MANAGING CHANGEBY SUHEL KHAN

ROADMAP

The context

What is organizational change?

Processes for managing change

People and change

Organizational Development

Conflict resolution

Fostering innovation

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GHOSHAL & BARTLETT

Old values: compliance, control, contract and constraint

New values: discipline, support, trust and stretchSuccessful change involves simplification,

integration, and regenerationPhased approach essential, along with focus on

people’s attitudes, assumptions and behaviorsBrings both organizational design and human

resources lessons to bearGhoshal and Bartlett provide a high-level model

for change, let’s look at some of the details and lessons learned at a more granular level

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WHAT IS ORGANIZATIONAL CHANGE?An alteration of an organization’s environment, structure,

culture, technology, or people A constant force An organizational reality An opportunity or a threat

Change agent A person who initiates and assumes the responsibility for managing a

change in an organization

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BASIC QUESTIONS FOR CHANGE AGENTSWhat are the forces acting upon me? What are the pressures I should take into consideration as I decide what

to change and how I should change it?

What should we change? Should the changes be strategic and companywide or relatively limited?

How should we change it? How should we actually implement the change?

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FORCES FOR CHANGE

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External Forces Internal ForcesCompetition Laws and regulations

Strategy modifications

New technologies New equipment

Labor market shifts New processes

Business cycles Workforce composition

Social change Job restructuring

Compensation and benefits

Labor surpluses and shortages

Employee attitudePrentice Hall, 2002

THREE CATEGORIES OF CHANGE

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Organizational Culture

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MODEL FOR PLANNED ORGANIZATIONAL CHANGE

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FIGURE 8–1Source: Adapted from Larry Short, “Planned Organizational Change,” MSU Business Topics, Autumn 1973,pp. 53–61 ed. Theodore Herbert, Organizational Behavior: Readings and Cases (New York: McMillan, 1976), p. 351. G.Dessler, 2003

TWO VIEWS OF THE CHANGEPROCESS“Calm waters” metaphor A description of traditional practices in and theories about

organizations that likens the organization to a large ship making a predictable trip across a calm sea and experiencing an occasional storm

“White-water rapids” metaphor A description of the organization as a small raft navigating a raging

river

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CHANGE IN “CALM WATERS”

Kurt Lewin’s Three-Step Process

UnfreezingThe driving forces, which direct behavior away from the status quo, can be increased

The restraining forces, which hinder movement from the existing equilibrium, can be decreased

The two approaches can be combinedImplementation of changeRefreezing

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CHANGE IN “WHITE-WATERRAPIDS”Change is constant in a dynamic

environment

The only certainty is continuing uncertainty

Competitive advantages do not last

Managers must quickly and properly react to unexpected events

Be alert to problems and opportunitiesBecome change agents in stimulating, implementing and supporting change in the organization

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IS A NEW STRUCTURE REALLY REQUIRED?

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LIS580- SPRING 2006 12 FIGURE 8–2Source: Adapted from Michael Goold and Andrew Campbell, “Do You Have a Well-Designed Organization?” Harvard Business Review, March 2002, p. 124.

When you identify a problem with your design, first look for ways to fix it without substantially altering it. If that doesn’t work, you’ll have to make fundamental changes or even reject the design. Here’s a step-by-step process for resolving problems.

When you identify a problem with your design, first look for ways to fix it without substantially altering it. If that doesn’t work, you’ll have to make fundamental changes or even reject the design. Here’s a step-by-step process for resolving problems.

G.Dessler, 2003

IS A NEW STRUCTURE REALLY REQUIRED? (CONT’D)

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Source: Adapted from Michael Goold and Andrew Campbell, “Do You Have a Well-Designed Organization?” Harvard Business Review, March 2002, p. 124.

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1.Create a Sense of Urgency

2.Decide What to Change

3.Create a Guiding Coalition and Mobilize Commitment

4.Develop and Communicate a Shared Vision

5.Empower Employees to Make the Change

6. Generate Short-Term Wins

7. Consolidate Gains and Produce More Change

8. Anchor the New Ways of Doing Things in the Company Culture

9. Monitor Progress and Adjust the Vision as Required

A NINE-STEP PROCESS FOR LEADING ORGANIZATIONAL CHANGE

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WHY PEOPLE RESIST CHANGE

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HOW IMMUNE IS THE PERSON TO CHANGE?

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FIGURE 8–3Source: Robert Kegan and Lisa Lahey, “The Real Reason People Won’t Change,” Harvard Business Review, November 2001, p. 89. G.Dessler, 2003

DEALING WITH CHANGE

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BARRIERS TO EMPOWERMENT

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FIGURE 8–5Source: Reprinted by permission of Harvard Business School Press. From Leading Change by John P. Kotter. Boston, MA. 1996, p. 102. Copyright © 1996 by the President and Fellows of Harvard College, all rights reserved. G.Dessler, 2003

ORGANIZATIONAL DEVELOPMENT

Organizational Development (OD) An approach to organizational change in which the employees

themselves formulate the change that’s required and implement it, usually with the aid of a trained consultant.

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OD INTERVENTIONS

Human Process InterventionsAimed at enabling employees to develop a better understanding of their own and others’ behaviors for the purpose of improving that behavior such that the organization benefits.

Sensitivity Training (Laboratory or T-groups)

Purpose is to increase participants’ insight into their own behavior and that of others by encouraging an open expression of feelings in a trainer-guided group.

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OD INTERVENTIONS (CONT’D)

Team Building The process of improving the effectiveness of a team through action

research or other techniques.

Survey Research The process of collecting data from attitude surveys filled out by

employees of an organization, then feeding the data back to workgroups to provide a basis for problem analysis and action planning.

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TECHNOSTRUCTURAL APPLICATIONS OF ODFormal Structure Change Program An intervention technique in which employees collect information on

existing formal organizational structures and analyze it for the purpose of redesigning and implementing

new organizational structures.

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STRATEGIC APPLICATIONS OF OD

Strategic InterventionAn OD application aimed at effecting a suitable fit among a firm’s strategy, structure, culture, and external environments.

Integrated Strategic ManagementAn OD program to create or change a company’s strategy by: Analyzing the current strategy Choosing a desired strategy Designing a strategic change plan Implementing the new plan.

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ORGANIZATIONAL STRESSORS:ROLE DEMANDSRole conflicts Work expectations that are hard to satisfy

Role overload Having more work to accomplish than time permits

Role ambiguity When role expectations are not clearly understood

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CONFLICT HANDLING STYLES

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FIGURE 8–7Source: Source: Kenneth W. Thomas, “Organizational Conflict,” ed., Steven Kerr, Organizational Behavior (Columbus, OH: Grid Publishing, 1979), in Andrew DuBrin, Applying Psychology (Upper Saddle River, NJ: Prentice Hall, 2000), p. 223. G.Dessler, 2003

CONFLICT RESOLUTION MODES

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STIMULATING INNOVATION

CreativityThe ability to combine ideas in a unique way or to make unusual connections

InnovationThe process of taking a creative idea and turning it into a useful product, service, or method of operation Perception Incubation Inspiration Innovation

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STRUCTURAL VARIABLES AFFECTINGINNOVATIONOrganic structuresPositively influence innovation through less work specialization, fewer rules and decentralization

Easy availability of plentiful resourcesAllow management to purchase innovations, bear the cost of instituting innovations, and absorb failures

Frequent inter-unit communicationHelps to break down barriers to innovation by facilitating interaction across departmental lines

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