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Chapter 14 Managing Change


									   Chapter 14

Managing Change


                  Chapter Objectives

 The Nature of Change
 Costs and Benefits of Change
 Resistance to Change
 Basic Frameworks for Interpreting Change
 Role of Transformational Leadership in Change
 Practices to Build Support for Change
 Meaning and Characteristics of OD (Organization Development)
 Benefits and Limitations of OD (Organization Development)
                 The Nature of Change

 Change is any alteration occurring in the work
 environment that affects the ways in which employees
 must act.
     - The whole organization tends to be affected by change in any part
 of it.
      - Change is a human as well as technical problem.
 Organizations tend to achieve an equilibrium in their
  social structure. When change comes along, it requires
  employees to make new adjustments as the organization
  seeks a new equilibrium.
 Disequilibrium occurs when employees are unable to
  make adequate adjustments.
                      The Nature of Change

 This disequilibrium makes a dilemma for managers.
  - One of their role is to be proactive which means they should introduce continual
 organizational changes so as to bring better fit between firm and its environment.
  - Their second role is to be reactive which is to restore and maintain the group
 equilibrium and personal adjustment that change upsets.

 Organizational changes involve minor changes and
 more dramatic changes.
  - Minor changes affect only a few people and in these cases a new equilibrium may be
 reached readily, such as adding new members to a work group.
  - More dramatic changes deals with the entire core of an organization. Examples include
 hostile takeovers of firms, reengineering of organizations, act of public terrorism and etc.
              Responses to Change

 Work change is further complicated by the fact that
  it does not produce a direct adjustment. Instead, it
  operates through each employee’s attitudes to
  produce a response which is related to their feelings
  toward the change.
 Obviously there was no direct connection between
  the change and the response. Some other intervening
  variable , which is later stated employee attitude ,
  changed expected pattern.
 The way that people feel about a change is one factor
  that determines how they will respond to it.
                       Responses to Change

 These feeling are not the result of chance; They are caused.
- One cause is Personal History.
- Second cause is The Work Environment itself.
 Feelings are not a matter of logic. They are in two separate
  category. So logic is not a successful method to modify
  these feelings.
                       Hawthorne Effect
 Hawthorne effect means that the mere observation of a
  group tends to change the group.
 - When people are observed, or believe that someone cares about them, they act
               Response to Change

                 Group Response to Change
 People interpret change individually and have their
  own probable response to it. On the other hand, they
  often show that they our belong to the group by
  joining with other group member in some uniform
  response to change.
 Basically, the group react with the feeling, “We’re all
  in this together. Whatever happens to one of us
  affects all of us.”
               Response to Change

 To reach equilibrium, a group is often inclined to
 return to its best way of life whenever any change
 occurs. For this the net result is a self-correcting
 mechanism. This self-correcting characteristic of
 organizations is called homeostasis.
                Costs and Benefits

 All changes are likely to have some costs. Because of
  costs, proposals for change are not always desirable.
  Each change requires a detailed cost-benefit analysis.
  If changes doesn’t provide benefits above costs, there
  is no reason for the changes.
 These cost s are not merely economic; they also are
  psychological and social. All of these costs must be
  considered in determination of benefits and costs.
 The organizational goal always is benefits greater
  than costs.
                 Costs and benefits

 Psychological costs also are called Psychic costs
  because they affect a person’s inner self, the Psyche.
 Knowledge of individual differences helps us predict
  that people will react in widely varying ways to
  change. Some will perceive only the benefits, while
  others see only what it costs them.
 In some cases the psychic costs of change can be so
  severe that they affect the psychological and even
  physical health of employees.
 The reality of change is that frequently there is no
  clear-cut 100 percent benefit for all parties.
                 Resistance to Change

 Resistance to change consists of any employee
  behaviors designed to discredit, delay, or prevent the
  implementation of a work change.
 Employees resist change because it threatens their
  needs for :
   - Security
   - Social Interaction
   - Status
               Resistance to Change

                   Nature and Effects
 Despite of the nature of the change, some employee try to
  protect themselves from its effect. Their action may
  range from complaints, foot-dragging, and passive
  resistance to absenteeism, sabotage, and work
 All employees tend to resist it because of the psychic
  costs that accompany it and also managers resist it too.
 Although people tend to resist change, this tendency is
  offset by their desire for new experiences and for the
  rewards that come with changes.
                Resistance to Change

 One lesson for management is that a change is likely to
  be either a success or problem, depending on how
  skillfully it is managed to minimize resistance.
 Insecurity and change are conditions that illustrate
  how a chain-reaction effect may develop in
  organizational behavior.
 A chain-reaction effect is a situation in which a change
  ,or other condition, that directly one person or a few
  persons may lead to a direct or indirect reaction from
  many people because of their mutual interest in it.
                       Resistance to Change

              Reasons for Resistance
 Employees may resist changes for three broad
 -They may not feel comfortable with the nature of the change it self. It may violate
  their belief system, they may believe the decision is technically incorrect, or they my
  simply be reluctant exchange comfort of certainty and familiarity for uncertainty.
 -The method by which change is introduced. People may resent having been ill-
  informed, or they may reject an insensitive and authoritarian approach that did not
  involve them in the change process.
 -The inequity experienced when people perceive themselves being changed while
  someone else appear to gain the benefits of the change.

