2. ORGANIZATIONAL CHANGE
Chapter 15
ORGANIZATIONAL CHANGE

3. 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

4. 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.

5. 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.

6. 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.

7. 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.

8. 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.

9. 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.

10. 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.

11. 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

12. 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

13. 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.

14. 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.

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