Chapter 14 Managing Change

1. Chapter 14Managing Change 049953 Soroush kiani

2. Chapter Objectives • The Nature of Change • Costs and Benefits of Change • Resistance to Change • Basic Frameworks for Interpreting Change • Role of Transformational Leadership in Change • Practices to Build Support for Change • Meaning and Characteristics of OD (Organization Development) • Benefits and Limitations of OD (Organization Development)

3. The Nature of Change • Change is any alteration occurring in the work environment that affects the ways in which employees must act. - The whole organization tends to be affected by change in any part of it. - Change is a human as well as technical problem. • Organizations tend to achieve an equilibrium in their social structure. When change comes along, it requires employees to make new adjustments as the organization seeks a new equilibrium. • Disequilibrium occurs when employees are unable to make adequate adjustments.

4. The Nature of Change • This disequilibrium makes a dilemma for managers. - One of their role is to be proactive which means they should introduce continual organizational changes so as to bring better fit between firm and its environment. - Their second role is to be reactive which is to restore and maintain the group equilibrium and personal adjustment that change upsets. • Organizational changes involve minor changes and more dramatic changes. - Minor changes affect only a few people and in these cases a new equilibrium may be reached readily, such as adding new members to a work group. - More dramatic changes deals with the entire core of an organization. Examples include hostile takeovers of firms, reengineering of organizations, act of public terrorism and etc.

5. Responses to Change • Work change is further complicated by the fact that it does not produce a direct adjustment. Instead, it operates through each employee’s attitudes to produce a response which is related to their feelings toward the change. • Obviously there was no direct connection between the change and the response. Some other intervening variable , which is later stated employee attitude , changed expected pattern. • The way that people feel about a change is one factor that determines how they will respond to it.

6. Responses to Change • These feeling are not the result of chance; They are caused. - One cause is Personal History. - Second cause is The Work Environment itself. • Feelings are not a matter of logic. They are in two separate category. So logic is not a successful method to modify these feelings. Hawthorne Effect • Hawthorne effect means that the mere observation of a group tends to change the group. - When people are observed, or believe that someone cares about them, they act differently.

7. Response to Change Group Response to Change • People interpret change individually and have their own probable response to it. On the other hand, they often show that they our belong to the group by joining with other group member in some uniform response to change. • Basically, the group react with the feeling, “We’re all in this together. Whatever happens to one of us affects all of us.”

8. Response to Change • To reach equilibrium, a group is often inclined to return to its best way of life whenever any change occurs. For this the net result is a self-correcting mechanism. This self-correcting characteristic of organizations is called homeostasis.

9. Costs and Benefits • All changes are likely to have some costs. Because of costs, proposals for change are not always desirable. Each change requires a detailed cost-benefit analysis. If changes doesn’t provide benefits above costs, there is no reason for the changes. • These cost s are not merely economic; they also are psychological and social. All of these costs must be considered in determination of benefits and costs. • The organizational goal always is benefits greater than costs.

10. Costs and benefits • Psychological costs also are called Psychic costs because they affect a person’s inner self, the Psyche. • Knowledge of individual differences helps us predict that people will react in widely varying ways to change. Some will perceive only the benefits, while others see only what it costs them. • In some cases the psychic costs of change can be so severe that they affect the psychological and even physical health of employees. • The reality of change is that frequently there is no clear-cut 100 percent benefit for all parties.

11. Resistance to Change • Resistance to change consists of any employee behaviors designed to discredit, delay, or prevent the implementation of a work change. • Employees resist change because it threatens their needs for : - Security - Social Interaction - Status -Competence -Self-Esteem

12. Resistance to Change Nature and Effects • Despite of the nature of the change, some employee try to protect themselves from its effect. Their action may range from complaints, foot-dragging, and passive resistance to absenteeism, sabotage, and work slowdowns. • All employees tend to resist it because of the psychic costs that accompany it and also managers resist it too. • Although people tend to resist change, this tendency is offset by their desire for new experiences and for the rewards that come with changes.

13. Resistance to Change • One lesson for management is that a change is likely to be either a success or problem, depending on how skillfully it is managed to minimize resistance. • Insecurity and change are conditions that illustrate how a chain-reaction effect may develop in organizational behavior. • A chain-reaction effect is a situation in which a change ,or other condition, that directly one person or a few persons may lead to a direct or indirect reaction from many people because of their mutual interest in it.

