MGT8033: S2 2012 – (i) Intervention
Categories (ii) Mergers & Acquisitions
Lecture Overview –
Revisiting ‘Intervention’
 Cummings & Worley’s typology of
interventions
 Threats inherent in mergers & acquisitions
 Social Identity Theory. What is it and how
does it relate to this module material?
 Acculturation and mergers & acquisitions
 Merging groups – focus on implementation
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Intervention refers to…???
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The method, technique or means used to
change a structure, work behaviour or
technology [Ivancevich, Lorenzi & Skinner 1994, p.539]
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Earlier focus in the literature is on targets of
change
Coming between or among members or
groups of an organisation for the purpose
of effecting change [Harvey & Brown 1997, p.98]
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Literal interpretation focusing on levels of
change
What is an intervention?
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The term intervention is used in this course to refer to a
sequenced, planned change effort or program such as the
implementation of self-managed teams or changing from a
functional to a matrix structure.
 Increased effectiveness is the major objective.
 An intervention is typically the application of various tools
available to an experienced change agent.
 Note that intervention may have other uses and definitions
(eg any action by a change agent), but the preferred
application, (as described in the dot points above) should
limit the possibility of confusion.
 Clearly, certain interventions will be useful to achieve
certain ends. Some form of grouping (of interventions)
helps us to make sense of the array of possibilities.
To what do interventions relate?
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Interventions can address three different levels (as seen
with diagnosis in Mod. 2) of an organisation:
 organisation-wide
 group-level
 Individual-level
Some interventions may target (initially at least) a
specific level
Most interventions will impact on more than one level
Different interventions target different organisational
situations or problems
The key is to think systematically, because of the
possibility of cross-level effects (which requires some
consideration of integration strategies)
Relationship between
intervention & diagnosis
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Before you can ‘intervene’ you must ensure that you have an accurate
diagnosis of the problem
Most texts on Org. Change & Development have entire sections on
diagnosis.
Note that no intervention can be implemented without first establishing
the need/justification. This diagnosis is critical … it legitimises action.
It is expedient to think about diagnosis as similar to the doctor-patient
situation and how the relationship develops from the point of arranging
an appointment (the patient can describe the effects but doesn’t
understand the underlying cause).
The key to effective diagnosis is to know what to look for at each level
Important to understand the correct order. To reiterate, diagnosis
must precede intervention
The typology of change interventions based on the
Cummings & Worley approach ...
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1.
2.
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4.
Categorisation of interventions based on the type
of problem (or opportunity) the intervention is
intended to change, is the Cummings & Worley
approach (see your text p. 160)
There are 4 problem or focal issue groups
Interpersonal interventions includes work
relationships
Techno-structural interventions often poor
alignment is implicated
HRM interventions generally targeting better
use of employees
Strategic Interventions pitched at broader
organisational level
The typology of change interventions based on the
Cummings & Worley approach ...
1. Interpersonal interventions
 These interventions relate to social processes and
relationships among employees
 They can be applied at all three organisational levels
 Individual and group techniques include
 Conflict resolution
 Team building
 T-groups
 Process consultation
 Third party interventions
 Team building
The typology of change interventions based on the
Cummings & Worley approach ...
1. Interpersonal interventions (continued)
 System-wide techniques include
Organisation confrontation meeting
 Intergroup relations
 Large group interventions
 Grid organisation development
Particularly in situations of conflict, it is often wise to use
the skills of a change agent/consultant from outside the
organisation.
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The typology of change interventions based on the
Cummings & Worley approach ...
2. Techno-structural interventions
2.1 Structural redesign
 Appropriate when structure-environment doesn’t
align (‘fit’). eg. Telstra (Australia’s) move from
monopoly to strong competition in a high tech. sector
meant a shift away from the historically appropriate
functional form
 Generally aim to move to more effective ways of
structuring activities (network structures often
implicated)
 Often involve downsizing
 BPR falls into this category … radical redesign of
business processes to improve performance
The typology of change interventions based on the
Cummings & Worley approach ...
2. Techno-structural interventions
2.2 Employee Involvement interventions
Common denominator here - employees are given power,
info., knowledge, skills and opportunity to be involved in
decision-making (more committed = better performers)
 Includes Quality of Worklife (QWL) interventions
(including self-managed teams, job enrichment)
 Parallel structures (project groups included)
 High involvement initiatives (eg TQM)
The typology of change interventions based on the
Cummings & Worley approach ...
2. Techno-structural interventions
2.3 work/job design including…
 Engineering approaches
 focus on improving efficiencies & job
simplification
 Motivational approaches
 focus on the intrinsics of work to energise
workers
 Socio-technical systems approaches
 focus on accommodating
technical/technology demands and social
sides of work
The typology of change interventions based on the
Cummings & Worley approach ...
3. HRM Interventions
Common denominator here is personnel practices &
how they are used to energise and include
organisational members, viz.
 Performance management
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Goal setting
Performance appraisal
Reward systems
Career planning and development
Managing workforce diversity (diversity can provide
competitive advantage)
Employee wellness programs
The typology of change interventions based on the
Cummings & Worley approach ...
4. Strategic Interventions
Common denominator here is better organisationenvironment fit
 Strategic interventions are applied primarily at the
organisational level and include
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Open systems planning
Integrated strategic change (integrating strategic &
operational levels)
Trans-organisation development (eg. network orgs.)
Also interventions that question & reshape org. culture
(assumption here is that existing org. culture is inhibiting
overall performance)
Mergers and Acquisitions
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Both involve combining two business entities
Rarely are two organisational cultures so similar that
the union will proceed without difficulty
Mergers typically reflect that both entities will retain a
presence/identity in the new arrangement
Acquisitions typically indicate a dominant entity (the
acquirer).
