- --

UNIT 2 TYPES OF CHANGE

Objectives

From this unit you will have an understanding of

kinds of change
turnaround management
planningchange
process of transformation

Structure
2. I Introduction
2.2 Focus on the Individual
2.3 Focus pn the Role
2.4 Focus on Teams
2.5 Focus on the Organisation
2.6 Types of Change
. t / ~ ; u T 1 " " ~ ~ l d Management
Key Constituents of Turnaround
2.7.2 Process Models of Turnaround Management
2.7.3 Types of Turnaround
2.7.4 Turnaround Performance
2.8 Planned Change
2.9 Work Redesign as aTechnique of Planned Organisation Change
2.9.1 Alternative Usesof Work Redesign
2.9.2 DesigningNew Organisational Units
2.10 Change: The Challenge of Transformation

2.12 Self-Assessment Questions

2.13 Further Readings

' 2.1 INTRODUCTION

There are several models of organizational change. A model is an integrated way of
explaining why and how change takes place, based on a known and acceptable basic
explanation (theory) of relat ionships of several aspects involved. It would be obvious
I that there can be different ways of explaining change, depending on what theory we
follow or use.
I
Two contrasting models of change are the "trickle down" model vs. "identity search"
model. The first is also termed in Sociology as Sanskritisation, i.e., following the
examples ofthe elite group. According to the first model organizational change occurs
because the top management takes a decision and adopts some new ways (technology,
Concept of systems, structure etc.) and others follow it. According to the second model, the urge
Managing Change to develop one's own uniqueness and identity will make the group or individuals
accept change.
Another way is to look at the external or internal forces as determinants of changes.
The adaptation model emphasiries the role of external factors (a new government
poliLcy,competitive environment) in producing change in organisations (more emphasis
on quality, restructuring etc.). According to the proaction model, the explanation
con~esfrom within the organisation (the decision of the organisation to set an example,
to be a leader, to anticipate future) and act and change itself in response to such an
internal urge.
Yet another explanation of organisational change may lie in emphasis on the structure
or the process. Successful change, according to the first model (structure model),
wauld require preparing the necessary structural details (technology, design of the
organisation, systems), and introduce them systematically. People will also change,
according to the process model, successfid change can be planned by helping people to
develop process competencies (ways of planning, decision-making, problem solving,
collabol~ating,communicating etc.), and then people will find new ways of organising
etc:.
A more comprehensive way is to look at the main emphasis in producing change-the
in~dividuals,the roles, the teams, or the organisations. We shall use this way of looking
at some models af organisational change.

-- FOCUS ON-"THE
2.2 -..~-
INDIVIDUAL
Arc~ .Ii n to~ this mod,.. :-angc-.the individual is the prime force in organisational
clung,. ll~dlv~dual s can ~ r o r r ~ cor
t eresist change. If individuals get motivated, change
is easy How do individ!~alsget motivated? We shall consider three explanations in
this regard: individuals c h a ~ g when
e they learn new and more desirable ways of
doing things; they change w hen they get non-threateningfeedback; they change
when their motives change.
Change as a Learning Process: The adoption-diffusion model of change, so popular
in agriculture, is based on the theory of change being the process of learning. Learning
t.akesplace when one is dissatisfied with the present state, wants a change. sees the
new alternatives somewhere, debates in one's mind about the pay off of the new
alternative, checks with others one trusts, tries the new alternative, assesses its
advantages over the old ways, and finally adopts it. Two main elements of this model
are: Change is regarded as a sequential process, and the rate of change varies from
one individual or a group to another.
'There are 8 stages in the process of change in an individual: initiation, motivation,
diugnosis, information collt?ction,action proposal, deliberation, implementation,
,md s fabilisation.
Individuals do not respond to change at the same time. Those who accept change have
been classified into five groups: innovators (about 2.5%), early adopters (about
13.5?/0),early majority to adopt change (about 34%), late majority (about 34%) and
laggards (about 16%).
A large number of studies have been made, and extension practices have been
developed to help people go through the sequential process faster, and to help "late
majairty" and "laggards" in learning to quicken their pace ofchange. One popular
method to help is "demonstration" of the new alternative, by taking people to a place
Change through Feedback: Another model ofchange is based on the assumption that
i~idividualschange if they get feedback on their behaviour, and also have a theoretical
framework which sliows that tlie current behaviour is dysfunctional. The feedback
need to be objective and non-threatening. A good example ofthis model is the work
done in schools on clianging teachers style, using Flander's theory of teacher's
classroom interaction behaviour. The teachers learn how to score objectively a
teacher's beliaviour while teaching the students. The scoring method is objective and
teacher's behaviour is scored every third second during the period of teaching. Scoring
reliability of 98% (agreement between two scores) has to be established before scoring
a teaclier's behaviour on "direct influence"(behaviour which restricts initiative and
freedom of the student, like lecturing,criticising, reprimanding,ordering, asking
questio~iswith one known answer) and "indirect influence"(behaviour which
encourages students' initiative and autonomy, like student talk, encouraging feelings,
asking questions with ~nultiplealternative answers). Then i/d (indirect divided by
direct) i~lfli~encebehaviour is worked out and feedback given to the teacher concerned.
The teacliers learn the theory and research results showing that direct influence
behavioi~rresults in dependency, lack of initiative, low activity level, lower
interpersonal trust, and low adjustment of students, while indirect influence behaviour
results in tlie opposite effect. Such feedback alone leads to change in teacher's styles
and change of the scl~oolclimate. (References to the results of work done with this
model are given in "Further Readings").
Motivation Change Model: The well-known work of David McClelland on
changing larger systems by changing basic motives of individuals is quite well-known,
and lias been widely used in India in tlie development of entrepreneurship. The basic
explanatio~iis that individuals engage in certain activities because of their dominant
motive or psychological need. A person with affiliation motive (the need to establish
and enjoy close personal relations) will socialise more and enjoy meeting and being
with people. Similarly, a person with achievement motive (the need to excel and to do
something unique) will be engaged in competitive activities, and is likely to spend
more time in work (business, selling, competitive games etc.). Ifwe can change the
maill motive of a person, for example, from affiliation to motivation, the patterns of
activities can be changed from "club-like" behaviour to work related excellence.
Successful attempts have been made to change motivation patterns of individuals, and
produce large change. (Reference to the work is made in the Readings at the end of
this unit.) McCIeIIund has suggested theJolIowing 12 propositions for designing
intervention to help the adults acquire motives which they desire to know.
Proposition 1. The more an individual believes in advance that he can, will, or should
develop a motive, the more likely he is to succeed in the educational attempts designed
to develop that motive.
Proposition 2. The more an individual perceives that developing a motive is
consistelit with tlie demands of reality (and reason), the more likely is the success of
educational attempts designed to develop that motive.
Proposition 3. The more tl~oroughlyan individual develops and clearly conceptualises
the associative network defining tlie motive, the more likely he is to develop the
motive.
Proposition 4. The more an individual can link the newly developed nebwrk to
related actions, the more likely is to occur and endure in thought and action.
Proposition 5. The more an individual can link the newly conceptualised
association-action complex (or motive) to events in his everyday life, the more likely
the motive is to infli~encehis thoughts and actions in situations outside the training
experience.
Proposition 6. The more an individual can perceive and experience the newly
conceptuafised motive as an improvement in the self-image, the more the motive likely
is it to influence his future thoughts and actions.
Proposition 7. The more an individual can perceive and experience the newly
conc.eptue~lisedmotive as an improvement on prevailing cultural values, the more the
motive likely is it to influence his future thoughis and actions.
Prolposition 8. The more an individual commits himself to achieving concrete goals in
life related to the newly-formed motive, the more likely the motive is to influence his
future thoughts and actions.
Proposition 9. The more an individual keeps a record of his progress toward
achi,evinggoals to which he committed, the more the newly-formed motive is likely to
infliuence his future thoughts and actions.
Prolposition 10. Changes in motives are more likely to occur in an interpersonal
atmosp11r:re in which the individual feels warmly but honestly supported and respected
by others as a person capable to guiding and directing his own future behaviour.
Proposition 11. Changes in motives are more likely to occur, ifthe setting dramatises
the importance of self-study and lifts it out ofthe routine ofeveryday life.
Proposiition 12. Changes in motives are more likely to occur and persist if the new
motive is a sign of membership in a new reference group.
--
2.3 IrOCUS ON THE ROLE- - -

Organisational change can be brought about by changing the organisational roles. It

has been argued that indiviual change is too expensive in terms of time and effort, and
may not necessarily lead to organisational change. If organisational roles can be
modified, these will on the one hand increase individuals' involvement, and on the
other increase organisational effectiveness.
One approach used for organsational change is that of role efficacy. Organisational
roles are analysedfor role efJicacy (potential efictiveness) in terms of the following
IOdimensions. The more these dimensions are present in a role, the higher the
efficacy of that role is likely to be.
1) Centrality Vs. Peripherality
The dinnension of centrality measures the role occupant's perception of the
significance of his or her role. The more the people feel their roles are central in the
organisation, the higher will be their role efficacy. For example, "I am a production
manager, and my role is very important."
2:)Integration Vs. Distance
I~ltegreitionbetween the selfand the role contributes to role efficacy, and self-role
distance diminishes efficacy. "!am able to usemy knowledge very well here."
3) Proactivity Vs. Reactivity
When a role occupant takes initiative and does something independently, that person is
exhibiting proactive behaviour. On the other hand, if he or she merrely responds to
vvhat others expect, the behaviour is reactive. For example, "I prepare the budget for
cliscussion"versus "I prepare the budget according to the guidance given by my boss."
4) Creativity Vs. Routinism
When role occupants perceive that they do something new or unique in their roles,
their e:fficacyis high. The perception that they do only routine tasks lowers role
eficac:y.
5) Linkage Vs. Isolation Types of Change

Interrole linkage contributes to role efficacy. If role occupants perceive

interdependence with others, their efficacy will be high. Isolation ofthe role reduces
efficacy. Example of linkage: "I work in close liaison with the production manager."
6) Helping Vs. Hostility
One important aspect of efficacy is the individual's perception that he or she gives and
receives help. A perception of hostility decreases efficacy."Whenever I have a
problem, others help me", instead of "People here are indifferent to others".
7) Superordination Vs. Deprivation
One dimension of role efficacy is the perception that the role occupant contributes to
some "larger" equity. Example: "What I do is likely to benefit other organisations
also."
8) Influence Vs. Powerlessness
Role occupant's feeling that they areable to exercise influence in their roles increases
their role efficacy. The influence may be in terms of decision-making, implementation,
advice, or problem solving. "My advice on industrial relations is accepted by top
management". "Iam able to influence the general policy of marketing".
9) Growth Vs. Stagnation
When a role occupant has opportunities-and perceives them as such--to develop in
his or her role through learningnew things, role eficacy is likely to be high. Similarly,
ifthe individual perceives his role as lacking in opportunities for growth, his role
efficacy will be low.
10) Confrontation Vs. Avoidance
When problems arise, either they can be confronted and attempts made to find
solutions for them, or they can be avoided. Confronting problems to find solutions
contributes to efficacy, and avoidance reduces efficacy. An example of confrontation:
"If a subordinate brings a problem to me, I help to work out the solution." "I dislike
being bothered with interpersonal conflict'' is a statement indicating avoidance.

