What is Change?
MGF 3621 Organizational Change Notes
Section 1
Week 1
Organizational Change Defined •
Long term approach that is aimed to improve the organization's ability to survive in the market by changing its problem solving approach o Organizational wide o Involves more than one single technique o Managed from the top • Need the top management to agree, so it is effective o Designed to increase the effectiveness and health of the organization • So the change can benefit shareholders o Application of behavioral science interventions • Understanding the culture and using that information to better the changes
Two Broad Approaches to Change
Types of Change
1. Developmental, Transitional &Transformational Change o Development: Gradually o Transitional: Change as time goes o Transformational: change the whole game 2. Planned vs Emergent Change o Planned: Undertaken slowly and change with plan REACTIVE o Emergent: Change that is sudden and make an emergent plan to react to that, PROACTIVE 3. Episodic vs Continuous change o Episodic: Steady state, change, then steady again • Change is unusual to the company o Continuous: Always changing and always constantly improve and possibility to change
Scale of Change • • • •
Fine Tuning- Departmental division level Incremental adjustment: collecting faulty processes or relocating staff within the deparmnents Modular transformation: realignment of departments o Take the whole thing and re engineering that department to make it more efficient Corporate transformation o Major change in the whole company o Something that is completely different o Trigger by change in taste and technology
Organizational Orientations to Change •
Some organization change depending on the organization types
1. Sluggish Thermostat Organizations a. They change only if the "temperature" is above the usual b. Only when they are force to change c. Highly stable environment 2. Satisficing Organizations a. Survive in stable environment b. Perform better in stable environment c. Similar to number one 3. Reactive Organization a. They respond to change due to a shift or respond in the environment b. They are not proactive, need to wait for change then react 4. Renewing/ Transformational Organization a. Always looking for ways to re invent the change b. They change before the event happens 1 is stable, then as progress the different organization more likely to change faster
Stage 1 •
Anticipating the need for change o State of disequilibrium • When the driving change is equal to steady state is equilibrium • Therefore only when there is problem (disequilibrium) then change o Recognition that organization is functioning below "par" o Monitoring of external environment (competitors) • But also can be the internal (staff)
Stage 2 • •
When the organization feel for a change they will bring someone in: Developing the client/ consultant relationship o Trust is important • If you are consultant, you need to have trust so staff are not anxious when someone new is in the workplace o Psychological contract • Make subliminal agreements of each parties explicit, so there is no unwanted disagreement o Contracting with principal client (anyone that will be involve due to the change) • Let stakeholders know that we are bringing change o Contracting with entire client system
Stage 3 •
Diagnosis (trying to systematically to analyze the problem) o Undertake data collection in collaboration with client o Use a range of a data sources • Observation • Interview • Pre existing data o Caution in Accepting client's initial diagnosis • When consultant bring in the problem, it might be wrong, so need to be careful before accepting
Stage 4 •
Action plans, Strategies an Techniques o Intervene in the client system o Intervention contingent on the nature of problem • If the diagnosis done correctly, the problem will be change successfully o Change in one part leads to change in another • One change, will make other system change (taking out an organ) • Need to be careful • Caution to accept the initial diagnosis
Stage 5 •
Self Renewal, Monitoring and Stabilizing o Contrast outcomes with stated objectives • Check if the outcomes is similar to the changes we want o Assess employees response to the change o Need to ensure behavior is internalized o Tendency to return to previous state • Double check to make sure change is implemented
Stage 6 •
Continuous Improvement Process o Must change to survive o Emphasize on client system becoming self reliant • Avoid relying on other people in the company o Avoid dependent relationships o Know when to leave
Week 2 “Approaches to Planned Change & Sustainable Organizational Change
What is Change? • •
A planned or unplanned response to internal or external forces The new state of things is different from the old state of things
Planned Change • • •
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Performance gap between ACTUAL and DESIRED states o Find this gap and kill the gap, so the goal can be achieved A problem to be solved o Need to correct an error An opportunity to exploit o Trying to develop new business opportunities o Getting to this state now Goal is to maximize positive consequences o Whether we can leverage many positive consequences from a change
Planned Changes • •
Is adaptive & internal Can include different strategies o Empirical-rational • Try to make a business case to demonstrate that the organization need to change in order to survive • Tell them that it will help them to • But not everyone will not be motivated by this • Logical explanation of the change o Normative-reeducate • Try to appeal to their value and beliefs § Culture & Norms • Much more emotion not logical explanation o Power Coercive • Carrot and stick approach • Requires Power to change people § Using incentives and disincentives
Unplanned Change • • • •
Unanticipated disasters o When there is a tornado, you need to make a change suit to that Breakdowns o No Gas in Victoria, which costs lots of money Shortages o Fire in Taiwan, destroys Ram production. People started to value RAM more Goal is to minimize negative consequences o Opposite of Planned change o Try to control the negative consequences
