CH 3 Overview of Change Mgt

1. Overview of Change Management Chapter 3

2. Course Objectives By the end of this chapter you will be able to: Describe the complexity and inevitability of changes in the workplace Explain dimensions and components of organizational changes Explain forces that act as stimulants to change Describe organizational change processes Describe the role of change agents Overview of Change Mgt

3. Cont… Discuss how change teams can be designed. Discuss the general strategies in the management of change Recognize change resisters (people who resist change) Identify reasons for resistance to change Propose a strategy for overcoming resistance to change Identify the skills managers need to have during change management Overview of Change Mgt

4. Unit 1 The Nature of Change Overview of Change Mgt

5. “Change is the law of life. And those who look only to the past or present are certain to miss the future.”John F. Kennedy, U.S. President Quotable Quotes Overview of Change Mgt

6. Organization & Organizational Change Defined • Organization: • An organization is defined as an entity where two or more people are working together cooperatively within identifiable boundaries to accomplish a common goal or objective. • Implicit in this definition are several important ideas: • Organizations are made up of people (i.e. members); • Organizations divide labor among members; • Organizations pursue shared goals or objectives; and • Organizations have identifiable boundaries (delineated in terms of membership of people & place of undertaking the activities). Overview of Change Mgt

7. What is Change? It is a transition from where we are to where we want to be Where we are Where we want to be Overview of Change Mgt

8. What is Organizational Change? • Change is simply the alteration of the status quo. • Over the last fifteen years or so, organizations all over the world have been bombarded by a cacophony- • Each organization must • reorganize every 2 to 5 years, • continually reinvent itself, • Revolution must replace evolution. Overview of Change Mgt

9. Cont’d … • According to Coffey, Cook and Hunsaker (1994: 638), • Change is defined as "the process of alteration or transformationof individuals, groups, and organizations undergo in response to internal and external factors." • In other words, change implies disruption in regular functioning of an organization. Overview of Change Mgt

10. Quotable Quotes • The only certainty in this world is that there will be change, “The older changes, yielding place to new.” • In this process of change, the Darwinian principles of adaptation and natural selection are as true for organizational world as they are for the animate. • ‘Survival of the fittest’ is the unwritten but the rule of this game. Overview of Change Mgt

11. Cont’d • In business, the competition will bite you if you keep running. If you stand still, it will swallow you. (William S. Knudsen, former Chairman of GM) • Apparently now we must all change to survive. Any manager not involved in changing something, and changing it radically, is assumed to be a managerial dinosaur headed for rapid extinction. (Neil Glass) Overview of Change Mgt

12. Defn. Cont’d • Organizational change is defined as the process of alteration or transformation of: • INDIVIDUALS • GROUPS, and • ORGANAZATION in response to internal and external forces. Overview of Change Mgt

13. Fig.1: Time & Difficulty Involved in Change Long Orgn. Behav. Time Group behavior Individual behavior Knowledge Attitude Knowledge Short Overview of Change Mgt Easy Difficult Level of Difficulty

14. The Dangers of routine lifestyle • Causes us to see the world in one eye (Single and narrow vernacular) • We never progress (It doesn't provide growth) • We become ignorant to the normal human development (There are stages of change that we naturally go through) • It is boring. • We tend not to be creative. • We resist new ideas and challenges • Potential of people is wasted. Overview of Change Mgt

15. The Nature of Change Change has always been part of our life Change is a process and not a destination It never ends, regardless of how successful you are this year, there is always a next year The only constant is change Overview of Change Mgt

16. Cont… Change can involve virtually any aspect of an organization: work schedules, bases for departmentalization, span of management, machinery, organization design, people themselves, and so on Overview of Change Mgt

17. Cont… In addition, change can also be seen in line with the following points: Change basically results from stimuli from both outside and inside the enterprise Change takes place in all organizations but at varying rates of speed and degrees of significance. Change takes place in all parts of an organization but at varying rates of speed and degrees of significance. Finally, the organization can be changed in several ways. Overview of Change Mgt

