1-1 Organization Change

1-2 Organizational Change ●Forces of change –External  Environmental, e.g. energy crisis, legal change, technology  Competition, suppliers, regulation –Internal  Product change  Strategy change

1-3 Planned vs. Reactive Change ●Planned –E.g. improve quality, lower costs ●Reactive –E.g. Kodak, Caterpillar

1-4 Resistance to Change ●Uncertainty –“Mushroom treatment”, fear ●Threatened self-interests –People like what they have –E.g. their schedule ●Different perceptions –Not everyone sees the problem the same way ●Feelings of loss –Change disrupts social network

1-5 Overcoming Resistance ●Participation is key –Include staff in the discussion/decision  Could backfire –Educate and communicate  Give people the motivation –Facilitate, help –Force-field analysis  Lay out reasons for/against a change

1-6 Areas of Organization Change ●Organization Structure –E.g. product to functional ●Technology and Operations –May move from metal to recycled material –May automate processes –E.g  80 yr. old secretary refused to use PC  United and Continental merger  LU – NJ and MA technologies

1-7 Areas of Organizational Change ●Changing people, attitudes, behaviors –Change benefits –Promote inter-divisional cooperation –Instill a quality emphasis ●Change business processes –May need to instill energy into company –May need to reduce costs –E.g. change UPS, Corning

1-8 Organizational Development - OD ●OD is concerned with changing the attitudes, perceptions, behaviors, and expectations ●OD techniques –Diagnostics  Questionnaires, interviews, etc. –Team building –Survey feedback –Education  May be ‘sensitivity’ education –Intergroup activities  E.g. role playing

1-9 Organizational Development - OD ●OD techniques – continued –Third party peacemaking  Use an outside party or consultant –Technostructural activities  Change structure and technology to help –Process consultation  Use a consultant to observe/recommend –Life and career planning –Coaching and goal setting –Planning and goal setting

Pole Exercise 1-10

1-11 Organizational Design Practice ●Mixed results ●Good tools to know ●The right tool depends upon the situation

1-12 Forms of Innovation ●Radical –Completely replace existing products/services –E.g. Land line phone vs. cell, CD vs. vinyl ●Incremental –Small, step-wise changes –E.g. most auto changes

1-13 Managing Innovation ●Product innovations –Decrease over product life cycle ●Process innovations –Increase over product life cycle ●Why?

1-14 Promoting Innovation Practice ●Reward system –Be careful what you reward –You may get too much of it –Those who don’t get may be upset ●Organization culture ●Intrapreneurship –Used in large companies to simulate entrepreneurship –May have separate organizations, budgets, and rewards