Organizational Change Chapter 18

Organizational Change All companies must change in order to remain competitive Change is difficult – Organizational Inertia There are benefits to stability

18-3 Forces of Change External Demographic Characteristics Technological Advancements Shareholder, Customer, and Market Changes Social and Political Pressures The Need for Change Internal Human Resource Problem/Prospects Managerial Behavior/Decisions

18-4 Types of Organizational Change Adaptive Change Innovative Change Radically Innovative Change Reintroducing a familiar practice Introducing a practice new to the organization Introducing a practice new to the industry  Degree of complexity, cost, and uncertainty  Potential for resistance to change LowHigh

18-5 Lewin’s Change Model  Changing –Provides new information, new behavioral models, or new ways of looking at things  Refreezing –Helps employees integrate the changed behavior or attitude into their normal way of doing things Unfreezing – Creates the motivation to change Benchmarking Data Financial data, emerging trends

Assumptions of Lewin’s Model Change involves learning something new & unlearning the old way of doing things Change will not occur without motivation People are the hub of all organizational change Resistance to change is found even when change is desirable

18-7 A Systems Model of Change Organizing Arrangements People Goals Social Factors Methods Target Elements of Change Internal  Strengths  Weaknesses External  Opportunities  Threats Inputs Internal  Organizational level  Department/ group level  Individual level Outputs Strategy

18-8 Kotter’s Eight Steps for Leading Organizational Change Create and implement a communication strategy that consistently communicates the new vision and strategic plan 4)Communicate the change- vision Create a vision and strategic plan to guide the change process 3)Develop a vision and strategy Create a cross-functional, cross-level group of people with enough power to lead the change 2)Create the guiding coalition Unfreeze the organization by creating a compelling reason for why change is needed 1)Establish a sense of urgency DescriptionStep Table 18-1

18-9 Kotter’s Eight Steps for Leading Organizational Change Reinforce the changes by highlighting connections between new behaviors and processes and organizational success 8)Anchor new approaches in the culture The guiding coalition uses credibility from short-terms wins to create change. Additional people are brought into the change process as change cascades throughout the organization 7)Consolidate gains and produce more change Plan for and create short-term “wins” or improvements 6)Generate short-term wins Eliminate barriers to change, use target elements of change to transform the organization 5)Empower broad-based action DescriptionStep Table 18-1

Organizational Development

Resistance to Change Emotional/behavioral response to threats to an established work routine – Passive or active – One of three possible outcomes of influence attempts (Compliance & commitment)

Recipient Characteristics & Resistance Resilience to change – Self-esteem, optimism, internal locus of control Fear of the unknown Fear of failure Loss of status/job security Peer pressure Past success

Change Agent Characteristics & Resistance Disruption of culture or group relationships Personality conflicts Lack of tact or poor timing Leadership style Failure to legitimize change

18-14 Overcoming Resistance to Change Can be very time consuming, expensive and still fail No other approach works as well with adjustment problems People are resisting because of adjustment problems Facilitation and Support Can be very time consuming if participators design an inappropriate change People who participate will be committed to the implementation of change The initiators do not have all the information they need to design the change & others have considerable power to resist Participation and Involvement Can be very time consuming if lots of people are involved Once persuaded, people will often help with implementation of change There is a lack of information or inaccurate information & analysis Education and Communication DrawbacksAdvantagesCommonly Used in Situations Where: Approach

18-15 Overcoming Resistance to Change Can be very risky ad leave people mad at the initiators It is speedy and can overcome any kind of resistance Speed is essential and where the change initiators possess considerable power Explicit and Implicit Coercion Can lead to future problems if people feel manipulated It can be relatively quick and inexpensive Other tactics will not work or are too expensive Manipulation and Co-optation Can be too expensive in may cases if it alerts other to negotiate for compliance Sometimes it is a relatively easy way to avoid major change Someone or some group will clearly lose out in a change and where that group has considerable power to resist Negotiation and Agreement DrawbacksAdvantagesCommonly Used in Situations Where: Approach Table 18-3

Stress An adaptive response to an environmental stimulus that places special demands on the individual Fight-or-flight response – Physiological changes – Physiological reactions Eustress vs. Distress Stressors – factors that cause stress

Stress and Performance Performance Stress

Coping Strategies Control strategy – Aggressively try to solve problem Escape strategy – Avoid problem Symptom Management strategy – Deal with symptoms (drinking, meditating, etc.)

Mitigating Factors Social Support – Esteem support – Informational support – Social companionship – Instrumental support Hardiness – Challenges vs. stressors – Internal locus of control

Personality & Stress Type A personality – Never ending struggle to achieve more and more in less and less time – Sense of urgency about time – Competitive – Aversion to idleness – Type A’s tend to: Speak rapidly Answer questions quickly Be sarcastic (hide rudeness in humor)