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m a n a g e m e n t 2e H i t t / B l a c k / P o r t e r. Chapter 15: Organizational Change and Development. Learning Objectives. After studying this chapter, you should be able to: Identify the internal and external forces for change in an organization

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m a n a g e m e n t 2e h i t t b l a c k p o r t e r

m a n a g e m e n t 2eH i t t / B l a c k / P o r t e r

Chapter 15:

Organizational Change and Development

learning objectives
Learning Objectives

After studying this chapter, you should be able to:

  • Identify the internal and external forces for change in an organization
  • Discuss the focus of change, including strategy, structure, systems, technology, culture, and staff
  • Analyze the process managers should use in evaluating the need for change
  • Describe the process of organizational change
learning objectives3
Learning Objectives
  • Explain common sources of resistance during the process of change
  • Discuss key approaches to overcoming such resistance
  • Outline the choices managers must make in managing change
  • Describe the most important elements involved in evaluating change outcomes
learning objectives4
Learning Objectives
  • Describe three approaches to comprehensive organizational change and compare their similarities and differences
fundamental issues of change
Fundamental Issues of Change
  • How much change is enough?
  • How fast should change take place?
  • How should the need for continual changes be balanced against the need for a minimum level of stability and continuity?
  • Who should be the major players in change processes, and what should their roles be?
  • Who, exactly, is likely to benefit and who could be harmed by particular changes?
forces for change
Forces for Change

Economic

Conditions

Legal/Political

Developments

Technology

Developments

Managers’ visions, ideas, and actions

Employees’ suggestions and actions

Social and

Demographic Shifts

Competitors’

Actions

Adapted from Exhibit 15.1

focus of organizational changes

Strategy

Structure

Systems

Focus

Technology

Shared values and culture

Staff

Focus of Organizational Changes

Adapted from Exhibit 15.2

Adapted from Exhibit 17.2: Forces of Organizational Changes

examples of focus of changes
Examples of Focus of Changes

Focus

Examples

Strategy

  • Change from niche market to general market focus
  • Change focus from individual customer to large corporate customer

Structure

  • Change from a geographic to a customer structure
  • Implement an international division

Systems

  • Replace batch with continuous flow manufacturing
  • Change from last in/first out to first in/first out inventory valuation

Adapted from Exhibit 15.3

Adapted from Exhibit 17.3: Some Specific Examples of Focus of Changes

examples of focus of changes9
Examples of Focus of Changes

Focus

Examples

Technology

  • Update computer systems
  • Use holography in product design

Shared values

and Culture

  • Is implement diversity awareness program
  • Institute participatory decision making throughout organization

Staff

  • Encourage cooperation through cross-training program
  • Increase number and availability of training workshops for lower-level employees

Adapted from Exhibit 15.3

Adapted from Exhibit 17.3: Some Specific Examples of Focus of Changes

recognizing the need for change
Recognizing the Need for Change
  • Proactive recognition
    • Effective managers recognize need for change at earliest possible time
    • Systematic monitoring of the environment
  • Reactive recognition
    • Not all change needs can be identified in advance
    • How and when to react rather than whether to react
  • Crisis recognition
    • Distinct threat to success of the organization and the manager
relative cost of change
Relative Cost of Change

High

Crisis

Cost

Reactive

Proactive

Low

Early

Late

Time when change is begun

Low

High

Problem severity and immediacy

Adapted from Exhibit 15.4

process of change
Process of Change

Change goes through three distinctive phases:

1. Unfreezing

2. Movement

3. Refreezing

phase 1 unfreezing
Phase 1: Unfreezing
  • Habits are strongly patterned ways of behaving
  • We can also have patterned ways of viewing and interpreting events
  • To change a patterned way of behaving or thinking, that pattern must be “unfrozen”

1. Unfreezing

factors causing resistance to unfreezing
Factors Causing Resistance to Unfreezing
  • Inertia
    • Being comfortable with the status quo
  • Mistrust
    • Of those communicating the need for change
  • Lack of information
    • About both the need for change and its effects

1. Unfreezing

phase 2 movement
Phase 2: Movement

Major determinants of movement

  • Level of certainty or uncertainty associated with the change
  • Magnitude of the change

2. Movement

factors causing resistance to movement
Factors Causing Resistance to Movement
  • Lack of clarity
    • If change is not clear, people will likely resist
  • Lack of capabilities
    • If people lack capabilities, they will probably resist
  • Lack of sufficient incentives
    • If negative consequences outweigh positive ones

2. Movement

phase 3 refreezing
Phase 3: Refreezing
  • Habitual behaviors and perceptions are strong
  • Change may not be permanent
    • After a change is made, actions should be taken to prevent reversion to old patterns
    • Reinforce the change until it becomes more established

