MM202 Organizational BehaviorMarch 15, 2014

The difference between

sink or swim

A walk in the park

Happening!

The key to success

The unknown

A reflection of the past

Hard work

First Order, Incremental Change

• “May involve adjustments in systems, processes, or structures, but it does not involve fundamental change in strategy, core values, or corporate identity.”

• Small-scale, Local changes

• May be personal initiatives or development of local routines

Second-order, Discontinuous Change

• “is transformational, radical, and fundamentally alters the organization at its core.”

Table 4.2 Rationale for New Organizational ChangesAdapted from Whittington et al., 1999:589.

Table 4.2 Rationale for New Organizational ChangesAdapted from Whittington et al., 1999:589.

Table 4.2 Rationale for New Organizational ChangesAdapted from Whittington et al., 1999:589.

INTERNAL

Structure

Organizational Culture

Quality programs

New business processes

Pressures most likely to have

major effects on organizations

EXTERNAL

Technology

Economic Shocks

Competition

World politics

Nature of the workforce

Social trends

Nature of workforce

Technology

Economic Shocks

Competition

Social Trends

World Politics

Nature of the Workforce

Rise and fall of global housing market

Financial sector collapse

Global recession

Technology

Faster, cheaper, and more mobile computers and handheld devices

Emergence and growth of social networking sites

Deciphering of the human genetic code

Economic Shocks

Increased environmental awareness

Liberalization of attitudes toward gay, lesbian, and transgender employees

More multitasking and connectivity

Competition

Global competitors

Mergers and consolidations

Increased government regulation of commerce

Social Trends

Raising health care costs

Negative social attitudes

toward business and executives

Opening of markets in China

World Politics

Seeks to improve the ability of organization to adapt

to changes in the environment

Seeks to change employee behavior

Proactive and purposeful

Two Views

“Calm Waters” “White Water Rapids”

Proactive and purposeful

Unfreezing

Changing

Refreezing

Force

Problem

Implement

Process

Evaluate

Transition

agent

Lewin’s Three-Step Change Process

Continuous Change Process

Kurt Lewin’s Change Process

OLD STATE

UNFREEZE CHANGE REFREEZE

NEW STATE

Awareness of

need for change

Movement from

old state to new

state

Assurance of

permanent

change

John Kotter’s Steps for Leading Organizational Change

Phase 1

Unfreezing

Change Leader’s task:

Create a need for change

This is done by:

• Establishing a good relationship with those involved

• Helping others to realize the need to change existing behavior as

they are not effective

• Minimizing resistance to change

Phase 2

Changing

Change leader’s task:

Implement change

This is done by:

• Identifying new and more effective behaviors

• Choosing appropriate changes in tasks, people and other factors

significant to the changes we are proposing

• Taking appropriate action to implement changes

Phase 3

Refreezing

Change leader’s task:

Stabilizing change

This is done by:

• Creating acceptance and continuity for the new behaviors

• Providing necessary resource support

• Using positive reinforcement to encourage positive outcome

Continuous Change Process Model

Adapted from Griffin and Moorhead, 2006:398

1. Forces for

Change

2.Recognize

and Define

Problem

4. Implement

the Change

3. Problem-

solving

Process

5. Measure,

Evaluate,

Control

Transition

Management

Change

Agent

Organizations respond

• Anticipate

• Prepare

• Incorporate

Understanding and Managing Resistance to Change

Provides a degree of stability and predictability to behavior

A source of functional conflict

Hinders adaptation and progress

Habit

Security

Economic Factors

Fear of the Unknown

Lack of Awareness

Social Factors

Structural Inertia

Limited Focus of Change

Group Inertia

Threat to Expertise

Threat to Established Power Relationships

Threat to Established Resource Allocations

Individual Resistance Organizational Resistance

A predisposition

Programmed response

Individual Resistance

Selectively processing information

A perceptual limitation

Habit SecurityEconomic

Factors

Fear of the

Unknown

Lack of

AwarenessSocial Factors

The comfort of doing things the same way

Possibly reduce opportunity for income increase

Dislike for uncertainty

Not knowing what is expected of them

Fear of what others will think

Peer pressure

Organizational Resistance

Structural inertia – designed to maintain stability

Limited focus of change– Adopts too narrow a focus

– Interdependencies not taken to account

Group inertia– Group norms act as constraint to individual

change

Threatened expertise– Possible transfer or elimination of

specialized task

Threatened power– Redistribution of decision-making

authority

Resource allocations – Threat to future allocations

ApproachCommonly Used

in SituationsAdvantages Drawbacks

Education and

Communication

- Where there is

lack of

information

- inaccurate

information

and analysis

Once persuaded,

people will often

help with the

implementation of

the change

Can be very time

consuming if lots

of people are

involved

Participation

and involvement

- Where

initiators do not

have all

information to

design the

change

- Others have

considerable

power to resist

People who

participate will be

committed to

implementing

change; relevant

information they

have will be

integrated into the

change plan

Can be very time

consuming if

change design is

inappropriate

Source: Adapted from Ahmad et al. (2009), Understanding Organizational Behaviour. New York. p. 241.

