ORGANIZATIONAL CHANGE Orga Organi niza zati tion onal al chan change ge is abou aboutt revi review ewin ing g and and modif odifyi ying ng manag anagem emen entt struct structure uress and busine business ss process processes. es. Small Small busine businesse ssess must must adapt adapt to surviv survivee agains againstt bigger bigger compet competito itors rs and grow grow. Howeve However, r, success success should should not lead lead to complacency. To stay a step ahead of the competition, companies need to look for ways to do things more efficiently and cost effectively. There is no need to fear change. Instead, small businesses should embrace change as a way to lay the foundations for enduring success
DRIVERS compa company ny!s !s chang changee driv drivers ers incl include ude the the compe competi titi tive ve envi enviro ronm nmen ent, t, new new technologies, consumer demand, economic conditions and government policy actions. Information technologies have changed how businesses operate and interact with one another. "ew business models, such as outsourcing and virtual collaboration, would not be possible without high#speed communications and the Interne Internet. t. $overn $overnmen mentt regula regulatio tions ns also also force force business businesses es to adapt, adapt, as do changing consumer preferences. %ecessions usually lead to layoffs, which may re&u re&uir iree rest restru ruct ctur urin ing, g, and and merg merger erss and and ac&u ac&uis isit itio ions ns lead lead to chan change gess in organizational culture.
SIGNIFICANCE 'ompanies that refuse to embrace change may disappear. However, change is difficult because it involves modifying people!s behavior. %esistance may come from employees who are generally skeptical of change initiatives, initiatives, especially especially if they they have have live lived d thro throug ugh h botch botched ed impl implem emen enta tati tion onss in the the past past.. Succ Success essfu full orga organi niza zati tion onal al chan change ge re&u re&uir ires es top top mana manage geme ment nt lead leader ersh ship ip and and a clea clear r e(planation of how the contemplated changes can help employees do their )obs more efficiently. efficiently.
IMPLEMENTATION Organizat Organizational ional change typically typically consists of three stages* establishing establishing the need, impl implem ement entat atio ion n and and moni monito tori ring ng.. To esta establ blis ish h a need need for for chan change ge,, seni senior or management could articulate where the company wants to be in five to + years and what it needs to do to get there. -or e(ample, a saturated local market may force a company to consider international e(pansion. The second stage involves changing structures and processes, such as reducing the number of management layers, combining business units, reassigning management, reducing employee headcount and giving division managers more decision#making fle(ibility. The
final stage involves monitoring the results from the organizational changes and making appropriate ad)ustments.
Issues 'hange efforts fail for different reasons, including lack of focus and inade&uate communication. 'hange initiatives that try to do too much tend to fail. It is better to succeed with small change pro)ects, such as improving the response time in customer service centers, and then building on this success to implement complicated changes. eadership should talk to employees in one#on#one and group settings to answer &uestions, e(change ideas and generally alleviate concerns.
