement. Companies can undertake continuous improvement (discussed more extensively in Chapter 13) when their employees are not afraid to suggest and implement changes. Finding ways to do things better helps the whole company improve. Sony’s long string of product successes is due in part to a strong commitment to training and development of both personal and tech- nically oriented skills. This training contributes to lower cost, higher quality, better morale, more openness in thinking about problems, and even whole new product ideas. Most important, by encouraging its employees to learn new skills, Sony reduces employees’fear of change. Sony maintains an internal training program designed to impress young Japanese employees with the firm’s newest technologies. It also instills the company’s management procedures, corporate values, and operating practices. Additionally, Sony trains its managers extensively to prepare them for overseas assignments. Overseas customs and practices are taught regularly. This type of training helps Sony’s managers spot new trends and potential opportunities in consumer electronics markets and understand what each market wants in Sony’s products. Decentralization of Decision Making Lower-level managers, sales representatives, and front-line employees are much closer to the action than most senior managers. They are therefore often the first to become aware of potential new developments and changes. A firm can improve its responsiveness by pushing decision-making responsibility down to these individuals; therefore, a firm should practice some degree of decentralization wherever possible. Careful decentralization facilitates organizational change and learning because it encourages managers and employees to participate in making decisions that directly affect them. It also gives them room to experiment with new methods they feel are appropriate. Yet, decentralization should not go so far that it results in duplication of activities across businesses, the dilution of a well- defined corporate mission and culture, or other inefficiencies. When carefully imple- mented, decentralization increases the number of employees who can deal with change, and mobilizes the energies of many people. Making the right level of decentralization work requires trust among managers and employees throughout the company. If managers cannot trust their employees or vice versa, then unfettered decentralization can cause numerous problems for the firm. Well thought-out decentralization works to promote change and learning because the flow of information is less likely to be distorted. 6 People on the front line (especially marketing, sales, customer service) are constantly exposed to numerous sources of timely information vital to detecting potential developments or opportunities. On the other hand, thick layers of management (particularly in companies organized along strictly functional lines for long periods of time) often distort or delay information flows. Managers tend to “reinterpret” information from their employees and pass it on in a distorted form to their superiors. Of course, decentralization must be balanced with a strong sense of shared values to promote change and learning. Decentralization frees up the creative energies of managers and employees but can result in chaos if people do not share some common goals and values. Although Sony delegates responsibility widely, the firm carefully impresses upon its people the company’s innovation-driven creed and goals. This combination allows Sony’s employees to learn and apply new ideas in ways that are consistent with Sony’s goals. A major part of Sony’s decentralized organization is its use of small project teams that can CHAPTER 12 Managing Strategic Change: Building Learning Organizations 415 move from one part of the company to another. These teams have the authority to make changes to improve the quality or efficiency of operations. Project teams help other department and business managers coordinate product development and use of new technologies. They also serve a vital purpose of moving across different functions and departments, thereby promoting active “cross-pollination” of ideas and skills throughout the company. Sony’s flexible and fast-moving project teams thus provide the basis for building strong interrelationships among business units. These interrelationships facilitate the sharing of know-how and skills systemwide. Johnson & Johnson is another example of how effective decentralization can foster the creation of new sources of competitive advantage. J&J’s senior management has divided the company into more than 50 operating divisions (or “companies”) that produce every- thing from surgical sutures to Tylenol, anesthesia, advanced surgical implements, medical instruments, diagnostic equipment, toothbrushes, baby oils, shampoos, and blood moni- tors. J&J’s senior management believes in giving each division the power to do whatever is needed to succeed in its market. This high degree of decentralization has enabled J&J business units to become some of the most successful innovators and marketers in the United States, although the company may be becoming overstretched in recent years. The CEO of Johnson & Johnson compares his role to that of an orchestra conductor: he gives his players inspiration and direction, but his subordinates get complete freedom to execute the desired objective. 