Organizational Change

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Nothing is permanent but “change” -

Heraclitus

Organizational Change Planned or unplanned transformations in an organization’s

structure, technology, and/or people. First-Order Change: that is continuous in nature and

involves no major shifts in the way an organization operates.

Second-Order Change: Radical change; major shifts involving many different levels of the organization and many different aspects of business.

Characteristics of change Vital to avoid stagnationProcess not a event Fast especially in present competitive scenario Can be directive or participative Natural or adaptiveIncremental or step Interdependent on organizational environment or culture

Need for ChangeNeed for Change Globalization Environmental concern Health consciousness Changes in lifestyle Need for non-traditional employees Knowledge asset of the company

External Forces for Change Government Force

Technology Faster ,cheaper & more mobile computer

Economic factor Fluctuating interest rate, declining productivity, uncertainties due to inflation or deflation, oil prices etc.

Competition Global competition, mergers & acquisitions, growth of e commerce

Social Trends Internet chat room, retirement of body boomers

Customers Changing need & preference

Internal Forces for ChangeNature of workforce More cultural diversity; aging population;

many new entrant with inadequate skill

System dynamics Technology, dominant group, formal or informal relationship

Inadequacy of admin processes Revision of org goal & objective; rules ;regulations, procedures.

Individual/group speculations Positive factor need, ambitions, potentialities, capabilities, career growth etc.

Structure focused change Downzing,rightsizing,job redesign

Technological changes Changes in equipment, work process, sequence, information processing system, automation

Resources constraints Depletion, non-availability

Levels of change Individual level Development changes such as- job assignment Physical movement to other location Change in the maturity of a person occurring over a period of time Group level Important because most of the activities are on group basis Change can affect work flow, job design, social organization, status, communication pattern Informal group must be considered-major barrier Formal group- in the form of trade unions Organizational level Major programs that affect both individual and group Made by senior mgt and are seldom implemented by single manager Long term and requires considerable planning- reorganization, revamping remuneration

system,etc also Referred as organizational development

Targets of Change

Organizational structure Technology People

Resistance to Change The tendency for employees to be unwilling to go along with organizational changes, either because of individual fears of the unknown, or organizational impediments

Individual barriers to change Organizational barriers to change Readiness for change Overcoming resistance to change

Readiness for change

Readiness = D (Dissatisfaction) x V (Vision) x F (First steps) > R (Resistance)

D

V

F

Is there enough dissatisfaction with the current state? What is the gap between the current reality and the envisioned future?

Is there a sense of compelling vision of a highly desirable future state? To what degree is it shared? To what degree are individuals committed to the vision?

Are the first steps for making the change 'doable'?

Sources of Resistance to Change Individual Sources Organizational Sources

Habit Security Economic factors Fear for the unknown Selective information

processing

Structural inertia Limited focus to change Group inertia Threat to expertise Threat to established power

relationships Threat to established allocation

of resources

Overcoming Resistance to Change Education and Communication Participation Build Support & Commitment Negotiation Manipulation & Cooptation Coercion Selecting people who accept change Overcoming Resistance to Change

• Provide appropriate training in new skills and coaching in new values and behaviors

• Encourage self-management

• Give more feedback than usual to ensure people always know where they stand

• Allow for resistance. Help people let go of the “old”

• Measure results, step back and take a look at what is going on. Keep asking “Is the change working the way we want it to?”

• Encourage people to think and act creatively

• Look for any “opportunity” created by the change

• Allow for withdrawal and return of people who are temporarily resistant

Tactics to Minimize Resistance

• Explain why

• Identify the benefits• Invite and answer questions

• Solicit participation, and, if possible, early involvement • (“first-draft / straw model” reviews,

membership in planning/implementation teams, etc.)

• Avoid surprises

• Set standards and clear targets

• Inform/involve informal leaders• Recognize and reward efforts• Over communicate

Managing Planned Change Managing Planned Change

Change (Making things different.)