2.4 FOCUS ON TEAMS

Some models of organisational change are based on effective teams as the medium of
change. Organisation Development (OD) emphasises team development. Work design
is also based on making work groups more effective. While OD mainly emphasises
organisational processes, work designing focuses on distribution of power in the
organ isation.

Organisation Development (OD)

OD model of change is based on the assumption that effective organisationalchange
would require change in basic values or ethos of the organisation, strong teams, and
involvement of organisational members in the different stages of planning of change
(problem identification, diagnosis, searching alternative interventions, using an
intervention, i.e. action, and evaluation). The change would be effective if the entire
organisation (including the top management) is actively involved in designing and
implementing change with an external process expert.
OD emphasises both team building and development of values, mainly OCTAPACE
values (openness, confrontation, trust, authenticity, proaction, autonomy,
collaboration, and experimenting). Team build in^ i s hoth the objective and an
important rnedium of change. Members of organisation work in teams at different
levels ofchange. Enough experience on OD is available, although not much research
has been done. Experience has shown that OD is a useful model of change, if internal
facilitators can be developed to sustain change. Both research competence and process
con1petenc.yis needed in OD.

Proccss Consultation
Procesq cc)nsultationis one specific approach. Process consultation is the help given to
a clit:nt group in understanding and developing methodology of working in general,
and ~~nderstanding and managing the effects of work methodology on involvement,
alierration, collaboration, conflict, consensus and such other group processes which
effect decision-making and the members' commitment to the decisions made.
Schcin stiggests three main characteristics of process consultation: joint diagnosis of
the ~r(>ce!;s
with the client, helping the client in learning the diagnostic skills, and the
active inbolvement of the client in searching a solution.
A consull.ant helps a client group by giving feedback on their ways of working in
examining the data, and in planning improvement in the processes of working and
decision-making. The process consultant helps the client group move from dependence
to interdependence and independence in diagnosis and action planning. As the term
suggests, consultation is on process of working and not on the client.

Work Redesigning
Work redesigning focuses on distribution of power of decision-making in work-related
matters 1.0 the group which is responsible for results. It is a radical model,
emphasising integration of intellectual (managerial-supervisory) and physical work
(produc1:ion). Work redesigning is done by training members of a team in multiple
ski Ils, and giving complete aufonomy to the team to plan, supervise and produce
productj or services. The role of the supervisors then changes; they plan boundary
management (getting resources needed by the team, solving their external problems)
and educational roles (helping the team when needed on new information, training
etc.).
Work redesigning emphasises the use of responsible autonomy, adaptability, variety,
and participation. It uses the socio-technical systems and open systems approaches,
suggesting that technical systems need to be integrated wit the social systems, and
sf~ouldbe open feedback and change. Self-regulation is greatly emphasised.
Nitish De, who pioneered work redesigning in India in different settings (industry, post
office, LIC, income tax office, consulting organisations, bank)proposedsevenphases
of, work redesigning, based on experience in India.
1 ) Hostility: Despite preliminary explorations, discussions and clarifications sought
and ofiered, there is a feeling amongst employees, irrespective of their positions and
roles, that the experiment is a motivated one, conditioned by the management's desire
to gain and the researcher's desire to conduct the research in order to publish. lnternal
consultants are seen as motivated by career considerations. Depending on the
dynatl-ticsof situation in most Indian organisation, this phase has been operating
covertly. Overt expression of hostility has often come from isolated individuals.
;!) Reluctance: Though some degree of curiosity develops amongst the members,
there is no visible symbol of commitment. However, a few persons involved in the
experiment feel that something is possible and that some changes for the better can be
effected. Positive leaders among the experimental groups do play an important role in
lihis a; well as in the earlier phase.
3) Guarded commitment and indifference: A substantial number show interest in Types of Change
what is happening, seeking data, taking initiative in group discussion, and offering
suggestions, while the majority still remain indifferent. Indifference is more passive
compared to the two earlier stages.
4) Intergroup dynamics: Something of a Hawthorne effect is produced in terms of
attention received. On the one hand, an in-group feeling gets created at the
experimental site and, on the other, a feeling ofjealousy and some amount of hostility
is often expressed by way ofjokes and caustic comrnents by the other groups.
5) Positive Interest: On one hand, in-group feeling brings some degree of stability to
the experimental group and, on the other, some internal dynamics goes on in terms of
power struggle regarding the experimental scheme. At times it is aggravated by caste
and regional considerations, factional in-fighting between sub-groups with negative
and positive attitudes and others who are in between. The positive groups, however,
acquire more visibility because they now take more active interest and gradually take
the control functions in the autonornous groups.
6) Isolation of negative elements: The majority are already committed to the
experi~nenthaving experienced some positive gains on some of the key criteria such as
variety ofjob, ~i~ea~ii~igfi~lness,
social support, challenge, autonomy, and evolving
norms for the group. The isolates are the negative elements who, depending on how
they majority treat them, either indicate withdrawal of a passive kind or personal
hostility. By and large, however, the group settles down to work out the operational
details of the scheme.
7) Networking: An experimental group takes initiative in looking outwards and seeks
to compare notes and experiences with other similar groups. This phase becomes a
potential force for the diffi~sionprocess.

2.5 FOCUS ON THE ORGANISATION

Structural change models have been extensively used for organisational change. The
emphasis is on developing a new structure of the organisation, in response to the
changing erivironment or the changing priorities of the organisation, and to designing
relevant systems (budgetary and informati011systems). 'l'he changes introduced
demand new ways of working, and individuals respond to such demands. Some good
accounts are available of such changes. Some turnaround work done is also in this
category.
MBO is a specific example of structural change, using a structured way of helping on
organisation plan its time-bound objectives at all levels, and working to achieve the
objectives set. Specific ways are adopted to monitor the working of group and
individ~~alson these objectives.
While the various models have been suggested in this unit, it should be emphasised
that these do not work in isolation, and in practice many approaches are combined.
Experience has shown that structural changes, for example, cannot be sustained
witlio~~t
relevant process si~pport.Similarly, process facilitation must be followed by
relevant structi~ralchanges so that the processes could be institutionalised and
sustained.

2.6 TYPES OF CHANGE

Ramnarayan ( 1998) in his book discusses four different types of change:
I) Co~iti~iuous
or incremental change,
2) Discontin~~ousor radical change. 33
-,
Concept o f 3) Participative change.
Managing Change
4) Directive change.
The first two types of changes are related to change process and the last two are
related to ~mplementation.The changes which take place in the environment can be
visualised as to how change in organisation grows. First1,y managers have to know
which asplsct of the change in the organisations to continue which to discontinue.
Secondly, managers must "acquire" the skills and "abilities" to change both in a
directive and participative manner. Finally, managers must be aware of the different
change strategies and learn to use appropriate strategies.
According to K. Harigopal (20011) 'Directional' change occurs because of intense
competition among the companies, changes in government policies and when there is a
failure in business strategy. "Fundamental change" occurs because there is a change in
organisatisn's purpose or in its goals. "Operational change" is as a result of
improvement in quality, quantity, as per given schedule, unit cost of operations in
developinj; products/services. "Total change" occurs when the entire existing system
needs a revamping. "Planned change" occurs because of certain internal and external
demands. 1e.g. golden hand shake. "Happened change" is unpredictable. It is not in
one'!; control. The change is required as a result of external causes.
"Tralisfor~nationachange"' occurs because of basic shift in goals. "Revolutionary
changes" are sudden changes, e.g. aut~mation."Recreation change" occurs when an
organisation wants to be ettirely different from the one which is at present. When
there 1s change in ~xostof the organEsations components, then 'strategic' change takes
place. Whsn there is a change ac a result of an event 'anticipatory' change occurs.
"Relative change" occurs tleca115,eof an event or series of events.
Increasri. : -'-mtional compet;.:,h- ,rid rapid technological change have magnitude
expectations about organizdtional performance and adoption. Deregultion and
globalization of our postindustrial society are putting an enormous amount of pressure
on organizations. Changes in political alliances and orientations over the entire offer a
host of new opportunities. In response to the new challenges, a number of models of
organizational analysis and decision making have come to the fore. Unfortunately, in
spite of all these up-to-date management technologies and technique, disasters such as
the nuclear explosion of Chernobyl. oil spills, as the loss ofNASA shuttles challenges
and <:olulr~biastill seem to be inevitable. Notwithstanding systemetic analysis ofall
possible contingencies, in all these instances something went terriby wrong.
Traditional focus on rational thinking will not be able to tell the total truth'. The reality
ofthe situation requires different approaches to different situations. We need to learn
more about the puzzles to reach get some clues in solving them.
Let us firsl. examine the process of turnaround in organizations. There is a river in
Africa where every year tens ofthousand of wildebeasts attempt a crossing. Many are
swept away by the swirling waters. Quite a few fall prey to the snapping jaws of
crocodiles. Several more are hunted down by staking lions, leopards, cheetahs and
hyenas. Olily a few survive.
The corpo~~ate world is not very different. Many companies fall to the grenades of
completioii: or of adverse technological or social change. Many more fall because of
internal wc:akness. But unlike the wildebeasts, whose deaths may sustain other lives,
corporate details can put thousands out of work, bringing misery to them and their
depel~~dents.Large pools of skills, assiduously build up over the year, quicky dry up.
Specialized machinery, often unsaleable, instead ofproductively humming, may turn
into a saurian graveyard. Uncleared debts may ruin. or at least discomfort, legions of
vendors ar~dlenders (Khandwalli~.2000).
This grin1 scenario is not imaginary. Many companies, large and small, fall by the Types @$Change
way side by the thousands every year. In India, during the 1980s, the number of sick
units grew some ten times, from around 22,500 at the end of the 1970s to over
200,000 ten years later. Several financial institutions were facing grave illness
because the money they had lent to these companies were practically irrecdverable.
Should we let sick companies die and should society suffer the consequences? We do
treat such hunians, and many do recover. Should we not also treat sick companies and
help them recover?
On the outside there is life, richly turbid, a river enriching and absorbing all in its
path, providing space to its citizens to live, lean and die. But inside these
organizational cages are unseen forces dissecting humans and sucking away all the
juices that tlie river of life honours, leaving only an electronic, robotic flicker.
But to students of turnaround management, organizationsare a lot more than
wastelands of padlocks and turning them around can be as lively as a storm and as
creative as a forest. In these organizations, people can be creative, heroic, friendly,
generaous, caring as also nasty. Turnarounds can be stuff a high drama and griping
novels.Not always, perhaps, but often enough.

