Organizational Change Chapter 14 Organizational Change Chapter 14, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 14-1 Copyright © 2007 Pearson Education Canada

What you are responsible for… Six forces for change Eight targets of change Individual and organizational resistance to change Lewin’s model and Kotter’s steps for implementing change Change agents Overcoming resistance to change Material pertinent to this illustration is found on page 512. The book does not specifically identify these items, but the instructor may want to motivate the lecture by explaining the variety of situations that lead to organizational change. Chapter 14, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 14-2 Copyright © 2007 Pearson Education Canada

Forces for Change More cultural diversity Aging population Many new entrants with inadequate skills Faster, cheaper, and more mobile computers Online music sharing Deciphering of the human genetic code Rise and fall of dot-com stocks 2000–02 stock market collapse Record low interest rates Nature of the work force Technology Economic shocks Force Examples Material pertinent to this illustration is found on page 512. The book does not specifically identify these items, but the instructor may want to motivate the lecture by explaining the variety of situations that lead to organizational change. Chapter 14, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 14-3 Copyright © 2007 Pearson Education Canada

Forces for Change Global competitors Mergers and consolidations Growth of e-commerce Internet chat rooms Retirement of Baby Boomers Rise in discount and “big box” retailers Iraq–U.S. war Opening of markets in China Hurricane disasters in US in September 2005 Competition Social trends World politics Force Examples Material pertinent to this illustration is found on pages 512. The book does not specifically identify these items, but the instructor may want to motivate the lecture by explaining the variety of situations that lead to organizational change. Chapter 14, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 14-4 Copyright © 2007 Pearson Education Canada

Organizational Targets for Change Purpose Clarify or create mission and objectives Technology Improve equipment facilities, and work flows Objective Set or modify specific performance Strategy strategic and operational plans Culture Clarify or create core beliefs and values People Update recruiting and selection practices; improve training and development Tasks Update job designs for individuals and groups Structure Update organizational design and coordination mechanisms Material pertinent to this illustration is found on page 514. Organizations can change the following: Purpose: Clarify or create mission and objectives. Technology: Modifying how work is processed and methods and equipment used. Structure: Altering authority relations, coordination mechanisms, job redesign, or similar structural variables. Tasks: Update job designs for individuals and groups. People: Changes in employee skills, expectations, and/or behaviour. Culture: Changing the underlying values and goals of the organization. Strategy: Clarify or create strategic and operational plans. Objective: Set or modify specific performance targets. Chapter 14, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 14-5 Copyright © 2007 Pearson Education Canada

Sources of Individual Resistance to Change Selective Habit information processing Individual Resistance Material pertinent to this illustration is found on pages 519-520. Habit: Life is complex. To cope with having to make hundreds of decisions everyday, we all rely on habits or programmed responses. Security: People with a high need for security are likely to resist change because it threatens their feelings of safety. Economic Factors: Another source of individual resistance is concern that changes will lower one’s income. Fear of the Unknown: Changes substitute ambiguity and uncertainty for the known. Selective Information Processing: Individuals shape their world through their perceptions. Once they have created this world, it resists change. Security Fear of the unknown Economic factors Chapter 14, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 14-6 Copyright © 2007 Pearson Education Canada

Sources of Organizational Resistance to Change Threat to established resource allocations Structural inertia power relationships Limited focus of change Threat to expertise Group Material pertinent to this illustration is found on page 522. Structural Inertia: Organizations have built-in mechanisms to produce stability; this structural inertia acts as a counterbalance to sustain stability. Limited Focus of Change: Organizations are made up of a number of interdependent subsystems. Changing one affects the others. Group Inertia: Group norms may act as a constraint. Threat to Expertise: Changes in organizational patterns may threaten the expertise of specialized groups. Threat to Established Power Relationships: Redistribution of decision-making authority can threaten long-established power relationships. Threat to Established Resource Allocations: Groups in the organization that control sizable resources often see change as a threat. They tend to be content with the way things are. Chapter 14, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 14-7 Copyright © 2007 Pearson Education Canada

Approaches To Managing Change Lewin’s Three-Step Model Kotter’s Eight-Step Plan for Implementing Change Action Research Appreciative Inquiry Material pertinent to this discussion is found on pages 515-518. Chapter 14, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 14-8 Copyright © 2007 Pearson Education Canada

Lewin’s Three-Step Model For Implementing Change Unfreezing Change efforts to overcome the pressures of both individual resistance and group conformity. Moving Efforts to get employees involved in the change process. Refreezing Stabilizing a change intervention by balancing driving and restraining forces. Material pertinent to this discussion is found on pages 515-516. Chapter 14, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 14-9 Copyright © 2007 Pearson Education Canada

Exhibit 14-4 Unfreezing the Status Quo Desired state Restraining forces Status Material pertinent to this illustration is found on page 516. quo Driving forces Time Chapter 14, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 14-10 Copyright © 2007 Pearson Education Canada

