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Ch10 - Organisation theory design and change gareth jones

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Ch10 - Organisation theory design and change gareth jones

  1. 1. Organizational Theory, Design, and Change Sixth Edition Gareth R. Jones Chapter 10 Types and Forms of Organizational Change
  2. 2. Learning Objectives <ul><li>Understand the relationship among organizational change, redesign, an organizational effectiveness </li></ul><ul><li>Distinguish among the major forms or types of evolutionary and revolutionary change organizations must manage </li></ul><ul><li>Recognize the problems inherent in managing change and the obstacles that must be overcome </li></ul>
  3. 3. Learning Objectives (cont.) <ul><li>Describe the change process and understand the techniques that can be used to help an organization achieve its desired future state </li></ul>
  4. 4. What is Organizational Change? <ul><li>Organizational change: the process by which organizations move from their present state to some desired future state to increase their effectiveness </li></ul><ul><ul><li>Goal is to find improved ways of using resources and capabilities in order to increase an organization’s ability to create value </li></ul></ul>
  5. 5. What is Organizational Change? (cont.) <ul><li>Targets of change include improving effectiveness at four different levels </li></ul><ul><ul><li>Human resources </li></ul></ul><ul><ul><li>Functional resources </li></ul></ul><ul><ul><li>Technological capabilities </li></ul></ul><ul><ul><li>Organizational capabilities </li></ul></ul>
  6. 6. Targets of Change: Human Resources <ul><li>Typical kinds of change efforts directed at human resources include: </li></ul><ul><ul><li>Investment in training and development </li></ul></ul><ul><ul><li>Socializing employees into the organizational culture </li></ul></ul><ul><ul><li>Changing organizational norms and values to motivate a multicultural and diverse workforce </li></ul></ul><ul><ul><li>Promotion and reward systems </li></ul></ul><ul><ul><li>Changing the composition of the top- management team </li></ul></ul>
  7. 7. Targets of Change: Functional Resources <ul><li>Change efforts directed at functional resources by transferring resources to the functions where the most value can be created in response to environmental change </li></ul><ul><li>An organization can improve the value that its functions create by changing its structure, culture, and technology </li></ul>
  8. 8. Targets of Change: Technological Capabilities <ul><li>Change efforts directed at technological capabilities are intended to give an organization the capacity to change itself in order to exploit market opportunities </li></ul><ul><li>Technological capabilities are a core competence </li></ul>
  9. 9. Targets of Change: Organizational Capabilities <ul><li>Change efforts directed at organizational capabilities alter organizational culture and structure, thereby permitting the organization to harness its human and functional resources to exploit technological opportunities </li></ul>
  10. 10. Forces for Change <ul><li>Competitive forces: organization must make changes to attempt to match or exceed its competitors on at least one of the following dimensions: </li></ul><ul><ul><li>Efficiency </li></ul></ul><ul><ul><li>Quality </li></ul></ul><ul><ul><li>Innovation </li></ul></ul>
  11. 11. Forces for Change (cont.) <ul><li>Economic, political, and global forces: affect organizations by forcing them to change how and where they produce goods and services </li></ul><ul><ul><li>Need to change organizational structure to: </li></ul></ul><ul><ul><ul><li>Allow expansion in foreign market </li></ul></ul></ul><ul><ul><ul><li>Adapt in a variety of national cultures </li></ul></ul></ul><ul><ul><ul><li>Help expatriates adapt to the cultural values of where they are located </li></ul></ul></ul>
  12. 12. Forces for Change (cont.) <ul><li>Demographic and social forces: changes in the composition of the workforce and the increasing diversity of employees has presented many challenges for organizations </li></ul><ul><ul><li>Increased need to manage diversity </li></ul></ul><ul><li>Ethical forces: government, political, and social demands for more responsible corporate behavior </li></ul><ul><ul><li>Creation of ethics officer position </li></ul></ul><ul><ul><li>Encourage employees to report unethical behaviors </li></ul></ul>
  13. 13. Resistances to Change <ul><li>One of the main reasons for some organizations’ inability to change is organizational inertia that maintains the status quo </li></ul><ul><li>Resistance to change lowers an organization’s effectiveness and reduces its chances of survival </li></ul>
  14. 14. Resistances to Change (cont.) <ul><li>Organization-level resistance to change stems from: </li></ul><ul><ul><li>Power and conflict </li></ul></ul><ul><ul><ul><li>When change causes power struggle and conflicts, there is resistance </li></ul></ul></ul><ul><ul><li>Differences in functional orientation </li></ul></ul><ul><ul><li>Mechanistic structure </li></ul></ul><ul><ul><li>Organizational culture </li></ul></ul>
  15. 15. Resistances to Change (cont.) <ul><li>Group-level resistance to change stems from: </li></ul><ul><ul><li>Group norms </li></ul></ul><ul><ul><li>Group cohesiveness </li></ul></ul><ul><ul><li>Groupthink </li></ul></ul><ul><ul><li>Escalation of commitment </li></ul></ul>
