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Managing Organizational

Change

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Learning Outcomes

After studying this chapter, you will be able to:• Define organizational change and compare

and contrast views on the change process.• Explain how to manage resistance to

change.• Describe what managers need to know

about employee stress.• Discuss techniques for stimulation

innovation

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1- Defining

Organizational Change

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Organizational change is:

“Any alteration of an organization’s people,

structure, or technology”

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What Is Organizational Change?

Categories of Organizational Change

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1.1 Changes in structure includes any alteration in

authority relationships, coordination mechanisms,

degree of centralization, job design, or similar

variables.

For example, restructuring can result in decentralization,

wider spans of control, reduced work specialization, and

work teams.

Teams that cut across departmental lines allows those

people who understand a problem best to rectify it.

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1.2 Changes in technology can include:

• modifications to work processes or to the methods and equipment used.

• continuous improvement initiatives, which focus on

developing flexible processes to support better-quality operations.

• employees committed to continuous improvement are constantly looking for things to fix, so work processes must be adaptable to continual change.

• work processes must be adaptable to continuous change and fine tuning.

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This adaptability requires an extensive commitment to

educating and training workers in problem solving,

decision making, negotiation, statistical analysis, and

team-building. Workers must also be able to analyze

and act on data.

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1.3 Changes in people

• refer to changes in employee attitudes, expectations, perceptions, or behaviors.

• To adapt well to change, the workforce must be committed to quality and continuous improvement, which stem from proper employee education and training, performance evaluation, and a reward system that supports and encourages those improvements.

For example, putting quality goals into executives’ bonus plans and incentives for employees

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2. Forces for organizational change(Why do organizations need to change)

• External forces

• Internal forces

Both internal and external forces in the environment bring about the need for change.

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2.1 The Need for Change: External Factors

External factors:

• Marketplace (Competition)

• Government laws and regulations

• Technology

• Fluctuations in labor markets

• Economic changes

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2.2 The Need for Change: Internal Forces

Internal forces:

• Redefined or modified organizational strategy• Composition of workforce• Employee attitudes

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Change Agents

• People who act as catalysts and assume the responsibility for managing the change process.

• A change agent can be a manager, internal staff specialist, or outside consultant with expertise in change implementation.

3- Initiating ChangeWho initiates organizational change?

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4- The Change ProcessHow does the organizational change happen?

Two metaphors are used to illustrate the change process:

1- The “calm waters” metaphor

2- The “White-water rapids” metaphor

These two metaphors represent distinctly different approaches to

understanding and responding to change

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4.1 The “Calm Waters” metaphor

The “calm waters” metaphor envisions the organization

as a large ship crossing a calm sea. Change appears as the

occasional storm, a brief distraction in an otherwise calm

and predictable trip

4- The Change Process

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4.1 The “Calm Waters” metaphor

Until recently, the “calm waters” metaphor

dominated the thinking of practicing managers and

academics. The prevailing model for handling

change in such circumstances is best illustrated in

Kurt Lewin’s three-step description of the change

process

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“Calm Waters” Change

Kurt Lewin’s three-step Model

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4.2 “White-Water Rapids” Change4.2 The “White-water rapids” metaphor

• The organization is seen as a small raft navigating a raging river

with uninterrupted white-water rapids.

• Aboard the raft are half a dozen people who have never

worked together before, who are totally unfamiliar with the

river, and who are unsure of their eventual destination.

• In this metaphor, change is the status quo and managing

change is a continual process.

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4.2 “White-Water Rapids” Change

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• Not every manager faces such a world but the number who do is increasing.

• Disruptions in the status quo are no longer occasional and temporary, and they are not followed by a return to calm waters.

• Many managers never get out of the rapids and face constant forces in the external and internal environment that bring about the need for organizational change.

4.2 “White-Water Rapids” Change

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5- Implementing Change

Organization development –

• Are concerted efforts that assist organizational members with a planned change.

• These efforts can help employees to be more adaptive and effective in achieving the new goals of the organization.

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5- Implementing Change

Organizational development tactics:

• Survey feedback

• Process consultation

• Team-building

• Intergroup development

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Survey feedback

Employees generally respond to a set of specific

questions regarding how they view such organizational

aspects as decision making, leadership, communication

effectiveness, and satisfaction with their jobs, coworkers,

and management. This data is used to clarify problems

that employees may be facing and to initiate action to

remedy the problems.

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Process consultation

Outside consultants help managers to perceive, understand, and act on

organizational processes they face, such as workflow, informal

relationships among unit members, and formal communication

channels. Consultants give managers insight into what is going on and

help managers diagnose the interpersonal processes that need

improvement.

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Team-building is generally an activity that helps work

groups set goals, develop positive interpersonal relationships, and clarify the roles and responsibilities of each team member. The primary focus of team-building is to increase members’ trust of and openness toward one another.

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Intergroup development

focuses on helping different work groups to become

more cohesive. It attempts to change attitudes,

stereotypes, and perceptions that one group may

have toward another in order to improve

coordination of efforts among the various groups.

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6- Resistance to Change & how to manage it

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Resistance to Change

• Fear about adaptation• Habits• Fear of losing something already possessed• Belief that the change is incompatible with the

goals and interests of the organization

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Reducing Resistance to ChangeTechniques for Reducing Resistance to Change

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7- What managers need to know about employee stress

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For many employees, change creates stress. A

dynamic and uncertain environment

characterized by restructurings, downsizings,

empowerment, and personal-life matters has

caused large numbers of employees to feel

overworked and “stressed out.”

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7.1 Symptoms of Stress

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7.2 Causes of Stress

Categories of organizational stressors:

1. Task demands

2. Role demands

3. Interpersonal demands

4. Organization structure

5. Organizational leadership

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Role demands are pressures placed on an employee

as a function of the particular role he or she plays in the

organization. Role conflicts create expectations that

may be hard to reconcile or satisfy. An employee

experiences role overload when he or she is expected

to do more than time permits. An employee

experiences role ambiguity when role expectations are

not clearly understood and the employee is not sure

what he or she is supposed to do.

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Reducing Stress

• Match employee skills to job requirements• Redesign jobs• Offer employee assistance programs

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To reduce job-related stress, managers begin with employee

selection—making sure that an employee’s abilities match

the job requirements. A realistic job preview during the

selection process can help minimize stress by clarifying job

expectations. Ongoing organizational communications keep

ambiguity-induced stress to a minimum. Similarly, a

performance planning program (such as MBO) states job

responsibilities clearly, provides clear performance goals, and

reduces ambiguity through feedback.

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Job redesign can also reduce stress by

increasing challenge, including employees in

decision making, or reducing the workload.

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Employee assistance programs is to get a

productive employee back on the job as quickly

as possible. Wellness programs are designed to

help cut employer health costs and to lower

absenteeism and turnover by preventing health-

related problems.

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Techniques for Stimulating Innovation

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Innovation

Is the process of taking a creative idea and turning

it into a useful product, service, or method of

operation. The innovative organization is

characterized by its ability to channel creativity into

useful outcomes. When managers talk about

changing an organization to make it more creative,

they usually mean they want to stimulate and

nurture innovation.

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Encouraging Innovation

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Encouraging Innovation (cont.)

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Culture and Innovation

Innovative organizations:

• Encourage experimentation

• Reward both successes and failures

• Celebrate mistakes

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HR aids innovation by:• Promoting training and development• Offering high job security• Encouraging individuals to become idea champions• Supporting new ideas• Overcoming resistance• Implementing innovations