Organizational Behavior: An Introduction to Your Life in Organizations

1. Organizational Behavior:An Introduction to Your Life in Organizations Chapter 18 Changing Organizations ©2007 Prentice Hall

2. Preview • What is large scale organizational change and why do companies attempt it? • In large scale organizational change, what, exactly, changes? • How do managers structure a planned change? • How does the change process work?: Models • During planned change, how do individuals and organizations learn? • What are some key ethical dilemmas during organizational change? • What are some common problems during organizational change? • Which assumptions about change are important? • How do individuals react to change and how do managers deal with their reactions? • Are Western approaches to change exportable? ©2007 Prentice Hall

3. Planned and unplanned change • A major reason managers institute change is to control change rather than being victimized by it • Planned change: change that is systematic and relatively controlled ©2007 Prentice Hall

4. Forces for stability versus forces for change • Companies pursue organizational stability when they value: • Institutionalism • Reduction of transaction costs • Sustained competitive advantage • Companies pursue organizational change when they value: • Adaptability • Cost containment • Meeting the demands of impatient capital markets • Consolidation of control • Competitive advantage through organizational design ©2007 Prentice Hall

5. Traditional change: Implementing a corporate strategy • To effectively implement a change in a company’s strategy, managers must have skills in: • mobilizing the executives and employees • responding to objections and resistance • creating a sense of urgency • articulating the strategy • building coalitions to support the strategy • locating the right people for key jobs • preventing distractions ©2007 Prentice Hall

6. Organizational development • Organizational development (OD) is the use of social science knowledge to improve organizational effectiveness • Process for behavioral systems change that includes the five steps of: • Diagnosis • Feedback • Planning • Intervention • Follow-up evaluation ©2007 Prentice Hall

7. Appreciative inquiry • Identifies the positive characteristics of an organization and builds on them • Steps: • discovering and valuing the best of what has already existed in the organization • dreaming and envisioning what might be • dialoguing about what can be • co-constructing - democratically discussing and creating - what will be ©2007 Prentice Hall

8. Positive organizational behavior • The study and application of positively oriented human resource strengths and psychological capacities that can be measured, developed, and effectively managed to improve performance • Researcher Fred Luthans suggests strengthening self-efficacy strengthens organizations ©2007 Prentice Hall

9. A three-stage model of change • Kurt Lewin’s three-stage model of change: • Unfreezing • Changing • Refreezing • Force-field theory: there are always two sets of opposing forces - forces for change and forces against change; organization changes only when balance is changed ©2007 Prentice Hall

10. Punctuated equilibrium change • Suggests that in some organizations, long periods of equilibrium, when change is minimal and incremental, are interrupted by brief periods of radical organizational change • Organizations coast along indefinitely until forced to change by some mobilizing event ©2007 Prentice Hall

11. Continuous change • Significant change that is ongoing • Companies undergoing continuous change neither rigidly plan for change nor chaotically react to it • Managers may use semistructures, where some organizational features are determined and structured, while others are undetermined and flexible ©2007 Prentice Hall

12. Where do people learn best? And What do people learn? • Training consultants or own trainers • Self training or online training • Emphasis on real world training for applicability • Could be straightforward cognitive knowledge to complicated behavioral patterns (large range of possible topics) ©2007 Prentice Hall

13. How do organizations learn? • Building an organizational memory involves understanding how organizations learn, how knowledge is retained and transferred within an organization, and how errors are detected • Parallel learning structures: create the supplemental structures to enhance organizational learning, innovation and other issues related to organizational adaptation ©2007 Prentice Hall

14. What are some key ethical dilemmas during organizational change? • The nature of the information individuals are required to give to their organization for purposes of the change • The nature of the changes which are espoused • Who is to have a voice in creating the targeted organizational values ©2007 Prentice Hall

15. What are some common problems during organizational change? • permitting complacency • failing to create a sufficiently powerful guiding coalition • underestimating the power of vision • undercommunicating the vision • allowing obstacles to get in the way of the new vision • failing to create short-term wins • declaring victory too soon • neglecting to anchor changes firmly in corporate culture • weak transfer of training • employee silence ©2007 Prentice Hall

16. Which assumptions about change are important? • Should the change focus on the process or the problem? • Is change logical, or emotional? • Does change start at the top or the bottom of the company? • How is change disseminated? ©2007 Prentice Hall

17. How do individuals react to change and how do managers deal with their reactions? • People react to a change in complex ways that can be understood in terms of three factors: beliefs, emotions, and behaviors • First, people develop beliefs about a change • Second, they react emotionally to the change • Third, they plan or resolve to take some action based on the change ©2007 Prentice Hall

18. Individual predispositions toward change • Individuals differ in their readiness for change • Some people resist change because they strongly prefer routine, they react emotionally to change, or they have a short-term focus • Others resist because, regardless of the circumstances, they seldom change their mind • Still others enjoy change ©2007 Prentice Hall

19. What managers can do to foster change • Communicate to their employees the need for the change • Involve any likely resistors • Be supportive • Negotiate • Manipulate and co-opt • Coerce people to accept the change ©2007 Prentice Hall

20. Are Western approaches to change exportable? • Issues with using these ideas internationally: • Values may not support change methods • Cultural assumptions about the change process • Differences in attitudes toward OD interventions • Consider how the change process works in companies in transitional economies ©2007 Prentice Hall

21. Apply what you have learned • World Class Company: BP • Advice from the Pro’s • Gain Experience • Can you solve this manager’s problem? ©2007 Prentice Hall

22. Summary – What is large scale organizational change and why do companies attempt it? • Large scale organizational change is organization-wide • Companies attempt planned, large scale organizational change because they seek adaptability, cost containment, or competitive advantage, among other things ©2007 Prentice Hall

23. Summary – In large scale organizational change, what, exactly, changes? • Typically, companies change: • their strategy and their systems for implementing their strategy • power and decision making • organizational culture ©2007 Prentice Hall

24. Summary – How do managers structure a planned change? • The traditional way is by choosing a new corporate strategy and changing organizational systems accordingly • Other ways include organizational development, appreciative inquiry, and positive organizational behavior ©2007 Prentice Hall

25. Summary – How does the change process work? • Models of change include: • Lewin’s model • The punctuated equilibrium model • The continuous change model ©2007 Prentice Hall

26. Summary – During planned change, how do individuals and organizations learn? • Individuals learn either in training settings or on the job • Organizations are also said to learn, by developing such processes as organizational memory and parallel learning structures ©2007 Prentice Hall

27. Summary – What are some key ethical dilemmas during organizational change? • The nature of the information individuals are asked to give to their organization (should they have to reveal their individual values?) • The nature of the changes to be adopted ©2007 Prentice Hall

28. Summary – What are some common problems during organizational change? • Typical problems in organizational change are: • failures of communication • weak transfer of training from the training class to the organization • employee silence ©2007 Prentice Hall

29. Summary – Which assumptions about change are important? • Assumptions to examine include: • whether a change should focus on the process or the problem • whether it is logical or emotional • whether it should start at the top or the bottom of the company • how change is disseminated ©2007 Prentice Hall

30. Summary – How do individuals react to change and how do managers deal with their reactions? • Some individuals enjoy change and some don’t • Managers can deal with individual reactions by, among other things, communicating clearly the need for the change and involving potential resistors in the change ©2007 Prentice Hall

31. Summary – Are Western approaches to change exportable? • Only to some extent • While some change is logically based, many aspects of change are culture-dependent ©2007 Prentice Hall