Chapter 18 Managing Change

1. Chapter 18Managing Change • Identify the major external and internal forces for change in organizations. • Describe how different types of change vary in scope. • Discuss methods organizations can use to manage resistance to change. • Explain Lewin’s organizational change model. • Explain how companies determine the need to conduct an organizational development intervention. • Discuss the major group-focused techniques for organization development intervention. • Discuss the major individual-focused techniques for organization development intervention. Learning Outcomes © 2011 Cengage Learning. All rights reserved.

2. 1 Learning Outcome Identify the major external and internal forces for change in organizations. © 2011 Cengage Learning. All rights reserved.

3. Organizational Changes Planned Change –change resulting from a deliberate decision to alter the organization Unplanned Change –change that is imposed on the organization and is often unforeseen © 2011 Cengage Learning. All rights reserved.

4. External Forces for Change Workforce Diversity Globalization Changing Technology Ethical Behavior © 2011 Cengage Learning. All rights reserved.

5. Globalization Organizations must rethink the most efficient ways to: Use resources Disseminate/gather information Develop people Globalization requires changes in structure and employee mindsets and © 2011 Cengage Learning. All rights reserved.

6. Workforce Diversity Workforce will see: Increased gender diversity Increased cultural diversity Increased age diversity © 2011 Cengage Learning. All rights reserved.

7. Technological Change Organizations that fail to keep pace can quickly fall behind. Innovation promotes associated changes in work relationships and organizationalstructures. © 2011 Cengage Learning. All rights reserved.

8. Managing Ethical Behavior • Organizations must create a culture that encourages ethical behavior. • Society expects organizations to maintain ethical behavior internally and externally. © 2011 Cengage Learning. All rights reserved.

9. Internal Forces for Change Declining Effectiveness Changes in expectations Changes in work climate Crisis © 2010 Cengage Learning. All rights reserved.

10. 2 Learning Outcome Describe how different types of change vary in scope. © 2011 Cengage Learning. All rights reserved.

11. Scope of Change Incremental Change –change of a relatively small scope, such as making small improvements Strategic Change –change of a larger scale, such as organizational restructuring Transformational Change –change in which the organization moves to a radically different, and sometimes unknown, future state © 2011 Cengage Learning. All rights reserved.

12. The Change Agent • Individual or group that undertakes the task of introducing and managing a change in an organization. • Internal or external © 2011 Cengage Learning. All rights reserved.

13. Internal Change Agents Advantages • know past history, political system, and culture • must live with results of change so will move carefully Disadvantages • may be associated with factions, accused of favoritism • may be too close to the situation to be objective © 2011 Cengage Learning. All rights reserved.

14. External Change Agents Advantages • outsider’s objective view • impartiality Disadvantages • limited knowledge of organization’s history • may be viewed with suspicion To succeed, they must be perceived as trustworthy, be experts with proven track records, be similar to those they are working with © 2011 Cengage Learning. All rights reserved.

15. 3 Learning Outcome Discuss methods organizations can use to manage resistance to change. © 2011 Cengage Learning. All rights reserved.

16. Resistance to Change • Fear of the unknown • Fear of loss • Fear of failure • Disruption of interpersonal relationships • Personality conflicts • Politics • Cultural assumptions and values © 2011 Cengage Learning. All rights reserved.

17. Dealing with Resistance to Change • Communication • details • rationale • Participation in the process • ownership • commitment • Empathy and support © 2011 Cengage Learning. All rights reserved.

18. 4 Learning Outcome Explain Lewin’s organizational change model. © 2011 Cengage Learning. All rights reserved.

19. Lewin’s Three-Step Change Model • Unfreezing – involves encouraging individuals to discard old behaviors by shaking up the equilibrium state that maintains the status quo • Moving – new attitudes, values, and behaviors are substituted for old ones • Refreezing – involves the establishment of new attitudes, values, and behaviors as the new status quo © 2011 Cengage Learning. All rights reserved.

20. Forces for change Weight gain Minimally passing treadmill test Feel lethargic; have no energy Family history of cardiovascular disease New, physically demanding job Force Field Analysis of Decision to Engage in Exercise Forces for status quo Lack of time No exercise facility at work Spouse/partner hates to exercise No interest in physical activity or sports Made a grade of D in physical education class Equilibrium © 2010 Cengage Learning. All rights reserved.

21. Applying Lewin’s Model • Unfreezing: the organization eliminates rewards for current behavior • Moving: the organization initiates new options and explains their rationale • Refreezing: organizational culture and formal reward systems encourage the new behaviors Refreezing Unfreezing Moving Reducing forces For status quo Developing new attitudes, values, and behaviors Reinforcing new attitudes, values, and behaviors © 2011 Cengage Learning. All rights reserved.

22. Beyond the Book:Testing Your Tolerance for Ambiguity Read each of the following statements carefully. Then rate each of them in terms of the extent to which you either agree or disagree with the statement using the following scale: Completely Agree Completely Disagree Neither Agree nor Disagree 1 2 3 4 5 6 7 1. An expert who doesn’t come up with a definite answer probably doesn’t know much. 2. I would like to live in a foreign country for a while. 3. The sooner we all acquire similar values and ideals, the better. 4. A good teacher is one who makes you wonder about your way of looking at things. 5. I like parties where I know most of the people more than ones where all or most of the people are complete strangers. © 2011 Cengage Learning. All rights reserved.

