Posted at 10.08.2018
Nike has been finding it difficult to find a replacement for Philip Knight, the creator and long time CEO of the organization.
The reason for this statement is to explore possible management and control styles with regards to William Perez's role as the new CEO of Nike. This statement identifies the techniques related to change management and tutorials Perez through organizational transformation processes in order for him to have the ability to fulfil his role as CEO of Nike.
This report strains the value of organizational development and transformation. Issues tackled in this report are the culture of the business, different control styles, the composition of the organization, the functions of organizational development and future tips.
Organizational Transformation's main aim is to help an company become more healthy and effective, especially during change. The key custodians of company health are not the inner or external HR or OD specialist; they are the organisation's market leaders and managers. Holbeche, L (08-09).
Organizational development is a planned method of organizational change made to enable a business to respond and adapt to changing market conditions and also to set a new plan. Organizational development is generally linked to corporation structure, which can respond either as an permitting or restrictive system for change. For organizational development to succeed, any plans or strategies launched must match the corporate culture.
In practice, Organizational Development may take on many varieties, and typical OD activities range from some of the next:
Culture is comprised of the assumptions, beliefs, norms of firm participants and their behaviours. Participants of a business soon come to sense this culture of a business. Edgar H. Schein stresses that, "When one brings culture to the amount of the organization and even right down to groups within the organization, you can see obviously how culture is established, embedded, advanced, and finally manipulated, at the same time, how culture constrains, stabilizes, and structure and interpretation to the group members. These dynamic procedures of culture creation and management will be the essence of management and make one recognize that control and culture are two edges of the same coin. "
Organizational change has a minimal success rate and it is critically important to obtain it right, this is support by Cameron who suggests that, "The failure rate of most organized organizational change initiatives is dramatic. It is popular, for example, that as many as three-quarters of reengineering, total quality management, strategic planning and downsizing attempts have failed completely or have created problems serious enough that the survival of the business was threatened".
According to Edgard Schein, "Organizational learning, development and designed change can't be known without considering culture as the principal source of amount of resistance to improve. "
Culture can be divided directly into three levels, artifacts, espoused principles and basic assumptions and principles.
Artifacts will be the surface, the aspects which can be easily determined but hard to understand. Artifacts are the manners of address, the kind of language used, the gown code. It really is vital never to judge exclusively by the Artifacts, one may see Google personnel as relaxed, enjoying their time at the job, having fun and bounce to the conclusion that they are inefficient, this being not very true. Artifacts also include buildings, furnishings, configurations, PR, rituals, Objective, stated principles and technology.
Beneath artifacts are the Espoused Values, they are the mindful strategies, goals and philosophies and ideology of the business.
The substance of culture is symbolized by the basic underlying assumptions and principles which can be difficult to discern because they are essentially at an unconscious level. That is also called the hidden values and assumptions or shared tacit assumptions.
Nike has already established an evolutionary culture as opposed to a groundbreaking culture. It is rolling out over many years without great intervention or change. Most of the key employees have been with Nike for many years and 'outsides' sense they have got 'their' way to do things. Nike is based on authenticity. Perez must be sure Nike is prepared for organizational change and that is correctly executed. As Drucker argues, "a good corporation structure may not always bring about a good performance, but a bad organization composition makes a good performance impossible no subject how good the workforce is. " Perez must understand Nike's main values and maintain them, things like the connection of Nike with key sportsmen from round the world and targeting the athletics segment of the clothing industry.
Leadership performs an important role in any organizations development. The personality of the leader and his style of command can determine the extent to which the organization will develop. Perez must be visionary and have the capability to influence others in order to bring about the required change to Nike. The leader can either reduce amount of resistance to change, or raise the stresses for change, or be considered a pressure for change. Knight would have helped condition the organizational culture; he has his own influence on Nike's culture predicated on experience and personality.
In order for employees to become more efficient Perez must provide staff with a spirit of involvement, motivate them through co-operation and be willing to learn from the organization. Analysing different varieties of leadership will help improve understanding and recommend which style Perez must choose.
Different control styles include: Authoritarian, Participative, Laissez fair also known as Delegative or Genuine.
