Ch 3 - Organizational Change PDF

CHAPTER 3 The Fields of Organizational Psychology Organizational Change Course: Psychology at Work – Workplace Psychology Course Code: BAHR2102 - BAHR2104 Specialization: Human Resource Management Department of Business Studies  Course learning outcomes Outco...

CHAPTER 3 The Fields of Organizational Psychology Organizational Change Course: Psychology at Work – Workplace Psychology Course Code: BAHR2102 - BAHR2104 Specialization: Human Resource Management Department of Business Studies  Course learning outcomes Outcome: Discuss the major areas of the organizational psychology field Contents: - Definition - Types of Change - Forces of Organizational Change - Reactions to Change - Resistance to change - Managing Change  Definition of Organizational Change “The movement of a company of the current situation to a desired future situation of the competitiveness” (Hill & Jones, 2001). Organizational change is the movement of an organization from one state of affairs to another. Change process in a company’s structure, strategy, policies, procedures, technology, or culture. Change involves letting go of the old ways in which work is done and adjusting to the new ways.  Meaning Organizational Change looks both at the process in which a company or any organization changes…. its operational methods, technologies, organizational structure, whole structure, or strategies, as well as what effects these changes have on it. Organizational change usually happens in response to – or as a result of – external or internal pressures. WHAT CAUSES ORGANIZATIONAL CHANGE? New leadership at the helm of the company or within its departments Shifts in the organizational team structure The implementation of new technology The adoption of new business models  Types of Change 1. Work Change includes changes in work’s machinery, working hours, methods of work, job enlargement and enrichment, job redesign, the working hours like morning shifts, evening shifts, operation of the organization on weekends/holidays. 2. Organizational Change includes changes in employees due to transfers, promotion, retrenchment, lay-off, introduction of new products or services, changes in organizational goals or objectives.  Forces of Organizational Change 1. Workforce Demographics Organizational change is often a response to changes in the environment. As the workforce gets older the types of benefits they prefer may change. Work arrangements such as flexible work hours and job sharing may become more popular as the workforce rapidly ages. 2. Poor Performance Change is more likely to happen if the company is performing poorly. Poorly performing companies often find it easier to change compared to successful companies because successful companies often keep doing what made them a success in the first place. Research shows that long-tenured CEOs are unlikely to change their formula for success. Instead, new CEOs and new top management teams create change in a company’s culture and structure (Barnett & Carroll, 1995; Boeker, 1997; Deutschman, 2005). 3. Organizational Growth One reason for organizational change is for the organization to grow. An example of this growth is the evolution of the Widmer Brothers Brewing Company, which started as two brothers Kurt and Rob Widmer brewing beer in their garage to become the 11th largest brewery in the United States. They made a change by merging with Redhook Ale Brewery to become Craft Brewers Alliance Inc. and grew in popularity. 4. Technology Organization change is motivated by rapid developments in technology. Sometimes technology produces such profound developments that companies struggle to adapt. The innovation process promotes associated changes in work relationships and organizational structures. 5. Competition Organization change is needed to meet the competitors and become better than them by having a competitive advantage. 6. Scarce of Resources Organization change is needed when the organization experience a lack of availability of resources. Example lack of money requires the organization to cut cost; or lack of manpower which requires change in workload. 7. Governmental Politics / Policies Law & policies of the countries sometimes force the company to change (eg. tax law, consumer law and protection, minimum wages) 8. Globalization Globalization is another force for change. Organizations are finding that it is often cheaper to produce goods and deliver services in some countries compared to others. This led many companies to utilize manufacturing facilities overseas, with China as a popular destination as it provides cheaper wages. Dealing with employee stress resulting from jobs being moved overseas, retraining the workforce, and learning to compete with a global workforce on a global scale are changes companies are trying to come to grips with.  Reactions to Change Active resistance is the most negative reaction to a proposed change attempt. Those who engage in active resistance may sabotage the change effort and be outspoken objectors to the new procedures. Passive resistance involves being disturbed by changes without necessarily voicing these opinions. Instead, passive resisters may quietly dislike the change, feel stressed and unhappy, and even look for an alternative job without necessarily bringing their point to the attention of decision-makers. Compliance involves going along with proposed changes with little enthusiasm. Enthusiastic supporters are defenders of the new way and actually encourage others around them to give support to the change effort as well.  Resistance to Change Human always fears the unknown, and a change represents the unknown. Thus, it is a common experience that employees resist change in the context of their situation in the organization. Example: resistance of employees to computerization during the early 1990s. 1. Fear of Reduction in Employment This is due to the change in technology, methods of work, quantity or quality of work which may not require much manpower anymore. This fear leads to resistance to change. 