 Their resistance will be even more intense if all three
  reasons exist.
                      Resistance to Change

                 Type of Resistance
 There are three different types of resistance to
 Logical Resistance.( or Rational Resistance) This is based on disagreement with
  facts, rational reasoning, logic, and science. It occurs because of the time and
  efforts which is needed to adjust to change.
 Psychological Resistance.( or Emotional Resistance ) This is typically based on
  emotions, sentiments, and attitudes. It is internally logical from the perspective
  of the employees’ attitudes and feelings about change because they may fear the
  unknown, mistrust the management’s leadership, or feel that their security and
  self-esteem are threatened.
 Sociological Resistance.( or Social Resistance) Sociological resistance also is
  logical, when it is seen as a product of a challenge to group interests, norms,
  and values.
               Resistance to Change

               Implications of Resistance
 All three types of resistance must be anticipated and
  treated effectively if employees are to accept change
  cooperatively. If administrators work with only one of
  them they will fail to made change.
 In a typical operating situation full support can’t be
  gained for every change that is made. What manager
  seeks is climate in which people trust managers, have a
  positive feeling toward most changes, and feel secure
  enough to tolerate other changes.
 If management can’t win support, it may need to use
                      Resistance to Change

           Possible Benefits of Resistance
 Resistance is not all bad. It can bring some benefits
  as follows:
 Encourage management to reexamine its change proposals.
 Help to Identify specific problem areas where a change is likely to cause
 Management may be encouraged to do a better job of communicating the
 Gives managers information about the intensity of employee emotions on an
 Encourage employees to think and talk more about a change.
      Implementing Change Successfully

 Some changes originate within the organization, but
  many come from the external environment. For example
  Government passes laws, new development in technology
  arise, competitors introduce new services and etc. then
  the organization should respond to them.
 Although stable environment mean less change, dynamic
  environments are now the norm, and they require more
    Transformational Leadership and Change
 Management has key role in initiating and implementing
  change successfully.
      Implementing Change Successfully

 Not only do managers sometimes overlook simple but
  important details, but they may fail to develop a master
  strategy for planned change. An overall plan should
  address Behavioral issues, such as employees’ difficulty
  in letting go of old methods and the general need to
  create an organization to welcomes change.
 Transformational Leaders are instrumental in this
  process. They are managers who initiate bold strategic
  changes to position the organization for its future.
 There are three important elements of transformational
  leadership : Creating Vision, Exhibiting charisma, and
  stimulating learning.
       Implementing Change Successfully

-Creating Vision. Transformational leaders create and communicate a vision for the
organization. A vision crystallized long-range image or idea of what can and should
be accomplished. A vision may also integrate the shared beliefs and values that
serve as a basis for changing an organization’s culture.

 -Communicating Charisma. Leaders should persuade employees that the vision is
urgent and motivate them to achieve it. Charisma is a leadership characteristic that
can help influence employees to take early and sustained action. Charismatic
leaders are dynamic risk takers, they can be warm mentors who treats employees
individually and guide them to take action, and also they need to recognize the
“emotional vulnerability” that employees experience.

-Stimulating Learning. The critical Task for transformational leaders is to develop
people’s capacity to learn from the experience of change. This process is called
double-loop learning which means that the way a change is handled should not only
reflect current information gathered but also prepare the participations to manage
future changes even more effectively. This process is in sharp contrast to single-
loop learning which is just focus on current problems.
      Implementing Change Successfully

               Three Stages in Change
 Behavioral awareness in managing change us aided
  by viewing change as a three-step process:
  -Unfreezing means that old ideas and practices need to be cast
 aside so that new ones can be learned.
  -Changing is the step in which the new ideas and practices are
 learned. The changing step usually is also mixed with hope,
 discovery, and excitement.
  -Refreezing means that what has been learned is integrated
 into actual practice. Successful on-the-job practice must be the
 ultimate goal of the refreezing step.
        Implementing Change Successfully

