1. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-1 Essentials of Organizational Behavior, 10/e Stephen P. Robbins & Timothy A. Judge Chapter 16 Organizational Change

2. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-2 After studying this chapter, you should be able to: 1.Identify forces that act as stimulants to change. 2.List the sources for resistance to change. 3.Compare the three main approaches to managing organizational change. 4.Describe the causes and consequences of work stress. 5.Describe characteristics of a learning organization. 6.Explain global differences in organizational change and stress.

3. 16-3 Forces that Stimulate Change

4. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-4 Sources of Resistance to Change Individual Habit Security Economic Factors Fear of the Unknown Selective Information Processing Organizational Structural Inertia Limited Focus of Change Group Inertia Threat to Expertise Threat to Established Power Relationships and Resource Allocations People tend to resist change, even in the face of evidence of its benefits.

5. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-5 Change Agents Persons in organization responsible for managing change activities Can be managers or non-managers, current employees, newly hired employees or outside consultants Outside consultants can provide objective perspectives, but don’t have to live with the consequences of change

6. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-6 Overcoming Resistance to Change 1.Education and Communication 2.Participation 3.Building Support and Commitment 4.Implementing Changes Fairly 5.Cooptation 6.Selecting People who Accept Change 7.Coercion

7. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-7 Approaches to Managing Organizational Change Lewin’s Three-Step Model of Change Kotter’s Eight-Step Model of the Change Process Organizational Development

8. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-8 Lewin’s Three-Step Model Unfreezing can be achieved by:  Increase driving forces that direct behavior away from the status quo  Decrease restraining forces that hinder movement from the existing equilibrium  Combine the two above approaches

9. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-9 Kotter’s Eight-Step Plan 1.Create urgency 2.Form coalition 3.Create new vision 4.Communicate the vision 5.Empower others 6.Reward “wins” 7.Consolidate improvements 8.Reinforce the change Unfreezing Movement Refreezing

10. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-10 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

11. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-11 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

12. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-12 Creating a Culture for Change Innovation: a new idea applied to initiating or improving a product, process, or service Sources:  Structural – verbose organic structures with slack resources and long-term managers  Cultural – encourage experimentation, reward success and failure, and celebrate mistakes  Human Resources – actively promote training and development, have high job security, use idea champions

13. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-13 Idea Champions Managers who actively and enthusiastically promote an idea, build support, overcome resistance, and ensure that innovation is implemented  Have high self-confidence, persistence, energy, and acceptance of risk  Use inspiration and vision to gain commitment  Have decision-making discretion

14. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-14 Contemporary Issues Technology in the Workplace Work Stress Creating Learning Organizations

15. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-15 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

16. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-16 Work Stress 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 Types:  Challenge Stress – may improve performance  Hindrance Stress – comes from obstacles to achieving goals – mostly negative

17. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-17 Managing Stress Organizational  Employee Selection  Organizational Communication  Goal-setting Programs  Job Redesign Personal Counseling Time Management Physical Activity Managers have no direct control on personal stress and there are ethical considerations about intruding into employees’ personal lives

18. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-18 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 relies on past routines and present policies  Double-Loop: errors are corrected in ways that involve the modification of the organization’s objectives, policies and standard routines – used by learning organizations

19. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-19 Five Basic Characteristics of a Learning Organization People in a learning organization: 1.Are willing to put aside their old ways of thinking 2.Learn to be open with each other 3.Understand how the organization really works 4.Can form a plan or vision that everyone agrees on 5.Can work together to achieve that vision

20. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-20 Learning Organizations Solves the three fundamental problems of traditional organizations:  Fragmentation – functional silos  Competition – overemphasis undermines collaboration  Reactiveness – ”firefighting” Managing Learning:  Establish a strategy  Redesign the organization’s structure  Reshape the organization’s culture

21. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-21 Global Implications Is managing change culture bound? 1.Do people believe change is possible? Yes, when people believe they control their environment 2.If it’s possible, how long will it take to bring about? Short-term focus cultures want fast results 3.Is resistance to change greater in some cultures than in others? Yes, traditional cultures resist change

22. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-22 Global Implications Continued 4.Does culture influence how change efforts will be implemented? Yes, high power distance cultures are autocratic 5.Do successful idea champions do things differently in different cultures? Yes, idea champions modified techniques based on culture Does stress vary across cultures?  The conditions that lead to stress may vary, but the personality effects, outcomes, and reduction methods do not

23. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-23 Implications for Managers The need for change encompasses almost aspects of OB The real world is turbulent, requiring organizations and their members to undergo dynamic change if they are to perform at competitive levels Managers must continually act as change agents

24. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-24 Keep in Mind… Organizations and their members tend to resist change It is unlikely that anyone approach to managing change we best in every situation Changes often stressful, but not all stress is harmful

25. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-25 Summary 1.Identified forces that act as stimulants to change. 2.Listed the sources for resistance to change. 3.Compared the three main approaches to managing organizational change. 4.Described the causes and consequences of work stress. 5.Described characteristics of a learning organization. 6.Explained global differences in organizational change and stress.

26. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16-26 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.