By a~ialyzingsome of the important organizational case studies and understanding the

approaches undertaken by people who were responsible for turnarounds, Khandwalla
sbserves that:
Tur~iaroundscan create rather volatile situation - they evoke images such as
those of war, endangered survival, junkyard pile.
During a crisis the turnaround leader acts on numerous fronts. Helshe articulates
a credible vision and strategic intent. The CEO's job is shaping the concept and
tlie structure by which the concept would be impIemented across the board, and
often draniatically (boom; strike; crash). Helshe becomes a bridge to various
stakeholder to rope them into the turnaround. The CEO tackles the immediate
cash or other crises on the war footing. Helshe imposes a philosophy (Do it
now!'), sometinies by crying a credible wolf ('The leader's job is to help
7
everyone see that tlie platfor~nis burning ). The CEO keeps up the energy of
people by personal example (work harder than anybody else, seven days a week,
24 IIOLI~S a day). To be able to do this need energy, purposiveness, versatility and
loads of infectious motivatio~land optimism in a scenario of despair. As Business
Week put it, 'Turnaround artists have uncommon stamina, a thirst for action, and
some of tlie biggest egos in business'.
The turnaround leader often simplifies the immensely complicated turnaround
task to get the organization moving ('fix it, sell it, or shoot it'; improve corporate
image, and that's it; VERC: volume, earning, returns, c ~ ~ l 'business
ii; don't fail,
people do'). But at the same time helshe reserves flexibility ('one pill cannot kill
a11 ailments; strategies are simple, there execution is not).
The turnaround leader asks some tough questions that can shatter preconceptions
(what's strategic, what's diseases, what's under performing). To get answers he1
she needs to circulate among the workers (how could we achieve 20-20-20). He1
she needs to break up big problems into smaller manageable ones, and scrape
away tlie encrustations to get to the core of problems.
0 The ti~rnarouridleader often has to take risky actions that can go either way.
The turnaround leader has to discriminate between what is good for the
organization and good for employees, especially tlie no performing ones. Helshe
Concept of cannot afford to be soft and sentimental but helshe need not be callous either.
Managing Change Some turnaround leaders may, however, use separations or punishments to send
a message to the rest ('if you can't get under the limbo rack, good-bye'; 'public
hangings' of change resisters). Others may move those that can deliver into
stratlsgic positions.
e The .turnaround leader acts authoritarian on the assumption that people like
dependencey ('A lot of people want to be led'; 'People need to be told here's
where we are going and why').
e The 1:urnaround leader has to manage the anxiety and insecurity of the staff, and
turn ithem into constructive action througll straight talk, consultation, credible
plan of action, incentives, decisiveness, tolerance for honest mistakes, and new
skills.
e The turnaround leader has to co-opt the doubters, the indifferent, even the
advexaries, into a team inspired by a common purpose (sing from the same song
sheet).
e The turnaround leader has to empower people down the line to take decisions.
Not all turnaround leaders are alike, of course. Some are real Theory X, while others
may be more. Theory Y, humane participative types; some are intuitive while others
may have Inore of an analytical professional approach, some are dramatic and some
can be paranoid and narcissistic. .

2.7.1 Key Constit-r.entsof Turnaround

A turnaround is a process, ;a I-iappening spread over many moons, full of passion and
. =
drama :ml:edy and triv- ;, ,jut it is also a structure, an architecture of management
actio~ls;.ii~&hhang together it1 dl.i~nctiveedifices. But to build an edifice there must
be constitutes. Fortunately, turnaround scholars have been quite prolific in producing
lists of turnaround actions which can cohere into 'gestalts' of success. The problem is
not one of availability; the problem is one of sifting the marginal or less important
from the critically important. Fortunately, there are studies that indicate the relatively
frequently used or more important elements in turnarounds.
Pradip Kittzndwnlla conducted a study of 10 Indian turnaround attempts (some were
more successful than others). He analyzed the cases in terms of 10 categories of
turnaround action. These ~ncludedboth internal and external focus actions. The
internal focus actions were : top management changes, credibility building actions by
the new management, initial attempts by the new management to control finances and
operations, mobilization ofthe staff for turnaround, coordination of activities, quick
payoffs projects in various functional areas and quick cost reduction. The external
focus actions were: negotiation of support of outside stakeholders and neutralization
of external pressures, revenue generation and asset liquidation for generating cash.
Later, he reported a study of 42 'complete' turnarounds and 23 'break-even'
turnarounds from all over the world. He utilized eight major categories of turnaround
actions for analysing each of these turnarounds. These were: personnel changes,
diagnosing and troubleshooting, stakeholder or people management, operations
management, management systems and structure, financial management, strategic
manag;ement,and miscellaneous. But several ofthese major categories included
subcategories. The largest category with 13-sub categories was stakeholder or people
management.The sub-categlries were: credibility-buildingactions of management;
securiingstakeholders' support; increased training of managers and staff; public
articulation by management of mission, goals, etc.; management communating with
staff, lower level managers, etc. incentives, motivating, grievance redressal; example
 participative management, elliphasis on core values, etc. Operations management Types of Change
included five categories: significant retrenchment, other cost reduction measures, plant
modemization, retooling arid reorganizatio~ifor greater efficiency, quality,
productivity, other efficiency, quality, productivity enhancing action, and marketing-
related actions. Two areas had three subcategories apiece, namely, management
systerns and structure, and strategic management. Personnel changes, diagnosing and
troublesliooting, and financial management has two sub-categories each. In all there
were 27 subcategories and each turnaround case was analyzed in terms of the sub-
categories utilized in the turnaround.
When tlie 42 tur~iaroundswere scored on the usage of these 27 subcategories, an
interesting insight emerged. 'There were six turnaround elements that were used by
' 60 per cent or more tur11arounds.These Kllandwalla called foundational turnaround
elernents. These were: product mix changes, changes at the top, marketing related
actions, restructuring, cost reduction measures (other than retrenchment), and plant
modemization for greater productivity, efficiency, quality, etc. Seven other elements
had Inally linkages to otherele~ne~its (as measured by number of significant
correlations), so that a change in one could trigger changes in several other turnaround
elernents. Khandwal la called them strategic elements. These were: use of staff
motivational devices such as incentives, garnering the support of stakeholders,
participation of lower level managers in turnaround related diagnosing and problem
solving, increased HRD, formal diagnostic work, mass layoffs, and creation of
organization-wide consensus on core values and required changes. Turnaround
resembled each other because of reliance on 'foundational' elements; they differed
because of differential resort to 'strategic' elements.
Scholars who have studied turnarounds have come from many different disciplines.
'Those with a strong strategic management orientation have tended to use turnaround
categories popi~larin their field, such as acquisitions, diversification, plant expansion,
R&D, new product development, and the like. Those witli a finance/economic
background have tended to utilize those variables for which secondary published data
are readily available, sucli as tlie PIMS database or the Disclosure Worldscope
database. Those witli a strong organizational behaviour background have tended to
include a number of 'people management' variables related to organizational
~iiobilization,leadersllip, c o ~ n ~ ~ ~ i ~ ~ i iincentives,
c a t i o ~ ~conflict
s, resolution, etc. Those
witli a strong organization theory background tend to include mechanisms for coping
with uncertainty such as forecasting, planning, and MIS; mechanism that facilitate the
carrying on of a variety of tasks such as delegation of authority and various fu~ictional
departments. and 1necha11is1n of coordinating and inter-departmental collaboration. As
of now it is difficult to separate the wheat from the chaff. One thing is certain:
turnaround requires the taking of many different actions.

