Chapter 18 Organizational Behavior: Foundations, Realities, & Challenges Nelson & Quick, 5th edition Managing Change

Organizational Change Unplanned Change – change that is imposed on the organization and is often unforeseen Planned Change – change resulting from a deliberate decision to alter the organization Managers must be prepared to handle both 2

External Forces for Change Workforce Diversity Globalization Changing Technology Ethical Behavior Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved 3

by South-Western, a division of Thomson Learning. Globalization Organizations must rethink the most efficient ways to Use resources Disseminate/gather information Develop people Majority of new workers will be female Workforce will grow in diversity - more Hispanics and African-Americans Workforce is aging - less young workers, more middle-aged Mental Change Structural Change and Workforce Diversity Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved 4

by South-Western, a division of Thomson Learning. Ethical Behavior Treatment Ethical Other Organizations Customers Environment Society Technological Change Changes in work relationships Changes in organizational structure Changing Technology Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved 5

Internal Forces for Change Company Crisis Declining Effectiveness Changing Employee Expectations Changing Work Climate Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved 6

Scope of Change Incremental Change – change of a relatively small scope, such as making small improvements Strategic Change – change of a larger scale, such as organizational restructuring Transformational Change – change in which the organization moves to a radically different, and sometimes unknown, future state 7

The Change Agent’s Role Change Agent – the individual or group who undertakes the task of introducing and managing a change in an organization Effective change leaders build relationships Within the leadership team Between the team and organizational members Between the team and key environmental players 8

Internal Change Agents Advantages know past history, political system, and culture must live with results of change so will move carefully Disadvantages may be associated with factions, accused of favoritism may be too close to the situation to be objective 9

External Change Agents Disadvantages limited knowledge of organization’s history may be viewed with suspicion Advantages outsider’s objective view impartiality To succeed, they must be perceived as trustworthy, be experts with proven track records, be similar to those they are working with 10

Resistance to Change Fear of the unknown Fear of loss Fear of failure Disruption of interpersonal relationships Personality conflicts Politics Cultural assumptions and values 11

Dealing with Resistance to Change Communication details rationale Participation in the process ownership commitment Empathy and support 12

Lewin’s Three-Step Change Model 1. Unfreezing – involves encouraging individuals to discard old behaviors by shaking up the equilibrium state that maintains the status quo 2. Moving – new attitudes, values, and behaviors are substituted for old ones 3. Refreezing – involves the establishment of new attitudes, values, and behaviors as the new status quo 14

Applying Lewin’s Model to the Organization Unfreezing Moving Refreezing Reducing forces For status quo Developing new attitudes, values, and behaviors Reinforcing new attitudes, values, and behaviors Unfreezing: the organization eliminates rewards for current behavior Moving: the organization initiates new options and explains their rationale Refreezing: organizational culture and formal reward systems encourage the new behaviors 16

Organizational Development (OD) Organizational Development (OD) – a systematic approach to organizational improvement that applies behavioral science theory and research in order to increase individual and organizational well-being and effectiveness 17

Diagnosis and Needs Analysis Intervention Follow-up Ask What are the forces for change? What are the forces preserving the status quo? What are the most likely sources of resistance? What are the goals to be accomplished by change? 18

Ethical Considerations in Organizational Development Selection of the OD method Voluntary participation Confidentiality Potential for manipulation by the change agent 25