Organizational Development and Theory

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Chapter 14

• Organizational Development and Theory

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Objective

• Change and stress
• Environmental forces that are requiring mangers
  to implement comprehensive change programs
• Why people and organizations often resist change
  ad how this resistance can be overcome
• Contemporary change issues for todays managers
• Elaborate on the sources and consequences of the
  stress
• What individuals and organizations can do to
  better manage stress levels

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Forces for Change (I)

• Face a dynamic and changing environment
• Changing nature of the workforce
• Having to adjust to a multicultural environment
• Attract and keep this more diverse workforce
• Having to spend large amounts of money on
  training to upgrade reading, math, computer and
  other skills of employees
• Technology
• Computer control for direct supervision
• Resulting in wider spans of control for managers
  and flatter organizations
• Sophisticated information technology is making
  organizations more responsive

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Forces for Change (II)

• Economic shocks
• Continued to impose changes on organizations
• Interest rates have become more volatile and
  economies of individual countries have become
  more interdependent
• Competition is changing
• Organizations need to defend themselves against
  both traditional competitors who develop new
  products and services and small, entrepreneurial
  firms with innovative offerings
• Social trends
• Organizations have to adjust for
• World politics

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Managing Planned Change (I)

• Change
• Making things different
• Clarify what we mean by planned change, describe
  its goals, contrast first-order and second-order
  change
• Responsible for bringing about planned change in
  an organization
• Planned change
• Improve the ability of the organization to adapt
  to changes in its environment
• Seeks to change employee behavior
• Organizations must respond to changes
• The competitors introduce new products or
  services
• Government agencies enact new laws
• Important sources of supply go out of business
• Similar environmental changes take place

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Managing Planned Change (II)

• First-order change
• Linear and continuous
• No fundamental shifts in the assumptions that
  organizational members hold about the world
• Or how the organization can improve its
  functioning
• Second-order change
• A multidimensional, multilevel, discontinuous,
  radical change involving reframing of assumptions
  about the organization
• The world in which it operates
• Change agents
• Change agents can be managers or nonmanagers,
  employees of the organization or outside
  consultants

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Managing Planned Change (III)

• Top managers are increasingly turning to
  temporary outside consultants with specialized
  knowledge in the theory and methods of change
• More objective perspective than insider can
• Inadequate understanding of the organizations
  history, culture, operating procedures and
  personal
• Outside consultants
• Willing to initiate second-order changes
• Dont have to live with the repercussions

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What Can Change Agents Change? (I)

• Structure
• Involves making an alteration in authority
  relations, coordination mechanisms, job redesign
  or similar structural variables
• Technology
• Encompasses modifications in the way work is
  processed
• In the methods and equipment used
• Physical setting
• Covers altering the space and layout arrangements
  in the workplace
• People
• Refers to changes in employee attitudes, skills,
  expectations, perceptions and or behavior

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What Can Change Agents Change? (II)

• Changing structure
• Changing conditions demand structural changes
• The change agent might need to modify the
  organizations structure
• Defined by how tasks are formally divided,
  grouped and coordinated
• Change agents can alter one or more of the key
  elements in an organizations design
• More rules and procedures can be implemented to
  increase standardization
• An increase in decentralization can be made to
  speed up the decision-making process

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What Can Change Agents Change? (III)

• Change agents
• Introduce major modifications in the actual
  structural design
• Shift from a simple structure to team-based
  structure or the creation of a matrix design
• Redesigning jobs or work schedules
• Job descriptions can be redefined, job enriched
  or flexible work hours introduced
• Modify the organizations compensation system
• Changing Technology
• Involve the introduction of new equipment, tools
  or methods, automation or computerization
• More efficient handling equipment, furnaces and
  presses have been installed to reduce the cost of
  manufacturing a ton of aluminum
• Automation that replaces people with machines

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What Can Change Agents Change? (IV)

• Changing the physical setting
• Work demands
• Formal interaction requirements
• Social needs when making decisions about space
  configurations
• Interior design
• Equipment placement
• Changing people
• Helping individuals and groups within the
  organization to work more effectively together
• Changing the attitudes and behaviors of
  organizational members through processes of
  communication, decision making and problem
  solving
• The concept of organizational development
• Encompass an array of interventions designed to
  change people and the nature and quality of their
  work relationships

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Resistance to Change (I)

• Resistance to change
• Organizations and their members resist change
• Provides a degree of stability and predictability
  to behavior
• Can be overt, implicit, immediate or deferred
• Employees quickly respond by voicing complains,
  engaging in a work slowdown, threatening to go on
  strike
• Implicit resistance efforts
• Loss of loyalty to the organization
• Loss of motivation to work
• Increased errors or mistakes
• Increased absenteeism due to sickness

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Resistance to Change (II)