This style is where leaders tell their employees what to do and how to undertake it without talking to or negotiating with employees. This is often found within the army on the battlefield or by a chef in a kitchen. It isn't to be confused with bossing people around, the leaders that take up this style often need to and it could be the best style specifically situations. If the first choice has time and desires to increase moral, stimulate the employees and gain more dedication then they should use the participative style.
The participative authority style, also called democratic, involves the first choice including a number of employees in the decision making process. Even though the first choice consults with employees or managers to know what to do and the way to do it the leader maintains the final decision making power. Leaders that adopt this style gain the respect of their workers.
Laissez good or the management design of delegation style is often viewed as giving a free of charge reign to employees. The first choice allows the employees to make decisions. However, the first choice is still accountable for the decisions made. Employees have the ability to analyse the situation they are confronted with and decide what needs to be done and exactly how to perform it. The first choice cannot do everything therefore delegates jobs and prioritization duties. This style is frequently used where in fact the leader knows and trusts his professionals.
A good head uses all three styles, reliant upon the situations requirements. For example Perez could adopt the authoritarian style of control with new employees, in order to form them to fit their job role and develop/settle in quicker. He may use the participative style with a team of individuals, though he knows the condition he might not exactly have everything, the employees have encountered this situation before and can be still left to take care of it.
Perez can adopt the delegative methodology when confronted with a situation where in fact the employees know more than him. For example with a team of staff that have a highly specialized jobs, such as those in the R&D section. They know their job and are best still left to do it, provided they may have demonstrated their efficiency jointly and have recently made accurate decisions, acting responsibly.
The control style used by Philip Knight was largely the genuine/laissez-fair design of leadership. Many of the employees got matured by his part over time, he had given his professionals the flexibility to make their own decisions and this had been proven successful for Nike.
The organizational framework is the formal system of task and reporting romantic relationships that adjustments, coordinates and motivates employees so that they can cooperate to achieve the organization's goals. Framework enables the business to apply the procedure of management and creates a hierarchy of demand rendering it clear for employees to identify their functions and tasks they are responsible for within each team. In small organizations there is less intricacy than in much larger ones, which means dependence on a structure enhances with how big is the organization. Drucker argues that good organizational buildings do not necessarily lead to good performance but a bad organizational framework makes good performance an impossibility, regardless of how good the employees are.
The manager's obligation is to set-up an organizational composition and culture that motivates employees to work hard and develop themselves and allows groupings to cooperate effectively.
Large organizations are significantly marginalizing the role of their founders. The founders of both Yahoo & Dell have been changed by professional managers at the shareholders demand.
An corporation can be split into several divisions such as creation, marketing, finance, R&D etc.
According to Wall structure (2004) there are five organizational buildings, included in these are: international department framework, international geographic/regional structure, international product structure, international functional composition, matrix or mixed structure.
Philip Knight used the Matrix composition. This includes the functional, physical and product structures and combines them in an attempt to meet the needs of a particular activity or job. Once that activity or job is completed, the 'team' is often disbanded and return to their original position within the divisional or other set ups of the organization. Employees report to different bosses in several departments to perform the different tasks.
Management of change ideas have been conceptualized to answer how successful change can happen within an business. It identifies changes in the task environment that necessitates the workforce to make certain adaptations to way they are being used to working. The ability of an organization to adapt to change is vital for successful organizations such as Nike, if not properly put in place the business could face huge problems. In order to execute change effectively, obstacles such as level of resistance to change must be successfully removed. The need for organizations to adjust has become vital to their survival, however individuals or groups in several departments have different ideas of how tasks should be completed therefore a common eye-sight must be shared by all for the change to reach your goals, this can be very frustrating.
Organisational Change Management issues are often under-estimated or overlooked entirely. In fact, people issues collectively account for the majority of project failures.
This study by KPMG viewed disastrous projects. Among the questions called for the prime cause of the failing of change implementation.
Although the effect did not point out "people" as the cause, it is interesting to notice that lots of of the complexities were to do with the behavior and skills of the members. Arguably all however the "technical issues" were related to the features, attitudes and behaviour of people.
Lewin (1951) unveiled the three step model for successful change management. The first rung on the ladder along the way is called unfreezing the problem.
