Organizational Change and Stress Management Dr. Sikalieh

Learning Objectives Describe the forces that stimulate change Learn about planned/unplanned changes Learn how individuals and organizations resist change Discuss overcoming resistance to change Learn about Lewin’s change model Describe potential sources of stress Learn how individual variables moderate the stress-outcome relationship Dr. Sikalieh

Forces For Change Workforce World Politics Technology Social Trends Economic Shocks Many forces are driving change in the contemporary workplace. The following is a discussion of six of them. The nature of the workforce is changing in the following ways: more cultural diversity, an increase in professionals, and many new entrants who lack basic skills. Human resource practices are changing in order to attract and keep this new workforce, and training costs are rising in order to upgrade math, reading, computer, and other skills of employees. Technology is changing jobs and organizations in the following ways: more computers and automation, TQM programs, and reengineering. Organizational structures are flattening and the span-of-control of many managers is widening. Many jobs are being reshaped as narrow, routine jobs are being replaced by those which require a team effort and multi-tasking. That we live in an “age of discontinuity” is witnessed by the following economic shocks that have imposed changes on organizations: the Asian real estate collapse, Russian devaluation of the ruble, and the collapse of oil prices. Competition is changing in many ways: more global competitors, increased consolidations and mergers, and the growth of Internet commerce. Successful organizations will be able to change in response to the competition by relying on short production runs, short product cycles, and an ongoing stream of new products. Doing so will demand a flexible, responsive workforce. The social trends of the 1970s and 1980s suggest changes for the 1990s that organizations will have to adjust for: such as, young people delaying marriage, a negative attitude toward those who smoke, and the popularity of sport-utility vehicles. Business schools have been preaching a global perspective since the early 1980s, but no one could have imagined how world politics would change in recent years: for instance, the U.S. embargo of Lybia, the collapse of the Soviet Union, and Black rule in South Africa. In response to such events, almost all major American businesses have had to make sweeping changes in order to survive. Competition Dr. Sikalieh

Planned and Unplanned Organizational Changes planned Changes Changes in products and services Changes in administrative systems Changes in organizational size or structure Introduction of new technologies Advances in information processing and communication Unplanned Changes Changing employee demographics Performance gaps Governmental regulations Economic competition in the global arena Dr. Sikalieh 4

What Can Change Agents Change? Structure Technology Physical Setting People Dr. Sikalieh

Structure, Technology, and People as Targets of Organizational Change Dr. Sikalieh 5

Resistance to Change Forms of Resistance to Change Overt and immediate Voicing complaints, engaging in job actions Implicit and deferred Loss of employee loyalty and motivation, increased errors or mistakes, increased absenteeism Dr. Sikalieh

Resistance to Change Individual Selective Information Processing Fear of the Unknown Force of Habit Need for Security Economic Factors Individual Organizations and their members resist change. In a sense, their resistance can be positive. It provides a degree of stability and predictability, and it can be a source of functional conflict. But, resistance also hinders progress and adaptation. Often, organizations that have experienced lengthy periods of success are particularly resistant to change. Organizational resistance to change can take several forms: overt, implicit, immediate, or deferred. The following summarizes five reasons why individuals may resist change. • Force of habit. To cope with the complexities of day-to-day living, we rely on habits or programmed responses. When confronted with changes, this tendency to respond in habitual ways hinders change. • Need for security. People with a high need for security resist change because it threatens them. • Economic Factors. Another source of individual resistance is fear that changes will lower income. • Fear of the Unknown. Changes replace stability and familiarity with ambiguity and uncertainty. • Selective Information Processing. Individuals shape their world through their perceptions. Once they have created this world, it is resistant to change. So, individuals selectively process information in order to maintain their perceptions. Dr. Sikalieh

Resistance cont…. Organizations and their members resist change. In a sense, their resistance can be positive. It provides a degree of stability and predictability, and it can be a source of functional conflict. But, resistance also hinders progress and adaptation. Often, organizations that have experienced lengthy periods of success are particularly resistant to change. Organizational resistance to change can take several forms: overt, implicit, immediate, or deferred. Dr. Sikalieh

