Organizational Change and Development

1. 15 C H A P T E R Organizational Changeand Development F I F T E E N

2. Why do organizations change? • Unplanned Change • Managers don’t expect it • Can lead to chaotic, uncontrolled periods of change • Planned Change • Systematic efforts by managers to move organizations to a new state • Design, technology, tasks, people, information systems, etc.

3. External Forces for Change • Computer technology • law of telecosm • effect on knowledge, competition, employment relations • Globalization and local competition • effect on restructuring, outsourcing • mergers • Demography • diversity • emerging expectations © Corel Corp. With permission.

4. Internal Forces For Change • Turnover of leaders • Need for profits • _______________ • _________________ • ________________

5. Types of Planned Change • Evolutionary Change • Incremental adaptation to the external environment • Series of phases • Need for change • Unfreeze • Change (or move) • Refreeze

6. Types of Change (cont) • Revolutionary Change • Unfolds over long periods of time • Equilibrium periods: organization moves steadily toward its mission and goals • Revolutionary periods: Feverish change that affects the overall strategy of the firm • Deep structures are affected like culture, design, processes, and relationships with the environment

7. Resistance to change • People and Organizations resist changes from both internal and external sources and planned and unplanned change • Manager’s reaction • See resistance as a problem • Treat it coercively • Added resistance • See resistance as a signal • People need more information, or better treatment • Gather insights from people

8. Slide 18.6Sources of Resistance to Change Individual Resistance * Perception * Personality * Habit * Threats to power and influence * Fear of the unknown * Economic reasons Organizational Resistance * Organization design * Organizational culture * Resource limitations * Fixed investments * Interorganizational agreements Resistance to Change

9. Slide 18.5Employee Readiness for Change Perceived Personal Risk from Change Low High High High readiness for change Moderate to indeterminant readiness for change Level of Dissatisfaction with the Current Situation Moderate to indeterminant readiness for change Low readiness for change Low Source: Adapted from Zeira, Y., and Avedisian, J. Organizational planned change: Assessing the chances for success. Organizational Dynamics, Spring 1989, 37.

10. Resistance to Change Direct Costs Saving Face Fear of the Unknown Breaking Routines Incongruent Systems Incongruent Team Dynamics Forces for Change

11. Slide 18.4A Systems Model of Change People Culture Task Technology Design Strategy

12. Slide 18.7Force Field Analysis Driving forces Resisting forces High performance goals Group norms for output Familiarity with present equipment New equipment Complacency Competition Need to learn new skills Employees with new skills Desire for increased influence and rewards Fear of reduced influence and rewards Current level of group performance Desired level of group performance Source: Adapted from Zand, D.E. Force field analysis. In N. Nicholson (ed.), Blackwell Encyclopedic Dictionary of Organizational Behavior. Oxford, England: Blackwell, 1995, 181.

13. Slide 18.3Initiatives Contributing to Effective Change Management Motivating Change Creating a Vision Effective Change Management Developing Political Support Managing the Transition Sustaining Momentum Source: Adapted with permission from Cummings, J.G., and Worley, C.G. Organization Development and Change, 6th ed. Cincinnati: South-Western, 1997, 154.

14. Successfully Diffusing Change • Successful pilot study • Favorable publicity • Top management support • Labor union involvement • Diffusion strategy described well • Pilot program people moved Courtesy of Roberts Express

15. Customer-Driven Change at Continental Airlines Continental Airlines executives created an urgency to change by listening to customers and communicating their concerns to employees. Customer-driven change motivates employees to engage in continuous change. Courtesy of Continental Airlines

16. Minimizing Resistance to Change Communication Minimizing Resistance to Change Coercion Training Negotiation Employee Involvement Stress Management

17. Refreezing the Desired Conditions Creating organizational systems and team dynamics to reinforce desired changes • alter rewards to reinforce new behaviors • new information systems guide new behaviors • recalibrate and introduce feedback systems to focus on new priorities

18. Organization Development A planned system wide effort, managed from the top with the assistance of a change agent, that uses behavioral science knowledge to improve organizational effectiveness.

19. Introduce Change Evaluate/ Stabilize change Action Research Process Establish Client- Consultant Relations Diagnose Need for Change Disengage Consultant’s Services

20. Delivering Developing objectives about “what will be” Discovery Dreaming Designing Discovering the best of “what is” Forming ideas about “what might be” Engaging in dialogue about “what should be” Appreciative Inquiry Process

21. Parallel Structures Parallel Structure Organization

22. Organization Development Concerns • Cross-Cultural Concerns • Linear and open conflict assumptions different from values in some cultures • Ethical Concerns • Management power • Employee privacy rights • Employee self-esteem • Consultant’s role