Organizational Change What is Organizational Change v The

Organizational Change

What is Organizational Change? v The process by which organizations move from their present state to some desired future state to increase their effectiveness

Workforce World Politics Social Trends Technology Forces For Change Competition Economic Shocks

Globalization Rethink the most efficient ways to • Use resources • Disseminate/gather information • Develop people Changes in work relationships Changing Technology Changes in organizational structure

Increased Diversity Less unionized More educated Changed values and expectations Changing Workforce Larger Contingent workforce More dual career families

General Model of Planned Change Entering and Contracting Diagnosing Planning and Implementing Evaluating and Institutionalizing

Different Types of Planned Change v Magnitude of Change Incremental n Quantum n v Degree of Organization Overorganized n Underorganized n v Domestic vs. International Settings

Critique of Planned Change v Conceptualization of Planned Change is not linear n Change is not rational n The relationship between change and performance is unclear n v Practice of Planned Change Limited consulting skills and focus n Quick fixes vs. development approaches n

Managing Planned Change First-Order Change Second-Order Change Linear Multilevel Continuous Discontinuous Incremental Radical

Lewin’s Change Model Unfreezing Changing Refreezing Lewin’s Three-Step Process

Lewin’s 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

Lewin’s Force-Field Theory of Change v Theory of change which argues that two sets of opposing forces within an organization determine how change will take place Forces for change and forces making organizations resistant to change n To change an organization, managers must increase forces for change and decrease forces resisting change n

Unfreezing the Status Quo Desired State Restraining Forces Status Quo Driving Forces Time

Force Field Analysis Driving forces Resisting forces New equipment Group norms for output Familiar equipment Competition Complacency Employees with new skills Need to learn new skills Desire for higher rewards Fear of reduced rewards High perf. goals Current level of group performance Desired level of group performance

Resistance Forces Change & Resistance Forces Strong No Change Discontinuous Change Weak Sporadic Change Continuous Change Weak Strong Change Forces

Resistance to Change - Individual Selective Information Processing Force of Habit Individual Fear of the Unknown Economic Factors Need for Security

Resistance to Change-Organisation Group Inertia Threat to Existing Relationships Structural Inertia Organizational Threat to Existing Allocations Threat to Expertise Limited Focus of Change

Employee Readiness for Change High Low High readiness Moderate to indeterminate readiness Low Level of Dissatisfaction with the Current Situation Perceived Personal Risk from Change Moderate to indeterminate readiness Low readiness

Overcoming Resistance to Change Education and Communication Participation Negotiation Facilitation and Support Manipulation and Cooptation Coercion

Organizational Culture v the set of shared values and norms that controls organizational members’ interactions with each other and with people outside the organization

Components of Organizational Culture v Routine behaviors. v Norms shared by members. v Dominant values. v Guiding philosophy for policies toward employees and customers. v The rules of the game for getting along in the organization. v The climate of the organization.

Levels of Organizational Culture Cultural Symbols Shared Behaviors Organisational Values

Organizational Culture Functions Liabilities v Defining boundaries v Impeding change v Conveying identity v Inhibiting diversity v Promoting commitment v Blocking mergers v Controlling behavior v Blocking acquisitions

Requirements for Successfully Changing Organizational Culture v Understand the old culture first. v Support employees and teams who have ideas for a better culture and are willing to act on those ideas. v Find the most effective subculture in the organization and use it as a model. v Use the vision of a new culture as a guide for change. v Recognize that significant cultural change takes time. v Live the new culture.

Issues to Address in Changing Organizational Culture v Capitalize on dramatic opportunities. v Combine caution with optimism. v Understand resistance to cultural change. v Change many elements, but maintain some continuity. v Recognize the importance of implementation. v Modify socialization tactics. v Find and cultivate innovative leadership.

Initiatives Contributing to Effective Change Management Motivating Change Creating a Vision Developing Political Support Managing the Transition Sustaining Momentum Effective Change Management