MGMT 4263 Organizational change
Greiner's 5 phases revolutionary stages
- 1, crisis of leadership - 2, crisis of autonomy - 3, crisis of control - 4, crisis of red tape - 5, crisis of Growth
Creating a Need for Change
- Create awareness that a crisis is near, or create a crisis that needs to be addressed - Develop a transformational vision for the change based on compelling values - Find a transformational leader to champion the change - Focus on common or shared goals and work out ways to achieve them - Create dissatisfaction with status quo through information and education
Quinn's Competing ValuesFramework (con't) Organizational need all 4 view points - Individuals tend to naturally fall into one of the quadrants Uses of the model:
- Describe current culture - Describe tasks - Portray focus of rewards systems - Describe a needed shift - Individual management development
Quinn's Competing Values Framework (con't) What makes an organization effective? How do we describe the current culture?
- Each quadrant represents values and assumptions, perceptions and perspectives - Dimensions 1. Focus - internal or external 2. Structure - preference for amount of structure
Refreeze (re-gel)
- Employees adapt to changes - Monitor changes after implementation to determine effectiveness - Modify as needed - Changes are incorporated to become the new normal
Greiner's 5 phases of Organizational Growth broken down in to
- Evolutionary stage - revolutionary stages
Why Change
- Examples: · 2008 financial crisis. - Warnings came 5 years earlier about practices going on, but people (some experts or high ranking) had a vested interest in NOT changing. - Took steps to ignore or silence questions. - Think about past false alarms. - HINI 2009-2010 sense of panic - Must demonstrate the need for change is real. - Unfreeze current or previous practices. - Recognize that differences in perspective are real, rather than stubbornness, lack of intelligence, deviance
Quinn's Competing Values Framework
- Flexibility (top) - internally focused (left) - control (down) - externally focused (right side)
New Management Challenges
- Greater diversity •Greater synchronization requirements •Greater time-pacing requirements •Faster decision-making, learning and innovation •More frequent environmental discontinuities •Faster industry life-cycles •Faster newness and obsolescence of knowledge •Risk of competency traps where old competencies no longer produce desired effects •Greater newness and obsolescence of organizations
Overcoming Groupthink
- Have the leader play an impartial role - Actively seek dissenting views. Have members play the role of devil's advocate - Actively discuss & assess the costs, benefits and risks of diverse alternatives - Establish a methodical decision-making process at the beginning - Ensure an open climate & solicit input from informed outsiders and experts - Allow time for reflection & do not mistake silence for consent
Groupthink
- Illusion of invulnerability - Construct rationalizations - Morality(good or bad) of position is unquestioned - Stereotypes - distort - Pressure applied to those who express doubts about the group's position - Self-censorship - deviations from consensus are avoided - Illusion of unanimity - Mind-guards: leaders and fellow members protected from adverse(harmful) information - ex- on the exam is most people put the answer is "A" but the answer was "B" and you know that, but you change your answer just b/c everyone picked A
What is a Vision Statement? - According to Tichy and Devanna:
- It provides conceptual framework for understanding the organization's purpose - the vision includes a road map - It has emotional appeal with which people can identify - A vision's value lies in its ability to guide behavior
Approaches to Visions for Change
- Leader-developed vision - Leader-senior team-developed vision - Bottom up visioning
Greiner's 5 phases of Organizational Growth
- Life cycle model - Small evolutionary change VS large revolutionary change - Model states that all organizations must pass through each stage - Advantages = captures many aspects of growth - Disadvantages = little role for organizational control and not all organizations may progress like this
Barriers to Recognizing the Need for Change ('Active Inertia')
- Mental models about the world become blinders - Past successes reinforce existing practices - Existing values and corporate culture may harden into dogma(belief) - Leadership practices may impede recognition of need for change - Embedded(set) systems and processes can harden into unquestioned routines and habits - Existing relationships can become shackles that impede(delay) the ability to respond to a changing environment
Vision integrates(combine) 3 factors:
- Mission: What business are we in? What's our reason for being & our fundamental values? - Strategy: How are we to achieve our mission and our competitive advantage? - Culture: The enactment of who we are in our values, beliefs, rituals, etc., relative to ourselves, our coworkers and our clients
Readying an Organization for Change
- Need for change is identified in terms of the gap between the current state and the desired state - People must believe that the proposed change is the right change - People must believe they can accomplish the change - The change is supported by key individuals organizational members look to - "What's in it for me?"
