Ch. 10 Managing Organizational Change PDF

§10 Types and forms of organiza onal change 10.1 What is organiza onal change Organiza onal change is the process by which organizaons move from their current or present state to some desired future state to increase their e*ecveness. The goal of planned organizaonal change is to nd new or impro...

§10 Types and forms of organiza onal change 10.1 What is organiza onal change Organiza onal change is the process by which organizaons move from their current or present state to some desired future state to increase their e*ecveness. The goal of planned organizaonal change is to nd new or improved ways of using resources and capabilies to increase an organizaon’s ability to create value and improve returns to its stakeholders. Targets of change Planned organizaonal change is normally targeted at improving e*ecveness at one or more of four di*erent levels: human resources, funconal resources, technological capabilies, and organizaonal capabilies. - Human resources are an organizaon’s most important asset. Typical kind of change e*orts directed at human resources include (1) a new investment in training and development acvies, (2) socializing employees into the organizaonal culture so they learn the new rounes, (3) changing organizaonal norms and values to movate a diverse workforce, (4) an ongoing examinaon of the way in which promoon and rewards systems operate in a diverse workforce, and (5) changing the composion of the top-management team to improve organizaonal learning and decision making. 47 - - - Func onal resources as the environment changes, organizaons o2en transfer resources to the funcons where the most value can be created. An organizaon can improve the value that its funcons create by changing its structure, culture and technology. Technological capabili es give an organizaon an enormous capacity to change itself to exploit market opportunies. The ability to develop a constant stream of new products or to modify exisng products so they connue to a9ract customers is one of an organizaon’s core competences. Organiza onal capabili es: organizaonal change o2en involves changing the relaonships between people and funcons. Changes in structure and culture include changing the rounes an individual uses to greet customers, changing work group relaonships, improving integraon between divisions, and changing corporate culture by changing the topmanagement team. These four levels are interdependent; it’s impossible to change one without changing the other. 10.2 Forces for and resistance to organiza onal change Forces for change are: - - - - compe ve forces: unless an organizaon matches or surpasses its competors in e;ciency, quality, or its capability to innovate new or improved goods, it will not survive. An organizaon must constantly adopt the latest technology, which changes task relaonships as workers learn new skills or techniques. economic, poli cal and global forces connually a*ect organizaons and compel them to change how and where they produce goods and services. Other global challenges facing organizaons include the need to change an organizaonal structure to allow expansion into foreign markets, the need to adapt to a variety of naonal cultures, and the need to help expatriate managers adapt to the economic, polical, and cultural values of the countries in which they are located. demographic and social forces changes in the demographic characteriscs of the workforce have led managers to change their styles of managing all employees and to learn how to understand, supervise, and movate diverse members e*ecvely. ethical forces: it is crical for organizaons to take steps to promote ethical behaviour in the face of increasing government, polical, and social demands for more responsible and honest corporate behaviour. E*ecve organizaons are agile enough to adjust to these forces, but many forces internal to an organizaon make the organizaon resistant to change and thus threaten its e*ecveness and survival. Resistance to change The main explanaon for a possible decline in an organizaon’s e*ecveness is an organizaon’s inability to change in response to changes in its environment because of organizaonal inera, the tendency of an organizaon to resist change and maintain the status quo. Resistance to change lowers an organizaon’s e*ecveness and reduces its chances of survival. Organiza on-level resistance to change Many forces make it di;cult for an organizaon to change in response to changing condions in its environment. The most powerful impediments to change are: 48 - - - power and conEict: when change causes power struggles and organizaonal con:ict, an organizaon is likely to resist it. dierences in func onal orienta on: di*erent funcons and divisions o2en see the source of a problem di*erently because they see an issue or problem primarily from their own point of view. And the organizaon must spend me and e*ort to secure agreement about the source of a problem before it can consider how the organizaon needs to change. mechanis c structure is characterized by a tall hierarchy, centralized decision making, and the standardizaon of behaviour through rules and procedures. This structure is resistant to change because people are expected to act in certain ways and do not develop the capacity to adjust their behaviour to changing condions. organiza onal culture. Group-level resistance to change Much of an organizaon’s work is performed by groups, and several group characteriscs can produce resistance to change. (1) many groups develop strong informal norms, (2) group cohesiveness, which is the a9racveness of a group to its members, (3) group think is a pa9ern of faulty decision making that occurs in cohesive groups when members discount negave informaon in order to arrive at a unanimous agreement. Individual-level resistance to change Several reasons why individuals within an organizaon may resist change are (1) they feel uncertain and insecure about what its outcome will be, (2) there is a general tendency for people to selecvely perceive informaon that is consistent with their exisng view of their organizaon. Workers tend to focus only on how it will a*ect them or their division personally. (3) Habit, people’s preference for familiar acons and events, is a further impediment to change. Lewin’s force-=eld theory of change The force-=eld theory is a theory of organizaonal change that argues that two sets of opposing forces within an organizaon determine how change will take place. These two sets of forces are the forces that make organizaons resistance to change, and the forces that push organizaons towards change. 10.3 Evolu onary and revolu onary change in organiza ons 49 Types of change fall into two broad categories, evoluonary and revoluonary: Evolu onary change is gradual, incremental, and narrowly focused. It involved not a drasc or sudden altering of the basic nature of an organizaon’s strategy and structure, but a constant a9empt to improve, adapt, and adjust strategy and structure incrementally to accommodate to changes. The three instruments of evoluonary change are: sociotechnical systems theory, total quality management, and the creaon of empowered, :exible work groups. 