Inputs strategic plans target elements of change and outputs

Part 3: Organizational Processes

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Chapter 16 | Slide 2

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MANAGING CHANGE AND STRESS

How Can You Apply OB and Show What You’ve Learned?

16.1 Forces for Change

16.2 Types and Models of Change

16.3 Understanding Resistance to Change

16.4 The Good and Bad of Stress

16.5 Effective Change and Stress Management

Forces for Change

External Forces for Change

Originate outside of an organization

Can apply to the organization, competitors, or the entire industry

Dramatically affects why an organization exists and which markets it will participate in and how

Chapter 16 | Slide 3

External forces for change originate outside the organization. Such forces often apply to your organization and its competitors or even entire industries. External forces therefore can dramatically affect why an organization exists, as well as which markets it participates in and how. For instance, external changes can either present new opportunities for organizations to realize and grow (e.g., smartphones for consumers and Apple’s iPhone), or they can cause the ultimate demise or failure of a business (e.g., smartphones for consumers and Blackberry).

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Forces for Change

Key External Forces for Change

Demographic characteristics

Technological advancements

Shareholder, customer, and market changes

Social and political pressures

Chapter 16 | Slide 4

Demographic Characteristics. Chapter 2 provided a detailed discussion of demographic changes occurring in the U.S. workforce. You learned that organizations are changing benefits and aspects of the work environment in order to attract, motivate, and retain diverse employees. Organizations also are changing the way in which they design and market their products and services and design their store layouts based on generational differences.

Persistently high unemployment levels among young people around the world are creating a strong force for change by governments and organizations alike. Experts believe that much of the current unrest in the Middle East is being fueled by a younger population that cannot find meaningful employment opportunities.

Technological Advancements. Technology is a common and often cost-effective tool for improving productivity, competitiveness, and customer service. Other surveys report that 98% of recruiters use some form of social media to find employees. This one technology has changed how employees look for and find jobs, how companies recruit talent, and how companies make money facilitating these relationships.

Shareholder, Customer, and Market Changes. Shareholders have become more involved with pressing for organizational change in response to ethical lapses from senior management and anger over executives’ compensation packages. Customers also are increasingly sophisticated and demand the companies with whom they do business to deliver higher value products and services. If they don’t get what they want, then they will shop elsewhere. This has led more and more companies to seek customer feedback about a wide range of issues in order to attract and retain customers, because “turning a potential negative situation into visible positive sentiment is social media’s biggest potential advantage.”

Social and Political Pressures. These forces are created by social and political events. For example, widespread concern about the impact of climate change and rising energy costs have been important forces for change in almost every industry around the world. Companies have gone “green,” looking for ways to use less energy themselves and to sell products that consume less energy and are safer to use.

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Forces for Change

Internal Forces for Change

Come from inside the organization

Forces may be subtle (low job satisfaction)

May manifest in outward signs (low productivity, conflict, or strikes)

Chapter 16 | Slide 5

Internal forces for change come from inside the organization.

These forces may be subtle, such as low job satisfaction, or can manifest in outward signs, such as low productivity, conflict, or strikes.

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Forces for Change

Key Internal Forces for Change

Chapter 16 | Slide 6

Human Resource Problems or Prospects. These problems stem from employee perceptions about how they are treated at work and the match between individual and organization needs and desires. Chapter 2 highlighted the relationship between an employee’s unmet needs and job dissatisfaction. Dissatisfaction is a symptom of an underlying employee problem that should be addressed. Unusual or high levels of absenteeism and turnover also represent forces for change. Organizations might respond to these problems by using the various approaches to job design discussed in Chapter 5, and by removing the different stressors. To help combat these challenges, leaders and managers of change are well served to encourage employee participation and suggestions.

Managerial Behaviors and Decisions. Excessive interpersonal conflict between managers and their subordinates or the board of directors is a sign that change is needed.

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Human Resource Problems or Prospects

Managerial Behaviors and Decisions

Test Your OB Knowledge

Managers at Storm Kayak Corporation (SKC) changed their marketing strategy to target baby boomers. Which change force did SKC experience?

Internal – job dissatisfaction

Internal - leadership

External - demographic

External – domestic/international competition

External – information technology

Chapter 16 | Slide ‹#›

The correct answer is (D).

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Types and Models of Change

Three General Types of Change

Adaptive change

Innovative change

Radically innovative change

Chapter 16 | Slide 8

Low degree of complexity

High degree of complexity

Adaptive change is the least complex, costly, and uncertain. It involves reimplementation of a change in the same organizational unit at a later time or imitation of a similar change by a different unit. Adaptive changes are not particularly threatening to employees because they are familiar.

Innovative change falls midway on the continuum of complexity, cost, and uncertainty. Innovative changes are therefore more complex, as organizations need to learn new behaviors, as well as create, implement, and enforce new policies and practices. These situations have both more uncertainty and cause more fear than adaptive changes.

Radically innovative change is at the high end of the continuum of complexity, cost, and uncertainty. Changes of this sort are the most difficult to implement and tend to be the most threatening to managerial confidence and employee job security. At the same time, however, radically innovative changes potentially realize the greatest benefits. Radical changes must also be supported by an organization’s culture. Organizational change is more likely to fail if it is inconsistent with any of the three levels of organizational culture: observable artifacts, espoused values, and basic assumptions.