2. Fear of Demotion (downgrading) Employees may fear that they may be demoted if they do not possess the new skills required for their jobs, or fear reducing their payment after the introduction of change. 3. Fear of Workload Change in work technology and methods may lead to the fear that workload will be increased while there will not be any corresponding increase in their salaries and benefits. 4. Need for Training If change in technology and work organization necessitates training and re- learning, it may lead to resistance, as employees do not like to go for refresher and retraining courses off and on. 5. Boredom and Monotony If the proposed change is expected to lead to greater specialization resulting in boredom and monotony (uniformity) then employees may resist the change. 6. No Participation in Change Process Some employees resist any change as they are critical of the situation and they are not given any part in the decision-making process for change. 7. Need for New Social Adjustment: An organizational change requires new social adjustment with the group, work situation and new boss. Some people refuse transfers and promotions for this reason as they will have to break their present social ties. 8. Other Considerations: Some employees may consider that every change brought about is only for the benefit of the organization and not for them, their fellow workers or even the general public.  Managing Change 1. Create a Vision for Change When the vision is exciting and paints a picture of a future that employees would be proud to be a part of, people are likely to be more committed to change. 2. Communicating a Plan for Change When employees know what is going to happen, and when and why, they may conquer their discomfort with change. Those who have more complete information about upcoming changes are more committed to a change effort. When top management and the company CEO discuss the importance of the changes in meetings, employees are provided with a reason to trust that this change is a strategic initiative. 3. Develop a Sense of Urgency People are more likely to accept change if they feel that there is a need for it. Those who plan the change will need to make the case that there is an external or internal threat to the organization’s competitiveness, reputation, or sometimes even its survival, and failure to act will have dreadful consequences. If employees feel their company is doing well, then they will think change is not needed. 4. Provide Support Management may provide emotional and instrumental support. Emotional support may be in the form of frequently discussing the changes, encouraging employees to voice their concerns, and simply expressing confidence in employees’ ability to perform effectively under the new system. Instrumental support may be in the form of providing a training program to employees, so they know how to function under the new system. 5. Allow Employees to Participate Employees who participate in planning change efforts tend to have more positive opinions about the change because they will have the opportunity to voice their concerns. They will feel a sense of ownership of the planned change and are more likely to be on board. 6. Publicize Success To make change permanent, the organization should share the results of the change effort with employees so that they are confidant that the implemented change was a right decision. Example: How much money did the company save? How much did the company’s reputation improve? What was the reduction in accidents after new procedures were put in place? 7. Reward Change Adoption Reward those who embrace the change effort. The rewards do not necessarily have to be financial. The simple act of recognizing those who are giving support to the change effort in front of their peers may encourage others to get on board.  Stop and think?? People have a natural resistance to change. True OR False. People get bored with routine and seek out new experiences. True OR False. Older people are more resistant to change than youngsters True OR False. Review Questions 1. Can you think of an organizational or personal change that you had to go through? Have you encountered any resistance to this change? What were the reasons? 2. How would you deal with employees who are resisting change because their habits are threatened? How would you deal with them if they are resisting because of a fear of failure? 3. What are the benefits of employee participation in change management? 4. Why are successful companies less likely to change? What should companies do in order to make organizational change part of their culture?  Glossary of Terms Organizational Change: Organizational change is the movement of an organization from one state of affairs to another. Change process in a company’s structure, strategy, policies, procedures, technology, or culture. Change involves letting go of the old ways in which work is done and adjusting to the new ways. Work Change: Is the change in work’s machinery, working hours, methods of work, job enlargement and enrichment, job redesign, the working hours like morning shifts, evening shifts, operation of the organization on weekends/holidays.  Reference: Organizational Behavior bridges the gap between theory and practice with a distinct ”experiential“ approach. Page 611 - 628 https://open.lib.umn.edu/organizationalbehavior/  CONTACT INFORMATION: Name of the Staff : Wathiqa Bait-Said Office: BS 035 Email: [email protected] VERSION HISTORY Version No Date Approved Changes incorporated 01 Sem. (I) 2022/2023 02 Sem. (II) 2022/2023 Some few formatting 31