The turbulent business environment

Get Complete Project Material File(s) Now! »

INTRODUCTION

In this chapter the researcher provides a short, concise overview of the turbulence faced by organisations. The chapter briefly discusses ways in which businesses respond. To enter into joint ventures, alliances, mergers and acquisitions is identified as an option. The researcher points out that the concept of Organisational Transformation is different from other forms of change because of the radical nature of change involved. It is concluded that the outcome of an organisational transformation is often the emergence of new organisational forms, such as entrepreneurial units.
The chapter provides a background to Sasol’s decision to enter the global market in the early nineties and its efforts to establish a successful merger between Sasol Waxes (Pty) Ltd and Schümann GmbH & Co. KG in Hamburg. A brief analysis of the merger’s newly formed competitive position is given, as well as some of the reasons why the South African subsidiary, Schümann-Sasol (Pty) Ltd, developed symptoms typically experienced when two organisations from diverse cultures, with different company histories and approaches to business, endeavor to do business together. A crisis developed and a decision was taken to enter into a serious organisational transformation.
The remainder of the chapter attempts a problem statement and aim to direct the research. This is followed by selected research questions to guide the researcher in deciding what to look for during the case study. The choice of research method – the case study- is defended as well as the reasons for selecting the Schümann-Sasol case. The chapter concludes with a framework for the research and its significance to the scientific and business community.

The turbulent business environment

To examine continuous efforts of organisations to adapt to change and survive, it is necessary to understand the nature of the turbulence.

The challenge of a turbulent environment

Today’s global business environment requires organisations to adapt to increasingly complex and uncertain technological, economic, political and cultural changes. It appears as if the world is becoming turbulent faster than organisations are able to adapt and respond. The evidence is worldwide. Of the 20 largest US bankruptcies in the past two decades, 10 occurred in the last two years. (Hamel & Välikangas, 2003). Even successful companies are finding it more difficult to deliver superior returns consistently. In 1994 Collins & Porras singled out 18 “visionary” companies that had consistently outperformed their peers between 1950 and 1990. Over the past ten years, just six of these companies managed to outperform the Dow Jones Industrial Average. The other twelve, which includes companies like Disney, Motorola, Ford, Nordstrom, Sony and Hewlett-Packard, had apparently slided from outstanding to merely average (Hamel & Välikangas, 2003).
Environmental turbulences are characterised by perceived dynamism, hostility and complexity. Each of these sources of turbulence needs to be understood to fully appreciate the challenges facing organisations of the 21st century.
Environmental dynamism. Dynamism refers to changes that occur in an organisation’s environment because of the technological and market shifts. Technological shifts create new opportunities for companies to pursue profitability and growth (Tuschman & Anderson, 1986). As a result of these shifts, organisations are pressured to revise their technological assets and to build new capabilities or risk failure. Dynamism also means that innovation is fast paced, causing technological obsolescence among companies that fail to upgrade their products (Prahalad, 1999). The implication of a dynamic environment is aggressive innovation and a pro-active pursuit of emerging market opportunities (Covin & Covin, 1990).

