Managing Organization ABE Graduate Diploma (QCF Level -6)

Prepared & Presented

By

Pyi Kyaw Lynn

B.A (English), Yangon University

M.B.A (Finance), Assumption University of Thailand

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CHAPTER [VIII] : ORGANIZATIONAL CHANGE & DEVELOPMENT

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TODAY’S AGENDA

The Dynamics of Change

The Process of Change

Change Strategies

The Role of Managers

Culture & Change

Organizational Development

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[A] The Dynamics of Change

Driving forces’ compelling change arise mainly from the external environment of the organization (both general & specific), but also from the internal environment in terms of performance results and aspects of the organization’s resources.

Restraining forces’ seek to resist change and maintain the status quo. The features include organizational inertia, vested interests of groups & the fears of individuals, etc.

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STATUSQUO

DRIVING FORCES RESTRAINING FORCES

FORCE FIELD ANALYSIS

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Pressures From External Environment

Political/legal pressures : Changes in regulation or the direction of government policies. Legislative changes have direct impact on organizations.

Economic pressures : Changes in economies of the countries.

Social/demographic pressures : Factors such as birth & mortality rates, social tastes, fashions & public attitudes affect on firms.

Technological pressures : Continual innovations in information & communication technology .

Market pressures : Customer demands & the actions of competitors are significant for the organizations.

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Pressures From Internal Environment

Performance : Achievement of objectives drive for a change. Successful performance is related to CSF.

Employee demands : The interest, commitment and motivation of employees are important and CSF for the organizations.

Innovation : Development of new ideas or products impact on the operations of the firms and outputs. Capability of the firms to develop its own innovations provide competitive advantage.

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[B] The Process of Change

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Change is a threat to the status quo so management need to consider all aspects before implementing the strategy in a planned manner.

Planning Change

Analysis of the current position and identifying the factors no longer appropriate in meeting the objectives.

Specification of new position & setting timescales within which the changes are required to be completed.

Identify the Required Changes

Management to establish open communication with those affected, keeping them informed & seeking their ideas & suggestions for implementation.

Identify Those Affected

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Cont’d

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Management to consider the best way of implementing the changes.

This involve agreeing strategies which overcome any resistance to change.

Select the Best Overall

Strategy

Involve decisions on the length of the changeover period & the programs required to train staff.

Costs to be addressed and pros and cons to be weighed.

Draw & Implement

Detailed Plan

To review the effectiveness of the new position in achieving the required objectives.

To enable a smooth transition with minimal disruption to operations & the morale of staff.

Review&

Evaluation

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[C] Change Strategies

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4 - Reason to Resist Change

Fear of people of losing something such as power, status, money, etc.

The way of lessening the resistance is negotiation.

A situation when people don’t understand the reasons & benefits of change & don’t believe in management.

The scenario is common in organization with “us & them culture.

A condition arise where both the originators of the change & those affected have same information but make different assessments.

Some see positively, negatively.

A situation where those affected by the change don’t adapt to change well because of their personality.

E.g., Some people feel that they are not able to learn new skill or technology.

Parochial self - interest Misunderstanding & Lack of Trust

Different Assessments Low tolerance for change

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Kotter & Schlesinger’s Model of Change

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Reasons for Resisting Change

Strategies for Change

Appropriate Management Style

Parochial self –interest

Misunderstanding & lack of trust

Different assessments

Low tolerance to change

Negotiate

Educate

Participate

Force & support

Collaborative Directive or

consultative Consultative,

collaborative or delegative

Combination of directive & supportive

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Lewin’s Three-Step Model of Change

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To create the motivation for change in the workforce who need to understand need to change before implementing.

Associated with breaking old patterns of behavior – the existing culture – so that new patterns can be set up.

To unfreeze resistance : managers need to increase the tension & dissatisfaction with the present & need to enhance the desirability & feasibility of the alternative.

Associates with the communication process & should address the reason for change the benefits to firm & individuals accrue from the change who is involved

Concerned with identifying what the new behavior, process & procedure should be.

Involves the development of new responses by staff based on the new information made available to them.

Moving them towards the new culture to fit the requirements.

nfreezing

hanging

U

C

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Cont’d

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The stage encompasses consolidation or reinforcement to integrate the changes made.

To stabilize the new culture in order to prevent people slipping back into the old patterns.

To be positive reinforcement such as praise or reward for adapting to the new circumstances.

Negative reinforcement such as sanctions can be applied to those who fail to comply.

