Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 14-2 Fundamentals of Changing an Organization Changing an Organization (Organizational Change): is the process of modifying an existing organization to increase organizational effectiveness( the extent to which organization accomplishes its objectives). What is affected by change in an organization? These modification can involve virtually any organizational segment, but effect the lines of organizational authority, the levels of responsibility held by various organizational members, and the established lines of organizational communication.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 14-3 Fundamentals of Changing an Organization What are the drives of change in an organization? Change is driven by new technology, expanding global opportunities, and organizational streamlining. The Importance of Change: Organization must change continually in response to significant developments in the environment, such as changing customers needs, technological changes, and new government regulations. (these are also drives of change) Change is a fundamental (basic) part of organizational existence.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 14-4 Fundamentals of Changing an Organization Managers who can determine appropriate changes and then implement such changes successfully enable their organizations to be more flexible and innovative, leading to organizational success. Many mangers encourage employee to continually search for areas in which beneficial changes can be made. (For example, GM provides employees with a ‘think list’ to encourage them to develop ideas for organizational change and to remind them that change is vital to the continued success of GM. (see pages ) ). GM made some changes because of financial collapse, bankruptcy filing, and subsequent bailout by the US government. This shows that organizations sometimes need to take radical steps to restructure, or reengineer their operations in order to stay in business

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 14-5 Change V.s. Stability Change V.s. Stability ( see figure 14.1) In addition to organizational change, some degree of stability is a prerequisite (needed) for long term organizational success. Change and stability are important to organizational survival.  The organizational survival and growth are most probable when both stability and adaptation are high within the organization (number 3 on the model). Adaptation = Change  The organization without enough stability to complement change is at a definite disadvantage.  When stability is low, organizational survival & growth declines.  Change after change without regard for the essential role of stability typically results in confusion and employee stress.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 14-6 Change V.s. Stability Adaptation = Change

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 14-7 Factors to Consider When Changing an Organization How managers deal with the major factors that need to be considered when an organizational change is being made - determines → how successful that change will be

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 14-8 Factors to Consider When Changing an Organization (1) The Change Agent: the individual inside or outside the organization who tries to modify the existing organizational situation The change agent is the most important factor Who? A self-designated manager within the org., or An outside consultant hired because of a special expertise in a particular area What to change? How Big? Broad changes (e.g. culture) Narrow (e.g. designing and implementing a new safety program or a new quality program)

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 14-9 Factors to Consider When Changing an Organization (1) The Change Agent (cont.) Special Skills: 1. Determine how a change should be made 2. Solve change-related problems 3. Using behavioral science tools to influence people appropriately during the change process 4. Determine how much change employees can withstand Managers should choose change agents who have the most expertise in all these areas A potentially beneficial change might not result in any advantages for the organization if a person without expertise in these areas is designated (chosen) as change agent

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Factors to Consider When Changing an Organization (2) Determining What Should be Changed Managers should make only those changes that will increase organizational effectiveness Organizational effectiveness depends on activities around three factors: 1. People: attitudes, leadership skills, communication skills, and all other characteristics of the human resources within the organization 2. Structure: organizational controls (e.g. policies & procedures) 3. Technology: any types of equipment or processes that assist organization members in the performance of their jobs

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Factors to Consider When Changing an Organization (2) Determining What Should be Changed (cont.) To maximize the effectiveness of an organization → Appropriate people must be matched with appropriate technology and appropriate structure These 3 factors are not independent determinants of organizational effectiveness Organizational effectiveness is determined by the relationship among these 3 factors

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Factors to Consider When Changing an Organization (3) The Kind of Change to Make The 3 rd major factor Most changes can be categorized as technological, structural, or people. (corresponding the 3 factors for org effectiveness) 1. Technological Change: modifying the level of technology in the management system. (outside experts, highly tech language) 2. Structural Change: increasing organizational effectiveness by changing controls that influence organization members during the performance of their jobs.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Factors to Consider When Changing an Organization (3) The Kind of Change to Make (cont.) Structural Change : is change aimed at increasing organizational effectiveness through modifications to the existing organizational structure. Forms of modifications: 1. Clarifying and defining jobs 2. Modifying organizational structure to fit the communication needs of the organization 3. Decentralizing the organization to reduce the cost of coordination, increase the controllability of the subunits, increase motivation, and gain greater flexibility

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Factors to Consider When Changing an Organization (3) The Kind of Change to Make (cont.) Primary focus: changing organizational structure When? If gathered information indicates that the present structure is the main cause of organizational ineffectiveness Changes vary (differ) from situation to situation After changes → management should conduct (make) periodic reviews Why? To make sure the changes are accomplishing their intended purpose

