Chapter 12 Management

What is the comprehensive organizational change model

1. Recognize the need for change. 2. Establish goals for the change. 3. Diagnose the relevant variables. 4. Select an appropriate change technique. 5. Plan for the implementation of the change. 6. Implement the change. 7. Evaluate the change and follow up.

What is resistance to change?

Change is inherently uncertain, so people often feel anxious about whether the change will negatively affect them. •Threatened self-interest arises when people know the change will reduce their influence or cause the organization to value their jobs less. •Sometimes people resist a change because they disagree with it. They have different perceptions of the situation or different opinions about the best response, and so they try to block the manager from acting .•Employees may feel a sense of loss during organization change, as their jobs, procedures, systems, status, and workplace relationships change.

Examples of resistance to change

For example, Shanice manages the technical support team. The chief technology officer has decided that each technical support specialist should work on just one product and should report to the business lead for that product. Shanice was not consulted about this change and believes it will reduce the quality of technical support for the company's products (she disagrees with it). Her team will be broken up, eliminating the need for her job, and she is unsure whether she will be given a different job or be laid off (anxiety about uncertainty). Furthermore, she believes that if she is given a different job, it will have less responsibility and prestige than her current role (threatened self-interest). Finally, she will miss interacting with her direct reports and her network of stakeholders, as well as the daily routine she has developed in her current role (sense of loss).

Example of the Lewin Model

For example, during a major downturn in the construction industry, Caterpillar experienced a significant drop in revenue. In response, the firm developed a plan to reduce the size of its workforce. The first step in this change (unfreezing) was convincing the United Auto Workers (UAW) to support the reduction because of its importance to the firm's long-term survival. After this unfreezing was accomplished, 30,000 jobs were eliminated (implementation). Then Caterpillar worked to improve its strained relationship with its workers (refreezing) by agreeing to guaranteed future pay hikes and promising no more cutbacks for the next five years. While Lewin's model is appealing in its simplicity, however, it unfortunately lacks operational specificity. Thus, a more comprehensive perspective is often needed.

What is the Lewin Model?

Kurt Lewin, a noted organizational theorist, suggested that every change requires three steps. The first step is unfreezing—individuals who will be affected by the impending change must be led to recognize why the change is necessary. Next, the change itself is implemented. Finally, refreezing involves reinforcing and supporting the change so that it becomes a part of the system. 1. In unfreezing, people recognize why the change is needed. 2. The change is implemented. 3. In refreezing, the organization reinforces the change so that it persists.

How does organizational change work?

Organization change can be prompted by external or internal forces. •External forces include changes in the general environment, such as to the economy, to laws and regulations, and in societal values. External forces also include changes in the task environment, such as activity of competitors, suppliers, regulators, and unions.•Internal forces include changes in strategy and in employee values and preferences. Types of change Planned changes are made in anticipation of future events. Reactive changes are responses, often rushed and inadequate, to developing circumstances. Although reactive change is sometimes necessary, planned change is preferable. Knowing this, managers who are aware that their organization may need to deal with a natural disaster (e.g., a hurricane), political upheaval (e.g., violent overthrow of the government), technological disruption (e.g., invention of a new product by a competitor), or other sudden changes should develop well-thought-out plans to deal with these anticipated disasters.

What is organizational Change?

Organization change is any substantive modification to some part of the organization. Thus, change can involve virtually any dimension or element of an organization: work schedules, bases for departmentalization, span of management, technology, machinery and equipment, organization design, people themselves, and so on. It is also important to keep in mind that any change in an organization may have effects extending beyond the actual area where the change is implemented.

What is the Task environment?

Specific organizations or groups that influence an organization Because of its proximity to the organization, the task environment is an even more powerful force for change. Competitors influence an organization through their price structures and product lines. When HP lowers notebook prices, Dell may have little choice but to follow suit. Because customers determine what products can be sold at what prices, organizations must be concerned with consumer tastes and preferences. Suppliers affect organizations by raising or lowering prices or changing product lines. Regulators can have dramatic effects on an organization. For example, if OSHA rules that a particular production process is dangerous to workers, it can force a firm to close a plant that uses that process until it meets stricter safety standards. Unions can force change when they have the clout to negotiate for higher wages or if they go on strike.

What is the comprehensive organizational change model continued?

The comprehensive approach to change takes a systems view and delineates a series of specific steps that often lead to successful change. This expanded model is illustrated in Figure 12.1. The first step is recognizing the need for change. Reactive change might be triggered by employee complaints, declines in productivity or turnover, court injunctions, sales slumps, or labor strikes. Recognition may simply be managers' awareness that change in a certain area is inevitable. For example, managers may be aware of the general frequency of organizational change undertaken by most organizations and recognize that their organization should probably follow the same pattern. The immediate stimulus might be the result of a forecast indicating new market potential, the accumulation of a cash surplus for possible investment, or an opportunity to achieve and capitalize on a major technological breakthrough. Managers might also initiate change today because indicators suggest that it will be necessary in the near future. Managers must next set goals for the change. To increase market share, to enter new markets, to restore employee morale, to settle a strike, and to identify investment opportunities all might be goals for change. Third, managers must diagnose what brought on the need for change. Employee turnover, for example, might be caused by below-market pay, substandard working conditions, inadequate supervision, or employee dissatisfaction with benefits. Thus, although turnover may be the immediate stimulus for change, managers must understand its causes in order to make the right changes. The next step is to select a change technique that will accomplish the intended goals. If turnover is caused by below-market pay, a new reward system may be needed. If the cause is inadequate supervision, interpersonal skills training may be called for. (Various change techniques are summarized later in this chapter.) After the appropriate technique has been chosen, its implementation must be planned. Issues to consider include the costs of the change, its effects on other areas of the organization, and the degree of employee participation appropriate for the situation. If the change is implemented as planned, the results should then be evaluated. If the change was intended to reduce turnover, managers should measure turnover after the change has been in effect for a while. If turnover is still too high, other changes may be necessary. It could be that the wrong change was implemented or that other measures are needed in addition to the initial change, for example.

What are the various types of innovation?

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What are the various types of change?

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How to overcome Resistence to change

•Encourage employees to participate in planning and implementing the change. They will understand it better and will feel that their perspectives have been considered. •Educate employees and communicate openly with them throughout the change to reduce uncertainty. •Facilitate change by not altering more than necessary, telling employees what will happen well in advance, and giving them time to adjust .•Conduct a force-field analysis by listing all the forces promoting and impeding change, then boosting the forces for change and reducing the forces against change.