Unfreezing is necessary to overcome specific resistance and group conformity. This is achieved in 3 ways. Firstly by increasing the driving a vehicle forces that direct behaviour from the situation. Subsequently, by lessening the restraining forces that negatively have an effect on the change. Lastly by finding a blend of the first two methods. These steps can include activities such as motivating the employees by getting ready them for the change, motivating and reassuring them of the need for change and make the employees donate to the change process by assisting identify problems and brainstorming alternatives.
The second step of Lewin's model for change is movement. This transformational process is made up of convincing the employees to concur that the existing situation is not beneficial to them and cause them to become look at the problem from another point of view. The employees should really know what the change is actually for, most avoid because they're unaware why the change is taking place or needed.
The third step is refreezing, this must happen after the change has been implemented in order for it to be sustainable, in any other case employees can revert back again to their old behaviours. This step stabilizes both the traveling and the restraining pushes. This can be achieved through the launch of strategies for the employees. This would also help new employees will find it easier to fit in with the organization.
Lippitt, Watson and Westley (1958) prolonged Lewin's three step model to add seven steps. This centered more on the role and responsibility of the change agent than on the development of the change itself.
Lewin's model is rational and goal focused. It is however limited because it does not consider personal factors such as human feelings that make a difference the change process. Lippitt's Stages of Change can be an extension of Lewin's Three-Step Theory. The concentration is on the change agent rather than the change itself. Lewin analyses the pushes that effects change.
Cummings and Worley (2008) have identified the next activities adding to effective change management.
Motivating change is the stage in the successful execution of change. Determination is vital because changing from the 'norm' is undoubtedly a daunting experience. Employees feel their future in the organization is uncertain. They must believe that the change is essential, this way they'll understand they are area of the change process and help this occur.
Creating a eyesight is the next phase. That is done by the first choice and provides a goal for those employees, allowing them to understand what the change is ideal for and how it will benefit the entire organization.
Develop political support. Organizations are made of powerful individuals and communities that can either block or promote change. Individuals within the organization have different pursuits, views and concerns about how exactly the change may influence their positions and levels of authority of their groups. Leaders and change realtors need to get their support to put into action changes.
The fourth period is handling the changeover, this is moving from the existing state to the future state. This isn't an instantaneous process, it requires the organization to find what direction to go with the implementation of change directly into reach the target. That is done through the look of special management set ups for operating the organization during the changeover.
Sustaining the momentum is the ultimate stage. Once the changes are executed there should be a continued emphasis in retaining them. This period is the same as Lewin's refreezing. The employees might return to their earlier behaviours if the changes aren't sustained.
Resistance to improve is what individuals or organizations do when they understand that a change that might occur is a risk. The risk of change is seen as greater than the chance of standing still.
Employees avoid change because they need to learn something new. In many case there isn't a disagreement with the benefits associated with the new process, but instead a fear of the anonymous future and about their capability to adapt to it. Folks are unwilling to leave the familiar behind. We are all dubious about the new, we are naturally concerned about how we will get from the old to the new, particularly if it entails learning something new and risking failure. Resistance to improve is thought as the fear that you will never be in a position to develop new skills and behaviours that will be required in the new working environment. Relating to Kotter & Schlesinger (1979), if an employee has a low tolerance for change, the increased uncertainty that arises as a result of having to execute their job in a different way would likely cause a level of resistance to the new way to do things. A worker may understand that a change is needed, but may be emotionally unable to make the transition and avoid for reasons they may well not consciously understand.
Resistance can maintain positivity in certain situations. Professionals see resistance as negative and the employees who withstand are regarded as disobedient and hurdles the business must overcome in order to implement the changes. However, employee amount of resistance can play a confident role in organizational change. Constructive criticism and debate can produce better understanding as well as additional options and alternatives. de Jager (2001) remarks, "the theory that anyone who questions the necessity for change comes with an attitude problem is simply incorrect, not only since it discounts past accomplishments, but also because it makes us vulnerable to indiscriminate and ill-advised change'.
Kotter and Schlesinger (1979) set out six approaches to deal with resistance to change.
Education and Communication are essential. One of the better ways to overcome resistance to change is to teach people about the change effort beforehand. Up-front, genuine communication and education helps employees start to see the logic in the change effort, this reduces unfounded and inappropriate assumptions and rumours regarding the effects of change in the organization.
