1 Initiating Change & Interaction of Context & Chnage

8/14/2019 1 Initiating Change & Interaction of Context & Chnage

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Organization Change

Learning outcomes


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Learning outcome

Factors initiating changeThe meaning of organization changeThe interaction between change and contextAnalyze the process managers should use inevaluating the need for changeDescribe the process of organizational

changeUnderstand the comprehensiveorganizational change approaches


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Learning outcome

Understand the change problem and itssolution

The eight-stage process

Implication of organization for the future


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Organization ChangeSession 1

Initiating Change

The interaction of context and change


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Organization Change: Anintroduction

Managers initiate or experience change soregularly

Many organizations see change as thenormal state of affairs

They want people to see change as a norm


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An introduction

The external environment is the main source of change such as:

PoliticalEconomic These development lead to changeSocial

Technical


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An introductionPersuade managers to change the way theyoperate to meet these new expectations

Numerous research has found that themajor reasons for organization changeswere a need to create:

Closer customer relations

Significant financial pressure to improveperformanceIntensified competition


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Introduction

Most accept the need for change but manyare critical of the way their organizationintroduce it.

Managers will still experience great difficultyin implementing major organizational

changes


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1 Initiating Change

Initiating change

External

context

Perceivedperformance gap

Internalcontext


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1.1 The external contextThe external context ( the forces for change ) consists of elements beyond the organization such as competitors,or the wider PESTEL factors (we will look into detailslater)

This will place new demand for the organizations

Eg- the spread of globalizationRapid development of information and communication

technologiesDeregulation and privatization of former statebusinesses

Transforming the competitive landscape of the firms operate.


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The external context

They face competition from unexpected quartersThreatening their prosperity or even their survival

(eg-BA and KLM or MAS have to respond to the pressure of newcompetition from low cost airlines )

Legal/Political developmentsEconomics conditionsSocietal and demographic shiftsTechnology developmentsCompetitors actions


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1.2 Perceived performancegap

A perceived performance gap arises when peoplebelieve that the actual performance of a unit or business is out of line with the level they desire.

Fall below customers expectation is a performancegap.

Hence, cumulatively this will lead to other performance gapemerging such as revenue from sales being below the

level needed to secure further resources.If uncorrected this would eventually cause the business tofail.


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Perceived performance gapIn a very uncertain business world the scope for logterm planning is seriously limited.

Successful businesses are likely to be thosedevelop high degree of strategic and organizational

flexibilityMaintaining efficiency and stable process.Theres a need for performance imperatives(Prastacos 2002).Performance Imperatives are aspects of performance which are especially important for anorganization to do well, such as flexibility andinnovation.


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Perceived performance gap

Other imperatives identified by Prastacos is:

innovation the ability to generate a variety of successful new products or services (embeddingtechnological innovation)

And to continuously innovate in all aspects of thebusiness.


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1.3 The internal context (alsoforces for change)

Meeting performance expectations dependon the organization the internal context of management.

The internal context consists of elementswithin the organization such as its

technology, structure or business processes.


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The internal context

The set of elements within an organizationthat shape behavior.

Change begins to happen when:

Sufficient influential people believe, for example,that outdated technology or a confusing structureis causing a performance by inhibiting flexibility or innovation.


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The internal context

They notice external or internal events andinterpret them as being a threat to theperformance that influential stakeholders

expect.

This interpretation and their implicit theory of

change, encourages them to propose achange to one or more aspects of theorganization.


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Internal contextThey then persuade enough people that the matter

is serious enough to earn a place on themanagement agenda.

The need for change is a subjective matter whatsome see as urgent and others will leave until later.

People can affect that process by managing

external information magnifying customer complaints to make the case for change or minimizing them if they wish to avoid change.


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Internal contextWhatever the underlying motivations, organization change is a

deliberate attempt to improve organizational performance bychanging one or more aspects of the organization, such as itstechnology, structure or business processes.

A change means that there will be also to have an implications in

other areas.

Once they perceived a need for change, those promoting it setup a formal or informal change process and then implement inrelevant organization units.

How well people manage the steps in this process determinesthe effect on the performance gap which in turn feeds back to thecontext of the organization.


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Internal contextThe two most important internal forces for change are there:

Managerial decisionsHave certain authority to make changes the higher up in anorganization, the more power they have in making changes.Most critical leadership issues facing managers is accuratelyevaluating change.Decision can affect status quo in major ways.

Employee preferences and suggestionsAre excellent sources of innovative suggestion for change.Some companies consider best methods for discovering new

ways to cut costs and improved procedures.Employees cab be a stimulus for change that frequently cannotor should not ignored.


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2. The interaction of context andchange

2.1 People introduce change to alterthe contextManagement attempts to change elements of its context to encourage behaviors thatsupport its objectives (this is to close the

performance gap)

eg, when tesco introduced online shopping,

management needed to change technology,structure, people and business processes toenabled staff to deliver the new service.


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People introduce change to alter thecontext

People do not necessarily accept the newarrangement without questions.

They may themselves make further changes tothe context.

As people begin to work on new changes or circumstances with new technology or new structure,

they may make small adjustments to the original plan.

As they use a new information system, they decidewhich aspect to ignore, use or adapt.


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People introduce change to alter thecontextAs people become used to working with the

new system their behaviors become routineand taken for granted.

They become part of the context that createdinformally.These new contextual elements may add to, or replace, the context that those formallyresponsible for planning the change created

The interaction between people and contextcontinues into the future.


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The interaction of context and change2.2 The context affects the ability to

changeThe culture shares values, ideals and beliefs that hold a unit together, has stronginfluence on how people view a change.

Cultures develop as members work together todeal with problems and in so doing sharedassumptions about external world and their internal processes .

Likely to resist one that conflicts with or challenges theculture.


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The context affects the ability tochange

The prevailing culture is a powerful influenceon the success or failure of change.

Some may support and encourage change andsome may resist


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Some companies culture encourage change.Some encourage people to resist change or least cautious towards.

These values and beliefs are hard to changeThey are crucial factor in determining the

organizations respond to change.


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The distribution of power also affectsreceptiveness to change.

Change threatens the status quo and is likelyto be resisted by stakeholders who benefitsfrom the prevailing arrangement.


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2.3 The context has a history andseveral levels

The present context is the result of past decision and is usually focused on one of several levels of context.

Both features influence the process of change.

Management seeks to implement changeagainst a background of past decisions.

Past decisions shaped the organization context asit is today and its ability to change.


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The context has a history and severallevels

Beliefs about the future also affects howpeople react to change.

Optimists are more receptive and open tochange than those who feel threatened andvulnerable.


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End of lecture

1 Initiating Change & Interaction of Context & Chnage

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