Organizational Change Planned or unplanned transformations in an organization’s structure, technology, and/or people. First-Order Change: that is continuous in nature and involves no major shifts in the way an organization operates. Second-Order Change: Radical change; major shifts involving many different levels of the organization and many different aspects of business.
Characteristics of change Vital to avoid stagnation Process not a event Fast especially in present competitive scenario Can be directive or participative Natural or adaptive Incremental or step Interdependent on organizational environment or culture
Need for Change Need for Change Globalization Environmental concern Health consciousness Changes in lifestyle Need for non-traditional employees Knowledge asset of the company
External Forces for ChangeGovernment ForceTechnology Faster ,cheaper & more mobile computerEconomic factor Fluctuating interest rate, declining productivity, uncertainties due to inflation or deflation, oil prices etc.Competition Global competition, mergers & acquisitions, growth of e commerceSocial Trends Internet chat room, retirement of body boomersCustomers Changing need & preference
Internal Forces for ChangeNature of workforce More cultural diversity; aging population; many new entrant with inadequate skillSystem dynamics Technology, dominant group, formal or informal relationshipInadequacy of admin processes Revision of org goal & objective; rules ;regulations, procedures.Individual/group speculations Positive factor need, ambitions, potentialities, capabilities, career growth etc.Structure focused change Downzing,rightsizing,job redesignTechnological changes Changes in equipment, work process, sequence, information processing system, automationResources constraints Depletion, non-availability
Levels of change Individual level Development changes such as- job assignment Physical movement to other location Change in the maturity of a person occurring over a period of time Group level Important because most of the activities are on group basis Change can affect work flow, job design, social organization, status, communication pattern Informal group must be considered-major barrier Formal group- in the form of trade unions Organizational level Major programs that affect both individual and group Made by senior mgt and are seldom implemented by single manager Long term and requires considerable planning- reorganization, revamping remuneration system,etc also Referred as organizational development
Targets of ChangeOrganizational Technology Peoplestructure
Resistance to ChangeThe tendency for employees to be unwilling to go alongwith organizational changes, either because of individualfears of the unknown, or organizational impediments Individual barriers to change Organizational barriers to change Readiness for change Overcoming resistance to change
Readiness for change Readiness = D (Dissatisfaction) x V (Vision) x F (First steps) > R (Resistance) Is there enough dissatisfaction with the current state? D What is the gap between the current reality and the envisioned future? Is there a sense of compelling vision of a highly desirable future state? V To what degree is it shared? To what degree are individuals committed to the vision? F Are the first steps for making the change doable?
Sources of Resistance toChangeIndividual Sources Organizational Sources Habit Structural inertia Security Limited focus to change Economic factors Group inertia Fear for the unknown Threat to expertise Selective information Threat to established power processing relationships Threat to established allocation of resources
Overcoming Resistance toChange Education and Communication Participation Build Support & Commitment Negotiation Manipulation & Cooptation Coercion Selecting people who accept change Overcoming Resistance to Change
Tactics to Minimize Resistance• Explain why • Provide appropriate training in new skills and coaching in new values• Identify the benefits and behaviors• Invite and answer questions • Encourage self-management • Give more feedback than usual to• Solicit participation, and, if possible, ensure people always know where early involvement they stand • (“first-draft / straw model” reviews, • Allow for resistance. Help people let membership in go of the “old” planning/implementation teams, etc.) • Measure results, step back and take a look at what is going on. Keep• Avoid surprises asking “Is the change working the way we want it to?”• Set standards and clear targets • Encourage people to think and act creatively• Inform/involve informal leaders • Look for any “opportunity” created• Recognize and reward efforts by the change• Over communicate • Allow for withdrawal and return of people who are temporarily resistant
Managing Planned Change Managing Planned Change Goals of Planned Change Change (Making things different.) Improving the ability of the organization to adapt to changes in its environment. Planned Change Changing the behavior of (Activities that are intentional and goal individuals and groups in the oriented) organization Change Agents (Persons who act as catalysts and assume the responsibility for managing change activities)
Approaches to ManagingOrganizational Change Lewin’s three-step Change Model Action Research Organizational Development
Lewin’s Three-Step ChangeModelUnfreezing Movement Refreezing
UNFREEZING Creating motivation and readiness to changeTechniques to reinforce unfreezing . . .• Acknowledge feelings and empathise• Give people as much information about the change as possible• Say what will not change• Treat the past with respect• Help others to see the gap
CHANGE & MOVEMENTGuiding through the transitionTechniques to reinforce movement . . .• Provide focus and direction• Strengthen peoples connections to one another• Open up two way communications• Provide the individual with a specific role in the change process• Provide leadership and tenacity
RE-FREEZINGIntegrating the new point of viewTechniques to reinforce re-freezing:• (before reverting to the old point of view)• Ensure that individuals and leaders are reinforced for new behaviour• Implement quick results and highlight successes• Build feedback mechanisms• Celebrate!
Action ResearchA change process based on systematic collection of data and thenselection of a change action based on what the analyzed dataindicate.Process Steps Entry Startup Assessment and Diagnosis Feedback Action planning Intervention Evaluation
Action ResearchAction research benefits; Problem-focused rather than solution-centered. Heavy employee involvement reduces resistance to change.
Organizational DevelopmentOrganizational Development (OD) A collection of plannedinterventions, built on humanistic-democratic values, that seeksto improve organizational effectiveness and employee well-being.OD Values: Respect for people Trust and support Power equalization Confrontation Participation
Organizational DevelopmentTechniques Sensitivity Training groups (T-groups) that seek to change behavior through unstructured group interaction. Provides increased awareness of others and self. Increases empathy with others, improves listening skills, greater openness, and increased tolerance for others.