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Factors to Consider When Changing an Organization (3) The Kind of Change to Make (cont.) 3. People Change: increasing organizational effectiveness by changing certain aspects of organization members. Focus: employees’ attitudes and leadership skills. When? If the human resources are the main cause of organizational effectiveness. Although successfully changing people factors necessarily involves some consideration of structure & technology, the primary emphasis is on people. Organization Development (OD): is the process of people change.although OD focuses mainly on changing certain aspects of people, these changes are based on an overview of structure, technology, and all other organizational ingredients.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Factors to Consider When Changing an Organization (4) Individuals Affected by The Change The efforts will be wasted if organization members do not support the change To increase the chances of employee support → managers should be aware of the usual employee resistance to change and how this resistance can be reduced. Resistance to change: 1. The manager decide to make some organizational change 2. They meet with employee resistance aimed at preventing that change from occurring. Behind this resistance (reasons of resistance to change): fear of some personal loss (e.g. ↓personal prestige, disturbance of established social and working relationship, personal failure because of inability to carry out new jobs responsibilities)

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Factors to Consider When Changing an Organization (4) Individuals Affected by The Change (cont.) Reducing Resistance to Change (Guidelines): 1. Avoid surprises: …(go back to the book p: ) 2. Promote real understanding: …(go back to the book p: ) 3. Set the stage for change: …(go back to the book p: ) 4. Make tentative change: …(go back to the book p: )

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Factors to Consider When Changing an Organization (5) Evaluation of The Change Managers should spend some time evaluating the changes they make Purpose: To gain insight into how the change might be modifies to increase organizational effectiveness more To determine whether the steps taken to make the change should be modified to increase organizational effectiveness the next time they are used Additional change is justified if it will accomplish any of the following goals: 1. Further improve the means for satisfying someone’s economic wants 2. Increase profitability 3. Promote human work for human beings 4. Contribute to individual satisfaction and social well-being

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Change and Stress Stress: The bodily strain that an individual experiences as a result of coping with some environmental factor Stress: constitutes the factors affecting wear and tear on the body. Any change may be creating stress. Very high level of stress, make organizations less effective The Importance of Studying Stress: (read the book P:346) Damaging psychological and physiological effects… Major cause of employee absenteeism and turnover… Can affect the safety of other workers or even the public… A very significant cost to organizations…

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Change and Stress - Managing Stress in Organizations Managing Stress in Organizations (3 steps): 1. Understanding How Stress Influences Worker Performance The manager must understand the relationship between the amount of stress felt by a worker and the worker’s performance. Extremely high and extremely low levels of stress tend to have negative effects on production (decrease production/performance of workers) In sum, a certain amount of stress among employee is generally considered to be advantageous for organization because it tends to increase production

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Change and Stress - Managing Stress in Organizations 2. Identifying Unhealthy Stress in Organizations Observable symptoms of undesirably high stress levels: Constant fatigue Low energy Moodiness Increased aggression Excessive use of alcohol Temper outbursts Compulsive eating High levels of anxiety Chronic worrying High blood pressure Pounding heart Gastrointestinal disorder

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Change and Stress

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Change and Stress - Managing Stress in Organizations 3. Helping Employees Handle Stress A Stressor: is an environmental demand that causes people to feel stress When do they face stressors? when their usual behaviors are inappropriate or insufficient and where negative consequences are associated with their actions Strategies to Prevent Initial Development of Unwanted Stressors: 1. Create an organizational climate that is supportive of individuals 2. Implement stress management courses 3. Make jobs interesting 4. Design and operate career counseling programs

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Change and Conflict Conflict: a struggle that results from opposing needs or feelings between two or more people Conflict generally results from managers making changes that threaten others or create competing views between others and the managers concerning when, how, or if particular organizational change should be made. Conflict can result in: Positive impact: get good suggestions from subordinates…(book) Negative impact: destroying work relationships & frustration…(book)

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Change and Conflict Strategies for Settling Conflict (Useful Techniques): 1. Compromising 2. Avoiding 3. Forcing 4. Resolving

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Change and Conflict Strategies for Settling Conflict (Useful Techniques): 1. Compromising: the parties to the conflict settle on a solution that gives both of them part of what they wanted … (for the remaining details, check the book P: 332)

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Change and Conflict Strategies for Settling Conflict (Useful Techniques): 2. Avoiding: is a conflict management technique whereby managers simply ignore the conflict … (for the remaining details, check the book P: )

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Change and Conflict Strategies for Settling Conflict (Useful Techniques): 3. Forcing: is a technique for managing in which managers use authority to declare that conflict is ended … (for the remaining details, check the book P: 333)

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Change and Conflict Strategies for Settling Conflict (Useful Techniques): 4. Resolving: is a conflict management strategy where managers work out the differences between managers and employees. … (for the remaining details, check the book P: 333) Resolving assumes that many conflicts are win-win conflicts.