                                Manipulating the Forces
 Social psychologist Kurt Lewin, who identified the three stages of
change, also suggested that any organization is a dynamic balance of
forces supporting and restraining any existing practice; there is an
equilibrium .
 Change is introduced within a group by a variety of
methods as follows:
  - Adding new supporting forces.
  - Removing restraining forces.
  - Increasing the strength of a supporting force.
  - Decreasing The strength of a restraining force.
  - Converting a restraining force into a supporting force.
 At least one of these approaches must be used to change the equilibrium,
with greater success likely when more than one is adapted. The idea is to help
change be accepted and integrated into new practices.
          Implementing Change Successfully

                           Building Support for Change
 Use of Group Forces.
  -Effective change focuses on both individuals and groups.
  -Any changes in group forces will encourage changes in individual behavior.
  -The more attractive the group is to each member, the greater its influence on a group member
  can be. If a member with high status support the change the influence will increase.
  -If the change disrupt the group’s social system more than necessary, the group will tend to
  meet resistance.
 Providing a Rationale for Change.
  -Capable leadership reinforces a climate of psychological support for change.
  -It is generally better to provide objective reasons for the change.
  -Ordinary requests of change should be in accord with the objectives and vision of the
  -Managerial and employee expectations of change may be as important as the technology of
  change, but expectations are not enough alone.
  - By believing that the change will work, the manager acts so as to fulfill that belief. This belief
  is transferred to employees, who buy into probability of success and change their behavior
         Implementing Change Successfully

 Participation.
   -A fundamental way to build support for change is through participation.
  -Participation encourage commitment rather than mere compliance with change.
  -As participation increases, resistance to change tend to decrease.
  -Employees want to involved and participate from the beginning to protect themselves from
  changes surprises.
 Shared rewards.
   -Another way to build employee support for the change is to make sure that there are enough
  rewards for them in the change situation.
   -Rewards give employees a sense that progress accompanies a change and also tell them that
  we care about you and wants you as well as us benefit from this change.
   -Also it is desirable for a change to pay off as directly and as soon as possible.
 Employee security.
   -along with shared rewards, existing employee benefits need to be protected and that’s why
  security during a change is very important.
   -For this reason many employers guarantee workers protection from reduced earnings when
  new technology and methods are introduced, or some offer retraining and delay installation of
  labor-saving equipment.
   -Grievance systems give employees a feeling of security that benefits will be protected and
  differences about them fairly resolved.
         Implementing Change Successfully

 Communication and Education.
  -Communication is essential in gaining support for change.
  -When a change occur all of a group members should informed even it affects only a few
  of them.
  -Since the flow of information may be weakest at the time it is needed most, special effort
  is required to maintain it in times of change.
 Stimulating Employee Readiness.
   -Change is more likely to be accepted if the people affected by it recognize a need for it
  before it occurs.
   -This awareness can happen both naturally or it can be induced by management.
   -One of the more powerful way is when Workers discover for themselves that a situation
  requires improvement.
 Working with the Total System.
   -Resistance to change can be reduced by a broader understanding of employee attitudes
  and natural reactions to change.
   -It is essential for the managers to take a broader, system-oriented perspective on
  change to identify the complex relationship involved.
   -Organization development can be a useful method for achieving this objective.
 Understanding Organization Development

 Organization Development (OD) is the systematic
  application of behavioral science knowledge at various
  levels to bring about planned change.
 It helps managers recognize that organizations are
  systems with dynamic interpersonal relationships
  holding them together.
 General objective of OD is to change all parts of the
  organization in order to make it more humanly
  responsive, more effective, and more capable of
  organizational learning and self-renewal.
 It relies on a systems orientation, casual models, and a
  set of key assumptions to guide it.
 Understanding Organization Development

                      Foundations of OD
 Change is so abundant in modern society that
  organizations need all their parts working together in
  order to solve the problems that are brought about by
 Organization Development is a comprehensive program
  that is that is concerned with the interactions of various
  parts of the organization as they affect one another.
 One contribution of the systems orientation is to help
  managers view their organizational processes in terms of
  a model with three types of variable; Casual, Intervening,
  End-result variables .
               Understanding Organization Development

                   -Organization                           -Attitudes                            -Improved
Casual Variables

                                   Intervening Variables

                                                                          End-result Variables
                   Structure                               -Perceptions                          Productivity
                   -Controls                               -Motivation                           -Increased sales
                   -Policies                               -Skilled                              -Lower costs
                   -Training                               Behaviors                             -Customer
                   -Leadership                             -Teamwork                             Loyalty
                   behavior                                -Intergroup                           -Higher
                   -OD                                     Relations                             earnings
  Understanding Organization Development

