Organizational change and development

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Organizational change and development

  1. 1. 1 •Organizational Change and Development
  2. 2. Courtesy National Board of Antiquities, Finland Continuous Change at NokiaContinuous Change at Nokia Nokia has continually adapted to its changing environment. The Finnish company began as a pulp and paper mill in 1865, then moved into rubber, cable wiring, and computer monitors. In the 1980s, Nokia executives sensed an emerging market for wireless communication. Today, Nokia is a world leader in cellular telephones.
  3. 3. 3© 2005 Prentice Hall Inc. 18 Forces for ChangeForces for Change E X H I B I T 18–1 E X H I B I T 18–1 Force Examples Nature of the workforce More cultural diversity Aging population Many new entrants with inadequate skills Technology Faster, cheaper, and more mobile computers On-line music sharing Deciphering of the human genetic code Economic shocks Rise and fall of dot-com stocks 2000–02 stock market collapse Record low interest rates Competition Global competitors Mergers and consolidations Growth of e-commerce
  4. 4. 4© 2005 Prentice Hall Inc. 18 Forces for ChangeForces for Change E X H I B I T 18–1 (conE X H I B I T 18–1 (con Force Examples Social trends Internet chat rooms Retirement of Baby Boomers Rise in discount and “big box” retailers World politics Iraq–U.S. war Opening of markets in China War on terrorism following 9/11/01
  5. 5. 5© 2005 Prentice Hall Inc. 18 Managing Planned ChangeManaging Planned Change Goals of Planned Change: Improving the ability of the organization to adapt to changes in its environment. Changing the behavior of individuals and groups in the organization. Goals of Planned Change: Improving the ability of the organization to adapt to changes in its environment. Changing the behavior of individuals and groups in the organization. Change Making things different. Planned Change Activities that are intentional and goal oriented. Change Agents Persons who act as catalysts and assume the responsibility for managing change activities.
  6. 6. 6© 2005 Prentice Hall Inc. 18 Resistance to ChangeResistance to Change Forms of Resistance to Change – Overt and immediate • Voicing complaints, engaging in job actions – Implicit and deferred • Loss of employee loyalty and motivation, increased errors or mistakes, increased absenteeism
  7. 7. 7© 2005 Prentice Hall Inc. 18 Sources of Individual ResistanceSources of Individual Resistance to Changeto Change E X H I B I T 18–2 E X H I B I T 18–2
  8. 8. 8© 2005 Prentice Hall Inc. 18 Sources of OrganizationalSources of Organizational Resistance to ChangeResistance to Change E X H I B I T 18–2 (cont’d) E X H I B I T 18–2 (cont’d)
  9. 9. 9© 2005 Prentice Hall Inc. 18 Overcoming Resistance toOvercoming Resistance to ChangeChange Tactics for dealing with resistance to change: • Education and communication • Participation • Facilitation and support • Negotiation • Manipulation and cooptation • Coercion Tactics for dealing with resistance to change: • Education and communication • Participation • Facilitation and support • Negotiation • Manipulation and cooptation • Coercion
  10. 10. 10© 2005 Prentice Hall Inc. 18 The Politics of ChangeThe Politics of Change • Impetus for change is likely to come from outside change agents. • Internal change agents are most threatened by their loss of status in the organization. • Long-time power holders tend to implement only incremental change. • The outcomes of power struggles in the organization will determine the speed and quality of change.
  11. 11. 11 Organizational Change: An International Phenomenon 0 10 20 30 40 50 60 70 80 0 10 20 30 40 50 60 70 80 Percentage of Respondents by Country International expansion Reduction in employment Mergers, divestitures, acquisitions Major restructuring Hungary Mexico S. Korea Germany United States Japan (Source: Kanten, R., 1991.)
