Organizational Change

Forces for change

Force Nature of the workforce

Examples More cultural diversity Aging population Many new entrants with inadequate skills Faster, cheaper, and more mobile computers On-line music sharing

Technology

Economic shocks

Rise and fall of dot-com stocks 200002 stock market collapse Record low interest rates
Global competitors Mergers and consolidations Growth of e-commerce

Competition

Forces for change

Force
Social trends

Examples
Internet chat rooms Retirement of Baby Boomers Rise in discount and big box retailers IraqU.S. war Opening of markets in China War on terrorism following 9/11/01

World politics

Incremental versus Radical Change

Incremental change represents a series of continual progressions that maintain the organizations general equilibrium and often affect only one organizational part. Radical change breaks the frame of reference for the organization, often transforming the entire organization.

Strategic types of Changes

Technology Changes Product and Service Changes Strategy and Structure Changes

Culture Changes

Strategic Types of Changes

Technology Change
Recent thinking has refined the idea of organic versus mechanistic structures with respect to innovation creation versus innovation utilization. Ambidextrous Approach is used by organizations to incorporate the structures and processes that are appropriate to the creation and implementation of innovation. It creates the organizational design elements that are important for exploring new ideas versus the design elements that are suitable for exploiting the current capabilities.

Division of Labour in the Ambidextrous Organization

Techniques for Encouraging Technology Change

Switching Structures Creating an organic structure when such structure is needed for initiation of new ideas. Eg. Philips Corporation. Creative Departments Venture Teams: These teams are separate location and facilities so that they are not constrained by organizational procedures. Eg. 3M.

New products and Services

Reasons for New Product Success: Successful innovating companies have better understanding of customer needs

Successful innovating companies make more effective use of outside technology Top management supports innovation

New products and Services

Horizontal Coordination Model: Specialization

Boundary Spanning
Horizontal Coordination

Horizontal Coordination for Innovation

Achieving Competitive Advantage: The Need for Speed

Rapid development of new products and services is becoming a strategic weapon Time-based competition means delivering products and services faster than competitors, giving companies a competitive edge

Strategy and Structure Change

Dual-Core Approach to Organization Change

Sources of Individual Resistance to Change

Sources of Organizational Resistance to Change

Overcoming Resistance to Change

Tactics for dealing with resistance to change: Education and communication Participation

Facilitation and support

Manipulation and cooptation Selecting people who accept change Coercion

Lewins Three Step Change Model

Unfreezing
Change efforts to overcome the pressures of both individual resistance and group conformity.

Refreezing
Stabilizing a change intervention by balancing driving and restraining forces.

Driving Forces
Forces that direct behavior away from the status quo.

Restraining Forces
Forces that hinder movement from the existing equilibrium.

Lewins Three Step Change Model

Unfreezing the Status Quo

Action Research
A change process based on systematic collection of data and then selection of a change action based on what the analyzed data indicate.

Process Steps:
1. 2. 3. 4. 5. Diagnosis Analysis Feedback Action Evaluation

Action research benefits: Problem-focused rather than solution-centered. Heavy employee involvement reduces resistance to change.

Organizational Development
A collection of planned interventions, built on humanistic-democratic values, that seeks to improve organizational effectiveness and employee well-being.

OD Values:
1. Respect for people 2. Trust and support 3. Power equalization 4. Confrontation 5. Participation

Organizational Development Techniques

Sensitivity Training Training groups (T-groups) that seek to change behavior through unstructured group interaction.

Provides increased others and self.

awareness

of

Increases empathy with others, improves listening skills, greater openess, and increased tolerance for others.

Organizational Development Techniques

Survey Feedback Approach The use of questionnaires to identify discrepancies among member perceptions; discussion follows and remedies are suggested.

Organizational Development Techniques

Process Consultation (PC) A consultant gives a client insights into what is going on around the client, within the client, and between the client and other people; identifies processes that need improvement.

Organizational Development Techniques

Team Building

High interaction among team members to increase trust and openness.

Team Building Activities: Goal and priority setting. Developing interpersonal relations.

Role analysis to each members role and responsibilities.

Team process analysis.

Organizational Development Techniques

Intergroup Development OD efforts to change the attitudes, stereotypes, and perceptions that groups have of each other.
Intergroup Problem Solving: Groups independently develop lists of perceptions. Share and discuss lists.

Look for causes of misperceptions.

Work to develop integrative solutions.

Organizational Development Techniques

Appreciative Inquiry Seeks to identify the unique qualities and special strengths of an organization, which can then be built on to improve performance.
Appreciative Inquiry (AI): Discovery: recalling the strengths of the organization. Dreaming: speculation on the future of the organization.

Design: finding a common vision.

Destiny: deciding how to fulfill the dream.

Creating a Learning Organization

Learning Organization An organization that has developed the continuous capacity to adapt and change.
Characteristics: 1. Holds a shared vision

2. Discards old ways of thinking.

3. Views organization as system of relationships. 4. Communicates openly. 5. Works together to achieve shared vision.

Creating a Learning Organization

Single-Loop Learning

Errors are corrected using past routines and present policies.

Double-Loop Learning

Errors are corrected by modifying the organizations objectives, policies, and standard routines.

Single Loop and Double Loop Learning

Creating a Learning Organization

Establish a Strategy

Redesign the Organizations Structure

Reshape the Organizations Culture

Organizational Effectiveness

Organizational effectiveness evaluates the extent to which the multiple goals of an organization are attained. It is a broad concept and takes into consideration a range of variables at both organizational and departmental levels.
Efficiency is a more limited concept and pertains to internal workings of the organization. It is the amount of resources used to produce a unit of output.

Traditional Effectiveness Approaches

Goal Indicators
Profitability
The positive gain from business operations or investments

Market Share
The proportion of the market the firm is able to capture relative to competitors

Growth
The ability of the organization to increase its sales, profits, or clients

Social Responsibility
How well the organization serves the community

Product Quality
The ability of the organization to achieve high quality products/services

Resource-Based Indicators

This approach looks at the input side of the transformation process. From this perspective, organizational effectiveness is defined as the ability of the organization to obtain scarce and valued resources and successfully integrate and manage them.

Internal Process Indicators

In this approach, effectiveness is measured as internal organizational health and efficiency. An effective organization has a smooth, well oiled internal processes. Employees are happy and satisfied. Department activities mesh with one another to produce high productivity. These indicators include Strong adaptive culture Operational efficiency Growth and development of employees Undistorted horizontal and vertical communication

Traditional Approaches to the Measurement of Organizational Effectiveness

Balanced Scorecard Approach