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Types and Models of Change

Lewin’s Change Model

Key assumptions underlying Lewin’s Model:

Learn and unlearn

Motivation

People make or break

Resistance

Reinforce

Chapter 16 | Slide 9

Most models of organizational change originated from the landmark work of social psychologist Kurt Lewin. Lewin developed a three-stage model of planned change that explained how to initiate, manage, and stabilize the change process. The three stages are unfreezing, changing, and refreezing. Before reviewing each stage, it is important to highlight some key assumptions underlying this model and many of the others:

1. Learn and unlearn. The change process involves learning something new, as well as discontinuing or unlearning current attitudes, behaviors, or organizational practices.

2. Motivation. Change will not occur unless there is motivation to change. This is often the most difficult part of the change process.

3. People make or break. People are the key to all organizational changes. Any change, whether in terms of structure, group process, reward systems, or job design, requires individuals to change. Organizations don’t change if employee behaviors don’t change.

4. Resistance. Resistance to change is found even when the goals of change are highly desirable.

5. Reinforce. Effective change requires reinforcing new behaviors, attitudes, and organizational practices.

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Types and Models of Change

Three Stages of Lewin’s Change Model

Chapter 16 | Slide 10

Unfreezing. The focus of this stage is to create the motivation to change. Individuals are encouraged to replace old behaviors and attitudes with new ones (desired by management). The initial challenge in the unfreezing process is creating and communicating a convincing reason to change.

Changing. This is where the rubber meets the road and change occurs. Because change involves learning and doing things differently, this stage entails providing employees with new information, new behavioral models, new processes or procedures, new equipment, new technology, or new ways of getting the job done.

Refreezing. The goal of this stage is to support and reinforce the change. Change is supported by helping employees integrate the changed behavior or attitude into their normal way of doing things. This is accomplished by first giving employees the chance to exhibit the new behaviors or attitudes. Once this happens, positive reinforcement is used to encourage the desired change.

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Unfreezing

Changing

Refreezing

Types and Models of Change

Systems Model of Change

Based on the notion that any change, no matter how large or small, has a cascading effect throughout an organization

Practical model to diagnose what to change and how to evaluate the success of a change effort

Chapter 16 | Slide 11

A systems approach to change is based on the notion that any change, no matter how large or small, has a cascading effect throughout an organization.

A systems model of change is similar to the systems framework used in the Integrative Framework of OB. However, it is a bit more complex, as shown in Figure 16.4.

This model includes inputs, strategic plans, target elements of change, and outputs.

It is a very practical approach and can be used to diagnose what to change and to determine how to evaluate the success of a change effort.

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Types and Models of Change

Systems Model of Change - Inputs

Intended change must align with:

Mission (the reason an organization exists)

Vision (a compelling future state for an organization)

Readiness for change:

Necessity

Top management support

Personal ability to cope with changes

Received personal consequences

Chapter 16 | Slide 12

The starting point for organizational change should be asking and answering the question: “Why change?” Leaders need to get clear on the overarching motive or reason for change. It then is essential to assure that the intended changes align with the organization’s mission, vision, and resulting strategic plan.

Mission statements represent the “reason” organizations exist.

A vision is a compelling future state for an organization, and it also is another important input in the systems model of change.

Readiness for change is defined as beliefs, attitudes, and intentions regarding the extent to which changes are needed and the capacity available to successfully implement those changes.

Put another way, effective change at work requires both the employees and the employer to be willing and able to change (i.e., have high readiness). Readiness has four components:

1. Necessity for change

2. Top management support for change efforts

3. Personal ability to cope with changes

4. Perceived personal consequences of change

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Types and Models of Change

Systems Model of Change – Strategic Plans

Chapter 16 | Slide 13

Outlines an organization’s long-term direction and the actions necessary to achieve planned results

Based on SWOT analysis

A strategic plan outlines an organization’s long-term direction and the actions necessary to achieve planned results.

Among other things, strategic plans are based on results from a SWOT—strengths, weaknesses, opportunities, and threats—analysis. This analysis aids in developing an organizational strategy to attain desired goals, such as profits, customer satisfaction, quality, adequate return on investment, and acceptable levels of turnover and employee satisfaction.

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Types and Models of Change

Systems Model of Change – Target Elements of Change

Components of an organization that may change

Used to diagnose problems and identify change-related solutions

Consist of:

Organizational arrangements

Social factors

Methods

People

Chapter 16 | Slide 14

Target elements of change are the components of an organization that may be changed. They essentially represent change levers that managers can push and pull to influence various aspects of an organization.

The choice of which lever to use, however, is based on a diagnosis of a problem, or problems, or the actions needed to accomplish a goal.

The target elements of change are used to diagnose problems and to identify change-related solutions.

There are four targeted elements of change:

1. Organizational arrangements

2. Social factors

3. Methods

4. People

Each target element of change contains a subset of more detailed organizational features.

There are two final issues to keep in mind about the target elements. First, the double-headed arrows in the figure connecting each target element of change convey the message that change ripples across an organization. Second, the “people” component is placed in the center of the target elements of change box because all organizational change ultimately impacts employees and vice versa.

Organizational change is more likely to succeed when managers proactively consider the impact of change on employees.

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Types and Models of Change

Systems Model of Change – Outputs

Represent the desired end results or goals of a change

Should be consistent with organization’s strategic plan

Can be at the individual, group, or organizational level

Chapter 16 | Slide 15

Outputs represent the desired end results or goals of a change. Once again, these end results should be consistent with an organization’s strategic plan. Figure 16.4 indicates that change may be directed at the individual, group, or organizational level.

Change efforts are more complicated and difficult to manage when they are targeted at the organizational level. This occurs because organizational-level changes are more likely to affect multiple target elements of change shown in the model.