Chapter 18 Nelson & Quick Managing Change

Organizational Change Planned Change - change resulting from a deliberate decision to alter the organization Unplanned Change - change that is imposed on the organization and is often unforeseen Managers must be prepared to handle both 2

External Forces for Change Workforce Diversity Globalization Changing Technology Ethical Behavior 3

Globalization Workforce Diversity Organizations must rethink the most efficient ways to Use resources Disseminate/gather information Develop people Majority of new workers will be female Workforce will grow in diversity - more Hispanics & African-Americans Structural Change & Workforce is aging - less young workers, more middle-aged Mental Change Workforce Diversity 4

Ethical Behavior Changing Technology Other Organizations Customers Treatment Changes in work relationships Environment With its ability to reach across boundaries and give voice to the many, the Internet changes the ground rules for everything from commerce to government. Visit digitrends.net to read the latest headlines on emerging technologies, What are the latest newsworthy events in the field of digital technology, and what are the implications for change in business and society? Society Technological Change Changes in organizational structure Changing Technology 5

Internal Forces for Change Company Crisis Declining Effectiveness Changing Employee Expectations Changing Work Climate 6

Scope of Change Incremental Change - change of a relatively small scope, such as making small improvements Strategic Change - change of a larger scale, such as organizational restructuring Transformational Change - change in which the organization moves to a radically different, and sometimes unknown, future state 7

The Change Agent’s Role Change Agent - the individual or group who undertakes the task of introducing and managing a change in an organization The change agent can be internal or external 8

Internal Change Agents Advantages know past history, political system, and culture must live with results of change so will move carefully Disadvantages may be associated with factions, accused of favoritism may be too close to the situation to be objective 9

External Change Agents Advantages outsider’s objective view impartiality Disadvantages limited knowledge of organization’s history may be viewed with suspicion To succeed, they must be perceived as trustworthy, be experts with proven track records, be similar to those they are working with 10

Resistance to Change Fear of the unknown Fear of loss Fear of failure Disruption of interpersonal relationships Personality conflicts Politics Cultural assumptions and values 11

Dealing with Resistance to Change Communication details rationale Participation in the process ownership commitment Empathy and support 12

Reactions to Change & Managerial Interventions Disengagement psychological withdrawal from change Disidentification feeling that one’s identity is being threatened by change Disenchantment feeling negativity or anger toward a change Disorientation feelings of loss and confusion due to change Expression Withdrawal Sadness, worry Anger Confusion Managerial Intervention Confront, identify Explore, transfer Neutralize, acknowledge Explain, plan Table adapted from H. Woodward and S. Buchholz. Aftershock: Helping People through corporate Change, p. 15. Copyright © 1987 John Wiley & Sons, Inc. Reprinted by Permission of John Wiley & Sons, Inc. 13

Lewin’s Three Step Change Model 1. Unfreezing - involves encouraging individuals to discard old behaviors by shaking up the equilibrium state that maintains the status quo 2. Moving - new attitudes, values, and behaviors are substituted for old ones 3. Refreezing - involves the establishment of new attitudes, values, and behaviors as the new status quo 14

Force Field Analysis of Decision to Engage in Exercise Forces for change Weight gain Minimally passing treadmill test Feel lethargic; have no energy Family history of cardiovascular disease New, physically demanding job Forces for status quo Lack of time No exercise facility at work Spouse/partner hates to exercise No interest in physical activity or sports Made a grade of D in physical education class Equilibrium 15

Applying Lewin’s Model to the Organization Unfreezing: the organization eliminates rewards for current behavior Moving: the organization initiates new options and explains their rationale Refreezing: organizational culture & formal reward systems encourage the new behaviors 16

Organizational Development (OD) Organizational Development (OD) - a systematic approach to organizational improvement that applies behavioral science theory and research in order to increase individual and organizational well-being and effectiveness 17

Diagnosis & Needs Analysis Diagnosis and needs analysis Intervention Follow-up The Group for Organizational Effectiveness helps clients facilitate change and manage knowledge. The group’s work with organizations such as NASA, Pfizer, and Johnson & Johnson has earned it a reputation as a leader in change management. What services are listed at the site, and how does the group address issues of needs analysis and evaluation for its clients? Ask What are the forces for change? What are the forces preserving the status quo? What are the most likely sources of resistance? What are the goals to be accomplished by change? 18

OD Intervention Methods: Organizational/Group Techniques Survey feedback - a widely used method of intervention whereby employee attitudes are solicited by questionnaire Anonymous Group reporting format No repercussions Clear purpose Follow-up 19

OD Intervention Methods: Organizational/Group Techniques Management by Objective an organization-wide intervention technique of joint goal setting between employees and managers Initial objectives Periodic progress reviews Problem solving to remove obstacles to goal achievement 19

OD Intervention Methods: Organizational/Group Techniques Quality Program - a program that embeds product and service quality excellence into the organizational culture Raise aspirations about product/service quality Embed product/service quality excellence in the organizational culture 20

OD Intervention Methods: Organizational/Group Techniques Team Building - an intervention designed to improve the effectiveness of a work group Seek feedback Discuss errors Reflect on successes & failures Experiment with new ways of performing Climate of psychological safety The American Quality Management Mall is a Web portal for management professionals, featuring discussion groups, publications, job opportunities, and links. Visit the site to learn more about quality topics such as benchmarking, total quality management, team building, and reengineering. 20

OD Intervention Methods: Organizational/Group Techniques Large Group Interventions - events that bring all of the key members of a group together in one room for an extended period of time Outside consultants determine participants & goals Participants=critical mass supporting change 21

OD Intervention Methods: Organizational/Group Techniques Process Consultation - an OD method that helps managers and employers improve the processes that are used in organizations Outside consultant: Enters organization Defines the relationship Chooses an approach Gathers data Diagnoses problem Intervenes Leaves organization 21

OD Intervention Methods: Individual-Focused Techniques Skills Training - increasing the job knowledge, skills, and abilities that are necessary to do a job effectively In formal classroom settings On the job (Continual updating) 22

OD Intervention Methods: Individual-Focused Techniques Sensitivity Training – an intervention designed to help individuals under- stand how their behavior affects others Outside trainer who intervenes only to move the group forward. Training can: help employees understand each other recognize their own feelings improve communication 22

OD Intervention Methods: Individual-Focused Techniques Management Development Training - a host of techniques for enhancing managers’ skills in an organization Verbal information Intellectual skills Attitudes Development 23

OD Intervention Methods: Individual-Focused Techniques Role Negotiation - a technique whereby individuals meet and clarify their psychological contract Outcomes Better understanding of what each can be expected to give & receive Less ambiguity 23

OD Intervention Methods: Individual-Focused Techniques Job Redesign - an OD intervention method that alters jobs to improve the fit between individual skills and the demands of the job Realign task demands and individual capabilities Redesign jobs to fit new techniques or organization structures 24

OD Intervention Methods: Individual-Focused Techniques Health Promotion Programs Career Planning Ex. Stress reduction education, employee assistance Match individual’s career aspirations with organizational opportunities 24

Ethical Considerations in Organizational Development Selection of the OD method Voluntary participation Confidentiality Potential for manipulation by the change agent 25