Managing Organizational Change

Age % Survival
5 38
10 21
15 14
20 10
25 7
50 2
75 1
100 .5
 Organizational Change

Organizational change:
the process by which organizations move
from their present state to some desired future state to
increase their effectiveness
OE often demands implementation of change
Small, incremental change
Broad, comprehensive, painful, system wide change
Change affects structure

Managed or planned change

Structural concerns, not individual
 Targets of Change

• Targets of change include improving effectiveness at

four different levels
– Human resources
– Functional resources
– Technological capabilities
– Organizational capabilities
 Kinds of change efforts

Human Resources:
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 systems
5. Changing the composition of the top management
team
Forces For Change Resistance to Change
Organizational Level
•Competitive Forces
•Structure
•Economic Forces •Culture
•Political Forces •Strategy

•Global Forces Functional Level

•Sub-Unit Orientation
•Demographic Forces
•Power & Conflict
•Social Forces
Group Level
•Ethical Forces •Norms
•Cohesiveness
•Groupthink
Individual Level
•Cognitive Biases
•Uncertainty and Insecurity
•Selective Perception
 Resistance to Change Resistance to Change

Performance

Force for Change Force for Change

Time

Lewin’s Force Field Theory of Change

 Kinds of Change Processes

• Evolutionary change: change that is gradual,

incremental, and narrowly focused (Socio-Technical
Theory, TQM, QC, Kaizen, Flexi-Teams, Multi-Skilling)
• Revolutionary change: change that is sudden, drastic,
and broadly focused (BPR, E Engineering,
Restructuring, Downsizing)

9
Levin's Three-Step Change Process
Steps in Action Research
 Feedback Forces Initiating Determinant
Change
Initiator
Change Agent

What is to be Implementation
Changed? Strategies
•Structure?
•Technology?
•Processes?
Implementation

Change Process Implementation Tactics

Unfreeze Move Refreeze Intervention
Participation
Persuation
Edict

Change
Results

OE
 Determinants

• Change in Objectives
• Opportunity
• New Equipment
• Threat
• Labor Shortage
• External
• Government Regulations
• Internal
• The Economy
• Anticipation
• Unionization
• Reaction
•Mergers and Acquisitions
•Actions of Competitors
•Employee Morale
Organization Development (To deal with resistance to
change)
– Education and communication: inform workers
about change and how they will be affected
– 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