• Individual resistance
• Reside in basic human characteristics such as
  perceptions, personality and needs
• Habit
• As human beings, were creatures of habit
• To cope with this complexity, we all rely on
  habits or programmed responses
• Respond in our accustomed ways becomes a source
  of resistance
• Security
• People with a high need for security are likely
  to resist change because it threatens their
  feelings of safety
• Economic factors
• Resistance is concern that changes will lower
  ones income

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Resistance to Change (III)

• Fear of the unknown
• Changes substitute ambiguity and uncertainty for
  the known
• employees in organizations hold the same dislike
  for uncertainty
• TQM means production workers will have to learn
  statistical process control techniques, some may
  fear theyll unable to do so
• Selective information processing
• Individuals are guilty of selectively processing
  information in order to keep their perceptions
  intact
• They ignore information that challenges the world
  theyve created
• Organizational Resistance
• Structural inertia
• Organizations have built-in mechanisms to produce
  stability
• Formalization provides job descriptions, rules
  and procedures for employees to follow

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Resistance to Change (IV)

• Organization is confronted with change, this
  structural inertia as a counterbalance to sustain
  stability
• Limited focus of chance
• Organizations are made up f a number of
  interdependent subsystems
• You cant change one without affecting the others
• Limited changes in subsystems tend to get
  nullified by the larger system
• Group inertia
• Individuals want to change their behavior, group
  norms may act as a constraint
• Union norms dictate resisting any unilateral
  change made by management
• Threat to expertise
• Changes in organizational patterns may threaten
  the expertise of specialized groups

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Resistance to Change (V)

• Decentralized end-user computing was a threat to
  the specialized skills held by those in the
  centralized information systems departments
• Threat to established power relationships
• Any redistribution of decision-making authority
  can threaten long-established power relationships
  within the organization
• Change that is often seen as threatening by
  supervisors and middle managers
• Threat to established resource allocations
• Control sizable resources often ass change as a
  threat
• The current allocation of resources often feel
  threatened by changes that may affect future
  allocations

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Resistance to Change (VI)

• Overcoming Resistance to Change
• Education and communication
• Resistance can be reduced through communicating
  with employees to help them see the logic of a
  change
• Communication can be achieved through one-on-one
  discussions, memos, group presentations or
  reports
• Employee relations are characterized by mutual
  trust and credibility
• Participation
• Its difficult for individuals to resist a change
  decision in which they participated
• Make a meaningful contribution
• Their involvement can reduce resistance
• Obtain commitment
• Increased the quality of the change decision

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Resistance to Change (VII)

• Facilitation and support
• Change agents can offer a range of supportive
  efforts to reduce resistance
• Implementation offers no assurance of success
• Negotiation
• Deal with potential resistance to change
  something of value for a lessening of the
  resistance
• Negotiation as a tactic may be necessary when
  resistance comes form a powerful source
• Change agent negotiates with one party to avoid
  resistance, possibility of being blackmailed by
  other individuals in positions of power
• Manipulation and cooptation
• Manipulation refers to covert influence attempts

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Resistance to Change (VIII)

• Appear more attractive, withholding undesirable
  information and false rumors to get employees to
  accept a change are all examples of manipulation
• Cooptation is a form of both manipulation and
  participation
• Relatively inexpensive and easy ways to gain the
  support of adversaries
• Coercion
• The application of direct threats or force upon
  the resisters
• Coercion are threats of transfer, loss of
  promotions, negative performance evaluations and
  poor letter of recommendation
• The politics of change
• Change invariably threatens the status quo, it
  inherently implies political activity
• Internal change agents typically are individuals
  high in the organization who have a lot to lose
  from change
• Creates the potential for others in the
  organization to gain power at their expense
• Change is a very real threat to their status and
  position
• Power struggles within the organization will
  determine, to a large degree, the speed and
  quantity of change

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Approaches to Managing Organizational Change (I)

• Lewins Three-step Model
• Kurt Lewin argued that sucessful change in
  organizations should follow three steps
• Unfreezing the status quo
• Movement to a new state
• Refreezing the new change to make it permanent
• When the management of a large oil company
  decided to recognize its marketing function in
  the western United State

Unfreezing
Movement
Refreezing
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Approaches to Managing Organizational Change (II)
Desired state
Restraining forces
Status quo
Diving forces
Time
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Approaches to Managing Organizational Change
(III)

• The status quo can be considered to be an
  equilibrium state
• To overcome the pressures of both individual
  resistance and group conformity-Unfreezing is
  necessary
• Driving forces
• Direct behavior away from the status quo, can be
  increased
• Restraining forces
• Hinder movement from the existing equilibrium,
  can be decreased
• To deal with resistance
• Management could use positive incentives to
  encourage employees to accept the change
• Consider unfreezing acceptance of the status quo
  by removing restraining forces
• Have to resort to both reducing resistance and
  increasing the attractiveness of the alternative
  if the unfreezing is to be successful

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Approaches to Managing Organizational Change (IV)

