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Management (MGH)

Chapter 16-Organizational Change, Development and Innovation I. The Concept of Organizational Change organizations are far from static They change and these changes have a strong impact on people changes are neither good nor bad, it is the way in which the changes are implemented and managed that is crucial to both customers and organizational members A. Why Organizations Must Change All organizations face two basic sources of pressure to change - external sources and internal sources External sources include the global economy, deregulation, and changing technology Internal sources include low productivity, conflict, strikes, sabotage, high absenteeism, and turnover As environments change, organizations must keep pace and internal changes often occur in response to external pressures Firms unable to anticipate or cope with such trends will cease to exist Increase in competitiveness of business (external environment), more global economy, deregulation and advanced technology business are leaner and meaner Changes can also be provoked by internal environment- low productivity, confict, strikes, sabotage and high absenteeism and turnover Employee opinion can also be a force of change Often, internal forces for change occur in response to organizational changes that are designed to deal with the external environment sometimes, when threat is perceived, organizations unfreeze, scan the environment for solutions, and use the threat as a motivator for change Other times, though, organizations seem paralyzed by threat, behave rigidly, and exhibit extreme inertia Without an investment of resources and some modification of routines and processes, inertia will occur Organizations should differ in the amount of change they exhibit Organizations in a dynamic environment must generally exhibit more change to be effective than those operating in a more stable environment Change always requires some investment of resources, money or management time Requires modification of routines and processes change in and of itself is not a good thing and organizations can exhibit too much change as well as too little B. What Organizations Can Change There are several specific domains in which modifications can occur as part of organizational change. Factors that can be changed include: Goals and strategies-Organizations frequently change the goals and the strategies they use to reach these goals. Technology- Technological changes can vary from minor to major. Job design-Companies can redesign individual groups of jobs to offer more or less variety, autonomy, identity, significance, and feedback. 1 www.notesolution.com Structure-Organizations can be modified from a functional to a product form or vice versa. Traditional structural characteristics of organizations such as formalization and centralization can also be changed. Processes- The basic processes by which work is accomplished can be changed. Culture- One of the most important changes that an organization can make is to change its culture. Changing an organizations culture is considered to be a fundamental aspect of organizational change. People- The membership of an organization can be changed either through a revised hiring process or by changing the skills and attitudes of existing members through training and development 1. a change in one area very often calls for changes in others o Failure to recognize this systematic nature of change can lead to severe problems 2. changes in goals, strategies, technology, structure, process, job design and culture almost always require that organizations give serious attention to people changes 3. in order for people to learn, organizations much learn o Many change programs fail because of the absence of learning C. The Learning Organization Organizational learning -process through which organizations acquire, develop, and transfer knowledge throughout the organization. Organizations learn through knowledge acquisition and knowledge development two methods of organizational learning knowledge acquisitions: acquisition, distribution and interpretation of knowledge that already exists but which is external to the organization knowledge development: development of new knowledge that occurs in an organization primarily through dialogue and experience organizational learning occurs when organizational member interact and share experiences and knowledge and thorough the distribution of new knowledge and information throughout the organization learning organization -an organization that has systems and processes for creating, acquiring, and transferring knowledge in order to modify and change its behaviour to reflect new knowledge and insights. There are four key dimensions that are critical for a learning organization: organizational change is more likely to occur in a learning organization Four key dimensions for learning organization 1. Visionsupport. Leaders must communicate a clear vision of the organizations 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 systemsdynamics. Employees are challenged to think, solve problems, make decisions, and act according to a systems approach by considering patterns of interdependencies and by learning by doing. 4. Knowledge managementinfrastructure. Learning organizations have established systems and structures to acquire, code, store, and distribute important information and knowledge so that it is available to those who need it, when they need it. Learning organizations have been found to be almost 50 percent more likely to have higher overall levels of profitability than those organizations not rated as learning organizations, and they are also better able to retain essential employees 2 www.notesolution.com
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