7 Kodak’s problems with its core photography and imaging operations stem in part from insufficient decentralization. After nine restructurings throughout the 1980s and 1990s, Kodak still has great difficulties in encouraging a high level of autonomy and responsiveness to market change. Despite holding numerous patents in the field of chemical and digital imaging, Kodak still appears unable to harness fully the knowledge of its product development teams to create new products faster and better. Kodak struggles with decentralization because the company lacks a well-defined, concrete mission that its people can follow in their day-to-day projects. A lack of a common focus and awareness of the need to learn new skills related to digital imaging has also contributed to Kodak’s problems. Encouragement of Multiple Experiments Developing new products and technological processes are often complicated tasks. Some- times several initiatives need to be tried simultaneously to determine which is better. Run- ning multiple projects reduces the likelihood that a superior approach will be overlooked. As separate groups or teams work on a solution to the same problem, people develop skills and insights that can prove useful in thinking about future products. In other words, companies need to “parallel process” their efforts to learn new technologies and develop new products. Parallel processing enables a firm to see which technologies, product standards, marketing approaches, and management methods work best. This approach harnesses a healthy degree of internal competition with a dual focus on continuous improvement and search for best designs and best value. In turn, people are exposed to different ways of thinking about and doing things. Sony’s legendary success with its portable Walkman radio/cassette player reveals the enormous power of experimentation in producing breakthrough products. Several project teams worked on this project, helping to determine which format would be the most desir- able to consumers and the most easily manufactured. Sony has used numerous parallel project development teams to work on other promising technologies, such as miniaturized compact and optical disks, hand-held color televisions, and small video camcorders that automatically adjust the lens for better picture quality. 416 PART 4 Sustaining and Renewing Advantage Multiple experiments are one key to Honda’s enormous success in developing a broad range of engine technologies for automobiles, motorcycles, lawnmowers, power boats, and power generators. Honda keeps an “idea file” that includes numerous prototypes and designs for models previously developed but never produced. Many of these ideas have later become the basis for motorcycles, automobiles, and lawnmowers when opportunities opened up. 8 Oftentimes, ideas developed in one business unit to serve a particular customer have had considerable future, unanticipated value serving Honda’s customers in another market. Timex’s early unwillingness to experiment with innovative applications may have shut the company out from new generations of products. The company’s cadre of mechanical engineers was unable to assimilate electronic displays and other new technologies in watch designs, because they saw mechanical springs and gears as superior to emerging electronic technologies being developed by other companies. For example, competing manufacturers such as Citizen Watch, Seiko, Casio, and Texas Instruments were already producing watches made with electronic components, which were often derived from other product applications, such as calculators and measuring instruments. High Tolerance for Failure If people are punished for working on projects that eventually are not selected, then few will be willing to take on risky projects in the future. Firms must be careful not to dis- courage people associated with projects that do not work out if they want to sustain high creativity. Instead, senior managers should continue to reward them if their efforts are meaningful and reasonable. This approach ensures that employees receive the encouragement they need to “venture off the beaten path” when exploring new solutions. Many innovative companies, including Sony and IBM, have experienced failures, some of them rather large. For example, during the 1980s, Sony pioneered a new digital camera called the Mavica. The company believed the public was ready for a new filmless camera that could take clearer pictures faster. Yet, the Mavica was ahead of its time and few consumers were interested, so Sony withdrew the product. Not until the mid-1990s did Sony reintroduce the Mavica and the even more improved Cybershot digital camera system. This product is now a real winner in the marketplace. Even with this early failure, Sony gained many insights into digital technology that led to new generations of compact disk players, Minidiscs, advanced integrated circuits, digital video disks (DVDs), digital phones, and network appliances. Sony did not penalize its managers or employees for this product’s failure. Instead, it gave these individuals important positions in which they could borrow upon their newly acquired experiences and skills. They were encouraged to apply their expertise to designing new products and technologies. Ultimately, Sony is now well- positioned to compete across a whole spectrum of digital imaging technologies for use in advanced consumer electronics applications. IBM is another company that traditionally has not punished its people for a given product’s failure. For example, IBM entered the home market for personal computers with the PS/1 model in the mid-1980s. Unfortunately, this product was severely underpowered and lacked many practical applications for home use. Customers could not use it very easily to manage their home finances, play computer games, or create their own stationery. IBM withdrew the product from the market and concentrated on improving the product’s power and versatility. Managers involved with this product were not punished but instead were given new marketing and development assignments for a