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Appunti completi di tutte le lezioni del corso Change Management - Frigerio
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developed in phases and goals
be achieved in the short run or in the long run In this definition, change can affect individuals —> we call change management, when we need to change the individuals The fact that the change can affect different levels of analysis (individuals, teams, organizations) on the same time, can create difficulties in understanding the change. People usually don’t like the change, they are usually against the change because we want to dream, to be innovate but our mindset creates lot of obstacles, because change is uncertainty. We will not know exactly what will be the change. That’s why here in the definition it’s written “desired future state”, since it’s something that we want to, but we are not sure that the future state will be as the planned one (especially for big transformations of change).
This is another definition that says that change management is something that occurs organizationally speaking, but it’s a process that means that is something that occurs with different activities. With this definition, we point the emphasis on the acceptance phase of employees, who need to embrace change (embrace meaning first of all understand why change occurs and accept change). Employees are going to lowering the barriers to change, because they understand the desired future state is better than the current one, even if there’s uncertainty. It’s important that employees make this shifting, because it’s not natural, it’s not something that occurs naturally. People need to be part of the change. Change Management is related to Project Management:
planning, for managing time, resources, communication and for creating something new
There are 2 big theories of looking change:
Starting from these perspectives, there’re 2 big ways of changing: one is continuous and embedded without planning; the other one is radical, big impact and needs to be planned. But both managed. Managing is not a synonym of planning: planning means that there are methods, tolls that help in defining the future and the ways to reach the future; they are not the same thing, because we can manage even if we don’t plan. What we will see in Change Management is how to manage both the changes, the planned and the unplanned. WHAT IS THE MAIN TOOL THAT WE USE TO MANAGE THE FIRST THEORY? The learning and the culture of the organization. Organizational culture is the culture that effects the way the employees act, think, make decisions inside the company. The culture can be very proactive or less proactive. It creates the background for changing naturally. The predominant culture is the tradition, the history, the past. It’s present in small and individual companies, that are usually founded by an entrepreneur who doesn’t want to change. Small companies usually stay small in their life, because they don’t embrace the change. Bigger companies usually have known big transformative changes, because otherwise they couldn’t be as big as they are. Organizations are bigger and bigger because:
organizations. Buying another organization, there’s a big radical change because there’re two organizations, usually one bigger than the other, that have to collapse in one
people, who usually are lower-experienced people It’s true that change can be naturally, but in some periods of time, change can also be radical. When it’s radical for something that is new, we need to plan the change. When it’s not radical and so it’s embedded, we need to manage by learning and culture. Organization can be seen as an organism, a system that is within an environment. We call environment what is external to the organization like the market, clients, competitors, suppliers. In the environment there are also norms, regulations, institutions… Inside the boundaries of the organization, there’re 2 subsystems: formal and informal. The formal subsystems (meaning visible and declared in the company), that manage the organization, are:
equality. All the organizations, especially the big ones, are forced to create D&I politics because clients and partners look at the organization also for its D&I rules
resources, we have to reduce the consume of them
MORE DETAILS OF THESE FACTORS —> PEST (Political, Economic, Social, Technological) FRAMEWORK POLITICAL FACTORS: There are legislations but also rights: in Europe we have universal rights; babies under 14 cannot work. Even wars have an impact; they bring inflection. Taxation > startups (new companies, also called
competition. Trade union activities > they can create change because they ask for rights in terms of salary, security. For example ATM is very close to trade union activities because of strikes. ECONOMIC FACTORS: Unemployment rates > in Italy are going down because demography is helping since there are no people. Competitors > in Italy there’s these globalization factors, meaning there’re a lot of service industries: we are losing our manufacturing and we are moving to services. SOCIO-CULTURAL FACTORS: Demographic trends > Demography: in Europe the life expectation is going higher and higher, but we don’t have enough children and that means that our balance is negative, we have more old than young people. Demography affects the working strategies, meaning who will be the employees of the future in an organization that has no young people? Low demography means less production because there aren’t enough people to sell products. Skills availability > there’re skill gaps, shortage of skills; it’s important for organizations, because they need to invest in the skilling. Attitudes to work > generations at work are totally different, for example GenZ vs Baby Boomer: GenZ wants to be more free because it has seen their parents working a lot; about the future, Baby Boomer think about the long-term (houses, carrier), while the GenZ think about the short objectives (step by step). TECHNOLOGICAL FACTORS: Information technology/the Internet > now information flows outside and also inside the organizations. New production processes > like robotic production; machine learning: it’s not just humans, but also the machines change.
