1. Chapter 18 Organizational Change and Development
28 July 1997
Chapter 18 Organizational Change and Development

2. Learning Goals
Discuss the pressures on managers to change their organizations
Describe different types of organizational change
Explain the phases and targets of planned organizational change

3. Learning Goals (Cont.)
List some reasons for resistance to change in organizations
Describe the organizational development techniques managers can use to change their organizations
Understand some international aspects of organizational change and development

4. Chapter Overview Introduction Forces For and Against Change
Unplanned and Planned Organizational Change
Targets of Organizational Change
Planned Organizational Change
Resistance to Change

5. Chapter Overview (Cont.)
Organizational Development
International Aspects of Organizational Change and Development
Ethical Issues About Organizational Change and Development

6. Introduction
Organizational change involves movement from the present state of the organization to some future or target state
Future state can include a new strategy, new technology, or changes in the organization’s culture

7. Introduction (Cont.)
Organizational change: moving from the present state of the organization to some future or target state. A A’
Time

8. Introduction (Cont.)
Many sources of pressure on managers to change their organizations exist and will continue in the future
Identify the pressures on organizations and their managers to change
Want to know the probable effects on you as a member of a changing system

9. Introduction (Cont.) Know how to deliberately change an organization
Understand the sources of resistance to change
Learn how to manage the change process to reduce resistance

10. Forces For and Against Change
External forces for change
Competitors and markets
Acquisition threats
International: global markets
Workforce diversity
Quality management

11. Forces For and Against Change (Cont.)
Internal forces for change
High dissatisfaction
Felt stress
Loss of control of processes
Dysfunctionally high conflict
Slow decision making
High turnover and absenteeism
Communication dysfunctions

12. Forces For and Against Change (Cont.)
Forces against change
Internal: resistance to change from individuals and groups
External: special interest groups such as consumer groups and unions
View the forces for and against change as a force field working on the organization

13. Forces For and Against Change (Cont.)
A Force Field
Present state of the organization
Desired state of the organization
Forces for change
Forces against change A
Time A’
Text book Figure 18.1

14. Unplanned and Planned Organizational Change
Unplanned organizational change: forces for change overwhelm resistance to change
Planned organizational change: A deliberate, systematic change effort

15. Unplanned and Planned Organizational Change (Cont.)
Unplanned organizational change
Forces for change overwhelm resistance to change
Usually unexpected
Chaotic, uncontrolled change effects
Example: economic changes leading to reductions in workforce

16. Unplanned and Planned Organizational Change (Cont.)
A deliberate, systematic change effort
Change organizational design, information systems, job design, and people’s behavior
Although managers try to follow a plan, the change does not always move smoothly
The change effort often hits blockages, causing managers to rethink their goals and plan

17. Unplanned and Planned Organizational Change (Cont.)
Phases
Define the desired future state of the organization
Diagnose the present state of the organization
Move the organization to the desired future state
A change agent helps managers to bring about planned change. An external or internal consultant

18. Targets of Planned Organizational Change
Organizational culture
Decision processes
Communication processes
Job design
Organizational design

19. Targets of Planned Organizational Change (Cont.)
Technology
Strategy
Managers should choose the target only after careful assessment of the current state of the organization and the need for change.

20. Targets of Planned Organizational Change (Cont.)
A model for thinking about planned organizational change
Targets
Culture
Technology
Organizational design
Job design
External
environment
Strategy
Mission

21. Planned Organizational Change
Reasons for planned organizational change
Managers react to environmental shifts
They anticipate the future state of the external environment
Often a difficult task. As noted by an organizational change scholar, “planned organization change is messy and never as clear as we have written in our books and articles”

22. Planned Organizational Change (Cont.)
Models of planned organizational change
Evolutionary model
Incremental change
Example: changing the organization’s pay scale to stay market competitive
Revolutionary model
Change many parts of an organization
Example: strategic shift

23. Planned Organizational Change (Cont.)
Evolutionary model of organizational change
Three phases with no distinct boundaries. Each phase blends into the next phase
A manager or other change agent develops a need for change among those affected
The change agent then tries to move the organization or part of it toward the changed state
The change agent tries to stabilize the change and make it a part of the organization

