MGT100 Organization and Management

Topic XIITopic XII

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Organizational Change

• ContentContent– Categories of changeCategories of change– Forces for changeForces for change– Change processChange process– Resistance to changeResistance to change– Making changes in the organizationMaking changes in the organization

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Categories of change

• Definition of changeDefinition of change• Categories of changeCategories of change

– StructureStructure– TechnologyTechnology– PeoplePeople

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What is Change?• Organisational changeOrganisational change

– Any alterations in the people, structure, or Any alterations in the people, structure, or technology of an organisationtechnology of an organisation

• Characteristics of changeCharacteristics of change– Is constant yet varies in degree and Is constant yet varies in degree and

directiondirection– Produces uncertainty yet is not Produces uncertainty yet is not

completely unpredictablecompletely unpredictable– Creates both threats and opportunitiesCreates both threats and opportunities

• Managing change is an integral partManaging change is an integral partof every manager’s jobof every manager’s job

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Forces for change

• External forcesExternal forces• Internal forcesInternal forces• Manager as a change agentManager as a change agent

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Forces for Change

• External forcesExternal forces– MarketplaceMarketplace

– Governmental lawsGovernmental laws

and regulationsand regulations

– TechnologyTechnology

– Labor marketLabor market

– Economic changesEconomic changes

• Internal forcesInternal forces

– Changes in Changes in organisational organisational strategystrategy

– Workforce Workforce changeschanges

– New equipmentNew equipment

– Employee Employee attitudesattitudes

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The Manager as Change Agent

• Change agentsChange agents– People who act as catalysts and assume People who act as catalysts and assume

the responsibility for changing process are the responsibility for changing process are called change agents.called change agents.

• Types of change agentsTypes of change agents– Managers: internal entrepreneursManagers: internal entrepreneurs– Non-managers: change specialistsNon-managers: change specialists– Outside consultants: change Outside consultants: change

implementation expertsimplementation experts

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Making changes in the organization

• Planned changesPlanned changes• Organization developmentOrganization development• Organization development techniquesOrganization development techniques

– Survey feedbackSurvey feedback– Process consultationProcess consultation– Team-buildingTeam-building– Intergroup developmentIntergroup development

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Change process

• ““Calm Water” metaphorCalm Water” metaphor• ““White-Water Rapids” metaphorWhite-Water Rapids” metaphor• Handle change Handle change

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Change Process Viewpoints

• The calm waters metaphorThe calm waters metaphor– Lewin’s description of the change process as a Lewin’s description of the change process as a

break in the organisation’s equilibrium statebreak in the organisation’s equilibrium state• UnfreezingUnfreezing the status quo the status quo• ChangingChanging to a new state to a new state• RefreezingRefreezing to make the change permanent to make the change permanent

• White-water rapids metaphorWhite-water rapids metaphor– The lack of environmental stability and The lack of environmental stability and

predictability requires that managers and predictability requires that managers and organisations continually adapt (manage change organisations continually adapt (manage change actively) to surviveactively) to survive

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The Change Process

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Managing ChangeThree categories of change

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Organisational Development Techniques

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Resistance to change

• Reason to resist changeReason to resist change

• Techniques for reducing resistanceTechniques for reducing resistance

Individual resistance

Fear of the unknown

Belief that Change is not good for

the organization

Fear of losing something of value

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Managing Resistance to Change

• Why do people resist change?Why do people resist change?

– The ambiguity and uncertainty that change The ambiguity and uncertainty that change introducesintroduces

– The comfort of old habitsThe comfort of old habits

– A concern over personal loss of status, A concern over personal loss of status, money, authority, friendships, and personal money, authority, friendships, and personal convenienceconvenience

– The perception that change is incompatible The perception that change is incompatible with the goals and interest of the organisationwith the goals and interest of the organisation

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Using Force Field Analysis

• Kurt Lewin proposed that two sets of Kurt Lewin proposed that two sets of forces operate in any system.forces operate in any system.

• Driving forces (encourage change)Driving forces (encourage change)• Resisting forces (discourage change)Resisting forces (discourage change)• Equilibrium is when the forces are Equilibrium is when the forces are

balanced against each other.balanced against each other.• To make change managers may need to To make change managers may need to

maximise driving forces and minimise maximise driving forces and minimise resisting forces. resisting forces.

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Techniques to reduce resistance to change

Education and communicationEducation and communication

ParticipationParticipation

Facilitation and supportFacilitation and support

NegotiationNegotiation

Manipulation and co-optationManipulation and co-optation

CoercionCoercion

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Contemporary issues inmanaging change

• Changing organisational culturesChanging organisational cultures– Cultures are naturally resistant to Cultures are naturally resistant to

change.change.– Conditions that facilitate cultural Conditions that facilitate cultural

change:change:• The occurrence of a dramatic crisisThe occurrence of a dramatic crisis• Leadership changing handsLeadership changing hands• A young, flexible, and small organisationA young, flexible, and small organisation• A weak organisational cultureA weak organisational culture

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How can cultural change be accomplished?

