Copyright © 2004 Prentice Hall. All rights reserved.8–1 Fundamental Question for Change What are the forces acting upon me? What are the pressures I.

Copyright © 2004 Prentice Hall. All rights reserved. 8–1

Fundamental Question for Change• What are the forces acting upon me?

What are the pressures I should take into consideration? Going back to problem identification… Where are the pressures to change coming from?

– Internal/External

• What should we change?Strategic (company-wide) Limited (specific area)

Too often, organizations change in the wrong areas or at the wrong levels– It is important to isolate and pinpoint the change agent.

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

What cultural, organizational characteristics need to be infused in the change.


Model for Planned Organizational Change

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.


Strategic Change (1 of 4)

• Strategic changeChanging the fundamental strategy of the

organization– While this may be necessary, it does pull at the fabric of

the organization• Identity / Culture / Direction

• Sources and Effects of Strategic ChangeStrategic changes are usually triggered by factors

outside the company.– Usually a function of competitive posturing

Strategic changes are often required for survival– Given that other change initiatives fail, it’s a must.

Strategic changes implemented under crisis conditions are highly risky.

– Given, they usually don’t follow organizational ideals


Technological and Structural Change (2 and 3)• More specific in application

Technological Change Changing the way the company creates and markets its

products or services.– Production process, communication channels, workflow

• This approach to change allows for major modification to specific areas of the organization

• Without affecting others

• Less resistance from the overall organization

Structural Change Changing one or more aspects of the company’s organization

structures.– Authority, Networks, Organizational Charts

• High amounts of resistance

– Reorganizing

• Changing the firm’s organization chart and structural elements.


Is a New Structure Really Required?

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

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


Is a New Structure Really Required? (cont’d)

FIGURE 8–2bSource: 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 When you identify a problem with your design, first look for ways to your design, first look for ways to fix it without substantially altering fix it without substantially altering it. If that doesn’t work, you’ll have it. If that doesn’t work, you’ll have to make fundamental changes or to make fundamental changes or even reject the design. Here’s a even reject the design. Here’s a step-by-step process for resolving step-by-step process for resolving problems.problems.

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


Is Your Organization Well-Designed?

• The market advantage test Does your design direct attention to competitive market sources?

Volkswagen: 9 3 (Premium, Mass, Commercial)

• The parenting advantage test Does your design allow the corporation to add value?

GE: Spin-off or Conglomerate (Managerial competence)

• The people test Does your design reflect strengths and weaknesses of personnel

Pepsi Co. and Quaker (reacquisition of key personnel)

• The feasibility test What problem would come with a new organizational design

Classis example: As organizations grow / personnel type changes

Small Innovative/Informal; Large Structured Roles


Is Your Organization Well-Designed?• The specialist culture test

Does the design facilitate and protect the core competencies of the organization? 3M Keeping the innovation alive

• The difficult-links test Does your design allow for the critical links between core functions?

Networks, Teams, Modular vs. Line

• The redundant-hierarchy test Are there too many management stops (Decision stops)?

Red tape

• The accountability test Are there proper controls (checks and balances) in place?

Rewards, Monitoring

• The flexibility test Does your formal design allow for change and adaptation

Within the parameters of the organizational strategy


People / Behavioral / Cultural Change (4 of 4)• One Constant

Regardless of the change initiative used Any change taken forth by an organization is going to

encounter differing levels of resistance. Whether you formally mean to alter the culture, or it is a

byproduct of another change initiative. It is inherently important to monitor the

– Culture

• Attitudes

• Values

• Skills Many change initiatives fail because of inadequate

understanding of consequences on culture So, how do we monitor the effect of change on culture?

First understand what it is and what it needs to be…


How to Read an Organization’s Culture Observe the physical surroundings.

Dress, openness, placement

Sit in on a team meeting. How employees treat each other Rank issues

Listen to the language. What are the buzz words…

Note to whom you are introduced and how they act. What are the dynamics of the relationships in the

organization?

Get the views of outsiders, including vendors, customers, and former employees. Incorporate the views of all the stakeholders Their input will lead to a better overall view of the culture


Creating and Sustaining the Right Corporate Culture

1. Make it clear to your employees what you pay attention to, measure, and control.

1. Through rewards, control functions, etc.

2. React appropriately.1. Act in accordance with what is important

3. Use “signs, symbols, stories, rites, and ceremonies.”

1. Initiatives that go beyond compliance

4. Deliberately role model, teach, and coach the values you want to emphasize.

1. Top management must reflect culture in action

5. Communicate your priorities by how you allocate rewards.

1. DJPJIJ

6. Make your HR procedures and criteria consistent.1. Make sure all HR outputs fall in line with culture


Why Do We Resist Change?“It is usually not technical aspects that bring about

resistance, rather social consequences”

• Level 1Lack of informationHonest disagreement over the facts concerning

change.

• Level 2Personal and emotional fear of

Loss of job Relationships Status.

Personality traits Poor self-image Low tolerance for ambiguity and risk.

Change creates competing commitments.


Kurt Lewin’s Model of Change• Unfreezing

Involves reducing the forces for the status quo Usually by presenting a provocative problem or event to

get people to recognize the need for change and to search for new solutions.– Participative decision making, Crisis

• Moving Using techniques and actually altering the

Behaviors, values, and attitudes of the individuals in an organization.– Organizational change techniques

• Refreezing Preventing a return to old ways by

Instituting new systems and procedures that reinforce the new organizational changes.– Reinforcement of new ways



Business Process Reengineering

• Business ReengineeringThe radical redesign of business processes to:

Cut waste Improve cost, quality, and service Maximize the benefits of information technology

Accomplished through Questioning how and why things are being done as

they are.


Nine Steps to Organizational Change1. Create a Sense of Urgency

1. Crisis, Eliminate excess, set targets, create impetus

2. Decide What to Change1. Choose from on of the four change initiatives

3. Create a Guiding Coalition and Mobilize Commitment1. Very important2. Guiding coalition of influential people

4. Develop and Communicate a Shared Vision1. Simple, participative, repetitive vision for everyone

5. Empower Employees to Make the Change1. Give those that jump on board the power to make the changes

6. Generate Short-Term Wins1. Instrumentality Let employees see rewards for their change

7. Consolidate Gains and Produce More Change1. Shoe increased productivity (Create Legitimacy)

8. Anchor the New Ways of Doing Things in the Company Culture9. Monitor Progress and Adjust the Vision as Required


FIGURE 8–5

Barriers to Empowerment

Source: 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.


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.

What are some of the fundamental principles in this approach: Goal setting Participative decision-making Empowerment Leadership


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.


OD Interventions (cont’d)

• Team BuildingThe process of improving the effectiveness of a team

through action research or other techniques.

• Survey ResearchThe 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.


Technostructural Applications of OD

• Formal Structure Change ProgramAn 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.


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.


FIGURE 8–7

Conflict Handling Styles

Source: 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.


Interpersonal Conflict Styles1. Confrontation

1. Head-on confrontation1. Works when there is structural control

2. Forcing1. Can be effective given you have the legitimized power

1. Still, may not truly change others

3. Avoidance1. Hardly ever works

1. Does allow for some problems to solve themselves

4. Process controlling1. Controlling the process used to resolve the problem

5. Compromise / Collaboration1. Requires mutual sacrifice and subordination

6. Accommodating1. Subordinating to the other desires )stop-gap)


Copyright © 2004 Prentice Hall. All rights reserved.8–1 Fundamental Question for Change What are the forces acting upon me? What are the pressures I.

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