Chapter 18 Organizational Change and Development

1. Chapter 18Organizational Changeand Development

2. Learning Goals • Discuss the pressures on managers to change their organizations • Describe different types of organizational change • Explain the phases and targets of planned organizational change

3. Learning Goals (Cont.) • List some reasons for resistance to change in organizations • Describe the organizational development techniques managers can use to change their organizations • Understand some international aspects of organizational change and development

4. Chapter Overview • Introduction • Forces For and Against Change • Unplanned and Planned Organizational Change • Targets of Organizational Change • Planned Organizational Change • Resistance to Change

5. Chapter Overview (Cont.) • Organizational Development • International Aspects of Organizational Change and Development • Ethical Issues About Organizational Change and Development

6. Introduction • Organizational change involves movement from the present state of the organization to some future or target state • Future state can include a new strategy, new technology, or changes in the organization’s culture

7. Introduction (Cont.) Organizational change: moving from thepresent state of the organization to somefuture or target state. A A’ Time

8. Introduction (Cont.) • Many sources of pressure on managers to change their organizations exist and will continue in the future • Identify the pressures on organizations and their managers to change • Want to know the probable effects on you as a member of a changing system

9. Introduction (Cont.) • Know how to deliberately change an organization • Understand the sources of resistance to change • Learn how to manage the change process to reduce resistance

10. Forces For and Against Change • External forces for change • Competitors and markets • Acquisition threats • International: global markets • Workforce diversity • Quality management

11. Forces For and Against Change (Cont.) • Internal forces for change • High dissatisfaction • Felt stress • Loss of control of processes • Dysfunctionally high conflict • Slow decision making • High turnover and absenteeism • Communication dysfunctions

12. Forces For and Against Change (Cont.) • Forces against change • Internal: resistance to change from individuals and groups • External: special interest groups such as consumer groups and unions View the forces for and against change asa force field working on the organization

13. Forces For and Against Change (Cont.) A Force Field Present state ofthe organization Desired state ofthe organization Forces againstchange Forces forchange A A’ Time Text book Figure 18.1

14. Unplanned and PlannedOrganizational Change • Unplanned organizational change: forces for change overwhelm resistance to change • Planned organizational change: A deliberate, systematic change effort

15. Unplanned and PlannedOrganizational Change (Cont.) • Unplanned organizational change • Forces for change overwhelm resistance to change • Usually unexpected • Chaotic, uncontrolled change effects • Example: economic changes leading to reductions in workforce

16. Unplanned and PlannedOrganizational Change (Cont.) • Planned organizational change • A deliberate, systematic change effort • Change organizational design, information systems, job design, and people’s behavior • Although managers try to follow a plan, the change does not always move smoothly • The change effort often hits blockages, causing managers to rethink their goals and plan

17. Unplanned and PlannedOrganizational Change (Cont.) • Planned organizational change (cont.) • Phases • Define the desired future state of the organization • Diagnose the present state of the organization • Move the organization to the desired future state • A change agent helps managers to bring about planned change. An external or internal consultant

18. Targets of PlannedOrganizational Change • Organizational culture • Decision processes • Communication processes • Job design • Organizational design

19. Targets of PlannedOrganizational Change (Cont.) • Technology • Strategy Managers should choose the target only after careful assessment of the current state of the organizationand the need for change.

20. Targets of PlannedOrganizational Change (Cont.) A model for thinking about planned organizational change Targets Culture Technology Organizational design Job design External environment Mission Strategy

21. Planned Organizational Change • Reasons for planned organizational change • Managers react to environmental shifts • They anticipate the future state of the external environment • Often a difficult task. As noted by an organizational change scholar, “planned organization change is messy and never as clear as we have written in our books and articles”

22. Planned Organizational Change (Cont.) • Models of planned organizational change • Evolutionary model • Incremental change • Example: changing the organization’s pay scale to stay market competitive • Revolutionary model • Change many parts of an organization • Example: strategic shift

23. Planned Organizational Change (Cont.) • Evolutionary model of organizational change • Three phases with no distinct boundaries. Each phase blends into the next phase • A manager or other change agent develops a need for change among those affected • The change agent then tries to move the organization or part of it toward the changed state • The change agent tries to stabilize the change and make it a part of the organization

24. Planned Organizational Change (Cont.) • Evolutionary model of organizational change • Sees change happening in small bits that add to a total amount of change • Unexpected events can occur along the way, forcing a return to an earlier phase

25. Planned Organizational Change (Cont.) • Revolutionary model of organizational change • Organizational change unfolds over long periods of stability followed by bursts of major change activities • Uses three concepts • Equilibrium period: organization moves steadily toward its mission and goals • Revolutionary period: a major change in the strategic direction of the organization • Deep structures: enduring features of the organization that let it succeed

26. Planned Organizational Change (Cont.) • Revolutionary model of organizational change (cont.) • Two events trigger a revolutionary period • Dissatisfaction with the organization's performance • Strong feelings among organization members that it is time for change

27. Planned Organizational Change (Cont.) • Revolutionary model of organizational change (cont.) • Dissatisfaction with the organization's performance • Misfit between the organization’s deep structure and its current environment • Follows a clear organizational failure or when many believe failure is imminent

