CHAPTER 19: ORGANIZATION CHANGE AND DEVELOPMENT

Companies that change appropriately can continue as viable businesses. Those that do not make the right
changes cease to exist by going out of business or by being gobbled up by a larger organization.
FORCES FOR CHANGE
- involve people, technology, information processing and communication, and competition
PRESSURES FOR ORGANIZATION CHANGE
CATEGORY EXAMPLES TYPE OF PRESSURE
FOR CHANGE
People Generation X, Y, Millennials Demands for different training,
Global labor supplies benefits, workplace arrangements, and
Senior citizens compensation systems
Workforce diversity
Technology Manufacturing in space More education and training for
Internet workers at all levels, more new
Global design teams products, products move faster to
market
Information Processing Computer, satellite Faster reaction times, immediate
and Communication communications responses to questions, new products,
Global Sourcing different office arrangements,
Videoconferencing telecommuting, marketing, advertising,
Social networking recruiting on social networking sites

Competition Global markets Global competition, more competing

International trade products with more features and
agreements options, lower costs, higher quality
Emerging nations

1. People

- Generational differences in the workplace

- Millennials, born from roughly between 1980 and 2000 - On the job, Millennials seem to prefer positive
reinforcement, like clarity in job assignments, want more flexibility in how to do their jobs, and want to be
treated as different individuals rather than everyone’s being treated the same.
- People will have to be completely adaptable to new situations while maintaining productivity under the
existing system.

2. Technology
- advances in information technology, organizations generate more information, and it circulates faster
- employees can respond more quickly to problems
- As organizations react more quickly to change, change occurs more rapidly, which in turn necessitates more
rapid responses

3. Information Processing and Communication

- Social networking - the most radical and fastest-growing aspect of the advances in information processing and
communication.
- Employees do not need offices because they work with computers and communicate through new data
transmission devices

4. Competition
- Manufacturers have to develop new equipment and software combinations to work on various platforms

PROCESSES FOR PLANNED ORGANIZATION CHANGE

A. Lewin’s Process Model (Static Model)

- In Lewin’s three-step model:

- change is a systematic process of transition from an old way of doing things to a new way
- “unfreezing” stage indicates the importance of preparing for the change
- “refreezing” stage reflects the importance of following up on the change to make it permanent
- Unfreezing is the process by which people become aware of the need for change.
- Top managers and change agents are urged to make the effort to empathize with employees, acknowledge
the difficulties of the past and uncertainties of the present
Refreezing is the process of making new behaviors relatively permanent and resistant to further change.
Examples:
- refreezing techniques include repeating newly learned skills in a training session
- role playing to teach how the new skill can be used in a real-life work situation
B. The Continuous Change Process Model (Dynamic Model)
- The continuous change process model incorporates the forces for change, a problem-solving process, a
change agent, and transition management. It takes a top-management perspective and highlights the fact
that in organizations today, change is a continuous process.
- Change agent:
 “collaborator” or “helper”
 responsible for managing a change effort
 recognize and define the problem
 evaluate potential plans of action
- Internal change agent - know the organization’s people, tasks, and political situations, but may be too close to
the situation to view it objectively
- Outsider - often received better because of his or her assumed impartiality
 change agent and the top management group assess the degree to which the change is having the desired
effect; measure progress toward the goals of the change
 Change arises from the conflict that results when the change agent challenges the organization’s
assumptions and generally accepted patterns of operation.
- Transition management is the process of systematically planning, organizing, and implementing change.
 ensures that business continues while the change is occurring
 key role - deal with unintended consequences
- An interim management structure or interim positions - ensure continuity and control of the business
during the transition.
ORGANIZATION DEVELOPMENT
I. OD Definition
- a system-wide application of behavioral science knowledge to the planned development and reinforcement of
organizational strategies, structures, and processes for improving organizational effectiveness.
1. involves attempts to plan organization changes, which excludes spontaneous, haphazard initiatives
2. improve organization effectiveness
3. based on knowledge of the behavioral sciences rather than on financial or technological considerations
The three most basic types of techniques for implementing organization development are:
 system-wide
 task and technological
 group and individual

