Change Management

1. Change Management

2. OBJECTIVES • Understand the range of reactions to organizational change • Understand the causes of reactions to change • Examine our own attitudes towards change • Identify techniques to develop support for organizational change • Examine a systematic plan to manage change

3. Objectives • What is organizational change? • What change strategies are used in organizations? • What can be done about resistance to change? • How do organizations innovate? • How does stress affect people at work?

4. What is organizational change? • Forms of change. • Radical change. • Also known as frame-breaking change. • Change that results in a major overhaul of the organization or its component systems. • Incremental change. • Also known as frame-bending change. • Change that is part of the organization’s natural evolution.

5. What is organizational change? • Change agents. • Individuals and groups who take responsibility for changing the existing behavior patterns of another person or social system. • Sometimes hired as outside consultants. • Managers and leaders in contemporary organizations are expected to be change agents.

6. What is organizational change? • Unplanned change. • Occurs spontaneously or randomly. • May be disruptive or beneficial. • The appropriate goal is to act quickly to minimize any negative consequences and maximize any possible benefits.

7. What is organizational change? • Planned change. • The result of specific efforts by a change agent. • A performance gap is a direct response to a perceived performance gap. • A discrepancy between the actual and desired state of affairs. • May reflect problems or opportunities.

8. What is organizational change? • Organizational forces for change. • Organization-environment relationships. • Organizational life cycle. • Political nature of organizations.

9. What is organizational change? • Organizational targets for change. • Purpose of the firm. • Objectives of the firm. • Strategy of the firm. • Culture • People. • Tasks. • Structure • Technology.

10. What is organizational change? • Phases of planned change. • Unfreezing. • Preparing a situation for change by disconfirming existing attitudes and behaviors. • Susceptibility to “boiled frog phenomenon.” • Changing. • Taking action to modify a situation by altering the targets of change. • Refreezing. • Maintaining and eventually institutionalizing the change.

11. Boiling Frog Phenomenon • If you drop a frog in a pot of boiling water, it will frantically try to clamber out. • But, if you place it gently in a pot of tepid water and turn the heat on low, it will float there quite placidly. • As the water gradually heats up, the frog will sink into a tranquil stupor, exactly like one of us in a hot bath, and before long, with a smile on its face, it will unresistingly allow itself to be boiled to death.

12. Pace • Old --Slow versus • New --rapid • This causes employees to become unsettled.

13. Scope • Old -- Incremental versus • New -- Quantum • Big changes create uncertainty among employees.

14. Goal • Old -- Short-term results, initiation of change. • New -- Short and long-term results, initiation, management, and maintenance of change.

15. Mentality • Old - Risks and errors are to be avoided, mistakes are to be punished, change is considered difficult. • New – one is to show carriage, there is more risk in not changing, mistakes are to be taken in stride and as learning opportunities.

16. Style • Old – gentle • New -- upsetting

17. Source of change • Old – from the top down, and through the support of sponsors. • New – from the middle and lower levels as well as from above, and through empowerment of others.

18. Degree of planning • Old– High: ready, ready, ready, aim, aim, aim, ….fire! • New – Modest: Ready, fire, aim.

19. Volume • Old – one – shot. • New – Continuous.

20. Organizational attitudes • Old – “If it ain’t broke, don’t fix it!” • New – “If it ain’t broke, break it!”

21. Social Organizational Technological Employee Needs & Values Business & Economic FORCES TO CHANGE CHANGE

22. RATE OF TECHNOLOGICALCHANGE Change Rate 2,500,000 B.C. 1,000,000 B.C. 2,000 A.D.

23. Acceptance Acquiescence Active resistance Acceptance/Modification Active Support Leaving Opposition RANGE OF REACTIONS

24. Gain/loss Personal Characteristics Understanding REACTIONS Agreement Trust CAUSES OF REACTIONS

25. CHANGE ATTITUDE COMPONENTS COGNITIVE • The higher the score, the more a person believes that change tends to produce positive effects for the individual, coworkers, and the organization AFFECTIVE • The higher the score, the more a person looks forward to change and enjoys it BEHAVIORAL • The higher the score, the more a person tends to initiate and/or support change

26. SELF-ASSESSMENT NATIONAL NORMS Attitudes toward Change Cognitive Affective Behavioral

27. Collaborative -- Participative Evolution Use when the organization is in good condition but needs minor adjustment, or is not in good condition but Key interest group’s favorite change. Collaborative -- Charismatic Transformation Use when the organization is not in good condition and though there is little time for extensive participation there is support for radical change Types of change strategies

28. Coercive -- Forced Evolution Use one the organization is in good condition but needs minor adjustment or when it is not in good condition and key interest groups oppose change Coercive -- Dictatorial Transformation Use when the organization is not in good condition there is no time for extensive participation and no support within the organization for radical change but radical change it is vital to organizational survival. Types of change strategies

29. Change Models • Emphasize hard Economic and Performance management • Emphasize behavioral management • Imperatives accountability • Focused on one dimension of the firm at a time such as technical competence

