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Many managers know that radical changes
are needed in the way their companies operate. What's less
obvious is just how those changes can be accomplished.
For competitive success in the 1990s, it
will not be enough to restructure or rationalize physical
assets; the organization itself must be revitalized. In
a fast-changing environment, the traditional command-and-control
managerial style becomes cumbersome. More promising is a
new model in which all members of the organization share
in the responsibility for making decisions and coordinating
activities. But old habits die hard, and it is difficult
to achieve such a metamorphosis. Hundreds of hopeful company
initiatives, from training programs to quality circles to
new compensation systems, have ended in disappointment --
and heightened resistance to the next change effort.
Fortunately, this book shows, the task of
change is not impossible. Based on an exceptionally close
study of six large corporations that tried to transform
their fundamental patterns of management, The Critical
Path to Corporate Renewal explores why some efforts
accomplished more than others. In hundreds of interviews
conducted over a five-year period, top executives, managers
of 26 plants and divisions, corporate staff, and workers
on the shop floor talked candidly to the authors about their
companies' change efforts: what worked and what didn't.
Their voices add life and color to these pages.
From the experiences of these six companies
(five manufacturing firms and an international bank), the
authors derive some principles of change management that
run counter to conventional wisdom. Profound organizational
renewal, they observe, requires greater coordination, competence,
and commitment among all members of the organization --
and no top-down programmatic change effort can accomplish
all that at once. The most successful companies in the study
built up from the bottom, initiating systemic change in
individual plants or divisions. At least initially, renewal
is driven by general managers at that level, while CEOs
create a corporate climate that supports and endorses change.
Recognizing that a premature focus on revamping
systems and structures can alienate employees rather than
build their commitment, the authors outline a six-step "critical
path" for implementing task alignment in a business
unit. The early stages build consensus among organization
members as to competitive problems and appropriate responses.
Change is then introduced in an informal, ad hoc way, and
only later consolidated through formal policies.
Many experts have diagnosed the need for
more participative modes of management; The Critical
Path to Corporate Renewal proposes a remedy. Grounded
in the realities of the large corporation, it offers practical
advice for CEOs, line managers, and human resource specialists
who seek a genuine revitalization of the organization.
Michael Beer is professor of business
administration at Harvard Business School. Russell A. Eisenstat
is assistant professor of business administration at Harvard
Business School. Bert Spector is associate professor of
human resources at Northeastern University.
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