Managing Organizational Change

CHANGE UNCEASINGLY

This is our turn to take our time to share this topic to everyone in the class. We are so enthusiastic to start because we really prepared for it. We think we have a unique presentation. We added some shockers; we combined our organization logos so that our discussions will be continuous.

Change is unstoppable; it will go as fast as a lightning. If you can’t catch it you will be left out. Many opportunities will just pass you by and success is a long and opaque view. People respond to change by seeing it as opportunity or danger.  

PHASES OF ORGANIZATIONAL CHANGE

 END 

                  The goal of this phase is to understand the change process and the steps needed to move through it.

             

  TRANSITION        

                 The goal of this phase is to regain the expected decreases in productivity

BEGINNING

                    The goal of this phase is implementing the new

Step 1 JOB DESIGN

5s method is always review our objectives and achieve organizational goal. 

Job specialization: a job composed of a small part of a larger task or process.  Job specialization is characterized by simple, easy-to-learn steps, low variety, and high repetition.  Advantages to using job specialization are that it is efficient and economical. Disadvantages are that the job becomes very boring and is subject to high absenteeism.

Step 2 DEPARTMENTALIZATION

Subsiding work and workers into separate organizational units responsible for completing particular tasks.

Advantages to this form of departmentalization are:

• ·         Work is done by highly-qualified specialists;
• ·         It lowers costs by reducing duplication;
• ·         Communication and coordination within a department is easier.

Disadvantages to this form of departmentalization are:

• ·        Cross-department coordination can be difficult;
• ·       Employees may be more interested in doing what’s right for their function than what’s        right for the organization;
• ·        It may lead to slower decision-making;
• ·        It produces managers with narrow experience and expertise.

Step 3 DELEGATION

Managers can complete tasks themselves or delegate tasks to subordinates. Delegation of authority: the assignment of direct authority and responsibility to a subordinate to complete tasks for which the manager is normally responsible.

When a manager delegates authority, three transfers occur from the manager to the subordinate:

• ·         The manager transfers full responsibility for the task;
• ·         The manager transfers full authority over the budget;
• ·         The manager transfers accountability for the task.

Step 4 SPAN OF MANAGEMENT

The defined  work  activities  to specific  individuals.  They give  each individual  the authority  to carry out  the assigned  tasks.

Step 5 CHAIN OF COMMAND ( My Topic )

UNITY OF COMMAND

An employee should have one and only supervisor to whom he or she is directly responsible.

This implies on subordinates-one superior relationship.  Which is every sub-ordinate is consumable and accountable to one boss at one time.  This helps in avoiding communication gaps and feedback and response is prompt.  

Unity of command also helps in effective combination of resources that is physical, financial resources which helps in easy co-ordination and, therefore effective organization.  That means each individual reports to one (and only one) boss or supervisor. The vital issue in that all employees need to know from whom to accept commands and to whom they are directly accountable. This establishes the legitimate authority that a supervisor has over his/her workers.

I have my own organization named STEAMER, we used that principle. Each outlet has one owner who manages the said outlet. All concerns, problems in the store or in the crew will be handled by her. If having any concern, we always set a meeting to answer or resolve the problem. Then that owner will implement the resolved issue to the store. In my case, I don’t manage any store but I check the store every now and then. If ever I noticed some lapses I catch the attention of my co-owner in charge. So it legitimizes the right of the owner to give an employee orders and then hold that person accountable in carrying out those orders.

SCALAR PRINCIPLE

Clearly defined line of authority that includes all employees in the organization.

This is chain of command which flows from top to bottom.  With a chain of authority available, wastages of resources are minimized, communication is affected, overlapping of work is avoided and easy organization takes place.  This scalar chain of command facilities work flow in an organization which helps on achievement of effective results.  As the authority flows from the top to bottom, it clarifies the authority positions to managers at all level and that facilitates effective organization.

In my another organization - PCT, should follow the scalar principle because the authority flows from top to bottom.  This principle should minimizes the resources, communication is really affected, overlapping and work is not avoided which I do believe that my organization needs help. Frankly speaking, we should follow the flow of authority, but in my case, NO NO! Because there are cases that some concerns should go to the higher level.  In my case i have to report to my Head but what if my problem is my head? Where I should send this concern?

HABITS  FOR THE AGE  OF CHANGE

• ·         Simplify
• ·         Seize the initiative
• ·         Learn or perish
• ·         Take Personal Responsibility
• ·          Accept  the mess
• ·          Focus on solutions
• ·         Have a  stress  management plan

A properly implemented organizing process should result in a work environment where all team members are aware of their responsibilities. To manage change, manage yourself first, influence other later.

