Organizational Change:Organizational Change:Two MetaphorsTwo Metaphors

• Calm Waters (Incremental)Calm Waters (Incremental)

• White Water Rapids (Radical)White Water Rapids (Radical)

Forces for ChangeForces for Change

• ExternalExternal::– CustomersCustomers– CompetitorsCompetitors– TechnologyTechnology– EconomicEconomic– SocialSocial– PoliticalPolitical– InternationalInternational

• InternalInternal::– Financial ProblemsFinancial Problems– Production Production

Inefficiencies Inefficiencies – Employee Employee

Expectations/ Expectations/ DemandsDemands

– Management GoalsManagement Goals

Steps in the Organizational Steps in the Organizational Change ProcessChange Process

Steps in the Organizational Steps in the Organizational Change ProcessChange Process

Assess need forAssess need forchangechange

Find source of problemFind source of problem

Assess need forAssess need forchangechange

Find source of problemFind source of problem

Decide on theDecide on the changechange

Identify obstaclesIdentify obstacles

Decide on theDecide on the changechange

Identify obstaclesIdentify obstacles

Implement ChangeImplement ChangeTop-down orTop-down orBottom-upBottom-up

Implement ChangeImplement ChangeTop-down orTop-down orBottom-upBottom-up

Evaluate ChangeEvaluate ChangeIs it successful?Is it successful?

Evaluate ChangeEvaluate ChangeIs it successful?Is it successful?

Types of ChangesTypes of Changes• TechnologyTechnology

• Product/ServiceProduct/Service

• Strategy/StructureStrategy/Structure

• People/CulturePeople/Culture

(Usually, more than one change at a time)(Usually, more than one change at a time)

Technology ChangeTechnology Change• Generally, Generally,

technology change is technology change is “bottom-up”“bottom-up”

• Facilitated by Facilitated by “Ambidextrous” “Ambidextrous” approachapproach– looser structure for looser structure for

innovation than for innovation than for established activitiesestablished activities

Product/Service ChangeProduct/Service Change• Innovation often requires expertise from Innovation often requires expertise from

several departments simultaneously (e.g., several departments simultaneously (e.g., Marketing, R&D, Manufacturing)Marketing, R&D, Manufacturing)

• ““Bottom-Up after Horizontal-Linkage” Bottom-Up after Horizontal-Linkage” – Horizontal Linkage Model:Horizontal Linkage Model:• Specialized departmentsSpecialized departments• Horizontal linkagesHorizontal linkages• Boundary spanningBoundary spanning

Horizontal Linkage ModelHorizontal Linkage Model

New-Venture TeamsNew-Venture Teams• Separate unit to develop and initiate Separate unit to develop and initiate

innovationsinnovations

• Small, OrganicSmall, Organic

• Relatively free from organizational Relatively free from organizational bureaucracybureaucracy

• Most effective when placed high in the Most effective when placed high in the organizational structureorganizational structure

Strategy/Structure ChangeStrategy/Structure Change• Mission, General GoalsMission, General Goals

• Structural Design, Administrative Structural Design, Administrative Procedures, Management SystemsProcedures, Management Systems

• Usually “top-down”Usually “top-down”

People and Culture ChangesPeople and Culture Changes

• TQM - Total Quality ManagementTQM - Total Quality Management

• OD - Organizational Development OD - Organizational Development

Organizational DevelopmentOrganizational DevelopmentUse of behavioral science knowledge to Use of behavioral science knowledge to

promote promote people/culture changespeople/culture changes such as: such as:

• Skill DevelopmentSkill Development

• Attitude ChangeAttitude Change

• TeamworkTeamwork

OD Can Help Managers OD Can Help Managers Address--Address--

• Organizational declineOrganizational decline

• Conflict managementConflict management

• Mergers/AcquisitionsMergers/Acquisitions

OD TechniquesOD Techniques

Individual:Individual:• Job TrainingJob Training• Career PlanningCareer Planning• Coaching, CounselingCoaching, Counseling

