Professional Documents
Culture Documents
09
Change Management in an Organisation
PARTICULARS PAGE
NO.
INTRODUCTION 04
COMPANY’S HISTORY 06
Forcefield Analysis 10
MAJOR CHANGES IN GE 11
Restructuring 16
Corporate Initiatives 20
Globalization 21
Six Sigma 21
Controlling Bureaucracy 23
Advancement of Technology 24
ROLE OF LEADERSHIP IN GE 27
CONCLUSION 33
REFERENCES 34
Change management (or change control) is the process during which the
changes of a system are implemented in a controlled manner by following a
pre-defined framework/model with, to some extent, reasonable
modifications.
The field of change management grew from the recognition that
organisations are composed of people. And the behaviours of people make
Scope of Change
Realignment Transformation
N
ature of Incremental Adaptation Evolution
Change
Big Bang Reconstruction Revolution
Adaptation:
Reconstruction:
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Reconstruction is the type of change which may be rapid
and could involve a good deal of upheaval in an organisation, but which
does not fundamentally change the paradigm. It could be a turnaround
situation where there is need for major structural changes or major cost-
cutting programme to deal with a decline in financial performance or difficult
or changing market conditions.
Evolution:
Revolution:
Forcefield Analysis:
• What aspects of the current situation might aid change in the desired
direction and how might these be reinforced?
• What aspects of the current situation would block such change, how
can these be overcome?
One branch of GE's operations that came into its own during this period
was the General Electric Credit Corporation, founded in 1943. Between
1979 and 1984, its assets doubled, to $16 billion, primarily because of
expansion into such markets as the leasing and selling of heavy industrial
goods, inventories, real estate, and insurance. In addition, the leasing
operations provided the parent company with tax shelters from accelerated
depreciation on equipment developed by GE and then leased by the credit
corporation. http://www.ge.com/investors/investing/index.html
The changes in GE’s structure were aimed at creating a more flexible and
responsive corporation. This goal also necessitated changes in GE’s highly
developed management systems. In particular, Welch led a major overhaul
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of GE’s much celebrated and widely emulated strategic planning system.
The framework of an annual planning cycle was retained, but the staff-led,
document-driven process was replaced by a less formal, more personal
process.
6. Corporate initiatives
One of the distinctive characteristics of Welch’s system of management
was his use of periodic new corporate initiatives as mechanisms to drive
particular aspects of company-wide performance. Thus, while strategic
planning, financial control, and human resource management provided the
basic systems for managing GE, about every two years, Welch would
announce a major new initiative designed to energize the company and
drive its performance in a particular direction. Over time these initiatives
would become absorbed into the ongoing management systems of GE.
8. Globalization
All of GE’s businesses were given global responsibility, which meant
exploiting international growth opportunities and exploiting the advantages
of global reach in terms of exploiting global-level economies of scale and
increased learning opportunities. Global diversity played an important role
in allowing GE to cope with economic problems that affected particular
countries or regions, and take advantage of the opportunities that such
downturns offered.
9. Six Sigma
From 1998 to 2000, Welch’s Six Sigma program was its dominant
corporate initiative and primary driver of organizational change and
performance improvement. Welch described it as his next “soul-
transforming cultural initiative.” The methodology of defining, measuring,
analyzing, improving, and then controlling every process that touches a
company’s customers until it reduces defects to 3.4 per million was
borrowed from Motorola. However, at GE it was with unprecedented
fervour across an unprecedentedly broad front. In four years some 100,000
people were trained in its science and methodology, and by 2001, GE was
able to report: “Now Six Sigma is the way we work. We all speak a
common language of CTQs (critical-to-quality), DPMOs (defects per million
opportunities), FMEAs (failure mode effect analysis), and Needs
Assessment Maps (to name just a few).” Across every one of GE’s
businesses major gains in performance ranking from reduced waste and
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lower operating costs to faster customer service and improved financial
management.
Why Change Required in an Organisation???