Types of Change
/very day for the past 0 years, %obert went to work at 'heapo Toys in the marketing department. He loved his )ob and was proud of all of his accomplishments. One day, on his way into work, he was greeted by a human resource manager. The manager took %obert aside and informed him that the company was having a corporate#wide layoff. %obert was laid off immediately and given a severance package. He was in total disbelief1 'heapo Toys! layoff was a huge change for the organization, and it occurred due to a number of factors. 2lanned and unplanned are the two types of changes that can occur with an organization. 2lanned change occurs when deliberate decisions are made in an organization, while unplanned change is a result of unforeseen occurrences. Ironically, the layoff was a planned change for 'heapo Toys, but an unplanned change for %obert. /(ternal factors and internal factors can cause both of these types of changes within a company. et!s take a look at specific e(amples of each with 'heapo Toys as our backdrop. External Forces of Change
n e(ternal force of change occurs from an outside influence on the organization. There are four main e(ternal forces of change* •
$lobalization
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3orkforce 4iversity
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/thical 5ehavior
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Technology
'heapo Toys! original employees consisted of merican employees who operated at two /ast 'oast locations. 4ue to the globalization of the economy, the company was forced into many changes over the last 6 years. 'heapo Toys! competitors did not )ust consist of merican companies but foreign as well. The kid population was declining in the 7.S., so 'heapo Toys had to look elsewhere for sales. big change for 'heapo Toys was building factories and selling overseas. The company now operates in over + different countries, ranging from -rance, ondon, 8apan and India. diverse workforce has also created a huge change for the company. 3hen 'heapo Toys began years ago, most of their workforce consisted of men. "ow, females are represented e&ually and all ethnicities e(ist within their various international locations. The third e(ternal force of change is society!s e(pectation of ethical behavior. 'ompanies are now held to a higher standard of ethics. -or e(ample, companies have a social responsibility to ensure that their products do not damage the environment during the production process. 'ompanies also have to conduct themselves ethically when it comes to their finances. 'heapo Toys has had to make huge changes in how they design, manufacture and sell their toys. ll of their toys now have to be made with plastics made of safe chemicals for kids. In addition, the company has had to hire additional &uality engineers to make sure that the products are designed for all of the changed safety standards. The last e(ternal force that creates change in organizations is technology. 'ompanies constantly have to change every aspect of their work life to ensure that they remain competitive. -or e(ample, 'heapo Toys )ust completed a three# day sales training session. ll of their sales reps! laptops were traded for tablets. The tablets allow for easy presentations, traceability and sales order processing. 'ompanies need to stay ahead of the technological curve or they will be left behind. Only +9 years ago, 'heapo Toys relied on )ust voicemail and emails for their sales reps! daily workload. There are also numerous internal forces of change that companies must monitor. Internal Forces of Change
n internal force of change occurs from internal sources, such as employees or company performance. These types include*
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2oor -inancial 2erformance
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Internal 'risis :such as a strike;
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'hanges in /mployee /(pectations
Unplanned Versus Planned Change 7nplanned change usually occurs because of a ma)or, sudden surprise to the organization, which causes its members to respond in a highly reactive and disorganized fashion. 7nplanned change might occur when the 'hief /(ecutive Officer suddenly leaves the organization, significant public relations problems occur, poor product performance &uickly results in loss of customers, or other disruptive situations arise. 2lanned change occurs when leaders in the organization recognize the need for a ma)or change and proactively organize a plan to accomplish the change. 2lanned change occurs with successful implementation of a Strategic 2lan, plan for reorganization, or other implementation of a change of this magnitude. "ote that planned change, even though based on a proactive and well#done plan, often does not occur in a highly organized fashion. Instead, planned change tends to occur in more of a chaotic and disruptive fashion than e(pected by participants.
CHANGE AGENT •
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Is anyone who has the skill and power to stimulate, facilitate, and coordinate the change effort. 'hange agents may be either e(ternal or internal.
ROLES OF CHANGE AGENT +. 'onsulting s a consultant, the manager places employees in touch with data from outside the organization or helping organization members to generate data from within the organization. The overall purpose is to help employees find solutions to problems through analysis of valid data. 6. Training
To help organization members derive implications for action from the present data and to provide organization members with a new set of skills
0. %esearch -inally, and closely associated with the previous role, the manager may assume the role of researcher. s researcher, the manager may train organization members in the skills needed for valid evaluation of the effectiveness of action plans that have been implemented.
Tpes O! Change Agen" +. Outside 2ressure Type These change agents work to change systems from outside the organization. They are not members of the company they are trying to change and use various pressure tactics such as mass demonstrations, civil disobedience, and violence to accomplish their ob)ectives.
6. 2eople#'hange#Technology Type The focus of activity for this type of change agent is the individual. The change agent may be concerned with employee morale and motivation, including absenteeism, turnover, and the &uality of work performed. The methods used include )ob enrichment, goal setting, and behavior modification.
0. nalysis#for#the#Top Type 'hanging the organizational structure so as to improve output and efficiency. The change agent uses operations research, systems analysis, policy studies, and other forms of analytical approaches to change the organization!s structure or technology =. Organization#4evelopment Type
-ocus their attention on internal processes such as intergroup relations, communication, and decision making. Their intervention strategy is often called a cultural change approach, because they thoroughly analyze the culture of the targeted organization.
