Introduction to organizational change

MBA HR en UBS Panjab University
28 de Jan de 2014

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Introduction to organizational change

  1. INTRODUCTION TO ORGANIZATIONAL CHANGE Presented to: Dr. RupinderBir Kaur Prepared by:Abhinav Chaturvedi Shobitash Jamwal MBA-HR (Sem II)
  2. What is Organizational Change? Organizational change is about reviewing and modifying management structures and business processes. Small businesses must adapt to survive against bigger competitors and grow.
  3. Organizational change comprises four main issues:• Content • Contextual • Process • Criterion
  5.  Content issues focus on the substance of contemporary organizational changes.  Contextual issues center on the forces or conditions present in the external and internal environments of organizations.  Process issues concentrate on the actions undertaking during the establishment of intended change.  Criterion issues, on the other hand, tackle outcomes usually evaluated in organizational change.
  6. 1. Set right the situation . Organizations often need to correct situations, which they believe require some adjustments or change. . For example, in a recessionary market, an existing HR policy on variable pay may seem to be incorrect when it is based on the value of total sales. The organization may amend this with the fixed performance incentive till the market situation improves.
  7. 2. Seize opportunities to grow . New market opportunities may motivate an organization to build new capabilities by expanding their activities or through strategic alliance, identifying business partners. . For example, when political pressure in the U.S mounted against outsourcing to India, Infosys set up units in Canada to get U.S outsourced jobs and then routed these to their Indian units.
  8. 3. Emerge as different entity . Often, organizations change to become more flexible. While adapting to new situations is essential, flexibility in operation or functions may also be required in special circumstances. . For example, developing strategic business units based on product mix or type to make each product type an independent profit centre.
  10. 1. Plan for long-term . Broadly, a sound strategic vision rather than a specific detailed plan can help the organization to make reliable predictions. 2. Empower people . Decision should be made at the operation level through delegation of power and responsibility. This can make the organizational change process much simpler, as with increased ability for problem solving, employees will volunteer for change.
  11. 3. Encourage, enable and develop people to be active in the change process. This will enable the organization to form virtual teams and adopt the matrix organizational structure, where seniors play a more proactive role in initiating the change. 4. Make the strategic change process free from autocracy and interference. 5. Establish forums to communicate methods to review and implement change.
  13. 1. Planned and unplanned change . Planned change is an organizational change that is deliberate and based on conscious reasoning and actions. On the other hand, at times, organizations opt for emergent change. . Unplanned change is an organizational change that is unpredictable and could take place suddenly.
  14. 2. Episodic and continuous change . Episodic change is frequent, discontinuous, intentional and radical in nature. Replacement of strategy or a new product can be done under this type of change. . Continuous change, on the other hand, is ongoing, evolving and cumulative. Organizations often go for continuous change as part of their incremental or short-term strategy.
  15. 3. Developmental change . This kind of change can be planned or emergent organizational change. It enhances or corrects existing aspects of an organization by primarily focusing on skills or process improvement. 4. Transitional change . It is an episodic, planned and radical change process. Most organizational change models are of the transitional type.
  16. 5. Transformational change . This kind of change is radical and second order in nature. It requires a shift in the assumptions made by the organization and its members. . It may result in the creation of an organization that operates in developmental mode – one that continuously learns, adapts and improves.
  18. 1. Normative re-educative strategy . This strategy believes that changing the norms, attitudes and values of individuals will lead to changes in their behaviour. It is based upon the core beliefs, values and attitudes and assumes that change will occur as individuals change their attitudes and this makes them behave differently. . Change strategy in this case emphasizes solutions that are more consistent with the beliefs and value systems of the people.
  19. 2. Rational-empirical strategy . This strategy of change management deals with the rationality of people to embrace change for their self-interest. Change intents need to be clear and organizations must understand the benefits of such change. 3. Power-coercive strategy . Organizational change often requires application of power. Employees become change compliant when it is enforced by the top echelons of management. Hence, this strategy often helps in achieving the change intents.
  20. 3. Action-centered strategy . These strategies focuses on problem solving. Such strategies not only help to resolve the problem, but also effectively manage the change implications, particularly in the post change phase. . This strategy is used when people oppose loss and disruption and demonstrate their eagerness to adapt readily to new circumstances. . An organization may use change initiatives to build a new organization and transfer existing people to it.
