chapter 15 managing organizational change and development
TRANSCRIPT
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Chapter 15
Managing Organizational Change
and Developmen
t
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Sources of Change
• Change is inevitable
• Most common forces for change include: New competitors, innovations in technology, new company leadership, evolving attitudes toward work
• Two sources of change:– External – Internal
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External Source of Change
• Originate in environment
• Examples:– Customers– Prevailing economic climate– Labor force– Legal environment– Legislation
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Internal Sources of Change
• Exist within the organization itself
• Examples:– Shifts in workers’ attitudes towards their
supervisor or benefits packages– Decline in productivity– Changes in key personnel (whose goals and
values influence large populations of the organization)
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Organizational Growth and Decline
• Organizational change often follows an evolutionary pattern of gradual growth and decline
• Larry Greiner contends that every organization has an ideal structure that corresponds to its stage in the growth process
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Stages of Growth Crisis
• Each new stage is preceded by a period of transition called a growth crisis
• These stages include:– Growth through creativity– Growth through direction– Growth through delegation– Growth through coordination– Continued growth through collaboration
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Growth through Creativity
• First stage
• At birth, organizations are loose in structure and informal
• Creative energies will help to carry organization through its birth process
• With growth, nature of problems changes
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Growth through Direction
• Second stage
• Formalization is introduced by professional managers
• Bureaucratization occurs in departments to manage organization
• Specialized divisions are created
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Growth through Delegation
• Third stage
• The crisis of autonomy is overcome by delegating greater decision-making power to middle- and lower-level managers, with top level managers focusing on long-range, strategic planning
• A crisis of control
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Growth through Coordination
• Fourth stage
• The crisis is resolved via greater coordination between departments
• Consultants may be hired to assess the extent of coordination needed and to suggest ways of improving efficiency and reducing redundancy
• The crisis of red tape
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Continued Growth through Collaboration
• Fifth stage
• Simplification of programs, and reliance on self-control and social norms eventually solve crisis of red tape
• Goal is to teach managers how to cope with the organization’s structure without giving in to impulse to create additional structure, to collaborate
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Managing Organizational Decline• Sixth stage
• A cutback in the size of an organization’s work force, profits, budget, or clients.
• Factors that can lead to decline:– Atrophy, loss of efficient processes, loss of
competitive drive– Self complacency
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Managing Organizational Decline
(cont.)– Changes in societal values and consumer
tastes– Insufficient external resources– Vulnerable state caused by inexperienced
managers, cash flow problems, economic downturns, etc
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Skills to Manage Decline
• Similar to those necessary to manage growth
• Skills include:– Ability to seek creative solutions– Willingness to innovate– Tactful management of conflict
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Factors that Lead to Organizational Success• Focus on customers and their needs
• Adapt the structure to the needs of their missions
• Managers are oriented to problem solving, with avoidance of “paralysis through analysis” mentally
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Factors that Lead to Organizational Success
(cont.)• Commitment to organization’s original
area of expertise, “sticking to one’s knitting”
• Stress a single value, e.g, delivering good service, etc.
• Improve performance by achieving agreement or consensus of employees
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Factors that Lead to Failure
• Environmental factors may catch organizations off guard
• Too dependent on suppliers and/or single customer
• Inadequate control mechanisms
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Factors that Lead to Failure (cont.)
• Management factors, e.g., tendency to overanalyze, or wait too long in making decisions, outdated expertise
• Intergroup conflicts
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Organizational Development (OD)
• A distinct area of organizational science that focuses on planned and controlled change of organizations in desired directions
• Seeks to challenge organizations by changing structure, technology, people, and tasks
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Organizational Development (OD)
(cont.)• Organizational development is a long-
range effort
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Phases of OD
• Unfreezing: occurs when a situation is recognized as being deficient or inadequate in some way
• Changing: occurs when a new plan or system is implemented in the organization
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Phases of OD (cont.)
• Refreezing: occurs as the newly created patterns of behavior and techniques become part of ongoing organizational processes
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Resistance to Change
• People tend to fear change out of desire for security and contentment with status quo
• Ways to overcome resistance to change:– Education– Participation– Negotiation
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OD Techniques
• Survey Feedback
• Team Building
• Sensitivity Training
• Confrontation Meetings
• Quality of work life programs
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Survey Feedback
• Involves administering a survey, or interviewing employees; it differs from the traditional survey method in that employees receive the analyzed results of the survey back for consideration and interpretation
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Survey Feedback (cont.)
–More likely to achieve productive change than traditional surveys due to completion of communication loop
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Team Building
• Involves either the formation of “family groups,” composed of people that currently work together, or “special groups” of employees brought together for a purpose
• Goal is to solve problems, and improve productivity
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Team Building (cont.)
–Group examines both hard data (facts and figures) and soft data (impressions and opinions) concerning production problems to encourage unfreezing
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Sensitivity Training
• Known as “T-groups”
• 8-12 people are brought together for 2 to 3 hours
• Trainer does not take active role, but does act as a guide
• Members are expected to focus on behavior and on giving feedback about their perceptions of one another
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Sensitivity Training (cont.)
• Member’s reactions may get out of hand
• Stranger groups may be formed of people who do not have prior knowledge of one another to encourage freer discussions
• Lost a lot of its popularity in recent years
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Confrontation Meetings
• Involves bringing conflicting groups together in a structured situation that is designed to enhance cooperation– Most follow a predictable sequence– Discuss need for change first– Plan for inter-group meetings is disclosed
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Confrontation Meetings (cont.)
– Groups meet and present comments, reconvene in private, and meet again in large groups to discuss differences
– At end of discussion, plans for resolution of problems are drawn up with feedback from both groups
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Quality of Work Life Programs
• Seek to enhance the total work climate in an organization or its subsystems
• Focuses on such issues as conflict resolution, employee satisfaction, worker participation
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Quality of Life Programs (cont.)
• Techniques may include: job redesign, employee involvement in decision making, redesign of pay systems, creation of quality circles
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Successful Adoption of OD
• Conditions that help ensure that an OD effort will succeed include:– Recognition of problems by top management– Acquire support from top-level management– Successes early in program that provide
further impetus
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Successful Adoption of OD (cont.)
– Respect for managerial talents of those whose domain of responsibility is being improved
– Cooperation and involvement from human resources department
– Effective coordination and control of the OD program
– Measurement of outcomes
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How does OD work?
• Results of 35 studies into outcome variables and process variables
• Outcome variables: measures of productivity, efficiency, absenteeism, profits, etc. that are quantifiable (hard measures)
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How does OD work? (cont.)
• Process variables: measures of trust, perceptions of leadership, motivation, decision making (soft measures)
• These studies were further categorized to whether they were directed at groups, organizations, individuals, or leaders
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How Does OD Work? (cont.)
– Found that group outcome variables were most likely to be affected by OD intervention
– Individual process variables also showed relatively positive improvement
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OD in Perspective
• It is not a “cure all” for every difficulty an organization may face
• Resistance to change is a significant obstacle to OD efforts
• The chief values espoused by OD specialists - trust, openness, power sharing- are not appropriate for some organizations