Organizational Change: Two Metaphors Calm Waters (Incremental) White Water Rapids (Radical) 2

Forces for Change External: Internal: Customers Financial Problems Competitors Technology Economic Social Political International Internal: Financial Problems Production Inefficiencies Employee Expectations/ Demands Management Goals 14

Steps in the Organizational Change Process Assess need for change Find source of problem Decide on the Identify obstacles Implement Change Top-down or Bottom-up Evaluate Change Is it successful?

Types of Changes Technology Product/Service Strategy/Structure People/Culture (Usually, more than one change at a time) 29

Technology Change Generally, technology change is “bottom-up” Facilitated by “Ambidextrous” approach looser structure for innovation than for established activities 29

Product/Service Change Innovation often requires expertise from several departments simultaneously (e.g., Marketing, R&D, Manufacturing) “Bottom-Up after Horizontal-Linkage” Horizontal Linkage Model: Specialized departments Horizontal linkages Boundary spanning 30

Horizontal Linkage Model 25

New-Venture Teams Separate unit to develop and initiate innovations Small, Organic Relatively free from organizational bureaucracy Most effective when placed high in the organizational structure 22

Strategy/Structure Change Mission, General Goals Structural Design, Administrative Procedures, Management Systems Usually “top-down” 31

People and Culture Changes TQM - Total Quality Management OD - Organizational Development

Organizational Development Use of behavioral science knowledge to promote people/culture changes such as: Skill Development Attitude Change Teamwork 33

OD Can Help Managers Address-- Organizational decline Conflict management Mergers/Acquisitions 34

OD Techniques Individual: Job Training Career Planning Coaching, Counseling Group: Sensitivity Training Role Playing Team-building The following can include large portions and even the Entire Organization: Survey-feedback Intergroup activities Process-consultation 35

Why People Resist Change Personal preference for sameness Fear of the unknown Climate of mistrust Fear of failure Loss of status and/or job security Disruption of cultural traditions and/or group relationships

Lewin’s Force Field Analysis: Decision to Engage in Exercise Forces for Change (Driving) Weight gain Minimally passing treadmill test Feel lethargic, having no energy Family history of cardiovascular disease New, physically demanding job Forces for Status Quo (Restraining) 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 a physical education class. Equilibrium

Driving Forces of Change Restraining Forces against Change FORCE FIELD ANALYSIS Current High Cost Level Driving Forces of Change Historically good company-union relations Foreign competition Recent company losses Cheaper sources available outside Union desire to save jobs Company desire for flexibility in layoff decisions Desired Lower Deteriorating company- union relations Stringent work rules Current benefit costs Current pay costs Employee absenteeism levels Company reluctance to eliminate jobs Restraining Forces against Change 8 8 8

Lewin’s 3-Step Change Model Unfreezing Motivate Change (strengthen driving and/or weaken restraining forces) Change Use Effective Change Method Refreezing Solidify the Change Unfreezing Communication/Education Negotiation/Promise of Rewards Change Participation/Training/ Coercion Refreezing Reinforce with Resources/Rewards 27

Lewin’s Change Model Unfreezing - Creates the motivation to change - Encourages the replacement of old behaviors and attitudes with those desired by management - Entails devising ways to reduce barriers to change - Creates psychological safety •Changing - Provides new information, new behavioral models, or new ways of looking at things - Helps employees learn new concepts or points of view - Role models, mentors, experts, benchmarking results, and training are useful mechanisms to facilitate change Refreezing - Helps employees integrate the changed behavior or attitude into their normal way of doing things - Positive reinforcement is used to reinforce the desired change - Coaching and modeling help reinforce the stability of change