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Chapter 16

Chapter 16 summary


Department
Management (MGH)
Course Code
MGHB02H3
Professor
Julie Mc Carthy
Chapter
16

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Questions and Exercises prepared by Alan Saks.
I. The Concept of Organizational Change
Common experience indicates that organizations are far from static. They change and these changes
have a strong impact on people. In and of themselves, such changes are neither good nor bad. Rather, 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.
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. Also, 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:
zGoals and strategies. Organizations frequently change the goals and the strategies they use to
reach these goals.
zTechnology. Technological changes can vary from minor to major.
zJob design. Companies can redesign individual groups of jobs to offer more or less variety,
autonomy, identity, significance, and feedback.
zStructure. 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.
zProcesses. The basic processes by which work is accomplished can be changed.
zCulture. One of the most important changes that an organization can make is to change its culture.
Changing an organization's culture is considered to be a fundamental aspect of organizational
change.
zPeople. 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.
Three important points should be noted about the various areas in which organizations can introduce
change. First, a change in one area very often calls for changes in others. Failure to recognize this
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technology, structure, process, job design and culture almost always require that organizations give
serious attention to people changes. Third, in order for people to learn, organizations much learn. Many
change programs fail because of the absence of learning.
C. The Learning Organization
Organizational learning refers to the process through which organizations acquire, develop, and
transfer knowledge throughout the organization. Organizations learn through knowledge acquisition and
knowledge development.
A learning organization is 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:
zVision/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.
zCulture. A learning organization has a culture that supports learning.
zLearning systems/dynamics. 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."
zKnowledge management/infrastructure. 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. Learning organizations are better able to change and transform
themselves because of their greater capacity for acquiring and transferring knowledge.
D. The Change Process
Change involves a sequence of organizational events or a psychological process that occurs over time.
This sequence or process involves three basic stages - unfreezing, changing, and refreezing.
Unfreezing. Unfreezing occurs when recognition exists that some current state of affairs is
unsatisfactory. Crises are especially likely to stimulate unfreezing.
Change. Change occurs when some program or plan is implemented to move the organization and/or its
members to a more satisfactory state. Change efforts can range from minor to major.
Refreezing. Refreezing occurs when the newly developed behaviours, attitudes, or structures become an
enduring part of the organization. The effectiveness of the change can be examined, and the desirability
of extending the change further can be considered.
II. Issues in the Change Process
There are several important issues that organizations must confront during the change process. These
issues represent problems that must be overcome if the process is to be effective. These problems
include dia
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A. Diagnosis
Diagnosis is the systematic collection of information relevant to impending organizational change. It
contributes to unfreezing by showing that a problem exists, and further diagnosis can clarify a problem
and suggest just what changes should be implemented. Diagnosis can take many forms and be
p
erformed by a variety of individuals. For more complex, nonroutine problems, it is worth seeking out
the diagnostic skills of a change agent. Change agents are experts in the application of behavioural
science knowledge to organizational diagnosis and change. It is possible to obtain diagnostic
information through a combination of observations, interviews, questionnaires, and the scrutiny of
records. Attention to the views of customers or clients is critical. Careful diagnosis cannot be
overemphasized as it clarifies the problem and suggests what should be changed and the proper strategy
for implementing change without resistance.
B. Resistance
People are creatures of habit, and change is frequently resisted by those at whom it is targeted. People
may resist both unfreezing and change.
Causes of Resistance. Resistance to change occurs when people either overtly or covertly fail to support
the change effort. People might resist change for many reasons which include:
zPolitics and self-interest. People feel they might lose status, power, or even their jobs.
zLow individual tolerance for change. Some people are just uncomfortable with change.
zMisunderstanding. The reason for the change or exact course might be misunderstood.
zLack of trust. People might not trust the motives of those proposing the change.
zDifferent assessments of the situation. The targets of the change might feel that the situation does
not warrant change and the advocates have misread the situation.
zA resistant organizational culture. Some organizational cultures have stressed and rewarded
stability and tradition and as a result advocates of change are viewed as misguided deviants or
aberrant outsiders.
Underlying these various reasons for resistance are two major themes: (1) change is unnecessary
because there is only a small gap between the organization's current identity and its ideal identity; (2)
change is unobtainable (and threatening) because the gap between the current and ideal identities is too
large. Therefore, a moderate identity gap is probably the most conducive to increased acceptance of
change because it unfreezes people, while not provoking maximum resistance.
Dealing with Resistance. Low tolerance for change is mainly an individual matter, and it can often be
overcome with supportive, patient supervision. If politics and self-interest are at the root of resistance, it
might be possible to co-opt the reluctant by giving them a special, desirable role in the change process or
b
y negotiating special incentives for change. Resistance to change can often be reduced by involving the
p
eople who are the targets of change in the change process and ensuring good communication. Finally,
transformational leaders are particularly adept at overcoming resistance to change. One way they
accomplish this is by "striking while the iron is hot". The other way is to unfreeze current thinking by
installing practices that constantly examine and question the status quo. One research study of CEOs
who were transformational leaders found that they used a number of unfreezing practices to create a
revised vision for followers about what the organization can do or be.
C. Evaluation and Institutionalization
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