23. Beyond the Book:Testing Your Tolerance for Ambiguity 6. Teachers or supervisors who hand out vague assignments give a chance for one to show initiative and originality. 7. A person who leads an even, regular life in which few surprises or unexpected happenings arise really has a lot to be grateful for. 8. Many of our most important decisions are based upon insufficient information. 9. There is really no such thing as a problem that can’t be solved. 10. People who fit their lives to a schedule probably miss most of the joy of living. 11. A good job is one where what is to be done and how it is to be done are always clear. 12. It is more fun to tackle a complicated problem than to solve a simple one. 13. In the long run, it is possible to get more done by tackling small, simple problems rather than large and complicated ones. 14. Often the most interesting and stimulating people are those who don’t mind being different and original. 15. What we are used to is always preferable to what is unfamiliar. © 2011 Cengage Learning. All rights reserved.

24. Beyond the Book:Testing Your Tolerance for Ambiguity Scoring: For even-numbered questions, add the total points. For odd-numbered questions, use reverse scoring and add the total points. (1 becomes 7, 2 becomes 6, etc.) Interpreting Your Results: A score of 15 would indicate perfect ambiguity tolerance, while perfect intolerance would yield a score of 105. Typical scores between 20 and 80 are reported, with means of 45. Tested private-sector managers scored 44.6 ± 8.5, while public- and third-sector managers scored 43 ± 20. © 2011 Cengage Learning. All rights reserved.

25. 5 Learning Outcome Explain how companies determine the need to conduct an organizational development intervention. © 2011 Cengage Learning. All rights reserved.

26. Organizational Development (OD) a systematic approach to organizational improvement that applies to organizational improvement in order to increase individual and organizational well-being and effectiveness © 2011 Cengage Learning. All rights reserved.

27. Diagnosis and needs analysis Intervention Follow-up Diagnosis and Needs Analysis • Questions to ask: • What are the forces for change? • What are the forces preserving the status quo? • What are the most likely sources of resistance? • What are the goals to be accomplished by change? © 2011 Cengage Learning. All rights reserved.

28. 6 Learning Outcome Discuss the major group-focused techniques for organization development intervention. © 2011 Cengage Learning. All rights reserved.

29. 5 Group-Focused Techniques • Survey feedback • Management by objectives (MBO) • Product and service quality programs • Team building • Process consultation © 2011 Cengage Learning. All rights reserved.

30. Survey Feedback A widely used method of intervention whereby employee attitudes are solicited by questionnaire • Anonymous • Group reporting format • No repercussions • Clear purpose • Follow-up © 2011 Cengage Learning. All rights reserved.

31. Management by Objectives An organization-wide intervention technique of joint goal setting between employees and managers • Initial objectives • Periodic progress • reviews Problem solving to • remove obstacles • to goal achievement © 2011 Cengage Learning. All rights reserved.

32. Quality Program A program that embeds product and service quality excellence into the organizational culture • Raise aspirations about product/service quality • Embed product/service quality excellence in the organizational culture © 2011 Cengage Learning. All rights reserved.

33. Team Building An intervention designed to improve the effectiveness of a work group • Seek feedback • Discuss errors • Reflect on successes and failures • Experiment with new ways of performing • Climate of psychological safety © 2011 Cengage Learning. All rights reserved.

34. Process Consultation An OD method that helps managers and employers improve the processes that are used in organizations • Outside consultant: • Enters organization • Defines the relationship • Chooses an approach • Gathers data • Diagnoses problem • Intervenes • Leaves organization © 2011 Cengage Learning. All rights reserved.

35. 7 Learning Outcome Discuss the major individual-focused techniques for organization development intervention. © 2011 Cengage Learning. All rights reserved.

36. Individual-Focused Techniques • Skills training • Leadership training & development • Executive coaching • Role negotiation • Job redesign • Health promotion programs • Career planning © 2011 Cengage Learning. All rights reserved.

37. Skills Training increasing the job knowledge, skills, and abilities that are necessary to do a job effectively © 2011 Cengage Learning. All rights reserved.

38. Leadership Training & Development A variety of techniques that are designed to enhance individual’s leadership skills • Action learning • Simulation • Business games • Role-playing • Case studies © 2011 Cengage Learning. All rights reserved.

39. Executive Coaching A host of techniques for enhancing managers’ skills in an organization • Verbal information • Intellectual skills • Attitudes • Development © 2011 Cengage Learning. All rights reserved.

40. Role Negotiation A technique whereby individuals meet and clarify their psychological contract • Better understanding of • what each can be expected to give and receive • Less ambiguity © 2011 Cengage Learning. All rights reserved.

41. Job Redesign An OD intervention method that alters jobs to improve the fit between individual skills and the demands of the job • Realign task demands and individual capabilities • Redesign jobs to fit new techniques or organization structures © 2011 Cengage Learning. All rights reserved.

42. Health and Career Health Promotion Programs • Ex. Stress reduction education, employee assistance • Match individual’s career aspirations with organizational opportunities Career Planning © 2011 Cengage Learning. All rights reserved.

43. Beyond the Book:When The Perks Are Gone • Because of the global recession, many organizations are removing organizational • perks and benefits in order to save money. • No more free lunches, no co-pay health insurance, subsidized child care, etc. • In light of these changes, what can be done to make sure employees stay content • and motivated? • Remember that perks are not essential to the job; i.e., lose the sense of entitlement • Be fair in cutbacks. • Continue gathering with co-workers, even at your own expense. • You are part of the solution – ask yourself “What does my work offer that I can be • happy about?” © 2011 Cengage Learning. All rights reserved.

44. Who is the target of change in this scene? • 2. What are the forces for change? Are the forces for change internal or external to the change target? • 3. Does the scene show the role of leadership in organizational change? If it does, who is the leader? Field of Dreams