  22.  Inappropriate approach of management or not being suitable for organizational change requirements.  Inappropriate and often unrealistic expectations from organizational change.  Absence of sustained efforts over a period of time to introduce organizational change.  Poor understanding of the organizational change.  Lack of support and systems.  Lack of commitment to the organizational change plans.
  23. Change - Definition ● ● Change is something that presses us out of our comfort zone. Change is for the better or for the worst, depending on where you view it. Change has an adjustment period, which varies on the individual to individual and from organization to organization. Change is needed when all the props and practices of the past no longer work.
  24. Change In Organization ● ● Change comes to business in many forms like merger, acquisition, divestiture, joint venture, technology implementation, organizational restructuring, or regulatory compliance. It can also come from new leadership, strategic decisions to change direction to position for growth or react to changing market conditions.
  25. Forces Of Change Two Opposing forces influence change in an organization: ● One that drives for change and one that resist.
  26. Forces Of Change Driving forces initiate change Resisting Forces act against and keep it going.This may the driving forces of be extrenal or internal. change.They are usually internal.
  27. Organizational Change Management ● ● Organizational change management includes processes and tools for managing the people side of the change at an organizational level. These tools include a structured approach that can be used to effectively transition groups or organizations through change. When combined with an understanding of individual change management, these tools provide a framework for managing the people side of change.
  28. Organizational Change Management ● People who are confronted by change will experience a form of culture-shock as established patterns of corporate life are altered, or viewed by people as being threatened. Employees will typically experience a form of "grief" or loss (Stuart, 1995)
  29. Dynamic Conservatism ● ● This model by Donal Schon explores the inherent nature of organizations to be conservative and protect themselves from constant change.Schon recognised the increasing need , due to the increasing pace of change for this process to become far more flexible. These ideas are further expanded on within his framework of 'refection-in-action' the mapping of a process by which this constant change could be coped with.
  30. According to Maira and Scott-Morgan (1997), there are three groupings within organizations that best support an understanding of unwritten expectations: (1) motivators, (2) enablers and (3) triggers, delineated below. Triggers, or triggering events, can be defined as circumstances which act as catalysts to organizational learning. As with human beings, organizations do not learn proactively (Watkins and Marsick, 1993).
  31. ● ● ● Motivators are items that are important to individuals within an organization. "Motivators correspond to what is actually important to people, what they value". Maira and Scott-Morgan (1997) state that Enablers are those who are important to individuals within an organization. This may or may not be in line with an organizational chart Triggers are how people get what is important to them: the conditions that lead an enabler to grant a reward or impose a penalty" (Maira & Scott-Morgan, 1997).
  32. Triggers Of Change -Definition “Any disorganizing pressure, arising outside or inside the organization, indicating that current arrangements, systems, procedures, rules and other aspects of organization structure and process are no longer appropriate or effective is known as a trigger causing change.” Triggers can be identified both on the basis of external and internal trigger in an organization.
  33. Triggers Of Change ● ● According to Brookfield (1987, 1994), “triggers” are life events “that prompts a sense of inner discomfort and perplexity." Motivator tends to elicit the learning desire from individuals; however, trigger tends to force organizations to respond the changes of the environment such as socioeconomic changes.
  34. According to Mohanan (2006), the characteristics of the teacher who is likely to trigger learning include: a) has a deep knowledge and understanding of the subject matter. b) is committed to teaching and is hard working. c) continually seeks ways to improve, innovate, and be up to date. d) has a strong passion for subject. e) has a high enthusiasm for teaching. f) is an inspirational role model to students. g) has a high emotional intelligence to empathize with students.
  35. Grundy (1993) states that major changes can be triggered by “ a multitude of factors”, the main ones being: External ● Changes in competitive forces ● Regulation/deregulation ● Changes in customer expectation ● Changes in standards ● Technology changes Internal ● ● Performance dips Changes in the management team (particularly the chief executive)
  36. Frequent causes of change Wille and Hodgson’s (1991) survey on the reasons for change found the following: ● Financial loss, profit reductions 12% ● Increased competition in almost 50% ● Technological development 19% ● New chief executive 8% ● Industry in recession 11%
  37. Internal Triggers ● Human Resources Issues. ● Implementation Issues. ● Inter-organizational relations.
  38. External Triggers ● Business Environment Issues. ● Technology Environment Issues. ● Economic Environment Issues. ● Ecological & Political Environment Issues. ● Change In Socioeconomic Issues ● Creativity as a Trigger.
