Organisational Change

2. Organisational Change Key Knowledge • Concept of organisational change • Internal & external pressures as a source of change • Driving & restraining forces for change

3. Strategies for effective change management – low risk and high risk practices • Kotter theory of change management • Process for effective change management • Role of leadership in managing change

4. The concept of organisational change What is change? How employees feel about change.

6. Pressures for change See pages 286-292 Pressures on LSOs include; Internal – • Corporate culture • Policies • Management • Employees

7. External pressures for change Operating environment • Customers • Suppliers • Competitors • Creditors • Trade unions

8. External pressures for change Macro • Economic • Political • Social & demographic • Technological • International • Geographic • Environmental

9. Lewin – force field analysis • http://www.youtube.com/watch?v=hBycYu7T5WY&feature=player_detailpage

11. Driving & restraining forces for change Force field analysis looks at the forces that are either driving movement towards a change or goal or are blocking (restraining) movement towards a change or goal.

12. Forces for change Driving forces • supportive culture • Participative management style • Communication ** See Table 13.2 page 294 Restraining forces • Apathy • Hostility • Poor working conditions

13. Kotter’s Change Theory There are eight steps to Kotter’s theory (you have to know all of them). These are; • Establish a sense of urgency • Assemble a group of people who will lead the change • Create a vision for the organisation

14. 4. Communicate the vision to all within the organisation 5. Empower others to act on the vision. 6. Plan to achieve short-term gains and wins rather than large instant changes.

15. 7. Consolidate all of the changes. ‘Don’t let up’. 8. Institutionalise the new approaches and create the new cultures. Reinforce change through recruitment, promotion & appointment of new change leaders.

16. Kotter • http://www.youtube.com/watch?v=ijCuvSejKD0&feature=player_detailpage • http://www.youtube.com/watch?v=W0EGhBlJK8o&feature=player_detailpage • http://www.youtube.com/watch?v=F9hbX6bLwd4&feature=player_detailpage • http://www.youtube.com/watch?v=7ohEBDLPaTE&feature=player_detailpage

17. ‘Elvis Presley/VCE/WII’ E (establish the need) P (put together a guiding team) V (vision) C (Communication) E (empower others) W (wins & celebrate) I (I don’t let up) I (institutionalise)

18. You need to be able to explain and apply Kotter to a scenario (see the examples & activities in class). Exam question worth 10 marks Complete Activity 13.6 page 296

19. Low-risk and high-risk practices (tactics) for change Organisations should try to use low-risk practices when bringing about change. These include; • Two-way communication • Empowerment of employees • Establish work teams • Support for others

20. High-risk practices include; • Coercion and threats • Manipulation of the situation eg. leave out certain facts and information. • Use of an autocratic management style • One-way communication & decision making; employees are told what to do.

21. Low-risk and high-risk practices can be linked to Kotter’s change theory.

22. Tactics for change • Educate the leaders to ensure that they understand what the change is. • Use a ‘systems’ approach to ensure all aspects are considered. • Use a team approach • Make plans but also allow for flexibility. • Share power with others.

23. 6. Tension between change and implementation. 7. Provide training & staff development 8. Innovative practices 9. Change only happens through people 10. Be prepared for ‘implementation dip’ 11. Help employees develop an ‘intellectual understanding’ of the new practices. 12. Take the long term view.

24. The role of leadership in the change process What skills do leaders and managers need? List at least five different skills (from Unit Three) a leader and manager would need to have.

25. Leaders are critical in the change process. They need to be able to; Diagnosing – understand the situation & knowing what could be expected in the future. Adapting – change & adapt behaviour & resources. Communicating – communicate & share what has to be done.

26. Impact of change on LSOs Changes to internal environment, OM & HRM Structure • Business many expand through mergers, takeovers and acquisition

27. May be horizontal or vertical integration of the organisation • Unprofitable parts of the business may be sold off • Some departments may be relocated interstate or overseas • Flatter organisational structures with fewer levels of management are more likely. • Non-core business activities may be outsourced

28. Business operations may be diversified • Closing some older plants Corporate culture • Changes to the size of the workforce may mean existing employees are negative about the future • Changes in tasks and jobs may impact on culture.

29. Policy • News methods and structure may mean that the organisation develops policies and procedures in areas such as recruitment & selection, training, codes and contracts with suppliers.

30. Management styles, skills and roles • Effective change may mean the use of consultative and participative styles – use of two way communication, group decision making and decentralised authority. • Need for skills such as interpersonal/communication skills, decision making, delegation and vision. • Focus on roles of Planning & Leading through the change process.

31. Need for Controlling and Organising – ensure that the change process has been implemented and evaluated. Changes to the operations management function • Emphasis on work groups of teams • New plant and equipment • Introduction of programs such as Total Quality Management (TQM)

32. Introduction of new value added programs • Pressure on organisations to use ‘green’ technology to lessen the impact on the environment • New technology training and equipment • New production methods Changes to the human resource function • Downsizing may lead to a reduction in the number of staff

33. Decentralisation of power, decision making and accountability with more emphasis on employees • Changing jobs and tasks • Employees may become multiskilled • HR managers will need to recruit staff with the right skill set and manage ways to provide career paths and retain talented and skilled employees

34. New ways of performing tasks and training programs may be introduced • Many job descriptions and tasks will change as a result of change within the organisation • Use of modern awards & EBAs and industry awards. • Legislative changes such as occupational health and safety, equal opportunity and affirmative action

35. Appointment of new senior managers, new management styles and new corporate culture • Legislative changes such as occupational health and safety, equal opportunity and affirmative action • Appointment of new senior managers, new management styles and new corporate culture

36. 2010 VCAA exam question – how would you answer this? • Question 7 Managing change is a vital part of ensuring the success of a large-scale organisation. Analyse possible driving and restraining forces which might cause change in a large-scale organisation. Illustrate your answer with references to an issue or organisation that you have studied this year. (10 marks = 40 lines)