  16. 16. Resistances to Change (cont.) <ul><li>Individual-level resistance to change stems from: </li></ul><ul><ul><li>Uncertainty and insecurity </li></ul></ul><ul><ul><li>Selective perception and retention </li></ul></ul><ul><ul><li>Habit </li></ul></ul>
  17. 17. Figure 10.1: Forces for and Resistances to Change
  18. 18. Levin's Force-Field Theory of Change <ul><li>This theory of change argues that two sets of opposing forces within an organization determine how change will take place </li></ul><ul><ul><li>Forces for change and forces making organizations resistant to change </li></ul></ul><ul><ul><li>When forces for and against change are equal, the organization is in a state of inertia </li></ul></ul><ul><ul><li>To change an organization, managers must increase forces for change and/or decrease forces resisting change </li></ul></ul>
  19. 19. Figure 10.2: Levin's Force-Field Theory of Change
  20. 20. Types of Change in Organizations <ul><li>Evolutionary change: change that is gradual, incremental, and narrowly focused </li></ul><ul><li>Revolutionary change: change that is sudden, drastic, and broadly focused </li></ul>
  21. 21. Developments in Evolutionary Change <ul><li>Sociotechnical systems theory: a theory that proposes the importance of changing role and task or technical relationships to increase organizational effectiveness </li></ul><ul><ul><li>Managers must fit or “jointly optimize” the workings of an organization’s technical and social systems or culture—to promote effectiveness </li></ul></ul><ul><ul><li>Managers need to make changes in the technical system slowly to allow group norms and cohesiveness are not disrupted </li></ul></ul>
  22. 22. Developments in Evolutionary Change (cont.) <ul><li>Total quality management (TQM): an ongoing and constant effort by all of an organization’s functions to find new ways to improve the quality of the organization’s goods and services </li></ul><ul><ul><li>Quality circles: groups of workers who meet regularly to discuss the way work is performed in order to find new ways to increase performance </li></ul></ul><ul><ul><li>Changing cross-functional relationships is very important to TQM </li></ul></ul>
  23. 23. Developments in Evolutionary Change (cont.) <ul><li>Flexible workers: employees who have acquired and developed the skills to perform any of the tasks necessary for assembling a range of finished goods </li></ul><ul><ul><li>Compensation frequently tied to the number of different tasks that a person can perform </li></ul></ul><ul><ul><li>Workers can substitute for one another </li></ul></ul>
  24. 24. Developments in Evolutionary Change (cont.) <ul><li>Flexible work teams: a group of workers who assume responsibility for performing all the operations necessary for completing a specified stage in the manufacturing process </li></ul><ul><ul><li>Team members jointly assign tasks and transfer workers from one task to another </li></ul></ul><ul><ul><li>Manager’s role is to facilitate the team’s activities </li></ul></ul>
  25. 25. Figure 10.3: The Use of Flexible Work Teams to Assemble Cars
  26. 26. Developments in Revolutionary Change <ul><li>Reengineering: managers redesign how tasks are bundled into roles and functions to improve organizational effectiveness </li></ul><ul><ul><li>Instead of focusing on an organization’s functions, the managers of a reengineered organization focus on business processes </li></ul></ul><ul><ul><li>Companies reengineer the work people do </li></ul></ul>
  27. 27. Developments in Revolutionary Change (cont.) <ul><ul><li>Business process: any activity that cuts across functional boundaries and which is vital to the quick delivery of goods and services, or that promotes high-quality or low costs </li></ul></ul><ul><ul><li>This forces managers to no longer focus on functions in isolation </li></ul></ul>
  28. 28. Developments in Revolutionary Change (cont.) <ul><li>Reengineering (cont.) </li></ul><ul><ul><li>Deliberately ignores the existing arrangement of tasks, roles, and work activities </li></ul></ul><ul><ul><li>Guidelines for performing reengineering successfully include: </li></ul></ul><ul><ul><ul><li>Organize around outcomes, not tasks </li></ul></ul></ul><ul><ul><ul><li>Have those who use the output of the process perform the process </li></ul></ul></ul><ul><ul><ul><li>Decentralize decision making to the point where the decision is made </li></ul></ul></ul>
  29. 29. Figure 10.4: Improving Integration in Functional Structure in Creating a Materials Management Function
  30. 30. Developments in Revolutionary Change (cont.) <ul><li>E-engineering: refers to companies’ attempts to use information systems to improve their performance </li></ul><ul><li>Restructuring: changing task and authority relationships and redesigning organizational structure and culture to improve organizational effectiveness </li></ul><ul><ul><li>Downsizing: the process of streamlining the organizational hierarchy and laying off managers and workers to reduce bureaucratic costs </li></ul></ul>
  31. 31. Developments in Revolutionary Change (cont.) <ul><li>Innovation: the process by which organizations use their skills and resources to: </li></ul><ul><ul><li>Create new technologies </li></ul></ul><ul><ul><li>Develop new goods and services </li></ul></ul><ul><ul><li>Better respond to the needs of their customers </li></ul></ul><ul><ul><li>One of the most difficult instruments of change to manage </li></ul></ul>
  32. 32. Managing Change: Action Research <ul><li>Action research: a strategy for generating and acquiring knowledge that managers can use to define an organization’s desired future state </li></ul><ul><ul><li>Used to plan a change program that allows the organization to reach that state </li></ul></ul>
