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Chapter 10

Types and Forms of Organizational

Change

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Learning Objectives1. Understand the relationship

among organizational change, redesign, an organizational effectiveness

2. Distinguish among the major forms or types of evolutionary and revolutionary change organizations must manage

3. Recognize the problems inherent in managing change and the obstacles that must be overcome

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What is Organizational Change? Organizational change:

process by which organizations move from their present state (structure, system, culture, etc.) to some desired future state to increase their effectiveness

Goal is to find improved ways of using resources and capabilities in order to increase an organization’s ability to create value

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Organizational Change Areas Targets of change include improving

effectiveness at four different levels Human resources e.g. new skill

development Functional resources e.g. process

redesign Technological capabilities e.g.

computerisation IBM- IT consulting Organizational capabilities e.g. Total

Quality Management

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Organizational Change Areas What is required to be done ? Human resources include:

1. Investment in training and development

2. Socializing employees into the organizational culture

3. Changing organizational norms and values to motivate a multicultural and diverse work force

4. Promotion and reward systems5. Changing the composition of the top

management team

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Organizational Change Areas Functional resources - transferring

resources to the functions where the most value can be created in response to environmental change

Organizational capabilities - alter organizational culture and structure, thereby permitting the organization to harness its human and functional resources to exploit technological opportunities.

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Forces for and Resistances to Change

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Levin's Force-Field Theory of Change

Theory of change which argues that two sets of opposing forces within an organization determine how change will take place

Forces for change and forces making organizations resistant to change

When forces for and against change are equal, the organization is in a state or inertia

To change an organization, managers must increase forces for change and decrease forces resisting change

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Levin's Force-Field Theory of Change

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Levin's Three-Step Change Process

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Evolutionary and Revolutionary Change in Organizations Evolutionary change: change

that is gradual, incremental, and narrowly focused

Revolutionary change: change that is sudden, drastic, and broadly focused

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Developments in Evolutionary Change Sociotechnical systems theory: a

theory that proposes the importance of changing role and task or technical relationships to increase organizational effectiveness Managers must fit or “jointly optimize”

the workings of an organization’s technical and social systems

Managers need to be sensitive to the fact that the way they structure the work process affects the way people and groups behave

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Types of Evolutionary Change

Total quality management (TQM): Quality circles: groups of workers who

meet regularly to discuss the way work is performed in order to find new ways to increase performance

Changing cross-functional relationships is very important to TQM

Flexible workers: employees who have acquired and developed the skills to perform any of the tasks necessary for assembling a range of finished goods

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Types of Evolutionary ChangeFlexible work teams: a group of

workers who assume responsibility for performing all the operations necessary for completing a specified stage in the manufacturing process Team members jointly assign tasks and

transfer workers from one task to another

Manager’s role is to facilitate the team’s activities

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Developments in Revolutionary Change

Reengineering: involves rethinking and redesigning business processes to increase organizational effectiveness

Instead of focusing on an organization’s functions, the managers of a reengineered organization focus on business processes

Deliberately ignores the existing arrangement of tasks, roles, and work activities

Organize around outcomes, not tasks

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Types of Revolutionary Change

E-engineering: refers to companies’ attempts to use information systems to improve their performance

Restructuring: changing task and authority relationships and redesigning organizational structure and culture to improve organizational effectiveness

Downsizing: the process of streamlining the organizational hierarchy and laying off managers and workers to reduce bureaucratic costs

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Types of Revolutionary ChangeInnovation: the process by which

organizations use their skills and resources to: Create new technologies Develop new goods and services Better respond to the needs of their

customers

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Managing Change: Action Research Action research: a strategy for

generating and acquiring knowledge that managers can use to define an organization’s desired future state

Used to plan a change program that allows the organization to reach that state

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Action Research

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Organizational Development (OD)Organizational development

(OD): a series of techniques and methods that managers can use in their action research program to increase the adaptability of their organization

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Organizational Development (cont.)

OD techniques to deal with resistance to change Education and communication: inform

workers about change and how they will be affected. WALMART- VIDEO CONFERENCE

Participation and empowerment: involve workers in change

Facilitation: help employees with change Bargaining and negotiation Manipulation: change the situation to

facilitate change Coercion: force workers to accept change

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Organizational Development (cont.)OD techniques to promote change

Counseling: help people understand how their perception of the situation may not be right

May learn how to manage their interactions with other people more effectively

Sensitivity training: intense counseling in which group members, aided by a facilitator, learn how others perceive them and may learn how to deal more sensitively with others

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Organizational Development (cont.)Techniques to promote change

(cont.) Process consultation: a trained

consultant works closely with a manager on the job to help the manager improve his or her interactions with other group members

Consultant acts as a sounding board Team building: an OD technique in

which a facilitator first observes the interactions of group members and then helps them become aware of ways to improve their work interactions

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Organizational Development (cont.)Techniques to promote change

(cont.) Organizational mirroring: a

facilitator helps two interdependent groups explore their perceptions of each other and their relations in order to improve their work interactions

Each group takes turns describing the other group

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Organizational Development (cont.) Total organizational

interventions Organizational confrontation

meeting: brings together all of the managers of an organization to meet to confront the issue of whether the organization is effectively meeting its goals