leadership & change management, lecture 5, by rahat kazmi

LEADERSHIP AND CHANGE

MANAGEMENT - NATURE OF ORGANIZATIONAL CHANGE

- REASONS FOR RESISTANCE TO CHANGE

- MANAGEMENT OF ORGANIZATIONAL CHANGE

- IMPORTANCE OF ORGANIZATIONAL HEALTH AND PERFORMANCE

LECTURE 2

BY

RAHAT KAZMI PREPARED BY: RAHAT KAZMI

SEPTEMBER 2010

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To explain the nature of organizational change and explore reasons for resistance to change

To examine the management of organizational change, and human and social factors of change

Review the importance of organizational health and performance, and ability of the organization to adapt to change

Objectives




Culture

Process People




Why Change?

Adaption of new ideas

Organisations need to continually

adapt to new situations if they

are to survive and prosper

Constant Change keeps

Organisations Agile




Don’t Try to Change Me…….




Old Learning Model New Learning Model

Old & New Change Models




Why Change? Other Factors

Market Transparency

Labour Mobility

Global Capital Flows




What is System?

SHRAED VISION

YOU ARE ACCOUNTABLE

SHAREHOLDER INVOLVEMENT

TOOLS & SKILLS

ENABLING BEHAVIOUR

MEASURES & PROCESSES

S

Y

S

T

E

M Follow him on Twitter: twitter.com/srahatkazmi or



Change We can Believe in




10 Principals of Change Management

1) Address the Human Side Systematically

2) Start at the Top

3) Involve every Layer

a) Define Strategy

b) Setting Targets

c) Design

d) Implement

4) Make the Formal Case

a) First confront reality and articulate a convincing need for change

b) Demonstrate faith that company has a viable future and the leadership to get

there

c) Provide a roadmap to guide behaviour and decision making

5) Create Ownership

6) Communicate the Message

7) Assess the Cultural Landscape

Values-Beliefs-Behaviours and Perceptions

8) Address Culture Explicitly

9) Prepare for the Unexpected

10) Speak to the Individual




Change Is.....

The human experience consists of matching our

capabilities against the challenges we face. A sense

of balance, is maintained in our lives when:

=

• Capability Challenge =

Ability/willingness Danger/Opportunity

We seek this kind of balance because it makes us feel that things are

predictable and thus easier to manage. Follow him on Twitter: twitter.com/srahatkazmi or



Change Is.....

Change occurs when this balance is disrupted. There

are two ways the status quo can be disrupted;

positive change or negative change:

=


>Positive Change

or




Change Is.....

When people believe their capabilities exceed a challenge, they

generally feel positive because the outcome is not only desirable but

expected (for example the birth of a child.) When the reverse is true,

people feel negative not only because the outcome is undesirable, but

also because such situations lack predictability.:

=


>Negative Change

Most people find it is extremely uncomfortable to face situations filled with the

unknown because of the loss of predictability. We are attracted to situations that

are familiar because they allow us the feeling of being in control.




KURT-LEWIN’S CHANGE MODEL

UNFREEZE

CHANGE

REFREEZE




KURT-LEWIN’S CHANGE MODEL

Kurt Lewin‟s model of change

Stage Characteristics Organizational impact

Unfreezing

People in the organization

made aware of

problems/performance gap

and need for change

This diagnosis stage is often driven by

a change agent

Changing

People experiment with new

workplace behaviour to deal

with needed change

This intervention stage features specific

training plans for managers and

employees

Refreezing

People employ new skills and

attitudes and are rewarded by

organization

Changes are institutionalized in the

corporate culture




THE CHANGE PROCESS

Present State

Desired State

Transition

State

Desired

State

The above model for change can be used to understand and plan for

change. It uses the analogy of an arrow to explain the change process of an

organization.

The 1st circle in its original shape represents the current state of the

organization. In order to change, the 1st circle must be unfrozen, moulded to

its new shape, and then, refrozen. Similarly the organization, in order to

change positively, must melt any forces, which resist change and create a

climate of acceptance and trust that will reinforce or refreeze the new state

of the organization.




Characteristics of the Transition State

Low stability.

High, often undirected energy.

Past patterns of behaviour become highly valued.