Planned Change (Activities that are intentional and

goal oriented)

Change Agents (Persons who act as

catalysts and assume the responsibility for managing change

activities)

Goals of Planned ChangeImproving the ability of the

organization to adapt to changes in its environment.

Changing the behavior of individuals and groups in the organization 

Approaches to Managing Organizational Change Lewin’s three-step Change Model Action Research Organizational Development

Lewin’s Three-Step Change Model

Unfreezing Movement Refreezing

UNFREEZINGCreating motivation and readiness to change

Techniques to reinforce unfreezing . . .

• Acknowledge feelings and empathise

• Give people as much information about the change as

possible

• Say what will not change

• Treat the past with respect

• Help others to see the gap

CHANGE & MOVEMENTGuiding through the transition

Techniques to reinforce movement . . .

• Provide focus and direction

• Strengthen peoples' connections to one another

• Open up two way communications

• Provide the individual with a specific role in the

change process

• Provide leadership and tenacity

RE-FREEZINGIntegrating the new point of view

Techniques to reinforce re-freezing:

• (before reverting to the old point of view)

• Ensure that individuals and leaders are

reinforced for new behaviour

• Implement quick results and highlight successes

• Build feedback mechanisms

• Celebrate!

Action Research A change process based on systematic collection of data and then selection of a change action based on what the analyzed data indicate.

Process StepsEntry StartupAssessment and Diagnosis Feedback Action planning Intervention Evaluation

Action Research Action research benefits;Problem-focused rather than solution-centered. Heavy employee involvement reduces resistance to

change.

Organizational Development Organizational Development (OD) A collection of planned interventions, built on humanistic-democratic values, that seeks to improve organizational effectiveness and employee well-being.

OD Values: Respect for people Trust and support Power equalization Confrontation Participation

Organizational Development Techniques Sensitivity Training groups (T-groups) that seek to change behavior

through unstructured group interaction. Provides increased awareness of others and self. Increases empathy with others, improves listening skills,

greater openness, and increased tolerance for others.

Creating a Learning Organization Learning Organization An organization that has developed the continuous capacity to adapt and change.

Characteristics:Holds a shared vision Discards old ways of thinking. Views organization as system of relationships. Communicates openly. Works together to achieve shared vision.

Organizational Culture and the Environment

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Organizational Culture

Organizational Culture is a system of shared beliefs and values that develop within an organization and guide the behavior of its members

“The way we do things around here.” Basic assumptions, values, norms

Implications: Culture is a perception. Culture is shared. Culture is descriptive.

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Organizational Stakeholders

Dimensions of Org Culture

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Exhibit 3.2

Keeping Culture Alive Sources of Organizational Culture

The organization’s founder Vision and mission

Past practices of the organization The way things have been done

The behavior of top management Continuation of the Organizational Culture

Recruitment of like-minded employees who “fit”Socialization of new employees to help them adapt to the

culture

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Fullfillment-orientated

Incubator

Project-Oriented

Guided Missile

FamilyPower-orientedculture

Eiffel-TowerRule-orientedculture

Equity

PersonEmphasis

Hierarchy

TaskEmphasis

Family culture Strong emphasis on hierarchy and orientation to the personFamily-type environment that is power oriented and headed

by a leader who is regarded as a caring parentManagement looks after employees, and tries to ensure that

they are treated well and have continued employmentMay catalyze and multiply the energies of the personnel or

end up supporting a leader who is ineffective and drains their energies and loyalties

Eiffel Tower Strong emphasis on hierarchy and orientation to the

taskJobs are well defined, and everything is coordinated

from the topThis culture is narrow at the top, and broad at the

baseRelationships are specific, and status remains with the job.Managers seldom create off-the-job relationships with their people,

because they believe this could affect their rational judgmentThis culture operates very much like a formal hierarchy—

impersonal and efficient and loyalties

Guided Missile Strong emphasis on equality in the workplace and

orientation to the taskThis culture is oriented to workWork typically is undertaken by teams or project

groupsIn projects, formal hierarchical considerations are given low

priority, and individual expertise is of greatest importanceAll team members are equal (or at least potentially equalAll teams treat each other with respect, because they may need the

other for assistanceEgalitarian and task-driven organizational culture

Incubator Strong emphasis on equality and personal

orientationBased on the premise that organizations serve

as incubators for the self-expression and self-fulfillment of their members

Little formal structureParticipants in an incubator culture are there primarily to

perform roles such as confirming, criticizing, developing, finding resources for, or helping to complete the development of an innovative product or service

