Managing Organizational Change

Strategic Planning and Organizational Development

Chapter 16

Learning Objectives
1. 2.

3.

4.

5.
6.

Characterize the prevalence of the change process in organizations. Understand what, exactly, is changed when organizational change comes about, and the forces responsible for unplanned organizational change. Describe what is meant by strategic planning and explain the types of strategic changes that organizations make. Identify the 10 steps in the strategic planning process. Explain why people are resistant to organizational change and how this resistance may be overcome. Identify and describe the major organizational development techniques that are used today.
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Organizational Change
Planned or unplanned transformations in an organizations structure, technology, and/or people. First-Order Change: Change that is continuous in nature and involves no major shifts in the way an organization operates. Second-Order Change: Radical change; major shifts involving many different levels of the organization and many different aspects of business.
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The Change Process

Targets: What is Changed?

Organizational structure Technology People

Forces behind Unplanned Change:

Shifting employee demographics Performance gaps Government regulation Global competition Changing economic conditions Advances in technology
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Targets of Change

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Strategic Planning
The process of formulating, implementing, and evaluating decisions that enable an organization to achieve its objectives. Strategic Planning Concepts:
Basic assumptions Targets of strategic plans 10 steps in the strategic planning process
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Strategic Planning Assumptions

Strategic planning is deliberate. Strategic planning occurs when current objectives no longer can be met. New organizational objectives require new strategic plans.
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Targets of Strategic Plans

Products

and

services Organizational structure

Downsizing Rightsizing Outsourcing

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Steps in Strategic Planning

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Varieties of Strategies

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Reactions to Change

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Resistance to Change

The tendency for employees to be unwilling to go along with organizational changes, either because of individual fears of the unknown, or organizational impediments. Related Topics:
Individual barriers to change Organizational barriers to change Readiness for change Overcoming resistance to change
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Individual Barriers to Change

Economic insecurity Fear of the unknown Threats to social relationships Habit Failure to recognize the need for change
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Organizational Barriers to Change

Structural inertia Work group inertia Threats to existing balance of power Previously unsuccessful change efforts
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Readiness for Change

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Overcoming Resistance to Change

Shape political dynamics Identify and neutralize change resisters Educate the workforce Involve employees in the change efforts Reward constructive behaviors Create a learning organization Take the situation into account
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Responses to Resistance

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Learning Organization
An organization that is successful at acquiring, cultivating, and applying knowledge that can be used to help it adapt to changes. Necessary steps:
Establish commitment to change Adopt an informal organizational structure Develop an open organizational culture
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Situational Responses

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Organizational Development
A set of social science techniques designed to plan change in organizational work settings for purposes of enhancing the personal development of individuals and improving the effectiveness of organizational functioning. OD Interventions:
Management by Objectives Survey Feedback Appreciative Inquiry Action Labs Quality of Work Life Programs
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Management by Objectives
The technique by which managers and their subordinates work together to set and then meet organizational goals.

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Survey Feedback
An OD technique in which questionnaires and interviews are used to collect information about issues of concern to an organization. This information is shared with employees and is used as the basis for planning organizational change.

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Appreciative Inquiry
An OD intervention that focuses attention away from an organizations shortcomings and toward its capabilities and its potential; based on the assumption that members of organizations already know the problems they face and that they stand to benefit more by focusing on what is possible. Four steps:
Discovery Dreaming Designing Delivering
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Action Lab
An OD intervention in which teams of participants work off-site to develop and implement new ways of solving organizational problems by focusing on the ineffectiveness of current methods.
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Quality of Work Life

An OD technique designed to improve organizational functioning by humanizing the workplace, making it more democratic, and involving employees in decision making. Work Restructuring: The process of changing the way jobs are done to make them more interesting to workers. Quality Circles (QCs): An approach to improving the quality of work life, in which small groups of volunteers meet regularly to identify and solve problems related to the work they perform and the conditions under which they work.
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Critical Questions about OD

Does Organizational Development really work? Is Organizational Development dependent on national culture? Is Organizational Development inherently ethical?
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OD and National Values

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The Ethics of OD

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