14. Resistance to Change Reasons for Resistance • Employees may resist changes for three broad reasons: -They may not feel comfortable with the nature of the change it self. It may violate their belief system, they may believe the decision is technically incorrect, or they my simply be reluctant exchange comfort of certainty and familiarity for uncertainty. -The method by which change is introduced. People may resent having been ill-informed, or they may reject an insensitive and authoritarian approach that did not involve them in the change process. -The inequity experienced when people perceive themselves being changed while someone else appear to gain the benefits of the change. • Their resistance will be even more intense if all three reasons exist.

15. Resistance to Change Type of Resistance • There are three different types of resistance to change. • Logical Resistance.( or Rational Resistance) This is based on disagreement with facts, rational reasoning, logic, and science. It occurs because of the time and efforts which is needed to adjust to change. • Psychological Resistance.( or Emotional Resistance ) This is typically based on emotions, sentiments, and attitudes. It is internally logical from the perspective of the employees’ attitudes and feelings about change because they may fear the unknown, mistrust the management’s leadership, or feel that their security and self-esteem are threatened. • Sociological Resistance.( or Social Resistance) Sociological resistance also is logical, when it is seen as a product of a challenge to group interests, norms, and values.

16. Resistance to Change Implications of Resistance • All three types of resistance must be anticipated and treated effectively if employees are to accept change cooperatively. If administrators work with only one of them they will fail to made change. • In a typical operating situation full support can’t be gained for every change that is made. What manager seeks is climate in which people trust managers, have a positive feeling toward most changes, and feel secure enough to tolerate other changes. • If management can’t win support, it may need to use authority.

17. Resistance to Change Possible Benefits of Resistance • Resistance is not all bad. It can bring some benefits as follows: • Encourage management to reexamine its change proposals. • Help to Identify specific problem areas where a change is likely to cause difficulties. • Management may be encouraged to do a better job of communicating the change. • Gives managers information about the intensity of employee emotions on an issue. • Encourage employees to think and talk more about a change.

18. Implementing Change Successfully • Some changes originate within the organization, but many come from the external environment. For example Government passes laws, new development in technology arise, competitors introduce new services and etc. then the organization should respond to them. • Although stable environment mean less change, dynamic environments are now the norm, and they require more change. Transformational Leadership and Change • Management has key role in initiating and implementing change successfully.

19. Implementing Change Successfully • Not only do managers sometimes overlook simple but important details, but they may fail to develop a master strategy for planned change. An overall plan should address Behavioral issues, such as employees’ difficulty in letting go of old methods and the general need to create an organization to welcomes change. • Transformational Leaders are instrumental in this process. They are managers who initiate bold strategic changes to position the organization for its future. • There are three important elements of transformational leadership : Creating Vision, Exhibiting charisma, and stimulating learning.

20. Implementing Change Successfully -Creating Vision. Transformational leaders create and communicate a vision for the organization. A vision crystallized long-range image or idea of what can and should be accomplished. A vision may also integrate the shared beliefs and values that serve as a basis for changing an organization’s culture. -Communicating Charisma. Leaders should persuade employees that the vision is urgent and motivate them to achieve it. Charisma is a leadership characteristic that can help influence employees to take early and sustained action. Charismatic leaders are dynamic risk takers, they can be warm mentors who treats employees individually and guide them to take action, and also they need to recognize the “emotional vulnerability” that employees experience. -Stimulating Learning. The critical Task for transformational leaders is to develop people’s capacity to learn from the experience of change. This process is called double-loop learning which means that the way a change is handled should not only reflect current information gathered but also prepare the participations to manage future changes even more effectively. This process is in sharp contrast to single-loop learning which is just focus on current problems.

21. Implementing Change Successfully Three Stages in Change • Behavioral awareness in managing change us aided by viewing change as a three-step process: -Unfreezing means that old ideas and practices need to be cast aside so that new ones can be learned. -Changing is the step in which the new ideas and practices are learned. The changing step usually is also mixed with hope, discovery, and excitement. -Refreezing means that what has been learned is integrated into actual practice. Successful on-the-job practice must be the ultimate goal of the refreezing step.

