Organizational BEHAVIOR M C SHANEV ON GLINOW 1 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill Organizational Change and Development 15 C H A P T E R F I F T E E N

Organizational BEHAVIOR M C SHANEV ON GLINOW 2 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill Why do organizations change? Unplanned Change –Managers don’t expect it –Can lead to chaotic, uncontrolled periods of change Planned Change –Systematic efforts by managers to move organizations to a new state –Design, technology, tasks, people, information systems, etc.

Organizational BEHAVIOR M C SHANEV ON GLINOW 3 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill External Forces for Change Computer technology –law of telecosm –effect on knowledge, competition, employment relations Globalization and local competition –effect on restructuring, outsourcing –mergers Demography –diversity –emerging expectations © Corel Corp. With permission.

Organizational BEHAVIOR M C SHANEV ON GLINOW 4 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill Internal Forces For Change Turnover of leaders Need for profits _______________ _________________ ________________

Organizational BEHAVIOR M C SHANEV ON GLINOW 5 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill Types of Planned Change Evolutionary Change –Incremental adaptation to the external environment –Series of phases Need for change Unfreeze Change (or move) Refreeze

Organizational BEHAVIOR M C SHANEV ON GLINOW 6 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill Types of Change (cont) Revolutionary Change –Unfolds over long periods of time –Equilibrium periods: organization moves steadily toward its mission and goals –Revolutionary periods: Feverish change that affects the overall strategy of the firm Deep structures are affected like culture, design, processes, and relationships with the environment

Organizational BEHAVIOR M C SHANEV ON GLINOW 7 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill Resistance to change People and Organizations resist changes from both internal and external sources and planned and unplanned change Manager’s reaction –See resistance as a problem Treat it coercively Added resistance –See resistance as a signal People need more information, or better treatment Gather insights from people

Organizational BEHAVIOR M C SHANEV ON GLINOW 8 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill Slide 18.6 Sources of Resistance to Change Individual Resistance * Perception * Personality * Habit * Threats to power and influence * Fear of the unknown * Economic reasons Organizational Resistance * Organization design * Organizational culture * Resource limitations * Fixed investments * Interorganizational agreements Resistance to Change

Organizational BEHAVIOR M C SHANEV ON GLINOW 9 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill Slide 18.5 Employee Readiness for Change Source: Adapted from Zeira, Y., and Avedisian, J. Organizational planned change: Assessing the chances for success. Organizational Dynamics, Spring 1989, 37. Perceived Personal Risk from Change Level of Dissatisfaction with the Current Situation Low High High readiness for change Moderate to indeterminant readiness for change Low readiness for change Moderate to indeterminant readiness for change

Organizational BEHAVIOR M C SHANEV ON GLINOW 10 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill Forces for Change Resistance to Change Direct Costs Saving Face Fear of the Unknown Breaking Routines Incongruent Systems Incongruent Team Dynamics

Organizational BEHAVIOR M C SHANEV ON GLINOW 11 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill Slide 18.4 A Systems Model of Change People TechnologyTask DesignStrategy Culture

Organizational BEHAVIOR M C SHANEV ON GLINOW 12 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill Slide 18.7 Force Field Analysis Source: Adapted from Zand, D.E. Force field analysis. In N. Nicholson (ed.), Blackwell Encyclopedic Dictionary of Organizational Behavior. Oxford, England: Blackwell, 1995, 181. Current level of group performance Desired level of group performance Driving forces High performance goals New equipment Competition Employees with new skills Desire for increased influence and rewards Group norms for output Familiarity with present equipment Complacency Need to learn new skills Fear of reduced influence and rewards Resisting forces

Organizational BEHAVIOR M C SHANEV ON GLINOW 13 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill Slide 18.3 Initiatives Contributing to Effective Change Management Motivating Change Creating a Vision Developing Political Support Managing the Transition Sustaining Momentum Effective Change Management Source: Adapted with permission from Cummings, J.G., and Worley, C.G. Organization Development and Change, 6th ed. Cincinnati: South-Western, 1997, 154.

Organizational BEHAVIOR M C SHANEV ON GLINOW 14 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill Courtesy of Roberts Express Successfully Diffusing Change Successful pilot study Favorable publicity Top management support Labor union involvement Diffusion strategy described well Pilot program people moved

Organizational BEHAVIOR M C SHANEV ON GLINOW 15 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill Courtesy of Continental Airlines Customer-Driven Change at Continental Airlines Continental Airlines executives created an urgency to change by listening to customers and communicating their concerns to employees. Customer-driven change motivates employees to engage in continuous change.

Organizational BEHAVIOR M C SHANEV ON GLINOW 16 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill MinimizingResistance to Change Communication Training EmployeeInvolvement StressManagement Negotiation Coercion Minimizing Resistance to Change

Organizational BEHAVIOR M C SHANEV ON GLINOW 17 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill Refreezing the Desired Conditions Creating organizational systems and team dynamics to reinforce desired changes –alter rewards to reinforce new behaviors –new information systems guide new behaviors –recalibrate and introduce feedback systems to focus on new priorities

Organizational BEHAVIOR M C SHANEV ON GLINOW 18 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill Organization Development A planned system wide effort, managed from the top with the assistance of a change agent, that uses behavioral science knowledge to improve organizational effectiveness.

Organizational BEHAVIOR M C SHANEV ON GLINOW 19 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill EstablishClient-ConsultantRelations DisengageConsultant’sServices Action Research Process Diagnose Need for Change IntroduceChangeEvaluate/Stabilizechange

Organizational BEHAVIOR M C SHANEV ON GLINOW 20 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill Discovery Discovering the best of “what is” Dreaming Forming ideas about “what might be” Designing Engaging in dialogue about “what should be” Delivering Developing objectives about “what will be” Appreciative Inquiry Process

Organizational BEHAVIOR M C SHANEV ON GLINOW 21 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill Organization Parallel Structure Parallel Structures

Organizational BEHAVIOR M C SHANEV ON GLINOW 22 © The McGraw-Hill Companies, Inc Irwin/ McGraw-Hill Organization Development Concerns Cross-Cultural Concerns –Linear and open conflict assumptions different from values in some cultures Ethical Concerns –Management power –Employee privacy rights –Employee self-esteem –Consultant’s role