30. Faulty design • Poor results • Slow growth

31. Redesign • Based on core values and vision • Building alignment around shared vision • Mobilizing people’s energy • Designing an organizational governance structure that allows for optimum utilization of people’s energy

32. Redesign • Shared responsibility among all groups and group members • Functional groups, members of the executive team, line leaders, labor unions, staff and so forth. • Not top down

33. PERSONALITY & ORGANIZATIONAL CHANGE Tolerance for Ambiguity • The higher the score, the better able a person is to be comfortable with uncertainty Dogmatism • The higher the score, the more rigid a person's belief system (for example, they like to know the rules and follow them and apply old solutions to new problems) Authoritarianism • The higher the score, the stronger a person's belief that power and status should be clearly defined and respected, and that there should be a formal organizational hierarchy of authority Cont.

34. PERSONALITY & ORGANIZATIONAL CHANGE (continued) Internal Locus of Control • The higher the score, the more a person believes that his or her abilities and efforts influence successes and failures External Locus of Control • The higher the score, the more a person believes that other people, circumstances, or luck influence his or her successes and failures

35. Gain/loss Personal Characteristics Understanding REACTIONS Agreement Trust CAUSES OF REACTIONS

36. TECHNIQUES FOR DEVELOPING SUPPORT & REDUCING RESISTANCE • Education and communication • Participation and involvement • Facilitative support • Emotional support • Incentives • Manipulation and co-optation • Coercion

37. What can be done aboutresistance to change? • Resistance to change. • Any attitude or behavior that indicates unwillingness to make or support a desired change. • Alternative views of resistance. • Something that must be overcome for change to be successful. • Feedback that can be used to facilitate achieving change objectives.

38. What can be done aboutresistance to change? • Why people resist change. • Fear of the unknown. • Lack of good information. • Fear for loss of security. • No reason to change. • Fear for loss of power. • Lack of resources. • Bad timing. • Habit.

39. When knowledge would help alleviate fears due to inaccurate or sketchy information Education & Communication When change initiators need information from others to design change and when the probability of resistance is high Participation & Involvement When people lack the necessary skills or tools to be effective following change Facilitative Support EXAMPLES Cont.

40. When people have personal concerns and anxiety about a change that supportive reassurance could help alleviate Emotional Support When key people will resist the change unless they benefit from it Incentives When change is absolutely necessary and all other techniques would be ineffective or too costly Manipulation When change must occur quickly and the initiators have significantly more power than the resistors Coercion EXAMPLES (continued)

41. What can be done aboutresistance to change? • Ways in which resistance is experienced. • Resistance to the change itself. • Resistance to the change strategy. • Resistance to the change agent.

42. What can be done aboutresistance to change? • How to deal with resistance. • Education and communication. • Participation and involvement. • Facilitation and support. • Negotiation and agreement. • Manipulation and cooptation. • Explicit and implicit coercion.

43. What can be done aboutresistance to change? • Education and communication. • Educates people about change prior to implementation and helps them understand the logic of change. • Use when people lack information or have inaccurate information. • Advantage — creates willingness to help with the change. • Disadvantage — can be very time consuming.

44. What can be done aboutresistance to change? • Participation and involvement. • Allows people to help design and implement the changes. • Use when other people have important information and/or power to resist. • Advantages — adds information to change planning; builds commitment to change. • Disadvantage — can be very time consuming.

45. What can be done aboutresistance to change? • Facilitation and support. • Provides emotional and material assistance for people experiencing the hardships of change. • Use when resistance traces to resource or adjustment problems. • Advantage — directly satisfies specific resource or adjustment needs. • Disadvantages — can be time consuming; can be expensive.

46. What can be done aboutresistance to change? • Negotiation and agreement. • Offers incentives to actual or potential change resistors. • Use when a person or group will lose something because of the change. • Advantage — helps avoid major resistance. • Disadvantages — can be expensive; can cause others to seek similar deals.

47. What can be done aboutresistance to change? • Manipulation • Use covert attempts to influence others by selectively providing information and consciously structuring events. • Use when other methods don’t work or are too expensive. • Advantages — can be quick and inexpensive. • Disadvantage — can create future problems if people sense manipulation.

48. What can be done aboutresistance to change? • Explicit and implicit coercion. • Employ the force of authority to implement change. • Use when speed is important and the change agent has power. • Advantages — quick; overpowers resistance. • Disadvantage — risky if people get mad.

49. Recognize Need for Change Identify Nature of Change General Strategy Selection Support Techniques Selection Situational Diagnosis Refreezing Data Collection Data Evaluation STAGE 1 CHANGE IDENTIFICATION CHANGE MODEL FEEDBACK STAGE 2 IMPLEMENTATION PLANNING STAGE 3 IMPLEMENT CHANGE Unfreezing Changing STAGE 4 EVALUATE CHANGE

50. SYSTEMATIC CHANGE MANAGEMENT Stage 1 Identify Change FEEDBACK Stage 2 Plan Change Stage 3 Implement Change Stage 4 Evaluate Change