18. Cont… Change is not the same to all people. Some people: Make changes happen Want changes to happen Watch things change Don’t even suspect anything is changing Don’t care what is changing Don’t want anything to change Hope nothing changes Overview of Change Mgt

19. Why organizations change? Why is change necessary/important to orgs? • Stated simply, organizations must change because their environments change. Therefore, they must continually change and adapt. • Organizations that do not adapt to change in a timely way are unlikely to survive. • To survive and thrive they must: • develop new products or services, • expand into new markets, • reorganize their structures, • introduce new technology, and • change working methods and practices. Overview of Change Mgt

20. Purposes of Change • To meet changing customer needs • To take advantage of new opportunities • To meet changing market conditions • To respond to internal pressures • To respond to external-competitive pressures Overview of Change Mgt

21. Forces/Factors that Cause Change • Forces for change may be external or internal to the organization. • External forces for change are derived from the organization’s general and task environments. • Changes in organization are stimulated by a number of internal and external forces, often interacting to reinforce one another • Major external forces of change include: • Socio-Cultural Environment • Technological Environment • Economic Environment • Political-Legal Environment • Competitive Environment Overview of Change Mgt

22. Factors that Cause Change cont’d INTERNAL FORCES • Pressures for change may arise from a number of sources within the organization, particularly from new strategies, technologies, and employees’ attitudes and behaviors. • Unexpected opportunities may arise that permit the entrepreneurial innovators inside the organization to develop new ways of doing things. • Useful ideas can come from the lowest levels of the company concerning organizational changes. Overview of Change Mgt

23. Cont’d … • Thus, quality circles, open-door policies, suggestion systems, and other vehicles for upward communication can stimulate organizational change. • For example, the introduction of automated equipment, the entrance of more women and minorities into the work force. • Furthermore, work dissatisfaction, as manifested in high turnover rates or strikes, may lead to changes in management policies and practices. Overview of Change Mgt

24. Cont’d … EXTERNAL FORCES • Outside pressures come from changes in the organization's technological, economic, political, legal, social, and competitive environments. • Advances in information and technologies transform organizations. • Changes in each of these categories occur at breath taking speed, and companies desperately try to keep pace. Overview of Change Mgt

25. Cont’d … The economic environment • Economic factors outside an organization affect its ability to function. • These factors include the ability to raise money, sell products, hire qualified labor, and purchase necessary goods and materials. • Economic conditions such as inflation or deflation, growth or recession, and full employment or unemployment all influence how an organization operates. Overview of Change Mgt

26. Cont’d … The political and legal environments • The other critical forces requiring organizational change include political and legal forces. These can occur at every level - global, regional, national, and local communities. • Some of the political and legal conditions that can affect the proper functioning of business and public sector organizations include: • Privatization • Deregulation • Diplomatic problems with foreign governments • Changes in the civil service • Other changes in federal and state laws Overview of Change Mgt

27. Some Changes that Affect all Types of Orgs. • Technological changes have multiplied; products & know-how are fast becoming obsolete. • Basic resources have progressively become more expensive. • Competition has sharply increased. • Communication & computers have reduced the time needed to make decisions. • Environment & consumer interest-groups have become highly influential; international pressures are mounting due to globalization. Overview of Change Mgt

28. Cont’d • The drive for social equity has gained momentum. • The economic inter-dependence among countries has become more apparent. • These and scores of other changes compel an organization to cope with the environment and become more adaptive. • If an organization fails to adapt with the changing environment, it will become extinct. Overview of Change Mgt

29. Cont’d • In fact, as a response to the change in the environment, the attributes of the organizations are changing unprecedently. • More dynamic organizations are shifting: • From formal to informal • From structured to less structured • From definite to ambiguous • From deterministic to probabilistic • From conservative to opportunistic. Overview of Change Mgt

30. Alternative Reasons for Change in Public Institutions • Reduction in public expenditure • Change in work perception • Dissatisfaction with bureaucracy • Prominence of institutional economics • International pressures of multilateral financial institutions and donors. Overview of Change Mgt