All these forces ask the organization to change. Some of them are very radical, others are smooth. What is difficult is that these factors are all together, they are affecting at the same time the same organization; so it’s not easy for an organization to manage the change and to survive. An organization can also fail; there’s a turnover meaning that there’s a rate that establish how many new born organizations are. In Italy at the moment there’re a lot of new organizations, because there’re a lot of new startups thanks to incentives, new technologies, new skills. These startups are founded by people from universities who want to create their own company. The number of startups depends also on the environmental culture, meaning from a social point of view: in the USA it’s important to have your own company, in Italy not so important.
Innovations is something that creates inside the company a new way of producing or delivering goods or services. It can be a new product, process or an improvement of an existing product or process. There’s a cause-effect relationship between innovation and change. Innovation is the cause and change is the effect. Before define the change, we will need to frame the innovation because innovation can be very widespread around the organization. TYPES OF INNOVATION - LEAN VENTURES, 2010 There’re 9 types of innovation depending on what we are going to innovate:
It’s another way to classify innovation, always on the purpose. It’s from Barry O’Really, an American scholar who defines the purpose of innovation making a division between exploring and exploiting innovation. It says that the organization can explore or exploit : EXPLORE
create something that is a new technology and a new business model so we can called it also exploration, meaning funding something new
adjacent markets
something new, so we have uncertainty (in radical innovation, we have 2 kind of uncertainties: technology and market; in disruptive innovation there’s a big presence of unknown)
learning. Organizations that want to explore, have the culture of experimenting and also of failure; in organizations, high tolerance means high risk taking. We saw different failures in the past like Kodak because it couldn’t explore new innovations and because the culture and the money couldn’t sustain the exploration strategies
On the opposite, it’s the strategy of incremental and architectural innovation, optimizing existing business model.
quality management: it’s a managerial strategy that comes from Japan, that says that every process, product needs to be updated to be adapt to the new needs of the clients. Culture is 0 mistakes of existing market and technology. For this culture, where quality and costumer satisfaction are very strong, the exploitation means that the existing technology is maximized for capturing markets for how performing from what we already know, exists
targets; this culture is more based on planning and control than the exploration. In the exploitation the uncertainty is lower, we have to optimize what we already know, so it’s easier
the trade-off for each product or each service. (Trade-off = balancing of opportunities and costs, what we call business cases = comparisons between benefits and costs)
In autonomous cars there’s the problem of ethics, because we cannot teach to AI from an ethical point of view what is the best to do in some situations, where we put the ethics before the decision —> problem in decision making. So Google is going to develop these autonomous cars, trading to solve this problem with an exploration mindset, but at the same time it’s going to exploit all the technologies it has. The biggest Google technology is the search engine, that is continuously exploited (≠ Yahoo).
that use the left and the right in the meantime or in different times. Another way of classifying innovation is about where the innovation comes from. Innovation can flow:
It’s where new products, new services are discovered, developed and commercialized internally typically with an IT department or with innovation teams widespread in existing departments. (In the Japanese culture innovation comes from the bottom in all the processes, the so called quality). Innovation is internally developed in all the parts of the organization, not just in an area. OPEN INNOVATION It’s when ideas and innovation can be originated from external sources, which are:
community; we can enter in the community online and we can coo-create with Lego designers the new products
Web Services has developed a new business model on the software supplied chain,
same pay that users use, also to enterprises, that buy services from Amazon, they start to buy these softwares with this new business model
new radical or disruptive innovation. They are focused on new technologies and services, they usually can grow with 2 strategies: the first one is to sell the new product, service directly to consumers or to sell new stuff to another company with a b-to-b business model (they sell the new market to what we call income-bet, that
Closed innovation:
Open innovation:
necessarily be the first
technologies. IPs can be bought or rented also from externals It’s possible to have both closed and open innovation. Depending on the business and the competences values for some they can buy or they can create. For example: there are some organizations that now are creating their own LLM and others that are creating specific LLM based on Open AI. Open and closed are also referring to open and source in the software arena. Open source: there’s no intellectual property on the kernel, that can be intellectual property once we use the basic source, we can create application with that source so the intellectual property is on the application. TYPES OF INNOVATORS STRATEGIES: WHO? We can divide innovation according to the innovators, who can be external (external) or internal (closed) and high and low, meaning the amount of money we need for investing in that innovation. When we have high need of money:
strategy, we act as builders through innovation labs inside the company, innovation
transformations, centre of excellence (departments with specialized knowledge on a given process) or internal accelerator. This is the way the biggest companies like Google and Apple are creating internal knowledge
