Organization Change and Development Chapter Fifteen Organization Change and Development

Chapter Objectives Summarize four dominant forces for change in organizations. Describe the process of planned organization change as a continuous process. Discuss several approaches to organization development. Explain organizational and individual sources of resistance to change. Identify six keys to managing successful organizational change and development Copyright © Houghton Mifflin Company. All rights reserved.

Forces for Change An organization faces pressures for change from numerous sources: It is difficult to predict what types of pressures for change will be the most significant in the next decade because the complexity of events and the rapidity of change are increasing. Four categories of pressures that are likely to have major effects on organizations include: People, technology, information processing and communications, and competition. Copyright © Houghton Mifflin Company. All rights reserved.

Pressures for Organizational Change People Baby Boomers comprise approximately 56 million people born between 1945 & 1960. Special characteristics of this group include distinct purchasing patterns that affect product and service innovation, technological change, and marketing activities. Technology Technology development is increasing so rapidly in almost every field making it difficult to predict which products will dominate 10 years from now. Copyright © Houghton Mifflin Company. All rights reserved.

Pressures for Organizational Change (continued) Information Processing and Communications In the future, people may not need offices as they work with computers and communicate through new data transmission devices. Competition Most markets are international because of decreasing transportation and communication costs. The Internet is creating new opportunities overnight. Copyright © Houghton Mifflin Company. All rights reserved.

Table 15.1 Pressures for Organizational Change Copyright © Houghton Mifflin Company. All rights reserved.

Planned Organizational Change External forces may impose change on an organization. Ideally, the organization will not only respond to change but will anticipate it, prepare for it through planning, and incorporate it in the organization strategy. Copyright © Houghton Mifflin Company. All rights reserved.

Lewin’s Process Model Kurt Lewin suggested that efforts to bring about planned change in organizations should approach change as a multistage process. His model of planned change consists of 3 steps Unfreezing Change Refreezing Copyright © Houghton Mifflin Company. All rights reserved.

Figure 15.1: Lewin’s Process Model of Organizational Change Copyright © Houghton Mifflin Company. All rights reserved.

The Continuous Change Process Model Lewin’s model is very simple and straightforward, so virtually all models of organizational change use his approach. However, it does not deal with several important issues. This approach treats planned change from the perspective of top management and indicates that change is continuous. Copyright © Houghton Mifflin Company. All rights reserved.

The Continuous Change Process Model (continued) Major Steps in the Model Top management perceives that change is needed. The issue in question is subjected to the organization’s usual problem-solving and decision-making processes. Alternatives for change are generated and evaluated, and an acceptable one is selected. The change agent and top management assess the degree to which the change is having the desired effect, and make adjustments if necessary. Copyright © Houghton Mifflin Company. All rights reserved.

Figure 15.2: Continuous Change Process Model of Organizational Change Copyright © Houghton Mifflin Company. All rights reserved.

Organization Development The process of planned change and improvement of an organization through the application of knowledge of the behavioral sciences. First, organization development involves attempts to plan organization changes, which excludes spontaneous, haphazard initiatives. Second, the specific intention of organizational development is to improve the organization. Third, the panned improvement must be based on knowledge of behavior sciences such as organizational behavior, psychology, sociology, and related fields rather than financial or technological considerations. Copyright © Houghton Mifflin Company. All rights reserved.

Systemwide Organization Development Structural Change A major reorientation or reorganization that affects performance appraisal and rewards, decision making, and communication and information processing systems. No systemwide structural change is simple. Copyright © Houghton Mifflin Company. All rights reserved.

Systemwide Organizational Development (continued) Contemporary Approaches to Systemwide Structural Change involve: Reengineering Changing the way tasks are divided into jobs Combining jobs into departments and divisions Rearranging authority and reporting relationships Dividing large groups into smaller ones Moving from functional departmentalization to a system based on products or geography Moving from a vertical or functional design to a matrix or a team-based design Copyright © Houghton Mifflin Company. All rights reserved.

Task and Technological Organizational Development Task Redesign Changing tasks involved in doing the work Changing how inputs are transformed into outputs is called technological change usually results in task changes Copyright © Houghton Mifflin Company. All rights reserved.

Four Types of People-Oriented Change Techniques Training Generally designed to improve employees’ job skills. Among the many training methods, the most common are lectures, discussions, lecture-discussion combinations, experiential methods, case studies, and films or videotapes. Management Development Programs Programs that attempt to foster certain skills, abilities, and perspectives. Training in this area typically relies heavily on participative methods such as case studies and role playing. Copyright © Houghton Mifflin Company. All rights reserved.

Four Types of People-Oriented Change Techniques (continued) Team Building Emphasizes members working together in a spirit of cooperation Survey Feedback Techniques used to form the basis for a change process; data are gathered, analyzed, summarized, and returned to those who generated them to identify, discuss, and solve problems Copyright © Houghton Mifflin Company. All rights reserved.

Figure 15.3: The Survey Feedback Process Copyright © Houghton Mifflin Company. All rights reserved.

Resistance to Change Resistance to change can come from the organization, the individual, or both. Organizations both promote and resist change. As an agent of change, the organization asks prospective customers to change their purchasing habits by buying its products or services, and asks clients and suppliers to change to accommodate other firm objectives. An organization resists change in that its structure and control systems protect the daily tasks of producing a product or service from uncertainties in the environment. Copyright © Houghton Mifflin Company. All rights reserved.

Table 15.3: Organizational and Individual Sources of Resistance Copyright © Houghton Mifflin Company. All rights reserved.

Table 15.3: Organizational and Individual Sources of Resistance (continued) Copyright © Houghton Mifflin Company. All rights reserved.

Table 15.4: Managing Successful Organizational Change Copyright © Houghton Mifflin Company. All rights reserved.