new line of business and home computers. These newer models (many labeled under the Aptiva brand) now enjoy considerable market success. IBM’s continued reliance on these people to design more CHAPTER 12 Managing Strategic Change: Building Learning Organizations 417 advanced types of personal computers has helped retain valuable experience and insight that the company used to revitalize its personal computer business. At both Sony and IBM, managers are encouraged to learn from their experiences instead of being fired for their decisions. Failures are defined as part of the learning process and personal growth. The knowledge gained by personnel associated with failures became instrumental in developing new products that helped the company enter other markets. In other companies, the very prospect of failure causes organizational paralysis rather than growth. Openness and Diversity of Viewpoints True openness by managers to new ideas, suggestions, and criticisms is rare in most firms. Openness not only means a willingness to listen to new ideas and face reality but also encouragement of a diversity of viewpoints and perspectives throughout the firm. Open- ness demands that managers suspend their need for control. The need for constant and direct control often limits the potential for effective learning, since it suppresses people from bring up contrary viewpoints, “bad news,” or alternative problem solutions that may cause internal political problems. Excessive control sharply narrows the manager’s attention to short-term objectives. For example, if managerial attention is riveted solely to quan- titative performance measures such as return on investment (ROI), managers will be less attuned and sensitive to environmental developments with potential long-term impact (as we’ve seen occur at Westinghouse). Moreover, managers obsessed with control are often unable to draw useful suggestions and ideas from their employees, many of whom may be afraid of their superiors. Control usually focuses managers’attention on immediate details, taking the time and effort that managers need for discovering and understanding important long-term trends. Another essential ingredient to openness is the ability to understand diverse perspectives and viewpoints. Managers must be able to appreciate other people’s values, backgrounds, and experiences as being no less important than their own. In other words, true openness means a willingness to accept and listen to other people’s ideas and perspectives. Although Sony tried to understand and shape the motion picture and entertainment industry through its initial acquisition of Columbia Pictures in 1989, the company soon discov- ered that many of its highly successful management techniques and insights learned from the electronics business had little direct applicability to the entertainment side of the firm. After a few difficult years in the early 1990s, Sony now applies a policy of openness to managing its Columbia Pictures unit in California. Realizing that film-making and electronics are two distinct industries, Sony encourages Columbia’s film producers, studio managers, and technical talent to share their viewpoints with Sony’s managers. This com- munication helps Sony’s senior management understand the specific film-making problems and issues that differ from issues involved in making electronics-based products. Instituting these changes became especially urgent when Sony at first did not grasp the fundamental differences in operational procedures, management practices, and attitudes that defined and separated the two businesses and their respective mindsets. 9 Asea-Brown-Boveri (ABB) also practices a policy of being open to many viewpoints. This European producer of power-generation equipment and machine tools believes that each market in which it operates is unique and that managers must therefore be open to their customers’ and local personnel’s specific requests. Products and technologies are customized to each market. ABB’s managers often work directly with their customers to get a better feel for their special needs. Internally, ABB relies on lower-level managers and employees within each national market to suggest ideas on how best to deal with 418 PART 4 Sustaining and Renewing Advantage competitors and government regulations. By listening to customer and employee suggestions, ABB’s managers gain insights into how to make their products better and what competitors are offering. This openness helps ABB become a better competitor. The hidden belief that one’s own background or experience is superior to another’s seriously hinders learning. This phenomenon is especially dangerous for firms whose top management is overly represented by a particular function. For example, engineering- dominated firms, such as Rockwell International and Texas Instruments, have experienced difficulty in entering the consumer market for such products as calculators and personal computers. TI’s inability to view marketing as a function equal in importance to engineering and production is partly to blame. Consequently, TI developed consumer products (calculators, personal computers) in the same way they developed products for the government and other large companies. The result was a series of consumer products that were over- priced and lacking many user-friendly features. Resources that TI allocated to the consumer market were not as great as those dedicated to industrial markets that were more familiar to its senior managers. As a result, TI’s managers were unable to get a feel for the consumer market. IMPLEMENTING CHANGE IN STATIC ORGANIZATIONS A handful of firms have fully incorporated the practices described in the preceding sec- tions into their management systems. Because of