  12. 12. 12 Changing People: Some BasicChanging People: Some Basic StepsSteps Recognizing the need for change Attempting to create a new state of affairs Incorporating the changes, creating and maintaining a new organizational system Step 1: Unfreezing Step 3: Refreezing Step 2: Changing Current State New State
  13. 13. 13 TeamTeam Building:Building: Its BasicIts Basic StepsSteps Sensitivity groups Objective data Group members recognize problem Diagnose group’s strengths and weaknesses Develop desired change goals Develop action plan to make changes Implement plan Evaluate plan Process completed if successfulif successful if unsuccessfulif unsuccessful RestartprocessRestartprocess
  14. 14. 14 When Will It Occur? Benefit of making change Compared to Cost of making change Change is made Change is not made Amount of dissatisfaction with current conditions Availability of a desirable alternative Existence of a plan for achieving a desirable alternative If benefits exceed costs If costs exceed benefits
  15. 15. Some External Forces for ChangeSome External Forces for Change InformationInformation TechnologyTechnology GlobalizationGlobalization & Competition& Competition DemographyDemography Courtesy National Board of Antiquities, Finland
  16. 16. Desired Conditions Current Conditions Before Change After Change Driving Forces Restraining Forces Force Field AnalysisForce Field Analysis During Change Driving Forces Restraining Forces Driving Forces Restraining Forces
  17. 17. Resistance to Change at BP NorgeResistance to Change at BP Norge • “SDWTs don’t work on drilling rigs!” • “We already have teams!” • “This creates more work — will we get higher pay?” • “I don’t know how to work in teams.” • “SDWTs will threaten my job as a supervisor!” Employees initially resisted self- directed teams BP Norge’s North Sea drilling rigs. AP Worldwide
  18. 18. Forces for Change Forces for Change Resistance to ChangeResistance to Change Direct Costs Saving Face Fear of the Unknown Breaking Routines Incongruent Systems Incongruent Team Dynamics
  19. 19. Creating an Urgency for ChangeCreating an Urgency for Change • Need to motivate employees to change • Most difficult when organisation is doing well • Must be real, not contrived • Customer-driven change
  20. 20. MinimizingMinimizing ResistanceResistance toto ChangeChange CommunicationCommunication TrainingTraining EmployeeEmployee InvolvementInvolvement StressStress ManagementManagement NegotiationNegotiation CoercionCoercion Minimizing Resistance to ChangeMinimizing Resistance to Change
  21. 21. Refreezing the Desired ConditionsRefreezing the Desired Conditions Creating organizational systems and team dynamics to reinforce desired changes – alter rewards to reinforce new behaviours – new information systems guide new behaviours – recalibrate and introduce feedback systems to focus on new priorities
  22. 22. Courtesy of CHC Helicopter Corp. Change AgentsChange Agents • Anyone who possesses enough knowledge and power to guide and facilitate the change effort • Change agents apply transformational leadership – Help develop a vision – Communicate the vision – Act consistently with the vision – Build commitment to the vision
  23. 23. Organization Development DefinedOrganization Development Defined A planned system wide effort, managed from the top with the assistance of a change agent, that uses behavioural science knowledge to improve organizational effectiveness.
  24. 24. 24 Organizational Development: HowOrganizational Development: How Effective Is It?Effective Is It? 2020 3030 4040 5050 PercentageofStudiesShowingPositiveChangesPercentageofStudiesShowingPositiveChanges IndividualIndividual outcomesoutcomes (e.g., job(e.g., job satisfaction)satisfaction) OrganizationalOrganizational outcomesoutcomes (e.g., profit)(e.g., profit) (23.55)(23.55) (48.70)(48.70) Organizational outcomes more often benefited from OD interventions than did individual outcomes (Source: Porras and Robertson, 1992.)
  25. 25. 25© 2005 Prentice Hall Inc. 18 Kotter’s Eight-Step Plan for Implementing ChangeKotter’s Eight-Step Plan for Implementing Change E X H I B I T 18–5 E X H I B I T 18–5 1. Establish a sense of urgency by creating a compelling reason for why change is needed. 2. Form a coalition with enough power to lead the change. 3. Create a new vision to direct the change and strategies for achieving the vision. 4. Communicate the vision throughout the organization. 5. Empower others to act on the vision by removing barriers to change and encouraging risk taking and creative problem solving. 6. Plan for, create, and reward short-term “wins” that move the organization toward the new vision. 7. Consolidate improvements, reassess changes, and make necessary adjustments in the new programs. 8. Reinforce the changes by demonstrating the relationship between new behaviors and organizational success. Source: Based on J. P. Kotter, Leading Change (Boston: Harvard Business School Press, 1996).
  26. 26. 26© 2005 Prentice Hall Inc. 18 Action ResearchAction Research Process Steps: 1. Diagnosis 2. Analysis 3. Feedback 4. Action 5. Evaluation Process Steps: 1. Diagnosis 2. Analysis 3. Feedback 4. Action 5. Evaluation Action research benefits: Problem-focused rather than solution-centered. Heavy employee involvement reduces resistance to change. Action research benefits: Problem-focused rather than solution-centered. Heavy employee involvement reduces resistance to change. Action Research A change process based on systematic collection of data and then selection of a change action based on what the analyzed data indicate.
  27. 27. 27© 2005 Prentice Hall Inc. 18 Organizational DevelopmentOrganizational Development OD Values: 1. Respect for people 2. Trust and support 3. Power equalization 4. Confrontation 5. Participation OD Values: 1. Respect for people 2. Trust and support 3. Power equalization 4. Confrontation 5. Participation Organizational Development (OD) A collection of planned interventions, built on humanistic-democratic values, that seeks to improve organizational effectiveness and employee well-being.
  28. 28. 28© 2005 Prentice Hall Inc. 18 Organizational DevelopmentOrganizational Development TechniquesTechniques Sensitivity Training 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 openess, and increased tolerance for others.