Central Themes of Organizational Development •
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Encourages Participation o Encourage people to change o try to engage stakeholder in the change o create a demographic environment within the organization Data Collection o Using interviews to get data o Using the information to act as a feedback, so people know what they are doing right and wrong Improved Effectiveness o Use all data to build better organization Legitimizes self examination o Environment of safety where people will not be threatened External/Internal consultants o Internal consultant: someone in HR employee that manage change process o External consultant: someone from outside consultant to help manage change process Long term, Ongoing, developmental o Incremental and gradual process o Not a quick fix Emphasis on error detection and correction o Try to correct the error act as a driver to create the change System approach: Sub-systems (structure, technology, people, or tasks) o Subdivision within the bigger system o Need to keep open ended approach where everything is related o This will help the dynamic of change affecting the different parts Power Equalization o Empowering and engaging the stakeholders Climate of trust and authenticity o Collogues need to be able to trust each other
Authentic leaders: Leaders that are honest with everyone Confrontation o Need this hard edge occasionally and challenge the underlying assumptions of how the organization is performing o We need to confront them Multiple levels of intervention o Need to change in different levels o
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Lewin's 3 phase model • •
This guy started the whole organizational model To bring change you need to: o Unfreeze • This is because the organization is going to be resistant • So we need to unpack and prepare them for change • Ex: Changing the ice cubes then freeze again o Change Phase • We intervene and change things around o Refreeze • Institutionalize and make the changes permanent
The 'Big Three Model (Kanters)
Think of change: 1. 3 kinds of movement a. Macro evolutionary • The environment, historical, industries or industry clusters b. Micro evolutionary • Developmental, related to sub systems, size and shape c. Political • Revolutionary, jockeying for power among stakeholders 2. 3 forms of change a. Identity • Changes in the relationship between an organisation and its environment • Related to macro movement b. Co-ordination • Changes in size, shape and structure • Related to micro movement c. Control • Who has the power, ownership, or governance in the company • Related to political •
3. 3 roles in the change process a. Changes strategists • Concerned with the top level or leaders • They need to be able to set the direction b. Change Implementers • Concerned with project management • Middle level • Ideally they should be strategists, so they know what to expect c. Change Recipients • Often involved at the end • They do not have much power, they just get the message
Change Typology (Narayan) • •
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Change is either internal or external Change in adaptive or natural o Adaptive: try to change o Natural: they change automatically and happen internal Population Ecology o When Coles set up the store, they will look at the competition o They try to sell at cheap, to drive people out of business o They have the characteristics to afford the loss to drive you out of business Institutional theory of imitation o Not anything new under the sun o They copy the innovative industry leaders Resource dependence o They are able to survive because they are able to get resources o Once it is out of supply, they will shut
Four Changes Strategies • • • • •
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Dumphy and states The arrow on top move to LARGE (right) from Small (left) The arrow on the side move from Democratic (up) and Autocratic (down) Participative evolution o Able to change by itself Charismatic transformation o Support for radical change o The leaders are able to pull everyone along Forced Evolution o Gradual change but there is a lot of resistant to the change Dictatorial transformation o Nasty changes because there is no support for the change o The leadership of the organization will make this call o Quick and radical change
6 Stages according to Dunphy, Griffiths & Benn (2007) on sustainability •
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Rejection o Exploit all resources for economic gain o Capitalize on finite resources Non-Response o Ignores the problem and keep going Compliance o React only whats required by legislation Efficiency o Firms that realize that they need to be efficient, because saving some resources Strategic Proactivity o They are changing because it is similar with their core values Sustaining Corporation o They report all the issues, not just money but people and planet
Structural elements supporting CSR learning & commitment to action • •
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Decentralization o Value individual Diversity o Recruiting different staff from different places o The more diverse, the more creative you will be Connections o Creating environment and culture, where learning can be learn everywhere Shared focus o Try to get the focus going, not just written in the mission statement Constraints o Limited resources, need to be selected on where to deploy resources Feedback o Long term of feedback sharing
Positive Responses • •
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Corporate Social Responsibility (CSR) is being embraced by leading companies o Focusing on changing the world and give impact to human Dow Jones Sustainability Index o Investors are able to look at not only the money but now with this index, you can look at sustainability Environmental Impact o They have to impact the environment Green Building Programs o H building to make better environment
