Organizational Change

1
Organizational Change

• OS 386
• Dec.3, 2002
• Fisher

2
Agenda

• Review org change concepts
• Discuss purpose and goals of organizational
  development
• Course evaluation

3
Why do organizations change?

• External forces
• Competition
• Information technology
• Demographics (customers, communities)
• Internal forces
• Poor financial performance
• New leadership
• Employee demographics

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What kind of change are we talking about?

• Processes and procedures
• Organizational structure
• Individual to team-based
• Hierarchical to matrix
• Over time, these changes can produce culture
  change

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Types of change

• Framebreaking
• Major change
• Intentional
• Top-down
• Incremental
• Evolutionary (small steps)
• Can be less directed
• Could be bottom-up

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Process of change

• Unfreezing preparing the organization for
  change
• Change
• Refreezing integrating the changes into the
  processes, procedures, and culture of the
  organization

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Force Field Analysis

• Driving forces vs. restraining forces

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Resistance to Change
Direct Costs Saving Face Fear of the
Unknown Breaking Routines Incongruent
Systems Incongruent Team Dynamics
Forces for Change
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Cynicism about Org Change

• Significant barrier to change
• nothings really going to happen
• we can wait this out it will go away
• Study examined levels, causes of cynicism
  (Reichers, Wanous Austin, 1997)
• 23 of managers were cynical about change
• 43 of hourly employees cynical about change
• Causes of cynicism
• People felt uninformed
• Perceived lack of communication and respect
• Not allowed to participate in planning and
  decision making

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How to minimize cynicism?

• Employee involvement in decision making and
  planning
• Dont surprise people
• Communication!
• Make sure messages are coming from a credible
  source
• Repeat messages, be consistent
• Acknowledge failed efforts of the past

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Creating urgency for change

• Need to motivate employees to change
• Most difficult when organization is doing well
• Explanations must be real, not contrived
• Customer-driven change can be effective
• Adverse consequences for firm
• Human element energizes employees

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How can organizations facilitate change?

• Think about
• Learning theories
• Motivation theories
• Power
• Politics
• Conflict
• Requires good leadership
• Transformational

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Organizational Development

• Practice of managing and directing organizational
  change
• Managed from the top
• Involves external (hopefully neutral) change
  agent
• Advising internal change agent
• Process consulting
• Uses behavioral science principles

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Ethical concerns with OD

• Data collection
• What is done with the data?
• Are individuals identified?
• Increasing management power
• Undermine self-esteem
• Failure to maintain neutral perspective

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Key learning points

• Consider driving forces and restraining forces
  when considering change
• Communication is key to overcoming resistance
• Use motivation theories, concepts related to
  power, conflict resolution to understand
  resistance

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For next class

• Wrap-up and Integration
• Read web article 3M GE ?
• Will be basis for integrative writing exercise on
  Thursday
• Bring a copy of the article and your textbook
  with you to class
• Writing exercise will be open-book