  29. 29. 29© 2005 Prentice Hall Inc. 18 Organizational DevelopmentOrganizational Development Techniques (cont’d)Techniques (cont’d) Survey Feedback Approach The use of questionnaires to identify discrepancies among member perceptions; discussion follows and remedies are suggested.
  30. 30. 30© 2005 Prentice Hall Inc. 18 Organizational DevelopmentOrganizational Development Techniques (cont’d)Techniques (cont’d) Process Consultation (PC) A consultant gives a client insights into what is going on around the client, within the client, and between the client and other people; identifies processes that need improvement.
  31. 31. 31© 2005 Prentice Hall Inc. 18 Organizational DevelopmentOrganizational Development Techniques (cont’d)Techniques (cont’d) Team Building Activities: • Goal and priority setting. • Developing interpersonal relations. • Role analysis to each member’s role and responsibilities. • Team process analysis. Team Building Activities: • Goal and priority setting. • Developing interpersonal relations. • Role analysis to each member’s role and responsibilities. • Team process analysis. Team Building High interaction among team members to increase trust and openness.
  32. 32. 32© 2005 Prentice Hall Inc. 18 Organizational DevelopmentOrganizational Development Techniques (cont’d)Techniques (cont’d) Intergroup Problem Solving:Intergroup Problem Solving: • Groups independently develop lists of perceptions.Groups independently develop lists of perceptions. • Share and discuss lists.Share and discuss lists. • Look for causes of misperceptions.Look for causes of misperceptions. • Work to develop integrative solutions.Work to develop integrative solutions. Intergroup Problem Solving:Intergroup Problem Solving: • Groups independently develop lists of perceptions.Groups independently develop lists of perceptions. • Share and discuss lists.Share and discuss lists. • Look for causes of misperceptions.Look for causes of misperceptions. • Work to develop integrative solutions.Work to develop integrative solutions. Intergroup Development OD efforts to change the attitudes, stereotypes, and perceptions that groups have of each other.
  33. 33. 33© 2005 Prentice Hall Inc. 18 Organizational DevelopmentOrganizational Development Techniques (cont’d)Techniques (cont’d) Appreciative Inquiry (AI): • Discovery: recalling the strengths of the organization. • Dreaming: speculation on the future of the organization. • Design: finding a common vision. • Destiny: deciding how to fulfill the dream. Appreciative Inquiry (AI): • Discovery: recalling the strengths of the organization. • Dreaming: speculation on the future of the organization. • Design: finding a common vision. • Destiny: deciding how to fulfill the dream. Appreciative Inquiry Seeks to identify the unique qualities and special strengths of an organization, which can then be built on to improve performance.
  34. 34. Establish Client- Consultant Relations Disengage Consultant’s Services Action Research ProcessAction Research Process Diagnose Need for Change Introduce Change Evaluate/ Stabilize Change
  35. 35. Discovery Discovering the best of “what is” Dreaming Forming ideas about “what might be” Designing Engaging in dialogue about “what should be” Delivering Developing objectives about “what will be” Appreciative Inquiry ProcessAppreciative Inquiry Process
  36. 36. 36 The Ethics of OD:The Ethics of OD: Summary of the DebateSummary of the Debate OD is unethical • Imposes values of the organization; coercive and manipulative • Potential for abuse OD is ethical • The imposition of values is an inherent part of life, especially on the job • Abuse comes from individuals, not from the technique itself, which is neither good nor evil
  37. 37. 37 Discussion of Activity 15.3Discussion of Activity 15.3 Strategic Change ManagementStrategic Change Management
  38. 38. Scenario #1: “Greener Telco”Scenario #1: “Greener Telco” Scenario #1 refers to Bell Canada’s Zero Waste program, which successfully changed wasteful employee behaviours by altering the causes of those behaviours. Courtesy of Bell Canada
  39. 39. Bell Canada’s Change StrategyBell Canada’s Change Strategy Courtesy of Bell Canada Relied on the MARS model to alter behaviour: Motivation -- employee involvement, respected steering committee Ability -- taught paper reduction, email, food disposal Role perc. -- communicated importance of reducing waste Situation -- Created barriers to wasteful behaviour, eg. removed garbage bins
  40. 40. Courtesy of Continental Airlines Scenario #2: “Go Forward Airline”Scenario #2: “Go Forward Airline” Scenario #2 refers to Continental Airline’s “Go Forward” change strategy, which catapulted the company “from worst to first” within a couple of years.
  41. 41. Continental Airlines’Continental Airlines’ Change StrategyChange Strategy Communicate, communicate, communicate Introduced 15 performance measures Established stretch goals (repainting planes in 6 months) Replaced 50 of 61 executives Rewarded new goals (on-time arrival, stock price) Customers as drivers of change Courtesy of Continental Airlines

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