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Chapter 9

The Challenges of Change - Chapter 9

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York University
Administrative Studies
ADMS 1000
Peter Modir

Forces of Change Why do organizations resist change? - Focusing on day to day routines and goals can create resistance to change. Change may be required to organizational systems and structures that have been in place for a long time. - It also requires individuals to change, the way they do their work and whom they work with as well as reporting systems and roles. - Bureaucracies have rigid rules and procedures in place which can create resistance to change. Although they allow for control and some level of security and consistency this can limit creativity and innovation (i.e. change). Types of Change 1. Developmental Change - improving on what the business is already doing 2. Transitional Change - replacing existing structures and processes, e.g. mergers, new production creation, etc… o The final destination or state in this change can be determined before the change starts, allowing it to be managed. o Largely impacts employees only at the levels of skills and actions, not at behaviour and culture. 3. Transformational Change - Future outcomes are uncertain but the organization and employees embark on a period of widespread change Methods of Change THEORY E focuses on formal structural and systemic change. - Seeks to maximize shareholder value - Top-driven – top managers decide on the format and process of change - Bonuses, re-engineering, downsizing etc E.g. Scott Paper – loss of 11,000 jobs, divestment of business units, relocation of HQ THEORY O focuses on change in human capability, learning from change. - Seeks to maximize employee learning & performance. - Emergent and permeates all levels of the organization. - Flatter structures, team work, employee ‘buy-in’ E.g. Champion International – high employee involvement, improved relations with unions, skill-based pay system, no layoffs. Transformational Change at IBM - Understanding the forces of change - Gerstner as an external recruit, exploring organizational challenges and assumptions. - The change vision & implementation – making change acceptable to all stakeholders, creating a shared vision for the future, strong leadership, reinforce and institutionalize change. - The need for cultural change – move from a paternalistic, cohesive family-oriented organization with lifelong careers to pay-for- performance. - Leading change through communication - offering a vision with encouragement & support, face to face honest communication and explanation. - Reinforcing the change – targeting opinion leaders and those who are resistance to change. Ensuring constant review and assessment of change process. - Change is process not an event Creating the learning organization - In order for organizations to successfully adapt to change they must adopt openness to learning and thus become learning organizations. - A learning organization is “an organ
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