22. Implementing Change Successfully Manipulating the Forces • Social psychologist Kurt Lewin, who identified the three stages of change, also suggested that any organization is a dynamic balance of forces supporting and restraining any existing practice; there is an equilibrium . • Change is introduced within a group by a variety of methods as follows: - Adding new supporting forces. - Removing restraining forces. - Increasing the strength of a supporting force. - Decreasing The strength of a restraining force. - Converting a restraining force into a supporting force. • At least one of these approaches must be used to change the equilibrium, with greater success likely when more than one is adapted. The idea is to help change be accepted and integrated into new practices.

23. Implementing Change Successfully Building Support for Change • Use of Group Forces. -Effective change focuses on both individuals and groups. -Any changes in group forces will encourage changes in individual behavior. -The more attractive the group is to each member, the greater its influence on a group member can be. If a member with high status support the change the influence will increase. -If the change disrupt the group’s social system more than necessary, the group will tend to meet resistance. • Providing a Rationale for Change. -Capable leadership reinforces a climate of psychological support for change. -It is generally better to provide objective reasons for the change. -Ordinary requests of change should be in accord with the objectives and vision of the organization. -Managerial and employee expectations of change may be as important as the technology of change, but expectations are not enough alone. - By believing that the change will work, the manager acts so as to fulfill that belief. This belief is transferred to employees, who buy into probability of success and change their behavior accordingly.

24. Implementing Change Successfully • Participation. -A fundamental way to build support for change is through participation. -Participation encourage commitment rather than mere compliance with change. -As participation increases, resistance to change tend to decrease. -Employees want to involved and participate from the beginning to protect themselves from changes surprises. • Shared rewards. -Another way to build employee support for the change is to make sure that there are enough rewards for them in the change situation. -Rewards give employees a sense that progress accompanies a change and also tell them that we care about you and wants you as well as us benefit from this change. -Also it is desirable for a change to pay off as directly and as soon as possible. • Employee security. -along with shared rewards, existing employee benefits need to be protected and that’s why security during a change is very important. -For this reason many employers guarantee workers protection from reduced earnings when new technology and methods are introduced, or some offer retraining and delay installation of labor-saving equipment. -Grievance systems give employees a feeling of security that benefits will be protected and differences about them fairly resolved.

25. Implementing Change Successfully • Communication and Education. -Communication is essential in gaining support for change. -When a change occur all of a group members should informed even it affects only a few of them. -Since the flow of information may be weakest at the time it is needed most, special effort is required to maintain it in times of change. • Stimulating Employee Readiness. -Change is more likely to be accepted if the people affected by it recognize a need for it before it occurs. -This awareness can happen both naturally or it can be induced by management. -One of the more powerful way is when Workers discover for themselves that a situation requires improvement. • Working with the Total System. -Resistance to change can be reduced by a broader understanding of employee attitudes and natural reactions to change. -It is essential for the managers to take a broader, system-oriented perspective on change to identify the complex relationship involved. -Organization development can be a useful method for achieving this objective.

26. Understanding Organization Development • Organization Development (OD) is the systematic application of behavioral science knowledge at various levels to bring about planned change. • It helps managers recognize that organizations are systems with dynamic interpersonal relationships holding them together. • General objective of OD is to change all parts of the organization in order to make it more humanly responsive, more effective, and more capable of organizational learning and self-renewal. • It relies on a systems orientation, casual models, and a set of key assumptions to guide it.

27. Understanding Organization Development Foundations of OD • Change is so abundant in modern society that organizations need all their parts working together in order to solve the problems that are brought about by change. • Organization Development is a comprehensive program that is that is concerned with the interactions of various parts of the organization as they affect one another. • One contribution of the systems orientation is to help managers view their organizational processes in terms of a model with three types of variable; Casual, Intervening, End-result variables .

