Organizational Change

1. Organizational Change Chapter 18

2. Organizational Change • All companies must change in order to remain competitive • Change is difficult • Organizational Inertia • There are benefits to stability

3. Forces of Change External Demographic Characteristics Technological Advancements Shareholder, Customer, and Market Changes Social and Political Pressures The Need for Change Internal Human Resource Problem/Prospects Managerial Behavior/Decisions

4. Types of Organizational Change Radically Innovative Change Adaptive Change Innovative Change Introducing a practice new to the organization Reintroducing a familiar practice Introducing a practice new to the industry Low High • Degree of complexity, • cost, and uncertainty • Potential for • resistance to change

5. Lewin’s Change Model • Unfreezing • Creates the motivation to change • Benchmarking Data • Financial data, emerging trends • Changing • Provides new information, new behavioral models, or new ways of looking at things • Refreezing • Helps employees integrate the changed behavior or attitude into their normal way of doing things

6. Assumptions of Lewin’s Model • Change involves learning something new & unlearning the old way of doing things • Change will not occur without motivation • People are the hub of all organizational change • Resistance to change is found even when change is desirable

7. A Systems Model of Change Target Elements of Change Organizing Arrangements Inputs Outputs • Internal • Strengths • WeaknessesExternal • Opportunities • Threats • Internal • Organizational • level • Department/ • group level • Individual level Social Factors Strategy People Goals Methods

8. Establish a sense of urgency Unfreeze the organization by creating a compelling reason for why change is needed • Create the guiding coalition Create a cross-functional, cross-level group of people with enough power to lead the change • Develop a vision and strategy Create a vision and strategic plan to guide the change process • Communicate the change-vision Create and implement a communication strategy that consistently communicates the new vision and strategic plan Table 18-1 Kotter’s Eight Steps for Leading Organizational Change Step Description

9. Empower broad-based action Eliminate barriers to change, use target elements of change to transform the organization • Generate short-term wins Plan for and create short-term “wins” or improvements • Consolidate gains and produce more change The guiding coalition uses credibility from short-terms wins to create change. Additional people are brought into the change process as change cascades throughout the organization • Anchor new approaches in the culture Reinforce the changes by highlighting connections between new behaviors and processes and organizational success Table 18-1 Kotter’s Eight Steps for Leading Organizational Change Step Description

10. Organizational Development

11. Resistance to Change • Emotional/behavioral response to threats to an established work routine • Passive or active • One of three possible outcomes of influence attempts (Compliance & commitment)

12. Recipient Characteristics & Resistance • Resilience to change • Self-esteem, optimism, internal locus of control • Fear of the unknown • Fear of failure • Loss of status/job security • Peer pressure • Past success

13. Change Agent Characteristics & Resistance • Disruption of culture or group relationships • Personality conflicts • Lack of tact or poor timing • Leadership style • Failure to legitimize change

14. Education and Communication There is a lack of information or inaccurate information & analysis Once persuaded, people will often help with implementation of change Can be very time consuming if lots of people are involved Participation and Involvement The initiators do not have all the information they need to design the change & others have considerable power to resist People who participate will be committed to the implementation of change Can be very time consuming if participators design an inappropriate change Facilitation and Support People are resisting because of adjustment problems No other approach works as well with adjustment problems Can be very time consuming, expensive and still fail Overcoming Resistance to Change Approach Commonly Used in Situations Where: Advantages Drawbacks

15. Negotiation and Agreement Someone or some group will clearly lose out in a change and where that group has considerable power to resist Sometimes it is a relatively easy way to avoid major change Can be too expensive in may cases if it alerts other to negotiate for compliance Manipulation andCo-optation Other tactics will not work or are too expensive It can be relatively quick and inexpensive Can lead to future problems if people feel manipulated Explicit and Implicit Coercion Speed is essential and where the change initiators possess considerable power It is speedy and can overcome any kind of resistance Can be very risky ad leave people mad at the initiators Overcoming Resistance to Change Table 18-3 Approach Commonly Used in Situations Where: Advantages Drawbacks

16. Stress • An adaptive response to an environmental stimulus that places special demands on the individual • Fight-or-flight response • Physiological changes • Physiological reactions • Eustress vs. Distress • Stressors – factors that cause stress

17. Stress and Performance Performance Stress

18. Coping Strategies • Control strategy • Aggressively try to solve problem • Escape strategy • Avoid problem • Symptom Management strategy • Deal with symptoms (drinking, meditating, etc.)

19. Mitigating Factors • Social Support • Esteem support • Informational support • Social companionship • Instrumental support • Hardiness • Challenges vs. stressors • Internal locus of control

20. Personality & Stress • Type A personality • Never ending struggle to achieve more and more in less and less time • Sense of urgency about time • Competitive • Aversion to idleness • Type A’s tend to: • Speak rapidly • Answer questions quickly • Be sarcastic (hide rudeness in humor)