24. Planned Organizational Change (Cont.)
Evolutionary model of organizational change
Sees change happening in small bits that add to a total amount of change
Unexpected events can occur along the way, forcing a return to an earlier phase

25. Planned Organizational Change (Cont.)
Revolutionary model of organizational change
Organizational change unfolds over long periods of stability followed by bursts of major change activities
Uses three concepts
Equilibrium period: organization moves steadily toward its mission and goals
Revolutionary period: a major change in the strategic direction of the organization
Deep structures: enduring features of the organization that let it succeed

26. Planned Organizational Change (Cont.)
Revolutionary model of organizational change (cont.)
Two events trigger a revolutionary period
Dissatisfaction with the organization's performance
Strong feelings among organization members that it is time for change

27. Planned Organizational Change (Cont.)
Revolutionary model of organizational change (cont.)
Dissatisfaction with the organization's performance
Misfit between the organization’s deep structure and its current environment
Follows a clear organizational failure or when many believe failure is imminent

28. Planned Organizational Change (Cont.)
Revolutionary model of organizational change (cont.)
Strong feelings among organization members that it is time for change
Organization members feel uneasy with the current equilibrium period
Develop feelings of little forward movement
Characterizes organizations that must shift direction

29. Resistance to Change
No matter what the target, changes affect the social system of an organization
People develop long-standing, familiar patterns of social interaction
Strong resistance develops when organizational change affects these social networks

30. Resistance to Change (Cont.)
Resistance can take many forms
Lack of cooperation with the change effort
Sabotage of the change effort
Dysfunctionally high conflict levels

31. Resistance to Change (Cont.)
Reasons for resistance to change
Perceive the loss of something valued such as social status
Misunderstand the goal of the change
Distrust the change agent
No common perception of the value of the change
Low tolerance for change

32. Resistance to Change (Cont.)
Manager’s orientation to resistance to change
Problem to overcome
Forcefully reduce resistance
Can increase resistance
Signal to get more information
Affected targets may have valuable insights about the change’s effects
Change agent can involve the targets in diagnosing the reasons for the resistance

33. Resistance to Change (Cont.)
Manager’s orientation to resistance to change (cont.)
Absence of resistance
Also a signal to get more information
Low commitment to the change can make the change less effective
Resisters can focus the change agents on potentially dysfunctional aspects of a proposed change

34. Resistance to Change (Cont.)
Managing the change process to reduce resistance
Use change agents with characteristics similar to the change target
Use dramatic ceremonies and symbols to signal disengagement from the past
Widely communicate information about the change

35. Resistance to Change (Cont.)
Managing the change process to reduce resistance (cont.)
Involve those affected by the change
Commit enough resources
Negotiation may be necessary, when a powerful person or group is a potential source of resistance

36. Resistance to Change (Cont.)
Managing the change process to reduce resistance (cont.)
Cooptation: a political tactic that aims to gain endorsement of the change from important individuals or groups
Sometimes no choice other than to force change onto the target system

37. Organizational Development
Organizational development is a long-term, systematic, and prescriptive approach to planned organizational change
Although it uses a system-wide view, it can focus on single subsystems of an organization
Applies the theories and concepts of the social and behavioral sciences to organizational change

38. Organizational Development (Cont.)
Tries to develop an organization’s self-renewing capacity
Tries to create an organization that can continuously improve
Views conflict as an inevitable part of organizational life

39. Phases of Organizational Development (Cont.)
Organizational development unfolds in a series of phases
These are phases, not steps, because no clear boundaries exist between them
Phases can repeat. For example, during the evaluation phase, managers may discover a need for more data from the diagnosis stage
See text book Figure 18.2

40. Phases of Organizational Development (Cont.)
Entry
First contact of the consultant with the client
Usually client initiates contact
Building a client-consultant relationship
Mutual evaluation of each other
Decide they can develop a compatible working relationship

41. Phases of Organizational Development (Cont.)
Contracting
Develop an agreement between the consultant and client
Can range from an oral agreement to a legally binding agreement
Describes mutual expectations and each party’s duties
Not static. Subject to renegotiation as the organizational development program unfolds