2.7.2 Process Models of Turnaround Management

Grinyer and McKiernan: "The process of inducing major and sustained improvements
in co~iipaniestliat are stagnating is of fundamental and lasting importance', so opined
two British Peters, Grinyer and McKiernan, they studied 25 UK cases of 'sharp-
bending' tliat is, companies that underwent transitions to much higher performance.
Although sharp benders may not all be turnarounds from decline, the processual
insights of the study can be illuminating for turnarounds. According to their model,
sharp-bending seems to begin with a dramatic crisis, a situation triggtd by internal
dissatisfaction over the gap between corporate aspirations and realized performance.
This gap may arise on account of any of several internal or external factors. Next, the
organizations may follow a widening sequence oftrying-out options tliat can get
results. Initially, it may seek to analyze function-wise the operational problems and
then launch a cost-cutting programme. Iftliis does not achieve desired results, it may
then go on to modest changes of a strategic nature, such as some changes in markets
served (bul still mostly in familiar terrains). If these two steps are found inadequate,
the organisation may seek radical options such as major changes in technology,
mark~:tsserved or the distributive chain, and involving divestment, acquisitions, or
unfamiliar diversification. This, however, would require the organization to adopt a
new paradigm of beliefs, practices, and methods. For this, the management may
borrow an existing recipe, or learns to change by trial and error processes. This
mindset change may require a new management team. Diagnostic'work may then be
initiated, such as analysis ofthe company's position is a work may then be initiated,
such ils analysis ofthe company's position in a competitive environment.
Declines apparently do not autorr~aticallylead to sharp-bending actions. The latter
requil-etriggers. Grinyer and McKiernan found links between various causes of
decline ant1events triggering sharp-bending changes. Where the causes of decline were
external, such as change in product technology or arrival of substitute products in the
markct, the,triggering event to be an intervention by an external institution, such as an
involved financial institution. An existing management tended to respond to marco-
sociallyenv~ronment-includeddeclines (such as from demogrphic changes or changes in
income distribution). But interestingly, it had difficulty responding to decline on
account of competitive pressure and seemed to ignore decline caused by poor quality
of management. The response to poor management seemed to be sharper when there
was a change at the helm andlor there was threat or actual change of ownership. There
were some additional findings that were interesting. Intervention by external
institutions, such as the involved banks or stock market authorities, usually pointed
the organi~~ation towards cost cutting but away from strategic change and service1
quality improvement. Threat or alctuality of ownership change too usually pointed the
organization towards cost cutting, but away from strategic change and servicelquality
imprc)vemc:nt.Threat or actuality of ownership change too usually pointed the
organizatic~ntowards cost cutting, but also towards fresh blood in the board and
greater decentralization but with tighter financial control. A new CEO tended to bring
a new visicln and attitudes, and also tighter controls. It was apparently only when
management initiated action on the basis of a recognition ofthe problems causing
declirie that attention was paid to quality and service.
Some further findings on primary and secondary steps in sharp-bending were
interesting Apparently, it was the ingress of new functional directors rather than of a
new CEO that triggered a flurry of 'strategic' changes such as vigorous extension of
markets or greater product differentiation or market segmentation. Also, it triggered
imprc~vementsin quality and service. The incoming CEO, however, brought with him
or her new value and attitudes, and tended to trigger divestiture. Three other primary
steps seemed to trigger various changes. Diagnostic work related to product market
focus seemed to stimulate a whole lot of 'strategic' changes, like acquisitions, exist
from inon-core business, greater segmentation and differentiation. It also triggered
actior~sto improve quality and customers service and steps to improve quality and
servic:e, as well as greater opport~inities,they had no effect on strategic options. And
they clid seam to weaken financial controls. Another primary trigger was
decentralization of operating and innovative decisions. These triggered new
invenments diversify into new markets, greater utilization of capacity, rightsizing of
the head office, and divestiture to reduce debt. All in all, and most powerful and
pervasive trigger seemed to be diagnostic work related to product market focus,
followed by ingress of new functional directors, profit incentives, decentralization, and
last of all, :I new CEO.
Grinyer anti McKiernanYsstudy highlights the useful role oftriggers in helping the
organizatic~nto do something about decline. It points to phases in sharp bending. It
also liigl~liglitstlie importance of changes in the board and change or threat of change
in ownership as important triggers for initiating sharp-bending steps. It underlines the
importance of strategic product market a~ialysisas the starting point for widespread
sharp-bending actions, and also the secondary but useful roles of profit incentives,
new firnctional directors, and decentralization. Their study suggests that it is not
enougll to get hold of new CEO; for sharp-bending success he or she must rebuild the
top team. get a diagnosis done of current product market strategy, get the management
to recognize problems, offer incentives, decentralize and tighten controls.
.John Sropfordund Cl~urlesBuden-Fuller: Stopford and Baden-Fuller examined the
renewal process of six British manufacturing organizations in disastrous straits. The
distinguished between 'turnaround', which they defined as oriented largely to financial
solvency and efficiency, and 'rejuvenation', in which system-wide changes in strategy,
structure, management systems and processes culminate in a metamorphosesand
powerfill new business capability. The previously limited, hide-bound organzation is
replaced by a 111i1climore resilient, distinctive organisation. They highlighted the
importance for this metamorphosis of a challenge initially posed by tlie CEO and his
definition ofthe programme to be solved, the choice ofthe competitive battleground,
the breaking down of earlier organizational rigidities, new skills, experimentation,
innovation and learning. Rejuvenation is a three-stage process which begins with
reduction in the company's scope of actitvities (downscoping) to what it can complete
in. Tlie CEO's belief in the new opportunities that could be available by the
organization deter;minestlie scope influence the focus of change. Tlie next state is
acquisition of skills and information to speed up learning in theorganization,
characterized by questioning, experimentation, and innovation. The final state is
recompilation of business, that is, enlargement of the company's scope.
During these stages, managers ask a lot of new questions, find out what they do not
know, go about plugging gaps in their knowledge, and in the process uncover many
unforeseen opportunities. It is in pursuilig these opportunities that the organization
invests in new approaches, lnetamorphoses and diversifies (see Box I).

Triggers to Trunaround Action, Strategic Direction, and Focus of Change

at Two British Companies

bought some of the products from-qanussi, which made

between Zanussi a n d h o t ~ i nefoducts.
t --- -*
--
process improvements. He got the organization to focus on improving gr@ng
a ~ o l o g qLater,
. he took up the challenge posed by Sears Roebuck, a customer, to
produce a knife that needed no sharpening: and a 'laser' knife ?as produced. The CEO
% i Y @ t - R M m ~ C uonm&leting.
s One major change Richardson made was in
moving C > m m ~ ~ (because
r k it created headaches in quality, supervision, overheads.
and disputes)&~n-:urly wages system. Richardson also added new products. Later,
Richardson was taken oSr-~%%WanBninterests which added financial strength that
enable Richardson to go global.

DonczldB~:beault: Several writers have tried to study the sequence of steps through
which a turnaround proceeds. The study by Donald Bibeault, turnaround practitioner
and :;chol;~r,of 8 1 US turnarounds led him to identify five stages of turnaround.
According to him, generally the first crucial stage of step is that of the moment of
truth and of a change at the top, followed by an evaluation, an emergency, and a
stab~lizationof the situation, and lastly, a return to normal growth. The moment of
truth dawns when people in power (generally the board) decide that something needs
to be done, the existing top management may not be able to do it, and therefore a new
heln~sma~i is needed. Change of management may not, however, occur if the cause of
decline is identified as clearly extenal. And even ifthe trouble is internal, the CEO
may not be replaced if he or she has strong ownership stake in the company - some
othr:r top executives may be replaced, usually the top operating offices. The new
leacler is likely to be an outsider ifthe problems are really tough and largely internal,
for an outsider, untainted by failure, is likely to be more objective and have greater
credibility than an insider who has been part of a team that wrecked the organization.
An outsi~dercan also be a more ruthless hatched man for the owners.
In the evaluation stage the focus is on the liability of the company and outli~iingof a
turnaround plan with priorities. This usually follows, at least in the US, some suave
chast thumping the scapegoating by the new chief to show that he or she means
businessland that the actions are rational in the circumstances. Evaluation work is
essential when the new chief is an outsider. It is also good for credibility. But it needs
to be fairly is an outsider. It is also good for credibility. But it needs to be failrly
quick-time is of the essence. The evaluation consists ofthe identification of short-term
and long-term, severe and marginal problems. Some crucial judgements need to be
made: Which business segments ofthe company are viable and which are not? Do any
of the ccjmpany's products have or can have, with suitable action a competitive
advantage in the market place that can yield profit? Some good brainstorming can
yijeld several good solutions, and in the initial period ofthe turnaround the realistic
target it; to solve 80 per cent of the relatively easily solvable problems rather than get
bogged down with 20 per cent more intractable problems. An action plan is preferable
to fire-'fighting actions, and an important part ofthe action plan may be to staunch the
negative cash flow. As important as the action plan is its effective communication -
upwards to the board for approval, possibly also to other stakeholders like lenders,
and downloads to the management team. A presentation to the management team
hopefully resulting in a consensus is desirable.
The next is the fire alarms stage of emergency, and stringent cash controls are
imposed to dowse the flames. This may be accompanied by postponement of long-
term expenditure, downsizing, and borrowing. Divestiture of loosing business may
5sllow.
lifter losses are sharply out comes the stabilization or settling down phase, which
means seeking an acceptable rate of return. Profitability takes priority over cash flow,
fbcus shifts to improving operations (and this means a lot of analysis), and to strategic
refocusing. The emphasis shifts to core businesses, that is, business the company
Icnowr; well, and to making them more profitable, and the best managers may be
assigned the task. Also, management systems get renovated, especially control
systems.
Finally, in tlie 'reposturing' stage, the company initiates aplanned exit from
~~nprofitable or fi~turelessbusiness and entry into high-potential businesses. This often
means divestitures balanced by acquisitions, possibly diversification. The emphasis is
on growth and development rather than retrenchment, and stronger financial
eval~~ation system. Is the turnaround now complete? Yes, says Bibeault, provided that
besides generating profits, the company has rebuilt its position in the market place,
made the right strategic moves, and motivated its staffto complete tlie turnaround
cycle.
Bibeault's stage model of turnaround was not derived from data on the 81 turnarounds
he studied. It is, therefore, a plausible prescriptive model. It sounds reasonable until
one starts questioning its premises. What if, in a society, most privately owned
enterprises, even large ones, are owner managed, as is the case with economies in
whicli business groups own, control, and manage the enterprises in their stable
(a fairly typical siti~ationin many Asian countries)? What then happens vis-a-vis
cliange in 'top management' if an enterprise declines? If in a society there are legal or
social liurdles to downsizing or to divestiture or to acquiring businesses freely, what
happens to tlie stages of emergency, stabilization, and reposturing? It is not as if
turnarounds do riot happen in these societies. But the mechanics may be rather
different, and so may tlie stages.

