Org change for bbm i isem bangalore university (1)

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Organizational ChangeOrganizational Change

Organizational change is the process by which organization move from their present state to some desired future state to increase effectiveness.

When an organization system is disturbed by some internal or external forces change frequently occur or any alteration which occur in the overall work environment of an organization.

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CHARACTERSTICS OF Organisational changeCHARACTERSTICS OF Organisational change

It is vital to avoid stagnation It is a process not an event It is normal and constant Change may be reactive or proactive. It is fast and will become more fast due to technology It can be directive i.e Top to Bottom Or participative :

Involving all the employees It will be Interdependent

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The Evolution of StarbucksThe Evolution of Starbucks

Exploring Behavior in Action

In the beginning they had only just a shop that sold some selected coffee beans.

As Starbucks growing, they realized that the informal techniques were not sufficient and needed to have a more formalized with people and places.

Now Starbucks was the biggest coffee chain network in the world with more than 15000 shops in over 44 countries. And they grown too fast.

They adopting the Italian culture and make some important changes in organization.

Howard Schultz

Dave Olsen

Dawn Pinaud

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Change ForcesChange Forces

INTETRNAL FORCES

Work forceManagerial personnelManagement structureAvoid developing inertia

External Forces

Political forcesEconomic conditionSocial changesTechnologyMarketing conditions

Change forces

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INTERNAL FORCESINTERNAL FORCES1. Pressures for change that originate inside the organization are

generally recognizable in the form of signals indicating that something needs to be altered, such are the internal forces.

2. Declining effectiveness is a pressure to change. A company that experiences its third quarterly loss within a fiscal year is undoubtedly motivated to do something about it. Some companies react by instituting layoffs and massive cost – cutting programs, whereas others look at the bigger picture, view the loss as symptomatic of an underlying problem, and seek the cause of the problem.

3. A crisis situation also may stimulate change in an organization. Strikes or walkouts may lead management to change the wage structure. The resignation of a key decision-maker is one crisis that causes the company to rethink the composition of its management team and its role in the organization. A much-publicized crisis that led to change with Exxon was the oil spill accident with Exxon’s Valdez oil tanker. The accident brought about many changes in Exxon’s environmental policies.

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INTERNAL FORCESINTERNAL FORCES4. Changes in employee expectations also can trigger change in

organizations. A company that hires a group of young newcomers may be met with a set of expectations very different from those expressed by older workers. The work force is more educated than ever before. Although this has its advantages, workers with more education demand more of employers. Today’s workforce is also concerned with career and family balance issues, such as dependent care. The many sources of workforce diversity hold potential for a host of differing expectations among employees.

5 Changes in the work climate at an organization can also stimulate change. A workforce that seems lethargic, unmotivated, and dissatisfied is a symptom that must be addressed. This symptom is common in organizations that have experienced layoffs. Workers who have escaped a layoff may grieve for those who have lost their jobs and may find it hard to continue to be productive. They may fear that they will be laid off as well, and many feel insecure in their jobs.

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External Pressures for ChangeExternal Pressures for Change

1. Political : stability and types2. Economic shocks: rise and fall of global housing market, financial sector

collapse, global recession.3. Social trends don’t remain static. Companies must continually adjust product

and marketing strategies to be sensitive to changing social trends. The State Bank of India did the same when it started a zero-balance bank account program for villagers

4. Technology : is continually changing jobs and organization. Ex: faster, cheaper and more mobile computers and handheld devices.

5. Marketing6. Nature of the work :Almost every organization must adjust to a

multicultural environment, demographic changes, immigration and outsourcing.

7. Competition is changing. Competitors are as likely to come from across the ocean as from across town. Ex: increased government regulation of commerce.

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Change AgentsChange Agents

• A Persons in organization responsible for managing change activities.

• Can be managers or non managers, current employees, newly hired employees or outside consultants.