CHAPTER 1: PROBLEM STATEMENT AND ORIENTATION 
1 INTRODUCTION
1.1 The turbulent business environment
1.1.1 The challenge of turbulent environment
1.1.2 Responses to environmental turbulence
1.1.3 Organisational transformation
1.1.3.1 Definition and reasons for occurrence
1.1.3.2 Characteristics of transformation change
1.1.4 The quest for entrepreneurship
1.2 The Schümann-Sasol business relationship
1.2.1 Sasol Limited
1.2.2 Sasol Wax
1.2.3 Schümann-Sasol International
1.2.4 Schümann-Sasol International’s competitive position
1.3 The South African subsidiary
1.3.1 Cultural differences
1.3.2 Performance decline
1.3.3 Conflict between the Management Board and SSSA
1.3.4 Crisis between the Management Board and SSSA defined
1.3.4.1 The situation by August 1997
1.3.5 Agreement between the Management Board and the SSA Management Team
1.3.6 Conclusions and reflection
1.3.7 Appointment and contracting with External Consultant
1.4 The problem and the aim of the research
1.4.1 Problem statement
1.4.2 Aim of the research
1.4.3 Research questions
1.5 Research method: the case study
1.5.1 Selection of the case
1.6 Framework of the research
1.6.1 Scoping the research
1.6.2 Chapters in the research dissertation
1.7 Significance of the research
CHAPTER 2: RESEARCH METHODOLOGY 
2 INTRODUCTION
2.1 Setting the context
2.2 Phases in the research
2.3 Research approach and rationale for methodology
2.3.1 Qualitative and quantitative research
2.3.2 Descriptions of qualitative research
2.3.3 The product of qualitative research
2.3.4 Consideration for the use of a qualitative methodology
2.3.5 The role of the researcher in qualitative research
2.3.6 Assessing strengths and weaknesses of the researcher
2.3.7 The trustworthiness of qualitative research
2.4 The case study
2.4.1 Unique characteristics of case study research
2.4.2 Use of methods
2.4.3 The place of theory
2.4.4 Applications of case study research
2.4.5 Reliability and validity of case study research
2.5 Research design
2.5.1 Selection of the case
2.5.2 The review of literature
2.5.3 The case study in the research
2.5.3.1 The study questions
2.5.3.2 The unit and the assembling of raw data
2.5.3.3 Preparing a case record
2.5.3.4 Writing the case study narrative
2.5.3.5 Generating and testing theory
2.5.3.6 Generalising from the case study
2.5.3.7 Validity and reliability
CHAPTER 3: THE BUSINESS ENVIRONMENT 
3 INTRODUCTION
3.1 The new business landscape: a new frontier
3.1.1 Drivers of the new business landscape
3.1.1.1 The technological revolutions
3.1.1.2 Globalisation
3.1.2 Some characteristics of the new landscape
3.1.3 The productivity factor in the new economy
3.1.4 The changing business landscape of Schümann-Sasol (Pty) Ltd
3.2 Building competitive advantage in the new business
landscape
3.2.1 The management of technology
3.2.1.1 Organisational structure, management and IT deployment
3.2.1.2 Organisational learning and skills development
3.2.1.3 Process innovation
3.2.1.4 Productivity improvement
3.2.1.5 Transformation improvement
3.2.2 Innovation
3.2.2.1 Product or service innovation
3.2.2.2 Strategic innovation
3.2.3 Organisational competencies
3.2.3.1 Composition of competencies
3.2.3.2 Knowledge transfer and learning
3.3 The shift to a new paradigm
3.3.1 Forces that convert success to failure
3.3.2 The dual paradigm shift
3.3.2.1 The first paradigm shift
3.3.2.2 The second paradigm shift
3.3.2.3 New learning required
CHAPTER 4: THE ENTREPRENEURIAL UNIT IN A CORPORATE
ENVIRONMENT 
4 INTRODUCTION
4.1 Environmental context and entrepreneurship
4.1.1 Innovation, risk-taking and Proactiveness
4.1.2 Entrepreneurship as a response to environmental turbulence
4.2 Entrepreneurship in the corporate environment
4.2.1 Background to entrepreneurship in large corporations
4.2.2 The case for entrepreneurship in large companies
4.2.3 Some characteristics of entrepreneurship in large corporations
4.2.3.1 Strategy and structure
4.2.3.2 Entrepreneurial climate and practices
4.2.3.3 Behaviour
4.2.3.4 Personality characteristics
4.2.3.5 Teamwork