2.7.3 Types of Turnaround

Turnaround types are distinctives configuration and turnaround elements. Typology
are useful in various ways. They help us conceive multidimensional, internally tightly
linked phenomina such as species of plant, insect, or animal life, types of cuit,ures,
political and econo~nicsystems, and types of organization. Once we have a useful
typology. tlie working of each type can be examined under a microscope, so to speak,
to understand what liolds its various elements together, and how they interact to enable
the type to functio~i.A typology also helps us think about the circumstances in which
each type evolves and the consequences of its existence. This knowledge can help us
modify if approximately. This is true of turnaround types. A couple of studies *
illustrate what turnaround types look like.
C
Hanibrick and Schecter attempted to identify turnaround types or designs in their
study of tlie turnarounds of 53 US business operating in mature industrial products
industries. These businesses were rnostly divisions or corporations.Through cluster
analysis they identified three designs, two ofwhich they had anticipated and one they
had not. The largest cluster, of 28 firms, was the one they had not anticipated, the one
they ca Iled piecemeal productivity turnaround. This was relatively high both on
capacity utilization and employee productivity and just about average on 10 other
variables. The second largest of 19 firrns labeled selective productlmarket pruning.
This type of turnaround appeared to be secured by generating cash by liquidating
receivables and inventories. possibly to reduce borrowings, cut in expenses like
marketing, a push on higher productivity (either through incentives or some
downsizing), arid on quality, relatively premium priced products, even iftliis led to
lower capacity utilization. suggestive of a niche positioning. The third cluster, of only
six finns, was labeled asset and cost surgery. This turnaround appeared to b:achieved
by sllarp cuts in R&D, divestiture of tlie older plant and equipment, and reduction in
~iiarketingexpense, with liquidation of i~ive~itoriesand receivables to release further
cash, and a very strong push indeed for higher productivity (probably through large
downsizing) and capacity utilization, that is, for a low cost market position. Of
Hanibrick and Schecter's three clusters, only two were truly multidimensional. These
were selective productJmarket pruning and asset and cost surgery. Of these two, the
Concept of asset and cost surgery cluster had only six out of 53 business. The only 1
Managing Change . multidimensional cluster of note was selective productlmarket pruning, and this may
t11erc:fore be an 'archetypical' turnaround design for mature industrial products
I
1

business i n the US.

Pradip Khandwalla divided 42 'complete' turnarounds from several countries into two
roughly equal groups of surgical turnarounds, involving substantial layoffs, and non-
surgical turnarounds, involving virtually no layoffs. Through cluster analysis he
iderrtifiecl two sub-types of non..surgical turnarounds. The two surgical subtypes were
'surgical reconstructive' and 'surgical productivity/innovation orientation'. The two
non-surgical sub-types were 'non-surgical innovation orientation' and 'non-surgical
trar~sfornlation'.
Thr: surgical reconstructive seemed to be the classic, slash-and burn tumaround,
involving managerial overhaul, mass layoffs, divestiture, restructuring (decentralized),
sharper iiccountability, other structural changes, a marketing push, and product mix
ch;inges(diversification, prodt~ctline rationalization, capacity expansion, etc.). The
surgical productivity/innovationorientation turnaround also involved mass layoffs,
managerial changes, product mix changes, and marketing push, but it was much more
comprel~ensive,with a strong productivity and innovation orientation. It resorted to
giving incentives to staff and motivating them to contribute to turnaround, disciplining
reluctar~tor non-performing staff, new product development, several ways of cost-
cutting (beyond mass layoffs), a strong push for operational excellence through
borrowings and equity, often 1.0fund modernization, diversification and expansion.
T'ne fir:;t sub-type mostly chopped away what was thought to be malfunctioning,
mended the sorry tinancials, restructured, but did precious litle to build up the
p:oductive and innovati\-:,capability of the organization; the second invested in
-
c..;.atinp a strong op-; 2nal and strategic platform for further growth.
?'he non-surgical innovation sub-types invested relatively heavily in changes at tlle
top, innovation and product development, product mix changes, marketing push and
cost reduction (without resorting to mass layoffs). The most compressive the best
performing of all four subtypes was the non-surgical transformation turnaround. It
tleveloped as many as 14 turnaround elements (versus five by the non-surgical
innovative, six by the surgical reconstructive, and 1 1 by the surgical productivity1
i n~lovationturnarounds).
'The non-surgical transformation was a highly participatory turnaround in which a
determined effort was made to involve both the internal and the external stakeholders
in designing as well as implementing the turnaround. There was also considerable
efforl at expert diagnosis of the organization's problems,~professionalizationof
various management systems, and emphasis on core valued. It did not neglect
restn~cturing,changes at the top, product mix changes, cost reduction, marketing
push, productivity push, etc. that are foundational to most turnarounds, but it went
further than any other sub-type in creating a participatory revolution in the
functioning of the organization. In several ways it was prolific in its use of what John
Stopford and Charles Baden-Fuller described as rejuvenation processes.

2.7.,4 Turnaround Performance

Several studies shed light on what makes for turnaround success. In several studies
insitghts were gained by comparing sick companies that were turned around with those
that could not recover or recover as well. Let us look at some of them.
Schendel and Patton did a study of 36 pairs of US manufacturing firms in 20
different industries. In each pair, one firm had experienced a relative decline and then
relative recovery and the other from the same broad industry had experienced decline ,
but no revival. While the tumaround firms reported lower income and sales rates of
 -

