Chapter 12

2. Chapter 12 Organizational Change and Learning

3. Learning Goals Describe four types of organizational change 2. Explain the planning process for organizationalchange 3. Identify four methods of organizational change 4. Describe how innovation relates to organizationalchange 5. Discuss how learning organizations foster change

4. Organizational change refers to any transformation in the design or functioning of an organization. Organizational Change

5. Unfreezing Unfreezing Transitioning Refreezing (adapted from Figure 12.1) Types of Organizational Change: Degree of Change • Radical change: organizations make majorinnovations in the ways they do business • Stages of Radical Change*

6. Types of Organizational Change: Degree of Change • Incremental change: ongoing process of evolution over time, during which many small adjustments occur routinely • Tempered radicals: people who strive to create radical change but do so by prodding an organization to make many small incremental changes • Total quality management: relies heavily on continuous incremental change

7. Advice for Tempered Radicals • Earn credibility first, and then leverage it • Gather and accept support from others along the way • Develop grass roots initiatives and be willing to share the stage with supporters • Chip away at standard operating procedures little by little over time until you achieve real success • Accept small changes as making progress • Develop your ability to compromise as well as persuade • Be persistent

8. Timing of Change • Reactive change:occurs when an organization is forced to adapt or innovate in response to some event in the external or internal environment • Anticipatory change:occurs when managers make organizational modifications based on forecasts of upcoming events or early in the cycle of a new trend

9. Types of Organizational Change(adapted from Figure 12.2) Small Adjustments Incremental Reactive Change Incremental Anticipatory Change Degree of Change Radical Anticipatory Change Radical Reactive Change Major Transformation Timing of Change Before Major Shifts in the Environment After Major Shifts in the Environment

10. Start The Process of Organizational Change(adapted from Figure 12.3) 2. Determine the Performance Gap 1. Assess the Environment 3. Diagnose Organizational Problems 7. Monitor the Changes 6. Anticipate Resistance and Take Action to Reduce 4. Articulate and Communicate a Vision for the Future 5. Develop and Implement an Action Plan

11. Planning for Organizational Change: Common Reasons for Resistance Fear Vested interests Misunderstandings Cynicism

12. Implementing Change: Common Methods for Creating Change Technological Change Organizational Redesign Job Redesign OrganizationalDevelopment

13. Technological Change • Involves incremental adjustments or radical innovations that affect workflows, production methods, materials, and information systems • Many new forms of informationtechnology (IT) • IT is enabling real time and any time links between suppliers, producers, distributors, and customers

14. Organization Redesign • Involves incremental adjustments or radical innovations focused on realigning departments, changing who makes decisions, and merging or reorganizing departments that sell the organization’s products • Two basic approaches • Change organization’s structure, such as from functional to product departmentalization • Change organization’s processes, such as how customer complaints are handled • Restructuring: reconfiguring the distribution of authority, responsibility, and control in an organization • Reengineering: radical redesigning of an organization’s functions and business processes

15. Job Redesign • Modifying specific employee job responsibilities and tasks • Job simplification: the scientific analysis of tasks • Focus on efficient workflow process for employees in a particular job • Frequent use of time and motion studies • Job enrichment: changing job specifications to broaden and add challenge to the tasks required and to increase productivity • Increases interesting and challenging work • Increases autonomy and personal freedom

16. Organization Development (OD) • A planned, long-range behavioral science strategy for understanding, changing, and developing an organization’s workforce in order to improve its effectiveness • Focus group discussion: a carefully planned discussion among several employees about a specific topic orissue of interest, which is led by a trained facilitator • Facilitator explains the topic to be discussed, the role of the scribe, and how the organization will use the results of the focus group discussion • Participants come prepared to discuss a specific topic. If confidentiality is a concern, participants are chosen from different units of the organization, not the same work group • Scribe: the person who takes notes about what is said, but not who says it

17. How to Set Up a Focus Group Discussion(adapted from Figure 12.5) The facilitator explains the topic to be discussed, the role of the scribe, and how the organization will use the results of the focus group discussion. The participants come prepared to discuss a specific topic. If confidentiality is a concern, participants are chosen from different units of the organization, not the same work group. The scribe takes notes about what is said, but not who says it.

18. Organization Development (OD) (cont’d) • Survey feedback: a process that allows managers and employees to report their thoughts and feelings about the organization and to learn about how others think and feel about their own behaviors • Feedback obtained by means of a questionnaire developed and distributed to employees, who complete it and turn it in anonymously • Content of questionnaire depends on areas of most concern Questionnaire

19. Organization Development (OD) (cont’d) • Team building: process that develops the ability of team members to collaborate effectively so they can perform the tasks assigned to them • Often emphasizes developing a group climate that is safe • Openness can be risky, but promotes creativity and effective problem solving

20. Combining Methods of Change • Major organizational change is a complex process • Typically involves a combination of methods • Example: purchasing and installing enterprise resource planning [ERP] software

21. Role of Innovation in Organizational Change • Innovation: the discovery, identification and diagnosis of unusual and ambiguous problems and/or the development of unique or creative solutions • Strategic importance of innovation • Critical in dynamic, changing environments • Organizations can rest on prior success • Complacency is deadly

22. Types of Innovation • Technical innovation: creation of new goods and services • Process innovation: creating a new way of producing, selling, and/or distributing an existing good or service • Administrative innovation: creating a new organization design that better supports the creation, production, and delivery of goods and services

23. Architecture for Innovation Foster Workforce Resilience Provide aSupport System forInnovation Develop a Learning Environment and Learning Orientation among Employees

24. Learning Organizations • Learning organization:has both the drive and the capabilities to modify or transform itself and improve its performance continuously • Learns from past experiences • Learns from customers • Learns from various parts of the organization • Learns from other organizations

25. Characteristics of a Learning Organization Shared Leadership Culture of Innovation Customer-FocusedStrategy The Learning Organization Organic OrganizationDesign Intensive Use ofInformation

26. Characteristics of a Learning Organization: Snapshot “We all make mistakes. It’s not as though at any time, Dell doesn’t have some part of its business that’s not working for us as it should. But we have a culture of continuous improvement. We train employees to constantly ask themselves, ‘How do we grow faster? How do we lower our cost structure? How do we improve service for customers?’” Michael Dell, Chairman and Cofounder, Dell Computer