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APPROACHES TO ORGANISATIONAL CHANGEAPPROACHES TO ORGANISATIONAL CHANGE::A ; A ; Process of Planned ChangeProcess of Planned Change

Unfreezing RefreezingMoving

• Provide rationale for change

• Create sense of psychological safety concerning change

• Change efforts to overcome the pressure,the pressure of both individual resistance and group conformity

• Provide information that suspects proposed changes

• Bring about actual shifts in behavior

• A chnge process that transforms the organisation from status quo to desired end stage

• Stabilising the change intervention by balancing ,driving and restraining forces

• Implement new evaluation systems

• Implement new hiring and promotion systems

Kurt Lewin

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APPROACHES TO ORGANISATIONAL CHANGE:APPROACHES TO ORGANISATIONAL CHANGE:B : THE SIX STEPS CHANGE PROCESSB : THE SIX STEPS CHANGE PROCESS

1. Becoming aware of the pressure for change

2. Recognise the need for change eg Technology

3. Diagnosing the problem : eg Interview,Questionaire, Observation, Secondary data/unobstructive measure

4. Planning the change; 1 Evolutionary,2 Revolutionary Top to bottom or Participativ e i.e Bottom to top

5. Implementing the change : Resistance,Hostility,aggression,absentism

2 Group level ;strike,, Managing Resistance : Six steps 1 Edn and Communication 2. Participative 3. Facilitation and support 4.Negotiatiation and agreemant 5. Manipulation and co-Operation 6. Selecting people who accept change –Coercion

6. Follow Up on Change

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APPROACHES TO MANAGING ORGANISATIONAL CHANGE:APPROACHES TO MANAGING ORGANISATIONAL CHANGE:C : C : KOTTER’S EIGHT STEP MODELKOTTER’S EIGHT STEP MODEL

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There are primarily two types of Organisational Change;A Total Quality management (TQM)B Business Process Re Engineering ( BPRE)

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A Total Quality Management

TQM is an approach to improving the effectiveness and flexibilities of business as a whole. It is essentially a way of organizing and involving the whole organization, every department, every activity and every single person at every level.

TQM ensures that the management adopts a strategic overview of the quality and focuses on prevention rather than inspection.

The importance of TQM lies in the fact that it encourages innovation, makes the organization adaptable to change, motivates people for better quality, and integrates the business arising out of a common purpose and all these provide the organization with a valuable and distinctive competitive edge.

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Objectives of TQMa. Meeting the customer's Expectation/requirements is the primary

objective and the key to organizational survival and growth.b. The second objective of TQM is continuous improvement of

quality. The management should stimulate the employees in becoming increasingly competent and creative.

c. Third, TQM aims at developing the relationship (among various stakeholders) of openness and trust among the employees at all levels in the organisation.

CHANGE THROUGH FOUR COMPONANTSCHANGE THROUGH FOUR COMPONANTS

1. People : Proper hiring, long life learning,, Institute suggestion scheme ,establish quality circle

2. Process : Constant review process through project improvement, waste elimination, Process chain Re-Engineering

3. System : change in system through statistical process control and bench marking, , quality assurance and control.

4. Management : Management with Vision and mission

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Elements of TQM

1. Be customer focusedIt requires the company to check customers' attitudes regularly and includes the idea of

internal customers as well as external ones.

2. Do it right the first time : This means avoiding rework, i.e., cutting the amount of defective work.

3. Constantly improve : Continuous improvement allows the company gradually to get better.

4. Quality is an attitude : Every one has to be committed to quality. That means changing the attitude of the entire workforce, and altering the way the company operates.

5. Telling staff what is going on : This involves improved communication. Typically, it includes team briefing.

6. Educate and train people : It means educating staff in the principles of TQM, which is a whole new style of working.

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7. Measure the work. : Measurement allows the company to make decisions based on facts, not opinion. It helps to maintain standards and keep processes within the agreed tolerances.

8. Top management must be involved : If senior management is not involved, the programme will fail.

9. Make it a good place to work : Many companies are full of fear. Staffs are afraid of the sack, their boss and making mistakes. There is no point in running a TQM program unless the company drives out fear.

10 Introduce team work : Team work boosts employees' morale. It reduces conflict and solves problem by hitting them with a wider range of skills. It pushes authority and responsibility downwards and provides better, more balanced solutions.

11. Organize by process, not by function : This element of TQM seeks to reduce the barriers that exist between different departments, and concentrates on getting the product to the customer.

