Organizational Change and Development

Overview Sources of change Systems view of change Sources of resistance to change Overcoming resistance Lewin’s 3-stage model Organizational development

Sources of Change Globalization –reductions in communications barriers –reductions in trade barriers –increased global competition –growth in international markets Technology –ubiquity of computing –information based economy –e-commerce –CKO’s in 1/5 of F500

Social change –aging workforce –increased diversity –increased demand for customized products –demand for faster, continuous, new product development Other forces: –government regulation/de-regulation –competitors –suppliers Sources of Change

A Systems View of Change Strategy & Structure Work Process and work environment Culture

Changing Strategy & Structure Changing goals and/or way the organization seeks to achieve its goals –may include reward systems; organizational policies; coordination devices; control systems etc. Tends to be ‘top-down’ requires support from lower levels of the organization may include major changes to structure: e.g. outsourcing, alliances, networks, joint ventures

Changing Work Processes and Environment Changes to how people do their work –includes production/process technology, job redesign, empowerment, QC’s, QWL. Impetus for change is often from bottom of the organization requires top management support

Changes to Culture Changes to the shared norms, beliefs and values that guide behavior Cultural change is often in the direction of increased flexibility, innovativeness, creativity must involve the ‘whole’ organization this type of change is ‘owned’ by everyone requires supporting changes in structure (e.g. rewards) and processes (e.g. job design)

Individual Sources of Resistance to Change Habit and Personality - cause people to respond to stimuli in the same way. Fear of the Unknown - uncertainty about the alternative future and about one’s own skills and abilities Fear of Personal Loss - e.g. loss of power, status, pay Lack of Understanding and Trust - knowledge of the employer’s intentions

Limited focus of change efforts - must consider systems effects Lack of coordination and cooperation - need to consider organizational interdependencies Different assessments and goals - employees, managers, departments, other change agents Established power relationships - e.g. supervisor-subordinate relations, mid and lower management Organizational Sources of Resistance to Change

Overcoming Resistance

Lewin’s Three Stage Model of Change Stage 1: Unfreezing - make employees aware of the problem(s) and the need for change –provide information about difference between current situation and desired state Stage 2: Changing - shifting attitudes and behaviors towards the desired state –provide information and examples of desired beliefs and behaviors Stage 3: Refreezing - stabilize change, integrate new behaviors, and reward them –show positive results of change, maintainance training

Example: Changing to JIT Cost savings Fewer workers DRIVING FORCES RESTRAINING FORCES Response to Market A. Traditional Inventory System Rail-freight system Facilities layout Worker skills Union resistance

Example: Changing to JIT Cost savings Fewer workers DRIVING FORCES REDUCED RESTRAINING FORCES Response to Market Use of trucks Addition of docks Training program Reassignment B. JIT Inventory System

Oganizational Development Definition: –a planned, systematic change process,... –...based upon the behavioral sciences... –...with the aim of improving organizational effectiveness … –...by improving internal relationships and increasing problem solving capabilities. Focus of OD is the human and social aspects of the organization Values of OD are fairness, openness, freedom from coercion, and individual autonomy

OD techniques Survey feedback –surveys used to identify issues Process consultation –focus on communication problems, leadership conflicts, decision making processes Team building –building trust, cohesiveness and effectiveness Intergroup activities –improving relationships between groups (e.g. ‘valentine’ game Large group interventions