Usually they are venture funds (= people who usually have a lot of money, they get money from the investors and they invest in companies, venture because they normally invest in startups). Structured partnership: like JV. External accelerator: one of the main accelerators we have is in Bergamo, it’s a digital district where inside there are firms, making startups but also paying these areas for creating one kilometer of innovation in that area. Then there are lot of facilities in some accelerators, meaning that a startup can be there and they give it spaces for meeting people, having conferences and marketing support, all the information that they need to accelerate the time to market of their innovation. External accelerators are the context, where usually startups and innovators can grow and be visible to the income-bet or other organizations using processes of the accelerators. Co- development track: like JV When we need lower amount of money:
they usually start from new ideas and create the company (while accelerators come after from the company to the market). Design sprint: are programs that internal companies are developing for designing innovation. Community of practice: groups of people usually connected in volunteering programs, they are not mandatory; practice because they share the same knowledge, practice. Innovation training: there are some learning programs are pushing innovation dynamics
students and used for recruiting people but also when an organization needs something very new, they are very challenging 2-day programs where all the participants in groups are asked to create some innovation. Co-experimentations track and co-innovation sessions: are all pointed to work with others for innovation but with low money TYPES OF INNOVATION STRATEGIES: HOW? (BCG)
change + focus on the scale and the style of change) They are more focused on defining and describing what change is. Emergent and unintentional change:
humans grow and become mature and then start decline. Organizations can grow in unintentional way, we cannot stop the growth of change. It’s called ecology of population, because Greiner applies the Darwin theory PLANNED CHANGE: LEWIN, 1943 In all organizations there’re what Lewin calls planned change , that is an organizational development that prepares the entire organization for new goals, strategies, culture or other relevant areas. It means that change is something planned and visible, that creates a new status and that can be managed. There’s a point of time during the life of the company, where there’s the need of change and the change occurs. To manage this kind of change, Lewin suggests to use 3 semi-stable stages :
change that has the power to create transformative organizations
needs to have the power, that usually comes from the top
lead the change, more than when they are reactive. Re-orientation and tuning are less risky than adaptation and re-creation because since the need comes from inside, managers can plan in advance and they can decide also when to plane without any urgency and hurry. DUNPHY & STANCE (1990): APPROACHES TO CHANGE They define change according to 2 different definitions:
Tushman say Then there’s transformation, that is not divided from inside to outside as Nadler and Tushman make, but from module to corporate:
to one organizational unit
motivation and their ideas on the change; people are not involved in the change
decide to have a style of direction and ask the others to follow the direction to change
asking; they are not interesting in the thoughts of people According to Dunphy and Stance there’re 4 kinds of change:
use, change, create the effect of change
fundamental change without a priori intentions to do so This means that managers cannot manage everything of the change, but just few things. The change will flow depending on the culture of the company.
activities because there’re rules or behavior that let them be done in a continuous and unique way) and when they deal with contingencies, breakdowns and opportunities in everyday work
together as noise in otherwise uneventful inertia and because small changes are neither heroic nor plausible ways to make strategy
the organization, it should be regarded as suspect, because Weik and Quinn think that the organization will not adopt the change So they introduce this concept of emergent change, something that can be seen mainly a posteriori, neither before nor during the change, but just after the change. WEICK & QUINN (1999): EPISODIC VS CONTINUOUS CHANGES They make a distinction between episodic and continuous change. NATURE OF CHANGE:
effects) TIME SCALE:
According to Greiner the growth model of the organization is dividend into 5 phases , that go along the organizational age and the organizational size. In each phase, there’re some:
company to the following phases Leaving the discontinuous point the company can enter the following phase. This discontinuous moments are crises, that can be predictable. According to Greiner, every company will suffer this crisis, because they are normal in the growth process like humans. This growing model combines emergent and discontinuous.
According to the growth model, organizations experience periods of emergent, normal, natural change and some breakthroughs crisis that are mainly due to internal factors that should be solved before going to the other phases. Startups usually die when they cannot survive from a financial point of view, but also when they cannot solve the first crisis (leadership crisis). Founders have to protect the organization, but during the organization’s growth they should let the organization making its life, so they are not the owners from a control point of view. Sometimes we cannot understand in which phase we are, like for humans. Depending on the lens we use, we can manage
and more specifically he’s responsible for AI capabilities in Italy, for Central Europe and Greece. On 30 November 2022 a new product on the market was released, the ChatGPT application, which basically demonstrated how to leverage on generative AI and specifically the concept of a large language model to provide service to the final customers and users. ChatGPT is an application based on a large language model, which is GPT. GPT is the acronym for Generative Pre-trained Transformer , which means that it generates language basically or at the beginning it was generating just language. It’s pre-trained transformer, meaning that it’s a model, which has been pre-trained on a wider knowledge base, and it’s based on a specific neural network which is called a transformer. The first remark is that we’re talking about generative AI in the last three years, but transformer and the foundational technology behind this application have been developed in the last decade. OpenAI was not so known before ChatGPT, now it’s an incumbent. OpenAI was founded by Sam, Alvan in 2015, so we’re talking about 10 years ago.