High emotional stress.

Control becomes a major issue.

Conflict increases.




Managing Change - Examples

Situation

A deregulation in the telephone industry that was capped by the antitrust

settlement broke up the Bell system and triggered the great shake-up at the

GTE Corporation.

Trigger External environmental change triggered by government laws.

Driver/Barrier Environmental

Actions Taken The company was forced to refocus its telecommunications business and

discontinue its other unrelated industrial businesses.

Results

GTE is attempting to integrate local phone service with cellular business to

create a streamline network. This would allow customers to easily call almost

anywhere.

CASE 1: Shake-up at the GTE Corporation




Managing Change - Examples

Situation Black box wants to improve the efficiency of the organization by delivering

their products quicker to the customers

Trigger Internal organization problem in which slow employees triggered the

change.

Driver/Barrier Incentive

Actions Taken

A change agent at Black Box used action in the form of a reward system to

incentives employees. He dramatized the need for faster deliveries by

implementing a new bonus plan for the employees.

Results

Warehouse fulfillment teams worked overtime taking extra orders and

sending out same-day shipments. Employees earned 140% of their bonuses

and nothing else suffered.

CASE 2: Need for quicker product deliveries at Black Box




Triggers of Change - Internal

Human Resource Issues

Organizational learning requires humans as agents.

Accordingly, changes in human resources within any organization pose major impetus for OL.

In Virany, Tushman, and Romanelli (1992), the researchers examine how changes in the chief executive officer triggered off necessary organizational learning among members in the top management team.

In a study on expatriation, Vink and Schapink (1994) argued that organizations must learn to work beyond Western ethnocentric theories of behaviour.

Effective intercultural managers are those who have acquired and shared their collective experiences on unfamiliar and different cultures.

On the relationship between personnel turnover and organizational learning, Carley (1992) showed that hierarchies were less affected by high turnover rates than teams, particularly when the task is non-decomposable.





Implementation Issues

The introduction of a new technology, innovation, or R&D often triggers need

for

organizational learning (see George 1983; Bessant and Buckingham 1993;

Carlsson and Kean1976).

Implementing a new innovation often alters existing work routines, reward

structures, or communication patterns to the extent that organizations must

ensure sufficient slack resources to support learning activities to incorporate

the innovations successfully and to obtain full benefits of the innovation.





Inter-organizational Relations

Organizational learning is an emerging paradigm for the study of strategy

making when firms diversify into new practices, products or services and

collaborate with other firms in creating new interorganizational relationships

or IOR (Alaharkonen and Rutenberg 1990) (Kazanjian and Drazin 1987).

The need for close collaboration and cooperation with others in IOR such as

strategic alliances imposes an unprecedented emphasis on organizational

learning as parties to the relationship need to institutionalize and

amalgamate distinct organizational practices, new job definitions, new ways

of managing and even redefining the nature of the firm (Lewis 1991).




Triggers of Change - External

Business Environment Issues

Business turbulence comprises one of the most significant environmental jolts

faced by firms.

Rapidly changing dynamics of industries and competitive forces require firms

to learn faster than competitors in order to achieve sustainable competitive

advantage.

To survive, organizations must learn to shift from managing and producing in

the world of stable markets to one with short product lifecycles, continual

innovation, and rapid changes in customer demands.

Organizations must build a capacity to learn: to conduct quick studies and

tackle novel problems (Maccoby 1993; Hosley, Lau, Levy, and Tan, 1994)





E-Commerce





Digital Convergence





Acquisitions





Technological Environment Issues

The greatest jolt from the environment is the unprecedented pace of change

in technologies. Because of the high rate of technological change, formal

education in schools will never be able to totally prepare workers for their

lifetime‟s technological work demands.

It is thus paramount that firms create a learning environment within their

organizations to promote on-the-job learning and growth.

Continual learning and investing in the full spectrum of employee talents with

teamwork are cornerstones for coping with relentless pace of change in

technology (Benett and O‟Brien 1994; Atkinson 1994).





Economic Environment Issues

Economic environment issues take on many forms. With globalization of

markets, organizations must learn to break the limited mindsets of national

markets to compete on a worldwide basis (Ghoshal and Butler 1992).