their ability to create new sources of competitive advantage rapidly, these learning organizations can adapt quickly to environmental change. On the other hand, many companies perceive change as a threat to their existing sources of competitive advantage and established procedures. In these firms, managers often resist efforts to change. Exhibit 12-2 presents a spectrum of how firms differ in their adaptability and responsiveness to change. Learning organizations such as Sony are found on the far right side of Exhibit 12-2. In learning organizations, managers view change as an opportunity for improvement and renewal of competitive advantage. At the far left are firms that have not adopted the organizational practices that promote learning and change but instead focus on doing exhibit(12-2) Adaptability to Corporate Change Static "dinosaur" organizations Learning organizations Most firms fall somewhere in the middle Timex General Motors Sears IBM Kodak DuPont Lockheed-Martin Toshiba AT&T Adobe Systems Lucent Technologies Microsoft Hewlett-Packard Sony Ben & Jerry's Qwest Southwest Airlines Cisco Systems United Airlines [...]...CHAPTER 12 Managing Strategic Change: Building Learning Organizations better what they are already doing Such firms we call “dinosaur” or static organizations. 10 Static organizations are akin to dinosaurs in that they have adapted themselves well to current environmental conditions but have... support of managers and employees in designing a change initiative and in implementing it Unfortunately, managers and employees in static organizations often withhold such support Among the most common reasons for withholding Managing Strategic Change: Building Learning Organizations CHAPTER 12 421 support are (1) lack of awareness of the need to change, (2) lack of interest in the opportunity that environmental... chemical-based films CHAPTER 12 Managing Strategic Change: Building Learning Organizations Fear of Personal Loss Fear of personal loss is perhaps the most significant obstacle that prevents firms from becoming successful learners The fear of restructurings that would eliminate entire divisions and businesses, along with all of the people involved, makes corporate change painful Strategic change greatly impacts... firms will face the need to adapt and change rapidly in the wake of environmental developments As senior managers begin to restructure their organizations to adapt to environmental change, they must also consider CHAPTER 12 Managing Strategic Change: Building Learning Organizations two key ethical questions surrounding organizational issues Although the ramifications of these questions are extremely complex... process are (1) sensing the need for change, (2) building organizational awareness of this need, (3) stimulating debate about alternative solutions, (4) strengthening consensus for a preferred approach, (5) assigning responsibility for implementation, and (6) allocating resources to sustain the effort CHAPTER 12 Managing Strategic Change: Building Learning Organizations • A boundaryless organization means... is scientific associations, which may know more about developments in product and manufacturing technologies Lobbyists who are typically aware of pending governmental CHAPTER 12 Managing Strategic Change: Building Learning Organizations regulations may also be a useful source of information Examining the actions of competitors in closely related fields gives managers an additional lens through which... should be selected to administer such a unit? Candidates who have championed a new initiative in the past should be candidates for this position Their past advocacy is CHAPTER 12 Managing Strategic Change: Building Learning Organizations 427 testimony to their belief in the effort’s worth, and it raises the likelihood that the initiative will receive the attention it needs to prosper Also, long-time... the high premium Japanese firms place on continuous training 6 See, for example, T Peters, “Rethinking Scale,” California Management Review, vol 35, no 1, 1992, pp 7–29 CHAPTER 12 Managing Strategic Change: Building Learning Organizations 7 See “Johnson & Johnson Is On a Roll,” Fortune, December 26, 1994, pp 178–195 8 See T Hout, M.E Porter, and E Rudden, “How Global Companies Win Out,” Harvard Business... Douma, “Organizational Learning and Diversification,” Academy of Management Journal, vol 37, 1994, pp 608–640; A Parkhe, “Interfirm Diversity, Organizational Learning, and Longevity in Global Strategic Alliances,” Journal of International Business Studies, vol 22, 1991, pp 579–601 3 This section is adapted from M McGill, J.W Slocum, Jr., and D Lei, “Management Practices in Learning Organizations, ” Organizational... Lei, “The New Learning Strategy: Anytime, Anything, Anywhere,” Organizational Dynamics, vol 23, no 2, 1994, pp 33–48; C Argyris, “The Executive Mind and Double-Loop Learning, ” Organizational Dynamics, vol 11, no 1, 1982, pp 5–22 Also see M Marquardt and A Reynolds, The Global Learning Organization (New York: Irwin, 1994); E.C Nevis, A.C DiBella and J.M Gould, “Understanding Organizations and Learning Systems,” . to learning organizations: firms that view change as a positive opportunity to learn and create new sources of competitive advantage. CHAPTER 12 Managing Strategic Change: Building Learning Organizations. Cope With Change Summary Managing Strategic Change: Building Learning Organizations WHAT YOU WILL LEARN • Why companies need to think about change • The concept of a learning organization • The. Airlines CHAPTER 12 Managing Strategic Change: Building Learning Organizations 419 better what they are already doing. Such firms we call “dinosaur” or static organizations. 10 Static organizations

Định dạng
Số trang	26
Dung lượng	143,17 KB