Table 6–3Summary Characteristics of the Four Corporate Culture

Relationshipsbetween employees

Four Corporate Cultures

Diffuse relation-ships to organic whole to which one is bonded

Specific role inmechanical system ofrequired interaction

Specific tasks in cybernetic system targeted on shared objectives

Diffuse, spontaneous relationships growing out of shared creative process

Attitude towardauthority

Status is ascribed to parent figures who are close and powerful

Status is ascribed to superior roles that are distant yet powerful

Status is achieved by project group members who contribute to targeted goal

Status is achieved by Individuals Exemplifying creativity and growth

Corporate CultureCharacteristic Family Eiffel Tower Guided Missile Incubator

Ways of thinking and learning

Intuitive, holistic, lateral and error correcting

Logical, analytical, vertical, and rationally efficient

Problem centered, professional, practical, cross disciplinary

Process oriented, creative, ad hoc, inspirational

Table 6–3Summary Characteristics of the Four Corporate Culture

Attitudes toward people

Four Corporate Cultures

Family members Human resources Specialists and experts

Co-creators

Ways of changing “Father” changes Course

Change rules and procedures

Shift aim as target moves

Improvise and attune

Corporate CultureCharacteristic Family Eiffel Tower Guided Missile Incubator

Ways of motivating and rewarding

Intrinsic satisfaction in being loved and respected

Promotion to greater position, larger role

Pay or credit for performance and problems solved

Participation in the process of creating new realities

Management by subjectives

Management by job description

Management by objectives

Management by enthusiasm

Table 6–3Summary Characteristics of the Four Corporate Culture

Four Corporate Cultures

Corporate CultureCharacteristic Family Eiffel Tower Guided Missile Incubator

Criticism and conflict resolution

Turn other cheek, save other’s face, do not lose power game

Criticism is accusation of irrationalism unless there are procedures to arbitrate conflicts

Constructive task related only, then admit error and correct fast

Improve creative idea, not negate it

Source: Adapted from Fons Trompenaars and Charles Hampden-Turner, Riding the Waves of Culture: Understanding Diversity in Global Business, 2nd ed. (Burr Ridge, IL: Irwin, 1998), p. 183.

Strong versus Weak CulturesStrong Cultures

Are cultures in which key values are deeply held and widely held.

Have a strong influence on organizational members.Factors Influencing the Strength of Culture

Size of the organizationAge of the organizationRate of employee turnoverStrength of the original cultureClarity of cultural values and beliefs

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How Employees Learn Culture

Stories - a narrative of significant events or people

Rituals - repetitive sequences of activities

Material symbols – essential in creating an

organization’s personality

Language - unique terminology or jargon

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How Culture Affects Managers? Plan - degree of risk that plans should containOrganize - degree of autonomy given to employeesLead - degree of concern for employees, style of

leadershipControl - what criteria to use when evaluating

performance

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How do we make a working environment more conducive?

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Besides Organizational Culture…

ManagerialDiscretion

Organization’s EnvironmentOrganizational Culture

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The External Environment

Customers

Competitors

Suppliers

PublicPressureGroups

TheOrganization

How do we make a working environment more conducive? Employee empowerment, Employee motivation, or Employee satisfaction, Employee engagement Employee engagement must be a strategy that focusesEmployee engagement must focus on business results

& measure the outcomes of their performance.

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Continue…An effective recognition and reward systemFrequent feedbackShared values and guiding principlePositive relationships with coworkersDemonstrated respect, trust, and emotional

intelligence on the part of the employee's direct supervisor

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Thank You…..