ORGANIZATIONAL CHANGE

GROUP 6

Why change?

Dynamic & competitive changing environment – force organizations to change

Change or die

Models of Toyota, Tata

Types of Change

Organization v/s Sub-System

Transformational v/s Incremental

Remedial v/s Developmental

Unplanned v/s Planned

Change Types

Type I That which is done to us.

Type II That which we do to ourselves.

Type III  That which we do to others.

(Change Perception Model by Peter de Jager)

BASIC THEORIES OF CHANGE

4 basic process theories of change. Characterized by event sequences:

Life Cycle Theories: Event Sequence: Start-up, Grow, Harvest, Terminate, Start-up

Teleological Theories Event Sequence: Set Goals, Implement Goals, Dissatisfaction,

Search/Interact, Set Goals

Dialectical Theories Event Sequence: Thesis/Antithesis, Conflict, Synthesis,

Thesis/Antithesis.

Evolutionary Theories Event Sequence: Variation, Selection, Retention, Selection.

Forces of change

Changing nature of workforce Multicultural environment Aging labor force has different needs. Large expenditure on training manpower with

inadequate skills- upgrade skills etc.

Technology Changing Demands /Requirements / Needs Faster ,cheaper, smaller, ways to do things – big

organizations rooted in old ways need to buckle up.

Forces of change

Economic shocks – age of discontinuity Oil prices, Dot com boom & bust Increasing Government Regulations. Recession changes consumer patterns

Competition Global economies- free trade- ever changing face &

nature of competition - both innovators & traditional ones.

Organizations today need to be nimble, quick on their feet , innovative - LEAN.

Mergers & acquisitions.

Forces of change

Social Trends Internet penetration – more people interacting –

information sharing. Generations changing - so are the needs &

habits – rising no. of people shopping in discount stores – looking for value for money

World Political environment Wars – Iraq , Afghanistan – Taliban. Muslim fundamentalism – 9/11, 26/11 New world markets – emergence of BRIC

Change needs to be planned

Generally changes are unplanned If possible should be proactive , goal oriented &

intentional. GOALs

Give the organization more flexibility to adapt to change.

Change employee attitude/ behavior. Who’s Responsible for Change

Change Agent - manager / employee / outside consultant

Source of functional conflict Good- makes people think & debate – but may hinder

adaptation & progress.

Barriers to change

Resistance Overt

Threat of strike Work slowdown Easy to handle – best

Implicit Subtle Loss of loyalty, motivation Increased error, Fall in productivity Difficult to handle.

Deferred Clouds link between Source & Reaction of resistance Piles up & then explodes over non-issues.

Sources of Resistance (Individual)

Habit / Routines Security /Threat to Security Economic factor – especially if (change) tied

to productivity Fear of unknown Selective information processing

Individuals hear & see what they want to Selective perception

Sources of Resistance(Organizational)

Structural Inertia Stability due to set / formalized procedures.

Limited Focus of Change Interdependent functions – change in only one nullified

by larger system . Group Inertia

Group norms. Threat to expertise

Specialised group. Threat to Established POWER Relationships

Redistribution of decision making power. Threat to established resource allocation

Overcoming Resistance

Education & Communication Tell the Logic of change – give full Facts Fights misinformation Helps sell need for change .

Participation Opposing forces – involved in decision making Improve quality & acceptability of change but

also time consuming.

Overcoming Resistance

Building Support & Commitment Use change agents Employee counseling, Therapy, New skill training, Short

paid leave.

Negotiation With key opposition May backfire – ‘Give them an inch, they’ll take a mile’

Select people who accept change Adaptation to change – depends on personality Take people open to experience, risk takers, optimists

Overcoming Resistance

Manipulation – Covert influence attempt Twist & Distort facts – appear more attractive Create false rumor, withhold undesirable

information.

Cooptation – buy off key leaders of resistance Give them key role in change decision – Get

their endorsement

Coercion Direct threat / force – transfer, loss of promotion

Generic Solutions

Adopt quality control measures Give power to each individual

Define roles Empower key personnel

Challenge people Motivate them to change.

Eliminate unnecessary rules Increase interaction and cross functionality In all, grease the joints to prevent rusting Fire / Retrench people if required – make space

for new blood.

