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ORGANIZATIONAL TRANSFORMATION Refers to drastic changes in how organization functions and relates to its environment. It is the creation and change of a whole new form, function or structure, culture, mission or vision. In other way, to create something new that has never existed before and could not be predicted from the past. Org. Transformation is a change in mindset. It is based on learning a system of profound knowledge and taking actions based on learning with knowledge and courage. OT may or may not be developmental. OT tends to use directive, not participative, approaches to change. top-management driven. Requires shared vision, willingness to clean house, restructure, tackle many problems. OT tends to be shaped by use of power rather than collaborative approaches.
Meaning of transformation
The Greek word metanoia captures the meaning of transformation well. It literally means beyond the mind. Its an idea of stretching or pushing beyond the boundaries with which we normally think and feel. It means a profound change in mind a radical revision a transformation of our whole mental process a paradigm shift. As one company leader commented, transformation is two words, a mind transplant.
Awakening:-Transformation begins with the awakening by individuals within the organization. It may come from the outside also. The awakening begins with a challenge, a question. It brings questions not answers. It is not a new way to do business; it is a new way to develop thinking about how to think, manage and lead. It is the realization on the part of the individual that, in spite of best efforts, they could do better something much better. Intention:-Transformation occurs with intention. This intention provides purpose. Intention is the conscious choosing of a course of action. It is not something that happens to someone (or to an organization) without its knowledge and consent. It is commitment deep and thoughtful commitment. Learning must be continual :- that means its never ending process.
Change is Triggered by Environmental and Internal Disruptions:in most cases, organizations must experience or anticipate a severe threat to survival before they will be motivated to undertake transformational change. Such threats arise when environmental and internal changes render existing organizational strategies and designs obsolete. The changes threaten the very existence of the organization as it presently is constituted. Transformational change occurs in response to at least three kinds of disruption: 1. Industry discontinuities
sharp changes in legal, political, economic, and technological conditions that shift the basis for competition within industries
changes in size, corporate portfolio strategy, executive turnover, and the like. These disruptions severely jolt organizations and push them to alter business strategy and, in turn, their mission, values, structure, systems, and procedures.
Change is Systemic and Revolutionary:Transformational change involves reshaping the organization's culture and design elements. These changes can be characterized as systemic and revolutionary because the entire nature of the organization is altered fundamentally. Typically driven by senior executives, change may occur rapidly such as structure, information systems, human resources practices. Change is Driven by Senior Executives and Line Management:A key feature of organization transformation is the active role of senior executives and line managers in all phases of the change process. They are responsible for the strategic direction and operation of the organization and actively lead the transformation. They decide when to initiate transformational change, what the change should be, how it should be implemented, and who should be responsible for directing.
0T is a response to environmental changes, where as OD was initially motivated by will of management. Transformation is revolutionary than evolutionary as in OD. In the other words , the new state is envisioned that fundamental different from the old one. Transformation involves a qualitative step in the way people think, perceive and behave, and not just changes to documents rules, policies and so forth.
Southwest Airlines After decades as the airline industry's example of growth and profitability, Southwest Airlines hit a rough spot in 2009. It had hedged against rising oil prices by buying reserves, then oil prices plummeted, leaving the company with losses in the hundreds of millions of dollars. The company responded by transforming itself into a business-class airline, teaming up with other airlines to offer low fares and expanding its service to include overseas flights. The company that once operated as a industry-wide growth organization transformed itself into a company focused on niche markets. Transformation can mean cutting back and refocusing. Starbucks Starbukcks did not transform itself -- it transformed an industry. Founder Howard Shultz was impressed with espresso bars in Milan and decided to create a shop where a sense of community was as important as the coffee. The resulting phenomenon of Starbucks is testament to the fact that influencing the customer's perception of your organization can be as important as what you sell. Many times, organizational transformation involves intangibles.
New Technology Some companies, such as Nokia, have undergone transformational change by changing their core products or focus as new technology comes along. As of 2011, Nokia is one of the world's leading makers of cellular phones, yet the company began in 1865 as a paper mill. Following World War II, Nokia entered the telegraph and telephone business as a cable manufacturer, and in the 1980s Nokia was a television manufacturer. Nokia transformed itself into a manufacturer of cell phones during the Finnish recession of the 1990s, when the company streamlined its business to stay profitable. The publishing world is an example of an entire industry undergoing transformational change associated with new technology, as desktop publishing has allowed small publishers to thrive and has led to book publishers, newspapers and magazines selling content online. Product Restructuring Restructuring products is another way for companies to transform. One example of a company that achieved transformational change by altering its product line is Apple Computer. In 1996, Apple was losing money and had very little market share when it purchased former owner Steve Jobs' software company, NeXT. In 1997, Jobs become CEO of Apple and began restructuring the product line, placing greater emphasis on style and the use of proprietary operating systems, rather than systems it licensed from other designers. The transformation to focus on quality and innovation led to a return to prosperity. In 2011, Apple was the third most valuable company in America.
Market Repositioning Some companies undergo transformational change in order to reposition themselves in the market, or to re-brand themselves. McDonald's is one example of this. In 2006, McDonald's suffered its first-ever quarterly loss, and the company was under fire from anti-obesity and anti-junk-food campaigners. Under direction from CEO John Skinner, McDonald's began transforming its culture, adding espresso drinks and healthier menu items and updating the look of its stores -- focusing on what its customers really wanted. By becoming more customer-focused, McDonald's built a culture of caring and empathy that brought it back into profit. Transformational Leadership A transformational leader is often responsible for challenging an organization's existing structure and inspiring employees to work harder and take the company forward. These leaders bring about transformational change through their vision and drive. One example is now-retired IBM CEO Lou Gerstner. In 1983, IBM had $8 billion in losses and was close to bankruptcy. Gerstner felt IBM had become too rigid and unable to change or adapt, and he set about changing the culture to one of teamwork, creativity and innovation. Gerstner fostered cooperation among employees and made the company more customer-focused. He did this by making tough decisions, sticking with them and modeling the behavior he wanted to see.
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