Topic 9 Revision Notes
ORGANISATIONAL CHANGE
Topic 9 Revision Notes Types of Organisational Change: Radical vs. Incremental Change: Radical Change: Incremental Change:
-Results in a major make-over of the organisation and its component systems -It involves large scales restructuring of the organisation and a change of strategy -Occurs more frequently and less traumatically as part of an organisation’s evolution -It is much smaller scale change.
Planned vs. Unplanned Change: Planned Change:
Unplanned Change:
-Happens as a result of specific efforts made by the organisation and change agents -They are made in response to organisational pressures and opportunities. -Change that occurs randomly or spontaneously -Much change and successful change occurs simply through stumbling through the dark (eg Ikea obtaining competitive advantage after discovering that one day it would be better to flat pack furniture to fit more into a truck, and let the consumer build it) -The organisation may all of a sudden have to respond to environmental pressures such as heightened global competition, or changes in laws, etc. -This type of change is much more difficult to manage
ORGANISATIONAL CHANGE
Major internal and external forces for change: •The impotence for change can come from within the organisation or from outside Internal Forces for Change:
External Forces for Change:
-Changes in ownership (eg mergers and acquisitions can bring new cultural challenges) -Changes in products and processes (eg many companies in the Australian motor industry are having to change their parts to suit other industries because of decreased demand) -Politics, laws, and markets (eg free markets and increasing competition, however this has put increased pressure on the car industry as well as changes in subsidy laws have forced the closures of many car manufacturers) -Globalization = increased competition from large multinational companies -Workforce diversity (eg female participation and managing challenges of maternity leave and equal pay and opportunities, ageing workforce, Australia has the 2nd most multicultural workforce in the world) -Technology represents many challenges and opportunities (eg constant pressures for upskilling, changing work processes and job content, increased automation of jobs with less need for worker participation) -Ethics and culture (eg increased pressure to adopt CSR and ethical practices due to pressure from community groups and those in the industry, and recent issues that have arisen from the GFC)
Role of Change Agents: Internal vs. External Change Agents: Advantages: -Familiar with the organisation -Must live with results
Disadvantages: Internal Change Agents: -Lack of objectivity; that is they are too close to the situation to view it objectively. There is potential for favoritism. -Insiders tend to have more tunnel vision External Change Agents: -Impartial; view the -Limited knowledge of the organisational change organisation. IE may not subjectively as there is no understand culture, etc. personal benefit -May lack support from jealous -Outsiders view the organisation insiders in its wider context -No ongoing role in change process; still get paid whether change is successful or not •Perhaps the most successful combination is made up of an internal/external change agent team
ORGANISATIONAL CHANGE
Lewin’s Change Model: Lewin’s three stage model of change: •Lewin held that change is the result of 2 forces: 1. Internally driven; ie from a person’s own needs OR 2. Imposed/induced by the environment -Driving forces (pushing for change); eg competitors, customers, culture within organisation, change laws and regulations, organisational crisis (eg bankruptcy) -Restraining forces (seeking to maintain the status quo); eg cost, training involved, culture and structures within organisation (eg bureaucratic rigidity) *For change to be environmentally imposed, driving forces must outnumber retraining forces!!!!!!!!!!! •Lewin’s three stage model process: 1. Unfreeze; ie make the organisation aware of the change -Increase driving forces to direct behaviour away from status quo -Decrease restraining forces -Should eliminate rewards for current behaviour 2. Change/movement; ie actually make the change through an intervention strategy -EG training, altering relationships, new managers, etc -Should communicate rational for change through vision and training 3. Refreeze; ie start to stabilize the new situation by balancing the driving and retraining forces. -EG Imbed new practices, policies and behaviours to become part of everyday life in the organisation -Should change culture and reward systems accordingly •Criticisms of Lewin’s model: -Oversimplifies an extremely complex process -Change is rather multidimensional, and more or less continuous -Periods of stability are merely periods of unnoticed or unchallenged change
Managing Resistance to Change: •Change involves new learning as well as discouraging current KSA’s Why people resist change? •Fear of the unknown •Disrupted habits; eg we have been doing this for 25 years •Poor timing; eg Deakin implemented new cloud system at the very beginning of trimester 1 •Can’t see the reason for change (lack of purpose) •Economic loss; ie ↓Job security, ↓Pay •Simply view it as a bad decision
ORGANISATIONAL CHANGE
6 Ways to overcome resistance to change: 1. Education & Communication: 2. Participation & Involvement:
3. Facilitation & Support: 4. Negotiation & Agreement: 5. Manipulation:
6. Implicit & Explicit Coercion:
-Help employees understand the need for change, its expected outcomes and how the change will benefit them -However, this can be time consuming -Involve those that are to be most affected by change (this is often the resistors to change). As they are likely to pass on the benefits of change to others in the organisation. -Participants are usually more committed to change if they have a sense of ownership in the decision -However, this can still be time consuming, and participants may actually make poor decisions in regards to change -Involves supporting and listening to employees, by providing training, counselling, paid leave. Useful when people are resisting change. -Exchange something of value in exchange for lessening resistance to change -EG reward/redundancy packages to compensate for loss -Useful when an individual will clearly lose out in the change process -Involves making things look better that they are, ie not being 100% truthful -EG withholding information or creating false rumors -Buy of major resistors by giving them major roles in change; seek their advice but not their input -However, can bread resentment -Directly threatening of resistors to change -EG loss of job, loss of promotion, etc -However, can bread anger, more resentment & distrust
Concept of Organisational Development: Organisational Development: “It is a process used to enhance both the effectiveness of an organisation and the well-being of its members through planned interventions” 3 Elements of organisational development: 1. It involves planned interventions; sets out structured activities to improve/change 2. It enhances organisational effectiveness; ↑capacity to achieve organisational goals and objectives 3. Organisational development aims to ensure healthy relationships which enable groups to initiate and manage change. Levinson’s Diagnostic Approach: -Identify problem -Diagnose various aspects of organisation -Gather data by qualitative and quantitative methods -Conduct needs analysis
ORGANISATIONAL CHANGE
Journal Articles: ‘Why Transformation Efforts Fail’: •A few corporate change efforts have been very successful. A few have been utter failures. Most fall somewhere in between, with a distinct tilt toward the lower end of the scale. •Change processes require a significant amount of time and need to go through a series of phases. Skipping steps creates only the illusion of speed and rarely produces a satisfying result. •Reasons why transformation efforts include: 1. Not establishing a sense of urgency:
2. Not creating a powerful enough coalition: 3. Lacking a vision:
4. Under communicating the vision:
5. Not removing obstacles to the vision:
6. Not systematically planning for and creating short term wins: 7. Declaring victory too soon: 8. Not anchoring changes in the corporation’s culture:
-Need to identify and discuss crisis or opportunities -Need to examine market and competitive realities -Need to assemble a group powerful enough to lead the change effort -Need to create a strong and clear vision -Should be able to communicate vision within 5 minutes, rather than someone reading through a whole document -Need to use every vehicle possible to communicate new vision and strategies -Guiding coalition must teach new behaviours by personal example -Need to get rid of obstacles to change -This may involve restructuring workforce by hiring new employees, changing behaviours of existing employees, and delisting non-conformant employees in a legal manner -Recognize and reward employees involved in change improvements -Successful change is long term (5-10 years) -Need to develop leadership and workforce to succeed each other with appropriate behaviours
ORGANISATIONAL CHANGE ‘The experience of work-related stress across occupations’: •Workplace stress arises when people perceive an imbalance between the pressures and demands made on them and the resources they have to cope with these demands -No. of people putting in compensation for stress has been increasing. We are working harder and longer hours. We are finding it harder to leave the workplace. Output is being measured more sophisticatedly than ever before. •Factors that impact on stress include: -Working hours, work life balance, risk and danger, relationships at work, change, physical working conditions, career related issues, org culture, managerial control. •Ways to reduce stress include: -Redesigning jobs, flexible work, participation, career development, cohesive teams, fair distribution of rewards, employment of specialist counsellors who provide mechanisms for coping with stress, free yoga class & gym memberships, assist workers who suffer stress from problems such as substance abuse, family problems, etc •Stress concerns and organisations bottom cost line -Organisations are attempting to get their workforce healthier (eg gym memberships) as there is less risk of productivity issues arising from work health issues •The high emotional labour associated with high stress jobs is discussed as a potential causal factor -Example: not only doing job of selling things, but also giving emotions away to convince people to buy something takes and emotional toll on the worker (eg put on a fake smile, chit chat, etc).