4.2.3.6 Differences between entrepreneurial and bureaucratic organisations
4.2.4 Perceptions on entrepreneurship in corporations
4.2.5 Current trends in entrepreneurship within large corporations
4.2.5.1 Hindustan Lever Ltd (HLL)
4.2.5.2 Koch Industries
4.2.5.3 Chrysler Corporation
4.2.5.4 Shell
4.2.5.5 Sony
4.2.5.6 3M
4.2.5.7 General Electric
4.2.5.8 Hewlett Packard
4.2.6 Bureaucratic obstacles in the process of creating entrepreneurial
organisations
4.2.6.1 Structure
4.2.6.2 Governance
4.3 Guidelines for designing and managing entrepreneurial
organisations
4.3.1 Designing of structures
4.3.1.1 Avoid too much structure
4.3.1.2 Maintain a sense of smallness
4.3.1.3 Establish separate structures
4.3.2 Corporate culture
4.3.2.1 Understand and accept the uniqueness of entrepreneurial behaviour
4.3.2.2 Promote freedom, autonomy and independence
4.3.2.3 Encouragement of entrepreneurial conduct
4.3.2.4 Avoid bureaucratic barriers
4.3.3 Management processes
4.3.3.1 Recognise the complementary role of entrepreneurship to
management
4.3.3.2 Apply enlightened management practices
4.3.3.3 Internalisation and drive for efficiency
4.3.4 Human resources policies
4.3.4.1 Assess the capability
4.3.4.2 Create career intrapreneurs
4.3.5 Reward systems
4.3.6 Systems
4.4 Strategy
4.4.1 A continuum of intrapreneurial activities
4.4.2 Possible steps in creating the entrepreneurial company
CHAPTER 5: ORGANISATIONAL CHANGE ANDTRANSFORMATION 
5 INTRODUCTION 102
5.1 Assessing organisational change in the South African
context 102
5.1.1 Reasons why South African organisations change 103
5.1.2 Common changes observed 104
5.1.2.1 Mergers, acquisitions or divestitures 105
5.1.2.2 The launch of a new product or service 105
5.1.2.3 Appointment of a new leader 105
5.1.2.4 New technology 105
5.1.2.5 Appointment of previously disadvantaged people at all levels 107
5.1.2.6 Improved corporate governance 107
5.1.3 How are these changes managed 108
5.1.3.1 Meaning attached to the term transformation 108
5.1.3.2 The cursory nature in which change is handled 109
5.1.3.3 Content vs process focus 109
5.1.3.4 The emphasis on structural change 109
5.1.3.5 Planned change 110
5.1.3.6 Systems-driven change 111
5.1.3.7 People and change 112
5.1.3.8 Leading change 112
5.1.3.9 Communicating change 113
5.1.3.10 Negative consequences 114
5.1.3.11 Perspective 114
5.1.3.12 Conclusions 114
Page vi
University of Pretoria etd – Serfontein, S (2006)
Organisation Transformation:
A quantum leap from the traditional to the entrepreneurial
5.2 Defining change 115
5.2.1 Change as a world-wide phenomenon 115
5.2.2 Change at organisational level 116
5.2.3 Defining change 116
5.2.4 The individual in organisational change 117
5.2.5 Can change in organisation be managed? 118
5.3 The organisation from a change perspective 118
5.3.1 Defining an organisation 119
5.3.2 Relevant organisational theory 119
5.3.3 Schools of thought 119
5.3.4 Paradigms of organisations 121
5.4 A thinking framework for understanding organisational
change 122
5.4.1 Live cycle-based change 122
5.4.2 Planned change 124
5.4.3 Organisational learning 125
5.4.3.1 Learning and change 126
5.4.3.2 Susceptibility to organisational learning 127
5.4.3.3 Conscious and unconscious learning 127
5.4.3.4 Forms of collective learning 128
5.4.3.5 High-order learning 129
5.4.4 Concluding comments 130
5.5 Types of change 130
5.5.1 Some typologies of change 130
5.5.1.1 First- and second-order change 130
5.5.1.2 Alpha, Beta and Gamma change 131
5.3.1.3 Scharmer’s typology of coping with change 131
5.5.1.4 Other popular change concepts 134
5.5.1.5 Conclusion 134
5.6 Organisational transformation 135
5.6.1 Defining the term 136
Page vii
University of Pretoria etd – Serfontein, S (2006)
Organisation Transformation:
A quantum leap from the traditional to the entrepreneurial
5.6.2 Organizational transformation as change type 137
5.6.3 Some characteristics of transformational change 138
5.6.4 Factors that trigger transformations 138
5.6.5 The role of leadership in organisational transformation 139
5.6.6 Conclusions 140
5.7 Organisation Development (OD) as a planned change
