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CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 2 Organizational Change The movement of an organization away from its present state and toward some desired future state to increase its effectiveness.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 3 Forces for Change Competitive forces Economic and political forces Global forces Demographic and social forces Ethical forces

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 4 Organizational Impediments to Change Power and conflict Differences in functional orientation Mechanistic structure Organizational structure

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 5 Group Impediments to Change Group norms Group cohesiveness Groupthink and escalation of commitment

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 6 Individual Impediments to Change Uncertainty and insecurity Selective perception and retention Habit

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 7 Lewin’s Force-Field Theory of Change The theory that organizational change occurs when forces for change strengthen, resistance to change lessens, or both occur simultaneously.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 8 FIGURE 19.1 Lewin's Force-Field Theory of Change

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 9 Advice to Managers Periodically analyze the organizational environment and identify forces for change. Analyze how the change in response to these forces will affect people, functions, and divisions inside the organization.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 10 Advice to Managers Using this analysis, decide what type of change to pursue, and develop a plan to overcome possible resistance to change and to increase the forces for change.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 11 Evolutionary Change versus Revolutionary Change Evolutionary Change - Change that is gradual, incremental, and narrowly focused. Revolutionary Change - Change that is rapid, dramatic, and broadly focused.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 12 Evolutionary Change I Socio-technical Systems Theory: Ideas about how organizations should choose specific kinds of control systems that match the technical nature of the work process.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 13 Evolutionary Change II Total Quality Management (T.Q.M.): An ongoing and constant effort by all of an organization’s functions to find new ways to improve the quality of the organization’s goods and services.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 14 Deming’s Principles of T.Q.M. Create constancy of purpose toward improvement of product and service, with the aim of becoming competitive, staying in business, and providing jobs. End the practice of awarding business on the basis of price tag. Instead, minimize total cost.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 15 Deming’s Principles of T.Q.M. Adopt the new philosophy. Western management must awaken to the challenge, learn its responsibilities, and take on leadership for change. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 16 Deming’s Principles of T.Q.M. Improve constantly and forever the system of production and service, to improve quality and productivity and thus constantly decrease costs. Institute training on the job.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 17 Deming’s Principles of T.Q.M. Institute leadership. The aim of leadership should be to help people, machines, and gadgets do a better job. Management leadership, as well as leadership of production workers, needs overhauling. Drive out fear, so that everyone may work effectively for the company.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 18 Deming’s Principles of T.Q.M. Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems in production and in use that may be encountered with the product or service.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 19 Deming’s T.Q.M. Principles Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. The bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 20 Deming’s Principles of T.Q.M. Eliminate work standards on the factory floor; substitute leadership. Eliminate management by objective, management by numbers, and numerical goals; substitute leadership.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 21 Deming’s Principles of T.Q.M. Remove barriers that rob the hourly workers of their right to pride of workmanship. The responsibility of supervisors should focus on quality. Remove barriers that rob people in management and in engineering of their right to pride of workmanship.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 22 Deming’s Principles of T.Q.M. Institute a vigorous program of education and self-improvement. Put everybody in the company to work to accomplish the transformation. The transformation is everybody’s job.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 23 Revolutionary Changes Revolutionary Change I: Reengineering Revolutionary Change II: Restructuring Revolutionary Change III: Innovation

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 24 Lewin’s Three-Step Change Process Unfreeze the organization from its present state Make the desired type of change Refreeze the organization in a new desired state.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 25 FIGURE 19.2 Lewin's Three-Step Change Process

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 26 FIGURE 19.3 The Steps in Action Research

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 27 Advice to Managers Develop criteria to evaluate whether change is necessary, and use these criteria systematically throughout the change process to assess progress toward the ideal future state. After analyzing resistance to change, carefully design a plan that both reduces resistance to and facilitates change.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 28 Advice to Managers Recognize that change is easiest to manage when an organization and its members are used to change, and consider using a total quality management program as a way of keeping the organization attuned to the need for change.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 29 Organizational Development A series of techniques and methods that managers can use in their action research program to increase the adaptability of their organization.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 30 O.D. Techniques to Deal with Resistance to Change Education and Communication Participation and Empowerment Facilitation Bargaining and Negotiation Manipulation Coercion

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 31 O.D. Techniques to Promote Change Counseling, Sensitivity Training, and Process Consultation Team Building and Intergroup Training Organizational Confrontation Meeting and use of Managerial Grid

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 32 O.D. Term Sensitivity Training - an O.D. technique that consists of intense counseling in which group members, aided by a facilitator, learn how others perceive them and may learn how to deal more sensitively with others.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 33 O.D. Term Process Consultation - an O.D. technique in which a facilitator works closely with a manager on the job to help the manager improve his or her interaction with other group members.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 34 O.D. Term Team Building - an O.D. technique in which a facilitator first observes the interactions of group members and then helps them become aware of ways to improve their work interactions.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 35 O.D. Term Intergroup Training - an O.D. technique that uses team building to improve the work interactions of different functions or divisions.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 36 O.D. Term Organizational Confrontation Meeting - an O.D. technique that brings together all of the managers of an organization to confront the issue of whether the organization is effectively meeting its goals.

CHAPTER 19 Organizational Change and Development Copyright © 1999 Addison Wesley Longman 37 O.D. Term Managerial Grid - a matrix that O.D. facilitators use to characterize an organization's managerial style in terms of its managers’ concern for people and concern for production.