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15F I F T E E N
Organizational Change Organizational Change and Developmentand Development
C H A P T E R
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Courtesy National Board of Antiquities, Finland
Continuous Change at NokiaContinuous Change at NokiaNokia has continually adapted to its changing environment. The Finnish company began as a pulp and paper mill in 1865, then movedinto rubber, cable wiring, and computer monitors. In the 1980s, Nokia executives sensed an emerging market for wireless communication. Today, Nokia is a world leader in cellular telephones.
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3
Organizational Change: An International Phenomenon
0 10 20 30 40 50 60 70 80
0 10 20 30 40 50 60 70 80
Percentage of Respondents by Country
Internationalexpansion
Reduction inemployment
Mergers,divestitures,acquisitions
Majorrestructuring
HungaryMexicoS. KoreaGermanyUnited StatesJapan
(Source: Kanten, R., 1991.)
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Changing People: Some Basic Changing People: Some Basic StepsSteps
Recognizing theneed for change
Attempting tocreate a new stateof affairs
Incorporating the changes,creating and maintaining anew organizational system
Step 1: Unfreezing
Step 3: Refreezing
Step 2: Changing
Current State
New State
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Team Team Building: Building: Its Basic Its Basic StepsSteps
Sensitivitygroups
Objectivedata
Group membersrecognize problem
Diagnose group’sstrengths andweaknesses
Develop desiredchange goals
Develop action planto make changes
Implement plan
Evaluate plan
Processcompleted
if successfulif successful if unsuccessfulif unsuccessful
Res
tart
pro
cess
Res
tart
pro
cess
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When Will It Occur?
Benefit ofmakingchange
Comparedto
Cost ofmakingchange
Changeis made
Change isnot made
Amount of dissatisfactionwith current conditions
Availability of adesirable alternative
Existence of a plan forachieving a desirable
alternative
If benefits exceed costs
If costs exceed benefits
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Some External Forces for ChangeSome External Forces for Change
InformationInformationTechnologyTechnology
GlobalizationGlobalization& Competition& Competition
DemographyDemography
Courtesy National Board of Antiquities, Finland
DesiredConditions
CurrentConditions
BeforeChange
AfterChange
DrivingForces
RestrainingForces
Force Field AnalysisForce Field Analysis
DuringChange
DrivingForces
RestrainingForces Driving
Forces
RestrainingForces
Resistance to Change at BP NorgeResistance to Change at BP Norge
• “SDWTs don’t work on drilling rigs!”
• “We already have teams!”
• “This creates more work — will we get higher pay?”
• “I don’t know how to work in teams.”
• “SDWTs will threaten my job as a supervisor!”
Employees initially resisted self-directed teams BP Norge’s North Sea drilling rigs.
AP Worldwide
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Forces forChange
Resistance to ChangeResistance to Change
Direct Costs
Saving Face
Fear of the Unknown
Breaking Routines
Incongruent Systems
Incongruent Team Dynamics
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Creating an Urgency for ChangeCreating an Urgency for Change
• Need to motivate employees to change
• Most difficult when organisation is doing well
• Must be real, not contrived
• Customer-driven change– Adverse consequences for firm– Human element energizes employees
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MinimizingMinimizingResistanceResistancetoto ChangeChange
CommunicationCommunication
TrainingTraining
EmployeeEmployeeInvolvementInvolvement
StressStressManagementManagement
NegotiationNegotiation
CoercionCoercion
Minimizing Resistance to ChangeMinimizing Resistance to Change
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Refreezing the Desired ConditionsRefreezing the Desired Conditions
Creating organizational systems and team dynamics to reinforce desired changes
– alter rewards to reinforce new behaviours
– new information systems guide new behaviours
– recalibrate and introduce feedback systems to focus on new priorities
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Courtesy of CHC Helicopter Corp.
Change AgentsChange Agents
• Anyone who possesses enough knowledge and power to guide and facilitate the change effort
• Change agents apply transformational leadership– Help develop a vision– Communicate the vision– Act consistently with the vision– Build commitment to the vision
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Courtesy of CHC Helicopter Corp.
Successfully Diffusing ChangeSuccessfully Diffusing Change
• Successful pilot study
• Favourable publicity
• Top management support
• Labour union involvement
• Diffusion strategy described well
• Pilot program people moved around
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Organization Development DefinedOrganization Development Defined
A planned system wide effort, managed from the top with the assistance of a change agent, that uses behavioural science knowledge to improve organizational effectiveness.
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Organizational Development: How Organizational Development: How Effective Is It?Effective Is It?
2020
3030
4040
5050Pe
rcen
tage
of
Stud
ies S
how
ing
Posi
tive
Cha
nges
Perc
enta
ge o
f St
udie
s Sho
win
g Po
sitiv
e C
hang
es
IndividualIndividualoutcomesoutcomes(e.g., job(e.g., job
satisfaction)satisfaction)
OrganizationalOrganizationaloutcomesoutcomes
(e.g., profit)(e.g., profit)
(23.55)(23.55)
(48.70)(48.70)Organizational outcomesmore often benefited fromOD interventions than did
individual outcomes
(Source: Porras and Robertson, 1992.)
EstablishClient-
ConsultantRelations
DisengageConsultant’s
Services
Action Research ProcessAction Research Process
DiagnoseNeed forChange
IntroduceChange
Evaluate/StabilizeChange
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OrganizationParallelStructure
Parallel StructuresParallel Structures
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Discovery
Discovering the best of “what is”
Dreaming
Forming ideas about “what might
be”
Designing
Engaging in dialogue
about “what should be”
Delivering
Developing objectives
about “what will be”
Appreciative Inquiry ProcessAppreciative Inquiry Process
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Organization Development Concerns Organization Development Concerns
• Cross-Cultural Concerns– Linear and open conflict assumptions
different from values in some cultures
• Ethical Concerns– Management power– Employee privacy rights– Employee self-esteem– Consultant’s role
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The Ethics of OD:The Ethics of OD:Summary of the DebateSummary of the Debate
OD is unethical
• Imposes values of theorganization; coerciveand manipulative
• Potential for abuse
OD is ethical
• The imposition of valuesis an inherent part of life,especially on the job
• Abuse comes from individuals, not fromthe technique itself,which is neither goodnor evil
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Discussion of Activity 15.3Discussion of Activity 15.3Strategic Change ManagementStrategic Change Management
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Scenario #1: “Greener Telco”Scenario #1: “Greener Telco”
Scenario #1 refers to Bell Canada’s Zero Waste program, which successfully changed wasteful employee behaviours by altering the causes of those behaviours. Courtesy of Bell Canada
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Bell Canada’s Change StrategyBell Canada’s Change Strategy
Courtesy of Bell Canada
Relied on the MARS model to alter behaviour:Motivation -- employee involvement, respected steering committee
Ability -- taught paper reduction, email, food disposal
Role perc. -- communicated importance of reducing waste
Situation -- Created barriers to wasteful behaviour, eg. removed garbage bins
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Courtesy of Continental Airlines
Scenario #2: “Go Forward Airline”Scenario #2: “Go Forward Airline”
Scenario #2 refers to Continental Airline’s “Go Forward” change strategy, which catapulted the company “from worst to first” within a couple of years.
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Continental Airlines’ Change StrategyContinental Airlines’ Change Strategy
Communicate, communicate, communicate
Introduced 15 performance measures
Established stretch goals (repainting planes in 6 months)
Replaced 50 of 61 executivesRewarded new goals (on-time
arrival, stock price)Customers as drivers of change
Courtesy of Continental Airlines
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