28. Understanding Organization Development

29. Understanding Organization Development • OD practitioners make a set of assumptions that guide their actions. • Sometimes these assumptions are implicit and need to be examined to enable double-loop learning. • OD assumptions need to be shared with managers and employees so that those groups will clearly understand the basis for the OD program. • Common Organization development assumptions are as follow: • Individuals -People want to grow and mature. -Employees have much to offer that is not now being used at work. -Most employees desire the opportunity to contribute. • Groups -Groups and teams are critical to organizational success. -Groups have powerful influence on individual behavior. -The complex roles to be played in groups require skill development. • Organization -Excessive controls, policies, and rules are detrimental. -Conflict can be functional if property channeled. -individual and organizational goals can be compatible.

30. Understanding Organization Development Characteristics of Organization Development • A number of characteristics are implied in the definition of OD. • Humanistic Values, which are positive beliefs about the potential and desire for growth among employees. To be effective and self-renewing an organization needs employees how tend to expand and improve their skills. • Use of a Change Agent. OD programs generally use one or more of them, whose role is to stimulate, facilitate, and coordinate change. They can be either internal or external, but they are always outsider. Advantages of using external change agents are that they are more objective and have diverse experiences. • Problem Solving. OD emphasizes the process of problem solving. By studding their own problem-solving process through action research, employees learn how to learn from their experiences, so they can solve their problem in future by they own. The cyclical process of using research to guide action, which generates new data as the basis for new actions, is know as action research or action science.

31. Understanding Organization Development • Experiential Learning. When participants learn by experiencing in the training environment the kinds of human problems they face on the job, the process is called experiential learning. This approach tends to produce more changed behavior than the traditional discussion and lecture alone. • Interventions at Many Levels. An overall OD strategy is then developed with one or more interventions, which are structured activities designed to help individuals or groups improve their work effectiveness. • Contingency Orientation. Organization development is usually described as contingency-oriented. Although some OD practitioners rely on just one or a few approaches, most OD people are flexible and pragmatic, selecting and adapting actions to fit assessed needs. • Summary and application. The OD process applies behavioral science knowledge and strategies to improve an organization. It seeks to integrate into an effective unit the four elements that affect organizational behavior – people, structure, and environment .

32. Understanding Organization Development the Organizational Development Process • OD is a complex process. It may take a year or more to design and implement, and the process may continue indefinitely. • Although there are many different approaches to OD, a typical complete program include most of the following steps : -Initial diagnosis -Data collection -Data feedback and confrontation -Action Planning and problem solving -Use of interventions -Evaluation and follow-up

33. Understanding Organization Development • Initial diagnosis. The consultant meets with top management to determine the nature of the firm’s problems, to develop the OD approaches most likely to be successful, and to ensure the full support of top management. • Data collection. Surveys may be made to determine organizational climate and behavioral problems. There are some questions that consultant deal with their answer to develop information like: • What kinds of conditions contribute most of your job effectiveness? • What kinds of conditions interfere with your job effectiveness? • What would you most like to change in the way organization operates? • Data feedback and confrontation. Work groups are assigned to review the data collected, to mediate areas of disagreement, and to establish priorities for change.

34. Understanding Organization Development • Action planning and problem solving. Groups use the data to develop specific recommendations for change. • Use of interventions. Once the action planning is completed, the consultant helps the participants select and use appropriate OD interventions. • Evaluation and follow-up. The consultant helps the organization evaluate the results of its OD efforts and develop additional programs in areas where additional results are needed. • Since the steps in OD are part of a whole process, all of them need to be applied if a firm expects to gain the full benefits of OD.

35. Understanding Organization Development Benefits and Limitations of OD • Organizational development is a useful organizational intervention. Although it has some benefits there some limitations as well. • OD benefits in summary are as follows: -Change throughout organization -Greater motivation -Increased productivity -Better quality of work -Higher job satisfaction -Improved teamwork -Better resolution of conflict -Commitment to objectives -Increased willingness to change -Reduced absences -Lower turnover -Creation of learning individuals and groups

36. Understanding Organization Development • OD limitation in brief are as follows: -Major time requirement -Substantial expense -Delayed payoff period -Possible failure -Possible invasion of privacy -Possible psychological harm -Potential conformity -Emphasis on group processes rather than performance -Possible conceptual ambiguity -Difficulty in evaluation -Cultural incompatibility • Finally, all managers should accept their roles as being responsible for OD, since organizational improvement is almost universally needed.