New Organizational Forms & Management Challenges (con't)
- New Organizational Forms and Competitive Dynamics - New Management Challenges
Greiner's 5 phases Evolutionary stage
- Phases 1, growth through creativity - Phases 2, growth through direction - 3, growth through delegation - 4, growth through coordination - 5, growth through collaboration
Readiness Dimensions:
- Previous Change Experience Score Range (-4 to +2) Score? __not ready for change _______ - Executive Support Score Range (-1 to +4) Score? __not ready for change_______ - Credible Leadership & Change Agents Score Range (0 to +9) Score? ___not ready ______ - Openness to Change Score Range (-3 to +15) Score? ___they are ready______ - Rewards for Change Score Range (-2 to +1) Score? ___not ready______ - Measures for Change & Accountability Score Range (0 to +4) - not ready Score below +10 are likely not ready for change, makes change very difficult
Develop Your Understanding of the Need for Change and Create Awareness and Legitimacy for it
- Seek Out & Make Sense of External Data - Seek Out & Make Sense of the Perspectives of Other Stakeholders - Seek out & Make Sense of Internal Data - Seek Out & Assess Your Personal Concerns & Perspectives
Issues & Problems with the Linear View
- Time delays and lag(fall back) effects related to variables and outcomes you are trying to manage e.g., inventory stocks and flows, customer satisfaction & purchase decisions - Complexity makes cause effect relationships difficult to predict and track - Attribution Errors and False Learning often result from the above
The Vision Trap
- Watch for vision creep - Get back to basics: • Language people can identify with • Language people can do something with and focus upon • Vision that engages and energizes and is not abstract and ambiguous
'Handy-Dandy Vision Crafter'
- We Strive to be the.. (Premier, Leading, Pre-eminent, World-class, Dominant, Best of Class) - Organization in Our Industry. We Provide the Best... (Committed, Caring, Innovative, Expert, Environmentally friendly, Reliable, Cost-effective, Focused, Diversified, High-Quality, On Time, Ethical, High value added) - (Products, Services, Business Solutions, Customer-Oriented Solutions) - To... (Serve Our Global Marketplace; Create Customer, Employee and Shareholder Value; Fulfill Our Covenants to Our Stakeholders; Exceed Our Customers' Needs; Delight our Customers) - Through... (Committed, Caring, Continuously Developed, Knowledgeable, Customer focused) - Employees in this Rapidly Changing & Dynamic... (Industry, Society, World)
A Checklist for Creating the Readiness for Change
- What is the objective need for change? What are the consequences to the organization of changing or not changing? Are people aware of these risks? - Are members aware of the need for change? Do they feel the need for change or do they deny its need? How can they be informed? - Individuals are motivated towards change when they perceive the benefits as outweighing the costs. Do they see the benefits as outweighing the costs? What can you do to ensure this is the case?
What is Your Experience with Vision Statements?
- What makes for a good vision statement? - What is the difference between a vision for the organization and one for change? - What does the organization & senior management want from the vision? - How much time, energy & resources should be devoted to creating a vision? Who should be involved?
Why this change?
- change cant happen by it self - Many things need change - Must analyze importance of expending resources - Craft a compelling vision of where you are going and why it's worth the effort - Steve Jobs. Ipad is "magical" - people are scared to change, they need to have a vision for someone to take a risk to change.
