Organizational Change Chapter 1 PDF

Stuvia - Koop en Verkoop de Beste Samenvattingen Chapter 1: Organizations and their changing environments A view of organizations Organiza$ons can be seen as people interac$ng in some kind of structured or organized way to achieve some de=ned purpose or goal. Illustra$on 1.1: According to Da, an o...

Stuvia - Koop en Verkoop de Beste Samenvattingen Chapter 1: Organizations and their changing environments A view of organizations Organiza$ons can be seen as people interac$ng in some kind of structured or organized way to achieve some de=ned purpose or goal. Illustra$on 1.1: According to Da, an organiza$on can be described as follows: (1) a social en$ty that (2) has goals and purpose, (3) has boundaries, so that some par$cipants are considered inside while others are considered outside, and (4) paCerns the ac$vi$es of par$cipants into a recognizable structure. Figure 1.1 iden$=es the main elements of most organiza$ons and their func$oning: Silverman challenged the idea of organiza$ons as systems since the no$on rests on an assump$on that de=ning an organiza$on’s goals is unconten$ous and that, within the organiza$on, there is consensus as to what its goals are. Out of this cri$que came forth the ‘social ac$on’ approach to understanding organiza$ons, this became recognized as an alterna$ve view to the idea of organiza$ons as systems. Stacy’s idea of organiza$ons as complex systems emphasizes the no$on of unpredictability by emphasizing the mul$tude of interac$ons in and between the individual, social, organiza$onal and environmental domains. An uncertain future Most commentators or organiza$ons agree that business condi$ons con$nue to be increasingly complex and more uncertain as the pace for change quickens and the future becomes more unpredictable. What seems incontestable is that both public and private sectors con$nue to face fast-moving change, even if the exact nature of the changes needed is not always clear. 3 Gedownload door: bartscholing | [email protected] Dit document is auteursrechtelijk beschermd, het verspreiden van dit document is strafbaar. ¤ 912 per jaar extra verdienen? Stuvia - Koop en Verkoop de Beste Samenvattingen Environmental triggers of change Organiza$ons opera$ng in the same sector, baCling with the same forces, may contrast the signi=cance of events quite di:erently. These di:erent construc$ons arise from the following: - How the characteris$cs and experiences of people =lter informa$on from the environment; How organiza$onal cultures in8uence the ways that managers and others can interpret events; How organiza$onal poli$cs interpret signals from the environment; How the organiza$on has developed in the past and what has worked and not worked; How the business sector as a whole interprets the informa$on. Analysing the environment A common way of grouping di:erent environmental factors is to examine poli$cal, economic, social and technological factors (PEST). Legal and ecological factors can be considered as well (PESTLE). Polical triggers: a plethora of na$onal and interna$onal bodies, elected and unelected, in8uence organiza$onal life to a greater or lesser degree. Governments aim to improve economic prosperity. They also act as lawmakers, passing legisla$on that can have a great e:ect on organiza$ons. Illustra$on 1.3: New public management (NPM) is a tern introduced in the 90s to represent new ways of poli$cal thinking about how public services should be managed. It stressed the role and importance of management in improving public service delivery. It is overtly managerial in its focus 4 Gedownload door: bartscholing | [email protected] Dit document is auteursrechtelijk beschermd, het verspreiden van dit document is strafbaar. ¤ 912 per jaar extra verdienen? Stuvia - Koop en Verkoop de Beste Samenvattingen on the eJcient produc$on of services and its opposi$on to systems of self-governance by service providers. Characteris$cs of NPM include: - Introducing compe$$on or at least the principles of compe$$on to public services; Contrac$ng out some services to private-sector providers; Introduce targets and explicit performance measures to public organiza$ons and to individual employees; Depoli$cizing service delivery (separa$ng poli$cs from delivery); Restructuring and separa$ng purchasers from providers; Budget cuts Economic triggers: poli$cal and economic environments are closely related since poli$cal decisions shape economic outcomes and economic changes in8uence poli$cal decisions. In general, governments in developed countries aim to keep four key economic indicators in balance: - Economic growth; A healthy balance of payments; Low in8a$on; Low unemployment. Socio-cultural triggers: Socio-cultural factors in8uence the way organiza$ons are set up, run and managed, as well as their capacity to aCract people to work within them. Examples of how changes in the socio-cultural environment in8uence aLtudes to work and trigger changes include: - Expecta$ons for con$nuous increases in the standard of living; Demographic changes such as the age composi$on of the workforce and the mobility of labour; Changes in family structures and the roles of men and woman, which in8uence preferences for working hours and provision of child care; Heightened awareness of equality and intolerance of unfair and unethical prac$ces; Heightened awareness of and sensi$vity to cultural and religious di:erences. Technological triggers: examples of technological triggering change are many and varied and o>en have a long-run e:ect on the shape of society and organiza$ons. Investment in technology is seen as a driver of produc$vity in organiza$ons. The technologies that organiza$ons use a:ect how they choose to structure for op$mum eJciency. They a:ect the knowledge and skills that employers want and which employees need and lead to retraining and career change. Internal triggers of a need for change: changes can also be triggered by factors internal to an organiza$on. Typically, these relate to how e:ec$vely the organiza$on is adap$ng to external forces. The following are indica$ve of internal triggers for change: - A new chief execu$ve or other senior manager; Falling organiza$onal performance; A new vision and mission statement; High employee turnover, low employee morale; Recogni$on or de-recogni$on of a union; Reloca$on and/or redesign of a factory or oJce layout; The adop$on of new technology; Takeover, divestment, or merger and acquisi$on; Labour shortages or surpluses. 