CHAPTER 14

Managing Change and Organizational Development

14.1 Process of Change and Organizational Development

The management of change and the development of organizations have been traditionally called Organizational development (OD). Organizational development (OD) is a comprehensive approach to planned change that is aimed at improving the overall effectiveness of organization.

14.2 The Change Management and Innovation Process

Organizational change is considered as the adoption of new idea or behaviour by an organization. Organizational innovation is the adoption of an idea or behaviour that is new to the organizations industry, market or general environment.

14.3 Forces for Change

External forces: Forces outside the organization, e.g. demographic characteristics, technological advancements, market changes, social as well political pressures, conflicts, and sometimes natural and man-made disasters. Internal forces: Forces within the organization itself, e.g. need for higher employee satisfaction with work environment or physical effects such as productivity and work performance. It may result into changes in internal policies, strategies, plans and rules.

Major Forces of Change

External Forces External Forces Global competition and markets Global threats Global recession Technological change International economic integration Maturation of markets in developed countries Fall of capitalist, communist and socialist regimes Internal Forces Internal Forces Structure change due to mergers, joint ventures and consortia Strategic change Cultural change New business processes, new technologies and products Knowledge management Enterprise resource planning Quality programs Learning organizations

14.4 Models of Planned Change

Lewins Force Field Analysis Model

System Model of Change

Kotters Steps for Leading Organizational Change

Change Through Organizational Development

Lewins Force Field Analysis Model

Driving forces: Forces that direct behaviour away from the status quo. Restraining forces: Forces that hinder behaviour away from the status quo. Unfreezing: Change efforts to overcome the pressures of both individual resistance and group conformity. Refreezing: Stabilizes a change intervention by balancing driving and restraining forces.

A System Model of Change

According to the system model, change occurring within an organization will have a direct effect on the organization (Stewart, 2006).

Kotters Steps for Leading Organizational Change

Phase 1 Unfreezing Change leaders task: Create a need for change This is done by: establishing a good relationship with those involved helping others to realize the need to change existing behaviour as they are not effective minimizing resistance to change

Kotters Steps for Leading Organizational Change (cont.)

Phase 2 Changing

Change leaders task: Implement change This is done by: identifying new and more effective behaviours

choosing appropriate changes in tasks, people and other factors significant to the changes we are proposing
taking appropriate action to implement changes

Kotters Steps for Leading Organizational Change

Phase 3 Refreezing Change leaders task: Stabilizing change This is done by: creating acceptance and continuity for the new behaviours providing necessary resource support using positive reinforcement to encourage positive outcome

Change Through Organizational Development

Organizational development (OD) is much broader in orientation and constitutes a set of techniques used to implement a planned change through increasing organizations ability to improve itself and to make it more effective. Four characteristics of OD:

Profound change: A fundamental change resulting in lasting improvements.

Change Through Organizational Development

Value loaded: Change aiming at satisfying customers needs and enhanced organizations products and services. Diagnosis cycle: An OD approach to diagnose organizational problems, prescribe and implement interventions, and monitor progress. Process oriented: OD focus on the form and not on the details such as the content of the dealings.

14.5 Research and Practical Implications

Understanding and Managing Resistance to Change

Channelling Change

Understanding and Managing Resistance to Change

Why people resist change: Individuals predisposition toward change Surprise and fear of the unknown Climate of mistrust Fear of failure Loss of status and/or job security Peer pressure Past success Lack of reward system

Channeling Change
Communication

Learning
Employee Involvement Stress Management

Negotiation
Coercion

14.6 Learning Organizations

Learning organization concentrates on methodologies for creating change to improve the learning process. Organizational learning is defined as a process of increasing an organizations ability to take effective action.

Organizational Learning
Focus The Concept of Organizational Learning Practices

Individual learning

Organizational learning occurs when Staff training and individuals within an organization experience a developement problematic situation and inquire into it on the organizational behalf (Argyris and Schon 1996) Organizational learning is the process where by organizations understand and manage their experiences (Glynn et al., 1992)capability Enhancement of information processing and problem solving

Process o system

Focus

The Concept of Organizational Learning

Practices
Creation and maintenance of learning culture: collaborative team working, employee empowerment and involvement

Culture or metaphor A learning organization should be viewed as a metaphur rather than a distinct type of structure, whose employees learn conscious communal processes for continually generating, retaining and leveraging individual and collective learning ta improve performance of the organizational system in ways important to all stakeholders and by monitoring and improving performance (Drew and Smith, 1995)

Focus Knowledge management

The Concept of Organizational Learning Organizational learning is the changes in the stale of knowledge (Lyles, l99i 199E). It involves knowledge acquisition, dissemination, refinement creation and implementation: the ability to acquire diverse information and to share common understanding so that this knowledge can he exploited (Fiol, 1994) and the ability to develop insights, knowledge, and to associate among past and future activities (Fiol and Lyles, 1985)

Practices Facilitation of interaction and strengthening of knowledge base

Focus Continuous improvement

The Concept of Organizational Learning

Practices

A learning organization should consciously and The adoption of intentionally devote to the facilitation of individual TQM practices learning in order to continuously transform the entire organization and its context (Pedler et al., 1991)