ORGANIZATIONAL TRANSFORMATION PROCESSES

TRANSFORMATION AND MAKE UP!       

(Inspired by SAILOR MOON)

When I saw this Image, I remembered this group who tackled this topic.  I was amazed by them because it was explained thoroughly, from each balloon to another.   But because of our turn to discuss, I was not that attentive comprehensively.

Steps in the Planned Change Process

1.       Recognize  the need for change

2.       Diagnose and  plan change

3.       Manage  the transition

4.       Measure results  Maintain Change

Why is it important to Adapt to CHANGE?

Individuals, teams, or organizations that do not adapt to change in timely ways are unlikely to survive.

In my organization, I actually involved in things transformational.  My voice I think is also important to this organization.  I have two organizations, the first organization that I have is in the academe.  I was hired as full time last semester but decided to be a part-timer because of my schedule.  In my almost 10 months on this institution, I always asked my opinion in my department.  Back then, I was a moderator of InfoSci Club. I think in my tenure as a moderator, I can say that I have legacy to leave. I initiated the membership of PSITE XI and PSITS XI.  I don’t mean that they will applaud me about that because for me, the school needs to transform to the next level like in enhancing skills and exposing students to the outside school activities.  I’ve heard many words after I brought the new allied organization in my institution like: this is the first time that PCT having guests from other schools and take note of that, almost all IT students of Region XI attended that seminar-meeting.  It was an honoured for me as a moderator, an IT instructor and a family of PCT to hear those words of appreciation; many seminars, trainings and scholarships that new organization that brings to my organization.  The school was new to that and that kind of transformation helps us to be more competitive not in this field but globally.

THREE PHASES OF PLANNED CHANGE

1. Unfreeze – help people  accept that  change is  needed  because  the existing  situation  is not adequate
2. Change – involves  rearranging  of current  work  norms  and  relationships to  meet new  needs
3. Refreeze – Reinforces the changes made so that the new ways of behaving become stabilized.

My second organization is in the food business. I am one of the owners of this business.  Every now and then we have meetings in regards to our blessed outlets.  They appointed me as a Consultant, actually I don’t know why.  But of course as one of the owners I have to think wiser, upright for our business.   My voice is also important in this organization.    I have this situation where I can relate to the three phases of planned change and that we have to transform literally.   The first outlet was in the PCT, we have to ‘unfreeze’ as a group that our outlet should be more saleable to the first occupant to the place.   What we did was, we created attractive designs and new to the eye of the many and that decision and plan was good.   Two months after, there was this new competitor arrived.   He copied our style of selling, designs of stall and etc.  And there was a rivalry then.   

The CHANGE PHASE was adapted. We decided to transform again and again because for us we have to compete and be unique to all the competitors. Now, we have to adapt the last PHASE which is ‘refreeze’ so that our business will still be stabilized. Our business is still in profitable stage.

THE CORE COMPETENCIES OF THE CORPORATION

THE CORE

In order to understand the core competence of the corporation is that we have to know first what a corporation is. A corporation is the most common form of business organization, and one which is chartered by a state and given many legal rights as an entity separate from its owners. This form of business is characterized by the limited liability of its owners, the issuance of shares of easily transferable stock, and existence as a going concern.

Now that we have the idea that a corporation is a business organization then I guess it is safe to say that a corporation is either selling products or services. These products or services would differ in to what kind of customers or market that the corporation is eyeing to benefit since a company's competitiveness derives from its core competencies and core products. Core competence is the collective learning in the organization, especially the capacity to coordinate diverse production skills and integrate streams of technologies. First companies must identify core competencies, which provide potential access to a wide variety of markets, make a contribution to the customer benefits of the product, and are difficult for competitors to imitate. Next companies must reorganize to learn from alliances and focus on internal development

Core competencies are those capabilities that are critical to a business achieving competitive advantage. The starting point for analysing core competencies is recognising that competition between businesses is as much a race for competence mastery as it is for market position and market power. Senior management cannot focus on all activities of a business and the competencies required undertaking them. So the goal is for management to focus attention on competencies that really affect competitive advantage.

In 1990 with their article titled "The Core Competence of the Corporation", Prahalad and Hamel illustrated that core competencies lead to the development of core products which further can be used to build many products for end users. Core competencies are developed through the process of continuous improvements over the period of time. To succeed in an emerging global market it is more important and required to build core competencies rather than vertical integration. NEC utilized its portfolio of core competencies to dominate the semiconductor, telecommunications and consumer electronics market. It is important to identify core competencies because it is difficult to retain those competencies in a price war and cost cutting environment. The author used the example of how to integrate core competences using strategic architecture in view of changing market requirements and evolving technologies.

