Organizational Change and its approaches

Organizational Change and its approachesAamir Ansari Ahmad Atif Abdullah

Organizational ChangeOrganizational changeis both the process in which an organization changes its structure, strategies, operational methods, technologies, or organizational culture to affect change within the organizationandthe effects of these changes on the organization.

Why do managers need Organizational Change?

Forces for ChangeNature of the WorkforceGreater diversityTechnologyFaster, cheaper, more mobileEconomic ShocksMortgage meltdownCompetitionGlobal marketplaceSocial TrendsBaby boom retirementsWorld PoliticsIraq War and the opening of China

Planned ChangeChangeMaking things differentPlanned ChangeActivities that are proactive and purposeful: an intentional, goal-oriented activityGoals of Planned ChangeImproving the ability of the organization to adapt to changes in its environmentChanging employee behaviorChange AgentsPersons who act as catalysts and assume the responsibility for managing change activities

Resistance to ChangeResistance to change appears to be a natural and positive stateForms of Resistance to Change:Overt and ImmediateVoicing complaints, engaging in job actionsImplicit and DeferredLoss of employee loyalty and motivation, increased errors or mistakes, increased absenteeismDeferred resistance clouds the link between source and reaction

Sources of Resistance to ChangeIndividualHabit, security, economic factors, fear of the unknown, and selective information processingOrganizationalStructural inertia, limited focus of change, group inertia, threat to expertise, threat to established power relationships and resource allocations

Tactics for Overcoming Resistance to ChangeEducation and CommunicationShow those affected the logic behind the changeParticipationParticipation in the decision process lessens resistanceBuilding Support and CommitmentCounseling, therapy, or new-skills trainingImplementing Change FairlyBe consistent and procedurally fairManipulation and CooptationSpinning the message to gain cooperationSelecting people who accept changeHire people who enjoy change in the first placeCoercionDirect threats and force

The Politics of ChangeImpetus for change is likely to come from outside change agents, new employees, or managers outside the main power structure.Internal change agents are most threatened by their loss of status in the organization.Long-time power holders tend to implement incremental but not radical change.The outcomes of power struggles in the organization will determine the speed and quality of change.

Lewins Three-Step Change ModelUnfreezingChange efforts to overcome the pressures of both individual resistance and group conformityMovementMake the changesRefreezingStabilizing a change intervention by balancing driving and restraining forces

Lewin: Unfreezing the Status QuoDriving ForcesForces that direct behavior away from the status quoRestraining ForcesForces that hinder movement from the existing equilibrium

Kotters Eight-Step PlanBuilds from Lewins ModelTo implement change:Establish a sense of urgencyForm a coalition Create a new visionCommunicate the vision Empower others by removing barriersCreate and reward short-term winsConsolidate, reassess, and adjustReinforce the changes

UnfreezingMovement Refreezing

Action ResearchA change process based on systematic collection of data and then selection of a change action based on what the analyzed data indicatesProcess steps:DiagnosisAnalysisFeedbackActionEvaluationAction research benefits:Problem-focused rather than solution-centeredHeavy employee involvement reduces resistance to change

What is change in organization and how to make change?

Organizational DevelopmentOrganizational Development (OD)A collection of planned interventions, built on humanistic-democratic values, that seeks to improve organizational effectiveness and employee well-beingOD ValuesRespect for peopleTrust and supportPower equalizationParticipation

Six Organizational Development TechniquesSensitivity TrainingIncreases empathy with others, listening skills, openness, and tolerance for othersSurvey Feedback ApproachThe use of questionnaires to identify discrepancies among member perceptions; discussion follows and remedies are suggestedProcess Consultation (PC)A consultant gives a client insights into what is going on around the client, within the client, and between the client and other people; identifies processes that need improvement.

Six Organizational Development Techniques (Continued)Team BuildingHigh interaction among team members to increase trust and opennessIntergroup DevelopmentOD efforts to change the attitudes, stereotypes, and perceptions that groups have of each otherAppreciative InquirySeeks to identify the unique qualities and special strengths of an organization, which can then be built on to improve performance.

Creating a Culture for Change: InnovationStimulating a Culture of InnovationInnovation: a new idea applied to initiating or improving a product, process, or serviceSources of Innovation:Structural variables: organic structuresLong-tenured managementcommunicationIdea Champions: Individuals who actively promote the innovation

Creating a Culture for Change: LearningLearning OrganizationAn organization that has developed the continuous capacity to adapt and changeLearning TypesSingle-Loop: errors are corrected using past routinesDouble-Loop: errors are corrected by modifying routinesCharacteristics Discards old ways of thinkingCommunicates openlyWorks together to achieve shared vision

Creating a Learning OrganizationOvercomes traditional organization problems:FragmentationCompetitionReactiveness

Manage Learning by:Establishing a strategyRedesigning the organizations structureReshaping the organizations cultureReward risk-taking and intelligent mistakes

Transact Insurance Corporation - case

Overview Jim, is the new vice- president, introduced to improve company system. One of the most pronounced symbols of change was the Claims Management Credo that outlines every claims manager would follow. After evaluation, the result was bad.

SymptomsSome managers and employees had disputes.Two managers quit.Three managers asked to put down their position.Many managers felt bad because their individual comments were shared.

Root CausesAuthoritative top down management.Walls between managers and employees.Jim did not keep his promise to managers.Jim did not prepare the solutions for the outcome.

Solutions and SuggestionsIntroducing and intervention- incremental changeSharing a strategic visionMake a culture.Evaluate both employees and managers.Individual privacy right & self esteem.Reward/incentive system for both.

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