Creating a LearningOrganizationLearning Organization An organization that has developedthe continuous capacity to adapt and change.Characteristics: Holds a shared vision Discards old ways of thinking. Views organization as system of relationships. Communicates openly. Works together to achieve shared vision.
Organizational Culture Organizational Culture is a system of shared beliefs and values that develop within an organization and guide the behavior of its members “The way we do things around here.” Basic assumptions, values, norms Implications: Culture is a perception. Culture is shared. Culture is descriptive. 28
Keeping Culture Alive Sources of Organizational Culture The organization’s founder Vision and mission Past practices of the organization The way things have been done The behavior of top management Continuation of the Organizational Culture Recruitment of like-minded employees who “fit” Socialization of new employees to help them adapt to the culture 31
Family culture Strong emphasis on hierarchy and orientation to the person Family-type environment that is power oriented and headed by a leader who is regarded as a caring parent Management looks after employees, and tries to ensure that they are treated well and have continued employment May catalyze and multiply the energies of the personnel or end up supporting a leader who is ineffective and drains their energies and loyalties
Eiffel Tower Strong emphasis on hierarchy and orientation to the task Jobs are well defined, and everything is coordinated from the top This culture is narrow at the top, and broad at the base Relationships are specific, and status remains with the job. Managers seldom create off-the-job relationships with their people, because they believe this could affect their rational judgment This culture operates very much like a formal hierarchy— impersonal and efficient and loyalties
Guided Missile Strong emphasis on equality in the workplace and orientation to the task This culture is oriented to work Work typically is undertaken by teams or project groups In projects, formal hierarchical considerations are given low priority, and individual expertise is of greatest importance All team members are equal (or at least potentially equal All teams treat each other with respect, because they may need the other for assistance Egalitarian and task-driven organizational culture
Incubator Strong emphasis on equality and personal orientation Based on the premise that organizations serve as incubators for the self-expression and self-fulfillment of their members Little formal structure Participants in an incubator culture are there primarily to perform roles such as confirming, criticizing, developing, finding resources for, or helping to complete the development of an innovative product or service
Four Corporate CulturesTable 6–3Summary Characteristics of the Four Corporate Culture Corporate CultureCharacteristic Family Eiffel Tower Guided Missile IncubatorRelationships Diffuse relation- Specific role in Specific tasks in Diffuse, spontaneobetween ships to organic mechanical cybernetic system us relationshipsemployees whole to which system of targeted on shared growing out of one is bonded required objectives shared creative interaction processAttitude toward Status is ascribed Status is ascribed Status is achieved Status is achievedauthority to parent figures to superior roles by project group by Individuals who are close and that are distant yet members who Exemplifying powerful powerful contribute to creativity and targeted goal growthWays of thinking Intuitive, holistic, la Logical, analytical, Problem Processand learning teral and error vertical, and centered, professi oriented, creative, correcting rationally efficient onal, practical, cro ad ss disciplinary hoc, inspirational
Four Corporate CulturesTable 6–3Summary Characteristics of the Four Corporate Culture Corporate CultureCharacteristic Family Eiffel Tower Guided Missile IncubatorAttitudes toward Family members Human resources Specialists and Co-creatorspeople expertsWays of changing “Father” changes Change rules and Shift aim as target Improvise and Course procedures moves attuneWays of Intrinsic Promotion to Pay or credit for Participation in themotivating and satisfaction in greater performance and process of creatingrewarding being loved and position, larger problems solved new realities respected role Management by Management by Management by Management by subjectives job description objectives enthusiasm
Four Corporate CulturesTable 6–3Summary Characteristics of the Four Corporate Culture Corporate Culture Characteristic Family Eiffel Tower Guided Missile IncubatorCriticism and Turn other Criticism is Constructive task Improve creativeconflict resolution cheek, save accusation of related only, then idea, not negate it other’s face, do irrationalism admit error and not lose power unless there are correct fast game procedures to arbitrate conflictsSource: Adapted from Fons Trompenaars and Charles Hampden-Turner, Riding the Waves of Culture:Understanding Diversity in Global Business, 2nd ed. (Burr Ridge, IL: Irwin, 1998), p. 183.
Strong versus Weak Cultures Strong Cultures Are cultures in which key values are deeply held and widely held. Have a strong influence on organizational members. Factors Influencing the Strength of Culture Size of the organization Age of the organization Rate of employee turnover Strength of the original culture Clarity of cultural values and beliefs 40
How Employees Learn Culture Stories - a narrative of significant events or people Rituals - repetitive sequences of activities Material symbols – essential in creating an organization’s personality Language - unique terminology or jargon 41
How Culture Affects Managers? Plan - degree of risk that plans should contain Organize - degree of autonomy given to employees Lead - degree of concern for employees, style of leadership Control - what criteria to use when evaluating performance 42
How do we make a working environment more conducive? 43
The External Environment Suppliers Customers The Organization Public Pressure Competitors Groups 45
How do we make a workingenvironment more conducive? Employee empowerment, Employee motivation, or Employee satisfaction, Employee engagement Employee engagement must be a strategy that focuses Employee engagement must focus on business results & measure the outcomes of their performance. 46
Continue… An effective recognition and reward system Frequent feedback Shared values and guiding principle Positive relationships with coworkers Demonstrated respect, trust, and emotional intelligence on the part of the employees direct supervisor 47