LECTOURE 10

Organisational Environment & Change

(DRIVERS AND DYNAMICS)

PURPOSE OF ORGANISATIONS

•Organisations exist in order to achieve their aims and objectives and to providesatisfaction for their members•Organisations are a structure of people•Organisations are integral part of society operating in both public and private sectors

Defining organisations

Farnham and Horton define oragnisation as:…social constructs created by groups in society

to achieve specific purposes by means of planned & co-ordinated activities

These activities involve using human beings toact in association with other inanimateresources in order to achieve the aims of theorganisation

Common factors in organisations

• There are at least three common factors in any organisation:

• People• Objectives• structure

The organisational iceberg

Strategy

• Corporate strategy serves to describe an organisation’s sense of purpose, plans and actions for its implementation

• Tilles suggests that without an explicit statement of strategy it becomes more difficult for expanding organisations to reconcile co-ordinated action with entrepreneurial effort.

A definition strategy

• Strategy according to Johnson & Scholes (1993) is the direction and scope of an organisation over the long term which achieves advantage for the organisation through its configuration of resources within a changing environment to meet the needs of market and to fulfill stakeholder expectations

Strategic framework

• Bruce maintains that a business needs a structured strategic framework which provides the starting point for moving forward and means for assessing and responding to change

The elements of a strategic framework• Things that are driving strategic decisions• The direction that the organisation is heading to• The products and services that will be delivered• The design of the organisation’s processes,

knowledge systems and people development mechanisms

• Specific targets that identify whether the organisation is deviating from its plan

Bruce

Environmental influences on the organisation

Environmental Drivers of Change

The environment affects the organisation through:• Technological & scientific development•Economic activity•Social status•Government activities

Factors leading to an increase in the global business environment

• Improvements in international communication facilities

• International competitive pressures• The spread of production methods and other

business processes across nations and regions• International business activity e.g. overseas

franchising or licensing agreements

Environment-its rate of change

The increasing rate of change in environmentalfactors highlights the need to study the totalorganisation and processes used to adapt toexternal demands

Example: globalisation has placed greater emphasis onorganisational processes rather than organisational functions.

Environmental effects on organisations

• The effects of the operation of the organisation within its environment are reflected in the:

• Mangement of opportunities and risks

• Successful achievement of organisational aims and objectives

Triggers of change in organisations

• Nature of workforce -diversity-knowledge workers

• Technology -IT-TQM/Re-engineering programmes

• Economic factors-global economy

Triggers of change in organisations cont’d

• Competition -mergers and acquisitions-global alliances-E-commerce

• Social trends-generation x-demographic factors

• World politics-trade embargoes-war and terrorism

Forces for and against change

• Driving forces for changei. External forcesii. Internal forces

• Driving forces against changei. Individual resistanceii. Organisational resistance

Lewin’s force field analysis

Force field analysis

The role of people in implementing change

• The successful implementation of new work methods and practices is dependent upon the willing and effective co-operation of staff, managerial colleagues and unions

• If change is to work it must change the perceptions, attitudes and behaviour of people

Individual’s reaction to changepositive Negatives NegativesEnthusiasm Fear Loss or peer

groupOpportunityChallenges

AnxietyShock

Letting goSaying goodbye

Excitement Distrust DistractionNew skills Anger Family disruptionNew knowledge Stress InsomniaReward Resentment ConflictFulfilment Confusion misunderstanding

Individuals’ resistance to change

• Selective perception• Habit• Inconvenience of loss of freedom• Economic implications• Security in the past• Fear of the unknown

Anything else please???

Organisational resistance to change• Investment in resources• Processes• Values• Organisational culture• Maintaining stability• Past contracts or agreements• Threats to power or influence

Christensen & Overdorf

Stages in a planned-change effort

(behaviour modification model by lewins)

Behaviour modification

• Unfreezing-reducing those forces which maintain behaviour in its present form; recognition of the need for change and improvement to occur

• Movement- development of new attitudes or behaviour and the implementation of the change

• Refreezing- stabilising change at the new level and reinforcement through supporting mechanisms, for example policies, structure or norms.