Management must realize that stakeholders to core competences are an asset which can be utilized to integrate and build the competencies. Competence building is an outcome of strategic architecture which must be enforced by top management in order to exploit its full capacity (http://en.wikipedia.org/wiki/Core_competency).

So in other words, the core competencies of the a corporation is based on its ability to let the different systems of the company to work together in harmony to achieve a common goal. These systems may include the following:

1. The owners of the company,

2. The whole staff of the company,

3. The production sector,

4. The technology used in producing products or services,

5. The market,

6. And the consumer.

According to Pralahad and Hammel,  core competencies lead to the development of core products. Core products are not directly sold to end users; rather, they are used to build a larger number of  end-user products. For example, motors are a core product that can be used in a wide array of end products. The business units of the corporation each tap into the relatively few core products to develop to a larger number of end user products based on the core product technology (http://www.quickmba.com/strategy/core-competencies/).

According to Pralahad and Hamel, core competencies arise from the integration of multiple technologies and the coordination of divers productive skills. Some examples include Philip’s expertise in optical media and Sony’s ability to miniaturize electronics.

There are three tests useful for identifying a core competence. A core competence should:

1. provide access to a wide variety of markets, and

2. contribute significantly to the end-product benefits, and

3. be difficult for competitors to imitate.

In my organization, one of our core competencies are the special skills and abilities of our students and well-educated instructors.  We are known as good in computer hardware.  Evidences od excellence can be seen in co-curricular competitions, assessment and trade test examinations and the expanding networks and linkages for on the Job Trainings, Ladderized Education Program Implementation, Consortia and the like.  This improvements and innovations have brought PCT to greater heights resulting to increase in its population this school year.

Core competencies tend to be rooted in the ability to integrate and coordinate various groups in the organization. While a company may be able to hire a team of brilliant scientists in a particular technology, in doing so it does not automatically gain a core competence in that technology. It is the effective coordination among all the groups involved in bringing a product to the market that results in a core competence.

It is not necessarily an expensive undertaking to develop core competencies. The missing pieces of a core competency often can be acquired at a low cost through alliances and licensing agreements. In many cases an organizational design that facilitates sharing of competencies can result in much more effective utilization of those competencies for little or no additional cost.

THE FIVE COMPETITIVE FORCES THAT SHAPE STRATEGY

THE FACTORS

The essence of these five competitive forces is to help an organization to understand the strategy they have acquired and stake out a position that is more profitable and less exposed. 

The Porter’s Five Forces Model will used to explore the environment in which a company operates to generate competitive advantage.   This will help also to take advantage of a situation of strength, improve a situation of weakness and avoid taking wrong steps.  

Understanding the tool, the original Five Factors for competitor advantage and competitive advantage:

Threat of New Entrants

The easier it is for new companies to enter the industry, the more cut-throat competition there will be. Factors that can limit the threat of new entrants are known as barriers to entry. Some examples include:

• 
  
• §  Existing loyalty to major brands
• §  Incentives for using a particular buyer (such as frequent shopper programs)
• §  High fixed costs
• §  Scarcity of resources
• §  Government restrictions or legislation
• §  Entry protection (patents, rights, etc.)
• §  Economies of product differences
• §  Brand equity
• §  Switching costs or sunk costs
• §  Capital requirements
• §  Access to distribution
• §  Absolute cost advantages
• §  Learning curve advantages
• §  Expected retaliation by incumbents

As per PCT, they are applying for accreditation for the new courses and relevant program curricula which designed to the technical needs of the community.  But because of this K-12 program to align the Philippine Basic Education Curriculum to the global standards by adding two years of senior high school to the current four year secondary education, and another year for mandated kindergarten, PCT decided to have a secondary education.  This decision leads to sustain the impact to tertiary education and a challenge to the management on how they will need to cushion of this new cycle to enrolment. 

Power of Suppliers

This is how much pressure suppliers can place on a business. If one supplier has a large enough impact to affect a company’s margins and volumes, then they hold substantial power. Here are a few reasons that suppliers might have power:

• §  There are very few suppliers of a particular product
• §  There are no substitutes
• §  The product is extremely important to the buyer, they cannot do without it
• §  The supplying industry has a higher profitability than the buying industry
• §  Supplier switching costs relative to firm switching costs
• §  Degree of differentiation of inputs
• §  Presence of substitute inputs
• §  Supplier concentration to firm concentration ratio
• §  Threat of forward integration by suppliers relative to the threat of backward integration by firms
• §  Cost of inputs relative to selling price of the product

In my organization and based on the months I stayed there, I saw some improvements in facilities, rooms, and etc. But, last semester we encountered a scarcity of teachers, the management decided to let us teachers handle subjects that are not in-line with our degree, like me an IT teacher teaching PE subjects.  Eventually the quality of education was compromised; many questions arose from students and even from us. The management of course alarmed with the situation and urgently hired new teachers.  