II. System-Wide Organization Development

- usually referred to as a structural change
- Structural change is a system-wide organization development involving a major restructuring of the
organization or instituting programs such as quality of work life.
 rearrangement of task division and authority and reporting relationships
 no system-wide structural change is simple
- J. Lloyd Suttle defined quality of work life as the “degree to which members of a work organization are able
to satisfy important personal needs through their experiences in the organization.
 Top management viewed improving life at work as a means of improving productivity
- The Defense Information Systems Agency (DISA) has a QWL program that includes:
1. options for a compressed work schedule, in which employees can work eighty hours in nine workdays
over a two-week period
2. “telework” option in which eligible employees may telework at an telework center, at home, or at a
satellite office, for a maximum of three days per week
- Total quality management (TQM) – emphasizes satisfying customer needs by making quality-oriented
changes
- Walton’s Categorization of Quality-of-Work-Life Programs
 Safe and Healthy Work Environment
 Growth and Security
 Constitutionalism
 Social Relevance
 Total Life Space
 Social Integration
 Development of Human Capacities
 Adequate and Fair Compensation
- The benefits gained from quality-of-work-life programs
1. increased job satisfaction
2. increased productivity
3. increased effectiveness of the organization as measured by its profitability, goal accomplishment,
shareholder wealth, or resource exchange
 III. Task and Technological Change
- Task redesign – the direct alteration of jobs
- Technological change – changing how inputs are transformed into outputs
- Integrated Framework for Implementation of Task Redesign in Organizations:
Step 1: Recognition of a need for a change
Step 2: Selection of task redesign as a potential intervention
Step 3: Diagnosis of the work system and context
a. Diagnosis of existing jobs
b. Diagnosis of existing workforce
c. Diagnosis of technology
d. Diagnosis of organization design
e. Diagnosis of leader behavior
f. Diagnosis of group and social processes
Step 4: Cost-benefit analysis of proposed changes
Step 5: Go/no-go decision
Step 6: Formulation of the strategy for redesign
Step 7: Implementation of the task changes
Step 8: Implementation of any supplemental changes
Step 9: Evaluation of the task redesign effort
- It is extremely important to recognize the full range of potential costs and benefits associated with a job
redesign effort. Factors such as short-term role ambiguity, role conflict, and role overload can be major
stumbling blocks to a job redesign effort.
- Strategy formulation
1. the organization must decide who will design the changes
2. the team undertakes the actual design of the changes based on job design theory and the needs, goals,
and circumstances of the organization
3. the team decides the timing of the implementation
4. strategy planners must consider whether the job changes require adjustments and supplemental changes

IV. Group and Individual Change

- Four popular types of people-oriented change techniques: training, management development, team
building, and survey feedback.
A. Training - designed to improve employees’ job skills.
 Training people to work in other countries
 Common training methods are lecture, discussion, a lecture-discussion combination, experiential
methods, case studies, films or videotapes, and online training modules.
 On-the-job training - the trainee learns from an experienced worker
 A major problem - upon returning to the normal work situation, an employee finds it easier to go back to
the old way of doing things.
B. Management Development - when a highly qualified technical person is promoted to manager of a work
group, he or she needs training in how to manage or deal with people.
 Participative and experiential methods - allow the manager to experience the problems of being a
manager as well as the feelings of frustration, doubt, and success
- Rapid changes make certain managerial skills obsolete in a very short time. As a result, some companies are
approaching the development of their management team as an ongoing, career-long process and require their
managers to periodically attend refresher courses.
-Guiding Principles:
1. Management development is a multifaceted, complex, and long-term process to which there is no quick
or simple approach
2. Organizations should carefully and systematically identify their unique developmental needs and
evaluate their programs accordingly
3. Management development objectives must be compatible with organizational objectives
4. The utility and value of management development remain more an article of faith than a proven fact.
C. Team building emphasizes members working together in a spirit of cooperation and generally has one or
more of the following goals:
1. To set team goals and priorities
2. To analyze or allocate the way work is performed
3. To examine how a group is working—that is, to examine processes such as norms, decision making, and
communications
4. To examine relationships among the people doing the work
– continuing process
– can be a way to train the group to solve its own problems in the future