Topic 9 Revision Notes Types of Organisational Change: Radical vs. Incremental Change: Radical Change: Incremental Change:
-Results in a major make-over of the organisation and its component systems -It involves large scales restructuring of the organisation and a change of strategy -Occurs more frequently and less traumatically as part of an organisation’s evolution -It is much smaller scale change.
Planned vs. Unplanned Change: Planned Change:
Unplanned Change:
-Happens as a result of specific efforts made by the organisation and change agents -They are made in response to organisational pressures and opportunities. -Change that occurs randomly or spontaneously -Much change and successful change occurs simply through stumbling through the dark (eg Ikea obtaining competitive advantage after discovering that one day it would be better to flat pack furniture to fit more into a truck, and let the consumer build it) -The organisation may all of a sudden have to respond to environmental pressures such as heightened global competition, or changes in laws, etc. -This type of change is much more difficult to manage
ORGANISATIONAL CHANGE
Major internal and external forces for change: •The impotence for change can come from within the organisation or from outside Internal Forces for Change:
External Forces for Change:
-Changes in ownership (eg mergers and acquisitions can bring new cultural challenges) -Changes in products and processes (eg many companies in the Australian motor industry are having to change their parts to suit other industries because of decreased demand) -Politics, laws, and markets (eg free markets and increasing competition, however this has put increased pressure on the car industry as well as changes in subsidy laws have forced the closures of many car manufacturers) -Globalization = increased competition from large multinational companies -Workforce diversity (eg female participation and managing challenges of maternity leave and equal pay and opportunities, ageing workforce, Australia has the 2nd most multicultural workforce in the world) -Technology represents many challenges and opportunities (eg constant pressures for upskilling, changing work processes and job content, increased automation of jobs with less need for worker participation) -Ethics and culture (eg increased pressure to adopt CSR and ethical practices due to pressure from community groups and those in the industry, and recent issues that have arisen from the GFC)
Role of Change Agents: Internal vs. External Change Agents: Advantages: -Familiar with the organisation -Must live with results
Disadvantages: Internal Change Agents: -Lack of objectivity; that is they are too close to the situation to view it objectively. There is potential for favoritism. -Insiders tend to have more tunnel vision External Change Agents: -Impartial; view the -Limited knowledge of the organisational change organisation. IE may not subjectively as there is no understand culture, etc. personal benefit -May lack support from jealous -Outsiders view the organisation insiders in its wider context -No ongoing role in change process; still get paid whether change is successful or not •Perhaps the most successful combination is made up of an internal/external change agent team
ORGANISATIONAL CHANGE
Lewin’s Change Model: Lewin’s three stage model of change: •Lewin held that change is the result of 2 forces: 1. Internally driven; ie from a person’s own needs OR 2. Imposed/induced by the environment -Driving forces (pushing for change); eg competitors, customers, culture within organisation, change laws and regulations, organisational crisis (eg bankruptcy) -Restraining forces (seeking to maintain the status quo); eg cost, training involved, culture and structures within organisation (eg bureaucratic rigidity) *For change to be environmentally imposed, driving forces must outnumber retraining forces!!!!!!!!!!! •Lewin’s three stage model process: 1. Unfreeze; ie make the organisation aware of the change -Increase driving forces to direct behaviour away from status quo -Decrease restraining forces -Should eliminate rewards for current behaviour 2. Change/movement; ie actually make the change through an intervention strategy -EG training, altering relationships, new managers, etc -Should communicate rational for change through vision and training 3. Refreeze; ie start to stabilize the new situation by balancing the driving and retraining forces. -EG Imbed new practices, policies and behaviours to become part of everyday life in the organisation -Should change culture and reward systems accordingly •Criticisms of Lewin’s model: -Oversimplifies an extremely complex process -Change is rather multidimensional, and more or less continuous -Periods of stability are merely periods of unnoticed or unchallenged change
Managing Resistance to Change: •Change involves new learning as well as discouraging current KSA’s Why people resist change? •Fear of the unknown •Disrupted habits; eg we have been doing this for 25 years •Poor timing; eg Deakin implemented new cloud system at the very beginning of trimester 1 •Can’t see the reason for change (lack of purpose) •Economic loss; ie ↓Job security, ↓Pay •Simply view it as a bad decision
ORGANISATIONAL CHANGE
6 Ways to overcome resistance to change: 1. Education & Communication: 2. Participation & Involvement:
3. Facilitation & Support: 4. Negotiation & Agreement: 5. Manipulation:
6. Implicit & Explicit Coercion:
-Help employees understand the need for change, its expected outcomes and how the change will benefit them -However, this can be time consuming -Involve those that are to be most affected by change (this is often the resistors to change). As they are likely to pass on the benefits of change to others in the organisation. -Participants are usually more committed to change if they have a sense of ownership in the decision -However, this can still be time consuming, and participants may actually make poor decisions in regards to change -Involves supporting and listening to employees, by providing training, counselling, paid leave. Useful when people are resisting change. -Exchange something of value in exchange for lessening resistance to change -EG reward/redundancy packages to compensate for loss -Useful when an individual will clearly lose out in the change process -Involves making things look better that they are, ie not being 100% truthful -EG withholding information or creating false rumors -Buy of major resistors by giving them major roles in change; seek their advice but not their input -However, can bread resentment -Directly threatening of resistors to change -EG loss of job, loss of promotion, etc -However, can bread anger, more resentment & distrust
Concept of Organisational Development: Organisational Development: “It is a process used to enhance both the effectiveness of an organisation and the well-being of its members through planned interventions” 3 Elements of organisational development: 1. It involves planned interventions; sets out structured activities to improve/change 2. It enhances organisational effectiveness; ↑capacity to achieve organisational goals and objectives 3. Organisational development aims to ensure healthy relationships which enable groups to initiate and manage change. Levinson’s Diagnostic Approach: -Identify problem -Diagnose various aspects of organisation -Gather data by qualitative and quantitative methods -Conduct needs analysis
ORGANISATIONAL CHANGE
Journal Articles: ‘Why Transformation Efforts Fail’: •A few corporate change efforts have been very successful. A few have been utter failures. Most fall somewhere in between, with a distinct tilt toward the lower end of the scale. •Change processes require a significant amount of time and need to go through a series of phases. Skipping steps creates only the illusion of speed and rarely produces a satisfying result. •Reasons why transformation efforts include: 1. Not establishing a sense of urgency:
2. Not creating a powerful enough coalition: 3. Lacking a vision:
4. Under communicating the vision:
5. Not removing obstacles to the vision:
6. Not systematically planning for and creating short term wins: 7. Declaring victory too soon: 8. Not anchoring changes in the corporation’s culture:
-Need to identify and discuss crisis or opportunities -Need to examine market and competitive realities -Need to assemble a group powerful enough to lead the change effort -Need to create a strong and clear vision -Should be able to communicate vision within 5 minutes, rather than someone reading through a whole document -Need to use every vehicle possible to communicate new vision and strategies -Guiding coalition must teach new behaviours by personal example -Need to get rid of obstacles to change -This may involve restructuring workforce by hiring new employees, changing behaviours of existing employees, and delisting non-conformant employees in a legal manner -Recognize and reward employees involved in change improvements -Successful change is long term (5-10 years) -Need to develop leadership and workforce to succeed each other with appropriate behaviours
ORGANISATIONAL CHANGE ‘The experience of work-related stress across occupations’: •Workplace stress arises when people perceive an imbalance between the pressures and demands made on them and the resources they have to cope with these demands -No. of people putting in compensation for stress has been increasing. We are working harder and longer hours. We are finding it harder to leave the workplace. Output is being measured more sophisticatedly than ever before. •Factors that impact on stress include: -Working hours, work life balance, risk and danger, relationships at work, change, physical working conditions, career related issues, org culture, managerial control. •Ways to reduce stress include: -Redesigning jobs, flexible work, participation, career development, cohesive teams, fair distribution of rewards, employment of specialist counsellors who provide mechanisms for coping with stress, free yoga class & gym memberships, assist workers who suffer stress from problems such as substance abuse, family problems, etc •Stress concerns and organisations bottom cost line -Organisations are attempting to get their workforce healthier (eg gym memberships) as there is less risk of productivity issues arising from work health issues •The high emotional labour associated with high stress jobs is discussed as a potential causal factor -Example: not only doing job of selling things, but also giving emotions away to convince people to buy something takes and emotional toll on the worker (eg put on a fake smile, chit chat, etc).