Nadler & Tushman Organizational Congruence Model, to make change - Transformation Process
- informal organization - work - people - formal organization - first we need to line them to make change
Beckhard and Harris' Change Process Model
- initial organization analysis - why change? - defining the desired future state, Gap analysis, describing the present state -action planning assessing the present in terms of the future to determine the work to be done - managing the transition
PESTE
- political - environmental - social - technological - economics
Environmental factors affecting change are outlined:
- social/ demographic - technological - political - economic forces
Nadler and Tushman Organizational Congruence Model 3 important points:
- system is dynamic(constant change) - fit between components is significant - better fit = better performance
Nature of Managed Organizational Change Lewin's View
- unfreeze - change - refreeze
The Change Path Model
1. Awakening - reminding 2. Mobilization - to get to one place to other 3. Acceleration - need to do this now, making sure the change happened 4.Institutionalization - getting it done
Kotter's Eight-Stage Process
1. Establishing a sense of urgency 2. Creating a guiding coalition(partnership) 3. Developing a vision and strategy 4. Communicate the change vision 5. Empower employees 6. Generate short-term wins 7. Consolidate(combine) gains and produce more change 8. Anchor the new approaches in the culture
A Second Look at Readiness
1. Leadership viewed as trustworthy by followers 2. Followers viewed as trustworthy & able to dissent by leaders 3. Have capable Champions of Change 4. Involved middle management 5. Innovative culture 6. Accountable culture 7. Effective communications 8. Systems thinking
Nadler and Tushman Organizational Congruence Model Performance =
4 components in the middle. If they are aligned with each other, AND if internal and external system are aligned, performance in external marketplace will be better - they are - informal organization - work - people - formal organization
A Letter of Complaint
A letter written by a consumer to a manufacturer or retailer regarding a problem with a product or service
What is a Vision Statement? According to Simons:
A vision without task is a dream world, and task without vision is drudgery(labor).
According to the book, past experiences may cause employees to react to change in what ways? a. With blind acceptance b. With urgency c. With compliance d. With cynicism
D. With cynicism
Organizational change is the planned alteration of organizational components to improve the ________________ of organizations. a. Effectiveness b. Profitability c. Efficiency d. Culture
Effectiveness
Why is change a Hot Topic?
Environmental Forces Driving Changes (PESTE factors)
GVV
Giving Voice to Values
Linear Event View of the World
Goal, Situation --> Gap/Problem --> Decision/Action --> Results
What is a Vision Statement? - According to Jick:
It is an attempt to articulate what a desired future for a company would look like... an organizational dream. Visions are big pictures.
New Organizational Forms & Management Challenges due to Environmental Change
Macro Changes and Impact
- Political & Legal Factors ............... Implications? - Economic Factors ............... Implications? how can they buy b/c of Covid - Social Factors ............... Implications? how many people watch what they eat or sauger it have - Technological Factors ............... Implications? - Ecological Factors ............... Implications?
PESTE
five forces framework
PESTE
Organizational Change: Defined
The intentional and planned alteration(change) of organizational components to improve organizational effectiveness.
A vision can be used to strengthen or transform existing cultures. a. True b. False
True
Visions should be clear, challenging, and tangible. a. True b. False
True
Save the Children Vision for Its "Survive to 5" Program
We believe all children should live to celebrate their fifth birthday. The Survive to 5 campaign supports Millennium Development Goal 4—to reduce child mortality by two thirds by 2015 and save the lives of over 5 million children under 5 who are dying of preventable and treatable diseases.
What is a key tool used heavily in the Institutionalization stage? a. Measurement b. Urgency c. Compelling vision d. Gap analysis
a. Measurement
Change upsets the internal equilibrium in
an organization and thus may be resisted.
