MANAGING CORPORATE CHANGE

Managing Corporate Change

Managing Corporate Change

Introduction

The 1980s and early 1990s are characterized by increasing emphasis on improving productivity in manufacturing (Grant, 2000). The improvement of manufacturing has lead to a deeper level of understanding about change and the management of change in routine based work organizations. At the same time, the increasingly complex nature of manufacturing systems generated a new understanding about standards, routines and non-routine work dimensions. During the same period, organizational change efforts seem to have shifted from “local”, “limited” and “focused” change to system-wide change (Mitki et al., 2001).

New product development (NPD) is based on non-routine work; therefore differing significantly in its characteristics compared to manufacturing that is mostly routine work (Pasmore and Gurly, 1996; Stebbins and Shani, 1995). The common body of knowledge on work design of product development is confined to traditional views (Ulrich et al., 2000). Dominating current practises are embedded in organizational routines, which become a hindrance for innovation, creativity and speed (Lundqvist, 1996; Ekvall, 2000). During the 1990s, the car industry faced an increased need to put new products with higher quality into the market with an additional need to reduce development cycle-time. This, together with the need to find alternatives to the more standard and routine based organization of NPD, creates a need for change of work processes that, to a high degree, contains non-routine elements. Yet, the literature on change and the management of change in product development organization is limited (Shani and Sena, 2001).

The dominant linear logic of change processes has been questioned (Gustavsen et al., 1991; Collins, 1998). Furthermore, it is argued that effective implementation should be based on informal approaches and learning by experimenting and evaluating experiments laterally in the organization (Beer et al., 1990; Norrgren, 1995). This article uses an example of change of NPD organization in the car industry to further explore what can be learned about change in work environment composed of both standard and routine dimensions, while dominated by non-routine work.

The article begins with a snapshot review of some general trends in NPD work. This is followed by an exploration of the similarities between the non-routine characteristics of NPD and organizational change. Next, a synopsis of a five-year change effort at the product development organization in Volvo Car Corporation is provided. The discussion focuses on the challenge in facilitating system-wide change in product development organization that is dominated by non-routine work.

NPD and organizational change

The change from one product to another in NPD, and change from one organizational design to a new one, have some distinct similarities. Both are embedded in a non-routine system perspective as well as knowledge creation. To change an NPD organization or apply a non-routine process on a non-routine system certainly raises several interesting challenges. At the most basic level, standards and routines lend themselves to a slow paced and linear change. Yet, non-routine work is change almost by definition. Both NPD and organizational change can be viewed as processes involving substantial proportions of non-routine ...