S#ILLS OF CHANGE AGENT •
/mpathy
This is the skill of understanding the feelings of another person. /mpathy leads to improved communication and understanding between the change agent and organization >embers. •
inkage
This refers to the e(tent to which the change agent and organization members are tied together in collaborative activities. The greater the collaborative involvement :the tighter the linkage;, the more likely the change agent will be successful. •
2ro(imity
This refers to the physical and psychological closeness of the change agent and organization members. 2ro(imity has relevance to open door policy and the visibility of the change agent during working hours. •
Structuring
This factor refers to the ability of the change agent and organization members to clearly plan and organize their activities concerning the change effort. clearly designed change effort is more likely to be understood and implemented by the employees. •
Openness
This characteristic refers to the degree to which the change agent and organization members are willing to hear, respond to, and be influenced by one another. •
%eward
This refers to the nature and variety of potential positive outcomes of the change effort that might accrue to the change agent and organization members.
'hange efforts should be designed so that the employees are rewarded for changing.
RESISTANCE TO CHANGE +. Individual %esistance 6. Organizational %esistance
Ind$%$dual Res$s"an&e Individual sources of resistance to change reside in basic human characteristics such as perceptions, personalities ? needs. %easons of Individual %esistance /conomic %eason @The economic reason of resistance to change usually focus on* •
-ear of technological unemployment.
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-ear of demotion ? thus reduced pay.
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-ear of reduced work hours ? conse&uently less pay.
-ear of oss# 3hen a change is impending, some employees may fear losing their )obs, status particularly when an advanced technology is introduced. Security @ people with a high need for security are likely to resist change because it threatens their feeling of safety. Status &uo# change may pose disturbance to the e(isting comforts of status &uo. 2eer 2ressure# individual employees may be prepared to accept change but refuse to accept it for the sake of the group. 4isruption of Interpersonal %elation# employees may resist change that threatens to limit meaningful interpersonal relationships on the )ob. Social 4isplacement# introduction of change often results in disturbance of the e(isting social relationships. 'hange may also result in breaking up of work groups.
Organ$'a"$(nal Res$s"an&e Individual sources of resistance to change reside in basic human characteristics such as perceptions, personalities ? needs.
Reas(ns (! Organ$'a"$(nal Res$s"an&e %esource constraint# resources are ma)or constraints for many organizations. The necessary financial , material ? human resources may not be available to the organization to make the needed changes. Structural inertia @ some organizational structures have in#built mechanism for resistance to change. /(ample* in bureaucratic structure where )obs are narrowly defined ? lines of authority are clearly spelled out, change would be difficult. Sunk cost # Some organization invest a huge amount of capital in fi(ed assets. If an organization wishes to introduce change, then difficulty arise because of the sunk cost Threat to e(pertise# 'hange in organizational pattern may threaten the e(pertise of specialized groups. Therefore, specialists usually resist change. 2olitics# Organizational changes may also shift the e(isting balance of power in an organization. Individuals or groups who hold power under the current arrangement may fear losing these political advantages.
MANAGING RESISTANCE TO CHANGE Edu&a"$(n ) C(**un$&a"$(n 'ommunication about impending change is essential if employees are to ad)ust effectively. The details of change should be provided ? its potential conse&uences. /ducating employees on new work procedures is often helpful.
Par"$&$pa"$(n It is difficult for individuals to resist a change decision in which they participated. 2rior to making a change, those opposed can be brought into the decision process.
E*pa"h ) Supp(r"
ctive listening is an e(cellent tool for identifying the reasons behind the resistance. n e(pression of concerns about the change can provide important feedback that managers can use to improve the change process.
Neg("$a"$(n nother way to deal with resistance to change is to e(change something of value for reduction in resistance.
Man$pula"$(n ) C((p"a"$(n It refers to covert influence attempts. Twisting ? distorting facts to make them appear more attractive, withholding undesirable information ? creating false rumors to get employees to accept a change .
C(er&$(n It is the application of direct threats or force on the resisters. They essentially force people to accept a change by e(plicitly or implicitly threatening them with the loss of their )obs, promotion possibilities ? transferring them.
