Organizational Change

Often viewed as the best part of the job by managers. Making the organization better. Putting a person stamp someplace. Having an impact. Managers careers often based on making positive changes.

Examples of change topics n Financial—Lots of companies and overstating profits. n Strategic--changing strategic goals (turnaround). Address IBM and EK n Organizational (higher levels) n Developing policies and procedures n New product development

n Implementing a new customer service program such as phone courtesy n Technology development n ISO certification n Adopting a common MIS platform across departments

Continuous improvement and learning organization n Mandates change. In the age of hyper- competition, the firm that remains the same will not exist unless it has a monopoly.

n External forces are immense n Technology n Market changes

Continuous improvement is n Buzz word—but buzz word that conveys something very important. n Hong Kong vs the US. n This gives the US a competitive advantage.

n As a manager you will be responsible for leading change efforts. Leading is complex. n Urging the troops on or providing support for employee generated change

Creating changes as a process.

Most important advice about creating change. n Its often political. n Within a department it may be less political. Example, reorganize jobs. n Between departments it highly political. n Culture wars.

Two aspects of Politics n Power (all people involved with change have some power) n Self-interest (all people involved with change have some self-interest) Some cases differentiation and sub goals.

n To create change you need to manage power issues and self-interest issues. n Important to not only gain acceptance but gain commitment to the change.

Following Waremart through Change n Growth No Frills grocery store. n Low prices, low costs, high volume. n Decentralized Decision Making. n Gunslinging culture. n Grew to need warehouse. n Minutely planned and tight control.

Conflict n Differentiation--different goals and different cultures between retail and distribution. n Vendors would play them against each other.

Ideally gain commitment through changing perceptions.

Or Kotter’s model n Establish a sense of urgency

n Usually identifying a gap and preparing for a change. Motivational. We have a problem and change is required. n Bad news is good news for change. n Opportunity seeking--changes in strategic orientation.

Waremart n Consultants n Both sides new there was a problem but blamed others. n Examined communication patterns. No compromise in building new distribution center. All alternatives got shot down. n Gridlock. Everyone new unacceptable

n Forcing in conflict resolution was the dominant mode. Compromise was not showing on the “radar”.

Resistance to change n Personality—One of the big 5 traits. n Fear of the unknown n Climate of mistrust (organizational politics) n Fear of failure—Change of work procedures n Loss of status or job security

n Peer pressure (coalitions) n Disruption of group dynamics n Personality conflicts n Timing and manner of creating change n No rewards for change

Think of leadership style

Kotter n Build a coalition n Establish a vision n Communicate the vision n Remove obstacles n Create short term wins

Waremart n Focus on disaffected managers and gaining their support rather than the dominant in fighters. As change occurred these people supported needed changes. n Education on building of culture. Actually use of it in discussion.

How is this related to leadership style

Issues of Power n Power of resistors to change n Power of those with competing agendas n Power of those with compatible agendas.

Kotter n Make long term changes in infrastructure. HR policies need to change, Management practices need to change. n Anchor in the organizational culture

This is the execution. n Controlling issue. Monitor progress. n Early identification of problems. n Helps to share successes

waremart n Differences in cultures. But work to bridge the differences. Cultural training. Some old guard supervisors who could not adjust were let go.

Example In teams n Sexual Harassment Policy n Different ways to do it.

How do you manage change. n What would you do? n Sources of resistance? n How would you overcome those sources.

Short note on organizational development n Comprehensive effort to improve organizational adaptability and flexibility. n Change is constantly needed

Bottom up change n Top down change is often reactive. n Adaptive organizations need bottom up change. n Research clearly shows that bottom up change is about 10 time more likely to be successful than top down change.

Think about Lewin’s stages n Unfreezing, changing refreezing. n How important is each in the following stages. Extremely important (5), very important (4), important (3), somewhat important (2), unimportant (1). n Leadership, power, group dynamics, personality and emotional intelligence, communication, conflict management, motivation (extrinsic and intrinsic).

Summary n Managing change most demanding and challenging (in positive sense) part of the job. If you like this, excellent chance you will be a successful manager.