1. Chapter 20 Organizational Change

2. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 2 Learning Outcomes: Organizational Change Describe the driving forces for change. Define the role of change agents. Identify why people resist change. Discuss the ways organizations may overcome the resistance to change.

3. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 3 Organizational Change “The illiterate of the 21 st century will not be those who cannot read or write, but those who cannot learn, unlearn, and relearn.” Alvin Toffler

4. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 4 Organizational Change Change is the single most important factor in business today: every business is an ongoing source of change. every professional discipline is a process of change. every fundamental business principle directs us to change.

5. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 5 Organizational Change Every market force (customers, competitors, technology, regulations, distribution channels, suppliers, etc.) creates change that forces change in response. Globalization of markets demands globalization of businesses.

6. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 6 Organizational Change A leader will be hired to bring about change; not to just maintain the status quo. A leader will need to become a change agent. Change with times or get left behind.

7. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 7 Organizational Change People who drive change are change agents. Leaders are all agents of change: Change-agent skills are as important to success as are professional discipline skills. The purpose of the leader’s jobs is to change what is possible, as companies and as individuals, by adding value every day.

8. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 8 Lesson for Change When you ask a question, it starts the change process simultaneously.

9. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 9 Organizational Change Driving forces of change are: Technology Nature of the workforce International effects Mergers – competition Economic shocks Social trends

10. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 10 Organizational Change Change is everywhere – it’s constant. Everyone is affected by change. The pace of change is accelerating. If the above is true, why do people and organizations resist change?

11. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 11 Organizational Change As leaders, we have a responsibility to bring about planned change.

12. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 12 Organizational Change Managing today would be more accurately described as long periods of ongoing change, interrupted occasionally by short periods of stability.

13. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 13 Why People Resist Change Habits – We are creatures of habit. Fear of the unknown. Security – The higher the need for security, the stronger the resistance. Economic factors. Selective information processing – We all have our own ideas of what is right.

14. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 14 Why Organizations Resist Change Group inertia – Peer pressure, group norms. Security. Threat to established power relationships. Threat to established resource allocations. Limited focus of change – Change affects others in the organization. Poor communication. Threat to expertise.

15. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 15 Lewin’s Three-Step Change Model Unfreezing Movement or Transition Refreezing

16. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 16 Organizational Change Status Quo Desired State Restraining Forces Driving Forces

17. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 17 Organizational Change Three options to bring about change: increase the driving forces. decrease the restraining forces. do a combination of the two approaches.

18. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 18 What Can Change Agents Change? Structure – Change agents can alter one or more of the key elements in an organization’s design. Technology – Competitive factors or innovations within an organization often require change agents to introduce new equipment, tools, or methods. People – Change agents help individuals and groups within the organization work more effectively together. Physical Settings – Change agents can affect their environment.

19. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 19 Getting People and Organizations to Change (Driving Forces) Education and training Participation and cooperation Support Economic incentives Increased communication Negotiation Coercion – Forcing

20. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 20 Organizational Change Resistance is not all bad. Resistance: forces management to check and recheck the proposals. helps identify specific problem areas where change is likely to cause difficulty. gives management information about the intensity of employee emotions on the issues. provides a means of release of emotions. This causes employees to think and talk more about the changes.

21. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 21 Organizational Change “ The trouble with the future is that it usually arrives before we’re ready for it.” Arnold H. Glasow

22. Human Behavior in Organizations, 2 nd Edition Rodney Vandeveer and Michael Menefee © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved. 22 Summary Change is inevitable. People and organizations will resist change. Change is a process. Leaders are change agents and must learn to embrace change.