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Ch 14 - Organizational Change

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University of British Columbia
COMM 292
Leah Sheppard

What causes change? Chapter 14  Mergers, acquisitions, divestitures, global competition, management and/or organization structure  Integrating different function areas, modifying the degree of centralization, downsizing, relying on job rotation and/or multi-skilling, outsourcing, collaborating on R&D  Degree of change varies by size Forces for Change  Nature of the workforce o Ex. adjusting to a multicultural environment or aging workforce o Human resource policies and practices have to change  Technology o Now perceived as necessities  Economic shocks o Ex. Dot com bubble, financial crisis in 2008  Competition o Global competitors o Growth of e-commerce  Social trends  World politics Opportunities for Change  Job redesign  more autonomy  increased job satisfaction  Importance of how you motivate employees to attain specific outcomes  Reorganizing the workplace  changing the structure  to flatter structures  more interconnections within  Change in org. culture Change Agents  Change agents = people who act as catalysts and assume the responsibility for managing change activities  Possibility: hire services of someone outside the firm (consultants) to provide advice and assistance with major change o Objective perspective o Disadvantage: inadequate understanding of the org’s history, culture, procedures, and personnel. Prone to initiating more drastic change than necessary. Approaches to Managing Change Lewin’s Three Step Model  Unfreezing – change efforts to overcome the pressures of both individual resistance and group conformity o Increase driving forces – direct behavior away from the status quo o Decrease restraining forces – forces that hinder movement from the existing equilibrium o Combine the two methods o Companies with strong cultures excel at incremental change but are overcome by restraining forces against radical change o Use positive incentives to encourage acceptance of change  Pay increases  Low-cost mortgage funds  Counseled individuals  Moving – efforts to get employees involved in the change process  Refreezing – stabilizing change intervention by balancing driving and restraining forces o Replace temporary forces with permanent ones o Ex. new bonus ststem tied to the specific changes desired  Conception of change as an episodic activity Kotter’s Eight Step Plan for Implementing Change 1. Establish sense of urgency – compelling reason why change is needed 2. Form coalition with enough power to lead the change 3. Create new vision to direct the change and strategies for achieving the vision 4. Communicate the vision throughout the organization 5. Empower others to act on the vision by removing barriers to change and encouraging risk-taking and creative problem-solving 6. Plan for, create, and reward short-term wins that move the org. towards the new vision 7. Consolidate improvements, reassess changes and make necessary adjustments 8. Reinforce the changes by demonstrating relationship between new behaviors and org success Action Research  Action research – a change process based on the systematic collection of data and then selection of a change action based on what the analyzed data indicate  Provides scientific method for managing planned change  People who will be involved in any change program has to be actively involved in determining what the problem is and in solution creation 1. Diagnosis – find what’s wrong i. Interview employees ii. Review records 2. Analysis – Primary concerns, problem areas, possible actions 3. Feedback i. Sharing with employees what has been found ii. Develop action plans for bringing about new change 4. Action – Carry out actions to correct the problems identified 5. Evaluation Benefits: o Problem-focused  Change agent objectively looks for the problem  Type of problem will dictate what solution is necessary o Resistance to change is reduced  Because the employees are so involved  Esp. in feedback stage Appreciative Inquiry  Appreciative inquiry – An approach to change that seeks to identify the unique qualities and special strengths of an org, which can then be built on to improve performance  Accentuates the positive  Focus on org’s successes rather than on its problems 1. Discovery – Find out what people think are the strengths of the company 2. Dreaming – Speculate possible futures for the organization 3. Design – Focus on finding a common vision of how the org will look and agree on its unique qualities 4. Destiny – Discuss how the org is going to fulfill its dream i. Action plans, development of implementation strategies Resistance to Change  Even when employees are shown the data that calls for change, they are in denial and latch onto any small piece of evidence that goes against the change.  Resistance to change = positive o Degree of stability and predictable behavior o Source of functional conflict  healthy debate  Hinders adaptation and progress  Can be overt, implicit, immediate or deferred o Easiest to deal with: overt and immediate (respond immediately and voice concerns) o Challenge: resistance that is implicit and deferred  Loss of loyalty  Loss of motivation  Increased errors and mistakes  Increased absenteeism o Deferred and stockpiled: Reactions to change can build up and explode in some response that seems totally out of proportion Individual Resistance 1. Self-interest – people worry they will lose something they value 2. Misunderstanding and lack of trust – when they don’t understand nature of change and fear that the cost of change will outweigh gains for them 3. Different assessments – when they see it differently than their managers do 4. Low tolerance for change – worry they don’t have the skills required for the new situation  Worry that it is a way of management saying that everything they’ve been doing in the past is wrong Cynicism Usually happens when there have been several rounds of change, but they have not experienced the positive effects of this  they become cynical Major contributing elements: 1. Feeling uninformed about what was happening 2. Lack of communication and respect from manager 3. Lack of communication and respect from union representative 4. Lack of opportunity for meaningful participation in decision making  More likely with negative personalities  Cynicism leads to lower commitment, less satisfaction, reduced motivation to work hard Organizational Resistance  Organizations, by nature, are very conservative  actively resist change Six major sources of organization resistance: 1. Structural inertia – organizations have built in mechanisms to provide stability. Structural inertia counters change to sustain stability. 2. Limited focus of change – interdependent subsystems: one cannot be changed without changing the others i. Changes in subsystems are nullified by the larger system 3. Group inertia – even if individuals want to change, group norms may act as a constraint
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