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Catalyst ForChange &
Managing
Change
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The Nature of Organizational Change
What is organizational change?
Any substantive modification to some part ofthe organization.
What are the forces for change? External forces: derive from the organizations
general and task environments.
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Managing Change
Modern day organizations are often required to
change to remain viable.
Planned change describes the systematic process
of introducing new behaviors, structures, andtechnologies for addressing problems and
organizational challenges. Three approaches are:
Behavioral (People)
Structural
Technological/Operations
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Behavioral/People Changes
Abilities and skills.
Performance. Perceptions.
Expectations.
Attitudes.
Values.
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Organization Structure and Design
Changes
Job design.
Departmentalization.
Reporting relationships.
Authority distribution.
Coordination mechanisms.
Line-staff structure.
Overall design.
Culture. Human resource management.
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Technological and Operational Changes
Information technologies.
Equipment.
Work processes.
Work sequences.
Control systems.
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Why Change?
What are these forces?
Top management
revises theorganizations strategy.
Socio-cultural values
shifts.
Attitudes toward jobs
shifts.
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Managing Change
UnexpectedExpected
Incremental
Radical
Tuning:
(e.g., new policies,technologies)
Adaptation:
(e.g., new products ornew features)
Reorganization:
(e.g.,org. redesignor reengineering)
Re-Creation:
(e.g., new culture ortotal strategic change)
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Types of Change
Risk
Return
Low
Low
High
High
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Types of Change
Automation
Using computers to speed up existing tasks
Low risk, low return
Rationalization
Streamline procedures to improve automation
Remove bottlenecks Low-medium risk, low-medium return
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Example: WorkflowManagement
Automation and subsequent rationalisation
Flow of work (documents) in an organisation
Routing Approvals
Scheduling
Reporting
Simultaneous work on documents
Instant transfer no more in transit
Indexing and collation of information
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Example: Total QualityManagement
Incremental change to organisation
Continuous improvement
Everyone is responsible for quality control Quality of products, services and operations
Catch problems early, they cost less
Simplify production process
Automate to give less steps
Less steps, less chance of error
Faster production times
Automation and subsequent rationalisation
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Changing Business Process
What does this mean?
Reengineering:
The radical redesign of all aspects of a
business to achieve major gains in cost,
service, or time.
Why reengineer? Problems occur when management does not
recognize entropy until it is well advanced.
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Types of Change
Business Process Re-engineering/Re-design
Radical re-design of business processes
Remove procedural steps
Eliminate paper-based tasks
Improve costs, quality and service
Medium-high risk, medium-high return
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TheReengineering
Process
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Types of Change
Paradigm Shifts
Re-thinking the nature of the business /
organisation
Complete re-conception of how the business
should function
High risk, High return
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Steps in theChange Process
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Understanding Resistance to Change
Uncertainty: employees may become
anxious.
Threatened self-interests: change may
diminish managerial power.
Different perceptions: employees may
disagree with managers assessment of
the change.
Feeling of loss: disruption of existing
social network.
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Forced-Field Analysis for Plant
Closing at GeneralMotors
Need to cut costs
Excess capacity
Outmoded facilities
Plant
closing
Resistance from unions
Concern about worker welfare
Possible future needs
Reason for change Reason against change
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Managing Change
Forces against change must be identified and theroot causes determined. Employee may see
resist change because: Their needs are ignored
Lack of information about changes Failure to perceive need for change We verus They attitude View change as supervisor flaw
Threat to their well being Conflict between individual andorganizational goal
Lack for resources to support change
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Managing Change
Change strategies: Extensive communication Training Employee involvement
Staff changes New policies (reward systems Evolutionary versus revolutionary
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Managing Change
Change mechanisms (dependent upon, problemdiagnosis and forces for and against change):
Survey feedback Team building Sensitivity training
Process consultation Confrontation meeting Training and development Automation of processes
Human Resource policies and programs Reward systems Job redesign Structural changes
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Organization Development Techniques
Diagnostic activities.