  39. Leavitt's Model Of Change-1965 Task Technology People Structure Leavitt's Model of Change: Task, Technology, Structure, and People Knowledge Management Culture
  40. Four Basic Change Management Strategies Empirical-Rational People are rational and will follow their self-interest — once it is revealed to them. Change is based on the communication of information and the proffering of incentives. Normative-Reeducative People are social beings and will adhere to cultural norms and values. Change is based on redefining and reinterpreting existing norms and values, and developing commitments to new ones. Bennis, Benne and Chin
  41. Power-Coercive People are basically compliant and will generally do what they are told or can be made to do. Change is based on the exercise of authority and the imposition of sanctions. Environmental-Adaptive People oppose loss and disruption but they adapt readily to new circumstances. Change is based on building a new organization and gradually transferring people from the old one to the new one.
  42. Role of Internal Consultants in Managing change Internal Consultants play a unique role in driving successful change in organizations across the globe. ● Not only do they support the specific solution development and expertise, and sometimes the project management support, but they are often times a key player in the change management activities that support project implementation.
  43. Dr. William Trotter Stated Change Consultant (CC) is any individual/group which serves internal clients in an advisory capacity, including: ● ● ● Working within the corporate structure to resolve business issues and implement solutions in areas that include organizational effectiveness/development, strategic planning, or process improvement Serving as a change agent, coach, educator or facilitator within your company Supporting internal clients in a shared service type organization, such as: Human Resources; Training & Development; Information Technology; Finance; Quality Management; Health, Safety & Environmental Services; Competitive/Business Intelligence and Planning; etc.
  44. Formal Content of Personal Construct Theory Fundamental Postulate: a person's processes are psychologically channelized by the ways in which he anticipates events ● ● ● ● Construction Corollary: a person anticipates events by constructing their replications Individuality Corollary: Persons differ from each other in their constructions of events Organization Corollary: Each person characteristically evolves for his convenience in anticipating events, a construction system embracing ordinal relationships between constructs Dichotomy Corollary: A person's construct system is composed of a finite number of dichotomous constructs
  45. ● ● ● ● ● Choice Corollary: A person chooses for himself that alternative in a dichotomized construct through which he anticipates the great possibility for the elaboration of his system. Range Corollary: A construct is convenient for the anticipation of a finite range of events only Experience Corollary: A person's construction system varies and he successively construes the replications of events. Modulation Corollary: The variation in a person's construction system is limited by the permeability of the constructs within whose ranges of convenience that variants lie. Fragmentation Corollary: A person may successively employ a variety of construction subsystems which are inferentially incompatible with each other.
  46. ● ● ● Commonality Corollary: To the extent that one person employs a construction of experience which is similar to that employed by another, his processes are psychologically similar to those of the other person. Sociality Corollary: to the extent that one person construes the construction processes of another he may play a role in the social process involving the other person. (Kelly, 1955)
  47. Challenges In Implementing Change ● ● ● A critical challenge for managers today is to synchronize the needs of individuals, the functions and the company and its value chain in a way to achieve the full benefits of the lean enterprise while increasing the individual opportunities, functional strength and the well-being of partner companies. Other challenge for the managers in the beginning of the implementation process was actually to follow the new practices and principles avoiding going back to the previous stage. A challenging job for the managers in all of the studied companies in the research of (Czabke, Hansen & Doolen 2008) turns out to be the effective communication of the vision and plan for lean implementation to the workforce
  48. Case Study-US Auto Industry ● ● Schein states that “survival anxiety” is the realization that survival of the individual or the organization depends on change (Coutu, 2002). This is demonstrated very clearly when one studies the U.S. auto industry and changes made for the sole purpose of "survival". All domestic competitors have undergone significant changes as a means of surviving the attack of foreign competition within their our own market. U.S.-based manufacturers have had to work collaboratively with the unions that represent their workforces to make changes in wages, benefits, operating practices, and work rules.
  49. ● ● ● They have also had to make significant changes in product development, styling, value, and quality, in efforts to maintain a presence in the market. When there were only few competitors in the market, just 20 years ago, the "need" for change was not as great. Now, with well over 300 nameplates competing in the U.S. market, dramatic changes have had to been made just as the "price of admission" -- for example without excellence in product quality and safety, a manufacturer cannot even hope to get in the market. The threat to survival of individuals and organizations has become a reality, and has driven changes that are ultimately good for the customer. One wonders if, without this threat to survival, would the changes have occurred at all.
  50. Thank You Any Queries ?