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Organizational Change & ConsultancyWEEK 1 (Introduction Organizational Change) Process / plan and establish programs / experiment and evolve / plan for
spontaneity
Reward systems / motivate through financial incentives / motivate through
What is organizational change? commitment: use pay as fair exchange / use incentives to reinforce change but not to
Organizational change = movement of an organization away from its present state drive it
and toward some desired future state to increase its effectiveness (successfully adapt Use of consultants / consultants analyse problems and shape solutions /
to industry change); not about personal change; not about creating new organizations; consultants support management in shaping their own solutions / consultants are
focus on what is happening inside existing organizations and their environment expert resources who empower employees
Organization = social structure (regular activities, relationships, and interactions),
participants (employees, managers, CEO), goals (statements about desired end Episodic and continuous change Weick & Quinn (1999)
results), technology (means used to process raw materials), and environment Episodic change: inertial, change is (1) infrequent, (2) discontinuous, and (3)
(organizations as an open system: inputs (materials and resources => intentional (macro, distant, global), short-term – unfreeze/transition/refreeze
formal/informal subsystems => outputs (goal achievement and employee Continuous change: emergent, change is (1) constant, (2) evolving, and (3)
satisfaction) cumulative (micro, close, local), long-term – freeze/rebalance/unfreeze
Environmental triggers for change (PESTLE): political factors, economic factors,
socio-cultural factors, technological factors, (legal factors) and (ecological factors) Implementing action
Organizational strategy = the direction and scope of an organization over the Top-down/revolutionary: decide on and implement by managers at a high-level in
longer term: ideally it matches its resources to the changing environment, and in organization; result of radical restructuring and reengineering; more resistance
particular its markets, customers, or clients so as to meet stakeholder expectations Bottom-up/evolutionary: implemented by employees at low levels and rises over
(focuses on both the internal resource capability and the external operating time; all levels involved in change process; gradual; less resistance
environment)
Organizational Life Cycle: importance of policies to organizational development: (1) Approaches to change – OD perspective
introduction (flexibility), (2) growth (more formalization), (3) maturity (cost Planned change = a change intervention that alters key organizational target
control), and (4) decline (downsizing)? – inverted U development on stability variables which alter individual behaviours which impact organizational outcomes
How to survive? Successfully follow industry change & successful adaptation in => is intentional and goal-oriented
direction of change Process: management intervention => change in (1) organizational setting, (2) social
Organizational agility: built-in capacity to flex and adapt to external changes; factors, and (3) technology => individual change, (1) cognitive, and (2) behavioural
enables change as matter of course => organizational outcomes, (1) performance, and (2) individual development
The problem… organizations need to change, but are not always successful; change
=> either-or proposition (economic versus organizational approach) Contingency model of change Dunphy & Stace (1988)
Two contrasting theories are compared: (1) incremental (small, logic steps), and (2)
Theories of change Beer & Nohria (2000) transformational (quick) theses (this difference lies in whether organizations are
Theory E: based on economic value, ‘hard approach’, economic incentives, lay-offs, effecting change on a continuous or on a discontinuous basis)
restructuring, problem = distancing from employees (US) Two contrasting modes of change are compared: (1) participation (takes time (which
Theory O: based on organizational capability, ‘soft approach’, developing corporate is not always given), no agreement between different stakeholders, ‘often does not
culture, building trust, commitment, problem = postpone though decisions (EU/Asia) lead to the best decision’), and (2) coercion (sometimes more effective to impose a
solution by a stronger party (management))
Dimensions of Change / Theory E / Theory O / Theories E and O combined
Goals / maximize shareholder value / develop organizational capabilities / explicitly A typology of change strategies
embrace the paradox between economic value and organizational capability Incremental change strategies Transformative change strategies
Leadership / manage change from the top down / encourage participation from the Collaborative model Type 1 (participative evolution): Type 2 (charismatic transformation):