 OD practitioners make a set of assumptions that guide their actions.
 Sometimes these assumptions are implicit and need to be examined to enable
   double-loop learning.
 OD assumptions need to be shared with managers and employees so that those
   groups will clearly understand the basis for the OD program.
 Common Organization development assumptions are as follow:
 Individuals
-People want to grow and mature.
-Employees have much to offer that is not now being used at work.
-Most employees desire the opportunity to contribute.
 Groups
-Groups and teams are critical to organizational success.
-Groups have powerful influence on individual behavior.
-The complex roles to be played in groups require skill development.
 Organization
-Excessive controls, policies, and rules are detrimental.
-Conflict can be functional if property channeled.
-individual and organizational goals can be compatible.
  Understanding Organization Development

               Characteristics of Organization Development
 A number of characteristics are implied in the definition of OD.
 Humanistic Values, which are positive beliefs about the potential
  and desire for growth among employees. To be effective and self-
  renewing an organization needs employees how tend to expand and
  improve their skills.
 Use of a Change Agent. OD programs generally use one or more of
  them, whose role is to stimulate, facilitate, and coordinate change. They
  can be either internal or external, but they are always outsider.
  Advantages of using external change agents are that they are more
  objective and have diverse experiences.
 Problem Solving. OD emphasizes the process of problem solving. By
  studding their own problem-solving process through action research,
  employees learn how to learn from their experiences, so they can solve
  their problem in future by they own. The cyclical process of using
  research to guide action, which generates new data as the basis for new
  actions, is know as action research or action science.
  Understanding Organization Development

 Experiential Learning. When participants learn by experiencing in the
  training environment the kinds of human problems they face on the job,
  the process is called experiential learning. This approach tends to produce
  more changed behavior than the traditional discussion and lecture alone.
 Interventions at Many Levels. An overall OD strategy is then
  developed with one or more interventions, which are structured activities
  designed to help individuals or groups improve their work effectiveness.
 Contingency Orientation. Organization development is usually
  described as contingency-oriented. Although some OD practitioners rely on
  just one or a few approaches, most OD people are flexible and pragmatic,
  selecting and adapting actions to fit assessed needs.
 Summary and application. The OD process applies behavioral science
  knowledge and strategies to improve an organization. It seeks to integrate
  into an effective unit the four elements that affect organizational behavior –
  people, structure, and environment .
 Understanding Organization Development

          the Organizational Development Process
 OD is a complex process. It may take a year or more to
  design and implement, and the process may continue
 Although there are many different approaches to OD, a
  typical complete program include most of the following
  steps :
  -Initial diagnosis
  -Data collection
  -Data feedback and confrontation
  -Action Planning and problem solving
  -Use of interventions
  -Evaluation and follow-up
     Understanding Organization Development

1.        Initial diagnosis. The consultant meets with top management to
          determine the nature of the firm’s problems, to develop the OD
          approaches most likely to be successful, and to ensure the full
          support of top management.
2.        Data collection. Surveys may be made to determine organizational
          climate and behavioral problems. There are some questions that
          consultant deal with their answer to develop information like:
     a)     What kinds of conditions contribute most of your job effectiveness?
     b)     What kinds of conditions interfere with your job effectiveness?
     c)     What would you most like to change in the way organization operates?

3.        Data feedback and confrontation. Work groups are assigned to
          review the data collected, to mediate areas of disagreement, and
          to establish priorities for change.
     Understanding Organization Development

4. Action planning and problem solving. Groups use the
   data to develop specific recommendations for change.
5. Use of interventions. Once the action planning is
   completed, the consultant helps the participants select
   and use appropriate OD interventions.
6. Evaluation and follow-up. The consultant helps the
   organization evaluate the results of its OD efforts and
   develop additional programs in areas where additional
   results are needed.
•  Since the steps in OD are part of a whole process, all of
   them need to be applied if a firm expects to gain the full
   benefits of OD.
 Understanding Organization Development

                  Benefits and Limitations of OD
 Organizational development is a useful organizational
  intervention. Although it has some benefits there some
  limitations as well.
 OD benefits in summary are as follows:
   -Change throughout organization
   -Greater motivation
  -Increased productivity
  -Better quality of work
  -Higher job satisfaction
  -Improved teamwork
  -Better resolution of conflict
  -Commitment to objectives
  -Increased willingness to change
  -Reduced absences
  -Lower turnover
  -Creation of learning individuals and groups
 Understanding Organization Development

 OD limitation in brief are as follows:
 -Major time requirement
 -Substantial expense
 -Delayed payoff period
 -Possible failure
 -Possible invasion of privacy
 -Possible psychological harm
 -Potential conformity
 -Emphasis on group processes rather than performance
 -Possible conceptual ambiguity
 -Difficulty in evaluation
 -Cultural incompatibility

 Finally, all managers should accept their roles as being
 responsible for OD, since organizational improvement
 is almost universally needed.

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