Group:Group:• Sensitivity TrainingSensitivity Training• Role PlayingRole Playing• Team-buildingTeam-building

The following can The following can include large include large portions and even theportions and even the Entire Entire OrganizationOrganization::

• Survey-feedbackSurvey-feedback• Intergroup activitiesIntergroup activities• Process-consultationProcess-consultation

Why People Resist ChangeWhy People Resist Change• Personal preference for samenessPersonal preference for sameness

• Fear of the unknownFear of the unknown

• Climate of mistrustClimate of mistrust

• Fear of failureFear of failure

• Loss of status and/or job securityLoss of status and/or job security

• Disruption of cultural traditions and/or Disruption of cultural traditions and/or group relationshipsgroup relationships

Lewin’s Force Field Analysis: Lewin’s Force Field Analysis: Decision to Engage in ExerciseDecision to Engage in ExerciseLewin’s Force Field Analysis: Lewin’s Force Field Analysis: Decision to Engage in ExerciseDecision to Engage in Exercise

Forces for Status Quo Forces for Status Quo (Restraining)(Restraining)

Lack of timeLack of time

No exercise facility at workNo exercise facility at work

Spouse/partner hates to Spouse/partner hates to exerciseexercise

No interest in physical No interest in physical activity or sportsactivity or sports

Made a grade of D in a Made a grade of D in a physical education class.physical education class.

Forces for Change Forces for Change (Driving)(Driving)

Weight gainWeight gain

Minimally passing Minimally passing treadmill testtreadmill test

Feel lethargic, having no Feel lethargic, having no energyenergy

Family history of Family history of cardiovascular diseasecardiovascular disease

New, physically New, physically demanding jobdemanding job

Equilibrium

Current HighCurrent HighCost LevelCost Level

Driving ForcesDriving Forces of Change of Change

Historically goodHistorically goodcompany-unioncompany-union

relationsrelations

Foreign competitionForeign competition

Recent companyRecent companylosseslosses

Cheaper sourcesCheaper sources available outsideavailable outside

Union desire toUnion desire tosave jobssave jobs

Company desire forCompany desire forflexibility in layoffflexibility in layoff

decisionsdecisions

Desired LowerDesired LowerCost LevelCost Level

Deteriorating company-Deteriorating company-union relationsunion relations

Stringent work rulesStringent work rules

Current benefit costsCurrent benefit costs

Current pay costsCurrent pay costs

Employee absenteeismEmployee absenteeismlevelslevels

Company reluctanceCompany reluctanceto eliminate jobsto eliminate jobs

Restraining ForcesRestraining Forces against Change against ChangeFORCE FIELD ANALYSISFORCE FIELD ANALYSIS

Lewin’s 3-Step Change ModelLewin’s 3-Step Change Model

• UnfreezingUnfreezing Motivate Change Motivate Change (strengthen driving (strengthen driving and/or weaken and/or weaken restraining forces)restraining forces)

• ChangeChange Use Effective Change Use Effective Change MethodMethod

• RefreezingRefreezing Solidify the ChangeSolidify the Change

• UnfreezingUnfreezing Communication/Education Communication/Education Negotiation/Promise of Negotiation/Promise of

RewardsRewards

• ChangeChange Participation/Training/Participation/Training/ CoercionCoercion

• RefreezingRefreezing Reinforce withReinforce with Resources/RewardsResources/Rewards

Lewin’s Change ModelLewin’s Change Model•UnfreezingUnfreezing- Creates the motivation to change- Encourages the replacement of old behaviors and attitudes with those desired by management- Entails devising ways to reduce barriers to change- Creates psychological safety••ChangingChanging- Provides new information, new behavioral models, or new ways of looking at things- Helps employees learn new concepts or points of view- Role models, mentors, experts, benchmarking results, and training are useful mechanisms to facilitate change•RefreezingRefreezing- Helps employees integrate the changed behavior or attitude into their normal way of doing things- Positive reinforcement is used to reinforce the desired change- Coaching and modeling help reinforce the stability of change