Chapter 12

Organizational Change and Learning

Learning Goals

1. Describe four types of organizational change

2. Explain the planning process for organizationalchange

3. Identify four methods of organizational change

4. Describe how innovation relates to organizationalchange

5. Discuss how learning organizations foster change

Organizational Change

• Organizational change refers to any transformation in the design or functioning of an organization.

(adapted from Figure 12.1)

Transitioning RefreezingUnfreezingUnfreezing

Radical change: organizations make majorinnovations in the ways they do business

Stages of Radical Change*

Incremental change: ongoing process of evolution over time, during which many small adjustments occur routinely

Tempered radicals: people who strive to create radical change but do so by prodding an organization to make many small incremental changes

Total quality management: relies heavily on continuous incremental change

1. Earn credibility first, and then leverage it

2. Gather and accept support from others along the way

3. Develop grass roots initiatives and be willing to share the stage with supporters

4. Chip away at standard operating procedures little by little over time until you achieve real success

5. Accept small changes as making progress

6. Develop your ability to compromise as well as persuade

7. Be persistent

Reactive change: occurs when an organization is forced to adapt or innovate in response to some event in the external or internal environment

Anticipatory change: occurs when managers make organizational modifications based on forecasts of upcoming events or early in the cycle of a new trend

Types of Organizational Change(adapted from Figure 12.2)

RadicalAnticipatory

Change

IncrementalReactiveChange

RadicalReactiveChange

Deg

ree

of C

han

ge

Before Major Shifts inthe Environment

After Major Shifts inthe Environment

Major Transformation

SmallAdjustments Incremental

AnticipatoryChange

Timing of Change

The Process of Organizational Change(adapted from Figure 12.3)

6. AnticipateResistance andTake Action toReduce

6. AnticipateResistance andTake Action toReduce

7. Monitor the Changes

7. Monitor the Changes

1. Assess the Environment1. Assess the Environment

5. Develop andImplement anAction Plan

5. Develop andImplement anAction Plan

2. Determine thePerformanceGap

2. Determine thePerformanceGap

3. DiagnoseOrganizationalProblems

3. DiagnoseOrganizationalProblems

4. Articulate and Communicate a Vision for the Future

4. Articulate and Communicate a Vision for the Future

Start

Fear Vested interests

Misunderstandings Cynicism

Technological Change Organizational Redesign

Job Redesign OrganizationalDevelopment

Technological Change

Involves incremental adjustments or radical innovations that affect workflows, production methods, materials, and information systems

Many new forms of informationtechnology (IT)

IT is enabling real time and any time links between suppliers, producers, distributors, and customers

Involves incremental adjustments or radical innovations focused on realigning departments, changing who makes decisions, and merging or reorganizing departments that sell the organization’s products

Two basic approachesChange organization’s structure, such as from functional

to product departmentalizationChange organization’s processes, such as how customer

complaints are handled

Restructuring: reconfiguring the distribution of authority, responsibility, and control in an organization

Reengineering: radical redesigning of an organization’s functions and business processes

Job Redesign

Modifying specific employee job responsibilities and tasks

Job simplification: the scientific analysis of tasks

Focus on efficient workflow process for employees in a particular job

Frequent use of time and motion studies

Job enrichment: changing job specifications to broaden and add challenge to the tasks required and to increase productivity

Increases interesting and challenging work Increases autonomy and personal freedom

A planned, long-range behavioral science strategy for understanding, changing, and developing an organization’s workforce in order to improve its effectiveness

Focus group discussion: a carefully planned discussion among several employees about a specific topic orissue of interest, which is led by a trained facilitator

Facilitator explains the topic to be discussed, the role of the scribe, and how the organization will use the results of the focus group discussion

Participants come prepared to discuss a specific topic. If confidentiality is a concern, participants are chosen from different units of the organization, not the same work group

Scribe: the person who takes notes about what is said, but not who says it

Facilitator explains the topic to be discussed, the role of the scribe, and how the organization will use the results of the focus group discussion

Participants come prepared to discuss a specific topic. If confidentiality is a concern, participants are chosen from different units of the organization, not the same work group

Scribe: the person who takes notes about what is said, but not who says it

How to Set Up a Focus Group Discussion(adapted from Figure 12.5)

The facilitator explains the topic to be discussed,the role of the scribe, and how the organizationwill use the results of the focus group discussion.

The scribe takes notes about what is said, but not who says it.

The participants come prepared to discuss a specific topic.If confidentiality is a concern, participants are chosen fromdifferent units of the organization, not the same work group.

Organization Development (OD) (cont’d)

Survey feedback: a process that allows managers and employees to report their thoughts and feelings about the organization and to learn about how others think and feel about their own behaviors

Feedback obtained by means of a questionnaire developed and distributed to employees, who complete it and turn it in anonymously

Content of questionnaire depends on areas of most concern

Feedback obtained by means of a questionnaire developed and distributed to employees, who complete it and turn it in anonymously

Content of questionnaire depends on areas of most concern Questionnaire

Organization Development (OD) (cont’d)

Team building: process that develops the ability of team members to collaborate effectively so they can perform the tasks assigned to them

Often emphasizes developing a group climate that is safe

Openness can be risky, but promotes creativity and effective problem solving

Often emphasizes developing a group climate that is safe

Openness can be risky, but promotes creativity and effective problem solving

Major organizational change is a complex process

Typically involves a combination of methods

Example: purchasing and installing enterprise resource planning [ERP] software

Role of Innovation in OrganizationalChange

Role of Innovation in OrganizationalChange

Innovation: the discovery, identification and diagnosis of unusual and ambiguous problems and/or the development of unique or creative solutions

Innovation: the discovery, identification and diagnosis of unusual and ambiguous problems and/or the development of unique or creative solutions

Strategic importance of innovation Strategic importance of innovation

Critical in dynamic, changing environments

Organizations can rest on prior success

Complacency is deadly

Critical in dynamic, changing environments

Organizations can rest on prior success

Complacency is deadly

Technical innovation: creation of new goods and services

Process innovation: creating a new way of producing, selling, and/or distributing an existing good or service

Administrative innovation: creating a new organization design that better supports the creation, production, and delivery of goods and services

FosterWorkforce Resilience

Provide aSupport System for

Innovation

Develop a Learning Environment andLearning Orientation among Employees

Learning organization: has both the drive and the capabilities to modify or transform itself and improve its performance continuously

Learning organization: has both the drive and the capabilities to modify or transform itself and improve its performance continuously

Learns from past experiences Learns from customers Learns from various parts of the

organization Learns from other organizations

Learns from past experiences Learns from customers Learns from various parts of the

organization Learns from other organizations

OrganicOrganization

Design

OrganicOrganization

Design

Shared Leadership

Customer-FocusedStrategy

Customer-FocusedStrategy

Culture of InnovationCulture of Innovation

IntensiveUse of

Information

IntensiveUse of

Information

TheLearning

Organization

Characteristics of a Learning Organization: SnapshotCharacteristics of a Learning Organization: Snapshot

“We all make mistakes. It’s not as though at any time, Dell doesn’t have some part of its business that’s not working for us as it should. But we have a culture of continuous improvement. We train employees to constantly ask themselves, ‘How do we grow faster? How do we lower our cost structure? How do we improve service for customers?’”

Michael Dell, Chairman and Cofounder, Dell Computer