Unfreezing Arouse dissatisfaction with the current state. Activate and strengthen top management support. Use participation in decision making. Build in rewards. Material pertinent to this discussion is found on pages 515-516. Arouse dissatisfaction with the current state. Tell them about deficiencies in organization. Activate and strengthen top management support. Break down power centres. Use participation in decision making. Get people involved. Build in rewards. Tie rewards to change. Use recognition, status symbols, and praise to get people to go along. Chapter 14, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 14-11 Copyright © 2007 Pearson Education Canada

Moving Establish goals. Institute smaller, acceptable changes that reinforce and support change. Develop management structures for change. Maintain open, two-way communication. Material pertinent to this discussion is found on pages 515-516. Establish goals. Eg., Make business profitable by end of next year. Institute smaller, acceptable changes that reinforce and support change. Eg., Procedures and rules, job descriptions, reporting relationships. Develop management structures for change. E.g., Plans, strategies, mechanisms that ensure change occurs. Maintain open, two-way communication. Chapter 14, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 14-12 Copyright © 2007 Pearson Education Canada

Refreezing Build success experiences Reward desired behaviour Develop structures to institutionalize the change Make change work Material pertinent to this discussion is found on pages 515-516. Build success experiences. Set targets for change, and have everyone work toward targets. Reward desired behaviour. GOOD: Reward behaviour that reinforces changes. BAD: Reward old system (e.g., people relying on old systems while computerization is going on). Develop structures to institutionalize the change. Organizational retreats, appropriate computer technology, performance appraisals that examine change efforts Make change work. Chapter 14, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 14-13 Copyright © 2007 Pearson Education Canada

Kotter: Change Steps in Response to Common Failures in Initiating Change The inability to create a sense of urgency. Step 1: Establish a sense of urgency. Failure to create a coalition. Step 2: Form a coalition. The absence of a vision for change. Step 3: Create a new vision & Step 4: Communicate the vision Not removing obstacles. Step 5: Empower others to act. Failure to provide short-term and achievable goals. Step 6: Develop short-term “wins.” The tendency to declare victory too soon. Step 7: Consolidate improvements. Not anchoring the changes in the organization’s culture. Step 8: Reinforce changes. Material pertinent to this discussion is found on pages 516-517. The inability to create a sense of urgency about the need for change. Failure to create a coalition for managing the change process. The absence of a vision for change and to effectively communicate that vision. Not removing obstacles that could impede the achievement of the vision. Failure to provide short-term and achievable goals. The tendency to declare victory too soon. Not anchoring the changes in the organization’s culture. Chapter 14, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 14-14 Copyright © 2007 Pearson Education Canada

Change Agents People who act as catalysts and assume the responsibility for managing change activities. Material pertinent to this discussion is found on page 514. Chapter 14, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 14-15 Copyright © 2007 Pearson Education Canada

Outside agents Can offer an objective perspective. Usually have an inadequate understanding of the organization’s history, culture, operating procedures, and personnel. Don’t have to live with the repercussions after the change is implemented. Material pertinent to this discussion is found on page 514. Can offer an objective perspective often unavailable to insiders. Are disadvantaged because they usually have an inadequate understanding of the organization’s history, culture, operating procedures, and personnel. May be prone to initiating more drastic changes because they don’t have to live with the repercussions after the change is implemented. Chapter 14, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 14-16 Copyright © 2007 Pearson Education Canada

Internal agents Have to live with the consequences of their actions. May be more thoughtful. May be more cautious. Material pertinent to this discussion is found on page 514. Chapter 14, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 14-17 Copyright © 2007 Pearson Education Canada

Overcoming Resistance to Change Education and communication This tactic assumes that the source of resistance lies in misinformation or poor communication. Best used: Lack of information, or inaccurate information Participation and involvement Prior to making a change, those opposed can be brought into the decision process. Best used: Where initiators lack information, and others have power to resist Facilitation and support The provision of various efforts to facilitate adjustment. Best used: Where people resist because of adjustment problems Material pertinent to this discussion is found on pages 522-523. Chapter 14, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 14-18 Copyright © 2007 Pearson Education Canada

Overcoming Resistance to Change Negotiation and agreement Exchange something of value for a lessening of resistance. Best used: Where one group will lose, and has considerable power to resist Manipulation and cooperation Twisting and distorting facts to make them appear more attractive. Best used: Where other tactics won’t work or are too expensive Explicit and implicit coercion The application of direct threats or force upon resisters. Best used: Speed is essential, and initiators have power Material pertinent to this discussion is found on pages 522-523. Chapter 14, Nancy Langton and Stephen P. Robbins, Organizational Behaviour, Fourth Canadian Edition 14-19 Copyright © 2007 Pearson Education Canada