1. Fundamental Question for Change
What are the forces acting upon me?
What are the pressures I should take into consideration?
Going back to problem identification…
Where are the pressures to change coming from?
Internal/External
What should we change?
Strategic (company-wide)  Limited (specific area)
Too often, organizations change in the wrong areas or at the wrong levels
It is important to isolate and pinpoint the change agent.
How should we change it?
How should we actually implement the change?
What cultural, organizational characteristics need to be infused in the change.
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2. Model for Planned Organizational Change
Source: Adapted from Larry Short, “Planned Organizational Change,” MSU Business Topics, Autumn 1973, pp. 53–61 ed. Theodore Herbert, Organizational Behavior: Readings and Cases (New York: McMillan, 1976), p. 351.
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FIGURE 8–1

3. Strategic Change (1 of 4) Strategic change
Changing the fundamental strategy of the organization
While this may be necessary, it does pull at the fabric of the organization
Identity / Culture / Direction
Sources and Effects of Strategic Change
Strategic changes are usually triggered by factors outside the company.
Usually a function of competitive posturing
Strategic changes are often required for survival
Given that other change initiatives fail, it’s a must.
Strategic changes implemented under crisis conditions are highly risky.
Given, they usually don’t follow organizational ideals
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4. Technological and Structural Change (2 and 3)
More specific in application
Technological Change
Changing the way the company creates and markets its products or services.
Production process, communication channels, workflow
This approach to change allows for major modification to specific areas of the organization
Without affecting others
Less resistance from the overall organization
Structural Change
Changing one or more aspects of the company’s organization structures.
Authority, Networks, Organizational Charts
High amounts of resistance
Reorganizing
Changing the firm’s organization chart and structural elements.
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5. Is a New Structure Really Required?
When you identify a problem with your design, first look for ways to fix it without substantially altering it. If that doesn’t work, you’ll have to make fundamental changes or even reject the design. Here’s a step-by-step process for resolving problems.
Source: Adapted from Michael Goold and Andrew Campbell, “Do You Have a Well-Designed Organization?” Harvard Business Review, March 2002, p. 124.
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FIGURE 8–2

6. Is a New Structure Really Required? (cont’d)
When you identify a problem with your design, first look for ways to fix it without substantially altering it. If that doesn’t work, you’ll have to make fundamental changes or even reject the design. Here’s a step-by-step process for resolving problems.
Source: Adapted from Michael Goold and Andrew Campbell, “Do You Have a Well-Designed Organization?” Harvard Business Review, March 2002, p. 124.
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FIGURE 8–2b

