©2007 The McGraw-Hill Companies, Inc., All Rights Reserved Newstrom 12/e PPT ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

©2007 The McGraw-Hill Companies, Inc., All Rights Reserved Chapter Fourteen Managing Change ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

©2007 The McGraw-Hill Companies, Inc., All Rights Reserved Chapter Objectives To understand: The nature of change Cost and benefits of change Resistance to change Basic frameworks for interpreting change Role of transformational leadership in change Practices to build support for change Meaning and characteristics of OD Benefits and limitations of OD ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

©2007 The McGraw-Hill Companies, Inc., All Rights Reserved Introduction Facts of life about change: It is everywhere It is constant Its pace is accelerating Organizations must decide: Not whether to change But when and how to do it Convincing employees of need for change is difficult to do ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

©2007 The McGraw-Hill Companies, Inc., All Rights Reserved Change at Work The nature of change: Effects are widespread Human and technical problems Managers have proactive and reactive roles Responses to change: Experiments relating lighting to productivity Individual attitudes affect response Feelings are nonlogical The Hawthorne effect Observation affects behavior ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Group Response to Change ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

©2007 The McGraw-Hill Companies, Inc., All Rights Reserved Change at Work Homeostatis A group tends to return to its perceived best way of life when any change occurs People establish a steady state of need fulfillment and protect themselves from disturbance of that balance ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

©2007 The McGraw-Hill Companies, Inc., All Rights Reserved Change at Work Costs and Benefits Psychic costs Repetitive change syndrome No clear-cut, 100 percent benefit for all parties ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

©2007 The McGraw-Hill Companies, Inc., All Rights Reserved Resistance to Change Any behavior designed to discredit, delay, or prevent a work change Change threatens employee needs for: Security Social interaction Status Competence Self-esteem ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

©2007 The McGraw-Hill Companies, Inc., All Rights Reserved Resistance to Change Other Causes of Resistance Culture over-values criticism of new ideas Employees support ideas in public but undercut changes behind the scenes Managers who suffer from “analysis paralysis” Emphasis on flashy proposals, not follow-through A “bunker” mentality ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

©2007 The McGraw-Hill Companies, Inc., All Rights Reserved Resistance to Change Nature and Effects Perceived threats can be real or imagined, intended or unintended, direct or indirect, large or small Resistance doesn’t respect type of dress or job Some changes are actively sought by employees Change can be a success or a problem, depending on how skillfully it is managed Chain-reaction effect may develop ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

©2007 The McGraw-Hill Companies, Inc., All Rights Reserved Resistance to Change Reasons for Resistance Nature of the change itself Method by which change is introduced Someone else appears to gain the benefits From Resistance to Acceptance Denial Anger Depression Search for alternative Acceptance ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

©2007 The McGraw-Hill Companies, Inc., All Rights Reserved Resistance to Change Types of Resistance Logical, rational Psychological, emotional Social factors, group interests ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

©2007 The McGraw-Hill Companies, Inc., All Rights Reserved Resistance to Change Possible Benefits of Resistance Discourages careless management decisions Identifies problem areas where change may cause difficulties Encourages better communication Helps management gauge intensity of employee emotions on an issue Provides emotional release for pent-up employee feelings Thinking and talking about the change encourages employees to better understand it ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Implementing Change Successfully Dynamic environments require change; it is now the norm. ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Implementing Change Successfully Transformational Leadership and Change Management needs a master strategy Learning organizations are needed Transformational Leaders Creating vision Communicating charisma Stimulating learning Double-loop learners challenge their own thinking ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Implementing Change Successfully Stages Of Change Unfreezing Changing Refreezing ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Implementing Change Successfully Manipulating the Forces Equilibrium between supporting and restraining forces Introducing Change Add new supporting forces Remove restraining forces Increase the strength of a supporting force Decrease the strength of a restraining force Convert restraining force into a supporting force ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Implementing Change Successfully Building Support for Change Use group forces Provide a rationale for change Expectations are important Encourage participation Ensure economic and psychic rewards Ensure employee security Communicate and educate Stimulate employee readiness Work with the total system ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Understanding Organization Development Organizational Development (OD) Systematic application of behavior science knowledge at various organizational levels to bring about planned change Helps managers recognize that organizations are systems with dynamic interpersonal relationships holding them together ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Understanding Organization Development Variables in the OD Approach ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Understanding Organization Development Foundations of OD Systems organization Understanding causality Assumptions underlying organization development ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Organization Development Assumptions Individuals Want to grow and mature Have much to offer that is not now being used Desire the opportunity to contribute Groups Critical to organizational success Powerful influences on individual behavior Complex roles require skill development ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Organization Development Assumptions Excessive controls, policies, and rules are detrimental Conflict can be functional if properly channeled Individual and organizational goals can be compatible ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

Characteristics of Organizational Development Humanistic values Use of a change agent Problem solving Interventions at many levels Appreciative inquiry Contingency orientation Summary and application Integrates people, structure, technology, and environment ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

The Organizational Development Process ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

©2007 The McGraw-Hill Companies, Inc., All Rights Reserved Benefits of OD More widely dispersed improvement Greater motivation Increased productivity Better quality of work Higher job satisfaction Improved teamwork Better resolution of conflict Commitment to objectives Increased willingness to change Reduced absences Lower turnover Creation of learning individuals and groups ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved

©2007 The McGraw-Hill Companies, Inc., All Rights Reserved Limitations of OD Major time requirements Substantial expense Delayed payoff period Possible failure Possible invasion of privacy Possible psychological harm Potential conformity Emphasis on group processes, not performance Possible conceptual ambiguity Difficulty in evaluation Cultural incompatibility ©2007 The McGraw-Hill Companies, Inc., All Rights Reserved