Kotter's model of change asserts that every change is different and that change can be implemented through a variety of different paths or steps in varying order. a. True b. False
b. False
Once a gap analysis is performed, it is fairly straightforward to decide how the organization can reach the desired future state. a. True b. False
b. False
The Change Path Model provides thorough instructions for enacting change that should be followed closely to ensure success. a. True b. False
b. False
What factors determine organizational readiness for change? a. The number of organizational change projects done in the past b. Leadership commitment and member confidence in the leadership c. The amount of money available to incentivize employees to buy in d. The size of the organization
b. Leadership commitment and member confidence in the leadership
Turbulence and ambiguity define the landscape for
both the public and private sectors
Gentile's Giving Voice to Values is meant to strengthen business students' skills in what type of situation? a. When negotiating for salary b. When instigating a change project c. When in a situation that runs counter to their principles d. When onboarding new employees
c. When in a situation that runs counter to their principles
Quinn's Competing Values Framework (con't) Advantages of the model
can describe multiple levels such as organizational rewards, group processes, individual viewpoints, skills and perspectives
Environmental Forces Driving Changes (PESTE factors):
changes happen not because we want to it just happen •Political and legal changes •Economic changes •Social, cultural and demographic •New technologies •Ecological/Environmental factors
Nadler and Tushman Organizational Congruence Model Advantages of this model:
complex yet allows for action planning
Which of the following is not a strategy for avoiding groupthink? a. Have the leader play an impartial role b. Solicit input from informed outsiders and experts c. Establish a methodical decision-making process d. Self-censoring and conflict avoidance
d. Self-censoring and conflict avoidance
What are the three stages in Lewin's model of change? a. Easy, hard, and harder b. Stop, drop, and roll c. Stop, look, and listen d. Unfreeze, change, and refreeze
d. Unfreeze, change, and refreeze
What situation makes it easiest to instigate change? a. The stakes are low so the organization can change gradually b. Everything else is stable so people only have to accept one change instead of many c. When everyone else's organizations are changing so people don't feel left out d. When there is an external urgency to complete the change
d. When there is an external urgency to complete the change
A Feedback Model cycle
decisions --go to--> decisions -go to----> environment---->go to decisions again
The goal of this class
develop your ability to initiate and manage change
What should companies consider when expanding their reach internationally? A. the challenges of having a homogenous workforce B. maintaining their culture and norms despite cultural shifts C. nothing; if they are small companies they will not be affected D. diversity-related challenges and differing rules and regulations
diversity-related challenges and differing rules and regulations
A system seeks ________ and one at equilibrium will only change if energy is applied
equilibrium ( waiting to change)
Change often originates in the
external environment
What is a Useful Vision?
focuses on the future
The difficulties in creating successful change are
highlighted and characteristics of successful change leader are described.
When organizations enhance(increases) their effectiveness, they
increase their ability to generate value for those they serve
Four change roles are described:
initiators, implementers, facilitators and recipients. The terms "change leader" and "change agent" are used interchangeably and could mean any of the four roles.
Change is not clean and linear
it is messy
In global competition, what matters is
not the firm's absolute rate of learning and innovation, but the relative pace of its development compared to its rivals.
When assessing organizations, think of them as open systems webs
of interconnected and interdependent relationships that interact with the environment
Both evolutionary and revolutionary change is needed for
organizational growth
Managers need to become effective agents of change,
possessing the will and skills to make positive change happen (7 Habits of highly effective people)
•There is a major 'knowing-doing' gap
smoking example - Knowing concepts and theories is not enough
Disadvantages of the model
static(unchanged) view
Nadler and Tushman Organizational Congruence Model Disadvantages of this model:
strategy change doesn't always come first, environment is not the only source of change
in sigmoid curve change
time is important
Four types of organizational change are discussed:
tuning, adapting, reorienting and recreating
Flint Water Problem
was plagued by more than lead. The city's switch from Detroit water to the Flint River coincided with an outbreak of Legionnaires' disease (a severe form of pneumonia) that killed 12 and sickened at least 87 people so people who was drinking the water was losing hair, and their health
awakening
· Conduct organizational analysis · Why change? · Scan external and internal environments · Review forces for and against change · Create buy-in and awareness · Identify change vision · Conduct a gap analysis · What to change · Need for change
Open Systems Perspective (con't)
• A system seeks equilibrium and one at equilibrium will only change if energy is applied • Individuals within a system may have views of the system's function and purpose that differ greatly from those of others • Things that occur within and/or to open systems should not be viewed in isolation. See them as interconnected, interdependent components of a complex system
Why is it necessary to have a Vision?