Reinforcement way include – Setting up employee suggestion schemes Giving staff a greater input into the decision making

process Implementing schemes which reward good effort Creating term spirit through identification schemes such as

logos, advertising T-shirts. Producing company newsletters Making managers more visible. E.g., open door policies.

efreezingR

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Business Process Re-engineering

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BPR is management technique & the fundamental rethinking & radical redesign of business to achieve dramatic improvements in critical, complementary measures of performance such as cost, quality, service & speed.

BPR involves “ re-inventing” the enterprise. Managers are required to dismiss many ways in which things have been done in the past.

Managers must – Abandon existing ideas of how the firm should be managed. Abandon well- established organizational principles &

procedures. Create new organizational principles & procedures.

TECHINQUE

REINVENTING

MANAGERS

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Principles of BPR

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Simple Processes

Combining Tasks

Empowerment

Natural Order

BPR is best implemented if process are kept as simple as possible. In case of complex structures, reverse this & processes to be organized outputs, rather than tasks.

Fragmented tasks to be combined & linked parallel activities. Several teams or individuals to be formed as a single team. E.g., customer service team.

Decision to be taken place at lower level where work is performed, enabling customers to elicit faster responses & quicker decisions.

Process to follow natural order & re-engineering can improve outputs by –

Convergence : identifying tasks that can be carried out simultaneously. Reduced time frames : to eliminate obsolescence or inconsistency

between the start & end points of the process.

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Cont’d

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Multiple Versions

Location

Streamlining Checking &

Control

Reduction of External

Contact Points

To break the cases down into straightforward, medium-hard & difficult. E.g., Operations in hospitals

Work should be moved across conventional boundaries. E.g., Life insurance underwriter can perform work with a laptop in the client’s home rather than traditional back office.

To be done without lowering standards by applying Management by Exception.

To reduce collection of data & information, enabling fewer resources. E.g., Application of IT systems.

To appoint managers for the holistic relationship with customers, providing the single point of contact, instigating all necessary tasks & trouble shoot appropriately.

Case Managers

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Implications of BPR in Organizational Structures

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Dramatic implications for the shape of an organization structure

Flexible work teams can be replaced & formed by breaking down of departments, lacking rigid departmental structure.

E.g., One team is formed to secure orders, produce goods, invoice, deliver & record payment for the goods instead of performing separately in an organization.

Flexible work teams

Replace of department by flexible team strip out some middle management layers - a process known as delayering, resulting flatter organizational structure.

Delayering

The process in which the size of the organization is reduced by concentrating on core activities. E.g., Stripping out of non-core personnel with outsourcing.

Downsizing

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[D] The Role of Managers

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PROVIDING LEADERSHIP

MANAGINGCONFLICT

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Managing Conflict : Reactions to Change

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ACCEPTANCE Acceptance of change not to be

enthusiastic. To be recognized that the change

process is going to take place. Individual to agree or accept his

role in the process

INDIFFERENCE If change does not directly

affect an individual, indifference may be result.

Individual may appear apathetic and lack of interest in the proposals.

ACTIVE RESISTANCE A deliberate attempt to avoid or

reverse the proposed change but not malicious/harmful in nature.

E.g., absenteeism, strikes, sabotages, or deliberate errors.

PASSIVE RESISTANCE Individual does not co-operate &

refuse to learn the new technology.

Deliberately stick to the old work patterns.

E.g., procrastination.

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Managing Conflict : Uses of Conflict

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Argument is where differences are resolved by discussion.

To be effective argument, arguing group to work as a team and to discuss based on trust & openness.

The healthiest form of conflict as it can be used to set standards, motivate people & reward high achievers.

Can be destructive in nature as it diverts attention away from the task.

Encourage defensive behavior & result in breakdown of the group.

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Managing Conflict : Negotiation

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Pre-negotiation stage

Negotiation stage

Post Negotiation stage

The stage when a meeting is set & agenda agreed. The involved parties determine an expected outcome &

minimum acceptable outcome.

The parties put their case & argue against the case of the other side.

Elements of common ground to be sought & the parties are prepared to compromise or concede minor points.

After an agreement, a program for implementation to be established.

The negotiators “sell” the agreement to those not directly involved in the negotiations.

Three Stages To Process Of Negotiation

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Areas of Managing Cultural Change

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Top management’s active involvement & commitment

Managers to adopt new patterns of behavior rather than directing

To have positive support for new behaviors, including recognition, rewards for new patterns

To review recruitment & selection policies to ensure that new patterns of behavior are recruited.