  33. 33. Figure 10.5: Levin's Three-Step Change Process
  34. 34. Figure 10-6: Steps in Action Research
  35. 35. Steps in Action Research <ul><ul><li>Diagnosing the organization </li></ul></ul><ul><ul><ul><li>Recognize problems and need to solve problems </li></ul></ul></ul><ul><ul><ul><ul><li>Gap perceived between actual and desired performance </li></ul></ul></ul></ul><ul><ul><ul><li>A complex process to distinguish between symptoms and causes </li></ul></ul></ul><ul><ul><ul><li>Information should be collected from all levels of the organization and outside stakeholders such as customers and suppliers </li></ul></ul></ul>
  36. 36. Steps in Action Research (cont.) <ul><ul><li>Determining the desired future state </li></ul></ul><ul><ul><ul><li>A difficult planning process including deciding what the structure and strategy should be </li></ul></ul></ul><ul><ul><ul><li>Managers need to work out various alternative courses of action that could move the organization to where they would like it to be </li></ul></ul></ul>
  37. 37. Steps in Action Research (cont.) <ul><ul><li>Implementing action </li></ul></ul><ul><ul><ul><li>Identify impediments to change </li></ul></ul></ul><ul><ul><ul><li>Decide who will be responsible for making the changes and controlling the change process </li></ul></ul></ul><ul><ul><ul><ul><li>External change agents: people who are outside consultants who are experts in managing change </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Internal change agents: managers from within the organization who are knowledgeable about the situation to be changed </li></ul></ul></ul></ul>
  38. 38. Steps in Action Research (cont.) <ul><ul><li>Implementing action (cont.) </li></ul></ul><ul><ul><ul><li>Decide which specific change strategy will most effectively unfreeze, change, and refreeze the organization </li></ul></ul></ul><ul><ul><ul><ul><li>Top-down change: change that is implemented by managers at a high level in the organization </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Bottom-up change: change that is implemented by employees at low levels in the organization and gradually rises until it is felt throughout the organization </li></ul></ul></ul></ul>
  39. 39. Steps in Action Research (cont.) <ul><ul><li>Evaluating the action </li></ul></ul><ul><ul><ul><li>Evaluating the action that has been taken and assessing the degree to which the changes have accomplished the desired objectives </li></ul></ul></ul><ul><ul><li>Institutionalizing action research </li></ul></ul><ul><ul><ul><li>Must become a norm of the organization </li></ul></ul></ul><ul><ul><ul><li>Necessary at all levels of management </li></ul></ul></ul><ul><ul><ul><li>Members at all levels must be rewarded for their efforts </li></ul></ul></ul>
  40. 40. Organizational Development (OD) <ul><li>Organizational development (OD): a series of techniques and methods that managers can use in their action research program to increase the adaptability of their organization </li></ul>
  41. 41. Organizational Development (cont.) <ul><li>OD techniques to deal with resistance to change </li></ul><ul><ul><li>Education and communication: inform workers about change and how they will be affected </li></ul></ul><ul><ul><li>Participation and empowerment: involve workers in change </li></ul></ul><ul><ul><li>Facilitation: help employees with change </li></ul></ul><ul><ul><li>Bargaining and negotiation </li></ul></ul><ul><ul><li>Manipulation: change the situation to secure acceptance </li></ul></ul><ul><ul><li>Coercion: force workers to accept change </li></ul></ul>
  42. 42. Organizational Development (cont.) <ul><li>OD techniques to promote change </li></ul><ul><ul><li>Counseling: help people understand how their perception of the situation may not be right </li></ul></ul><ul><ul><ul><li>May learn how to manage their interactions with other people more effectively </li></ul></ul></ul><ul><ul><li>Sensitivity training: intense counseling in which group members, aided by a facilitator, learn how others perceive them and may learn how to deal more sensitively with others </li></ul></ul>
  43. 43. Organizational Development (cont.) <ul><li>Techniques to promote change (cont.) </li></ul><ul><ul><li>Process consultation: a trained consultant works closely with a manager on the job to help the manager improve his or her interactions with other group members </li></ul></ul><ul><ul><ul><li>Consultant acts as a sounding board </li></ul></ul></ul><ul><ul><li>Team building: an OD technique in which a facilitator first observes the interactions of group members and then helps them become aware of ways to improve their work interactions </li></ul></ul>
  44. 44. Organizational Development (cont.) <ul><li>Techniques to promote change (cont.) </li></ul><ul><ul><li>Intergroup training: uses team building to improve the joint activities of different functions or divisions </li></ul></ul><ul><ul><li>Organizational mirroring: a facilitator helps two interdependent groups explore their perceptions of each other and their relations in order to improve their work interactions </li></ul></ul><ul><ul><ul><li>Each group takes turns describing the other group </li></ul></ul></ul>
  45. 45. Organizational Development (cont.) <ul><li>Total organizational interventions </li></ul><ul><ul><li>Organizational confrontation meeting: brings together all of the managers of an organization to meet to confront the issue of whether the organization is effectively meeting its goals </li></ul></ul>