31. Approaches to Managing Change Three-Step Sequential Change Process Lewin's Three-Step Model Change Refreezing Unfreezing Managing Planned Change

32. Unfreezing Unfreezing involves the following: Awakening Energizing Initiating Acknowledging that status quo is not viable. Disengaging from the past Managing Planned Change

33. Changing Changing involves the following: Mobilizing Envisioning Implementing Creating and adopting a new direction. Managing Planned Change

34. Refreezing Refreezing involves the following: Reinforcing Enabling Institutionalizing Absorbing the new behaviors, attitudes and practices into the organizational culture so that new ways become acceptable practice. Managing Planned Change

35. The Change Process • The comprehensive approach to change takes a system view and delineates a series of 12 steps that often lead to successful change. • These steps include: • Scanning of environmental & internal conditions • Recognition of gap between current conditions and desired conditions • Perceptions and assessment • Planning and analysis • Determining change goals Managing Planned Change

36. Cont’d • Determining change tactics and program • Unfreezing of behaviors • Evaluating change plan • Adjusting or modifying plan • Implementing plan • Following up • Refreezing Managing Planned Change

37. MANAGING STRATEGIC CHANGE • Change can be planned or unplanned. The latter just happens in the natural course of events. • Planned change, on the other hand, is the result of consciously preparing to reach a desired goal or organizational state. • The key questions to be answered in the process of change management are: • What do we want to achieve? • Why? • How do we plan to make that happen? • What consequences do we anticipate from the change? Managing Planned Change

38. MANAGING Cont’d … An effective management of change involves the following key factors: • Change agents, • Performance gaps, • Levels, and targets of change, systems approach, and • Content and process Managing Planned Change

39. Change Agent and Role of a Change Agent Change agents are the people who plan, support, and implement the change. Managing Planned Change

40. Cont’d … In every situation in which a change is desired, some person or group must be designated as the catalyst for change. That person or group is called the change agent. Change agents who have managerial responsibility or authority to initiate change in their areas are also sponsors of the change The change agent is the individual who is responsible for taking a leadership role in managing the process of change. Managing Planned Change

41. Change Agent cont’d … • The individual, group, or organization that is the target of the change attempt is called the client systems. • Managers or staff at various levels in organizations can serve as change agents. • Consultants brought in from outside can also be change agents. • Their role is to recognize the need for altering the status quo and to plan and manage the implementation of the desired changes. Managing Planned Change

42. Cont’d … There are two levels of change agents: • Primary and • Secondary change agents Managing Planned Change

43. Cont’d … Primary changeagents have an assigned and often dedicated role as implementers of the change. They are the members of the reengineering core team and they constitute the change management team as well. Managing Planned Change

44. Cont’d… Secondary change agents are scattered throughout the organization, and act in support of the primary change agents. Secondary change agents can be in the human resource and information management organization as well as in the line organization. They take direction from the implementation team. Managing Planned Change

45. Responsibilities of a Change Agent The major responsibilities of the change agent are: A. Understand the change • Identify the impact of the change on the people, structure, processes and culture of the company • Determine the level and type of sponsorship required • Find the appropriate sponsors and transfer ownership of the change to the right sponsors • Figure out the primary and secondary sources of resistance by target population Managing Planned Change

46. Cont’d… B. Manage the change resources • Systematically apply the principles of effective change management • Integrate multiple changes into a common plan and apply sound project management principles to all the changes required Managing Planned Change

47. Cont’d… C. Deal with people • Listen and listen and listen and listen • Translate the change messages to targets and sponsors in language that is meaningful to them • Develop an effective coaching and counseling technique • Use project management tools to identify, monitor and track the changes • Use the change management process to keep the organization focused on change while maintaining regular company business Managing Planned Change

48. THANK YOU Overview of Change Mgt

49. RESISTANCE TO CHANGE Unit 2

50. Quotable Quote It is the nature of man as he grows older … to protest against change, particularly change for the better. John Steinbeck Resistance to Change