Managing Change

Module 10 LIS 580: Spring 2006 Instructor- Michael Crandall

Roadmap
The context What is organizational change? Processes for managing change People and change Organizational Development Conflict resolution Fostering innovation
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Ghoshal & Bartlett

Old values: compliance, control, contract and constraint New values: discipline, support, trust and stretch Successful change involves simplification, integration, and regeneration Phased approach essential, along with focus on peoples attitudes, assumptions and behaviors Brings both organizational design and human resources lessons to bear Ghoshal and Bartlett provide a high-level model for change, lets look at some of the details and lessons learned at a more granular level
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What is Organizational Change?

An alteration of an organizations environment, structure, culture, technology, or people
A constant force An organizational reality An opportunity or a threat

Change agent
A person who initiates and assumes the responsibility for managing a change in an organization
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Basic Questions for Change Agents

What are the forces acting upon me?
What are the pressures I should take into consideration as I decide what to change and how I should change it?

What should we change?

Should the changes be strategic and companywide or relatively limited?

How should we change it?

How should we actually implement the change?
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Forces for Change

External Forces
Competition Laws and regulations New technologies Labor market shifts Business cycles Social change

Internal Forces
Strategy modifications New equipment New processes Workforce composition Job restructuring Compensation and benefits Labor surpluses and shortages Employee attitude
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Three Categories of Change

Organizational Culture

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Model for Planned Organizational Change

Source: Adapted from Larry Short, Planned Organizational Change, MSU Business Topics, Autumn 1973, pp. 5361 ed. Theodore Herbert, Organizational Behavior: Readings and Cases (New York: McMillan, 1976), p. 351.

FIGURE 81
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Two Views of the Change Process

Calm waters metaphor
A description of traditional practices in and theories about organizations that likens the organization to a large ship making a predictable trip across a calm sea and experiencing an occasional storm

White-water rapids metaphor

A description of the organization as a small raft navigating a raging river
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Change in Calm Waters

Kurt Lewins Three-Step Process
Unfreezing
The driving forces, which direct behavior away from the status quo, can be increased The restraining forces, which hinder movement from the existing equilibrium, can be decreased The two approaches can be combined

Implementation of change Refreezing

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Change in White-water Rapids

Change is constant in a dynamic environment The only certainty is continuing uncertainty Competitive advantages do not last Managers must quickly and properly react to unexpected events
Be alert to problems and opportunities Become change agents in stimulating, implementing and supporting change in the organization
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Is a New Structure Really Required?

When you identify a problem with your design, first look for ways to fix it without substantially altering it. If that doesnt work, youll have to make fundamental changes or even reject the design. Heres a step-by-step process for resolving problems.
Source: Adapted from Michael Goold and Andrew Campbell, Do You Have a Well-Designed Organization? Harvard Business Review, March 2002, p. 124.

FIGURE 82
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Is a New Structure Really Required? (contd)

Source: Adapted from Michael Goold and Andrew Campbell, Do You Have a Well-Designed Organization? Harvard Business Review, March 2002, p. 124.

FIGURE 82b
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A Nine-step Process For Leading Organizational Change

1. Create a Sense of Urgency 2. Decide What to Change 3. Create a Guiding Coalition and Mobilize Commitment 4. Develop and Communicate a Shared Vision 5. Empower Employees to Make the Change
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6. Generate Short-Term Wins 7. Consolidate Gains and Produce More Change 8. Anchor the New Ways of Doing Things in the Company Culture 9. Monitor Progress and Adjust the Vision as Required
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Why People Resist Change

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How Immune Is the Person to Change?

Source: Robert Kegan and Lisa Lahey, The Real Reason People Wont Change, Harvard Business Review, November 2001, p. 89.

FIGURE 83
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Dealing with Change

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Barriers to Empowerment

Source: Reprinted by permission of Harvard Business School Press. From Leading Change by John P. Kotter. Boston, MA. 1996, p. 102. Copyright 1996 by the President and Fellows of Harvard College, all rights reserved.

FIGURE 85
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Organizational Development
Organizational Development (OD)
An approach to organizational change in which the employees themselves formulate the change thats required and implement it, usually with the aid of a trained consultant.

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OD Interventions
Human Process Interventions
Aimed at enabling employees to develop a better understanding of their own and others behaviors for the purpose of improving that behavior such that the organization benefits.

Sensitivity Training (Laboratory or T-groups)

Purpose is to increase participants insight into their own behavior and that of others by encouraging an open expression of feelings in a trainer-guided group.
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OD Interventions (contd)
Team Building
The process of improving the effectiveness of a team through action research or other techniques.

Survey Research
The process of collecting data from attitude surveys filled out by employees of an organization, then feeding the data back to workgroups to provide a basis for problem analysis and action planning.
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Technostructural Applications of OD
Formal Structure Change Program
An intervention technique in which employees collect information on existing formal organizational structures and analyze it for the purpose of redesigning and implementing new organizational structures.

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Strategic Applications of OD
Strategic Intervention
An OD application aimed at effecting a suitable fit among a firms strategy, structure, culture, and external environments.

Integrated Strategic Management

An OD program to create or change a companys strategy by:

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Analyzing the current strategy Choosing a desired strategy Designing a strategic change plan Implementing the new plan.
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Organizational Stressors: Role Demands

Role conflicts
Work expectations that are hard to satisfy

Role overload
Having more work to accomplish than time permits

Role ambiguity
When role expectations are not clearly understood
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Conflict Handling Styles

Source: Source: Kenneth W. Thomas, Organizational Conflict, ed., Steven Kerr, Organizational Behavior (Columbus, OH: Grid Publishing, 1979), in Andrew DuBrin, Applying Psychology (Upper Saddle River, NJ: Prentice Hall, 2000), p. 223.

FIGURE 87
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Conflict Resolution Modes

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Stimulating Innovation
Creativity
The ability to combine ideas in a unique way or to make unusual connections

Innovation
The process of taking a creative idea and turning it into a useful product, service, or method of operation

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Perception Incubation Inspiration Innovation

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Structural Variables Affecting Innovation

Organic structures
Positively influence innovation through less work specialization, fewer rules and decentralization

Easy availability of plentiful resources

Allow management to purchase innovations, bear the cost of instituting innovations, and absorb failures

Frequent inter-unit communication

Helps to break down barriers to innovation by facilitating interaction across departmental lines
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Next Week
Leading Mondays topic is motivation
Read Chapters 10 and 11 and the assigned articles

Discussion group-- think about the following questions:

Does NASA have clear and consistent leadership? What are some of the problems with the leadership structure? How do you think this affects the motivation of the engineers and managers? Does this have impact on safety & performance? What could be done to improve the situation?

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