Chapter 18 Managing Change Nelson & Quick

Organizational Change Planned change - change resulting from a deliberate decision to alter the organization Unplanned change - change that is imposed on the organization and is often unforeseen The Organization Managers must be prepared to handle both 2

External Forces for Change Workforce Diversity Globalization Changing Technology Ethical Behavior 3

Globalization Workforce Diversity Organizations must rethink the most efficient ways to Use resources Disseminate/gather information Develop people Majority of new workers will be female Workforce will grow in diversity - more Hispanics & African-Americans Mental Change Structural Change & Workforce is aging - less young workers, more middle-aged Workforce Diversity 4

Ethical Behavior Changing Technology Other Organizations Ethical Customers Changes in work relationships Treatment Environment Society Changes in organizational structure Technological Change Changing Technology 5

Internal Forces for Change Declining Effectiveness Company Crisis Changing Employee Expectations Changing Work Climate 6

Scope of Change Incremental change - change of a relatively small scope, such as making small improvements Strategic change - change of a larger scale, such as organizational restructuring Transformational change - change in which the organization moves to a radically different, and sometimes unknown, future state 7

The Change Agent’s Role Change agent - the individual or group who undertakes the task of introducing and managing a change in an organization The change agent can be internal or external 8

Internal Change Agents Advantages know past history, political system, and culture must live with results of change so will move carefully Disadvantages may be associated with factions, accused of favoritism may be too close to the situation to be objective 9

External Change Agents Advantages outsider’s objective view impartiality Disadvantages limited knowledge of organization’s history may be viewed with suspicion To succeed, they must be perceived as trustworthy, be experts with proven track records, be similar to those they are working with 10

Resistance to Change Fear of the unknown Fear of loss Fear of failure Disruption of interpersonal relationships Personality conflicts Politics Cultural assumptions and values 11

Dealing with Resistance to Change Communication details rationale Participation in the process ownership commitment Empathy and support 12

Reactions to Change & Managerial Interventions Disengagement psychological withdrawal from change Disidentification feeling that one’s identity is being threatened by change Disenchantment feeling negativity or anger toward a change Disorientation feelings of loss and confusion due to change Expression Withdrawal Sadness, worry Anger Confusion Managerial Intervention Confront, identify Explore, transfer Neutralize, acknowledge Explain, plan Table adapted from H. Woodward and S. Buchholz. Aftershock: Helping People through corporate Change, p. 15. Copyright © 1987 John Wiley & Sons, Inc. Reprinted by Permission of John Wiley & Sons, Inc. 13

Lewin’s Three Step Change Model 1. Unfreezing - involves encouraging individuals to discard old behaviors by shaking up the equilibrium state that maintains the status quo 2. Moving - new attitudes, values, and behaviors are substituted for old ones 3. Refreezing - involves the establishment of new attitudes, values, and behaviors as the new status quo 14

Force Field Analysis of Decision to Engage in Exercise Forces for change Weight gain Minimally passing treadmill test Feel lethargic; have no energy Family history of cardiovascular disease New, physically demanding job Forces for status quo Lack of time No exercise facility at work Spouse/partner hates to exercise No interest in physical activity or sports Made a grade of D in physical education class Equilibrium 15

Applying Lewin’s Model to the Organization Unfreezing: the organization eliminates rewards for current behavior Moving: the organization initiates new options and explains their rationale Refreezing: organizational culture & formal reward systems encourage the new behaviors 16

Organizational Development (OD) Organizational Development (OD) - A systematic approach to organizational improvement that applies behavioral science theory and research in order to increase individual and organizational well-being and effectiveness 17

Diagnosis & Needs Analysis Diagnosis and needs analysis Intervention Follow-up Ask What are the forces for change? What are the forces preserving the status quo What are the most likely sources of resistance What are the goals to be accomplished by change 18

OD Intervention Methods: Organizational/Group Techniques Survey feedback - a widely used method of intervention whereby employee attitudes are solicited by questionnaire Management by Objective an organization-wide intervention technique of joint goal setting between employees and managers Anonymous Group reporting format No repercussions Follow-up Initial objectives Periodic progress reviews Problem-solving to remove obstacles to goal-achievement 19

OD Intervention Methods: Organizational/Group Techniques Quality Program - a program that embeds product and service quality excellence into the organizational culture Team Building - an intervention designed to improve the effectiveness of a work group Raise aspirations about product/service quality Embed product/service quality excellence in the organizational culture Communication Member interaction Emphasis on team goals Examples of effective/ ineffective teamwork 20

OD Intervention Methods: Organizational/Group Techniques Large Group Interventions - events that bring all of the key members of a group together in one room for an extended period of time Process Consultation - an OD method that helps managers and employers improve the processes that are used in organizations Outside consultant determines participants Participants=critical mass supporting change Outside consultant: Enters organization Defines the relationship Chooses an approach Gathers data Diagnoses problem Intervenes Leaves organization 21

OD Intervention Methods: Individual-Focused Techniques Skills Training - increasing the job knowledge, skills, and abilities that are necessary to do a job effectively Sensitivity Training - an intervention designed to help individuals under- stand how their behavior affects others In formal classroom settings On the job (Continual updating) Outside trainer who intervenes only to move the group forward. Training can: help employees understand each other recognize their own feelings improve communication 22

OD Intervention Methods: Individual-Focused Techniques Management Development Training - a host of techniques for enhancing managers’ skills in an organization Role Negotiation - a technique whereby individuals meet and clarify their psychological contract Verbal information Intellectual skills Attitudes Development Outcomes Better understanding of what each can be expected to give & receive Less ambiguity 23

OD Intervention Methods: Individual-Focused Techniques Job Redesign - an OD intervention method that alters jobs to improve the fit between individual skills and the demands of the job Health Promotion Programs Career Planning Realign task demands and individual capabilities Redesign jobs to fit new techniques or organization structures Ex. Stress reduction education, assistance Match individual’s career aspirations with organizational opportunities 24

Ethical Considerations in Organizational Development Selection of the OD method Voluntary participation Confidentiality Potential for Manipulation by the change agent 25