5 Gedownload door: bartscholing | [email protected] Dit document is auteursrechtelijk beschermd, het verspreiden van dit document is strafbaar. ¤ 912 per jaar extra verdienen? Stuvia - Koop en Verkoop de Beste Samenvattingen The future of work A survey (in 2014) reported the following trends that will a:ect business organiza$ons: - - - Technology is transforming how organiza$ons func$on. By 2020, each person will have six di:erent devices that will be connected to the Internet. As a result, people skills will become more vital to organiza$ons; Managers will need to be able to lead teams consis$ng of workers who work 8exibly, independently and in broad range of geographical loca$ons. Workplace structures will become wider, 8aCer and less hierarchical; Managers will have tools for analysing sta: emails and social media accounts in order to gauge sta: engagement and manage performance; Diversity will become even more of a business impera$ve. Nearly one billion women are likely to enter the global workforce over the next decade; Many of the young people joining companies today will live to 100 years and they will be working un$l they are about 85; Managers need to develop a business culture that makes ethics, corporate social responsibility and sustainability an integral art of the company’s business model; Future leaders need to be agile, authen$c, sustainable and talented. Organizational responses to change Organiza$ons operate in at least three types of environment. The =rst consists of the historical developments bringing changes over $me. These range from those ac$vi$es that are mainly sector focused to those which rely more on knowledge and human capital. These can be categorized as the temporal environment, this is an environment that in8uences organiza$ons in at least two ways: - - General way, through cycles of industry-based innova$on, which move organiza$ons through a major series of developments; Speci=c way, through the life-cycle of the organiza$on itself. It includes par$cular history built up from its founder days through periods of expansion and decline, all of which are instrumental in helping to explain an organiza$on’s idiosyncrasies of strategy and structure, culture, poli$cs and leadership style. The second type of environment is the PEST framework and the third is the organiza$ons internal environment which, to some extent, consists of those organiza$onal changes that are the =rst-line responses to changes in the external and temporal environments (see =gure 1.4). Environmental turbulence 6 Gedownload door: bartscholing | [email protected] Dit document is auteursrechtelijk beschermd, het verspreiden van dit document is strafbaar. ¤ 912 per jaar extra verdienen? Stuvia - Koop en Verkoop de Beste Samenvattingen The dynamics of an organiza$on’s environment can also be assessed in terms of the degree of environmental turbulence (Anso: and McDonnel). There are =ve levels of environmental turbulence: - - - Level 1: predictable. A repe$$ve environment characterized by stability of markets, where the challenges repeat themselves, change is slower than the organiza$on’s ability to respond and the future is expected to be the same as the past. Level 2: forecastable by extrapola$on. Complexity increases but managers can s$ll extrapolate from the past and forecast the future with con=dence. Level 3: predictable threats and opportuni$es. Complexity increases further when the organiza$on’s ability to respond becomes more problema$c. However, the future can s$ll be predicted with some degree of con=dence. Level 4: par$ally predictable opportuni$es. Turbulence increases with the addi$on of global and socio-poli$cal changes; the future is only partly predictable. Level 5: unpredictable surprises. Turbulence increases further with unexpected events and situa$ons occurring more quickly than the organiza$on can respond. These levels can be compared to three di:erent kinds of change situa$ons proposed by Stacey (1996): - - - Closed change: we are able to say what happened, why it happened and what the consequences are. We are also able to explain in a widely accepted way that such a sequence of events and ac$ons will con$nue to a:ect the future course of the business. Closed change would normally apply to the con$nuing opera$on of an exis$ng business; Contained change: we are able to say only what probably happened, why it probably happened and what its probable consequences were. The impact of such a sequence of events upon the future course of the business has similarly to be quali=ed by probability statements. (evolu$onary change under way); Open-ended change: other sequences of events and ac$ons arising from the past and con$nuing to impact on the future where explana$ons do not command anything like widespread acceptance by those involved. (new entrants in the market, rapid change). These levels can be compared to three di:erent kinds of change situa$on proposed by Stacy, namely closed change, contained change and open-ended change. Both concepts (Anso:, McDonnell and Stacey) can be related to Stacey’s concept of ‘close to certainty’ and ‘far from certainty’. Close to certainty describes a situa$on on where organiza$onal members face closed and contained change (or levels 1-3 Anso:, McDonnell). Far from certainty describes a situa$on where organiza$onal members face open-ended change (or levels 4-5 Anso:, McDonnell). 7