Managing Change By Suhel Khan

Roadmap The context What is organizational change? Processes for managing change People and change Organizational Development Conflict resolution Fostering innovation

Ghoshal & Bartlett Old values: compliance, control, contract and constraint New values: discipline, support, trust and stretch Successful change involves simplification, integration, and regeneration Phased approach essential, along with focus on people’s attitudes, assumptions and behaviors Brings both organizational design and human resources lessons to bear Ghoshal and Bartlett provide a high-level model for change, let’s look at some of the details and lessons learned at a more granular level April 27, 2006

What is Organizational Change? An alteration of an organization’s environment, structure, culture, technology, or people A constant force An organizational reality An opportunity or a threat Change agent A person who initiates and assumes the responsibility for managing a change in an organization April 27, 2006

Basic Questions for Change Agents What are the forces acting upon me? What are the pressures I should take into consideration as I decide what to change and how I should change it? What should we change? Should the changes be strategic and companywide or relatively limited? How should we change it? How should we actually implement the change? April 27, 2006 G.Dessler, 2003

Forces for Change External Forces Internal Forces Competition Laws and regulations Strategy modifications New technologies New equipment Labor market shifts New processes Business cycles Workforce composition Social change Job restructuring Compensation and benefits Labor surpluses and shortages Employee attitude April 27, 2006 Prentice Hall, 2002

Three Categories of Change Organizational Culture April 27, 2006 Prentice Hall, 2002 LIS580- Spring 2006

Model for Planned Organizational Change April 27, 2006 Source: Adapted from Larry Short, “Planned Organizational Change,” MSU Business Topics, Autumn 1973, pp. 53–61 ed. Theodore Herbert, Organizational Behavior: Readings and Cases (New York: McMillan, 1976), p. 351. FIGURE 8–1 G.Dessler, 2003 LIS580- Spring 2006

Two Views of the Change Process “Calm waters” metaphor A description of traditional practices in and theories about organizations that likens the organization to a large ship making a predictable trip across a calm sea and experiencing an occasional storm “White-water rapids” metaphor A description of the organization as a small raft navigating a raging river April 27, 2006 LIS580- Spring 2006 Prentice Hall, 2002

Change in “Calm Waters” Kurt Lewin’s Three-Step Process Unfreezing The driving forces, which direct behavior away from the status quo, can be increased The restraining forces, which hinder movement from the existing equilibrium, can be decreased The two approaches can be combined Implementation of change Refreezing April 27, 2006 LIS580- Spring 2006 Prentice Hall, 2002

Change in “White-water Rapids” Change is constant in a dynamic environment The only certainty is continuing uncertainty Competitive advantages do not last Managers must quickly and properly react to unexpected events Be alert to problems and opportunities Become change agents in stimulating, implementing and supporting change in the organization April 27, 2006 LIS580- Spring 2006 Prentice Hall, 2002

Is a New Structure Really Required? When you identify a problem with your design, first look for ways to fix it without substantially altering it. If that doesn’t work, you’ll have to make fundamental changes or even reject the design. Here’s a step-by-step process for resolving problems. April 27, 2006 Source: Adapted from Michael Goold and Andrew Campbell, “Do You Have a Well-Designed Organization?” Harvard Business Review, March 2002, p. 124. LIS580- Spring 2006 FIGURE 8–2 G.Dessler, 2003

Is a New Structure Really Required? (cont’d) April 27, 2006 Source: Adapted from Michael Goold and Andrew Campbell, “Do You Have a Well-Designed Organization?” Harvard Business Review, March 2002, p. 124. FIGURE 8–2b LIS580- Spring 2006 G.Dessler, 2003

A Nine-step Process For Leading Organizational Change Create a Sense of Urgency Decide What to Change Create a Guiding Coalition and Mobilize Commitment Develop and Communicate a Shared Vision Empower Employees to Make the Change Generate Short-Term Wins Consolidate Gains and Produce More Change Anchor the New Ways of Doing Things in the Company Culture Monitor Progress and Adjust the Vision as Required April 27, 2006 LIS580- Spring 2006 G.Dessler, 2003

