Chapter 16 Nelson & Quick Managing Change Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.

Organizational Change Managers must be prepared to handle both 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

External Forces for Change Globalization Workforce Diversity Changing Technology Ethical Behavior

Majority of new workers will be female Workforce will grow in diversity - more Hispanics & African Americans Workforce is aging - less young workers, more middle-aged Globalization Workforce Diversity Organizations must rethink the most efficient ways to Use resources Disseminate/gather information Develop people Mental Change Structural Change &

Technological Change Changes in work relationships Changes in organizational structure Treatment Ethical Other Organizations Customers Environment Society Changing Technology Ethical Behavior

Internal Forces for Change Declining Effectiveness Changing Employee Expectations Company Crisis Changing Work Climate

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

The Change Agent’s Role Change Agent - the individual or group who undertakes the task of introducing and managing a change in an organization The change agent can be internal or external

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

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

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

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

Reactions to Change & Managerial Interventions Reaction Disengagement psychological withdrawal from change Disidentification feeling that one’s identity is being threatened by change Disenchantment feeling negativity or anger toward a change Disorientation feelings of loss and confusion due to change Expression Withdrawal Sadness, worry Anger Confusion Managerial Intervention Confront, identify Explore, transfer Neutralize, acknowledge Explain, plan Table adapted from H. Woodward and S. Buchholz. Aftershock: Helping People through corporate Change, p. 15. Copyright © 1987 John Wiley & Sons, Inc. Reprinted by Permission of John Wiley & Sons, Inc.

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

Force Field Analysis of Decision to Engage in Exercise Forces for change Weight gain Minimally passing treadmill test Feel lethargic; have no energy Family history of cardiovascular disease New, physically demanding job Forces for status quo Lack of time No exercise facility at work Spouse/partner hates to exercise No interest in physical activity or sports Made a grade of D in physical education class Equilibrium

Applying Lewin’s Model to the Organization  Unfreezing: the organization eliminates rewards for current behavior  Moving: the organization initiates new options and explains their rationale  Refreezing: organizational culture & formal reward systems encourage the new behaviors

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

Diagnosis & Needs Analysis Diagnosis and needs analysis InterventionFollow-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?

OD Intervention Methods: Organizational/Group Techniques 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

OD Intervention Methods: Organizational/Group Techniques Management by Objective - 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

OD Intervention Methods: Organizational/Group Techniques 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

OD Intervention Methods: Organizational/Group Techniques Team Building - an intervention designed to improve the effectiveness of a work group Seek feedback Discuss errors Reflect on successes & failures Experiment with new ways of performing Climate of psychological safety

OD Intervention Methods: Organizational/Group Techniques Large Group Interventions - events that bring all of the key members of a group together in one room for an extended period of time Outside consultants determine participants & goals Participants = critical mass supporting change

OD Intervention Methods: Organizational/Group Techniques 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

OD Intervention Methods: Individual-Focused Techniques Skills Training - increasing the job knowledge, skills, and abilities that are necessary to do a job effectively In formal classroom settings On the job (Continual updating)

OD Intervention Methods: Individual-Focused Techniques Sensitivity Training - an intervention designed to help individuals under- stand how their behavior affects others Outside trainer who intervenes only to move the group forward. Training can: help employees understand each other recognize their own feelings improve communication

OD Intervention Methods: Individual-Focused Techniques Management Development Training - a host of techniques for enhancing managers’ skills in an organization Verbal information Intellectual skills Attitudes Development

OD Intervention Methods: Individual-Focused Techniques Role Negotiation - a technique whereby individuals meet and clarify their psychological contract Outcomes: Better understanding of what each can be expected to give & receive Less ambiguity

OD Intervention Methods: Individual-Focused Techniques 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

OD Intervention Methods: Individual-Focused Techniques Health Promotion Programs Career Planning Ex. Stress reduction education, employee assistance Match individual’s career aspirations with organizational opportunities

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