Power of Buyers/ Customers

This is how much pressure customers can place on a business. If one customer has a large enough impact to affect a company’s margins and volumes, then they hold substantial power. Here are a few reasons that customers might have power,

• §  Small number of buyers
• §  Purchases of large volumes
• §  Switching to another (competitive) product is simple
• §  The product is not extremely important to the buyer; they can do without it for a period of time.
• §  Customers are price sensitive
• §  Buyer concentration to firm concentration ratio
• §  Bargaining leverage
• §  Buyer volume
• §  Buyer switching costs relative to firm switching costs
• §  Buyer information availability
• §  Ability to backward integrate
• §  Availability of existing substitute products
• §  Buyer price sensitivity
• §  Price of total purchase

PCT continues to move onward in fulfilling its vision and mission of providing technically skilled graduates and highly competitive professionals for the manpower needs of an economically, socially and morally developed Mindanao as well as Asian countries on a global scale.  

PCT is giving scholarship to deserving students and accept government scholars.   

PCT also have linkages in the Philippines, like PLDT, Super Ferry and more.  PCT deploys and gives services like conducting seminars and training workshop in collaboration with PSITE XI, CHED and TESDA.

Availability of Substitutes

What is the likelihood that someone will switch to a competitive product or service? If the cost of switching is low, then this poses to be a serious threat. Here are a few factors that can affect the threat of substitutes:

§  Buyer propensity to substitute

§  Relative price performance of substitutes

§  Buyer switching costs

§  Perceived level of product differentiation

§  Fad and fashion

§  Technology change and product innovation

I think all colleges or tertiary schools experienced the same situation as my organization, because every second semester the number of enrolees will decrease.   This occurrence provoked the management to cost cutting. The management decided to close the office of the assistant dean because of malfunctioning; she was offered to be an English teacher to multi-task but she declined the offer and resigned.  According to her, the management wanted to have a multitasking because of the decreasing number of students who transferred to the other schools, stop schooling and etc. I think this is only discretion to her.   

Competitive Rivalry

This describes the intensity of competition between existing firms in an industry. Highly competitive industries generally earn low returns because the cost of competition is high. A highly competitive market might result from:

§  Many players of about the same size, no dominant firm.

§  Little differentiation between competitors’ products and services.

§  A mature industry with very little growth.

§  Companies can only grow by stealing customers away from competitors.

For many industries, this is the major determinant of the competitiveness of the industry. Sometimes rivals compete aggressively and sometimes rivals compete in non-price dimensions such as innovation, marketing, etc.

§  Number of competitors

§  Rate of industry growth

§  Intermittent industry overcapacity

§  Exit barriers

§  Diversity of competitors

§  Informational complexity and asymmetry

§  Fixed cost allocation per value added

§  Level of advertising expense

Competition among rival organizations drives profits to zero.  But competition is not perfect and firms are not unsophisticated passive price takers.  Fairly, organizations strive for a competitive advantage over their rivals.

In my organization, we compete for the same customers in a large number of same type organizations.  The 19^th years of service, my organization started to prove that we have our own style to produce products and we are competing to the other IT schools in Davao as of now.  


PCT have a modular type of teaching which I think this is the reason why many working students preferred to study here.  


PCT strongly adheres to quality education at affordable cost as a way of empowering the people through sustainable human resource management and development, thus making them technologically equipped to participate in the socio-economic progress.  


PCT continues to upgrade the resources and expand its programs and services to cater the growing number of customers region-wide.  


PCT now, continues to find partners in some companies who gave scholarships to conduct trainings, seminars and in collaboration with CHED and TESDA for professional advancement.  We have new courses and relevant program curricula designed in answer to the technical needs of the community.   We have one branch in Calinan and the main branch is in Bajada.  Evidences of excellence can be seen in co-curricular competitions, assessment and trade test examinations and the expanding networks and linkages for on the Job Trainings, Ladderized Education Program and more.  These improvements and innovations have brought PCT to greater heights resulting to 60% increase in its population this school year.

Reference: http://rapidbi.com/porterfiveforces/