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Chapter 16: Managing Change
16 MANAGING CHANGE
Chapter Scan
Organizations have to keep pace with the current issues related to quality, technology, diversity, globalization, and ethics. This requires managing change and also managing resistance to change. All organizations face forces for change that are internal and external to the organization There is a host of organization development interventions available to managers. Diagnosis and needs analysis are essential first steps in any change management effort.
LEARNING OBJECTIVES
After reading this chapter, you should be able to do the following:
1. Identify the major external and internal forces for change in organizations.
2. Define the terms incremental change, strategic change, transformational change, and change agent.
3. Describe the major reasons individuals resist change, and discuss methods organizations can use to manage resistance.
4. Apply force field analysis to a problem.
5. Explain Lewin's organizational change model.
6. Describe the use of organizational diagnosis and needs analysis as a first step in organizational development.
7. Discuss the major organization development interventions.
8. Identify the ethical issues that must be considered in organization development efforts.
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Chapter 16: Managing Change
key terms
The following key terms are introduced in Chapter 16.
planned change
unplanned change
incremental change
strategic change
transformational change
change agent
disengagement
disidentification
disenchantment
disorientation
unfreezing
moving
refreezing
organization development (OD)
survey feedback
management by objectives (MBO)
quality program
team building
process consultation
skills training
sensitivity training
management development
role negotiation
job redesign
THE CHAPTER SUMMARIZED
I. THINKING AHEAD: Transformation of the American Red Cross Biomedical Services
II. FORCES FOR CHANGE IN ORGANIZATIONS
The forces for change are everywhere in the organization. Tom Peters has said that if an organization does not make drastic changes every three or four years, it will not survive. Adaptiveness, flexibility, and responsiveness are terms used to describe the organizations that will succeed in meeting the competitive challenges that businesses face. Planned change results from deliberate decisions to alter an organization. Unplanned change is imposed on the organization and is often unforeseen.
A. External Forces
The four themes of this text are the major drivers of change in organizations.
Although we anticipate changes, we are still lagging behind in acting on the changes. Two examples of planned change are the European Community and the North American Free Trade Agreement. Regardless of the degree of planning involved in these ventures, there are numerous unplanned circumstances surrounding the events.
1. Globalization
Multinational and transnational organizations are heavily involved in global changes. Many of these organizations are pursuing joint ventures with firms from other countries.
2. Workforce Diversity
The work force is aging, and there will be tremendous diversity in the workforce in the next century. One avenues for contribution has been made available to the disabled, with the passing of the Americans with Disabilities Act in 1990. This act aids employment for disabled individuals by requiring that employers make "reasonable accommodations" for their entry into the position.
3. Technological Change
Many changes will alter the way in which we think about work and the way we interact with others in organizations. Tools like executive support systems have been developed. The value of these tools lies in the ability to share external information, in a concise, useful fashion with all organizational members. Many of the technological changes will require a surrendering of power and control.
4. Managing Ethical Behavior
Ethical behavioral practices continue to receive attention from executives and the mass media. It is probably telling that the movie Wall Street was such a flagrant example of misconduct, and was released in the 1980s. The concern about ethical practices is amplified because of the dynamics and complexity involved with international business partnerships. The number of codes of ethics has reached a purported all time high in industry.
B. Internal Forces
The news carries internal restructuring information about large organizations, almost daily. A recent study has determined that there is an increase in layoff policies in existence in organizations.
III. CHANGE IS INEVITABLE
A. The Scope of Change
Change may take one of three forms. Incremental change is relatively small in scope, and as such, makes small improvements. Strategic change is a larger scale approach that is similar in magnitude to a restructuring effort. Transformational change moves the organization in a radically different, and sometimes, unknown, future state.
B. The Change Agent’s Role
The change agent's role can be exciting, innovative, and difficult, since these individuals introduce and manage change in an organization. Organizations using change agents external to the organization may have advantages with openness and trust in organizational members. However, internal change agents may have greater access to a breadth and depth of information.