Overcoming resistance to change

• Education and communication• Participation• Facilitation and support• Negotiation• Coercion

Kotter & Schlesinger

Kotter’s ‘eight (8) failures of change’John P Kotter (1995) identified eight commonerrors made by organisations that had managedchange:1) Allowing too much complacency2) Failing to create a sufficiently powerful guiding

coalition3) Understanding the power of vision4) Under communicating the vision 5) Permitting obstacles to block the new vision

Kotter’s ‘eight (8) failures of change’

• Failing to create short term wins• Declaring victory too soon• Neglecting to anchor changes

Actions to secure effective change

• Create a sense of urgency-among relevant people, whatever the nature or size of the organisation

• Build guiding team-with the credibility, skills, connections, reputation and formal authority to provide change leadership

• Create vision-which are sensible, clear and uplifting and set strategies

• Communicate-the vision and strategy in order to induce understanding and commitment

Actions to secure effective change

• Empower action-and remove obstacles that stop people acting on the organisational vision

• Produce short term win- that help to provide credibility, resources and momentum to the overall effort

• Make the change stick- by nurturing a new culture and developing group norms of behaviour and shared values

Organisations of the future

• Organisations are living organisms that are constantly evolving

• Ulrich suggests that with the changing and dynamic contextual factors

‘…..the essence of organisations has shifted and will continue to shift from focusing on structure to capability’

End of organisational change

• Questions, discussions and contributions

Attitude

• When you hear the word attitude, what do you think about?

• I think of about attitude as an inward feeling expressed by outward behavior. People always project on the outside what they feel on the inside. Some people try to mask their attitude, and they can fool others for a while. But that cover-up doesn’t last long. Attitude always wiggles its way out.

Defining attitudeAttitude can be defined as providing a ‘state ofreadiness’ or tendency to respond in a particularway.’ -Ribeaux and Poppleton (1978)• Attitudes are learned throughout life and are

embodied within our socialisation process• Some attitudes may be central to us-a core

construct-and be highly resistant to change.• Peripheral attitudes such as job loss may easily

change with new information

Values, Beliefs & Attitudes

• Values: basic convictions with judgmental element: what is right, good or desirable. Values can be a summary of many attitudes

• Beliefs: a summary of beliefs forms an attitude

• Attitudes: enduring pre-dispositions, which are learned rather than innate

The functions of attitudes

• Knowledge-it provides knowledge framework to place new information

• Expressive-means of expressions of values and self-concept

• Instrumental-attitudes towards people based on positive or negative experiences

• Ego-defensive- attitudes held to protect the ego

Attitude change

Attitude change

Theories on attitude change stress on theimportance of balance and consistency in ourpsyche• Heider suggests that holding two conflicting

attitudes would motivate us to change one in order to reach a balanced state

• Festinger stated that we feel uncomfortable when we act in a way that is inconsistent with our true beliefs (cognitive dissonance). It is suggested we will be motivated to reduce its impact

Cognitive Dissonance

This is the feeling of uncomfortable tension which comes from holding two conflicting thoughts in the mind at the same time.

(If I believe I am good but do something bad, then the discomfort I feel as a result is cognitive dissonance).

Dissonance increases with:• The importance of the subject to us. • How strongly the dissonant thoughts conflict. • Our inability to rationalize and explain away the

conflict.

Cognitive Dissonance and Behaviour Change

• Cognitive dissonance is a very powerful motivator which will often lead us to change one or other of the conflicting belief or action. The discomfort often feels like a tension between the two opposing thoughts. To release the tension we can take one of three actions:

• Change our behavior. • Justify our behavior by changing the conflicting cognition. • Justify our behavior by adding new cognitions.

The process of attitude change

Key factors in attitude change:• Why an attitude is held in the first place• Why it should change• What the benefits are and to whom• What the outcomes are if it does not change

The process of attitude change

Research has demostrated the importance ofthe following variables:• The persuader's characteristics• Presentation of the issues• Audience characteristics• Group influences• Outcome of attitude change (reward or

punishment)

The influence of groups

• Groups strongly influence individual’s opinions and attitudes. They are rewarded for conforming to the standards and norms of the group

• Opinions which people make known to others are harder to change than opinions which people hold privately

Attitude and employee morale

• Research have shown that the attitude held by employees have an impact on their morale, job satisfaction and performance

• It is suggested that adults may have thousands of beliefs, they have hundreds of attitudes and a few dozens of values

Attitude, Management and Culture in the workplace

• Attitudes cannot be seen it can only be inferred

• Attitudes are often shared within an organisation and as such are embodied in the culture of the organisation

• All managers regardless of status contribute and continue to influence the cultural and attitude formation in their organisations