Managing Change

1. Chapter Sixteen Managing Change

2. Chapter Sixteen Outline • Models of Planned Change • Lewin’s Change Model • A Systems Model of Change • Kotter’s Eight Steps for Leading Organizational Change • Organizational Development • Understanding and Managing Resistance to Change • Why People Resist Change in the Workplace • Alternative Strategies for Overcoming Resistance to Change

3. Forces of Change External Forces:originate outside the organization. • Demographic Characteristics- the workforce is more diverse- there is a business imperative to effectively manage diversity • Technological Advancements- organizations are increasingly using technology as a means to improve productivity and market competitiveness • Market Changes- the emergence of a global economy is forcing companies to be more competitive and to do business differently- organizations are forging new partnerships and alliances aimed at creating new products and services • Social and Political Pressures- society and its legislative bodies can put pressure on organizations to change the way they do business – the tobacco industry is a good example

4. Forces of Change (continued) Internal Forces:originate inside the organization. • Human Resource Problems/Prospects- employees’ needs, job satisfaction, organizational commitment, behavior, and performance are forces of change- dissatisfied employees and high levels of absenteeism and turnover are signs that change is needed • Managerial Behavior/Decisions- the level of conflict between managers and their direct reports is a force for change- inappropriate leader behavior may result in employee problems requiring change- inequitable reward systems are an additional force for change

5. Forces of Change (exercise) Intel (Opening story): What are the key reasons for pursuing change? What changes are being pursued? Sources of resistance?

6. Forces of Change (continued) Internal Forces: originate inside the organization. Organizational objectives not being met is a reason for change – question of timing degree of change necessary

7. 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

8. Kotter’s Steps for Leading Organizational Change Step Description • Establish a sense Unfreeze the organization by creating aof urgency compelling reason for why change is needed. • Create the guiding Create a cross-functional, cross-level group ofcoalition people with enough power to lead the change. • Develop a vision Create a vision and strategic plan to guide theand strategy change process. • Communicate the Create and implement a communication strategychange vision that consistently communicates the new vision and strategic plan. • Empower broad- Eliminate barriers to change, and use targetbased action elements of change to transform the organization. Encourage risk taking and creative problem-solving.

9. Kotter’s Steps for Leading Organizational Change (continued) Step Description • Generate short- Plan for and create short-term “wins” orterm wins improvements. Recognize and reward people who contribute to the wins. • Consolidate gains The guiding coalition uses credibility fromand produce more short-term wins to create more change.change Additional people are brought into the change process as change cascades throughout the organization. Attempts are made to reinvigorate the change process. • Anchor new Reinforce the changes by highlightingapproaches in the connections between new behaviors and culture processes and organizational success. Develop methods to ensure leadership development and successes.

10. Resistance To Change Resistance to Change:an emotional/behavioral response to real or imagined work change. The leading reasons why people resist change are: • An individual’s predisposition toward change • Surprise and fear of the unknown • Climate of mistrust • Fear of failure • Loss of status and/or job security

11. Resistance to Change (cont) • Leading Reasons Why People Resist Change (cont): • Peer pressure • Disruption of cultural traditions and/or group relationships • Personality conflicts • Lack of tact and/or poor timing • Nonreinforcing reward systems For Class Discussion: What do you think are the top three reasons people resist change?

12. Assessing an Organization’s Readiness for Change • Why is readiness for change an important consideration? • What survey questions resulted in the lowest readiness for change? Why did this occur? • What can managers do to prepare an organization for change?

13. Strategies for Overcoming Resistance to Change Education + Communication Participation + Involvement Where the initiators do not have all the information they need to design the change and where others have considerable power to resist Where there is a lack of information or inaccurate information and analysis Once persuaded, people will often help with the implementation of the change People who participate will be committed to implementing change, and any relevant information they have will be integrated into the change plan Can be very time consuming if lots of people are involved Can be very time consuming if participators design an inappropriate change Approach Commonly Used in Situations Advantages Drawbacks

14. Strategies for Overcoming Resistance to Change (continued) Facilitation + Support Negotiation + Agreement Where someone or some group will clearly lose out in a change and where that group has considerable power to resist Where people are resisting because of adjustment problems No other approach works as well with adjustment problems Sometimes it is a relatively easy way to avoid major resistance Can be time consuming, expensive, and still fail Can be too expensive in many cases if alerts others to negotiate for compliance Approach Commonly Used in Situations Advantages Drawbacks

15. Strategies for Overcoming Resistance to Change (continued) Manipulation + Co-optation Explicit + Implicit Coercion Where speed is essential and where the change initiators possess considerable power Where other tactics will not work or are too expensive It can be a relatively quick and inexpensive solution to resistance problems It is speedy and can overcome any kind of resistance Can lead to future problems if people feel manipulated Can be risky if it leaves people mad at the initiators Approach Commonly Used in Situations Advantages Drawbacks