Organizational Change and Development

1. Organizational Change and Development

2. Overview • Sources of change • Systems view of change • Sources of resistance to change • Overcoming resistance • Lewin’s 3-stage model • Organizational development

3. Sources of Change • Globalization • reductions in communications barriers • reductions in trade barriers • increased global competition • growth in international markets • Technology • ubiquity of computing • information based economy • e-commerce • CKO’s in 1/5 of F500

4. Sources of Change • Social change • aging workforce • increased diversity • increased demand for customized products • demand for faster, continuous, new product development • Other forces: • government regulation/de-regulation • competitors • suppliers

5. A Systems View of Change Work Process and work environment Strategy & Structure Culture

6. Changing Strategy & Structure • Changing goals and/or way the organization seeks to achieve its goals • may include reward systems; organizational policies; coordination devices; control systems etc. • Tends to be ‘top-down’ • requires support from lower levels of the organization • may include major changes to structure: e.g. outsourcing, alliances, networks, joint ventures

7. Changing Work Processes and Environment • Changes to how people do their work • includes production/process technology, job redesign, empowerment, QC’s, QWL. • Impetus for change is often from bottom of the organization • requires top management support

8. Changes to Culture • Changes to the shared norms, beliefs and values that guide behavior • Cultural change is often in the direction of increased flexibility, innovativeness, creativity • must involve the ‘whole’ organization • this type of change is ‘owned’ by everyone • requires supporting changes in structure (e.g. rewards) and processes (e.g. job design)

9. Individual Sources of Resistance to Change • Habit and Personality - cause people to respond to stimuli in the same way. • Fear of the Unknown - uncertainty about the alternative future and about one’s own skills and abilities • Fear of Personal Loss - e.g. loss of power, status, pay • Lack of Understanding and Trust - knowledge of the employer’s intentions

10. Organizational Sources of Resistance to Change • Limited focus of change efforts - must consider systems effects • Lack of coordination and cooperation - need to consider organizational interdependencies • Different assessments and goals - employees, managers, departments, other change agents • Established power relationships - e.g. supervisor-subordinate relations, mid and lower management

11. Overcoming Resistance

12. Lewin’s Three Stage Model of Change • Stage 1: Unfreezing - make employees aware of the problem(s) and the need for change • provide information about difference between current situation and desired state • Stage 2: Changing - shifting attitudes and behaviors towards the desired state • provide information and examples of desired beliefs and behaviors • Stage 3: Refreezing - stabilize change, integrate new behaviors, and reward them • show positive results of change, maintainance training

13. Example: Changing to JIT DRIVING FORCES RESTRAINING FORCES Cost savings Rail-freight system Fewer workers Facilities layout Worker skills Response to Market Union resistance A. Traditional Inventory System

14. Example: Changing to JIT REDUCED RESTRAINING FORCES DRIVING FORCES Cost savings Use of trucks Fewer workers Addition of docks Training program Response to Market Reassignment B. JIT Inventory System

15. Oganizational Development • Definition: • a planned, systematic change process, ... • ...based upon the behavioral sciences ... • ...with the aim of improving organizational effectiveness … • ...by improving internal relationships and increasing problem solving capabilities. • Focus of OD is the human and social aspects of the organization • Values of OD are fairness, openness, freedom from coercion, and individual autonomy

16. OD techniques • Survey feedback • surveys used to identify issues • Process consultation • focus on communication problems, leadership conflicts, decision making processes • Team building • building trust, cohesiveness and effectiveness • Intergroup activities • improving relationships between groups (e.g. ‘valentine’ game • Large group interventions