The Challenge of Managing Organizational Change: Exploring the Relationship of Re-engineering, Developing Learning Organizations and Total Quality Management Michaela Johnson Kelsey Gillaspie

Essential Requirements for Organization Change In Favor of Change: Sufficient dissatisfaction with the status quo as described by performance levels and trends. Sufficient dissatisfaction with the status quo as described by performance levels and trends. A strong attraction towards moving to a more desirable condition. A strong attraction towards moving to a more desirable condition. The appeal of a well thought out strategy for realizing the vision. The appeal of a well thought out strategy for realizing the vision. Against Change: Passive Resistance: caused by cynicism due to previous unsuccessful attempts at change. Passive Resistance: caused by cynicism due to previous unsuccessful attempts at change. Active Resistance: caused by internal fear due to the redistribution of power resulting from the change. Active Resistance: caused by internal fear due to the redistribution of power resulting from the change.

Methods for Managing Change Re-engineering Re-engineering Total Quality Management Total Quality Management Development of Learning Organizations Development of Learning Organizations “The new organization must be responsive, flexible, adaptable and value adding for all stakeholders.” “… for any system to preserve it’s integrity and survive, its rate of learning must at least march the rate of change in its environment.”

Re-engineering Reasons for Failure: Lack of shared vision and sufficient participation from leaders who are affected by this change. Lack of shared vision and sufficient participation from leaders who are affected by this change. –Why would employees be willing to contribute to improvements that would put them out of a job? The desire for a quick-fix results in superficial changes, leaving deeper problems untouched. The desire for a quick-fix results in superficial changes, leaving deeper problems untouched. In countries that value social harmony and respect for human resources, there is a preference for smoother transition patterns. In countries that value social harmony and respect for human resources, there is a preference for smoother transition patterns. –These countries strive for successful long-term change instead of ‘quick-fixes’. “the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical measures of performance such as cost, quality, service and speed”

Total Quality Management (TQM) Basic Principles for Success: 1.Commitment from management at all levels. 2.Focus on needs of customers and employees. 3.Insistence on everyone’s participation. 4.Decisions made based on facts. 5.Aim for Continuous Improvements “[TQM draws] ideas, principles and tools from psychology, sociology, statistics, management and marketing…which create value through greater satisfaction for all stakeholders.”

Total Quality Management Basic Functions: Quality Planning Quality Planning –Determine the needs and expectations of customers and employees and design products and processes that generate the highest degree of satisfaction. Quality Control Quality Control –Find and remove controllable sources of variability in products or processes. Quality Improvement Quality Improvement –Experimenting or benchmarking to improve customer and employee relations and sense of value.

Learning Organization (LO) An organization in which people… Continually expand their capacity to create the results they truly desire. Continually expand their capacity to create the results they truly desire. Continually learn how to learn together. Continually learn how to learn together. Share common goals that are larger than individual goals. Share common goals that are larger than individual goals. Function together in extraordinary ways, complementing each other’s strengths and compensating each other’s limitations. Function together in extraordinary ways, complementing each other’s strengths and compensating each other’s limitations. “…practically all conventional management approaches…have prevented the natural development and growth of adult individuals, work teams and organizations by creating environments that impede learning.”

Learning Organization Systems Thinking Systems Thinking –Understanding a system as an interconnected group instead of as individual parts. Personal Mastery Personal Mastery –The discipline of continually clarifying and deepening our personal vision, focusing our energies, of developing patience and seeing reality objectively. Mental Models Mental Models –Sharing our internal assumptions, generalizations and pictures of the world and allowing them to be scrutinized. Building a Shared Vision Building a Shared Vision –Influencing all employees to participate in developing a common destiny. Team Learning Team Learning –Allowing the free-flow of ideas to teach each other.  The collective intelligence of the team surpasses that of the individual. Five Disciplines:

TQM and Learning Organization Similarities: 1. Aim to create a new culture that recognizes the need for change. 2. Strive to develop human resources to the fullest extent 3. Focus on satisfying genuine needs and expectations of all stakeholders. 4. Formulate and solve problems based on fact. 5. Emphasize long-term view instead of ‘quick-fixes.’ 6. Draw on knowledge from multiple scientific fields. Differences: 1. TQM uses simplified models to understand system function, whereas LO uses webs to understand the entire system. 2. LO uses mental models to focus all employees, whereas TQM focuses on the importance of leadership (push vs. pull). 3. LO demands specific and effective dialogue in group problem-solving where TQM is more simplified. 4. Quality definition is more easily addressed in LO. 5. Bottom-up change is often preferred in TQM. 6. LO is overall more costly, intellectually demanding, and more difficult to sustain under pressure, but provides greater depth and insight.

Conclusion Based on similarities and differences, it is more desirable to use both of them concurrently, but in different ways. Based on similarities and differences, it is more desirable to use both of them concurrently, but in different ways. Both should start intensively at the top management level, and cascade at different speeds to the lower levels. Both should start intensively at the top management level, and cascade at different speeds to the lower levels. TQM is more successful in providing short-term improvements when used by middle managers. TQM is more successful in providing short-term improvements when used by middle managers. The transformation process will gain momentum as human resources reach their full potential. The transformation process will gain momentum as human resources reach their full potential. “Faced with the challenge of changing a company for the long term with credible results in the short run, we must view the ‘alliance’ of TQM and learning organizations as a powerful means to address most of the difficult problems encountered in successful organization transformation.”