1. Chapter Twenty Managing Change in Learning Organizations

2. Chapter Twenty Outline Forces of Change - External Forces - Internal Forces Forces of Change - External Forces - Internal Forces Models and Dynamics of Planned Change - Types of Change - Lewin’s Change Model - A Systems Model of Change - Kotter’s Eight Steps for Leading Organizational Change - Organization Development Models and Dynamics of Planned Change - Types of Change - Lewin’s Change Model - A Systems Model of Change - Kotter’s Eight Steps for Leading Organizational Change - Organization Development Understanding and Managing Resistance to Change - Why People Resist Change in the Workplace - Research on Resistance to Change - Alternative Strategies for Overcoming Resistance to Change Understanding and Managing Resistance to Change - Why People Resist Change in the Workplace - Research on Resistance to Change - Alternative Strategies for Overcoming Resistance to Change Creating a Learning Organization - Defining a Learning Organization - Building an Organizations’ Learning Capability - Organizations Naturally Resist Learning - Effective Leadership Is the Solution - Unlearning the Organization Creating a Learning Organization - Defining a Learning Organization - Building an Organizations’ Learning Capability - Organizations Naturally Resist Learning - Effective Leadership Is the Solution - Unlearning the Organization 20-1

3. The External and Internal Forces for Change 20-2 Figure 20-1 Demographic Characteristics *Age*Education * Skill level*Gender * Immigration Technological Advancements * Manufacturing automation * Office automation Market Changes * Mergers and acquisitions * Domestic and international competition * Recession Social and Political Pressures *War*Values * Leadership External Forces Human Resource Problems/Prospects *Unmet needs*Job dissatisfaction *Productivity*Participation/ *Absenteeism and suggestions turnover Managerial Behavior/Decisions * Conflict* Leadership * Reward systems* Structural reorganization Internal Forces The need for change

4. Forces of Change  Demographic Characteristics - the workforce is more diverse - there is a business imperative to effectively manage diversity  Technological Advancements - organizations are increasingly using technology as a means to improve productivity and market competitiveness  Market Changes - the emergence of a global economy is forcing companies to be more competitive and to do business differently - organizations are forging new partnerships and alliances aimed at creating new products and services  Social and Political Pressures - society and its legislative bodies can put pressure on organizations to change the way they do business -- the tobacco industry is a good example 20-3a External Forces: originate outside the organization.

5. Forces of Change (continued)  Human Resource Problems/Prospects - employees’ needs, job satisfaction, organizational commitment, behavior, and performance are forces of change - dissatisfied employees and high levels of absenteeism and turnover are signs that change is needed  Managerial Behavior/Decisions - the level of conflict between managers and their direct reports is a force for change - inappropriate leader behavior may result in employee problems requiring change - inequitable reward systems are an additional force for change 20-3b Internal Forces: originate inside the organization.

6. Ethics at Work Key Issue: Should parent companies located in the U.S. be held accountable for how employees are treated in supplier plants in other countries? 20-4

7. A Generic Typology of Organizational Change 20-5 Figure 20-2 Adaptive change Innovative change Radically innovative change Reintroducing a familiar practice Introducing a practice new to the organization Introducing a practice new to the industry LowHigh Degree of complexity, cost and uncertainty Potential for resistance to change

8. Assumptions About Change  The change process involves learning something new, as well as discontinuing current attitudes, behaviors, or organizational practices.  Change will not occur unless there is motivation to change. This is often the most difficult part of the change process.  People are the hub of all organizational changes. Any change, whether in terms of structure, group process, reward systems, or job design, requires individuals to change.  Resistance to change is found even when the goals of change are highly desirable.  Effective change requires reinforcing new behaviors, attitudes, and organizational practices. 20-6

9. Lewin’s Change Model  Unfreezing - 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 20-7

10. A Systems Model of Change 20-8 Figure 20-3 Target Elements of Change Organizing Arrangements Goals Social Factors Methods People Internal * Strengths * Weaknesses External * Opportunities * Threats * Organizational Level * Department/ group level * Individual level Inputs Outputs Strategy

11. Kotter’s Steps for Leading Organizational Change StepDescription  Establish a senseUnfreeze the organization by creating a of urgencycompelling reason for why change is needed.  Create the guidingCreate a cross-functional, cross-level group of coalitionpeople with enough power to lead the change.  Develop a visionCreate a vision and strategic plan to guide the and strategychange process.  Communicate theCreate and implement a communication strategy change visionthat consistently communicates the new vision and strategic plan.  Empower broad-Eliminate barriers to change, and use target based actionelements of change to transform the organization. Encourage risk taking and creative problem-solving. 20-9a Table 20-1a