Firms in economic recessionary regimes must learn new survival skills to re-

vitalize the organization, steering the organization from danger to opportunity

(Hollingworth 1992).

Organizations in East European economies and other communist regimes face

great challenges when reforms coverted centrally planned markets to free,

open markets (Swiderski and Seiderski 1986).

Firms had to erase old organizational memories and routines of a socialist

economy and generate new rules, standard operating procedures to compete

in a new open market economy.





Ecological & Political Environment Issues

Occasionally, organizations learned from natural disasters (e.g., Bhopal

disaster).

Disasters make explicit organizational policies on safety measures (Bowman

and Kunreuther 1988).

As nations become more concerned with the ecological environment, and as

new laws and statutes are enacted to protect the natural environment,

organizations need to develop new rules, behaviors and business practices to

abide by the “green” laws (Mylonadis 1994).

Organizations also need to learn to cope with new regulation following

changes in political leadership and regimes (Godkin and Montano 1991).





Changes in socioeconomic values

Jurgen Kadtler discusses how „social movements‟ and „interest groups‟ act as

Triggers for organizational learning.

Some organizations are forced to adapt to surrounding social, environmental,

or Regulational factors (Dierkes, Antal, Child, & Nonaka, 2003).

Often these factors are outside their control and they must react to them.

“Whether the organization acquires the capacity to manage the crisis and

deal with the concern of social movements or interest groups is determined by

organizational learning.

This refers to the tension between and analytical and a normative perspective

on organizational learning” .




Triggers of Change - Other

Technological Visions

Although visions have been heralded as an all important component of

organizational leadership, there has been – up till now, little research

conducted to better understand the concept of visions.

New insight, however, confirms that visions facilitate vicarious learning and

serve as “points of orientation…based on core values and shared perceptions





Creativity as a Trigger

Cunha, Cunha and Kamoche (2002) suggest that an open minded and, indeed,

creative approach to errors may serve as the trigger for organizational

improvisation and learning.

Rather than simply rewarding employees and managers for fixing problems,

we should encourage their use as stimuli for further learning.

Consider, “an example from Nordstrom's department store where employees

are encouraged to "respond to unreasonable customer requests." Stories

circulate about an employee paying a customer's parking ticket when the

store's gift wrapping took too long”.

This type of accommodation should be rewarded and viewed as a departure

point for a learning journey aimed at discovering what caused the process to

fail to produce the desired result.





Anxiety as a Trigger

Edgar Schein, as cited in Coutu, (2002), provides a useful and realistic view of

the essential triggers of organizational learning. He maintains that anxiety is

necessary as a trigger for learning.

Adopting a distinctly unpopular stance, Schein maintains that learning is

coercive. He believes that anxiety, or more correctly, “learning anxiety” occurs

when we are afraid of trying something new out of fear of failure,

embarrassment, or the desire not to give up old paradigms.

Conversely, “survival anxiety” is the realization that survival of the individual

or the organization depends on change.

Schein tells us that “the evidence is mounting that real change does not begin

to occur until the organization experiences some real threat of pain that in

some way dashes its expectations or hopes” .




Ford Motor Company – Case Study

Ford Motor Company has been advertising in gay and lesbian magazines, recently.

Some in the special interest evangelical movement has strongly objected to Ford‟s advertising practices and see it as a promotion of a lifestyle to which they object.

They have sought to use boycotts to convince Ford to change it advertising policies.

How Ford responds can have negative financial implications on either side.

However Ford reacts in the above situation will be a learning organization challenge.

In whatever direction it goes, “new organizational competencies have to be acquired if critical issues are to be addressed successfully”




“Twenty years from now we‟ll look back

and say this was the embryonic period.

The Web is only going to get more

revolutionary”

Tim Berners-Lee, 2006

The Role of Web in Change




The Web is

a bigger megaphone

The Web is a

fundamentally new

way of getting

things done

The Role of Web in Change




Laurie J Mullins (2007) Management and Organisational behaviour, 7th edition

Richard L Daft (2007) Organization theory and design, 8th edition

John Pearson and Robinson (2005) Strategic management; Formulation,

implementation and control, 7th edition

IAM Diploma in Administrative Management: Study guide

References




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