1. Controlling bureaucracy
One of Welch’s signature concepts and the one term most closely
associated with the GE leader. To spark productivity and break down the
walls that he felt were killing the company, Welch sought to topple every
barrier: internal barriers, such as those between functions (sales and
manufacturing), and external barriers, such as anything that got between
GE and its customers and suppliers. Any wall was a bad one, insisted
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Welch. In a boundary less organization, information flows easily. There is
nothing to impede the seamless transfer of decisions, Ideas, people, etc.
Boundary less behaviour helped GE to rid itself of its century-old bad habits
of rigid hierarchy and bloated bureaucracy. Anything that limited the free
flow of ideas and learning was destructive, Welch said, and he spent two
decades taking aim at GE’s bureaucratic ways.
This is the next step after the implementation of change that how to
manage/ maintain this change.
Here we can see different styles of managing change and different roles in
change management that who is responsible for what job.
i. Strategic Leadership
iii. Outsiders
Charismatic Leaders, who are mainly concerned with building a vision for
the organisation and energising people to achieve it, and are therefore
usually associated with managing change.
ROLE OF LEADERSHIP IN GE
Welch has a very specific vision of the ideal leader. Unlike the “command
and control style” of autocratic leadership, Welch’s leadership ideal
encompasses a wide range of qualities closely associated with a learning
organization. Early on, Welch looked for customer-focused leaders who
had “head,” “heart, “and “guts.” Later he spoke of a leader’s ability to
embrace change, think globally, and deliver results. He also articulated
ideal leaders as those who had the “Four E’s”: Energy Energizer (can
excite others), Edge (competitive types who moved quickly), and Execution
(delivered in the form of results).
GE as an executive farm club
Welch said that one of the more difficult decisions was to fire Type C’s,
those managers who made their numbers but did not subscribe to the
company’s values.
2. Look for leaders who harness the power of change: Welch embraced
change, never afraid of staring reality in the face. Look for leaders who will
see things as they are, those unafraid of making the really difficult
decisions.
3. Look for the “Four E’s”: Welch sought out managers who were strong
on all four traits.
http://www.ge.com/company/leadership/executives.html
B. Change specific reason for resistance: Resistance may arise from the
very nature of a proposed change. It may arise from what people
perceive as the personal consequences of the change.
Jack Welch’s attitude towards management boils down to a few very simple
ideas: breaking down hierarchies, ensuring free information flows
throughout the organization, and encouraging people to talk, listen and be
open to new ideas. When he first became a GE vice president at the age of
36, he “stalked out on the plant floor, or picked up the telephone to deal
directly with anyone at any level when a problem came up”18 and that is
the organization Jack Welch has attempted to build in terms of
communication. Welch succeeded in transforming a complacent behemoth
into an energized company ready to face world competition. By flattening
the organization and by removing unnecessary layers of bureaucracy, he
liberated employees and empowered them to make decisions and effect
their jobs, as well as the company as a whole. At the same time, he relied
on stretch goals and the slope of satisfaction (as previously discussed) to
further push the company to new levels of achievement. An additional
sense of empowerment was relayed through various communication,
training and motivation mediums, such as the “Work-Out”, “the Pit”, “the
Corporate Executive Council” and other special project teams. Foremost he
underlined his words with accompanying actions and an exemplary
attitude, avoiding the well known saying that words by themselves are
empty. Through the use of 360- degree review processes, appropriate
bonus schemes and structural organizational changes, Welch created and
opened communication channels at GE, allowing for unprecedented
networking, teamwork, and openness to take place at GE. All of these
factors combined to form a motivating force for the employees of GE. This
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motivation in turn has lead to a decade of outstanding performance by Jack
Welch and General Electric Corporation.
References:
http://www.ge.com/index.html
http://en.wikipedia.org/wiki/Special:Search
http://ivythesis.typepad.com/term_paper_topics/
http://www.businessballs.com/changemanagement.htm
http://www.cipd.co.uk/subjects/corpstrtgy/changemmt/
http://www.jiscinfonet.ac.uk/infokits/change-management