42. Phases of Organizational Development (Cont.)
Diagnosis
Consultant gets information about the client system and diagnoses its current state
Observe the client’s behavior and reactions
Observe physical characteristics of system
Systematic data collection using surveys, interviews, and company records
Consultant summarizes this phase’s results for feedback to the client system

43. Phases of Organizational Development (Cont.)
Feedback
Consultant has a series of feedback meetings with client system members
The number of meetings varies according to the scope of the organizational development program
Several steps: (1) consultant’s analysis; (2) discussion; (3) consultant’s preliminary diagnosis; and (4) actively work with members of client system to arrive at collaborative diagnosis

44. Phases of Organizational Development (Cont.)
Planning the change
A collaborative activity between the consultant and client system
Identify alternative courses of action and the effects of each
Lay out the steps in the change program
Client decides the nature of the change program--not the consultant

45. Phases of Organizational Development (Cont.)
Intervention
Collaborative intervention to move the client system to the desired future state
Includes job and organizational design changes, conflict reduction program, and the like. See the “Organizational Development Interventions” section of the chapter
Consultant’s role: help the intervention and forecast dysfunctional results
Earlier client involvement helps reduce resistance to change in the intervention phase

46. Phases of Organizational Development (Cont.)
Evaluation
Focuses on whether the organizational development effort had the desired effect
Ranges from simply asking how the client feels to a well-designed research effort
Done independently of the consultant
Should also give the client system information about the next steps to take

47. Phases of Organizational Development (Cont.)
Termination
Ends at some point
Client terminates consultant
As the client system changes and develops, the external consultant reduces involvement
Internal consultants are part of the organization and can continue contact
The goal is independence of the client system from the consultant. Build client system self-reliance

48. Organizational Development Interventions
Many interventions exist for organizational development programs
Systematic techniques drawn from the behavioral sciences
Earlier chapters have detailed descriptions of the interventions summarized here

49. Organizational Development Interventions (Cont.)
Human process interventions
Focus on interpersonal, intra-group, and intergroup processes
Includes conflict, communication and decision making
Goal: improve human processes to get more effective organizational functioning

50. Organizational Development Interventions (Cont.)
Structural and technological interventions
Focus on organizational design, job design, and the addition of new technology
New technology focuses on improving organizational processes
Goal: improve human productivity and organizational effectiveness

51. Organizational Development Interventions (Cont.)
Human resource management interventions
Draws on the human resource management or personnel practices of an organization
Includes motivation and rewards, career planning and development, and stress management
Goal: change individual behavior and performance to get improved organizational effectiveness

52. Organizational Development Interventions (Cont.)
Strategy interventions
Changes in an organization’s strategic position to better align it with the external environment
Includes changes in the organization’s culture to create values and beliefs more congruent with the new environment
Goal: strategic shifts to gain competitive advantage

53. Organizational Development Interventions (Cont.)
Multiple interventions have the strongest effects
Structural/technological interventions and human resource management interventions had the strongest effects
Effects stronger in small organizations than in large organizations
Survey feedback has weaker effects than other interventions

54. International Aspects of Organizational Development
Intellectual roots of organizational development are mainly in the United States, England, northern Europe, and Scandinavia
Values and assumptions of organizational development consultants likely reflect these cultural values
Nature of interventions also reflect these cultural values

55. International Aspects of Organizational Development (Cont.)
Cultural differences and effect of organizational development approaches
Latin American workers often accept a directive management style
France and Italy: view organizations as hierarchical systems that use power and political behavior
Sweden and the United States: view organizations as less hierarchical

56. International Aspects of Organizational Development (Cont.)
Cultural differences and effect of organizational development approaches (cont.)
Conflict management approaches vary depending on tolerance of uncertainty
Tend to use nonconfrontational approaches to conflict reduction

57. Ethical Issues About Organizational Development
Ethical dilemmas that can undermine an organizational development effort
Misrepresentation of consultant’s capabilities, skills, or experience
Misrepresentation of client’s problems
Data confidentiality and voluntarism in providing data
Full awareness of and consent to the behavioral changes asked of participants