1. Sociotechnical systems theory is a theory that proposes the importance of changing role and task or technical relaonships to increase organizaonal e*ecveness. When managers change task and role relaonships, they must recognize the need to adjust the technical and social systems gradually so group norms and cohesiveness are not disrupted. By taking this approach, it avoids group-level resistance. 2. Total quality management (TQM) is an ongoing and constant e*ort by all of an organizaon’s funcons to nd new ways to improve the quality of the organizaon’s goods and services. Once TQM is adopted, it leads to connuous, incremental change, and all funcons are expected to cooperate with each other to improve quality. The emphasis in TQM is on the t or match between technical and social systems. Another important aspect in TQM is changing cross-funconal relaonships to help improve quality. TQM can fail, because (1) underesmates of the degree of commitment, and (2) the long me frame necessary for TQM to succeed. 3. Flexible work team is a group of workers who assume responsibility for performing all the operaons necessary for compleng a specied stage in the manufacturing process. With :exible workers, an organizaon is able to quick respond to changes in its environment. Quality circles are groups of workers who meet regularly to discuss the way work is performed in order to nd new ways to increase performance. Revolu onary change is rapid, dramac, and broadly focused. It involves a bold a9empt to quickly nd new ways to be e*ecve. Three important instruments are: reengineering, restructuring and innovaon. 1. Reengineering refers to the process by which managers redesign how tasks are bundled into roles and funcons to improve organizaonal e*ecveness. In doing so, managers focus on processes, not on funcons. A business process is any acvity that cuts across funconal boundaries; it is the ability of people and groups to act in a cross-funconal way that is the vital factoring in determining how quickly goods are delivered to customers. Business processes involve acvies across funcons. Three guidelines for performing reengineering successfully are: 1. Organize around outcomes, not tasks. 2. Have those who use output of the process perform the process. 3. Decentralize decision making to the point where the decision is made E-engineering refers to companies’ a9empts to use all kinds of informaon systems to improve their performance. 2. Restructuring refers to the process by which managers change task and authority relaonships and redesign organizaonal structure and culture to improve organizaonal e*ecveness. One of the most common kinds of structuring is the move from a funconal to some form of divisional structure. Another type is downsizing, the process by which managers streamline the organizaonal hierarchy and lay o* managers and workers to reduce bureaucrac costs. 50 3. Innova on is the successful use of skills and resources to create new technologies or new goods and services so an organizaon can change and be9er respond to the needs of customers. 10.4 Managing change: Ac on research Kurt Lewin, whose force-eld theory argues that organizaons are balanced between forces for change and resistance to change, has a related perspecve on how managers can bring change to their organizaon. In Lewin’s view, implemenng change is a three-step process: (1) unfreezing the organizaon from its present state, (2) making the change, and (3) refreezing the organizaon in the new, desired state so its members do not revert to their previous work a3tudes and role behaviours. Ac on research is a strategy for generang and acquiring knowledge that managers can use to dene an organizaon’s desired future state and to plan a change program towards that future state. Acon research has ve main steps: 1. Diagnosing the organiza on: recognize the existence of a problem that needs to be solved and acknowledge that some type of change is needed to solve the problem. This can be a complex process, managers should collect informaon from all levels in the organizaon. 2. Determining the desired future state: this step involves a di;cult planning process as managers work out various alternave courses of acon that could move the organizaon to where they would like it to be 3. Implemen ng ac on is a three-step process: (1) managers need to idenfy possible impediments to change that they will encounter as they go about making changes. (2) Managers must decide who will be responsible for actually making the changes and controlling the change process. The choices are to employ external change agents or internal change agents, or some combinaon of both. And (3) is deciding which specic change strategy will most e*ecvely unfreeze, change and refreeze the organizaon. The types of change fall into two categories: top-down change is implemented by managers at a high level in the organizaon, and boGom-up change is implemented by employees at low levels in the organizaon and gradually rises unl it is felt throughout the organizaon (this provokes less resistance). 4. Evalua ng the ac on: management decides whether more change is needed to reach the organizaon’s desired future state or whether more e*ort is needed to refreeze the organizaon in its new state. 5. Ins tu onalizing ac on research: make acon research a required habit or a norm adopted by every member of an organizaon. 10.5 Organiza onal development Organiza onal development (OD) is a series of techniques and methods that managers can use in their acon research program to increase the adaptability of their organizaon. The goal of OD is to improve organizaonal e*ecveness and to help people in organizaons reach their potenal and realize their goals and objecves. 51 - - - counselling, sensi vity training, and process consulta on: the personalies of individuals di*er and these di*erences lead individuals to interpret and react to other people and events in a variety of ways. Through counselling, workers learn how to manage their interacons with other people in the organizaon more e*ecvely. Sensi vity training is an intense type of counselling. It is an OD technique in which group members, aided by a facilitator, learn how others perceive them and may learn how to deal more sensively with others. Process consulta on is an OD technique in which a facilitator works closely with a manager on the job to help the manager improve his or her interacon with other group members. team building and intergroup training: team building is an OD technique in which a facilitator rst observes the interacons of group members and then helps them become aware of ways to improve their work interacon. Team building does not focus on what the group is trying to achieve. Intergroup training takes team building one step further and uses it to improve the ways di*erent funcons or division work together. Its goal is to improve organizaonal performance by focusing on a funcon’s or division’s joint acvies and output. A popular form of intergroup training is called organiza onal mirroring, an OD technique designed to improve the e*ecveness of interdependent groups. It helps the two groups explore their percepons and relaons in order to improve their work interacons. total organiza onal interven ons: a variety of OD techniques can be used at the organizaon level to promote organizaon-wide change. One is the organizaonal confronta on mee ng, which is an OD technique that brings together all of the managers of an organizaon at a meeng to confront the issue of whether the organizaon is meeng its goals e*ecvely. s , d . e 52