Managing Change and Organizational Learning Chapter Sixteen Mc

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Managing Change and Organizational Learning Chapter Sixteen Mc. Graw-Hill/Irwin © 2012 The Mc. Graw-Hill

Managing Change and Organizational Learning Chapter Sixteen Mc. Graw-Hill/Irwin © 2012 The Mc. Graw-Hill Companies, Inc. All rights reserved. Copyright © 2012 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

After reading the material in this chapter, you should be able to: LO 16.

After reading the material in this chapter, you should be able to: LO 16. 1 Discuss the external and internal forces that can create the need for organizational change. LO 16. 2 Describe Lewin’s change model and the systems model of change. LO 16. 3 Explain Kotter’s eight steps for leading organizational change. 16 -2

After reading the material in this chapter, you should be able to: LO 16.

After reading the material in this chapter, you should be able to: LO 16. 4 Review the 11 reasons employees resist change. LO 16. 5 Identify alternative strategies for overcoming resistance to change. LO 16. 6 Define the term learning organization LO 16. 7 Review the factors that hinder an organization’s ability to learn from success and failure. 16 -3

Forces of Change External forces for change 9 originate outside the organization Internal forces

Forces of Change External forces for change 9 originate outside the organization Internal forces for change 9 originate inside the organization. 16 -4

External Forces Demographic characteristics Technological advancements Customer and market changes Social and political pressures

External Forces Demographic characteristics Technological advancements Customer and market changes Social and political pressures 16 -5

Internal Forces Low job satisfaction Low productivity Conflict Strikes 16 -6

Internal Forces Low job satisfaction Low productivity Conflict Strikes 16 -6

Question? ABC Trucking, conducted an analysis of employee job satisfaction and turnover, and concluded

Question? ABC Trucking, conducted an analysis of employee job satisfaction and turnover, and concluded that its turnover rate was 48%. This was primarily attributed to job dissatisfaction by employees. This represents a(n) ______ for ABC. A. External force for change B. Social and political pressure C. Technological advancements D. Internal force for change 16 -7

Lewin’s Change Model Unfreezing 9 Focus is to create the motivation to change 9

Lewin’s Change Model Unfreezing 9 Focus is to create the motivation to change 9 Begin by disconfirming the usefulness or appropriateness of employees’ present behaviors or attitudes 16 -8

Lewin’s Change Model Benchmarking 9 the overall process by which a company compares its

Lewin’s Change Model Benchmarking 9 the overall process by which a company compares its performance with that of other companies, then learns how the strongestperforming companies achieve their results 16 -9

Question? Fredfirst, a securities trading company, regularly compares its performance with that of high

Question? Fredfirst, a securities trading company, regularly compares its performance with that of high performing organizations in the industry, such as Merrill Lynch. This process is described as A. Change. B. Refreezing. C. Benchmarking. D. A strategic plan 16 -10

Lewin’s Change Model Changing 9 providing employees with new information, new behavioral models, new

Lewin’s Change Model Changing 9 providing employees with new information, new behavioral models, new processes or procedures, new equipment, new technology, or new ways of getting the job done 9 change can be aimed at improvement or growth, or it can focus on solving a problem such as poor customer service or low productivity 16 -11

Lewin’s Change Model Refreezing 9 Change is stabilized by helping employees integrate the changed

Lewin’s Change Model Refreezing 9 Change is stabilized by helping employees integrate the changed behavior or attitude into their normal way of doing things 9 Giving employees the chance to exhibit new behaviors, which are then reinforced 16 -12

A Systems Model of Change Systems Approach 9 Based on the premise that any

A Systems Model of Change Systems Approach 9 Based on the premise that any change, no matter how large or small, has a cascading effect throughout an organization 9 Takes a “big picture” perspective of organizational change 16 -13

A Systems Model of Change Mission statement 9 represents the “reason” an organization exists

A Systems Model of Change Mission statement 9 represents the “reason” an organization exists Vision 9 a long-term goal that describes “what” an organization wants to become. 16 -14

A Systems Model of Change Strategic plan 9 outlines an organization’s long-term direction and

A Systems Model of Change Strategic plan 9 outlines an organization’s long-term direction and the actions necessary to achieve planned results Target elements of change 9 components of an organization that may be changed 16 -15

Target Elements of Change Organizational arrangements Social factors Methods People 16 -16

Target Elements of Change Organizational arrangements Social factors Methods People 16 -16

A Systems Model of Change 16 -17

A Systems Model of Change 16 -17

Applying the Systems Model of Change Two ways to supply the systems model: Aid

Applying the Systems Model of Change Two ways to supply the systems model: Aid during the strategic planning process Using the model as a diagnostic framework to determine the causes of an organizational problem and to propose solutions 16 -18

Steps to Leading Organizational Change Table 16 -19

Steps to Leading Organizational Change Table 16 -19

Question? Dale needs to change the manufacturing processes of his firm. This will cause

Question? Dale needs to change the manufacturing processes of his firm. This will cause many changes to his labor force. He shares a compelling reason to his employees. Which step is this in leading change? A. Generate short term wins B. Develop a vision and strategy C. Establish a sense of urgency D. Create a guiding coalition 16 -20

Creating Change Through Organization Development 9 consists of planned efforts to help persons work