ApproachCommonly Used

in SituationsAdvantages Drawbacks

Facilitation and

Support

- Where people

are resisting

because of

adjustment

problems

No approach

works as well with

adjustment

problems

Can be time

consuming,

expensive, and

still fail

Negotiation and

agreement

- Where

someone or

some group

will clearly lose

out in a change

- Group has

considerable

power to resist

Sometimes it is a

relatively easy

way to avoid

major resistance

Can be too

expensive in

many cases if it

alerts others to

negotiate for

compliance

Source: Adapted from Ahmad et al. (2009), Understanding Organizational Behaviour. New York. p. 241.

ApproachCommonly Used

in SituationsAdvantages Drawbacks

Manipulation

and co-optation

- Where other

tactics will not

work or are too

expensive

It can be a

relatively quick

and inexpensive

solution to

resistance

problems

Can lead to future

problems if

people feel

manipulated

Explicit and

implicit coercion

- Where speed is

essential

- Where

initiators

possess

considerable

power

It is speedy and

can overcome any

kind of resistance

Can be risky if it

leaves people

angry at the

initiators

Source: Adapted from Ahmad et al. (2009), Understanding Organizational Behaviour. New York. p. 241.

Symptoms:

Increased heart rate, blood pressure…

(physiological)

Job Dissatisfaction (psychological)

Changes in productivity, absence, turnover…

(behavioral)

WORK STRESS

Reduce (dysfunctional) stress:

Employee selection – job matching

Job redesign – increase challenge or reduce workload

Counseling

To be continued…

Managing change

The process of planned change and improvement of the organization through application of knowledge of the behavioral sciences.

Griffin and Moorhead (2006)

Attempts to plan organization changes

Specific intention is to improve the organization

Planned improvement is based on knowledge of

behavioral sciences rather than on financial or

technological considerations

Is built on humanistic-democratic values

Interventions for bringing about change

.

. . .

.STRUCTURAL INTERVENTIONS

TASK-TECHNOLOGY

INTERVENTIONS

PEOPLE-

FOCUSED

INTERVENTIONS

Structural Intervention

Structural Reorganization

New Reward System

Changing Organizational

Culture

• Flatter

• Decentralized

• Organic

Economic benefits

Improved

communication

Give greater

autonomy

• Move to “pay-for-

performance”

programs

• Group-based

bonus plans

• Introducing new

cultural values

Support less

management control

Increase tolerance

for risk and conflict

Open communication

channels

Step 1: Recognition of a need for a

change

Step 2: Selection of task redesign as a

potential intervention

Step 3: Diagnosis of the work system

and context

a. Diagnosis of existing jobs

b. Diagnosis of existing workforce

c. Diagnosis of technology

d. Diagnosis of organization design

e. Diagnosis of leader behavior

f. Diagnosis of group and social

process

Step 4: Cost-benefit analysis of

proposed changes

Step 5: Go/ no-go decision

Step 6: Formulation of the strategy for

redesign

Step 7: Implementation of the task

changes

Step 8: Implementation of any

supplemental changes

Step 9: Evaluation of the task redesign

effortSource: Adapted from Griffin & Moorhead. (2006). p.401

Sensitivity

Training

Process

Consultation

Survey

Feedback

Team Building

Intergroup

Development

People-Focused

InterventionsUnstructured

group interaction

Resolving differences

in perception

Consultant as

change agent

Clarify each member’s

role in the group

Directed toward

improving intergroup

relations

Consider introducing these variables to create an

innovative climate:

STIMULATING

INNOVATION

Structural variables

organic structures, managerial tenure, slack resources, inter-unit communication

Cultural variables

Encourage experimentation – reward both success and failure

Human Resource variables

Active training and development to keep them current

Encourage individuals to become champions of change

What can managers do to help

their organizations become

more innovative?

CREATING A

LEARNING

ORGANIZATION

Establish a strategy

Commitment to change, innovation, and continuous improvement

Redesign the organization’s structure

Reinforce interdependence, reduce boundaries

Reshape the organization’s culture

“We think agreement is so important. Who cares? You have to bring paradoxes, conflicts, and dilemmas out in the open, so collectively we can be more intelligent than we can be individually. “

How can managers create a

continuously changing and

learning organization?

Now in the 21st century, change and how to lead it successfully has become a critical topic on the minds of organizational leaders

The future success of our organizations depends on how successful leaders are at leading change

Leaders themselves must transform to lead transformation successfully in their organizations.

Today’s marketplace demands conscious change leadership – a shift in consciousness regarding how we view change, ourselves, and our roles as change leaders.

FOOD FOR THOUGHT

Ahmad, Z. A., Surienty, L., Effendi, A. A., Jauhar, J., Rohaida, S., & Sharma, T. (2009).

Understanding Organizational Behaviour. New York: Oxford University Press.

Anderson, D., & Anderson, L. A. (2010). Beyond Change Management. San Francisco: Pfeiffer.

Griffin, R. W., & Moorhead, G. (2006). Fundamentals of Organizational Behavior. Boston:

Houghton Mifflin Company.

Robbins, S. P. (2000). Essentials of Organizational Behavior. New Jersey: Prentice Hall.

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