Elements of TQM (contd)

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1.Top management sees no reason for change.2.Top management is not concerned for its staff.3.Top management is not committed to the TQM programme.4.The company loses interest in the programme after six

months.5.The workforce and the management do not agree on what

needs to happen.6.Urgent problems intervene.7.TQM is imposed on the workforce, which does not

inwardly accept it.8.No performance measure or targets are set, so progress

cannot be measured.9.Processes are not analyzed, systems are weak and

procedures are not written down.

Reasons for FAILURE of TQM

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B. Business Process Re-Engineering (BPRE)B. Business Process Re-Engineering (BPRE)

Definition:The fundamental rethinking and radical redesign of core

business processes to achieve dramatic improvements in critical

performance measures such as quality, cost, and cycle time.

Components :

1.Business process : The business delivery process negates organisational

boundaries thereby reducing administrative overheads

2.Management and Measurement : Mapping existing process and need

Benchmarking worldwide best practices, Appointing process owners for each

process

3. Job and Structure : flat structure, wide span control, checking and auditing

4. Values and Belief : for Mangers : Lead by Example, for Employees :Every

job is important, Customer service and relationship

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The Reengineering Diamond

Business Processes & Functions

Business Processes & Functions

Management & Measurement

Systems

Management & Measurement

Systems

Jobs , Skills, & Organizational

Structures

Jobs , Skills, & Organizational

Structures

Values andBeliefs

Values andBeliefs

Enlighten

Entail Demand

Foster

Culture

Components' of

BPRE

Competitors

Markets

Customers &Suppliers

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3 Basic key to BPRE

1. Identify competitive strength

2. Assess Core process

3. Re-Organising

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Resistance to ChangeResistance to Change

Three Factors

Organizational Organizational ResistanceResistance

Group Group ResistanceResistance

Effort to block new ways of doing things

Individual Individual ResistanceResistance

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Individual Resistance

Why people resists changes. Some of these appear to be rational or emotional.1.Cognitive bias : Dissonance 9disagreement)2.Selective perception : hear and see what I want to see3.Economic factors4.Habits5.Uncertainty and Insecurity6.Lack of communication7.Extend of change8.Psychological factors9.Social factors

Group ResistanceMost organizational changes have impact on formal groups in the organization the main reason why the groups resists change is that they fear that their cohesiveness or existence is threatened by it.

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Organizational ResistanceOrganizational resistance means the change is resisted at the level of the organization itself.

Some organization/ business firm are so designed that they resist new ideas, this is specifically true in case of organization which are conservative in

nature.The major reason for organizational resistance are:-

•Threat to power•Group inertia•Organizational structure•Organisational culture•Organisational strategy •Threat to specialization•Resource constants•Sunk costs

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CommunicationCommunication • Highest priority and first strategy for change

• Improves urgency to change

• Reduces uncertainty (fear of unknown)

• Problems -- time consuming and costly

Minimizing Resistance to Change

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CommunicationCommunication • Provides new knowledge and skills

• Includes coaching and action learning

• Helps break old routines and adopt new roles

• Problems -- potentially time consuming and costly

Minimizing Resistance to ChangeMinimizing Resistance to Change

TrainingTraining

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CommunicationCommunication • Increases ownership of change

• Helps saving face and reducing fear of unknown

• Includes task forces, search conferences

• Problems -- time-consuming, potential conflict


TrainingTraining

Employee Employee InvolvementInvolvement

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CommunicationCommunication • When communication, training, and involvement do not resolve stress

• Potential benefits• More motivation to

change• Less fear of unknown• Fewer direct costs

• Problems -- time-consuming, expensive, doesn’t help everyone


TrainingTraining


Stress Stress ManagementManagement

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CommunicationCommunication

• When people clearly lose something and won’t otherwise support change

• Influence by exchange-- reduces direct costs

• Problems• Expensive• Increases compliance,

not commitment

Minimising Resistance to Change

TrainingTraining



Negotiation

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CommunicationCommunication

• When all else fails

• Assertive influence

• Firing people -- radical form of “unlearning”

• Problems• Reduces trust• May create more subtle

resistance

Minimising Resistance to Change

TrainingTraining



Negotiation

Coercion

Org change for bbm i isem bangalore university (1)

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