•Conduct a cultural analysis to identify cultural Conduct a cultural analysis to identify cultural elements needing change.elements needing change.

•Make it clear to employees that the Make it clear to employees that the organisation’s survival is legitimately threatened organisation’s survival is legitimately threatened if change is not forthcoming.if change is not forthcoming.

•Appoint new leadership with a new vision.Appoint new leadership with a new vision.

• Initiate a reorganisation.Initiate a reorganisation.

• Introduce new stories and rituals to convey the Introduce new stories and rituals to convey the new vision.new vision.

•Change the selection and socialization Change the selection and socialization processes and the evaluation and reward processes and the evaluation and reward systems to support the new values.systems to support the new values.

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Managing the downsized workplace

Help for survivors of downsizingHelp for survivors of downsizing

Open and honest communicationOpen and honest communication

Managing thedownsized workplace

Managing thedownsized workplace

Assistance to ‘downsized’ workersAssistance to ‘downsized’ workers

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Handling employee stress

• What is stress?What is stress?– StressStress

• The physical and psychological tension an individual The physical and psychological tension an individual feels when confronted with extraordinary demands, feels when confronted with extraordinary demands, constraints, or opportunities and their associated constraints, or opportunities and their associated importance and uncertainties.importance and uncertainties.

• Functional StressFunctional Stress– Stress that has a positive effect on performance.Stress that has a positive effect on performance.

– How potential stress becomes actual stressHow potential stress becomes actual stress• When there is uncertainty over the outcome.When there is uncertainty over the outcome.• When the outcome is important.When the outcome is important.

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Causes of stress

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Symptoms of stress

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Issues in managing change

• Reducing stressReducing stress– Engage in proper employee selectionEngage in proper employee selection– Match employees’ KSA’s to jobs’ TDR’sMatch employees’ KSA’s to jobs’ TDR’s– Use realistic job interviews for reduce Use realistic job interviews for reduce

ambiguityambiguity– Improve organisational communicationsImprove organisational communications– Develop a performance planning programDevelop a performance planning program– Use job redesignUse job redesign– Provide a counseling programProvide a counseling program– Offer time planning management Offer time planning management

assistanceassistance– Sponsor wellness programsSponsor wellness programs

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Issues in managing change

• Making change happen successfullyMaking change happen successfully– Embrace changeEmbrace change—become a change-—become a change-

capable organisation.capable organisation.– Create a simple, compelling message Create a simple, compelling message

explaining why change is necessary.explaining why change is necessary.– Communicate constantly and honestly.Communicate constantly and honestly.– Foster as much employee participation as Foster as much employee participation as

possible—get all employees committed.possible—get all employees committed.– Encourage employees to be flexible.Encourage employees to be flexible.– Remove those who resist and cannot be Remove those who resist and cannot be

changed.changed.

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Characteristics of change-capable organisations

• Link the present Link the present and the future.and the future.

• Make learning a Make learning a way of life.way of life.

• Actively support Actively support and encourage and encourage day-to-day day-to-day improvements improvements and changes.and changes.

• Ensure diverse teams.Ensure diverse teams.

• Encourage mavericks.Encourage mavericks.

• Shelter breakthroughsShelter breakthroughs

• Integrate technology.Integrate technology.

• Build and deepen Build and deepen trust.trust.

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Stimulating innovation

• CreativityCreativity– The ability to combine ideas in a The ability to combine ideas in a

unique way or to make an unusual unique way or to make an unusual association.association.

• InnovationInnovation– Turning the outcomes of the creative Turning the outcomes of the creative

process into useful products, services, process into useful products, services, or work methodsor work methods

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Systems view of innovation

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Innovation variables

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Stimulating and nurturing innovation

• Structural variablesStructural variables– Adopt an organic structureAdopt an organic structure– Make available plentiful resourcesMake available plentiful resources– Engage in frequent inter-unit Engage in frequent inter-unit

communicationcommunication– Minimize extreme time pressures on Minimize extreme time pressures on

creative activitiescreative activities– Provide explicit support for creativityProvide explicit support for creativity

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Stimulating and nurturing innovation (cont’d)

• Cultural variablesCultural variables– Accept ambiguityAccept ambiguity– Tolerate the impracticalTolerate the impractical– Have low external controlsHave low external controls– Tolerate risk takingTolerate risk taking– Tolerate conflictTolerate conflict– Focus on ends rather than meansFocus on ends rather than means– Develop an open-system focusDevelop an open-system focus– Provide positive feedbackProvide positive feedback

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Stimulating and nurturing innovation (cont’d)

• Human resource variablesHuman resource variables– Actively promote training and Actively promote training and

development to keep employees’ development to keep employees’ skills current.skills current.

– Offer high job security to encourage Offer high job security to encourage risk taking.risk taking.

– Encourage individual to be Encourage individual to be “champions” of change.“champions” of change.