Creating Change Through Organization Development 9 consists of planned efforts to help persons work and live together more effectively, over time, in their organizations 16 -21

The OD Process 16 -22

The OD Process 16 -22

OD Research and Practical Implications 1. Planned organizational change works 2. Change programs are

OD Research and Practical Implications 1. Planned organizational change works 2. Change programs are more successful when they are geared toward meeting both short-term and long-term results 3. Organizational change is more likely to succeed when top management is truly committed to the change program 4. Effectiveness of OD interventions is affected by cross-cultural considerations 16 -23

Why People Resist Change in the Workplace Resistance to change 9 emotional or behavioral

Why People Resist Change in the Workplace Resistance to change 9 emotional or behavioral response to real or imagined work changes 16 -24

Why People Resist Change in the Workplace 1. An individual’s predisposition toward change 2.

Why People Resist Change in the Workplace 1. An individual’s predisposition toward change 2. Surprise and fear of the unknown 3. Fear of failure 4. Loss of status and/or job security 5. Peer pressure 6. Past success 16 -25

Question? Jamie is not directly affected by the change introduced in her company, but

Question? Jamie is not directly affected by the change introduced in her company, but she is actively resisting it to protect the interests of her friends. This describes which reason for resistance to change? A. Surprise and fear of the unknown B. Personality conflicts C. Peer pressure D. Lack of tact 16 -26

Why People Resist Change in the Workplace 7. Disruption of cultural traditions and/or group

Why People Resist Change in the Workplace 7. Disruption of cultural traditions and/or group relationships 8. Personality conflicts 9. Lack of tact and/or poor timing 10. Leadership style 11. Failure to legitimize change 16 -27

Overcoming Resistance to Change Resilience to change 9 represents a composite characteristic reflecting high

Overcoming Resistance to Change Resilience to change 9 represents a composite characteristic reflecting high self-esteem, optimism, and an internal locus of control, was positively associated with recipients’ willingness to accommodate or accept a specific organizational change 16 -28

Overcoming Resistance to Change Commitment to change 9 A mind-set “that binds an individual

Overcoming Resistance to Change Commitment to change 9 A mind-set “that binds an individual to a course of action deemed necessary for the successful implementation of a change initiative” 16 -29

Overcoming Resistance to Change 1. Provide as much information as possible to employees about

Overcoming Resistance to Change 1. Provide as much information as possible to employees about the change 2. Inform employees about the rationale for the change 3. Conduct meetings to address employee’s concerns 4. Provide employees the opportunity to discuss how the proposed change might affect them 16 -30

Six Strategies for Overcoming Resistance to Change 16 -31

Six Strategies for Overcoming Resistance to Change 16 -31

Creating a Learning Organization Learning organization 9 proactively creates, acquires, and transfers knowledge throughout

Creating a Learning Organization Learning organization 9 proactively creates, acquires, and transfers knowledge throughout the organization 16 -32

Creating a Learning Organization Team mental model 9 Represents team members’ “shared, organized understanding

Creating a Learning Organization Team mental model 9 Represents team members’ “shared, organized understanding and mental representation of knowledge about key elements of the team’s relevant environment” 16 -33

Leadership Is the Foundation of a Learning Organization Building a commitment to learning Working

Leadership Is the Foundation of a Learning Organization Building a commitment to learning Working to generate ideas with impact Working to generalize ideas with impact Helping the organization to “unlearn” old mental models 16 -34

Factors That Detract from an Organization’s Ability to Learn from Failure 16 -35

Factors That Detract from an Organization’s Ability to Learn from Failure 16 -35

Working to Generate Ideas with Impact Implement continuous improvement programs. Increase employee competence through

Working to Generate Ideas with Impact Implement continuous improvement programs. Increase employee competence through training, or buy talent from outside the organization. Experiment with new ideas, processes, and structural arrangements. Go outside the organization to identify world-class ideas and processes. 16 -36

Working to Generalize Ideas with Impact Measuring and rewarding learning. Increasing open and honest

Working to Generalize Ideas with Impact Measuring and rewarding learning. Increasing open and honest dialogue among organizational members Reducing conflict. Increasing horizontal and vertical communication. Promoting teamwork. 16 -37

Working to Generalize Ideas with Impact Rewarding risk taking and innovation. Reducing the fear

Working to Generalize Ideas with Impact Rewarding risk taking and innovation. Reducing the fear of failure. Increasing the sharing of successes, failures, and best practices across organizational members. Reducing stressors and frustration. Reducing internal competition. 16 -38

Helping the Organization to Unlearn Old Mental Models Management must seriously question and challenge

Helping the Organization to Unlearn Old Mental Models Management must seriously question and challenge the ways of thinking that worked in the past if they want to create a learning organization. For example, the old management paradigm of planning, organizing, and control might be replaced with one of vision, values, and empowerment. 16 -39

Video Case: Louisville Slugger – Hillerich & Bradsby What role do information systems play

Video Case: Louisville Slugger – Hillerich & Bradsby What role do information systems play at H&B? What were the internal and external trade-offs between reconfiguring the old information system and designing a new one? Why was the transition to the new system difficult? How could Kotter’s eight steps be used to facilitate such a transition? Why did some people resist change and experience stress? What strategies could H&B have used to overcome resistance to change? 16 -40