Why People Resist Change April 27, 2006 LIS580- Spring 2006 Prentice Hall, 2002

How Immune Is the Person to Change? April 27, 2006 Source: Robert Kegan and Lisa Lahey, “The Real Reason People Won’t Change,” Harvard Business Review, November 2001, p. 89. FIGURE 8–3 LIS580- Spring 2006 G.Dessler, 2003

Dealing with Change April 27, 2006 LIS580- Spring 2006 G.Dessler, 2003

Barriers to Empowerment April 27, 2006 Source: Reprinted by permission of Harvard Business School Press. From Leading Change by John P. Kotter. Boston, MA. 1996, p. 102. Copyright © 1996 by the President and Fellows of Harvard College, all rights reserved. FIGURE 8–5 LIS580- Spring 2006 G.Dessler, 2003

Organizational Development Organizational Development (OD) An approach to organizational change in which the employees themselves formulate the change that’s required and implement it, usually with the aid of a trained consultant. April 27, 2006 LIS580- Spring 2006 G.Dessler, 2003

Human Process Interventions OD Interventions Human Process Interventions Aimed at enabling employees to develop a better understanding of their own and others’ behaviors for the purpose of improving that behavior such that the organization benefits. Sensitivity Training (Laboratory or T-groups) Purpose is to increase participants’ insight into their own behavior and that of others by encouraging an open expression of feelings in a trainer-guided group. April 27, 2006 LIS580- Spring 2006 G.Dessler, 2003

OD Interventions (cont’d) Team Building The process of improving the effectiveness of a team through action research or other techniques. Survey Research The process of collecting data from attitude surveys filled out by employees of an organization, then feeding the data back to workgroups to provide a basis for problem analysis and action planning. April 27, 2006 LIS580- Spring 2006 G.Dessler, 2003

April 27, 2006 LIS580- Spring 2006 G.Dessler, 2003

Technostructural Applications of OD Formal Structure Change Program An intervention technique in which employees collect information on existing formal organizational structures and analyze it for the purpose of redesigning and implementing new organizational structures. April 27, 2006 LIS580- Spring 2006 G.Dessler, 2003

Strategic Applications of OD Strategic Intervention An OD application aimed at effecting a suitable fit among a firm’s strategy, structure, culture, and external environments. Integrated Strategic Management An OD program to create or change a company’s strategy by: Analyzing the current strategy Choosing a desired strategy Designing a strategic change plan Implementing the new plan. April 27, 2006 LIS580- Spring 2006 G.Dessler, 2003

Organizational Stressors: Role Demands Role conflicts Work expectations that are hard to satisfy Role overload Having more work to accomplish than time permits Role ambiguity When role expectations are not clearly understood April 27, 2006 Prentice Hall, 2002 LIS580- Spring 2006

Conflict Handling Styles April 27, 2006 Source: Source: Kenneth W. Thomas, “Organizational Conflict,” ed., Steven Kerr, Organizational Behavior (Columbus, OH: Grid Publishing, 1979), in Andrew DuBrin, Applying Psychology (Upper Saddle River, NJ: Prentice Hall, 2000), p. 223. FIGURE 8–7 LIS580- Spring 2006 G.Dessler, 2003

Conflict Resolution Modes April 27, 2006 LIS580- Spring 2006 G.Dessler, 2003

Stimulating Innovation Creativity The ability to combine ideas in a unique way or to make unusual connections Innovation The process of taking a creative idea and turning it into a useful product, service, or method of operation Perception Incubation Inspiration April 27, 2006 Prentice Hall, 2002 LIS580- Spring 2006

Structural Variables Affecting Innovation Organic structures Positively influence innovation through less work specialization, fewer rules and decentralization Easy availability of plentiful resources Allow management to purchase innovations, bear the cost of instituting innovations, and absorb failures Frequent inter-unit communication Helps to break down barriers to innovation by facilitating interaction across departmental lines April 27, 2006 Prentice Hall, 2002 LIS580- Spring 2006