Change: Failure

According to global research: More than 60% of the changes organizations try

to implement, fail to achieve expectations. Many more require significantly more time and

resources than their planners anticipated.

Source: (http://www.mclaganint.com/change/)

Mistakes In Implementing Change Not Building a Task Force Assuming Responses to Change Will be

Unanimous Not Providing Enough Face Time

Honest, Open, Interpersonal dialogues are more effective in changing behaviour

Not Sticking to the Vision Failing to Plan Small Successive Successes Underestimating importance of humans Treating change as an event and not as a

process

Managing Organizational Change

LEWIN’S THREE STEP MODELACTION RESEARCHKOTTER’S 8 STEP MODELORGANIZATIONDEVELOPMENT

Mc Kinsey 7-StepModel

LEWIN’S MODEL: Unfreezing techniques

Burning platform: Expose or create a crisis Challenge: Inspire them to achieve remarkable thing Command: Just tell them to move! Evidence: Cold, hard data is difficult to ignore Destabilizing: Shaking people of their comfort zone Education: Learn them to chang Management by Objectives (MBO): Tell people what to do, but not

how Restructuring: Redesign the organization to force behavior change Rites of passage: Hold a wake to help let go of the pas Setting goals: Give them a formal objective Visioning: Done well, visions work to create change Whole-system Planning: Everyone planning together

Transition Techniques

Boiling the frog: Incremental changes may well not be noticed. Challenge: Inspire them to achieve remarkable things. Coaching: Psychological support for executives. Command: Tell them what to do. Education: Teach them, one step at a time. Facilitation: Use a facilitator to guide team meetings. First steps: Make it easy to get going. Involvement: Give them an important role. Management by Objectives (MBO): Tell people what to do, but not how. Open Space: People talking about what concerns them. Re-education: Train the people you have in new knowledge/skills. Restructuring: Redesign the organization to force behavior change. Shift-and-sync: Change a bit then pause restabilize. Spill and fill: Incremental movement to a new organization. Stepwise change: breaking things down into smaller packages. Whole-system Planning: Everyone planning together.

Refreezing Techniques

Burning bridges: Ensure there is no way back. Evidence stream: Show them time and again that the

change is real. Golden handcuffs: Put rewards in their middle-term future. Institutionalization: Building change into the formal

systems and structures. New challenge: Get them looking to the future. Rationalization trap: Get them into action then help them

explain their actions. Reward alignment: Align rewards with desired behaviors. Rites of passage: Use formal rituals to confirm change. Socializing: Build it into the social fabric.

Action Research Model

Kotter’s Eight-Step Plan

Establish a sense of urgency by creating a compelling reason for why change is needed

Form a coalition with enough power to lead the change

Create a new vision to direct the change and the strategies for achieving the vision

Communicate the vision throughout the organizationEmpower others to act on the vision by removing barriers to change and encouraging risk taking and creative problem solvingPlan for, create, and reward short-term “wins” that move the organization toward new visionConsolidate improvements, reassess changes, and make necessary adjustments in the new programsReinforce the changes by demonstrating the relationship between new behaviors and organizational success.

Mc Kinsey 7-S Model

Mc Kinsey Model

Strategy The direction and scope of the company over the

long term. Structure

The basic organization of the company, its departments, reporting lines, areas of expertise, and responsibility (and how they inter-relate).

Systems Formal and informal procedures that govern

everyday activity, covering everything from management information systems, through to the systems at the point of contact with the customer (retail systems, call centre systems, online systems, etc).

The 4Ss across the bottom of the model are less tangible, more cultural in nature, and were termed 'Soft Ss' by McKinsey: Skills: The capabilities and competencies that exist

within the company. What it does best. Shared values: The values and beliefs of the

company. Ultimately they guide employees towards 'valued' behavior.

Staff: The company's people resources and how they are developed, trained, and motivated.

Style: The leadership approach of top management and the company's overall operating approach.

Mc Kinsey Model

Organization Development

Definition Decoded:

No easy definition Planned change intervention Humanistic-Democratic Values Improves org. effectiveness and employee

well-being

Organizational Development

Underlying Values:

UNDERLYING

VALUES

RESPECT FOR PEOPLE

TRUST AND SUPPORT

POWER EQUALIZATIO

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CONFONTRATION

PARTICIPATION

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APPRECIATIVE

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Practical examples

GLOBALIZATION OF WAL MART