Managing Change and Organizational Development

CHAPTER14

14.1 Process of Change and Organizational Development

• The management of change and the development of organizations have been traditionally called Organizational development (OD).

• Organizational development (OD) is a comprehensive approach to planned change that is aimed at improving the overall effectiveness of organization.

14.2 The Change Management and Innovation Process

• Organizational change is considered as the adoption of new idea or behaviour by an organization.

• Organizational innovation is the adoption of an idea or behaviour that is new to the organization’s industry, market or general environment.

14.3 Forces for Change

• External forces: Forces outside the organization, e.g. demographic characteristics, technological advancements, market changes, social as well political pressures, conflicts, and sometimes natural and man-made disasters.

• Internal forces: Forces within the organization itself, e.g. need for higher employee satisfaction with work environment or physical effects such as productivity and work performance. It may result into changes in internal policies, strategies, plans and rules.

External Forces External Forces • Global competition and markets• Global threats• Global recession• Technological change• International economic

integration• Maturation of markets in

developed countries• Fall of capitalist, communist and

socialist regimes

Internal Forces Internal Forces• Structure change due to mergers,

joint ventures and consortia• Strategic change• Cultural change• New business processes, new

technologies and products• Knowledge management• Enterprise resource planning• Quality programs• Learning organizations

Major Forces of Change

14.4 Models of Planned Change

• Lewin’s Force Field Analysis Model

• System Model of Change

• Kotter’s Steps for Leading Organizational Change

• Change Through Organizational Development

Lewin’s Force Field Analysis Model

• Driving forces: Forces that direct behaviour away from the status quo.

• Restraining forces: Forces that hinder behaviour away from the status quo.

• Unfreezing: Change efforts to overcome the pressures of both individual resistance and group conformity.

• Refreezing: Stabilizes a change intervention by balancing driving and restraining forces.

A System Model of Change

• According to the system model, change occurring within an organization will have a direct effect on the organization (Stewart, 2006).

Kotter’s Steps for Leading Organizational Change

Phase 1Unfreezing

Change leader’s task:

Create a need for change

This is done by: establishing a good relationship with those involved

helping others to realize the need to change existing behaviour as they are not effective

minimizing resistance to change

Kotter’s Steps for Leading Organizational Change (cont.)

Phase 2Changing

Change leader’s task:Implement changeThis is done by: identifying new and more effective behaviours choosing appropriate changes in tasks, people and

other factors significant to the changes we are proposing

taking appropriate action to implement changes

Kotter’s Steps for Leading Organizational Change

Phase 3Refreezing

Change leader’s task:Stabilizing changeThis is done by: creating acceptance and continuity for the new

behaviours providing necessary resource support using positive reinforcement to encourage positive

outcome

Change Through Organizational Development

• Organizational development (OD) is much broader in orientation and constitutes a set of techniques used to implement a planned change through increasing organization’s ability to improve itself and to make it more effective. Four characteristics of OD:

– Profound change: A fundamental change resulting in lasting improvements.

Change Through Organizational Development

Value loaded: Change aiming at satisfying customers’ needs and enhanced organization’s products and services.

Diagnosis cycle: An OD approach to diagnose organizational problems, prescribe and implement interventions, and monitor progress.

Process oriented: OD focus on the form and not on the details such as the content of the dealings.

14.5 Research and Practical Implications

• Understanding and Managing Resistance to Change

• Channelling Change

Understanding and Managing Resistance to Change

Why people resist change:• Individual’s predisposition toward change• Surprise and fear of the unknown• Climate of mistrust• Fear of failure• Loss of status and/or job security• Peer pressure• Past success• Lack of reward system

Channeling Change

• Communication

• Learning

• Employee Involvement

• Stress Management

• Negotiation

• Coercion

14.6 Learning Organizations

• Learning organization concentrates on methodologies for creating change to improve the learning process.

• Organizational learning is defined as a process of increasing an organization’s ability to take effective action.

Organizational Learning

Focus The Concept of Organizational Learning Practices

Individuallearning

‘Organizational learning occurs when individuals within an organization experience a problematic situation and inquire into it on the organizational behalf’ (Argyris and Schon 1996)

Staff training and developement

Process o system

Organizational learning is the process where by organizations understand and manage their experiences (Glynn et al., 1992)capability

Enhancement of information processing andproblem solving

Focus The Concept of Organizational Learning Practices

Culture or metaphor A learning organization should be viewed as a metaphur rather than a distinct type of structure, whose employees learn conscious communal processes for continually generating, retaining and leveraging individual and collective learning ta improve performance of the organizational system in ways important to all stakeholders and by monitoring and improving performance’ (Drew and Smith, 1995)

Creation and maintenance of learning culture: collaborative team working, employee empowerment and involvement

Focus The Concept of Organizational Learning Practices

Knowledge management

Organizational learning is the changes in the stale of knowledge (Lyles, l99i 199E). It involves knowledge acquisition, dissemination, refinement creation and implementation: the ability to acquire diverse information and to share common understanding so that this knowledge can he exploited (Fiol, 1994) and the ability to develop insights, knowledge, and to associate among past and future activities (Fiol and Lyles, 1985)

Facilitation of interaction and strengthening of knowledge base

Focus The Concept of Organizational Learning Practices

Continuous improvement

‘A learning organization should consciously and intentionally devote to the facilitation of individual learning in order to continuously transform the entire organization and its context’ (Pedler et al., 1991)

The adoption of TQM practices