Organizational Change

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Chapter 12
Organizational Change and Learning
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Learning Goals

• Describe four types of organizational change

2. Explain the planning process for
organizationalchange
3. Identify four methods of organizational change
4. Describe how innovation relates to
organizationalchange
5. Discuss how learning organizations foster
change
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Organizational Change

• Organizational change refers to any
  transformation in the design or functioning of an
  organization.

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(adapted from Figure 12.1)
Types of Organizational Change Degree of Change

• Radical change organizations make
  majorinnovations in the ways they do business

• Stages of Radical Change

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Types of Organizational Change Degree of Change

• Incremental change ongoing process of evolution
  over time, during which many small adjustments
  occur routinely

• Tempered radicals people who strive to create
  radical change but do so by prodding an
  organization to make many small incremental
  changes

• Total quality management relies heavily on
  continuous incremental change

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Advice for Tempered Radicals

• Earn credibility first, and then leverage it
• Gather and accept support from others along the
  way
• Develop grass roots initiatives and be willing to
  share the stage with supporters
• Chip away at standard operating procedures little
  by little over time until you achieve real
  success
• Accept small changes as making progress
• Develop your ability to compromise as well as
  persuade
• Be persistent

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Timing of Change

• Reactive change occurs when an organization is
  forced to adapt or innovate in response to some
  event in the external or internal environment

• Anticipatory change occurs when managers make
  organizational modifications based on forecasts
  of upcoming events or early in the cycle of a new
  trend

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Types of Organizational Change(adapted from
Figure 12.2)
Incremental Reactive Change
Small Adjustments
Incremental Anticipatory Change
Degree of Change
Radical Anticipatory Change
Radical Reactive Change
Major Transformation
Timing of Change
Before Major Shifts in the Environment
After Major Shifts in the Environment
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The Process of Organizational Change(adapted
from Figure 12.3)
2. Determine the Performance Gap
1. Assess the Environment
3. Diagnose Organizational Problems
7. Monitor the Changes
6. Anticipate Resistance and Take Action
to Reduce
4. Articulate and Communicate a Vision
for the Future
5. Develop and Implement an Action Plan
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Planning for Organizational Change Common
Reasons for Resistance
Fear
Vested interests
Misunderstandings
Cynicism
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Implementing Change Common Methods for Creating
Change
Technological Change
Organizational Redesign
Job Redesign
OrganizationalDevelopment
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Technological Change

• Involves incremental adjustments or radical
  innovations that affect workflows, production
  methods, materials, and information systems

• Many new forms of informationtechnology (IT)

• IT is enabling real time and any time links
  between suppliers, producers, distributors, and
  customers

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Organization Redesign

• Involves incremental adjustments or radical
  innovations focused on realigning departments,
  changing who makes decisions, and merging or
  reorganizing departments that sell the
  organizations products

• Two basic approaches

• Change organizations structure, such as from
  functional to product departmentalization
• Change organizations processes, such as how
  customer complaints are handled

• Restructuring reconfiguring the distribution of
  authority, responsibility, and control in an
  organization

• Reengineering radical redesigning of an
  organizations functions and business processes

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Job Redesign

• Modifying specific employee job responsibilities
  and tasks

• Job simplification the scientific analysis of
  tasks

• Focus on efficient workflow process for employees
  in a particular job
• Frequent use of time and motion studies

• Job enrichment changing job specifications to
  broaden and add challenge to the tasks required
  and to increase productivity

• Increases interesting and challenging work
• Increases autonomy and personal freedom

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Organization Development (OD)

• A planned, long-range behavioral science strategy
  for understanding, changing, and developing an
  organizations workforce in order to improve its
  effectiveness

• Focus group discussion a carefully planned
  discussion among several employees about a
  specific topic orissue of interest, which is led
  by a trained facilitator

• Facilitator explains the topic to be discussed,
  the role of the scribe, and how the organization
  will use the results of the focus group
  discussion
• Participants come prepared to discuss a specific
  topic. If confidentiality is a concern,
  participants are chosen from different units of
  the organization, not the same work group
• Scribe the person who takes notes about what is
  said, but not who says it

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How to Set Up a Focus Group Discussion(adapted
from Figure 12.5)
The facilitator explains the topic to be
discussed, the role of the scribe, and how the
organization will use the results of the focus
group discussion.
The participants come prepared to discuss a
specific topic. If confidentiality is a concern,
participants are chosen from different units of
the organization, not the same work group.
The scribe takes notes about what is said, but
not who says it.
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Organization Development (OD) (contd)

• Survey feedback a process that allows managers
  and employees to report their thoughts and
  feelings about the organization and to learn
  about how others think and feel about their own
  behaviors

• Feedback obtained by means of a questionnaire
  developed and distributed to employees, who
  complete it and turn it in anonymously
• Content of questionnaire depends on areas of most
  concern

Questionnaire
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Organization Development (OD) (contd)

• Team building process that develops the ability
  of team members to collaborate effectively so
  they can perform the tasks assigned to them

• Often emphasizes developing a group climate that
  is safe
• Openness can be risky, but promotes creativity
  and effective problem solving

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Combining Methods of Change

• Major organizational change is a complex process

• Typically involves a combination of methods

• Example purchasing and installing enterprise
  resource planning ERP software

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Role of Innovation in Organizational Change

• Innovation the discovery, identification and
  diagnosis of unusual and ambiguous problems
  and/or the development of unique or creative
  solutions

• Strategic importance of innovation

• Critical in dynamic, changing environments
• Organizations can rest on prior success
• Complacency is deadly

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Types of Innovation

• Technical innovation creation of new goods and
  services

• Process innovation creating a new way of
  producing, selling, and/or distributing an
  existing good or service

• Administrative innovation creating a new
  organization design that better supports the
  creation, production, and delivery of goods and
  services

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Architecture for Innovation
Foster Workforce Resilience
Provide aSupport System forInnovation
Develop a Learning Environment and Learning
Orientation among Employees
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Learning Organizations

• Learning organization has both the drive and the
  capabilities to modify or transform itself and
  improve its performance continuously

• Learns from past experiences
• Learns from customers
• Learns from various parts of the organization
• Learns from other organizations

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Characteristics of a Learning Organization
Shared Leadership
Customer-FocusedStrategy
Culture of Innovation
The Learning Organization
Organic OrganizationDesign
Intensive Use ofInformation
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Characteristics of a Learning Organization
Snapshot
We all make mistakes. Its not as though at any
time, Dell doesnt have some part of its business
thats not working for us as it should. But we
have a culture of continuous improvement. We
train employees to constantly ask themselves,
How do we grow faster? How do we lower our cost
structure? How do we improve service for
customers?
Michael Dell, Chairman and Cofounder, Dell
Computer