Chapter 18 Managing Change Identify the major external and internal forces for change in organizations. Describe how different types of change vary in scope. Discuss methods organizations can use to manage resistance to change. Explain Lewin’s organizational change model. Explain how companies determine the need to conduct an organizational development intervention. Discuss the major group-focused techniques for organization development intervention. Discuss the major individual-focused techniques for organization development intervention. Learning Outcomes © 2011 Cengage Learning. All rights reserved.

Organizational Changes Planned Change – change resulting from a deliberate decision to alter the organization Unplanned Change – change that is imposed on the organization and is often unforeseen © 2011 Cengage Learning. All rights reserved.

External Forces for Change Workforce Diversity Globalization Changing Technology Ethical Behavior © 2011 Cengage Learning. All rights reserved. 3

Globalization Organizations must rethink the most efficient ways to: Use resources Disseminate/gather information Develop people Globalization requires changes in structure and employee mindsets and © 2011 Cengage Learning. All rights reserved. 4

© 2011 Cengage Learning. All rights reserved. Workforce Diversity Workforce will see: Increased gender diversity Increased cultural diversity Increased age diversity © 2011 Cengage Learning. All rights reserved. 4

Organizations that fail to keep pace can quickly fall behind. Technological Change Organizations that fail to keep pace can quickly fall behind. Innovation promotes associated changes in work relationships and organizational structures. © 2011 Cengage Learning. All rights reserved. 5

Managing Ethical Behavior Organizations must create a culture that encourages ethical behavior. Society expects organizations to maintain ethical behavior internally and externally. © 2011 Cengage Learning. All rights reserved.

Internal Forces for Change Declining Effectiveness Changes in expectations Changes in work climate Crisis © 2010 Cengage Learning. All rights reserved. 3

© 2011 Cengage Learning. All rights reserved. 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 © 2011 Cengage Learning. All rights reserved. 7

© 2011 Cengage Learning. All rights reserved. The Change Agent Individual or group that undertakes the task of introducing and managing a change in an organization. Internal or external © 2011 Cengage Learning. All rights reserved. 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 © 2011 Cengage Learning. All rights reserved. 9

External Change Agents Advantages outsider’s objective view impartiality Disadvantages limited knowledge of organization’s history may be viewed with suspicion To succeed, they must be perceived as trustworthy, be experts with proven track records, be similar to those they are working with © 2011 Cengage Learning. All rights reserved. 10

© 2011 Cengage Learning. All rights reserved. Resistance to Change Fear of the unknown Fear of loss Fear of failure Disruption of interpersonal relationships Personality conflicts Politics Cultural assumptions and values © 2011 Cengage Learning. All rights reserved. 11

Dealing with Resistance to Change Communication details rationale Participation in the process ownership commitment Empathy and support © 2011 Cengage Learning. All rights reserved. 12

Lewin’s Three-Step Change Model Unfreezing – involves encouraging individuals to discard old behaviors by shaking up the equilibrium state that maintains the status quo Moving – new attitudes, values, and behaviors are substituted for old ones Refreezing – involves the establishment of new attitudes, values, and behaviors as the new status quo © 2011 Cengage Learning. All rights reserved. 14

Applying Lewin’s Model 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 © 2011 Cengage Learning. All rights reserved. 16

Organizational Development (OD) a systematic approach to organizational improvement that applies to organizational improvement in order to increase individual and organizational well-being and effectiveness © 2011 Cengage Learning. All rights reserved. 17

Group-Focused Techniques 5 Group-Focused Techniques Survey feedback Management by objectives (MBO) Product and service quality programs Team building Process consultation © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Survey Feedback A widely used method of intervention whereby employee attitudes are solicited by questionnaire Anonymous Group reporting format No repercussions Clear purpose Follow-up © 2011 Cengage Learning. All rights reserved. 19

Management by Objectives An organization-wide intervention technique of joint goal setting between employees and managers Initial objectives Periodic progress reviews Problem solving to remove obstacles to goal achievement © 2011 Cengage Learning. All rights reserved. 19

© 2011 Cengage Learning. All rights reserved. Quality Program A program that embeds product and service quality excellence into the organizational culture Raise aspirations about product/service quality Embed product/service quality excellence in the organizational culture © 2011 Cengage Learning. All rights reserved. 20

© 2011 Cengage Learning. All rights reserved. Team Building An intervention designed to improve the effectiveness of a work group Seek feedback Discuss errors Reflect on successes and failures Experiment with new ways of performing Climate of psychological safety © 2011 Cengage Learning. All rights reserved. 20

© 2011 Cengage Learning. All rights reserved. Process Consultation An OD method that helps managers and employers improve the processes that are used in organizations Outside consultant: Enters organization Defines the relationship Chooses an approach Gathers data Diagnoses problem Intervenes Leaves organization © 2011 Cengage Learning. All rights reserved. 21

Individual-Focused Techniques Skills training Leadership training & development Executive coaching Role negotiation Job redesign Health promotion programs Career planning © 2011 Cengage Learning. All rights reserved.

© 2011 Cengage Learning. All rights reserved. Skills Training increasing the job knowledge, skills, and abilities that are necessary to do a job effectively © 2011 Cengage Learning. All rights reserved.

Leadership Training & Development A variety of techniques that are designed to enhance individual’s leadership skills Action learning Simulation Business games Role-playing Case studies © 2011 Cengage Learning. All rights reserved. 22

© 2011 Cengage Learning. All rights reserved. Executive Coaching A host of techniques for enhancing managers’ skills in an organization Verbal information Intellectual skills Attitudes Development © 2011 Cengage Learning. All rights reserved. 23

© 2011 Cengage Learning. All rights reserved. Role Negotiation A technique whereby individuals meet and clarify their psychological contract Better understanding of what each can be expected to give and receive Less ambiguity © 2011 Cengage Learning. All rights reserved. 23

© 2011 Cengage Learning. All rights reserved. Job Redesign An OD intervention method that alters jobs to improve the fit between individual skills and the demands of the job Realign task demands and individual capabilities Redesign jobs to fit new techniques or organization structures © 2011 Cengage Learning. All rights reserved. 24

© 2011 Cengage Learning. All rights reserved. Health and Career Health Promotion Programs Ex. Stress reduction education, employee assistance Match individual’s career aspirations with organizational opportunities Career Planning © 2011 Cengage Learning. All rights reserved. 24