IV. THE PROCESS OF CHANGE IN ORGANIZATIONS
A. Resistance to Change
Individuals often resist change because they feel their freedom is threatened.
1. Fear of the Unknown
Uncertainty is the logical extension of change. Most individuals choose uncertainty avoidance in work situations.
2. Fear of Loss
The most obvious fear of organizational members is being replaced by technology.
3. Fear of Failure
Many individuals are comfortable with entry level skills with computers, but realize that the skills are dated within a short time frame. This fear of failure might also be termed fear of keeping up.
4. Disruption of Interpersonal Relationships
New technologies often reduce the amount of interpersonal interaction necessary on the job. This can be threatening to some individuals.
5. Personality Conflicts
Conflict can occur because of the seemingly insensitive personality of the change agent.
6. Politics
There are organizational structural dynamics connected with technology. Many organizations have created new positions related to information computing.
7. Cultural Assumptions and Values
Cultures with high uncertainty avoidance may not be as receptive to change.
B. Managing Resistance to Change
Communication is a key to effectively managing change.
C. Behavioral Reactions to Change
Disengagement is the psychological withdrawal from change. Disidentification is the feeling that one's identity is being threatened by a change. Disenchantment is a negative feeling or anger toward a change. Disorientation is the feelings of loss and confusion due to a change. Disorientation is evident in many computer training sessions. At least one person asks, "what do I do if this happens?" thereby sidetracking an entire session. Often, the question is obscure and is accompanied by a story of disaster.
D. Lewin's Change Model
The Lewin change model was a theory long before it was fashionable to apply the model to technology. Behavior is the product of two opposing forces, one force pushes toward preserving the status quo, while the other pushes for change. Before a change can be implemented, the organization requires a necessary step of unfreezing. This involves encouraging individuals to discard old behaviors by shaking up the equilibrium state. The second step in the change process is the moving stage which involves new attitudes, values, and behaviors substituted for old ones. One of the neglected stages of the change model in organizations is the refreezing step. This step is necessary to establish new attitudes, values, and behaviors to become the new status quo.
V. ORGANIZATION DEVELOPMENT INTERVENTIONS
Organizational development (OD) is the systematic approach to organizational improvement that applies behavioral science theory and research in order to increase individual and organizational well-being and effectiveness.
A. Diagnosis and Needs Analysis
Organizational development includes diagnosis before any steps are taken for implementation. The diagnosis process can be divided into purpose, structure, reward system, support system, relationships, and leadership. Not all organizations will benefit from OD. The best prospects for success are organizations with organic structures and Theory Y assumptions.
B. Organization- and Group-Focused Techniques
1. Survey Feedback
Survey feedback is a widely used method of intervention whereby employee attitudes are solicited using a questionnaire. One of the major differences between traditional questionnaires and survey feedback is the attempt to share the information with the individuals supplying the responses.
2. Management by Objectives
MBO is an organization-wide intervention technique that involves joint goal setting between employees and managers. One of the criticism of MBO is that a great deal of time needs to be invested in the process for it to be successful.
3. Product and Service Quality Programs
Quality programs embed product and service excellence into the organizational culture. In many organizations these programs have joined with, or taken the place of more traditional organizational development efforts.
4. Team Building
Team building can improve the effectiveness of a work group. OD practitioners use team building as one of the most successful OD techniques in practice. Chrysler Corp. has used team building to reduce conflicts between unionized employees and managers.
5. Large Group Interventions
Among the newer techniques for managing change are larger group interventions; these are intended to create a critical mass of people within an organization to support a change.
6. Process Consultation
Process consultation is an OD method that helps managers and employees improve the processes that are used in organizations. In most instances an external organization consultant is used.
C. Individual-Focused Techniques
1. Skills Training
Skills training is the attempt to increase job knowledge, skills, and abilities that are necessary to do a job effectively. The Ford Glass Plant in Tulsa, Oklahoma has hired public school teachers to be on site for classes related to literacy and mathematics.
