1. Organizational Change

2. Often viewed as the best part of the job by managers. Making the organization better. Putting a person stamp someplace. Having an impact. Managers careers often based on making positive changes.

3. Examples of change topics n Financial--Downsizing. Dealing with internal audit recommendations. EAI n Strategic--changing strategic goals (turnaround). Address IBM and EK n Organizational (higher levels) n Developing policies and procedures n New product development

4. n Implementing a new customer service program such as phone courtesy n Technology development n ISO certification n Adopting a common MIS platform across departments

5. Two cases n Success--IBM n Limited Success--Eastman Kodak

6. What did Gerstner do? n Retrenchment n Reanalyzed the market. Main Frame to PCs. Strength was service--consulting. This has been major growth area for IBM. n Money put into R and D. IBM leader in Patents.

7. We will continue to improve the execution of our strategies to produce marketplace wins, chiefly by strengthening and leveraging IBM's unique breadth of people, skills and technology — assets many of our competitors are trying furiously to replicate.

8. n Reorganized--Example with PC division. Cost cutting to be competitive with Dell. n Outsourcing production. Reduce parts and models, just in time delivery. Increasing inventory turns. n Created Single world wide sales division. (Functional overlay).

9. n New hires Gerstner. Hired Dell’s procurement manger. n Change culture from Academy to baseball team. Slow process. Top down, turnover, new hires. n Today--IBM rebound. Dominant player in PC market challenging Compaq. Loss of $7/share in 1993 to Gain of $6/share 1997. Major consultant #2.

10. n This summer near historic new highs, but caught in current down draft.

11. Eastman Kodak p. 423-424 n New CEO--Fisher.. n Slow to retrench--gentle touch and gradual. n Change culture and promote risk taking. n Strategy New products--Digital camera’s not player in the market. Royal Gold film.

12. Build a world-class, results-oriented culture... by providing customers and consumers with solutions to capture, store, process, output and communicate images to people and machines anywhere, anytime... bringing differentiated, cost-effective solutions... to the marketplace quickly and with flawless quality through a diverse team of energetic employees with the world-class talent and skills necessary to sustain Kodak as the World Leader in Imaging. In this way, we will achieve our fundamental objective of Total Customer Satisfaction, and our consequent goals of Increased Global Market Share and Superior Financial Performance."

13. n Change the culture--top down to teams. Slow to change. n Not the classic turnaround. Flat to declining sales.

14. Latest with EK n It has done large scale downsizing (Fall 97). In spite of continued loss of market to Fugi (largely based on price), profits finally increased 50% (Spring 98). Recent lowest price in 5 years. n Currently engaged in price war. n Profits simply based on reduced operating costs.

15. n Another corporate restructuring of the film division.

16. In teams n What are common elements n What are differences

17. Creating changes as a process.

18. Most important advice about creating change. n Its often political. n Within a department it may be less political. Example, reorganize jobs. n Between departments it highly political. n Culture wars.

19. Two aspects of Politics n Power (all people involved with change have some power) n Self-interest (all people involved with change have some self-interest) Some cases differentiation and sub goals.

20. n To create change you need to manage power issues and self-interest issues. n Important to not only gain acceptance but gain commitment to the change.

21. Following Dragonfly through Change n

23. n Usually identifying a gap and preparing for a change. Motivational. We have a problem and change is required. n Bad news is good news for change. n Opportunity seeking--changes in strategic orientation.

24. Waremart n How did ted unfreeze?

25. Resistance to Change Selective Information Processing Fear of the Unknown Force of Habit Need for Security Economic Factors Individual

26. Resistance to Change Organizational Threat to Existing Relationships Threat to Existing Allocations Structural Inertia Limited Focus of Change Threat to Expertise Group Inertia

27. Education and Communication CommunicationParticipationParticipation NegotiationNegotiationFacilitation and Support Facilitation CoercionCoercionManipulation and Cooptation Manipulation Overcoming Resistance to Change Overcoming

28. n What were sources of resistance?

31. Ted used which of these methods

32. IBM n Emphasized force coercion. (downsizing and dictate). Did use some others as well

33. EK used n Rational persuasion as first choice but used others too later (such as downsizing and restructuring). n Also tried shared power through teams and mixed success. Best example was Royal gold.

34. Tradeoffs between speed and acceptance n Downsizing which would probably be best. n Policies and procedures governing family leave which would be best.

36. Acceptance and continuity n Administrative support n Organizational support (restructure jobs) n Peer support

37. Resource support n Education n technology

38. Reward systems and motivation n Difficult

39. This is the execution. n Controlling issue. Monitor progress. n Early identification of problems. n Helps to share successes

40. Example n Cases to date. n Different ways to do it.

41. How do you manage change. n What would you do? n Sources of resistance? n How would you overcome those sources.

42. Summary n Managing change most demanding and challenging (in positive sense) part of the job. If you like this, excellent chance you will be a successful manager.

43. n Political--error assume boss orders it and it will occur. n Different ways to achieve results. Tradeoffs. n Resistance to change is critical aspect to manage and manage early in the process.

44. Short note on organizational development n Comprehensive effort to improve organizational adaptability and flexibility. n Change is constantly needed

45. Bottom up change n Top down change is often reactive. n Adaptive organizations need bottom up change. n Research clearly shows that bottom up change is about 10 time more likely to be successful than top down change. n P. 392 offers many different ways to promote OD. You are likely to be tested on this.