MANAGEMENT OF ORGANIZATIONAL CHANGE

1. MANAGEMENT OF ORGANIZATIONAL CHANGE

2. Work Change Work Change is any alteration that occurs in the work environment.

3. Forces for Change • Nature of the Workforce • Technology • Economic shocks • Competition • Social trends

4. Nature of the Workforce • Demographic changes • More cultural diversity • Young population

5. Technology • Faster, cheaper and more mobile computers • Virtual office

6. Economic shocks • Business Cycles • Eg – Recent Recession

7. Competition • Global competition • Mergers and acquisition

8. Social trends • Social networking • Retail industry • Online Shopping • Going Green

9. Planned Change Planned change are change activities that are intentional and goal oriented. • It seeks to improve the ability of the organization to adapt to changes in its environment. • It seeks to change employee behavior.

10. Resistance to Change Individual Sources Habit Security Economic factors Fear of the unknown Selective information processing Organizational Sources Structural Inertia Limited focus of change Group inertia Threat to expertise Threat to established power relationships Threat to established resource allocations

11. INDIVIDUAL SOURCES HABIT To cope with life’s complexities we rely on habits or programmed responses. But when confronted with change it becomes source of resistance

12. INDIVIDUAL SOURCES SECURITY People with a high need for security are likely to resist change because it threatens their feelings of safety

13. INDIVIDUAL SOURCES ECONOMIC FACTORS Changes in jobs tasks or established work routines can arouse economic fears if people are concerned that they wont be able to perform the new tasks or routines to their previous standards, especially when pay is closely tied to productivity.

14. INDIVIDUAL SOURCES FEAR OF THE UNKNOWN Change substitutes ambiguity and uncertainty for the unknown.

15. INDIVIDUAL SOURCES SELECTIVE INFORMATION PROCESSING Individuals are guilty of selectively processing information in order to keep their perceptions intact. They hear what they want to hear and they ignore information that challenges the world they’ve created.

16. ORGANIZATIONAL SOURCES STRUCTURAL INERTIA Organizations have built in mechanisms to produce stability. When confronted with change structural inertia acts as a counterbalance to sustain stability.

17. ORGANIZATIONAL SOURCES LIMITED FOCUS OF CHANGE Organizations are made up of a number of interdependent subsystems. One cant be changed without affecting the others. So limited changes in subsystems tend to be nullified by the larger system.

18. ORGANIZATIONAL SOURCES GROUP INERTIA Even if individuals want to change their behavior, group norms may act as a constraint.

19. ORGANIZATIONAL SOURCES THREAT TO EXPERTISE Changes in organizational patterns may threaten the expertise of specialized groups.

20. ORGANIZATIONAL SOURCES THREAT TO ESTABLISHED POWER RELATIONSHIPS Any redistribution of decision making authority can threaten long established power relationships within the organization.

21. ORGANIZATIONAL SOURCES THREAT TO ESTABLISHED RESOURCE ALLOCATIONS Groups in the organization that control sizable resources often see change as a threat. They tend to be content with the way things are.

22. Overcoming Resistance to Change • Education & Communication • Participation • Building Support and Commitment • Implementing Changes Fairly • Manipulation and Cooptation • Selecting People who accept change • Coercion

23. Overcoming Resistance to Change • Education & Communication Communicate with employees to help them see the logic of a change. It helps at two levels : • It fights the effects of misinformation and poor communication. • It helps in selling the need for change

24. Overcoming Resistance to Change • Participation It is difficult for individuals to resist a change decision in which they participated. Prior to making a change, those opposed can be brought into the decision process.

25. Overcoming Resistance to Change • Building Support and Commitment Change agents can offer a range of supportive efforts to reduce resistance like employee counseling and therapy.

26. Overcoming Resistance to Change • Implementing Changes Fairly Make sure the change is implemented fairly. Organizations must ensure procedural fairness and let employees see the reason for the change and perceive that the changes are being implemented consistently and fairly.

27. Overcoming Resistance to Change • Manipulation and Cooptation Manipulation refers to twisting and distorting facts to make them appear more attractive, withholding undesirable information and creating false rumors to get employees to accept a change. Cooptation is a form of both manipulation and participation.

28. Overcoming Resistance to Change • Selecting People who accept change Ability to accept and adapt to change is related to personality. People who adjust best to change are those who are open to experience, take a positive attitude toward change, are willing to take risks and are flexible in their behavior.

29. Overcoming Resistance to Change • Coercion It is the application of direct threats or force on the resisters.

30. Lewin’s Three Step Change Model • Unfreezing - Changing the status quo to overcome the pressures of both individual resistance and group conformity. • Movement – A change process that transforms the organization from the status quo to a desired end state. • Refreezing – Stabilizing a change intervention by balancing driving and restraining forces.

31. CASE ABC Oil Company has 3 divisional offices located in Mumbai, Ahmedabad and Pune. The decision is made to consolidate the divisions into a single regional office to be located in Mumbai. The reorganization means transferring more than 150 employees, eliminating some duplicate managerial positions and instituting a new hierarchy of command. The people affected by the change have no say whatsoever in the choice. For those in Ahemedabad and Pune who may dislike the change, their only recourse is to quit. Suggest strategy to manage change.

32. THANK YOU