• A vision enhances performance measures • It promotes change and provides a basis for a strategic plan • It motivates individuals and facilitates recruitment • It establishes a context for decision making
Acceleration
• Action planning • Implementation • Transition management
Gentile's Giving Voice to Values
• Clarification and articulation of one's values • Post decision-making analysis and implementation plan • The practice of speaking one's values and receiving feedback from peers
Value of a Vision isto Guide Behaviour - Good visions are:
• Clear, concise, easily understandable • Memorable • Exciting & inspiring • Challenging • Excellence-centered • Stable but flexible • Implementable & tangible
Gentile's Giving Voice to Values Evaluation
• Considers ethical implications of organizational change (think about 2014 VA hospital, etc.) • Focuses on the "identify need for change" step in other models • GVV curriculum gives people the skills to speak up when organizational practices conflict with their values
Dynamic Complexity because Systems are:
• Constantly Changing • Tightly Coupled • Governed by Feedback • Nonlinear • History-Dependent • Self Organizing • Adaptive • Characterized by Trade-offs - give or take • Counterintuitive- b/c laziness, clamant change • Policy Resistant - people don't like policy so it scary people out if it a lot - Need to understand this to be a successful change agent • Can't expect that after plans are made the reality will be the same •Time lags, delays, competitor or other environmental changes
Tata's Vision for the Nano
• Create a $2,000 "people's car." It has to be safe, affordable, all weather transportation for a family. It should adhere to regulatory requirements, and • achieve performance targets such as fuel efficiency and acceleration. • The Result: The Nano. Gets 50 miles per gallon & seats five. At $2,500 - the least expensive car in the world.
Unfreeze:
• Dislodge(remove) some of the beliefs and assumptions of those involved •May be due to a crisis or a combination of factors •Systems, structures, beliefs, and habits become fluid •Unfreezing must happen at multiple levels
What is Your Experience with Organizational Vision?
• How do you think an organization should go about developing a vision? Bottom up? Top down? • To whom should it be communicated? How should it be communicated? • When does an organization need to consider or revisit its vision?
Quinn's Competing ValuesFramework (con't) Rational Economic View
• How to stimulate individual & collective achievement • Maximization of output • Producer & director roles
Quinn's Competing ValuesFramework (con't) Internal Processes View
• How to understand & control the work unit • Consolation and continuity • Internal monitor & coordinator roles
Quinn's Competing ValuesFramework (con't) Open Systems View of Organization
• How to use power & manage change • The challenge of change • Innovator & broker roles
Quinn's Competing ValuesFramework (con't) Human Resources View
• How to work with individuals & groups • Teamwork & HR department • Mentor & group facilitator roles
Stacy's Complexity Theory & Organizational Change (con't)
• If organizations give into forces of stability, they become ossified and change impaired • If organizations succumb to forces of instability, they will disintegrate • Success is when organizations exist between frozen stability and chaos • Short term dynamics (or noise) are characterized by irregular cycles and discontinuous trends, but long term trends are identifiable • A successful organization faces an unknowable specific future because things can and do happen • Agents can't control the long term future - they can only act in relation to the short term • Long term development is a spontaneous, self-organizing process that may give rise to new strategic directions • It is through this process that managers create and come to know the environments and long-term futures of their organizations
Institutionalization
• Measurement ,note that this should be thought of much earlier in the process • Tracking - New structures and systems in place
Stacy's Complexity Theory & Organizational Change
• Organizations are webs of non-linear feedback loops that are connected with individuals and organizations through similar webs • These feedback systems operate in stable and unstable states of equilibrium, even to the point at which chaos ensues(follow) • Organizations are inherently paradoxes, pulled by forces of stability and instability
Kotter's Eight-Stage Process Evaluation
• Overcomes simplicity of Lewin's model, says steps must go in sequence(order). • Make sure change is embedded(implanted) in organization's culture and norms
Duck's Five-Stage Change Curve Evaluation
• Related to emotional transitions • at length about issues like perception, trust, fairness, individual reactions, on change recipients and change agents.