2. Sensitivity Training
Sensitivity training is designed to help individuals understand how their behavior affects others. There are a number of names for sensitivity training: encounter groups, T-groups, training groups, but all seek to change behavior through unstructured group interaction. Sensitivity training attempts to combine individuals and keep them focused on the "here and now," rather than past situations in which all may not be involved. Its focus is on enhancing interpersonal skills.
3. Management Development Training
Management development encompasses techniques designed to enhance manager's skills. A number of the programs are fast-track programs.
4. Role Negotiation
Role negotiation is a simple technique whereby individuals meet and clarify their psychological contract.
5. Job Redesign
Job redesign is an OD intervention method that alters jobs to improve the fit between individual skills and the demands of the job. Students may enjoy an impromptu job redesign for positions like toll booth operators, computer input operators, or traffic directors. They quickly discover that the task is not as easy as it appears.
6. Health Promotion Programs
Companies are increasingly recognizing the importance of health promotion programs for reducing their health care costs. Coors has one of the most comprehensive health promotion programs in the country.
7. Career Planning
The benefits of career planning to the organization are that the workforce is more confident and assured of their abilities. In addition, areas have been identified that need improvement, in a less threatening manner than the typical performance appraisal.
VI. ETHICAL CONSIDERATIONS IN ORGANIZATION DEVELOPMENT
OD consultants must be careful not to direct their value system toward the organization. There should not be pressure on individuals to participate, and confidentiality is of the utmost concern. Organizational interventions must not be used to gain information about a problem for control. OD consultant cannot work for both the organizational members and the overriding control group. In order to facilitate change, conflict is encouraged, but must be handled carefully, by trained, concerned professionals.
VII. ARE ORGANIZATION DEVELOPMENT EFFORTS EFFECTIVE?
It is important to understand that no one OD method will be effective in all cases. Organizations must find the methods that work best for them and for their particular change situation. Research seems to indicate that OD programs can have positive effects on performance if managed properly.
VIII. MANAGERIAL IMPLICATIONS: MANAGING CHANGE
IX. LOOKING BACK: Technology Keeps the American Red Cross Running Smoothly
CHAPTER SUMMARY
· Organizations face many pressures to change. Some forces are external, including globalization, workforce diversity, technological innovation, and ethics. Other forces are internal, such as declining effectiveness, crises, changing employee expectations, and a changing work climate.
· Organizations face both planned and unplanned change. Change can be of an incremental, strategic, or transformational nature. The individual who directs the change, known as a change agent, can be internal or external to the organization.
· Individuals resist change for many reasons, and many of these reasons are rooted in fear. Organizations can help manage resistance by educating workers and openly communicating the change, encouraging worker participation in the change efforts, and providing empathy and support to those who have difficulty dealing with change.
· Reactions to change may be manifested in behaviors reflecting disengagement, disidentification, disenchantment, and disorientation. Managers can use separate interventions targeted toward each reaction.
· Force field analysis states that when the forces for change are balanced by the forces restraining change, an equilibrium state exists. For change to occur, the forces for change must increase, or the restraining forces must decrease.
· Lewin's change model proposes three stages of change: unfreezing, moving, and refreezing.
· A thorough diagnosis and needs analysis is a critical first step in any organization development (OD) intervention.
· OD interventions targeted toward organizations and groups include survey feedback, management by objectives, product and service quality programs, team building, and process consultation.
· OD interventions that focus on individuals include skills training, sensitivity training, management development training, role negotiation, job redesign, stress management programs, and career planning.
· OD efforts should be managed ethically and should preserve individual freedom of choice and privacy.
· When properly conducted, organization development can have positive effects on performance.
REVIEW QUESTIONS: suggested answers
1. What are the major external and internal forces for change in organizations?
The four major themes of the text are the four external forces: globalization, work force diversity, technological change, and managing ethical behavior. Internal forces are things like a crisis, declining effectiveness, changes in employee expectations, and changes in the work climate.
2. Contrast incremental, strategic, and transformational change.
Incremental change is small in scope resulting in only small improvements, but they tend to be ongoing occurrences. On the other hand, strategic changes are on a large scale like organizational restructuring. A transformational change moves the organization to a radical, and sometimes unknown, future state.