Team building.
Survey feedback.
Education. Inter-group activities.
Third-party peacemaking.
Techno-structural activities.
Process consultation.
Life and career planning. Coaching and counseling.
Planning and goal setting.
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Overcoming Resistance - Summary
Participation:
Allow employees to takepart in the planning and
implementation. Education and communication:
Educate the employeesabout the need.
Facilitation:
Make only necessarychanges, announce inadvance, and allowemployees to adjust to thechange/s.
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Change Leadership
Requires a dedicated change agent
Change agentis the single individual responsible
for overseeing the change process
Change agent are: Change generators
Change implementers
Change adopters Changes agents can either be internal, external or a
combination
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Traditional Implementation
Project management deals with the size and complexity ofthe project
Breakdown to subprojects / tasks
Schedule, milestones, budget
Assign team to subprojects / tasks
However, this focuses on project mechanics, not businessobjectives
Need to consider changing environment and be moreflexible
Not easy with third-party fixed-price contracts
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Costs and Benefits
Can be both financial and non-financial:
Costs
Tangible benefits Intangible benefits
Benefits may go direct to customer
Reduce costs lead to reduced prices for competitiveness
Benefits may not be realised if poorly implemented
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Example Costs and Benefits
Costs:
Equipment, maintenance, services, training, personnel
Tangible benefits: Productivity, lower costs and expenses
Intangible benefits:
Improved planning and flexibility, attained legalrequirements, morale, customer satisfaction, better
image A business case will require the quantification of
intangible benefits
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Risks
Organizational
Management / user / customer support
Requirements fully analysed and understood Technological
Inadequate, unproven, unreliable, unavailable
Project team have insufficient knowledge
Project and control
Insufficient time, budget or resources
Supplier delays
Can we account for Acts of God?
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Controlling Risk
Increasing user involvement
Users can become active project members
Users can control installation and training
Input into requirements and design Involved in testing and trials
Manage technical complexity
Planning, control and reviews
Managers must understand technical constraints
Build good relationships with team / suppliers
Anticipate problems: risk register and manager
Give team members access to technical decisions
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Types of Failure
Cost
Implementation over budget or schedule
Too costly to complete
Running costs over budget Costs may exceed business value
Estimated that projects are:
Underestimated by 1.5 times budget and schedule
1994: 25% of projects cancelled
1998: 30%-40 % fail or are abandoned
1998: 75% exceed budget/schedule
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Types of Failure
Design
Failure to capture business requirements
Failure to improve organisational performance
Information may be wrong / wrong format / delivered
slowly
System may be difficult to use user interface
Traditionally all design was technically-based
Technically excellent solutions
Solutions that do not meet the organisational needs
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Types of Failure
Data
Data may be inaccurate / inconsistent /
incomplete Operation
System runs poorly or is unreliable
Neither timely or efficient
Can be organisational issues
Mostly technical reasons for failure
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Managing Change
Failure can be avoided by effective management /
leadership
For example:
Effective management
Maintain management support
Increase user involvement and influenceMonitor project tasks and risks
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ImplementationManagement
Poor management makes failure more likely
Cost overruns far exceed budget
Unexpected slippage
Technical shortfalls
Failure to obtain benefit
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ImplementationManagement
Common causes of management problems:
Ignorance and optimism
Poor ways of estimating time and budget
Not enough experience of similar projects
Mythical man-month
More people does not equal less time
Training and expertise
Bad news travels slowly
Slow communication of lateness to management
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Management Support
Commitment from all levels of management will improvechances of success
Recognition and rewards for involvement
Sufficient funding and resources
Management backing of organisational changes
However
Over commitment can lead to excessive funding and
resources for a failing project
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Evaluating Change
Evaluating changes, four levels:
Affective Learning Behavioral Performance
Change must be institutionalized!