7. Is Your Organization Well-Designed?
The market advantage test
Does your design direct attention to competitive market sources?
Volkswagen: 9  3 (Premium, Mass, Commercial)
The parenting advantage test
Does your design allow the corporation to add value?
GE: Spin-off or Conglomerate (Managerial competence)
The people test
Does your design reflect strengths and weaknesses of personnel
Pepsi Co. and Quaker (reacquisition of key personnel)
The feasibility test
What problem would come with a new organizational design
Classis example: As organizations grow / personnel type changes
Small  Innovative/Informal; Large  Structured Roles
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8. Is Your Organization Well-Designed?
The specialist culture test
Does the design facilitate and protect the core competencies of the organization?
3M  Keeping the innovation alive
The difficult-links test
Does your design allow for the critical links between core functions?
Networks, Teams, Modular vs. Line
The redundant-hierarchy test
Are there too many management stops (Decision stops)?
Red tape
The accountability test
Are there proper controls (checks and balances) in place?
Rewards, Monitoring
The flexibility test
Does your formal design allow for change and adaptation
Within the parameters of the organizational strategy
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9. People / Behavioral / Cultural Change (4 of 4)
One Constant
Regardless of the change initiative used
Any change taken forth by an organization is going to encounter differing levels of resistance.
Whether you formally mean to alter the culture, or it is a byproduct of another change initiative.
It is inherently important to monitor the
Culture
Attitudes
Values
Skills
Many change initiatives fail because of inadequate understanding of consequences on culture
So, how do we monitor the effect of change on culture?
First understand what it is and what it needs to be…
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10. How to Read an Organization’s Culture
Observe the physical surroundings.
Dress, openness, placement
Sit in on a team meeting.
How employees treat each other
Rank issues
Listen to the language.
What are the buzz words…
Note to whom you are introduced and how they act.
What are the dynamics of the relationships in the organization?
Get the views of outsiders, including vendors, customers, and former employees.
Incorporate the views of all the stakeholders
Their input will lead to a better overall view of the culture
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11. Creating and Sustaining the Right Corporate Culture
Make it clear to your employees what you pay attention to, measure, and control.
Through rewards, control functions, etc.
React appropriately.
Act in accordance with what is important
Use “signs, symbols, stories, rites, and ceremonies.”
Initiatives that go beyond compliance
Deliberately role model, teach, and coach the values you want to emphasize.
Top management must reflect culture in action
Communicate your priorities by how you allocate rewards.
DJPJIJ
Make your HR procedures and criteria consistent.
Make sure all HR outputs fall in line with culture
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12. Why Do We Resist Change? Level 1 Level 2
“It is usually not technical aspects that bring about resistance, rather social consequences”
Level 1
Lack of information
Honest disagreement over the facts concerning change.
Level 2
Personal and emotional fear of
Loss of job
Relationships
Status.
Personality traits
Poor self-image
Low tolerance for ambiguity and risk.
Change creates competing commitments.
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13. Kurt Lewin’s Model of Change
Unfreezing
Involves reducing the forces for the status quo
Usually by presenting a provocative problem or event to get people to recognize the need for change and to search for new solutions.
Participative decision making, Crisis
Moving
Using techniques and actually altering the
Behaviors, values, and attitudes of the individuals in an organization.
Organizational change techniques
Refreezing
Preventing a return to old ways by
Instituting new systems and procedures that reinforce the new organizational changes.
Reinforcement of new ways
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15. Business Process Reengineering
Business Reengineering
The radical redesign of business processes to:
Cut waste
Improve cost, quality, and service
Maximize the benefits of information technology
Accomplished through
Questioning how and why things are being done as they are.
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16. Nine Steps to Organizational Change
Create a Sense of Urgency
Crisis, Eliminate excess, set targets, create impetus
Decide What to Change
Choose from on of the four change initiatives
Create a Guiding Coalition and Mobilize Commitment
Very important
Guiding coalition of influential people
Develop and Communicate a Shared Vision
Simple, participative, repetitive vision for everyone
Empower Employees to Make the Change
Give those that jump on board the power to make the changes
Generate Short-Term Wins
Instrumentality  Let employees see rewards for their change
Consolidate Gains and Produce More Change
Shoe increased productivity (Create Legitimacy)
Anchor the New Ways of Doing Things in the Company Culture
Monitor Progress and Adjust the Vision as Required
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17. Barriers to Empowerment
Source: Reprinted by permission of Harvard Business School Press. From Leading Change by John P. Kotter. Boston, MA. 1996, p Copyright © 1996 by the President and Fellows of Harvard College, all rights reserved.
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FIGURE 8–5

18. Organizational Development
Organizational Development (OD)
An approach to organizational change in which the employees themselves formulate the change that’s required and implement it, usually with the aid of a trained consultant.
What are some of the fundamental principles in this approach:
Goal setting
Participative decision-making
Empowerment
Leadership
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19. OD Interventions Human Process Interventions
Aimed at enabling employees to develop a better understanding of their own and others’ behaviors for the purpose of improving that behavior such that the organization benefits.
Sensitivity Training (Laboratory or T-groups)
Purpose is to increase participants’ insight into their own behavior and that of others by encouraging an open expression of feelings in a trainer-guided group.
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20. OD Interventions (cont’d)
Team Building
The process of improving the effectiveness of a team through action research or other techniques.
Survey Research
The process of collecting data from attitude surveys filled out by employees of an organization, then feeding the data back to workgroups to provide a basis for problem analysis and action planning.
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21. Technostructural Applications of OD
Formal Structure Change Program
An intervention technique in which employees collect information on existing formal organizational structures and analyze it for the purpose of redesigning and implementing new organizational structures.
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22. Strategic Applications of OD
Strategic Intervention
An OD application aimed at effecting a suitable fit among a firm’s strategy, structure, culture, and external environments.
Integrated Strategic Management
An OD program to create or change a company’s strategy by:
Analyzing the current strategy
Choosing a desired strategy
Designing a strategic change plan
Implementing the new plan.
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23. Conflict Handling Styles
Source: Source: Kenneth W. Thomas, “Organizational Conflict,” ed., Steven Kerr, Organizational Behavior (Columbus, OH: Grid Publishing, 1979), in Andrew DuBrin, Applying Psychology (Upper Saddle River, NJ: Prentice Hall, 2000), p. 223.
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FIGURE 8–7

24. Interpersonal Conflict Styles
Confrontation
Head-on confrontation
Works when there is structural control
Forcing
Can be effective given you have the legitimized power
Still, may not truly change others
Avoidance
Hardly ever works
Does allow for some problems to solve themselves
Process controlling
Controlling the process used to resolve the problem
Compromise / Collaboration
Requires mutual sacrifice and subordination
Accommodating
Subordinating to the other desires )stop-gap)
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