3. Refreezing

factors causing resistance to refreezing
Factors Causing Resistance to Refreezing
  • Pull of past competencies
    • If previous actions were successful, people see little need for change
  • Non-immediate results
    • If results are slow, people will resist change

3. Refreezing

forces for failure
Forces for Failure

Done well

Right thing

Wrong thing

3. Refreezing

1. Unfreezing

Done poorly

2. Movement

Adapted from Exhibit 15.5

overcoming resistance to change
Overcoming Resistance to Change

Overcoming resistance to:

Create contrast to help

employees see differences

Provide training and

other tools

1. Unfreeze

2. Move

Celebrate early “wins” and

reinforce successful behavior

3. Refreeze

dealing with resistance to change
Dealing with Resistance to Change

Adapted from Exhibit 15.6

the change process
The Change Process

Planning

and

Preparation

Implementation

Evaluation

of outcomes

Dealing with

resistance to

change

Adapted from Exhibit 15.7

planning choices for change
Planning Choices for Change

How soon is change needed?

Whose support will be critical for success?

Planning

Timing

How should the change be communicated?

Method

How can support for the change be developed?

Participation

Incentives

Adapted from Exhibit 15.8

force field analysis
Force Field Analysis

Driving forces (examples)

Restraining forces (examples)

New technology

Cost of updating old

plant and equipment

Visionary leader

Employee groups

opposed to change

Pressure from managers for workers to implement new products

Norms that punish

risk taking

Equilibrium

Driving forces = Restraining forces

Adapted from Exhibit 15.9

matrix of agreeability and influence
Matrix of Agreeability and Influence

Potential

Key Supporter

(if numbers are large)

Most Important

Supporters

High

Agreeability

Low

Least Important

Supporters

Potential Key

Supporters

(if they listen to "most

important supporters")

Low High

Influence

Adapted from Exhibit 15.10

implementation choices
Implementation Choices

Technology

Shared values and culture

Strategy

Structure

Systems

Staff

Focus

Small

Moderate

Major

Amount

Implementation

Seldom

Often

Frequency

Slow

Rapid

Rate

Adapted from Exhibit 15.11

evaluating change outcomes
Evaluating Change Outcomes

Collect

data

Compare

outcomes

against

goals

Feedback

of results

Process

  • Type of data:
    • Quantitative
    • Qualitative
  • Amount
  • Cost
  • Timing

Goals, standards and benchmarks to be used in this step must have been set early on in process

  • To whom?
  • How?

Issues

Adapted from Exhibit 15.12

organizational development od approach to change
Organizational Development (OD) Approach to Change
  • Organizational development (OD) approach
    • Strong behavioral and people orientation
    • Emphasis on planned, strategic, long-range efforts
    • Focus on people and their interrelationships in organizations
    • Evolved from T-groups
organizational development od approach to change30
Organizational Development (OD) Approach to Change
  • Values and assumptions
  • Basic approach to the process of change
    • Change agents
    • Interventions
    • Behavioral process orientation
    • Organizational renewal
types of od interventions
Types of OD Interventions

Adapted from Exhibit 15.13

types of od interventions cont
Types of OD Interventions (cont.)

Adapted from Exhibit 15.13

issues in process redesign
Issues in Process Redesign

Objectives

Coverage

Potential Drawbacks

  • Reduce Costs
  • Shorten Cycle Times
  • Improve Quality
  • Breadth
  • Depth
  • Requires high level of persistence and involvement of top management
  • Effort may be greater than results
  • High chaos factor
  • High levels of resistance

Adapted from Exhibit 15.14

process redesign reengineering
Process Redesign (Reengineering)
  • Process redesign (reengineering)
    • Fundamental redesign of business processes to achieve dramatic improvements
    • Technology driven
    • Most successful efforts have both breadth and depth (across units and core organizational elements)
organizational learning
Organizational Learning

Organizational learning

  • Occurs in a organization that is skilled at
    • Creating, acquiring, and transferring knowledge,
    • Modifying its behavior to reflect new knowledge and insights
  • Factors that facilitate learning by organizations
    • Central, core competencies of current personnel
    • Organizational culture that supports continuous improvement
    • Organizational capabilities (such as managerial expertise) to implement necessary changes
organizational learning36
Organizational Learning
  • Systematic, organized,and consistent approach to problem solving
  • Experimentation to obtain new knowledge
  • Drawing lessons from past experiences
  • Learning from the best practices and ideas of others
    • Benchmarking
    • Focus groups
  • Transferring and sharing knowledge
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