Chapter 16 – Organizational Change, Development and Innovation
The Concept of Organizational Change
Why Organizations Must Change
- All organizations face two basic sources of pressure to change: external sources and internal sources
- Environmental changes must be matched by organizational changes if the organization is to remain
- Changes can also be provoked by forces in the internal environment of the organization
- Change almost always entails some investment of resources, be it money or management time
- Organizations should differ in the amount of change they display
- Change in and of itself is not a good thing, and organizations can exhibit too much change as well as
What Organizations Can Change
Factors which can be changed include these:
• Goals and strategies
• Job design
- A change in one area very often calls for change in others, failure to recognize this systemic nature of
change can lead to severe problems.
- Changes in goals, strategies, technology, structure, process, job design, and culture almost always
require that organizations give serious attention to people changes
The Change Process
1. Unfreezing – the recognition that some current state of affairs is unsatisfactory. This might involve the
realization that the present structure, task design, or technology is ineffective, or that member skills or
attitudes are inappropriate.
- Example: unfreezing at Ontario Power Generation occurred when Ontario’s new government fired the
company’s top three executives, who were responsible for massive cost overruns in the rebuilding of
the Pickering nuclear generating stations.
2. Change – the implementation of a program or plan to move the organization or its members to a more
satisfactory state. Change efforts can range from minor to major. A simple training program and
revised hiring procedure constitute fairly minor changes, in which few organizational members are
3. Refreezing – the condition that exists when newly developed behaviours, attitudes, or structures
become an enduring part of the organization.
The Learning Organization
Organization learning – the process through which an organization acquires, develops, and transfers
knowledge throughout the organization.
First, organizations learn through knowledge acquisition. This involves the acquisition, distribution, and
interpretation of knowledge that already exists but which is external to the organization.
Second, organizations also learn through knowledge development. This involves the development of new
knowledge that occurs in an organization primarily through dialogue and experience. Organizational
learning occurs when organizational members interact and share experiences and knowledge.
Learning organization – an organization that has systems and processes for creating, acquiring, and
transferring knowledge to modify and change its behaviour to reflect new knowledge and insights There are four key dimensions that are critical a learning organization:
1. Vision/support: leaders must communicate a clear vision of the organization’s strategy, and goals, in
which learning is a critical part and key to organizational success.
2. Culture: a learning organization has a culture that supports learning.
3. Learning system/dynamics: employees are challenged to think, solve problems, make decisions, and
act according to a system approach by considering patterns of interdependencies and by “learning by
4. Knowledge management/infrastructure: learning organizations have established systems and
structures to acquire, code, store, and distribute information when needed.
Learning is an important prerequisite for organizational change and transformation
Issues in the Change Process
- Diagnosis – is the systematic collection of information relevant to impending organizational change
- Initial diagnosis
- Initial diagnosis can provide information that contributes to unfreezing by showing that a problem
exists. Once unfreezing occurs, further diagnosis can clarify the problem and suggest just what
changes should be implemented.
- Change agents – experts in the application of behavioural science knowledge to organization
diagnosis and change.
- In any event, the change agent brings an independent, objective perspective to the diagnosis while
working with the people who are about to undergo change
- Proper diagnosis clarifies the problem and suggests what should be changed and the appropriate
strategy for implementing change without resistance.
People may resist both unfreezing and change
Resistance – overt or covert failure by organizational members to support a change effort
Causes of resistance:
- Low individual tolerance for change – people who seek routine are likely to resist change
- Lack of trust – people might clearly understand the argument being made for change but do not trust