• Employees will attempt to revert to the previous
  equilibrium state
• The objective of refreezing is to stabilize the
  new situation by balancing the driving and
  restraining forces
• Management might impose a permanent upward
  adjustment of salaries or permanently remove time
  clocks to reinforce a climate of trust and
  confidence in employees
• Action Research
• Change process based on the systematic collection
  of data and then selection of a change action
  based on what the analyzed data indicate
• Providing a scientific methodology for managing
  planned change

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Approaches to Managing Organizational Change (V)

• Diagnosis
• The change agent begins by gathering information
  about problems, concerns and needed changes for
  members of the organization
• The physicians search to find what specifically
  ails a patient
• The change agent asks questions, interviews
  employees, reviews records and listens to the
  concerns of employees
• Analysis
• Gathered during the diagnostic stage is then
  analyzed
• The change agent synthesizes this information
  into primary concerns, problem areas and possible
  actions
• Feedback
• Extensive involvement of the change targets
• Determining what the problem us and participating
  in creating the solution

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Approaches to Managing Organizational Change (VI)

• Sharing with employees what has been found from
  steps one and two
• Develop action plans for bringing about any
  needed change
• Action
• Action part of action research is set in motion
• The change agent carry out the specific actions
  to correct the problems that have been identified
• Evaluation
• The change agent evaluates the effectiveness of
  the action plans
• Any subsequent changes can be compared and
  evaluated
• Specific benefits for an organization
• Problem focused
• Objectively looks for problems and the type of
  problem determines the type of change action
• Seek out problems that his ir her solution fits

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Approaches to Managing Organizational Change (VII)

• Resistance to change is reduced
• Employees have actively participated in the
  feedback stage, the change process typically
  takes on a momentum of its own
• Organizational Development
• An easily defined single concept
• Planned-change interventions built on
  humanistic-democratic values that seek to improve
  organizational effectiveness and employee
  well-being
• Strong emphasis on collaboration
• Power, authority, control, conflict and coercion
  are held in relatively low esteem among OD change
  agents

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Approaches to Managing Organizational Change
(VIII)

• Respect for people
• Individuals are perceived as being responsible,
  conscientious and caring
• Should be treated with dignity and respect
• Trust and support
• The effective and healthy organization is
  characterized by trust, authenticity, openness
  and a supportive climate
• Power equalization
• Effective organizations deemphasize hierarchical
  authority and control
• Confrontation
• Problems shouldnt be swept under the rug
• Should be openly confronted
• Participation
• Change are involved in the decisions surrounding
  that change, the more they will be committed to
  implementing those decisions

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Approaches to Managing Organizational Change (IX)

• Five interventions that change agent might
  consider using
• Sensitivity training
• Encounter groups or T-groups
• Method of changing behavior through unstructured
  group interaction
• Free and open environment in which participants
  and their interactive processes, loosely directed
  by a professional behavioral scientist
• To express their ideas, beliefs and attitudes
• The objectives of the T-groups
• Increased awareness of their own behavior how
  others perceive them
• Greater sensitivity to the behavior of others
• Increased understanding of group processes
• Successful T-group can affect more realistic
  self-perceptions, greater group cohesiveness and
  a reduction in dysfunctional interpersonal
  conflicts

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Approaches to Managing Organizational Change (X)

• Survey feedback
• Assessing attitudes held by organizational
  members, identifying discrepancies among member
  perceptions and solving
• Asked to suggest questions or may be interviewed
  to determine what issues are relevant
• Identifying problems and clarifying issues that
  may be creating difficulties for people
• Group discussion in the survey feedback approach
• Result in the group agreeing upon commitments to
  various actions that will remedy the problems
  that are identified
• Process consultant
• An outside consultant to assist a client, to
  perceive understand and act upon process events
• Include work flow, informal relationships among
  unit members and formal communication channels
• PC is dealing with interpersonal problems and in
  its emphasis on involvement

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Approaches to Managing Organizational Change (XI)

• Consultant is a guide or coach who advice on the
  process to help the client solve his or her own
  problems
• The consultant works with the client in jointly
  diagnosing what processes need improvement
• The consultant helps the client to locate such as
  expert and instructs the client in how to get the
  most out of this expert resources
• Team building
• Can be applied within groups or at the
  inter-group level where activities are
  interdependent
• Interest concerns applications to organizational
  families, as well as to committees, project
  teams, self-managed teams and task groups
• The objective is to improve coordinative efforts
  of members, which will result in increasing the
  teams performance
• Emphasize or exclude certain activities depending
  on he purpose of the development effort and the
  specific problems with which the team is
  confronted

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Approaches to Managing Organizational Change (XII)

• Free interchange of views, may initially take
  place in smaller groups followed up by the
  sharing of their findings with the total team
• Key processes that go on within the team to
  identify the way work is performed
• How these processes might be improved to make the
  team more effective
• Inter-group development
• Seeks to change the attitudes, stereotypes and
  perceptions that groups have of each other
• Improving inter-group relations, a popular method
  emphasizes problem solving

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Chapter 14

• -THE END-