1. Management Chapter 7 Managing Change

2. Types of Organizational Change StrategyStructure TechnologyPeople Corporate Level (growth, stability, turnaround and retrenchment) Principles Chain of command Span of management Division of labour Coordination Responsibility & authority Delegation and flexibility Machines Systems process Information Process skills performance attitudes behaviour culture Business Level (prospecting, defending & analyzing) Authority Formal and informal Levels Centralized, decentralized Functional (marketing, operations, finance, HR, IT) Organizational and Job design

4. Stages in the Change Process People go through four stages in the change process: 1.Denial. When people firstly receive the change signal, they may deny that it will affect them. 2.Resistance. Once people realize that change is going to be a reality, they resist the change. 3.Exploration. When the change begins to be implemented employees explore the change, often through training, better understand how it will affect them. 4.Commitment. Through exploration, employees determine their level of commitment to making the change a success.

5. Resistance to Change and Ways to Overcome Resistance Why employees resist change? Uncertainty--- Fear of the unknown outcome of change Uncertainty--- Fear of the unknown outcome of change Learning anxiety--- Nervousness or fear of change that requires learning new ways of working Learning anxiety--- Nervousness or fear of change that requires learning new ways of working Self-interest--- People resist change that threatens their own self interest Self-interest--- People resist change that threatens their own self interest Loss --- Lost job or change in salary/benefits Loss --- Lost job or change in salary/benefits Control --- Change can also result in an actual or perceived loss of power, status, security and control, feeling that someone else is controlling their destiny Control --- Change can also result in an actual or perceived loss of power, status, security and control, feeling that someone else is controlling their destiny

6. Overcome Resistance to Change Ways to overcome resistance to change: Develop a positive trust climate for change --- Develop and maintain good human relations Plan --- Take good planning. Identify the possible resistance to change and plan how to overcome it. Communication ---Clearly state why the change is needed and how it will affect company or employees Create a win-win situation --- Company should guarantee that employees will not lose jobs, pay or other loses, at least within a short period of time Involve employees --- Employees who have participated in developing changes are more committed to them than those who have not Provide support --- Give advance notice and providing training before the change take place.

7. Change Models 2. A Comprehensive Change Model: 1. Recognize the need for change: The change agent can use a variety of techniques to diagnose problems in need of changes to solve them. 2.Identify possible resistance to the change and plan how to overcome it: Follow the guidelines in step 1. 3.Plan the change interventions: Based on the diagnosis of the problem, the appropriate intervention must be selected. 4.Implement the change interventions: The change agent, or someone selected, conducts the intervention to bring about the desired change. 5.Control the change: Follow up to ensure that the change is implemented and maintained. Make sure the objective is met. If not, take corrective action.

8. Change Models Lewin’s Change Model: 1.Unfreezing: This step usually involves reducing those forces that are maintaining the status quo, by introducing information that shows discrepancies between desired performance and actual performance 2.Moving: This step shifts the behavior to a new level. This is the change process in which employees learn the new desirable behavior, values, and attitudes. Strategy, structure, technology, and people/culture changes may take place to reach desirable performance levels. 3.Refreezing: The desirable performance becomes the permanent way of doing things or the new status quo. Refreezing often take place through reinforcement and support for new behaviour

9. Resistance to Change Sources of Resistance to Change –Facts Provable statements that identify reality. Fact used correctly help to overcome fear of the unknown –Beliefs Subjective opinions that cannot be proven, but can be shaped by others. Our beliefs lead us to think and feel that a change is correct or incorrect or good/ bad. –Values What people believe are important and worth pursuing or doing.

10. Resistance to Change (cont’d) Focuses of Resistance to Change –Self The reaction of individuals who feel their self-interests are threatened by change. –Others People tend to consider how the change will affect their friends, peer and colleagues. –Work environment Include physical setting and the climate. Change in the working environment threatens individuals control of the environment.

11. Resistance Matrix Focus of Resistance: Self 1. Fact about selfBeliefs about selfValues pertaining to self I have never done the task before I am too busy to learn it I like the way I am doing my job now, Why change? I failed last I tried. I’ll do it, but don’t blame me if it’s wrong I like working in a group There are three major focuses of resistance: Self, Others and Work environment.

12. Resistance Matrix Focus of Resistance: Others 1. Fact about OthersBeliefs about OthersValues pertaining to Others She has the best performance record in the department He just pretends to be busy to avoid extra work Let someone else do it; I don’t want to work with her Other employees told me it’s hard to do She’s better at it than I am; let her do it. I like working with him. Don’t cut him from our department

13. Resistance Matrix Focus of Resistance: Work Environment Model 7–1c 1. Fact about the work environment Beliefs about the work environment Values pertaining to the work environment we are only paid very low salary, I.e. 200/day This is a lousy job I’d rather to work inside office than outside office the cleanness of the office is not up to level The paid here is too low

14. Innovation Innovative Organizational Structures –Flat organizations with limited bureaucracy –Generalist division of labor –Coordinate with cross functional teams –Informal with decentralized authority –Create separate systems for innovative groups –Attract and retain creative employees –Reward innovation and creativity

15. Innovation (cont’d) Innovative Organizational Cultures –Encourage creativity and innovation –Develop structures to match their creative culture –Encourage risk-taking---without fear of punishment due to the failure –Foster Intrapreneurship--- development of new products that might become separate business units is encouraged. –Have open systems--- organizational members scan environment fore creative ideas –Focus on ends rather than means--- Employees are told the objectives but the employees decided on the means to achieve it. –Accept ambiguous and impractical ideas---Employees are encouraged to work on creative ideas even they do not have to have an immediate practical value for the idea –Tolerate conflict--- Diversity of opinions is encouraged as a mean of coming up with creative ideas

16. Quality Core Values of Total Quality Management (TQM) –To focus everyone in the organization on delivering customer value. –To continuously improve the system and its processes. The Continuous Improvement Culture –Successful implementation of TQM requires incorporation of TQM values into the organizational culture in long term, but not just a one time program.

17. Diversity –The degree of differences among members of a group or an organization. Race/ethnicity, religion, gender, age, ability Diversity in all forms is increasing in the general population and the workforce. –Incorporating diversity opens up a larger labor pool of skilled workers from which to recruit. –Diversity is a legal requirement, an ethical obligation, and a competitive advantage.

18. Managing Diversity Is Diversity really important??? Yes. The world is currently in a shortage of skilled workers, so to exclude a qualified person because of diversity issues is a harm to business success The world is currently in a shortage of skilled workers, so to exclude a qualified person because of diversity issues is a harm to business success Increasing cultural diversity in the workforce poses one of the most challenging human resources and organizational issues.Increasing cultural diversity in the workforce poses one of the most challenging human resources and organizational issues. Diversity is a strategic business imperative, a policy of inclusion is essentialDiversity is a strategic business imperative, a policy of inclusion is essential Sometimes dealing with it in an ethical behaviour with all people regardless of their individual difference will help to be successful in a diverse workforce.Sometimes dealing with it in an ethical behaviour with all people regardless of their individual difference will help to be successful in a diverse workforce.

19. Diversity (cont’d) Valuing Diversity –Emphasizing training employees of different races and ethnicity, religions, genders, ages, and abilities and with other differences to function together effectively. Managing Diversity –Emphasizes fully utilizing human resources through organizational actions that meet all employees’ needs. Managing diversity can only be successful with a change in culture.