28. Planned Organizational Change (Cont.) • Revolutionary model of organizational change (cont.) • Strong feelings among organization members that it is time for change • Organization members feel uneasy with the current equilibrium period • Develop feelings of little forward movement • Characterizes organizations that must shift direction

29. Resistance to Change • No matter what the target, changes affect the social system of an organization • People develop long-standing, familiar patterns of social interaction • Strong resistance develops when organizational change affects these social networks

30. Resistance to Change (Cont.) • Resistance can take many forms • Lack of cooperation with the change effort • Sabotage of the change effort • Dysfunctionally high conflict levels

31. Resistance to Change (Cont.) • Reasons for resistance to change • Perceive the loss of something valued such as social status • Misunderstand the goal of the change • Distrust the change agent • No common perception of the value of the change • Low tolerance for change

32. Resistance to Change (Cont.) • Manager’s orientation to resistance to change • Problem to overcome • Forcefully reduce resistance • Can increase resistance • Signal to get more information • Affected targets may have valuable insights about the change’s effects • Change agent can involve the targets in diagnosing the reasons for the resistance

33. Resistance to Change (Cont.) • Manager’s orientation to resistance to change (cont.) • Absence of resistance • Also a signal to get more information • Low commitment to the change can make the change less effective • Resisters can focus the change agents on potentially dysfunctional aspects of a proposed change

34. Resistance to Change (Cont.) • Managing the change process to reduce resistance • Use change agents with characteristics similar to the change target • Use dramatic ceremonies and symbols to signal disengagement from the past • Widely communicate information about the change

35. Resistance to Change (Cont.) • Managing the change process to reduce resistance (cont.) • Involve those affected by the change • Commit enough resources • Negotiation may be necessary, when a powerful person or group is a potential source of resistance

36. Resistance to Change (Cont.) • Managing the change process to reduce resistance (cont.) • Cooptation: a political tactic that aims to gain endorsement of the change from important individuals or groups • Sometimes no choice other than to force change onto the target system

37. Organizational Development • Organizational development is a long-term, systematic, and prescriptive approach to planned organizational change • Although it uses a system-wide view, it can focus on single subsystems of an organization • Applies the theories and concepts of the social and behavioral sciences to organizational change

38. Organizational Development (Cont.) • Tries to develop an organization’s self-renewing capacity • Tries to create an organization that can continuously improve • Views conflict as an inevitable part of organizational life

39. Phases of Organizational Development (Cont.) • Organizational development unfolds in a series of phases • These are phases, not steps, because no clear boundaries exist between them • Phases can repeat. For example, during the evaluation phase, managers may discover a need for more data from the diagnosis stage See text book Figure 18.2

40. Phases of Organizational Development (Cont.) • Entry • First contact of the consultant with the client • Usually client initiates contact • Building a client-consultant relationship • Mutual evaluation of each other • Decide they can develop a compatible working relationship

41. Phases of Organizational Development (Cont.) • Contracting • Develop an agreement between the consultant and client • Can range from an oral agreement to a legally binding agreement • Describes mutual expectations and each party’s duties • Not static. Subject to renegotiation as the organizational development program unfolds

42. Phases of Organizational Development (Cont.) • Diagnosis • Consultant gets information about the client system and diagnoses its current state • Observe the client’s behavior and reactions • Observe physical characteristics of system • Systematic data collection using surveys, interviews, and company records • Consultant summarizes this phase’s results for feedback to the client system

43. Phases of Organizational Development (Cont.) • Feedback • Consultant has a series of feedback meetings with client system members • The number of meetings varies according to the scope of the organizational development program • Several steps: (1) consultant’s analysis; (2) discussion; (3) consultant’s preliminary diagnosis; and (4) actively work with members of client system to arrive at collaborative diagnosis

44. Phases of Organizational Development (Cont.) • Planning the change • A collaborative activity between the consultant and client system • Identify alternative courses of action and the effects of each • Lay out the steps in the change program • Client decides the nature of the change program--not the consultant

45. Phases of Organizational Development (Cont.) • Intervention • Collaborative intervention to move the client system to the desired future state • Includes job and organizational design changes, conflict reduction program, and the like. See the “Organizational Development Interventions” section of the chapter • Consultant’s role: help the intervention and forecast dysfunctional results • Earlier client involvement helps reduce resistance to change in the intervention phase

46. Phases of Organizational Development (Cont.) • Evaluation • Focuses on whether the organizational development effort had the desired effect • Ranges from simply asking how the client feels to a well-designed research effort • Done independently of the consultant • Should also give the client system information about the next steps to take

47. Phases of Organizational Development (Cont.) • Termination • Ends at some point • Client terminates consultant • As the client system changes and develops, the external consultant reduces involvement • Internal consultants are part of the organization and can continue contact • The goal is independence of the client system from the consultant. Build client system self-reliance

48. Organizational Development Interventions • Many interventions exist for organizational development programs • Systematic techniques drawn from the behavioral sciences • Earlier chapters have detailed descriptions of the interventions summarized here

49. Organizational Development Interventions (Cont.) • Human process interventions • Focus on interpersonal, intra-group, and intergroup processes • Includes conflict, communication and decision making • Goal: improve human processes to get more effective organizational functioning

50. Organizational Development Interventions (Cont.) • Structural and technological interventions • Focus on organizational design, job design, and the addition of new technology • New technology focuses on improving organizational processes • Goal: improve human productivity and organizational effectiveness