Transcript Chapter 15

Chapter 15
Managing
Organizational
Change
and
Development
Sources of Change
• Change is inevitable
• Most common forces for change include:
New competitors, innovations in
technology, new company leadership,
evolving attitudes toward work
• Two sources of change:
– External
– Internal
External Source of Change
• Originate in environment
• Examples:
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Customers
Prevailing economic climate
Labor force
Legal environment
Legislation
Internal Sources of
Change
• Exist within the organization itself
• Examples:
– Shifts in workers’ attitudes towards their
supervisor or benefits packages
– Decline in productivity
– Changes in key personnel (whose goals and
values influence large populations of the
organization)
Organizational Growth and
Decline
• Organizational change often follows an
evolutionary pattern of gradual growth
and decline
• Larry Greiner contends that every
organization has an ideal structure that
corresponds to its stage in the growth
process
Stages of Growth Crisis
• Each new stage is preceded by a period of
transition called a growth crisis
• These stages include:
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Growth through creativity
Growth through direction
Growth through delegation
Growth through coordination
Continued growth through collaboration
Growth through Creativity
• First stage
• At birth, organizations are loose in
structure and informal
• Creative energies will help to carry
organization through its birth process
• With growth, nature of problems
changes
Growth through Direction
• Second stage
• Formalization is introduced by
professional managers
• Bureaucratization occurs in departments
to manage organization
• Specialized divisions are created
Growth through Delegation
• Third stage
• The crisis of autonomy is overcome by
delegating greater decision-making
power to middle- and lower-level
managers, with top level managers
focusing on long-range, strategic
planning
• A crisis of control
Growth through
Coordination
• Fourth stage
• The crisis is resolved via greater
coordination between departments
• Consultants may be hired to assess the
extent of coordination needed and to
suggest ways of improving efficiency and
reducing redundancy
• The crisis of red tape
Continued Growth through
Collaboration
• Fifth stage
• Simplification of programs, and reliance
on self-control and social norms
eventually solve crisis of red tape
• Goal is to teach managers how to cope
with the organization’s structure without
giving in to impulse to create additional
structure, to collaborate
Managing Organizational
Decline
• Sixth stage
• A cutback in the size of an organization’s
work force, profits, budget, or clients.
• Factors that can lead to decline:
– Atrophy, loss of efficient processes, loss of
competitive drive
– Self complacency
Managing Organizational
Decline (cont.)
– Changes in societal values and consumer
tastes
– Insufficient external resources
– Vulnerable state caused by inexperienced
managers, cash flow problems, economic
downturns, etc
Skills to Manage Decline
• Similar to those necessary to manage
growth
• Skills include:
– Ability to seek creative solutions
– Willingness to innovate
– Tactful management of conflict
Factors that Lead to
Organizational Success
• Focus on customers and their needs
• Adapt the structure to the needs of their
missions
• Managers are oriented to problem
solving, with avoidance of “paralysis
through analysis” mentally
Factors that Lead to
Organizational Success
(cont.)
• Commitment to organization’s original
area of expertise, “sticking to one’s
knitting”
• Stress a single value, e.g, delivering good
service, etc.
• Improve performance by achieving
agreement or consensus of employees
Factors that Lead to Failure
• Environmental factors may catch
organizations off guard
• Too dependent on suppliers and/or single
customer
• Inadequate control mechanisms
Factors that Lead to Failure
(cont.)
• Management factors, e.g., tendency to
overanalyze, or wait too long in making
decisions, outdated expertise
• Intergroup conflicts
Organizational
Development (OD)
• A distinct area of organizational science
that focuses on planned and controlled
change of organizations in desired
directions
• Seeks to challenge organizations by
changing structure, technology, people,
and tasks
Organizational
Development (OD) (cont.)
• Organizational development is a longrange effort
Phases of OD
• Unfreezing: occurs when a situation is
recognized as being deficient or
inadequate in some way
• Changing: occurs when a new plan or
system is implemented in the
organization
Phases of OD (cont.)
• Refreezing: occurs as the newly created
patterns of behavior and techniques
become part of ongoing organizational
processes
Resistance to Change
• People tend to fear change out of desire
for security and contentment with status
quo
• Ways to overcome resistance to change:
– Education
– Participation
– Negotiation
OD Techniques
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Survey Feedback
Team Building
Sensitivity Training
Confrontation Meetings
Quality of work life programs
Survey Feedback
• Involves administering a survey, or
interviewing employees; it differs from
the traditional survey method in that
employees receive the analyzed results of
the survey back for consideration and
interpretation
Survey Feedback (cont.)
– More likely to achieve productive
change than traditional surveys due to
completion of communication loop
Team Building
• Involves either the formation of “family
groups,” composed of people that
currently work together, or “special
groups” of employees brought together
for a purpose
• Goal is to solve problems, and improve
productivity
Team Building (cont.)
– Group examines both hard data (facts
and figures) and soft data (impressions
and opinions) concerning production
problems to encourage unfreezing
Sensitivity Training
• Known as “T-groups”
• 8-12 people are brought together for 2 to
3 hours
• Trainer does not take active role, but
does act as a guide
• Members are expected to focus on
behavior and on giving feedback about
their perceptions of one another
Sensitivity Training (cont.)
• Member’s reactions may get out of hand
• Stranger groups may be formed of people
who do not have prior knowledge of one
another to encourage freer discussions
• Lost a lot of its popularity in recent years
Confrontation Meetings
• Involves bringing conflicting groups
together in a structured situation that is
designed to enhance cooperation
– Most follow a predictable sequence
– Discuss need for change first
– Plan for inter-group meetings is disclosed
Confrontation Meetings (cont.)
– Groups meet and present comments,
reconvene in private, and meet again in large
groups to discuss differences
– At end of discussion, plans for resolution of
problems are drawn up with feedback from
both groups
Quality of Work Life
Programs
• Seek to enhance the total work climate in
an organization or its subsystems
• Focuses on such issues as conflict
resolution, employee satisfaction, worker
participation
Quality of Life Programs
(cont.)
• Techniques may include: job redesign,
employee involvement in decision
making, redesign of pay systems, creation
of quality circles
Successful Adoption of OD
• Conditions that help ensure that an OD
effort will succeed include:
– Recognition of problems by top management
– Acquire support from top-level management
– Successes early in program that provide
further impetus
Successful Adoption of OD
(cont.)
– Respect for managerial talents of those
whose domain of responsibility is being
improved
– Cooperation and involvement from human
resources department
– Effective coordination and control of the OD
program
– Measurement of outcomes
How does OD work?
• Results of 35 studies into outcome
variables and process variables
• Outcome variables: measures of
productivity, efficiency, absenteeism,
profits, etc. that are quantifiable (hard
measures)
How does OD work?
(cont.)
• Process variables: measures of trust,
perceptions of leadership, motivation,
decision making (soft measures)
• These studies were further categorized to
whether they were directed at groups,
organizations, individuals, or leaders
How Does OD Work?
(cont.)
– Found that group outcome variables were
most likely to be affected by OD intervention
– Individual process variables also showed
relatively positive improvement
OD in Perspective
• It is not a “cure all” for every difficulty
an organization may face
• Resistance to change is a significant
obstacle to OD efforts
• The chief values espoused by OD
specialists - trust, openness, power
sharing- are not appropriate for some
organizations