New behaviors to be clearly communicated to existing staffs & new comers via an induction programs.

Training &

development

[E] Culture & Change

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[F] Organizational Development

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DEFINITION

FLEXIBILITY

FEEDBACK

COLLABORATION

CONFLICT

To develop a flexible, self-renewing system that can organize in different ways depending on the tasks.

A generic term covering a wide range of intervention strategies designed to promote organizational health & adaptability to change. OD aims to create the conditions of organizational functioning that enable the organization to develop naturally & harmoniously.

To reach the point where decision making is based on the authority of knowledge rather than organizational position.

To create or improve feedback mechanisms which continuously monitor the external & internal environments in respect of the need for change.

To encourage high collaboration & low competition among interdependent parts of the organization.

DECISIONMAKING

To create conditions in which conflict among members is brought out into the open & managed rather than covered up.

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Distinction Between OD & MD

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MANAGEMENT DEVELOPMENT

Individual manager or group of managers

Developing a manager’s full potential

Poor performance by manager Lack of “ready made”

managers in succession plans Need to train new managers

TARGET

TYPICAL GOALS

SYMPTOMS ADDRESSED

Planned program of development through external courses & suitable on site experience

STRATEGY

System or subsystem of organization

Increasing effectiveness of work group/organization

Ineffective performance of organization in response to change imperatives.

Lack of flexibility in organization & management.

Problem-solving for work groups

ORGANIZATINAL DEVELOPMENT

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Cont’d

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MANAGEMENT DEVELOPMENT

Courses, training managers, coaching on-sites, secondment to other companies.

The manager being developed Personnel & training

executives. Manager’s immediate

supervisor.

Regular appraisal interviews between manager & his superior

PROCESS OF INTERVENTION OR ACTIVITIES

KEY INITIATORS & MANAGERS

OF EFFORT

EVALUATION

Transfer of learning Firms to have right climate for

applying new knowledge. Manager to retain motivation.

PROBLEMS & CRITICISMS

Team-building, confrontation, meetings, survey feedback, intergroup interfaces

op management Personnel & Training

Executives OD practitioners/external

consultants.

Establishment of feedback system to ascertain objectives being met

OD requires willingness to take risks.

Changes might antagonize workers.

ORGANIZATINAL DEVELOPMENT

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Learning Organization

Learning organization is based on the need for organizations to develop a capacity to do this, i.e. to learn from the environment & from operational problems so that they are able to recognize the change imperatives and how they may be responded to.

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Learning organization consider the context which is leading to problems & failures.

Learning organization question the operating practices & procedures, and explore the policy , cultural, attitudinal & constraints which underline them.

Kolb’s Learning Cycle

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CONCRETE EXPERIENCE

OBSERVATION & REFLECTION

APPLICATION OF CONCEPTS IN NEW SITUATIONS

FORMATION OF CONCEPTS

Basic of the cycle Past or new

experiences can be used for further learning

To examine bad or good experience and frequency of happening.

What it means in terms of learning cycle.

To generalize individual experience to be used in other ways in terms of principles & trends.

To test the analysis of experience by applying the ideas & principles.

Application is active experimentation by modifying behavior & beginning of the new learning cycle.

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Kolb’s Experiential Learning Cycle

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Learning Cycle

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Characteristics of the Learning Organization

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Learning approach to

strategy

Learning climate

Self development

Inter-company learning

Organization development process to be designed as a learning process. Mistakes to be valued rather than criticized.

Management must change to supporting rather than controlling or leading & encouraging direct involvement of all workers.

Training & development to be a high priority as they increase the flow of ideas & information and develop the skills.

Involves looking at best practice within the industry, adopting, developing techniques & system to use within own organization

The use of information to be regarded as a resource rather than a control mechanism.

Informatting

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Cont’d

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Establishing structures

Environmental scanning

Participative policy

making

Reward flexibility

The concept views organizational structures as temporary rather than fixed, able to change & response to changing conditions & exploit opportunities.

Monitoring opportunities from the environment not only to be the role of specialist department but to encourage through out the organization. Internal exchange idea is that each department view other departments/ individuals to be regarded as customers whose needs to be identified & satisfied.

All stakeholders with an interest in the organization to have a right to participate in the policy setting of the organization.

There has to be a flexible & open & rationale approach to rewards system which shift the balance of power within the organization away from salary as an indicator of power.

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Features of Learning Organization

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Learning from past

experience

Learning from others

Experimentation

Disseminating knowledge

Scientific method of diagnosing & resolving problems.