bottom up / set direction from the top and engage the people bellow minor adjustment, time is available, little time for extensive participation,
Focus / emphasize structure and systems / build up corporate culture: employees’ key interest groups favour change support for radical change
behaviour and attitudes / focus simultaneously on the hard (structure and systems) Coercive models Type 3 (forced evolution): minor Type 4 (dictatorial transformation):
and the soft (corporate culture) adjustment, time is available, key out of fit, no time, no support
interest groups oppose change
, Organizational Change & Consultancy
WEEK 2 (General Principles of Change Management) implementing it, and (4) the stake involved (e.g. the presence or absence of a crisis,
the consequences of resistance and lack of change)
How to implement change? Kotter & Rathgeber (2005): eight-step process of success Best is to select a point as far to the right of the continuum as possible, both for
1. Increase urgency: raise a feeling of urgency so that people say “let’s go”, making a economic and social reasons
change effort well positioned to launch (set the stage)
2. Build a guiding team: help form a group that has the capability – in membership Evolving interpretations of change Isabella (1990)
and method of operating – to guide a very difficult change process (set the stage) Central aim is to generate (grounded) theory from data collected during the study (40
3. Get the vision and strategy right: create the right vision and strategies to guide interviews with managers, how they construe events over time and how those
action in all of the remaining stages of change (decide what to do) viewpoints are linked to the process of change)
4. Communicate for buy-in: communicate change visions and strategies effectively so Implication: resistance to change is not an obstacle to overcome, but inherent elements
as to create both understanding and gut-level buy-in (make it happen) of the cognitive transition that occurs during change
5. Empower action: deal effectively with obstacles that block action, especially
disempowering bosses, lack of information, the wrong performance measurement and
reward systems, and lack of self-confidence (make it happen)
6. Create short-term wins: produce sufficient short-term wins, sufficiently fast, to
energize the change helpers, enlighten the pessimists, defuse the cynics, and build
momentum for the effort (make it happen)
7. Don’t let up: continue with wave after wave of change, not stopping until the vision
is a reality, despite seemingly intractable problems (make it happen)
8. Make change stick: be sure the changes are embedded in the very culture of the
organization so that the new way of operating will stick (make it stick)
Force field model of change Kotter & Schlesinger (1979, reprint 2008)
Before & After change: driving forces and restraining forces in balance
During change: mainly driving forces, with a view restraining forces
=> while getting from the present state to the desired state (important to refreeze
again, so you have to rebalance the two forces)
Restraining force: resistance: parochial self-interest (loose something of value),
misunderstanding and lack of trust (communication), different assessments, low
tolerance for change, peer group pressure, fear of the unknown, habit, etc…
Effects of PCMH on employee attitudes and
Approach to overcome resistance to change (increasing potency (force) of approach): turnover Bordia et al (2011), 1: measure, 2:
(1) communication (lack info), (2) participation (initiators lack info), (3) facilitation What to do? Be aware of past; effective
(fear), (4) negotiation (power to resist), (5) manipulation, and (6) coercion (speed) communication practices (reduce cynicism
Potency of force should be contingent on the level/degree of resistance occurring and enhance trust), Philippines
Determinants of which strategies to use (change as a continuum) Managing uncertainty during organizational
Rapid changes/implementation: clearly planned, little involvement of others, attempt change DiFonzo & Bordia (1998)
to overcome resistance ó Slow changes: not clearly planned initially, lots of Uncertainty reduction theory:
involvement of others, attempt to minimize resistance communication reduces uncertainty (or you
Key situational variables: (1) the amount ant type of resistance anticipated, (2) the can fill in the gaps with rumours; making up
position of the change initiators versus the resistors (in terms of power, trust, etc.), stories to make sense of the situation)
(3) the locus of relevant data for designing the change and of needed energy for Paradox: employees want more information, just on the moments managers can’t
give it to them (solution? being clear about the uncertainty; announce early, even
incomplete; establish information time-line; trust-facilitating actions; be open)
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