Organizational Change

Age of Hypercompetition External forces creating change Globalization of Capitalist system Technology Increasing government regulations social pressure on businesses (In large part to deal with those businesses that fail to act responsibly; and in part sought by industry to level competition or restrict competition) Demographic changes (domestically)

All of this leads to Change Rate of change in order to survive is increasing. Management/leadership is needed to stimulate needed changes.

Typically Supervisory Responsibility to facilitate Change

Change Management Becomes central issue Often top down. Examples Workforce reduction. Offer new product lines. Reorganization New accounting procedures New MIS system. New positions. Diversity initiative

Your job Get your subordinates to comply with expectations. Takes communication, leadership, power, individual differences, motivation, conflict, group demands to be able to make an effective change. There is simply nothing harder to do.

Target Elements of Change Organizing Arrangements 19-6 Figure 19-3 A Systems Model of Change Target Elements of Change Organizing Arrangements Inputs Outputs Internal Strengths Weaknesses External Opportunities Threats Internal Organizational level Department/ group level Individual level Social Factors Strategy Goals People Methods McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Research suggests that 15% of all change efforts are totally successful ½ to 2/3 are failures. Change efforts had minimal impact and little persists over a long period of time. In my opinion its why managers get paid what they get paid.

Lewin’s Change Model Unfreezing 19-5 Changing Refreezing Creates the motivation to change Encourages the replacement of old behaviors and attitudes with those desired by management Entails devising ways to reduce barriers to change Creates psychological safety Changing Provides new information, new behavioral models, or new ways of looking at things Helps employees learn new concepts or points of view Role models, mentors, experts, benchmarking results, and training are useful mechanisms to facilitate change Refreezing Helps employees integrate the changed behavior or attitude into their normal way of doing things Positive reinforcement is used to reinforce the desired change Coaching and modeling help reinforce the stability of change McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Assumptions Underlying Lewin’s Change Model 19-4 Assumptions Underlying Lewin’s Change Model The change process involves learning something new, as well as discontinuing current attitudes, behaviors, and organizational practices Change will not occur unless there is motivation to change People are the hub of all organizational changes Resistance to change is found even when the goals are highly desirable Effective change requires reinforcing new behaviors, attitudes, and organizational practices McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Why is change so difficult Resistance to change. People do not do as they are told to do. Sometimes for very good reasons.

Why People Resist Change in the Workplace 19-11 Why People Resist Change in the Workplace An individuals’ predisposition toward change Surprise and fear of the unknown Climate of mistrust Fear of failure Loss of status and/or job security McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Why People Resist Change in the Workplace Cont. 19-12 Why People Resist Change in the Workplace Cont. Peer pressure Disruption of cultural traditions and/or group relationships Personality conflicts Lack of tact and/or poor timing Nonreinforcing reward systems McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Overcoming Resistance to Change 19-14 Table 19-2 Overcoming Resistance to Change Approach Commonly Used in Situations Where: Advantages Drawbacks Can be very time consuming if lots of people are involved Once persuaded, people will often help with implementation of change There is a lack of information or inaccurate information & analysis Education + Communication Can be very time consuming if participators design an inappropriate change People who participate will be committed to the implementation of change The initiators do not have all the information they need to design the change & others have considerable power to resist Participation + Involvement McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Overcoming Resistance to Change 19-15 Table 19-2 cont. Overcoming Resistance to Change Approach Commonly Used in Situations Where: Advantages Drawbacks Can be very time consuming, expensive and still fail No other approach works as well with adjustment problems People are resisting because of adjustment problems Facilitation + Support Can be too expensive in may cases if it alerts other to negotiate for compliance Sometimes it is a relatively easy way to avoid major change Someone or some group will clearly lose out in a change and where that group has considerable power to resist Negotiation + Agreement McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

case application