Resistance cont… The following summarizes five reasons why individuals may resist change. Force of habit. To cope with the complexities of day-to-day living, we rely on habits or programmed responses. When confronted with changes, this tendency to respond in habitual ways hinders change. Need for security. People with a high need for security resist change because it threatens them. Economic Factors. Another source of individual resistance is fear that changes will lower income. Fear of the Unknown. Changes replace stability and familiarity with ambiguity and uncertainty. Selective Information Processing. Individuals shape their world through their perceptions. Once they have created this world, it is resistant to change. So, individuals selectively process information in order to maintain their perceptions. Dr. Sikalieh

Overcoming Resistance to Change Education and Communication Participation Negotiation Facilitation and Support Manipulation and Cooptation Coercion Dr. Sikalieh

Organizational Change Unfreezing Changing Refreezing Lewin’s Three-Step Process Dr. Sikalieh

Org. change cont… Kurt Lewin asserts that successful change requires unfreezing the status quo, changing to a new state, then refreezing the new change to make it permanent. Moving from the status quo (equilibrium) can be achieved in three ways: The driving forces, which direct behavior away from the status quo, can be increased. The restraining forces, which hinder movement away from the status quo, can be increased. The two approaches can be combined. Dr. Sikalieh

Unfreezing the Status Quo Desired State Restraining Forces Status Quo The status quo can be considered an equilibrium state. To move from a state of equilibrium (to overcome individual and organizational resistance), unfreezing must occur. It can be done in three ways: 1. The driving forces, which direct behavior away from the status quo, can be increased. 2. The restraining forces, which hinder movement from the existing equilibrium, can be decreased. 3. A third alternative is combining the first two approaches. Once unfreezing has been accomplished, the change can be implemented. But merely introducing change does not ensure that it will take hold. The new situation must be refrozen. The objective of refreezing is to stabilize the new situation by balancing the driving and restraining forces. Unless this is done, employees will revert to the previous state of equilibrium. Driving Forces Time Dr. Sikalieh

Action Research Process One: Diagnosis Three: Feedback Five: Evaluation Two: Analysis Four: Action Dr. Sikalieh

Survey Feedback: An Overview Employees complete surveys to provide information about problems in their organization Feelings about the organization are summarized and shared with all employees Develop Action Plans Through group discussions, specific plans for overcoming problems are identified and developed Data Collection Feedback Dr. Sikalieh . 6

Organizational Development Respect for people Trust and support Power equalization Confrontation Participation Dr. Sikalieh

Five OD Interventions Intergroup development Process consultation Sensitivity training Survey feedback Team building Dr. Sikalieh

OD Interventions cont…. Intergroup Development. This technique can change attitudes, stereotypes, and perceptions that groups have of each other. One method emphasizes problem solving. Once problems have been identified, team members can move to the integration phase of working together to develop solutions to improve intergroup relations. Process Consultation. An outside consultant helps a client to perceive, understand, and act upon various processes in the workplace: such as work flow, informal relationships, and formal communication channels. Dr. Sikalieh

OD Interventions cont… Sensitivity Training. This method uses unstructured group interaction to change behavior. Members meet in an “open” environment to discuss their interactive processes and themselves. The discussion is loosely directed by a behavioral scientist. The group is process oriented, and individuals learn by observing and participating rather than being told. Survey Feedback. Management can use the survey feedback approach to assess the attitudes of organizational members in order to identify and address the discrepancies among their perceptions. Team Building. The following team building activities promote trust and openness between team members: goal setting, interpersonal development, role analysis, and team process analysis. Dr. Sikalieh

Organizational Culture Sources of Innovation Human Resources Structural Variables Organizational Culture Dr. Sikalieh

What Is a Learning Organization? Definitions Advantages Characteristics Dr. Sikalieh