D. Survey Feedback - data are gathered, analyzed, and summarized

– a survey can help management diagnose and solve an organization’s problems

- The survey feedback process has three distinct stages:

- Meetings are usually held serially

1. meeting of the top management group
2. meetings of employees throughout the organization
- The group manager leads sessions to transfer “ownership” of the data from the change agent to the work
group.

- Analysis stage - the process of making decisions, communicating, and accomplishing work, with the help of
the consultant.
RESISTANCE TO CHANGE
- Resistance to change may arise from several individual and organizational sources. Resistance may indicate a
legitimate concern that the change is not good for the organization and may warrant a reexamination of plans.

1. ORGANIZATIONAL SOURCES OF RESISTANCE (MORENO-LACALLE)

- Daniel Katz and Robert Kahn have identified six major organizational sources of resistance:

Overdetermination or structural inertia

 the structure of the organization produces resistance to change because it was designed to maintain
stability
 the culture of an organization can have powerful and long-lasting effects on the behavior of its
employees
Narrow Focus of Change
 must take into account the interdependence among organizational elements such as people, structure,
tasks, and the information system.
 structure changed with no concern given to other issues
Group Inertia
 group norms may act as a brake on individual attempts at behavior change
Threatened Expertise
 A job redesign or a structural change may transfer responsibility for a specialized task from the current
expert to someone else, threatening the specialist’s expertise.
Threatened Power
 any redistribution of decision-making authority may threaten an individual’s power relationships with
others.
 decentralized decision making
Resource Allocation
 groups that are satisfied with current resource allocation methods may resist any change they believe
will threaten future allocations.
2. INDIVIDUAL SOURCES OF RESISTANCE
Habit
 Learning an entirely new set of steps makes the job more difficult.
 Most people prefer to do easier rather than harder work.
Security - employees like the comfort and security of doing things the same old way.
Economic Factors - Workers may fear that change will make their jobs obsolete or reduce their opportunities
for future pay increases.
Fear of the Unknown - Any disruption of familiar patterns may create fear because it can cause delays and
foster the belief that nothing is getting accomplished.
Lack of Awareness - lack of attention or selective attention, a person may not recognize a change in a rule or
procedure and thus may not alter his or her behavior.
Social Factors - People may resist change for fear of what others will think.

MANAGING SUCCESSFUL ORGANIZATION CHANGE AND DEVELOPMENT

SEVEN KEYS TO MANAGING CHANGE IN ORGANIZATIONS:

Consider Global Issues

Keeps in touch with the latest global developments and how change is handled in different cultures.

Take a holistic view of the organization

Helps anticipate the effects of change on the social system and culture
 A limited view can endanger the change effort because the subsystems of the organization are
interdependent.

Start small
 Works out details and shows the benefits of the change to those who might resist
 Change start with one team. If the change makes sense, it begins to spread to other teams, groups, and
divisions throughout the system.

Secure top-management support

 Gets dominant coalition on the side of change: safeguards structural change, heads off problems of
power and control
 Complications may arise if disgruntled employees complain to high-level managers who have not been
notified of the change or do not support it.

Encourage participation by those affected by the change

 Minimizes transition problems of control, resistance, and task redefinition

Foster open communication

 Minimizes transition problems of resistance and information and control systems
 A manager should always be sensitive to the effects of uncertainty on employees, especially during a
period of change

Reward those who contribute to change

 Minimizes transition problems of resistance and control systems
 Employees who contribute to the change in any way need to be rewarded–mention in a
news release or the internal company newspaper, special consideration in a performance
appraisal, a merit raise, or a promotion