change in tlie decline phase, and also lower change in several efficiency and Types of Change
profitability ratios compared to the non-turnaround firms, the figures were completely
reversed in the turnaround phase. The wide range ofvariables of which turned around
firms were superior, compared with both their decline phases and also with the non-
turnaround phase. The wide range ofvariables for which turned around firms were
superior. compared with both their decline phases and also with the non-turnaround
group, suggests that the turned around firms employed a multi-pronged strategy for
turnaround that involved higher rates of modernization, better use of equipment,
greater sales productivity, better cost control, better use of working capital, and better
on sales.
Prudip Khundwallu did a comparative study of five relatively successful Indian
turnarounds and five relatively unsucessful turnarounds broadly from the same
industries. The firms were medium sized. To analyze the cases he used 10 categories
of turnaround action. There were six categories of action in which the number of
actions in which tlie number of actions take by the successes far outnumbered the
nuniber of action taken by the relative failures. These were: initial control (21 actions
versus three), quick pay-off projects and actions (30 versus 1 9 , quick cost reduction
(25 versus I 1 ), revenue generation (27 versus nine), organizational mobilization
(20 versus nine), and internal coordination (nine versus zero). Three categories did not
differentiate significantly between the relative successes and the relative
failures,namely ~hangesin top management (all 10 firms had such changes), initial
credibility building actions, and negotiation of outside support and pressure
neutralization. Neither group tried the asset liquidation route in a big way. Successful
turnaround seemed to result from a new management seizing control over the finances
and operations of tlie firm, hustling in numerous ways, some large, many small, to cut
costs, boost revenues, and improve operations (quality, productivity, cleanliness, etc.)
mobilizing the managers as well as the staff for turnaround through communications,
briefings, brainstorming meetings, and task forces, and ensuring originated reponses
throi~glicom~nitteesand periodic reviews. In short, success came from a highly pro-
active, opportunistic and participatory management of turnaround.
I n his study of 42 turnarounds from different countries, Khandwalla drew out two
sub-samples. One was of 18 fast turnarounds and the other of 20 slower turnarounds.
When tlieir early, middle and final phase actions were compared, some important
differences were noted. In the initial phase, fast turnarounds tended to engage far more
in formal diagnostic activities than slower turnarounds. They also tried harder at
getting tlie si~pportof various stakeholders. And they were more vigorous in taking
market related a~idmanagement control enhancing actions. Thus, fast trackers got
going on a number of fronts while the slow trackers tarried.
In the middle phase, fast turnarounds were much more likely to use incentives and
motivation than slower tu'rnarounds. They were also likely to use participative
management, an emphasis on core values, and other modes of creating organizational
cohesion for turnaround, as well as attempt more vigorously to increase efficiency,
quality, and productivity(other than through modernization and automation). In the
middle phase, too, the fast trackers acted on many more fronts than slow trackers.
Fast trackers tended to pay much greater initial attention to diagnosing the
organization's proble~nsand mobilizing the internal and external stakeholders for
turnaround than slow trackers, and were much more likely to seize control and push
for larger sales early in the game. They also tended to push harder and earlier for
operational excellence than the slow trackers, and that, too, without slackening the
effort at coliselisus building for turnaround. It is possible that attacking many fronts
vigorously led to a faster turnaround.
An interesting point in this Khandwatia study was that while the non-surgical
turnarounds a group outperformed the surgical turnaround group both as to extent and 43
Concept o f speed of turnround, one surgical sub-type the surgical productivity/innovation
Ndnaging Change turnaround --outperformed one non-surgical sub-type, the non-surgical innovation
sub-type. T'nis suggests that mere presence or absence or surgery is not decisive,
though the general advantage may lie with turnarounds without mass layoffs. What
else goes with surgery or its absence - in other words, synergy - can make a large
diffensnce to performance.
What do we make of the scl~olarlyempirical work on turnarounds? As is well known,
pundits seldom agree on anything. and cumulation of knowledge in the human sciences
is impeded by different research approaches, samples, variables examined and their
operationalization, and interpretation of the findings. Turnaround pundits are no
renegades to their race. Nonetheless some inferences, at least at a tentative level, are
possible.
As somebady put it, the eye altering all. Turnarounds to yield rich fresh insights when
the perspective is altered. When economists and finance people look at turnarounds,
they see one face of turnarounds, say, of changes in various financial or cost ratios.
Wlhen strategic managment scholars can turnarounds, they see another face, say of
changes i n business focus, growth and competitive strategies and restructuring for
realigning the structure with a changed strategy. When organizational behaviour
specialisls examine turnarounds, they see still another face, ofchanges in leadership
style. in I-IRD, in how 'people problem' of motivation and conflict resolution are
tackled. .4nd so on. \9/1w! we a n conclude is that turnaround is an extraordinarily rich
medley of possible actions. Numerous sets of only partially overlapping variables can
be developed t- studv it.
.
However. study after stc -Ir so indicates that some turnaround actions have a lot
mc -,. clout than others ;.; I luenc~ng the form and effectiveness of turnarounds. Some
of t 4 - - a + I ful actiol~:, :,: to most turnarounds. They are almost necessary
dr- h - ~
coindrtlcns, and include management changes, especially at the top, and marketing,
cost pruning, better operational and financial control and productivity enhancing
actions. However, there maj be no unique way these basic or foundational actions are
undertaken; each management may deploy them in its own distinctive manner. Another
class of powerful actions seerns to be those that can be termed 'strategic'. Their
deploy~nentis optional, but if any is employed, it can catalyze a lot more turnaround
ac,tions.Expert diagnosis seeins to have this capacity, and also many 'people
management' actions like creating a support base of stakeholders to get them to pitch
in with help, extensive participation of lower levels in turnaround related decision
making, internal communications to rouse the staff and keep them informed, greater _
enlphasis on HRD and motivators, etc. Business strategy actions, too, can have large
catalytic capability, such as repositioning the organization's business, and revamping
ils growth and competitive strategies. Restructuring also may be strategic in its
ram iti1:ations.
TNhy tlo these 'strategic' turnaround actions catalyze many other actions? The reason
rnay be that they touch upon many, possibly all facets of organizational functioning.
'Fake expert diagnosis of sickness causes. It can uncover a broad band of causative
?actors that encompasses pract~callyall the facets of organizational functioning thus
initialing a broadband remedial actlon. Similarly, when turnarounders involve many
stake11olders in the turnaround, again a whole lot of concerns as well as suggestions
for in~provementare likely to arise, and acting upon them may have organization-wide
repercussions. This is obviously true of strategic change, for a change in strategic
intent needs to be implemented by a whole host of operational-wide repercussions.
This is obviously true of strategic change, for a change in strategic intent needs to be
,
impl~mentedby a whole host of operational level changes in marketing, finance,
personnel, and production areas. Restructuring, too, has many ramifications because it
can iilter substantially the power and authority structure in an organization species is
 our creativity, our nearly inexhaustible capacity to improvise solutions.. In turnaround Types of Change
situations this implies the capacity to craft many different turnaround modes even in
very similar context. So long as tlie mindset of turnaround scholars is to look for just
one kind of tur~iaroundresponse to a context, we will continue to underestimate
turnaround creativity. After all, each successful (or unsuccessful) turnaround is an
experiment which can trigger many learning and changes in other turnarounds. Rather
than looking out for ~~nique context-turnaround modes for each contextual condition,
so that they can be compared and provide a choice to the bewildered turnaround
practitioner. This is a major task.
These choices and possibilities need to be compared with what the turnarounders think
turnaround is all about. Turnarounders tend to see their situations as hot seats, and
indeed they are. But scholars clarify the numerous sources of crisis and the
relationship oftliese sources with one another a d with consequential actions.
Turnarounderssee themselves as energizers par excellence who provide a gripping
vision of the future, who act as bridges to various stakeholders, who impose on the
lesser denizens of their organizations new work philosophies, who suffuse them with a
new purpose and energy, who set personal example, who ask tough questions to
shatter relatively under examined preconceptions, who take risks, who differentiate
between the organizational deadwood and what can be salvaged, who build teams,
who empower the lesser fry, who assuage the anxiety and insecurity of the flock, and
so on. This is often so, but these dramatic flourishes camouflage a huge amount of
vital backroom work. It is up to scholars to uncover this work of nitty gritty
implementation, local and lower-level initiative taking, n~cndingoftattered
management systems, tactics in tlie market place, redefinitionsof lower level roles and
relationsliips and so on. Without this work, turnaround flourishes by the CEO may
well resemble vigorous baton waving by the conductor in front of a drowsy orchestra.
And finally, turnaround and also what can be made to happen. It is the difference
between 'fix it, sell it, or shoot it' -the simplistic mantra of Allen Born of Amax -
and the fine-grained constituents of a decline - stemming strategy and recovery
strategy, or the different modes of surgical and non-surgical turnarounds, or
differences between 'strategic' and 'operating' turnaround strategic, and the
differences between the turnaround stages of arresting sickness, reorienting,
institutio~lalization,and growth. During turnarounds restructuring often takes the form .
of decentralization but with sharper accountability, divisionalization, and change in
incentives. This implies that a lot more managers get the freedom to take initiatives,
and these initiates again may mean organization-widechanges.
We noted earlier sonie controvery among American scholars whether 'retrenchment',
meaning Illass layoffs, diverstitures, and downscoping,'isa necessary condition for
turnaround. Evidence suggests otherwise. In Khandwalla's study of42 successful
turnarounds, just about half had not resorted to mass layoffs, and many also had not
divested or downscoped. Even in US studies, asset-cot surgery therefore is likely to be
at best a strategic variable, and a dubiously useful one at that. In Khandwalla's study,
1 significant retrench~nentwas negatively correlated with the rate of improvement in
firm profitability. Thus, firms that retrenche~dtened to be slower in turning around
than firms that did not. On the other hand, attempts to increase operational
effectiveness, expert diagnosis, attempts to rope in various stakeholders in the
turnarounds, improvement of management systems, and use of motivation aids tended
to speed up turnarounds. Thus, retrenchment may often be a negative strategic action,
more a hindrance to turnaround than help.
The studies also suggest that resorting to many, diverse actions rather than just a few
i makes turnarou~idsuccess more probable. That is to say, the turnround battle usually
needs to be fought on Inany fronts. The greater the recourse to 'strategic' turnaround
I actions, t'he more action are likely to be catalyzed, and therefore the more

I c~n~prehe~isive tends to be the tur~iarourldeffort.

lConcept of Turnxounds tend to be rich not only in terms of variety of actions taken but also in
Managing Change
the v,arietyof process activated. These processes include those events than can trigger
off a stron:; turnaround, effort, rnanagment change processes, vision building and
leadership, problem defintion and decision making processes, intervention process
involving (outsidestakeholder, rejuvenatory and mindset change processes, processes
by which the organization empowers itself with new skills, etc. It is when we see
turnaround actions as part of wider organizational processes that we realize what a
flux a turliaround is, a river in which a large number of currents, some horizontal,
some sideways, some vertical, and some diagonal are at play, interacting with and
influencing one another. These processes are the stuff of organisational dynamics.
Alsc. these processes cannot be switched on and off by the people in power. They
have tnon~entumand a futurity and almost inevitably alter the culture ofthe
organization. Turnaround wjsdom lies substantially in unleashing the creative and
gerniinal orocesses and snuffing out the deadlier ones.

--
2.8 P'LANNED CHANGE
The eficiencies of advance tech,nology,the economics of scale and the benefits of
increased inanagerial control have generated substantial increase in the productive
efficiency of organizations and :substantialeconomic benefits to the owners of
organizations and to the society as a whole. These economic benefits, it is argued,
have been responsible for a general increase in the affluence, education and personal
1eve:Isof aspirations. However, ,alongwith positive development, people have argued
that these,changes also have brought higher level of stress, lowerjob satisfaction and
sotr~etimesincrease in attrition rate. It is very important to create an understanding of
the process of change and lay a foiindation for gaining results which have least
possibiliiies of negative effects. Thus understanding planned change is of utmost
importance to the students of management.
"Ijirmly believe that any organization in order to survive and achieve success, must
hme a sound set of beliefs on which it premises all its policies and actions. Next, I
believe t,llat the most importantisingle factor in corporate success is faithful
adherence to those beliej.7. And, Jinally, I believe ifan organization is to change
everything about itself except those beliefs as it moves through corporate life".
(Thomas Watson, Jr.)
"fi10l.7say they learn by experience. Iprefer to learn from others experience".

"Fortune favors the brave".

(Terence)
There are some rules that govern the interaction of competitors, the evolution of
compler. systems and the behaviour of human beings in organizations.
That they are sometimes soft, often derived through observation, usually followed
more by instinct than conscious design, and never wholly deterministic for any given
does not mean we cannot base our actions on them. Indeed it means the
sit~~atiorl
opposite:. The whole purpose of strategic managment is to have the courage so to do,
and thereby to beat not just cornpetition but evolution itself.
However, to do so means using our heads as well as our hearts, pitting others'
experience against our hope, and dealing with reality as it is, not as we wish it were.
Such is life for those who wou~ldlead.
Leaders.are busy for having to deal with the pace of change and intensity of
46 competition that has been thrust upon us in the last few years. Qusy because they are