A learning organization is one that has developed the continuous capacity to adapt and change. Most organizations engage in single-loop learning: that is, detecting and correcting errors by using past routines and present policies. In contrast, learning organizations use double-loop learning: that is, detecting errors and correcting them in ways that modify the organization’s objectives, policies, and standard routines. Proponents believe that the learning organization can remedy the following three basic problems in traditional organizations. Fragmentation based on specialization creates “walls” and “chimneys” that separate different functions into independent and often warring fiefdoms. Stressing competition can hinder collaboration. Reactiveness misdirects management’s attention to solving problems rather than generating new ideas. Dr. Sikalieh

Dr. Sikalieh

Characteristics The following are characteristics of a learning organization: Everyone agrees to a shared vision. People discard old ways of thinking and standard routines. Members see that organizational processes and activities are interrelated. People communicate openly across horizontal and vertical boundaries. Employees sublimate departmental/personal interests for the shared vision. The learning organization is a paradigm built on contemporary management concepts. No company has successfully achieved all the characteristics. Dr. Sikalieh

Managing Learning Establishing Strategy Redesigning Structure Reshaping Culture Dr. Sikalieh

Managing Change: It’s Culture Bound! Is change possible? How long will it take? Does culture influence resistance? Does culture influence implementation? Does culture influence idea champions? Dr. Sikalieh

What Is Stress? Importance Uncertainty Demands Constraints Dr. Sikalieh

A Model of Stress Consequences Potential Sources Environmental Factors Individual Differences Psychological Symptoms Organizational Factors Experienced Stress Physiological Symptoms Individual Factors Behavioral Symptoms Dr. Sikalieh

Stress cont…. Environmental stress factors include economic, political, and technological uncertainty. Organizational stress factors include task demands, role demands, interpersonal demands, organizational structure, organizational leadership, and the organization’s life stage. Individual stress factors include family problems, economic problems, personality. Stress builds up. To assess the total amount of stress that a person is under, we must sum up his or her opportunity stresses, constraint stresses, and demand stresses. Dr. Sikalieh

Stress cont…. Five variables moderate the relationship between potential and experienced stress. Employees react in response to their perception of reality rather than to reality itself. Experience on the job tends to be negatively related to stress. Social support can buffer the impact of stress. Those with an internal locus of control perceive their jobs to be less stressful than those with an external locus of control. A high degree of hostility and anger increases a person’s stress. The consequences of stress fall into three categories. The link between stress and physiological symptoms is not clear, even though early research focused on the physical manifestations of stress. For students of OB, the two following categories are more important. Job-related stress can cause job-related dissatisfaction—the most obvious psychological effect of stress. It can also cause tension, anxiety, irritability, boredom, and procrastination. Behavioral symptoms include changes in productivity, absence, and turnover. They also include substance abuse, overeating, chain smoking, and sleep disorders. Dr. Sikalieh

Individual Stress Management Time Management Physical Exercise Individual Stress Management Relaxation Training Social Support Dr. Sikalieh

Organizational Stress Management Goal Setting Wellness Programs Job Redesigning Organizational Communication Employee Involvement Selection and Placement Dr. Sikalieh

Stress management cont… Stress is not necessarily bad. In fact, it can help one to achieve superior performance in a critical situation. But excess or prolonged stress can manifest itself in physiological, psychological, and behavioral problems. Today’s workers take on larger workloads, work longer hours, have fewer resources, confront ambiguity daily, and have less job security. These factors contribute to employee stress. While not all sources of stress can be controlled, management must realize that certain jobs are more stressful than others, and individuals vary in their response to stress situations. Therefore, selection and placement decisions must consider these factors. Dr. Sikalieh

Stress management cont… The use of goals can reduce employee frustration, job uncertainty, and stress. Wasting time causes stress, so management should provide time-management training. Redesigning jobs to give employees more responsibility, meaningful work, and increased feedback can reduce stress. Management can increase employee involvement in decision making to reduce uncertainty about goals, expectations, and evaluations. Helping employees to expand their social support networks can reduce tension. Improving formal organizational communication with employees lessens ambiguity and reduces stress. Physical activity programs supported by the organization focus on the employee’s total physical and mental condition. Dr. Sikalieh