Why do Visions Fail?
• Senior management's walk doesn't match the talk • Ignores needs of those putting it into practice • Unrealistic expectations develop that can't be met • Lacks grounding in the reality of the present • Either too abstract or too concrete • Lack of creative input • Poor management of participation • Complacency - no sense of urgency
Duck's Five-Stage Change Curve
• Stagnation - before starting • Preparation - the things you need to start • Implementation - starting • Determination - not stopping what you started • Fruition - the finishing
Mobilization
• Take identification of what needs to change a step further • Change leaders convince others of the need to change and proposed chourse • Address formal systems and structures (chapter 5) • People factors o Change agents (chapter 8) o Change recipients (chapter 7) o Interpersonal dynamics (chapter 6)
Organizational Vision & Change Vision
• The approach to vision crafting remains the same but the focus shifts and becomes more specific around the particular change you have in mind • The change leader's goals are advanced when they develop a compelling change vision that appeals to groups critical to the change initiative and effectively communicate it to them
Recognizing the Need for Change is Not Enough
• There is no shortage of things needing change • Recognizing the need for change is not sufficient(enough) • "Why change" is aided(helped) by solid analysis of what needs to change and why its important to expend resources on this area, but... • We need to be able to craft a compelling vision of: • Where we want to go (the desired change) • Why it is worth the effort
Rate the Organization's Readiness for Change
• Total scores can range from -10 to +35 - The higher the score, the more ready the organization is for change • Organizations that score below +10 are likely not ready for change, making change very difficult • Use the scores from each area as a guide to focus your attention on those low-scoring sections needing improvement before attempting change. - The purpose of this tool is used to raise awareness of the organization's readiness for change. It is not meant to be used as a formal research tool!
Two distinct aspects in any change management situation need to be addressed:
• WHAT needs to change • HOW to bring about that change
The 'Knowing-Doing' Gap,
•Change capability has become a core managerial competency, But managers' abilities to deliver on change are modest at best
Digitization leading to:
•Faster information transmission •Lower cost information storage and transmission •Integration of states and opening of markets •Geographic dispersion of the value chain •All leading to globalization of markets
New Organizational Forms and Competitive Dynamics
•Global small and medium sized enterprises •Global constellations of organizations (i.e. networks) •Large, focused global firms All leading to: - Spread of autonomous, dislocated teams •Digitally enabled structures •Intense global rivalry and running faster while seeming to stand still
Change
•May be uncertainty •Need to determine ◦ What to change ◦ Who is affected and who will be involved in implementing change ◦ How to implement the change
Organization components include the organization's:
•Mission and vision •Strategy •Goals •Structure •Processes or systems •Technology •People
Open Systems Perspective
•Organizations exchange information, material & energy with their environment. They are not isolated - A system is the product of its interrelated and interdependent parts • It represents a complex web of interrelationships, not a chain of linear cause-effect relationships
Common Management Responses to Competitive Pressures
•Running hard, but for all purposes standing still Called the Red Queen phenomenon (Alice Through the Looking Glass, by Lewis Carroll
Evaluation of Lewin's Model:
•Simplistic but still useful •Limitations: ◦ Presents change as simple and linear ◦ Does not address the need for change ◦ Assumes the refreezing is optimal(best)
Sterman's System Model Dynamics Problems with the linear view:
•Time delays and lag effects •Complexity makes cause-effect relationships difficult to predict and track •Attribution errors often result from difficulty in cause-effect tracking
Models in this chapter have focused on the
•WHAT of change
The Need for Change: Have You Done Your Homework?
•What is your assessment of the need for change and the important dimensions and issues that underpin it? •Have you investigated fully the perspectives of internal and external stakeholders? •Can the different perspectives be integrated in ways that offer the possibility for collaborative solutions? •Have you developed and communicated the need for change in ways that will heighten readiness and willingness to change?