Participation and Involvement of employees. Where the initiators do not have everything they have to design the change and where others have appreciable power to avoid. When employees are involved in the change effort they will approve change than resist it.
Facilitation and Support is important as employees may have adjustment problems, by the professionals being supportive at difficult times they can avoid potential level of resistance. Managerial support helps employees deal with anxiety and stress during a transition period. Special training or counselling can help ensure the staff do not perceive the change as damaging.
Negotiation and Contracts help managers' combat resistance through bonuses to employees not to resist change. This is done by allowing change resistors to veto components of change that are intimidating, or change resistors can be offered bonuses to leave the business through early on buyouts or retirements to avoid having to go through the change effort. This approach is suitable if all else fails and the ones resisting change are ready of power.
Manipulation and Co-option can be used when other strategies do not work or are very costly. Kotter and Schlesinger $time$&page quantity- suggest that: "an effective manipulation strategy is to co-opt with resisters. Co-option will involve the patronizing gesture in delivering a person into an alteration management planning group for performances alternatively than their genuine contribution. This often will involve selecting market leaders of the resisters to participate in the change effort. These leaders can be given a symbolic role in decision making without threatening the change effort. Still, if these market leaders feel they are simply being tricked they will probably push resistance even further than if indeed they were never contained in the change effort authority.
Lastly Jotter and Schlesinger argue Explicit and Implicit Coercion can be used. Where circumstances happen that speed is completely essential and also to be used only as last resort. Managers can explicitly or implicitly force employees into receiving change by causing clear that resisting change can result in losing careers, firing, transferring or not promoting employees.
In today's overly busy world the capability to change and innovate is key to survival, the tactical recommendations have been made after extensively analysing Nike together with different solutions and strategies from several reputable academics. Change is inevitable and it is human to withstand anonymous, however this research shows that with the right preparation and tactical systems in place you'll be able to overcome and successfully implement changes that will lead to the organization developing in line with its eyesight and mission. The suggestions below will support the conclusions drawn from the above mentioned analysis and research.
On the basis of the above mentioned analysis I recommend Perez proceeds with the transformational strategy, while monitoring and revising it occasionally.
The change must start at the top. Philip Knight possessed his methods of running the business which have demonstrated successful as received the support of the employees. Though Perez is experienced he has a very different way of performing, he cannot expect the employees to follow his business lead from day one, he must adapt to match the business and gain the acceptance of the employees.
Perez should familiarize himself with the business; he must understand the current culture to be able to devise an idea to improve this. If he tries to effect a result of change too quickly this will most probably fail as Nike is an organization with a well founded 'pop' culture which developed over ages under Knight.
An businesses team should be created and meetings planned where the requirements should be set-out to enable the employees to be engaged, this increasing drive and offer all stake holders with a feeling of possession of the transformational process.
A responses system must be created to help the employees feel more comfortable and know their views are taken into consideration. The transformation process must be clear with the employees understanding and being involved in the change strategy. Adapting the culture efficiently will be difficult as much of the employees have put in almost all of their opportunities working within Nike, it has become part of who they are, but getting all the employees up to speed will reduce the resistance to change. The responses must be monitored, staff assurance levels should be checked. When they show the first indicators of dropping faith their problems must swiftly be attended to.
Training employees is vital; to encourage drive, increase self recognition and productivity encompassing their new tasks and responsibilities. This will also help maintain the transformation.
Perez must agree with Knight exactly what his role in the organization is. This can avoid any problems in the foreseeable future running of the business. The duties of both, and the levels of expert must be clear and not overlapping. Founders are often difficult to displace, they start to see the company as something they can intervene in every time they want. This however has proven to be harmful to business and has caused some catastrophic occasions. This has been done to many founders of huge organizations such as Michael Dell within the Dell business. The founders of Yahoo, Jerry Yang and David Filo are no more directly mixed up in management of the business. Jerry Yany the ex-CEO has now been given the title of Key Yahoo and sits on the panel. They were substituted by professional professionals that the buyers saw as more appropriate for the development of their business. Eliminating Knight from the business completely may be considered a difficult task however an obvious agreement grasped by both people must be come to for Perez to have the ability to successfully take business lead of Nike.