1
I
,
trying to transform their organization so as to win in this new, hyperactive world. Types of Change
And, all to many of them busy because they are frantically searching for ways to
maintain the competitive health of tlieir organizations.
The primitive hunting party like every team and orga~iizationever since, faced two
immediate challenges:
1. How is it going to deal with a hostile environment of animals and rival hunting
parties so as to provide a superior source of food for itself and its dependents,
and ...
2. How was it.going to organize its members to do that, and then to share the
results in such a way they would be happy to continue the partnership?
The first challe~igedeals with competition in the world external to an organization,
and poses tlie problem of strategy. The second deals with organization, and poses the
proble~nof strategy. The secontideals with pefformance in its internal world, and ~

poses the proble~nof integration.Tlie hunting parties that thrived were those best able
to devise solutions to these two problems. Then, over time, as conditions changes, as
tlie most successfuI combinations of hunting parties and family groups grew in size
because of their very success, as new tools were invented and new more sophisticated
methods of li~~nting and fending of rival grouping were developed, those burgeoning
mini-civilizationsfaced a third challenge- how to cope with change. Evolution had
done its for them in tlie past, but evolution itself implied a huge advantage to a group
whose menlber were able to take advantage of or, even more advantageous, shape
change better than their rivals. So was added a third challenge to the list that all
organizations share:
3. How is it going to deal with changes in either or both of its external or internal
environments, and so cope with the need to change its methods of strategy andlor
its means of integration?
In reality every orga~iizationalso faces a fourth, common challenge, which we didn't
stop to notice because it was self-evident in the very name ofthese earliest simplest
exaniple- families and hunting parties. Why does an organization exist? What are its
purposes? What is it in business for all? And this we call the challenge mission.
So the four, fundamental challenges faced by all organizations are:
a Mission a Competition a Performance a Change
Now what about tlie leaders ofthose early, human organizations- first the hunting
parties, and tlien the tribes that naturally followed them into existence as the
advantages of combining them with their associated family grouping made such
'societies' the most successful? Where did they come from? How did they emerge?
Organizational leadership then is about finding the wisdom and courage to make the
choices that are entailed in answering tliese four, great questions:
1. Mission: what are we trying to accomplish?
2. Comeptition: how do we get a competitive edge?
3. Performance: how do we deliver the results?
4. Changes: how do we cope with change?
Grand strategy is simply tlie name that we give to the all encompassing discipline that
it entails. So grand strategy is an agenda for leadership, not a recipe for management.
It is an agenda with four components but only one aim; and that aim is to find and
keep vital the ultimate competitive advantage- a superior way of running the
organization that ensures mutually supporting solutions to all challenges, all of the
time so that everything is done and every operating decision is made in a pre-
Concept of much overuse and abused term is simply operational management driven by a
Managing Change deliberatellychosen, explicitly articulated and comprehensively institutionalized grand
strategy, as opposes to beirig a collection of response to the tactical exigencies of the
moment.

-7

2.9 WORK REDESIGN AS A TECHNIQUE OF PLANNED

OiRGANIZATIONALCHANGE
There are reasons both for optimism and pessimism about the use of work redesign as
a device fix organizational change. When meaningful improvements in jobs can
actually be made and supported over time, their effects can be powerful. Yet
significant restructuring of work is vey difficult to accomplish, especially under
"normal" circumstances when organizational systems are operating relatively
smoathly Just how feasible is it to use work redesign as a point or leverage for
planned cinange in organizations?
Work redsign has some special advantages in dealing with three key change problems.
The first is simply getting behaviour to change. Many change attempts are based on
the hope that if people's attitudes change, or if they learn better what they are
supposed to do and how to do it, or if they are helped to understand better the
nonobvious causes oftheir and others' behaviour in organizations, then behavioural
changes will "naturally"follow.
Research evidence forces us to be skeptical about such hopes. People do not always
behave consistency with their attitudes or with what they cognitively "know'' they
should do. People who have high job satisfaction do not always work hard and
effectively. And, in most organzations, vast amounts of task-relevant knowledge and
ski1Is are untapped either because people choose not to use their talents in
organizational work or because they do not have the opportunity to.
On he other hand, people do perform the tasks they have accepted. How well they
perform them depends on many factors, including how the tasks are designed. But
people pe:rform them. Redesigning jobs, then, is almost certin to result in changes in
the overt behaviour of the people who hold th&e jobs. I f p changes require people to
know more than they now kriow then they may become motivated to increase their on-
the-job slrills. And if the changes turn out to prompt hard, task-oriented work, the
people may over time develop beliefs and attitudes that support these new work
behaviours.
Work redesign, then does not rely on getting beliefs or attitudes or skill changes first
(such as by inducing a worker to "care more" about work outcomes, as in zero defects
pro:grammes)and hoping that such changes will generalize to work behaviour. Instead,
the thrusl:of the change is to alter behaviour itself. Attitudes, beliefs, knowledge, and
skills will follow these behavio~urand gradually become consistent with them.
Tho second problem of planned change is getting behaviour to stay changes. After
jobs are changed it is difficult fbrjobholders to slip back into old ways of behaving.
The old ways are just not appropriate for the new tasks. Moreover, the requirements
and reinforcements built into the new tasks support the new ways of behaving. So one
need not worry too much about the kind of "back-sidings" that occurs so often after
training cw attitude change activities, especially those that take place away from the
job itself'. The stimuli that direct and constrain the person's behaviour are experienced
right on 1 he job, day after day. And once those stimuli have been changed, they are
likely to stay the way until the job is once again redesigned.
The thircl organizational change problem is getting the changes to spread to other
organizational systems and practices. What happens in an organization is completely
and redundantly detertnined. A change in any single organizational system or practice, Types of Change
no matter liow competently carried out, ca~iliotbe expected to result in a basic
reorientation of liow an orgaliization operates. If overall orga~iizationalclia~igeis
desired,-then- eventually
-- ,. .
iheinitial clianges must spread to and affect otlier structures,
syste~iisand practices.
Cliangcs in jobs invariably place strains on otlier aspects of tlie orga~iization- ranging
from personnel practices and reward systems to the style of orga~iizational
management. These pressures, followed u p witli vigour and competence, can serve as
points of entry for brad-scale orga~iizationalimprovements. Even organizational
practices that previously may be defied at all atteinpts at planned change (such as
compensation arrangements or control systems) may now become amenable to clia~ige
because everyone agrees tliat tliey need to be changed to fit witli tlie new ways tlie
work is being done. And beliavioural science professionals may find themselves freed
liom tlie old difticulty of selling their wares to skeptical managers who are not really
sure anything is wrong - or, if there is, tliat tliey want to liear about it.
Much is recli~iredfor competent organizational cliange and for following up
and d iffils ing changes tliat are made. There are many more "change proble~ns"
than tlie three -getting behaviour to cliange, getting it to stay changes, and
getting the c l ~ n g e to
s spread.-are critical. And for tliese problems work
redesign has sonie special advantage in co~nparisonto other organization .
development approaches.

2.9.1 Alternative Uses of Work Redesign

Our suggestion tliat work redesign can only occasionally be used to
"tun1 arouncl" intact work systeliis cot~ldbe-taken as an occasion for great pessimism.
Indeed. one conclusion could be that we should give up on job redesign as a change
strategy. This appears to be the view of Dr. Hamy tevinson, as well-known
management psycliologists, as reported in theblew York Times article
reproduced in Exliibit 1.

Exhibit 1.
Giving Up on Redesigning .lobs: One Consultant's View

If you're a boss and grumbling eniployees cause you sleepless nights. forget it.
That's the advice of Harry tevinson, a Mallagemelit psycliologist. Reporting in a
recent issue of his Levi~isonLetter, Dr. Levinson says that most e~nployees
eventi~allyget sick of tlieirjobs and tliat tliere is really nothing anyone can do for
them.
"The quality of work life call be improved in small ways. Dr. Levinso~isays, "but
flexitime, worker participatio~iand ihnproved working conditions don't cliange the
basic nature of tlie work. Most work is repetitive, routinized and boring. No job can
be endlessly enriched".
One of the principal tasks of any good manager, Dr. Levinson advices, is to help
e~iiployees"accept the realit~esof tlieirjob li~nitation".He cites a study by Herbert
Greenberg. president of tlie Marketing Research Corporation, wliicli purporets to
show tlia180 per cent of a11 American workers in every job category have jobs for
....
wliicli they are i~nsuited
"They are", says Dr. Levinson, "simply stuck". "A good boss", he contends, "will
help si~cliemployees reconcile themselves to tlie fact tliat they are stuck". "But", lie
concludes. "boredom is a reason, not an excuse, a!id when dissatisfied e~nployees
eannot shape up, tliey must go".
Lest we be misunderstood, let us emphasize that we do not concur with what
Dr. Levinson seems to be saying - namely, that the cause is hopeless, that work
redesign should be abandoned as a point of leverage for personal and organizational
change. For one thing, sometimes organizational circumstances are such that it is
possible to use work redesign to initiate substantial changes in work systems.
What, then are the alternatives to using work redesign as an "organization
dekelopl-nent" technique? Three possibilities are re-viewed below.

2.9.2 Designing New Organizational Units

The use ofwork redesign as an organization development technique and its proble~ns
stems pr~marilyfrom the difficulty of getting changes in jobs to take root and prosper
in relatively stable, ongoing organizational units.
When, however, new organizations are designed (or when there is a major
reorgani:tation of an existing unit), it is possible to design organisational systems,
stri~ctures,and practices from the ground up, and to design them in a way tliat
supports rather than undermines nontraditional work structures. The result can be
substa~itialinnovations in the design of work that have powerful and beneficial effects.
At mininium, an organizational structure provides the following:
a Means for managing organization-environment relations, including responses to
environmental changes (in the laboi~rmarket, tlie competitive environment, or
rrg~~latory
c~ntext).
a Means for coordinat ;ng organizational units and assuring an appropriate flow of
infr~rmationand infl*mce - both up and down the organizational hierarchy and
IatcraD1y across a;:,,'! ent fllnctional and substantive areas.
a Mcans for suppxting and managing the work activities or organization niembers
- providing direction, information, supplies, technical assistance, and so on, to
those who are actually generating and goods or services tliat the organization
exists to produce.
*
Traditiol~alwisdom about organizational design suggests that the structure of an
organization should be responsive to (1) the imperatives ofthe core technology ofthe
organization, (2) the demands and opportunities in the environment (including how
stable and predictable the environment is), and (3) the strategic directions for the
organization that have been selected by top management. Tlius, the shape of an
organization that produces inexpensive furniture for a stable mass market using
production line technology would be quite different from that of an organization tliat
produces hand-crafted custom furniture in response to special customer orders.
First, the strategy oftlie organization would be determined by top management. Based
on the properties oftlie organizational environment, the position ofthe organization in
its market, and the goals and values of management, tlie major aspirations and
performance objectives oftlie organization as a whole would be specified.
Second, designers would identify those special resources and constraints in tlie
organizations and its environment tliat bear on the accomplishment oftliese strategic
objt-ctiu:s. These might include tlie availability of special work technologies,
regulatory constraints, the supply of capital, the character of the labour market, the
level of managerial talent available and so on.
'Third, explicit consideration would be given to how the work should be arranged to
contribute most directly to the accomplisliment of strategic objectives given any
specific resources ofthe orga~iization(sucli as a readily available pool of skilled
wol-kers)and any constraints within which it must operate (that only a single type of
technology is viable for the kind of work that is to be done, for example).
F inally, attention would turn to alternative structures for si~pportingand managing key Types of Change
work activities, for coordination and controlling organizational units, and for
managing organization-environme~it relationship. Decisions about these matters would
follow from. and be respo~isiveto. tlie three issues highlighted above: the strategy of
the organization, special resosurces and constraints, and tlie design of core work
activities.

