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Organizational Change Four major types of change: Technology: General rule is that technology change is bottom up. New product: Companies that successfully develop new products: Horizontal linkage model emphasizes shared development of innovations among several departments. Time-based competition is based on the ability to deliver products and services faster than competitors. Structure: Successful structural change is accomplished through a top-down approach. Culture/people: Training is the most frequently used tool for changing the organization’s mind-set. Continental Airlines is more than just an airlines

Model of Change Sequence of Events Environmental Forces Monitor global competition, and other factors Need for change Implement change Initiate change Evaluate problems and opportunities, define needed changes in technology products, structure, and culture Facilitate search, creativity, idea champions, venture teams, skunk works and idea incubators Use force field analysis, tactics for overcoming resistance Internal Forces Consider plans, goals, company problems, and needs

Learning Organizations and Change Incremental, deals with an organizational effort to gradually improve basic operational and work processes in different parts of the company Transformational, change involving redesigning and renewing the entire organization

Need for Change Based on external or internal forces. Performance gap-a disparity between existing and desired performance levels. Performance gap may occur because: current procedures are not up to standard a new idea or technology could improve current performance

Characteristics of Creative People Originality Open-minded Curiosity, a focused approach to problem solving Persistence A relaxed and playful attitude Receptive to new ideas

Idea Champion A person who sees the need for and champions productive change within the organization.

Four Roles in Organizational Change Champion Believes in idea Visualizes benefits Confronts organization realities of cost, benefits Obtains financial and political support Overcomes obstacles Inventor Develops and understands technical aspects of ideas Does not know how to win support for the idea or make a business of it Sponsor High-level manager who removes organizational barriers Approves and protects idea within organization Critic Provides reality test Looks for short- comings Defines hard-nosed criteria that idea must pass Sources: Based on Harold L. Angle and Andrew H. Van de Ven, “Suggestions for Managing the Innovation Journey,” in Research in the Management of Innovation: The Minnesota Studies, ed. A. H. Van de Ven, H. L. Angle, and Marshall Scott Poole (Cambridge, Mass.: Ballinger/Harper & Row, 1989); and Jay R. Galgraith, “Designing the Innovating Organization,” Organizational Dynamics (winter 1982) 5-25.

Resistance to Change Self-Interest: the fear of personal loss is perhaps the biggest obstacle to organizational change. Lack of Understanding and Trust: do not understand the intended purpose of a change or distrust the intentions. Uncertainty: the lack of information about future events. Different Assessments and Goals: people who will be affected may innovation may assess the situation differently.

Forced Field Analysis The process of determining which forces drive and which resist a proposed change Driving Forces Thought of as problems or opportunities that provide motivation for change Restraining Forces (Barriers) Lack of resources Resistance from middle managers Inadequate employee skills

Traditional to Just In Time Inventory Systems

Types of Organizational Change Structure Technology Strategy Products Culture/People SOURCE: Based on Harold J. Leavitt, “Applied Organizational Change in Industry: Structural, Technical, and Human Approaches,” In New Perspectives in Organization Research, ed.W.W. Cooper, H.J. Leavitt, and Shelly II (New York: Wiley, 1964), 55-74.

Problems OD Can Address Mergers/acquisitions Decline/revitalization Conflict management

Large group intervention OD Activities Team building Survey feedback Large group intervention

OD Approaches to Culture Change Traditional Organizational Development Model Large-Group Intervention Model Focus for action: Information Source: Distribution: Time frame: Learning: Specific problem or group Organization Limited Gradual Individual, small group Entire system Organization and environment Widely shared Fast Whole organization Change Process: Incremental Change Rapid transformation SOURCE: Adapted from Barbara Benedict Bunker and Billie T. Alban, “Conclusion: What Makes Large Group Interventions Effective,” The Journal of Applied Behavioral Science 28, no 4 (December 1992), 579-591.