Problems are addressed by solutions & evidence rather than intuition or guess work.

Learning organization Looking for innovative

approached to problem-solving.

Conducting post –incident reviews & encouraging reflection.

Identifying the success or failure factors from which to learn.

Looking at best practice & using benchmarking

Exploring learning opportunities offered by customers, suppliers, etc.

Through education & training programs & shared approach to information.

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Systematic problem solving

Barriers to Organizational Development

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Lack of management direction & vision

Structuralfactors

Professsional factors

Cultural factors

Short - termism

Insensitivity toslow change

Lack of clarity in goals & objectives, resistance to change of top management, failure of management will or support to push through change

Poor communication in tall structures & the excessive departmentalism inhibit the flow and dissemination of ideas, information & knowledge.

Organization fail to recognize slow changes compared to sudden changes in environment. OD encourage proactive rather than reactive change.

Dominance of established professional patterns & lack of credence to challenge these views to open up new ideas.

Lack of team-based approach, defensive style of bureaucracies which rewards success & punish failure inhibits risk-taking & leading to problems being hidden.

Cost & budgetary savings due to financial constraints. Limited resources tend to conflicts of interest among team members.

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Thank You !!

Q & A

1. ‘Organizational Development’ is concerned with improving the overall levels of performance and effectiveness of an organization.

Identify and appraise the different characteristics needed to ensure Organizational Development is successful within an organization.

[10 marks]

Organizational Development is also an essential process within the establishment of the ‘learning organization’.

Discuss the key features of a ‘learning organization’. [10 marks]

2. (a) Explain the term ‘Organizational Development’

You are one of the managers of an international chain of hotels and wish to introduce the concept of Organizational Development. [5 marks]

(b) Critically evaluate the barriers to organizational development that you need to overcome to make this strategy work. [15 marks]

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Q & A

3. (a) Explain the three main stages, according to Lewin, in the creation of programs of organizational development. [10 marks]

(b) Discuss the advantages and disadvantages of using an external consultant to promote effective organizational development. [15 marks]

4. (a) Grid training is a useful part of wider programs of organizational development. It is derived from the Blake and Mouton Managerial Grid and helps managers achieve maximum concern for people and production.

Explain the main features of a program of organizational development.[10 marks]

(b) Refer to the lecture notes.

Evaluate the usefulness of a specific intervention strategy, such as “Grid Training” within overall programs of organizational development. [15 marks]

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Q & A

5. “Organizational development is concerned with attempts to improve the overall performance and effectiveness of an organization.” (Mullins)

Explain the differences between organizational development and managerial development. [10 marks]

Assess the problems caused by an unplanned approach to organizational development. [15 marks]

6. Systems thinking are the approach to management that integrates principles & practices needed to create a “learning organization”.

Critically analyze the main features of a systems approach to organizations. [25 marks]

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Q & A

7. There are many ways in which manages can contribute to the development of their organization. An alternative is to appoint a “third-party”, an external consultant, to stimulates and guide the process.

(a) Explain the difference between “organizational development” and “management development”. [10 marks]

(b) Examine the advantages and disadvantages of using third party intervention as a way of achieving organizational development.

[15 marks]

8. Organizational development is concerned with improving the overall levels of performance and effectiveness of an organization.

Discuss the key factors that might constrain organizational development. [10 marks]

Examine the impact that employee’s commitment has on the level of work performance. [15 marks]

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Q & A 9. Organizational development is a generic term, covering a wide range

of intervention strategies, designed to promote organizational health and adaptability to change.

Describe and justify the five operational objectives of an organizational development program. [10 marks]

Identify and analyze five of the key distinctions between “organizational development” and “management development”. Use relevant concepts and theories to support your answers. [15 marks]

10. For organizations to adapt successfully to the turbulent environments of the modern day, they have to recognize and accept the need for change. The concept of the “learning organization” is based on the need for the organizations to develop a capacity to do this.

Explain and discuss the concept of the “learning organization”, using relevant theory and workplace examples to support your answer.

[20 marks]

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Q & A

11. Explain the barriers to change that are found within organizations and discuss how these can be overcome. Use relevant theory and give examples from the workplace to support your answer. [20 marks]

12. You are one of the managers of an international chain of hotels. The organization is in the process of changing its strategy from competing on price to one of service excellence, customer loyalty and customer retention. This will involve changes to employees’ work practices.

Discuss the change strategies that the organization can use to introduce these changes and outline the types of change that might affect employees and the organization. Use relevant theory to support your answer. [20 marks]

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