Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall14-1 Managing Behavior In Organizations Sixth Edition Jerald Greenberg

Managing Organizational Change: Strategic Planning and Organizational Development Chapter Fourteen

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 14-3 Learning Objectives  DISTINGUISH among the major targets of organizational change  IDENTIFY the major sources of unplanned organizational change  DESCRIBE what is meant by strategic planning and IDENTIFY the steps in the strategic planning process  DESCRIBE why people are resistant to change in organizations and ways in which this resistance may be overcome  DEFINE organizational development (OD) and DESCRIBE five OD techniques  DESCRIBE how OD is affected by national culture and EXPLAIN the ethical concerns that have been voiced about using OD techniques

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 14-4 Organizational Change Three Good Reasons Why You Should Care About... Organizational Change 1.The success – even the mere survival – of companies depends on their ability to adapt to change. 2.For organizations to be effective, employees’ resistance to change must be overcome. 3.Organizational development techniques can help people adapt to change.

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 14-5  Organizational change – planned or unplanned transformation in an organization’s structure, technology, and/or people  Research shows that leaders of successful organizations support change 94 percent of the time, whereas others support change only 76 percent of the time. Change or Disappear

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 14-6 Why Are Things Changing? 5 % Consumer awareness 25% Innovations in products or services 18% Ease of getting information 12% Availability of capital 11% Reduced trade barriers 11% Availability of talented labor 10% Technological changes 8% Competitive threats

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 14-7  Three prospective targets:  Changes in organizational structure  Changes in technology  Changes in people Unfreezing – recognizing the need for change Doomsday management – creating a sense of urgency in employees by introducing the idea that there is an impending crisis Changing – implementing planned change Refreezing – accepting newly changed state Targets: What is Changed?

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 14-8  First-order change - change that is continuous in nature and involves no major shifts in how an organization operates  Second-order change - radical change involving major shifts in different levels of the origination and different aspects of the business How Much is Changed?

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall 14-9  Shifting employee demographics  Performance gaps  Government regulation  Global competition  Fluctuating economic conditions  Advances in technology Why Does Unplanned Change Occur?

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall Technology and the Way We Work

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall Strategic planning – the process of formulating, implementing, and evaluating changes that enable an organization to achieve its objectives –Basic assumptions:  Strategic planning is deliberate  Strategic planning occurs when current objectives no longer can be met  New organizational objectives require new strategic plans Strategic Planning

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall  Most strategic plans involve:  Products and services  Organizational structure Outsourcing – hiring outside firms to perform noncore business Offshoring – using outsourcing services of overseas companies Making Strategic Plans…

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall Major Forms of Offshoring

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall Popular Competitive Strategies

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall Individual Barriers to Change  Economic insecurity  Fear of the unknown  Threats to social relationships  Habit  Failure to recognize the need for change

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall Organizational Barriers to Change  Structural inertia  Work group inertia  Threats to existing balance of power  Previously unsuccessful change efforts

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall  Change is more likely when:  There is dissatisfaction with the current conditions  There are desirable alternatives available  There are plans for achieving that alternative When Will Change Occur?

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall Overcoming Resistance to Change  Gain leadership support  Identify and neutralize change resisters  Educate the workforce  “Sell” the need for change  Involve employees in the change efforts  Create a “learning organization”

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall Responding to Change Resisters

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall  Organizational development (OD) - set of social science techniques designed to plan and implement change in work settings for purposes of enhancing the personal development of individuals and improving the effectiveness of organizational functioning –OD practitioners ― individuals, usually from outside the organization, who coordinate and facilitate an organization’s change efforts –OD interventions – planned organizational change Organizational Development

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall Survey Feedback 1.Collect data: Employees complete surveys to provide information about problems in their organization 2.Give feedback: Feelings about the organization are summarized and shared with all employees 3.Develop action plans: Through group discussions, specific plans for overcoming problems are identified and developed

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall Appreciative Inquiry Discovery: Identifying the positive aspects of the organization Dreaming: Envisioning what “might be” Designing: Talking with others about what “should be” Delivering: Instituting a plan for delivering on ideas

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall  Action lab – teams of participants work off-site to develop and implement new ways of solving organizational problems by focusing on the ineffectiveness of current methods Action Labs

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall  Quality of work life (QWL) programs – designed to increase organizational output and improve quality by involving employees in the decisions that affect them on the job –Quality circles (QCs) Quality of Work Life Programs

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall Critical Questions about OD  Is OD inherently unethical?  Does OD really work?  Is OD dependent on national culture?

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall The Ethics of OD  OD techniques impose the values of the organization on the individual without taking the individual’s own attitudes into account.  The OD process does not provide any free choice on the part of the employees.  The unequal power relationship between an organization and its employees makes it possible for the true intent of OD techniques to be misrepresented.  OD is only a tool and as such is not inherently good or evil.

Copyright © 2013 Pearson Education, Inc., publishing as Prentice Hall  OD interventions generally are more effective among blue-collar employees than among white-collar employees.  The beneficial effects of OD can be enhanced by using a combination of several techniques instead of any single one.  To be effective, OD techniques must have the support of top management; the more strongly OD programs are supported from the top, the more successful they are. OD Effectiveness

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