2.10 CHANGE: THE CHALLENGE OF

TRANSFORMATION
"Managing Change" is tlie name given, in cornillon with many others, to the
generalized version of tlie management paradigm that is taking place of "Command
and Control" as tlie new era begins. I n a world of increasing uncertainty, change is a
journey \vitIioi~ta tangible destination. We know little more about where it will take 11s
than that. at its end, we will have to be able to go on managing change better than any
of our competitors if we are to survive and prosper over the long haul. Like a nomadic
tribe, the modern corporati011maintains its competitive health internally by the endless
renewal of its capabilities, and exter~iallyby continual migration to markets where its
capabilities, old and new, can sustai~iit. The organization, its competitors and its
markets are in constant flux. The winners are those dynamically able to develop
distinctive capabilities, with special value, to particular parts ofthe market-place.
Fi~iancialperformance is the nieasure of success at doing this at a particular point in
time. Sustained tinancial performance is the nieasure of success at doing it over time,
i.e.. of tlie superior aoility to change in a competitive world. Where the old
management paradigm, "Cornmand and Control". Was eminently suited to a static
world, the new management paradigm, "Managing Change", is the destination as well
as the transition process of the transformation projects all of tlie world's business
enterprises ~ieeclto undertake, and o~ilya few have really begun.
Grand strategy is the ovrarcliing discipline tliat deals with defining and refining the
way an organization is managed so as not just to succeed in the current period, but to
maintain its competitive Iiealth into the indefinite future. When faced with massive
change in multiple aspects of the competitive environ~nentthe steady, continuous
refinement of an organization's management paradigm, that typifies the leadership
task in stable times, will not longer suffice. Now the very assuniptions on whicli the
paradigm rests are changing. Now so~netliingmore dramatic, more discontinuous,
more far reaching is needed. Tliis "something" is transforniation - of tlie way the
organization is managed, of its busi~iessprocesses, oftlie behaviouc of its people, of
its use of information teclinology, ofthe way it treats all its stakeholders and ofthe
way it is competed; in other words tlie development and adoption of a wliole, new,
grand strategy suited to a whole, new, economic order.
The shift from one economic long wave to the next is tlie definitional time of
transformation for business. Thus tlie particular from that grand strategy takes in such
a period is businesses transformation. It was seen how, each of previous times this
have happened, there have been equally fi~ndamentalchanges, first in the industries
tliat drove tlie economy, and then in tlie busi~iessenterprise itself and the way it was
managed. One more time a generation of business leaders face the challenge-to
transform the way their organizations are managed, to make them the winners in a
new. this ti~iieglobal, economy.

The Process of Transformation

We start by taking the first two dimensions of competitive health strategy and
integration -and use them to define the axes of a two dimensional chart. Then we
Concept o f imagine ourselves as an organization in trouble without a winning strategy and in need
Managing Change
of a process, for bringing about internal integration. In other words, we are in the
bottom, left-hand corner of the chart, wanting to get to the top right - which is reached
by having a well defined, fully detailed set of strategies and a well aligned smoothly
operating organization (see Fig. 1).

INTEGRATION
Fig.1 Process o f Transformation

The first step up the strategy axis is to define business concept, or Participation
Strategy. ?'his comprises a basic definition ofthe business and where in the industry
we will participate, i.e., where we're going to compete. The second step is to develop
an Operatiiig Strategy, or how we're going to compete, down to the level of detailed,
product/market, functional and geographic plans. These are not discrete, sequential
steps. since what we are practically capable of doing, or becoming able to do, and
wherc: thesze capabilities have value, are directly connected:However, we have to
start r;ome\vhere.So, in practice we undertake an interactive process, hypothesizing
first a desired participation strategy based on our aspirations and understanding
of the competition, technology ar~dmarket place. Next we attempt to develop an
operating strategy that can be demonstrated to the value-creating. Then, on the basis
of this learning, including early experience of product development and market
participation, we adjust both participation and operating strategies unti I we
have iifeasible whole.
Simil.arly,now looking at the Integration axis there are two steps to tlie desired, fully
integ~.atedorganization. First we must build a Top Team to exercise leadership and
personality the behaviour we are going to demand ofthe whole organizations.
This team rnay sirnply be comprised of the direct reports to the organization's leader.
More usually it is longer than that, including the key managers from the next level of
tlie organization. It is rare that it rlu~nbersless than twelve, and impractical that at
least its core much exceeds forty. The goal in composing it is to include the
critical mass of power wielders arid opinion leaders needed - first to ensure the
credibility ofthe team's pronouncements, and second to bring along the rest of
the organiz;ition.
The second step along the Integration axis is to expand tlie core team to cover the
whole orgai~iizationand everything that goes on within it, with particular
emphasis on all the aspects of the way people relate to each other and are
manal:ed. P s with strategy, in practice this must be an interactive process since the
ideas of the leadership need ultimately to be owned by everyone iftrue alignment
throughout the organization is to be achieved. Now we can fill in the lines
and define the nine boxes of what has come to be called the Transformation
Matrix (see Fig. 2).
 Operating
Strategy

Participation
Strategy

Top Team Aligned

Organization
b
\~
INTEGRATION
Figure 2: The Transformation Matrix-]

Tlle first thing to recognize about this matrix is that every surviving organization was
at some time in the top right hand corner having achieved Strategic Integration - a
well aligned organization, with a fully detailed, operating strategy being implemented
to deliver f ~ ~ ldetailed,
ly operating strategy being implemented to deliver strategic
success. This is a very important insight for two reasons. The first is externally
focused. Every single one of our surviving competitors was once also in that top right
box. Moreover, if we are in trouble there is a good chance that one of the reasons is
that at least one ofthose competitors is still there! A healthy respect for one's
co~npetitorsis mandatory to maintaining competitive health.
The second is internally focused, and has two, rather paradoxical parts. It reminds
those of us who are in trouble that just because we've got problems it doesn't mean
we're failures. We did it right once, we ought to be able to do it again. But it also
requires us to recognize that the biggest barriers to getting it right again is the
institutionalized character ofthe way we got it right before. We are probably in
trouble because our success locked us into "the way we do things around here". And
when the assun~ptionson which we'd build that paradigm ceased to be valid, because
of shifts in the external and internal environment, we failed to change with them.

2.11 SUMMARY
In this unit types of changes are explained and a detailed description of how
turnaround management can be applied is given and finally process of transformation
has been explained.

2.12 SELF-ASSESSMENT QUESTIONS

1) Describe different models ofchange, which focus on the individuals.
2) Explain the ten dimensions which bring about organisationalchange through role
efficacy.
3) Explain OD as a useful model of change.
4) What is process consultation? Explain.
Concept o f 5) Explain the seven pahses ofwork redesigning, as suggested by Nitish De.
Managing Change
6) Discuss in detail how turnaround management can be applied for an
organ isation.
7) Describe as to how to plan change in an organisation.
8) Expl;lin the phase oftransformation in bringingchange in the organisation.
--
--
2.13 FURTHER READINGS
N.A, Flanders pioneered work on change through feedback, reported in his volume
AnaiIvsing Teacher Behaviour (A.ddison-Wesley,1970). Udai Pareek and T.V. Rao have
reported results of work done in Indian in "Behaviour modification in teachers by using
feedback using interaction analysis" (Indian Educational Review, 197 l,6(2), 11-46).
An excellent account ofdevelopment ofachievement motivation in an Indian town is
available in Motivating Economic Achievement (Free Press, 1971) by D.C.
McClella.ndand D.C. Winter. Prayag Mehta has described in detail the work done on
dev'elopingachievementmotivation in high school boys in DevelopingMotivation in
Education (NCERT).
Developing role efficacy and other role-related interventions have been discussed in
detail in Udai Pareek's Making ~ r ~ a n i i a t i o n~aol l eEffective
s (Tata McGraw Hill,
1973).
Or:<aniztationDevelopment by W.L. French and C.H. Bell (Prentice HaU of India,
1983) is a good elementary book on OD. Edgar Scheins' Zvolume edition of Process
Consultcztion(Addison-Wesley, 1980) is an excellent source on process consultation.
Nil ish Ce's Alternative Designs of Human Organization (Sage, 1984) contains
:sc.c:ient material on work redesigning in different settings.

-. . *,.
..
tiil.ttt?cha: ..ly;z has done pioneering work in organizational structuring, some
!;i,,is2,:i.lA.. d :vhich is ara;ldble in l\funaging Orgunizational Change edited by
\:-::-.:i:::i: '
CIuttopad!?yayand Ud,li Pareek (Oxford & IBH. 1982). Chapters arid 6.
.. . 'i'.ilicsh;.;?r~'s plone-:ring \horL, !:: MBC) is ilvailahle in h ~ :Vicmapir.g
s I,r3
~ , ~
., .,
.
, > ;,.:-.i,
1:. .;.:- {Tata McGraw-Hill. i 98f! >