Chapter Fourteen

Managing Change

What is change?

Change is any alteration occurring in the environment that affects the ways in which employees must act. These changes may bePlanned or unplanned

Catastrophic or evolutionary
Positive or negative Strong or weak

Slow or rapid
Stimulated internally or externally

Types of Change The managerial role is to introduce continuous changes that bring a better environment to fit between the firm and its environment. Managers role to the change are two types: 1. Proactive Change: 2. Reactive Change:

Resistance to Change
Resistance to change consists of any employees behavior prevents to the implementation of a work change because it may threaten their needs for security, social interaction, status, competence or self-esteem. Other cause of resistance include: Organizational culture that overvalue criticism of new ideas

Employee who mouth support in public but undercut changes behind the scenes
Indecisive manager who suffer from analysis paralysis An emphasize on flashy proposals instead of follow through, A bunker mentality where employees have learned that organizational crisis dont often prove to be as significant as they are claimed to be, and hence they can be ignored

Reason for Resistance Employees may resist changes for three broad reasons:

First, Employees may feel uncomfortable with the nature of change itself.
It may violate their moral belief system,

They may believe the decision may technically incorrect

Employees may reluctant to exchange the comfort of certainty and familiarity for uncertainty Changes create the fear of unknown, threats to the job security

Reason for Resistance

Second, resistance arises from the method by which change is introduced. People may ill inform with the change as well as they reject an insensitive approach that did not involve in the change process.

Third, Resistance may happen because people think it will create the inequity because they may perceive themselves that someone will gain the benefit of the proposed change.

Types of Resistance There are three different types of resistance that work in a combination to produce each employees total attitude toward a change: 1. Logical Resistance: This is based on disagreement with the facts, rational reasoning, logic and science.

Types of Resistance to Change Among Employees

Logical, Rational Resistance

Time required to adjust
Extra effort to relearn Possibility of less desirable conditions Economic cost of change questioned technical feasibility of change

Types of Resistance 2. Psychological Resistance: This is based on emotions, sentiments and attitudes. Employees may fear the unknown, mistrust managements leadership or feel that their security and self esteem are threatened.

Types of Resistance to Change Among Employees

Psychological, Emotional Resistance

Fear of the unknown
Low tolerance of change Dislike of management or other change agent Lack of trust in others Need for security, desire for status quo

Types of Resistance 3. Sociological Resistance Sociological resistance is seen as a product of a challenge to group interests, norms, and values.

Types of Resistance to Change Among Employees

Sociological Factors, Group Interest

Political coalition
Opposing group values Parochial, narrow outlook Vested interests Desire to retain existing friendship

Possible Benefits of Resistance Examine the changes proposal

Identify specific problem areas to take corrective action

Better job of communicating for long run acceptance Gives information about the intensity of employee emotions

Stages in Change Behavioral awareness in managing change is a three step process:

1. Unfreezing means that old ideas and practices need to be cast aside so that new ones can be learned.
2. Changing is the process involves helping an employee think, reason, and perform in new ways. It can be a time of confusion, disorientation, overload, and despair. 3. Refreezing means that new practices has been integrated into actual practice

Methods of Change Changes is introduced within a group by a variety of methods: 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

Equilibrium of Change
Effectiveness Restraining forces
Employee Behavior

Supporting forces Ineffectiveness Time Point at which changes occur (Length of vertical line indicates strength of force)

Building Support for Change A wide variety of positive activities are used to build support: 1. Use of Group forces: The group is an instrument for bringing pressure on its members to change. 2. Providing a rationale for change: The effective leadership reinforces a climate of psychological change on the basis of the impersonal requirements of the situation- objective (performance-related)- rather than on personal ground. 3. Participation: encourages employees to discuss, to communicate, to make suggestions, and to become interested in change

A Model of Participation and Resistance to Change

I D E A L

Building Support for Change 4. Shared rewards: Another way to build employee support for change is to ensure sufficient rewards for employees in the change situation. If they see that a change brings them losses and no gains, they can hardly be enthusiastic about it. 5. Employee Security: Many employers guarantee workers protection from reduced earnings when new technology and methods are introduced. Others offer retraining and delay installation of labor-saving equipment until normal labor turnover can absorb displaced workers. Seniority rights, opportunities for advancement, and other benefits are safeguarded when a change is made

Building Support for Change

6. Communication and Education : All of employees need to be informed clearly and regularly about the change in order to feel secure and to maintain group cooperation. 7. Stimulating Employee Readiness: Closely related to communication help employees to become aware of the need for a change. This approach builds on the premise that change is more likely to be accepted if the people affected by it recognize a need for it before it occurs. This awareness may happen through sharing operating information with employees, as is done in open-book management programs.

8. Working with the Total System : Management's role is to help employees recognize the need for each change and to invite them to participate in it and gain from it.

UNDERSTANDING ORGANIZATIONAL DEVELOPMENT Organization development (OD) is the systematic application of behavioral science knowledge at various levels (group, inter-group, and total organization) to bring about planned change. The general objective of OD include a higher quality of work life, productivity, adaptability, and effectiveness.

FOUNDATION OF ORGANIZATIONAL DEVELOPMENT Systems Orientation: Organization development is a comprehensive program that is concerned with the interactions of various parts of the organization as they affect one another. OD is concerned with the interplay of structure, technology, and people. It is concerned with the behavior of employees in different groups, departments, and location.

Understanding Causality: One contribution of the systems orientation is to help managers view their organizational processes in terms of a model with three types of variables.
1. Causal, 2. Intervening, and 3. End-result variables

VARIABLES IN ORGANIZATIONAL DEVELOPMENT APPROACH

Causal Variables
Organizational Culture Control Policies Training Leadership Behavior OD

Incentive Variable
Attitudes Perceptions Motivation Skilled Behavior Teamwork Inter group relations

End-result Variables
Improved Productivity Increased Sales Lower Costs Customer loyalty Higher Earnings

Characteristics of Organization Development

Humanistic Values Use of a Change Agent Problem Solving Interventions at Many Levels Contingency Orientation Summary and Application

The organization Development Process

Diagnosis Evaluation and Follow-up Data Collection

OD Intervention

Data Feedback

Action Planning

Benefits of OD
Change throughout the 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 group

Limitations of OD
Major time requirements Substantial expenses Delayed pay-off 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.

End of the Chapter