12. Kotter’s Steps for Leading Organizational Change (continued) StepDescription  Generate short-Plan for and create short-term “wins” or term winsimprovements. Recognize and reward people who contribute to the wins.  Consolidate gainsThe guiding coalition uses credibility from and produce moreshort-term wins to create more change. changeAdditional people are brought into the change process as change cascades throughout the organization. Attempts are made to reinvigorate the change process.  Anchor newReinforce the changes by highlighting approaches in theconnections between new behaviors and cultureprocesses and organizational success. Develop methods to ensure leadership development and successes. 20-9b Table 20-1b

13. Characteristics of Organization Development (OD)  OD involves profound change  OD is value loaded  OD is a diagnosis/prescription cycle  OD is process-oriented 20-10 Table 20-1

14. Resistance To Change The leading reasons why people resist change are:  An individual’s predisposition toward change  Surprise and fear of the unknown  Climate of mistrust  Fear of failure  Loss of status and/or job security  Peer pressure  Disruption of cultural traditions and/or group relationships  Personality conflicts  Lack of tact and/or poor timing  Nonreinforcing reward systems For Class Discussion: What do you think are the top three reasons people resist change? 20-11 Resistance to Change: an emotional/behavioral response to real or imagined work change.

15. Strategies for Overcoming Resistance to Change ApproachEducation + CommunicationParticipation + Involvement Commonly UsedWhere there is a lack ofWhere the initiators do not in Situationsinformation or inaccuratehave all the information they information and analysisneed to design the change and where others have considerable power to resist AdvantagesOnce persuaded, people willPeople who participate will often help with the implementationbe committed to implementing of the changechange, and any relevant information they have will be integrated into the change plan DrawbacksCan be very time consumingCan be very time consuming if lots of people are involvedif participators design an inappropriate change 20-12a Table 20-2a

16. Strategies for Overcoming Resistance to Change (continued) ApproachFacilitation + SupportNegotiation + Agreement Commonly UsedWhere people are resistingWhere someone or some group in Situationsbecause of adjustment problemswill clearly lose out in a change and where that group has considerable power to resist AdvantagesNo other approach works as wellSometimes it is a relatively with adjustment problemseasy way to avoid major resistance DrawbacksCan be time consuming, expensiveCan be too expensive in many and still failcases if it alerts others to negotiate for compliance 20-12b Table 20-2b

17. Strategies for Overcoming Resistance to Change (continued) ApproachManipulation + Co-optationExplicit + Implicit Coercion Commonly UsedWhere other tactics will notWhere speed is essential and in Situationswork or are too expensivewhere the change initiators possess considerable power AdvantagesIt can be a relatively quick andIt is speedy and can overcome inexpensive solution toany kind of resistance resistance problems DrawbacksCan lead to future problems ifCan be risky if it leaves people people feel manipulatedmad at the initiators 20-12c Table 20-2c

18. Building an Organization’s Learning Capability 20-13 Figure 20-5 Facilitating factors Learning mode Culture and experience Internal structure and processes An organization’s learning capability Customer satisfaction Organizational performance Sales growth Profitability

19. Factors That Facilitate Organizational Learning  Scanning imperative  Performance gap  Concern for measurement  Experimental mindset  Climate of openness  Continuous education  Operational variety  Multiple advocates  Involved leadership  Systems perspective 20-14 Table 20-3

20. Leadership Roles and Activities for Building a Learning Organization Role 1: Role 2: Role 3: Build a Work to Work to Commitment Generate Generalize to Learning Ideas with Ideas with Leadership Activities Impact Impact Make learning a component X of the vision and strategic objectives Invest in learning X Publicly promote the value X of learning Measure, benchmark, and X track learning Create rewards and symbols X of learning Implement continuous X improvement programs 20-15a Table 20-4a

21. Leadership Roles and Activities for Building a Learning Organization (continued) Role 1: Role 2: Role 3: Build a Work to Work to Commitment GenerateGeneralize to Learning Ideas with Ideas with Leadership Activities Impact Impact Increase employee X competence through training, or buy talent from outside the organization Experiment with new ideas, X processes, and structural arrangements Go outside the organization X to identify world-class ideas and processes 20-15b Table 20-4b

22. Leadership Roles and Activities for Building a Learning Organization (continued) Role 1: Role 2: Role 3: Build a Work to Work to Commitment Generate Generalize to Learning Ideas with Ideas with Leadership Activities Impact Impact Identify mental models of X organizational processes Instill systems thinking X throughout the organization Create an infrastructure that X moves ideas across organizational boundaries Rotate employees across X functional and divisional boundaries 20-15c Table 20-4c