approach to organisational transformation 140
5.7.1 Definitions and distinguishing characteristics 141
5.7.2 Action research 143
5.7.3 Criticism of the OD approach to planned change 144
5.8 The process of change at individual level 145
5.8.1 Cognitive change 145
5.8.2 Change at emotional level 146
5.8.2.1 Definition 146
5.8.2.2 Dimensions of emotion 147
5.8.2.3 The emotion – cognition interface 148
5.8.3 Transitions 149
5.8.3.1 Personal transition conceptualized 149
5.8.3.2 Human development and transition 150
5.8.3.3 Transition models 150
5.8.4 Transitions at managerial level 151
5.8.5 Concluding comments 152
5.9 Applied organisational change: a summary 152
5.9.1 Critical success factors 153
5.9.1.1 Energy 154
5.9.1.2 A clear vision 155
5.9.1.3 Effective communication 156
5.9.1.4 Leadership and management 156
5.9.1.5 Employee involvement 157
5.9.1.6 Learning 158
5.9.1.7 The consultant-client relationship 158
5.9.2 Change models 159
5.9.2.1 The step-by-step models of change 159
Page viii
University of Pretoria etd – Serfontein, S (2006)
Organisation Transformation:
A quantum leap from the traditional to the entrepreneurial
5.9.2.2 Application of the Lewinian model 160
5.9.2.3 A second-order change model 161
5.9.2.4 An industry specific change model 163
5.9.2.5 A community change model 165
5.9.2.6 Organisational learning as a model for change 167
CHAPTER 6: THE TRANSFORMATIONAL MODEL 170
6 INTRODUCTION 170
6.1 The purpose of a model in this research 171
6.2 Description of the model 173
6.2.1 Strategy 173
6.2.1.1 Vision 173
6.2.1.2 Strategic priorities 175
6.2.1.3 The mission 176
6.2.1.4 Values 176
6.2.2 The project team and consultant-championed period vs leaderchampioned
period of change 178
6.2.3 Sustained communication 179
6.2.4 Phases in the period championed by the consultant – project
team alliance 180
6.2.4.1 The crisis 180
6.2.4.2 Contracting 181
6.2.4.3 Aligning stakeholders around strategy 181
6.2.4.4 Creating a readiness for change 182
6.2.4.5 Re-designing structures and assessing the culture (values) 183
6.2.4.6 Preparing for the implementation of the new structure and values 184
6.2.5 Transfer of the change initiative to the new MD 185
6.2.5.1 Addressing inconsistencies in the new structure 187
6.2.5.2 Putting strategy in perspective 187
6.2.5.3 Making empowerment a reality 188
6.2.5.4 Articulating a personal management philosophy 189
Page ix
University of Pretoria etd – Serfontein, S (2006)
Organisation Transformation:
A quantum leap from the traditional to the entrepreneurial
6.2.5.5 Closing the leadership void 190
6.2.6 Phases in period championed by the leader 190
6.2.6.1 The year of structure (October 1999 to June 2000) 191
6.2.6.2 The year of margins (July 2000 to June 2001) 197
6.2.6.3 The year of detail (July 2001 to June 2002) 199
6.2.6.4 The year of alternatives (July 2002 to June 2003) 200
6.2.7 SSSA as an entrepreneurial company 202
6.2.7.1 Strategy (and vision) 202
6.2.7.2 Structure 203
6.2.7.3 New products and markets 204
6.2.7.4 Management process 204
6.2.7.5 Systems 205
6.2.7.6 Human Resources Management 205
6.2.7.7 Culture 205
6.2.7.8 Rewards and remuneration 205
6.2.7.9 Leadership 206
6.2.7.10 Performance Management 206
6.2.7.11 Business results 206
6.2.7.12 Sustainability of change 206
6.3 Key success factors in the transformation process 208
6.3.1 The transformation was strategy driven 208
6.3.2 The transformation was primarily a people process 209
6.3.3 Change was a plan-do-review process 209
6.3.4 Appropriate leadership 209
6.3.5 Aligning people with changes in processes, structures and
systems 210
6.3.6 Organisational learning 211
6.3.7 Entrenching the values 212
6.3.8 Sharing ownership and risk 212
6.3.9 Sustaining high energy levels 213
6.3.10 Managing the consultant 213
6.3.11 To conclude 214
Page x
University of Pretoria etd – Serfontein, S (2006)
Organisation Transformation:
A quantum leap from the traditional to the entrepreneurial
CHAPTER 7: APPLICATION

READ  FARMERS‟ OR CLIENT NEEDS ASSESSMENT

GET THE COMPLETE PROJECT

Related Posts