ORGANIZATIONAL CHANGE Chapter 15 ORGANIZATIONAL CHANGE

LEARNING OUTCOMES Define the concept of change Distinguish the forces of change Discuss the change process Identify causes of resistance to change Explain the ways to administer resistance to change

INTRODUCTION Change is inevitable. Some change can be initiated by the organization itself, otherwise the organization must learn how to respond and adapt quickly and effectively to the requirements of completely new circumstances.

CONCEPT OF CHANGE Organizational change is the movement of an organization from its existing situation to a more effective condition. There are two forms of change in an organization: Planned change: A change resulting from a deliberate decision to alter the organization. Unplanned change: A change that is imposed on an organization and is often unexpected.

INTERNAL FORCES FOR CHANGE Strategic Changes Change that occurs because of transformation in strategic management of a company would lead to decline in the workers’ effectiveness. Due to this strategic change, people will view the organization as being different and no longer feel the same about the organization. Cultural Changes People change due to habits. People do not like to be asked to do something opposite to what they have been doing previously.

INTERNAL FORCES FOR CHANGE (cont.) Needs and Values Many of today’s employees are leaning less towards financial rewards and more towards quality of life alternatives.

EXTERNAL FORCES OF CHANGE Workforce Diversification Workforce diversification is the differences of background, education, language skills, personality, preference, expectations and work role among the employees. Technology Rapid technological innovation is changing jobs and organizations. The transition from manpower to more computer control has increasingly enhanced division of authority.

EXTERNAL FORCES OF CHANGE (cont.) Globalization Competition Globalization describes a process by which regional economies, societies, and cultures have become integrated through a global network of communication, transportation and trade. Social Trends In the past two decades, evolution in social trends suggests that organizations change. Businesses like frozen meals, fast food and more have to cater for these changes to meet increasing demands. House-building businesses are also affected by social trend changes.

EXTERNAL FORCES OF CHANGE (cont.) Economic Shocks Unexpected pattern of global economic changes lead many businesses to bankruptcy. Economic problems lead to uncertainty and if organizations are not prepared for unplanned change, major breakdown will occur. World Politics A nation’s political stability is an important factor to determine the efficiency of a business.

THE CHANGE PROCESS Levin’s Three Steps Model Kurt Lewin’s change model emphasizes that effective change occurs by: Unfreezing the current situation Changing towards the desired situation Refreezing the changed situation so that it remains in the desired state

THE CHANGE PROCESS (cont.) Kotter’s Change Model Kotter’s first four steps focus on Lewin’s freezing stage. Step 5 to 7 represent the movement stage and the final step portrays the refreezing stage. Step 1: Create urgency Step 2: Form a powerful coalition Step 3: Create a vision for change Step 4: Communicate the vision Step 5: Remove obstacles Step 6: Create short-term wins Step 7: Build on the change Step 8: Anchor the changes in corporate culture

THE CHANGE PROCESS (cont.) THE CHANGE CURVE The Change Curve is developed by Elisabeth Kubler-Ross to explain the grieving process. It has been widely utilized as a method of helping people understand their reactions to significant change.

RESISTANCE TO CHANGE Logical Psychological Sociological It refers to reasons given based on rational and scientific evaluation. Psychological It refers to reasons given based on emotional sentiments and attitudes in human. Sociological It refers to reasons given based on interests of group and group values.

MANAGING RESISTANCE TO CHANGE Education and Communication Participation and Involvement Facilitation and Support Negotiation and Agreement Manipulation and Cooptation Explicit and Implicit Coercion