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Learning Goals
1. 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
Organizational Change
• Organizational change refers to any transformation in the design or functioning of an organization.
(adapted from Figure 12.1)
Transitioning RefreezingUnfreezingUnfreezing
Radical change: organizations make majorinnovations in the ways they do business
Stages of Radical 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
1. Earn credibility first, and then leverage it
2. Gather and accept support from others along the way
3. Develop grass roots initiatives and be willing to share the stage with supporters
4. Chip away at standard operating procedures little by little over time until you achieve real success
5. Accept small changes as making progress
6. Develop your ability to compromise as well as persuade
7. Be persistent
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
Types of Organizational Change(adapted from Figure 12.2)
RadicalAnticipatory
Change
IncrementalReactiveChange
RadicalReactiveChange
Deg
ree
of C
han
ge
Before Major Shifts inthe Environment
After Major Shifts inthe Environment
Major Transformation
SmallAdjustments Incremental
AnticipatoryChange
Timing of Change
The Process of Organizational Change(adapted from Figure 12.3)
6. AnticipateResistance andTake Action toReduce
6. AnticipateResistance andTake Action toReduce
7. Monitor the Changes
7. Monitor the Changes
1. Assess the Environment1. Assess the Environment
5. Develop andImplement anAction Plan
5. Develop andImplement anAction Plan
2. Determine thePerformanceGap
2. Determine thePerformanceGap
3. DiagnoseOrganizationalProblems
3. DiagnoseOrganizationalProblems
4. Articulate and Communicate a Vision for the Future
4. Articulate and Communicate a Vision for the Future
Start
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
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 approachesChange organization’s structure, such as from functional
to product departmentalizationChange 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
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
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
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
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 organizationwill use the results of the focus group discussion.
The scribe takes notes about what is said, but not who says it.
The participants come prepared to discuss a specific topic.If confidentiality is a concern, participants are chosen fromdifferent units of the organization, not the same work group.
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
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
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
Often emphasizes developing a group climate that is safe
Openness can be risky, but promotes creativity and effective problem solving
Major organizational change is a complex process
Typically involves a combination of methods
Example: purchasing and installing enterprise resource planning [ERP] software
Role of Innovation in OrganizationalChange
Role of Innovation in OrganizationalChange
Innovation: the discovery, identification and diagnosis of unusual and ambiguous problems and/or the development of unique or creative solutions
Innovation: the discovery, identification and diagnosis of unusual and ambiguous problems and/or the development of unique or creative solutions
Strategic importance of innovation Strategic importance of innovation
Critical in dynamic, changing environments
Organizations can rest on prior success
Complacency is deadly
Critical in dynamic, changing environments
Organizations can rest on prior success
Complacency is deadly
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
FosterWorkforce Resilience
Provide aSupport System for
Innovation
Develop a Learning Environment andLearning Orientation among Employees
Learning organization: has both the drive and the capabilities to modify or transform itself and improve its performance continuously
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
Learns from past experiences Learns from customers Learns from various parts of the
organization Learns from other organizations
OrganicOrganization
Design
OrganicOrganization
Design
Shared Leadership
Customer-FocusedStrategy
Customer-FocusedStrategy
Culture of InnovationCulture of Innovation
IntensiveUse of
Information
IntensiveUse of
Information
TheLearning
Organization
Characteristics of a Learning Organization: SnapshotCharacteristics 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