Chapter 16 Organizational Change

What Are the Forces Acting as Stimulants to Organizational Change? Evolving nature of workforce Technological advances Economic shocks Heightened competition Social and consumer trends World politics and globalization The forces for organizational change are both internal (in the processes and people) and external (in the environment). External forces for change are part of the general and business environment. Demographic changes in an organization’s workforce or customer base typically require adjustments to its culture and strategy. Social trends, such as demand for environmentally safe products, can cause change. Organizations must adjust internal procedures as governments change labor laws, financial regulations, or ownership requirements. And organizations must react to changes in business and industry, stay ahead of competition, and respond to customers. Internal forces for change arise from inside and relate to internal functions. Poor quality or inefficiency will require changes to close the performance gap: the difference between expected and actual performance. Other internal forces for change include a new mission and new leadership. While these forces do not always occur together, they are often closely related. 4

Individual Barriers to Change (textbook’s) Habits Need for security Economic fears Fear of unknown Selective information processing

Individual Barriers to Change (M. Stevens’) Cognitive barriers (knowing) Limited mental models Self-awareness biases Skill-set barriers (doing) Affective barriers (feeling) Character/values barriers (being)

Organizational Barriers to Change Structural inertia Limited focus of change (no “systems” view) Group inertia and constraints Threats to specialized expertise Threats to established power relationships Threats to established resource allocations

Dealing With Resistance Change agents/champions Education and communication Participation and involvement Building emotional commitment Implementation with fairness Cooptation and manipulation Better selection on front end Explicit and implicit coercion Education and communication provide information in various ways, such as face-to-face meetings or newsletters. Even though such methods can be time consuming, they can reduce the fear of the unknown, build trust, and minimize group resistance. Participation and involvement rely on input from those affected by a change to design and implement it. If managers lack the power or information to implement a change, such tactics can increase the commitment of employees. Facilitation and support (active listening and supportive communication) are highly effective in reducing individual resistance to change. Negotiation and agreement offer incentives or trade-offs in exchange for the acceptance of change. These methods are effective with powerful individuals and cohesive teams. Manipulation and cooptation reduce resistance to change by refocusing the attention of employees or bribing them to cooperate. Such techniques will not be effective in the long-run. Coercion forces the acceptance of change. Even though it works quickly in most situations, it will not build commitment and may backfire in the long-run. 9

Lewin’s Force Field Analysis Changing Refreezing Unfreezing In the 1950s, Kurt Lewin proposed the Force Field Analysis of Change which asserts that organizations contain forces that either drive or resist change. If these forces are balanced, the status quo remains. If change forces are stronger than resistance forces, however, change occurs in a three-stage process. The first stage is unfreezing which involves questioning existing practices and developing motivation to change. Becoming aware of the need for change weakens resistance forces and strengthens change forces. The second stage is changing. New practices and policies are implemented and new behaviors are learned while work processes are being transformed. The final stage is refreezing. New practices, policies, behaviors, and processes are encouraged and supported. Key factors during this stage are coaching, training, and rewarding employees. Lewin’s model is based on four ideas: (1) the importance of recognizing the need for change and of being motivated to implement it; (2) the presence of resistance to change; (3) the importance of people as the source of learning and change; and (4) the need to support new behaviors. 10

Kotter’s Eight Step Process Create urgency Form coalition Create new vision Communicate the vision Empower others Reward “wins” Consolidate improvements Movement The planned process of change follows six steps. The first step is for managers and employees to recognize their dissatisfaction with current levels of performance. Recognition of the need for change starts the process of unfreezing described in Lewin’s model. The next step is the development of alternative ideas for change by managers, employees, or customers. Steps three and four are adoption and implementation of the change plan. These steps are similar to Lewin’s change phase. The final two steps--allocation of resources to make the change and evaluation--support the implementation phase. The process can originate at and be implemented by different levels within the organization. Top-down change is initiated and planned by managers at the top of the organization. Employees at lower levels implement the change and manage its effects. This type of change works best in hierarchical or traditional command-and-control organizations. Bottom-up-change is initiated, planned, and implemented by employees at low levels of the organization. Boundaryless and team-based organizations rely on bottom-up-change to empower employees. This type of change requires the involvement and participation of employees to minimize their resistance. But unless it is endorsed by top-management, they may not support it, no matter how involved employees may be. Refreezing Unfreezing Reinforce the change 12

Organizational Development A collection of planned-change interventions that seek to improve organizational effectiveness and employee well-being. Based on humanistic & democratic values: Respect for people Trust and support Power equalization Confrontation Participation

Typical OD Interventions Sensitivity Training Changing behavior through unstructured group interaction Survey Feedback Gathering data and acting on it Process Consultation Using outside consultants Appreciative Inquiry Discovering what the organization does right

Creating a Culture for Change Innovation: New ideas applied to initiating or improving a product, process, or service. Sources: Structural: Highly communicative, organic structures, slack resources, and managers with long tenure. Cultural: Encourage experimentation, reward both successes and failures, and celebrate mistakes. Human Resources: Actively promote training and development, offer high levels of job security, and use change/idea champions.

Idea Champions Champions: People who actively and enthusiastically promote an idea, build support, overcome resistance, and ensure that innovation is implemented. These people: Have high self-confidence, persistence, energy; Have high tolerance for risk; Use inspiration and vision to gain commitment; Have decision-making discretion.

Contemporary Issues Technology in the Workplace Work Stress Creating Learning Organizations

A. Technology in the Workplace Continuous Improvement Process: Goal is constant reduction in variability Uniformity results in lower costs, higher quality, and increased stress Process Reengineering: How you would do things if you could start over from scratch Very stressful for everyone

B. Work Stress Stress: A dynamic condition in which an individual is confronted with an opportunity, constraint, or demand related to what is desired and for which the outcome is perceived to be both uncertain and important. Two types of stress: Challenge Stress: Typically improves performance Hindrance Stress: Comes from obstacles to achieving goals (mostly negative).

Strategies for Managing Stress Organizational Personal Employee Selection Org. Communication Goal-setting Programs Job Redesign Counseling Time Management Physical Activity Note: Managers have no direct control over personal (or life) stressors and as a result should be aware that there are ethical considerations about intruding into employees’ personal lives.

C. Creating a Learning Organization An idealized organization that has developed the continuous capacity to adapt and change. Types of Learning: Single-Loop: Error correction process that relies on past routines and present policies. Double-Loop: Errors are corrected in ways that involve modification of the organization’s objectives, policies and standard routines (typically used by learning organizations).

Five Basic Characteristics of a Learning Organization People in a learning organization: Are willing to put aside old ways of thinking; Learn to be open with each other; Understand how the organization really works; Form plans or visions that everyone agrees on; Work together to achieve that plan or vision.

Learning Organizations... Solve three fundamental problems of traditional organizations: Fragmentation (due to functional silos) Competition (overemphasis undermines collaboration) Reactiveness (“firefighting”) To Manage the Learning Process: Proactively establish a strategy Redesign the organization’s structure Reshape the organization’s culture