Threats inherent in mergers and acquisitions ...
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While many welcome mergers or acquisitions (more opportunity &
work variety), others see threat.
In ‘acquired’ firms, members often feel they’ve been ‘sold out’ or
betrayed. Redundancy fears are also real in the aftermath as either
dynamic (i.e. either M or A) means some duplication of jobs, roles or
positions. Loss of control and career direction - often reported.
Job satisfaction, levels of engagement can suffer. Absenteeism,
turnover and lower individual & group performance will all impact on
org. functioning
See Hayes (2010 p. 408) - discusses post-merger behaviours
Note also there are high rates of exit by top managers from acquired
companies
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http://www.youtube.com/watch?v=ZwQ
2nZMECsg
Short clip that identifies differences between merger and
acquisition
Social identity theory - how it helps to explain the
behaviours of groups ...
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Social identity theory features the idea of ‘belonging’ to
the organisation.
Extent of belonging to a group can influence behaviour.
Intergroup discrimination describes behaviour intended to
reduce the relative importance of other work groups. Ingroup bias describes attitudes & behaviours intended to
elevate one’s own work group. When groups are brought to
work together (in mergers and acquisitions) both responses
are predicted.
The more the group’s distinctiveness (identity prior to the
change) is under threat, the more likely the above
responses.
Social identity theory - how it helps to explain the
behaviours of groups ...
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Members of dominant parties in merger or acquisition
tend to experience ‘continuity’ (limited disruption to work
life).
Members of the weaker partner entity tend to experience
discontinuity. Feelings of belonging are rather less
likely. (Note impacts on performance from previous
slide).
Different organisational cultures are often brought
together in mergers & acquisitions. Culture consists of
shared values & beliefs that inform how things should be
done, how people should be treated etc. Org. cultures
can vary substantially on these matters ... clear potential
for conflict.
Acculturation & mergers/acquisitions
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Acculturation – cultural and psychological change that
occurs as a result of contact between 2 or more cultural
groups and their individual members.
The interest is in the degree of fusion of two (often) quite
different sets of values, beliefs, and work practices
The greater the similarity in organisational cultures,
(Hayes calls this ‘congruence’) the more likely an
effective acquisition or merger. Low congruence can
equate to negative emotions and behaviours
Acculturation & mergers/acquisitions
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Note the ways that different org. cultures can
influence mergers and acquisitions (Hayes 2010 p.
411).
Be prepared to differentiate between integration (some accommodation for both parties to
retain values, beliefs etc in the new enterprise)
 assimilation (one party willingly adopts the culture/identity
of the other)
 separation (one party retains its identity and practices)
 deculturation (acquired party members don’t value their
own culture, but also reject the acquiring organisation
Which of the above have you experienced in your workplace?
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Different workplace cultures and the merging groups
intervention
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Note how pre-screening can limit the likelihood of
incompatible or divergent cultures (Hayes 2010 p. 414).
 Familiarise with the idea of a culture audit.
 Four types of culture. Distinguished by the degree of
constraint they place on members
1. Power Cultures
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High constraint on members (do as you are told).
Few rules/limited bureaucracy
Unequal access to resources
Power is centralised – strong leader
Different workplace cultures and the merging groups
intervention
3. Task/achievement
cultures
2. Role cultures
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Less constraint and more
freedom in one’s work area
More hierarchical and less
communication outside
functional areas
Planning and method are
more important than
outcomes alone
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More freedom than Role
cultures
Task completion is a
dominant driver of
behaviour
Expert power is
characteristic of this type as
an influence in work
organisation
Highly adaptable work
teams
Different workplace cultures and the merging groups
intervention
4. Person/Support cultures
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Impose the least constraint on members
Members help each other beyond the formal demands of the
job
Minimum formal org. or job structure
Mutual trust between members and the employer, and
confidence in employer support when necessary
Different workplace cultures and the merging groups
intervention
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Clearly, knowledge of the 4 culture types is only
a starting point in demonstrating familiarity with
implementation.
What is the role and importance of
communications (management) in limiting
feelings of alienation/discontinuity?
Note on Hayes 2010 p. 420, reference to
transitions and the relevance of material
addressed earlier in our studies
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http://www.youtube.com/watch?v=7C_z
8UuCJ-Y
Some problems with poorly planned mergers
How effective is your learning?
1.
(a)
(b)
(c)
(d)
When the objective is to
fundamentally redesign
the ways that the firm
carries out its
operation, the approach
is a …..… intervention
Human process
Technostructural
HRM
Strategic
2. The disciplines of HRM and
Marketing were brought
into one School (School of
Management & Marketing),
though little attempt was
made to create a single
culture. Which of the
below is most evident
here?
(a) integration
(b) disintegration
(c) assimilation
(d) deculturation
How effective is your learning?
3.
(a)
(b)
(c)
(d)
The USQ sets up a formal
mentoring program where
newer staff are linked with
more senior staff for the
explicit purpose of sharing
knowledge and guiding
behaviour. In Cummings &
Worley’s framework, which
of the following is most
implicated?
Process consultation
Job redesign
Workforce diversity
Career planning &
development
4. When members of an
‘acquired’ firm believe
the acquiring
company’s culture is
likely to be less
constraining ...
(a) Everyone will be happy
(b) They are more likely to
let go of their old work
values and beliefs
(c) Deculturation occurs
(d) Managerial ethos is
implicated
How effective is your learning?
5.
(a)
(b)
(c)
(d)
In your capacity as a senior manager, you invite
your organisation’s main suppliers and
customers to a 2-day retreat with other middle
and senior managers to ensure that everyone
understands how current performance is
achieved and to identify threats and
opportunities in the future. The intervention
illustrated here is most closely linked with …?
Experts and systemic problems
Task significance
Integrated strategic change
Open systems planning