Managing change 15.05. 13 lecture
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Organizational change management is a framework for preparing for, adopting, and implementing changes to an organization's culture, policies, processes, environment, and employee roles and responsibilities. Managing change effectively is a key challenge for organizations as they must continually adapt to dynamics in the external environment. There are both internal and external forces that drive organizational change, such as strategic needs, structural redesigns, process improvements, and changes to employee skills and behaviors. Resistance to change stems from individual, group, and organizational factors, so change managers must use strategies like communication, participation, support, and incentives to overcome resistance and gain commitment to changes.
Managing change 15.05. 13 lecture
- 1. Managing change The Need to change and the need to manage the change has become one major challenge that the organizations face in the current context of strategic management. Due to the dynamics in the external environment, many organizations find themselves in nearly continuous change. Change Management Defined Change managementmeans to plan, initiate, realize, control, and finally stabilize change processes on both, corporate and personal level. Change may cover such diverse problems as for example strategic direction or personal development programs for staff. Definition - What is Organizational Change Management (OCM)? Organizational Change Management (OCM) is a framework structured around the changing needs and capabilities of an organization. OCM is used to prepare, adopt and implement fundamental and radical organizational changes, including its culture, policies, procedures and physical environment, as well as employee roles, skills and responsibilities. Change Change is the continuous adoption of corporate strategies and structures to changing external conditions. Today, change is not the exception but a steady ongoing process. On contrast „business as usual‟ will become the exception from phases of turbulence. Change management comprises both, revolutionary one-off projects and evolutionary transformations Change management is a basic skill in which most leaders and managers need to be competent. There are very few working environments where change management is not important. Typically, the concept of organizational change is in regard to organization-wide change, as opposed to smaller changes. Examples of organization-wide change might include a change in mission, restructuring operations, new technologies, mergers, major collaborations, etc. The forces for organizational change The forces for organizational change are both internal (in the processes and people) and external (in the environment). External forces for change are part of the general and business environment. Demographic changes in an organization‟s workforce or customer base typically require adjustments to its culture and strategy. Social trends, such as demand for environmentally safe products, can cause change. Organizations must adjust internal procedures as governments change labor laws, financial regulations, or ownership requirements. And organizations must react to changes in business and industry, stay ahead of competition, and respond to customers. Internal forces for changearise from inside and relate to internal functions. Poor quality or inefficiency will require changes to close the performance gap: the difference between expected and actual performance. Other internal forces for change include a new mission and new leadership. While these forces do not always occur together, they are often closely related. Planned change occurs when managers or employees make a conscious effort to change in response to specific problems; so, this type of change is expected or programmed. Examples include introducing a new information management system and changing accounting procedures.
- 2. Unplanned change occurs randomly and spontaneously without the specific intention of addressing a problem. Examples include raw material shortages due to political shifts and cutbacks due to innovations by competitors. Crisis Management Unplanned change is also known as “Crisis Management”. When confronted by the need to make unplanned changes, organizations can ignore the problem, respond with all available resources, or take a middle-of-the-road approach. Evolutionary change is gradual and incremental and may be either planned or unplanned. Unplanned evolutionary change occurs when employees adjust their work habits in minor ways, on an on-going basis, in order to address unforeseen problems. Planned evolutionary (convergent change) is the result of specific, conscious action needed to adjust systems, strategy, and structure. Revolutionary change(restructuring or reengineering) is rapid and dramatic. At times, organizations must implement “frame-breaking change” to respond to a major shift in the environment. Those which cannot reinvent their values, missions, cultures, and processes will not survive. Focus of Change The external environment like(elements in the PESTEL Model) will continue to play a role in an organizations ability to deliver goods and services, the internal environment within the organization will increasingly inhibit it from delivering products required to meet the demands of the market place unless it is able to adapt quickly. The Change strategy and interventions are determined by the specific forces driving for change. These can be categorized as: 1) Strategic: Sometimes in the course of normal business operation, it is necessary for management to adjust the firm‟s strategy to achieve the goals of the company or even to change the mission statement of the organization in response to demands of the external environments. Adjusting a company‟s strategy may involve changing its fundamental approach to doing business: the markets it will target, the kind of products it will sale, how they will be sold, its overall strategic orientation, the level of global activity, and its various partnership and other joint business arrangements. 2) Structural: Organizations often find it necessary to redesign the structure of the company due to influences from the external environment structural changes involve the hierarchy of authority, goals, structural characteristics, administrative procedures and management systems almost all the changes in how an organization is managed falls under the category of structural change. A structural change may be as simple as implementing a no smoking policy, or as involved as restructuring the company to meet the customers need more effectively. 3) Process Oriented: Organization may need to reengineer to process to achieve optimum work flow and productivity. Process oriented change is often related to an organization production or how the organization assembles product or deliver services. 4) People centered: This type of change alters the attitudes, behaviors, skills or performance of employees in the company changing people centered process involves communicating, motivating, leading, interacting with in groups. This focus may entail changing how problems are solved, the way employees learned new skills and even the very nature of how employees perceived themselves, their jobs and the organization. Many employees believe that a change is often reactive and nothing more than a quick fix, then they brace themselves for more changes in the future. Management needs to realize that serious underline problems in organization must be addressed with long term consequences in mind. When management implements changes, careful thought must be given to ensure that the new process are for the long term good of the company.
- 3. Resistance to change is caused by individual, group, or organizational factors. • Individuals resist change for numerous reasons: they fear its consequences; their comfortable routines are disrupted; they face unfamiliar situations; they have to learn new skills; and they are risk averse. • group factors affect resistance to change: group norms and cohesion. Peripheral norms can be changed without too much trouble. But central norms involve the group‟s identity. Since group members will work to protect the central norms of the group, any change to them will be resisted. A cohesive group that wants to implement change can typically overcome the resistance of individual members through peer pressure for conformity. • The tendency for an organization as a whole to resist change and defend the status quo is called organizational inertia. It is caused by a rigid structure which cannot be adapted to internal or external pressures for change and a culture and system of rewards that resist change. Strategies to overcome resistance • Education and communication provide information in various ways, such as face-to-face meetings or newsletters. Even though such methods can be time consuming, they can reduce the fear of the unknown, build trust, and minimize group resistance. • Participation and involvement rely on input from those affected by a change to design and implement it. If managers lack the power or information to implement a change, such tactics can increase the commitment of employees. • Facilitation and support (active listening and supportive communication) are highly effective in reducing individual resistance to change. • Negotiation and agreement offer incentives or trade-offs in exchange for the acceptance of change. These methods are effective with powerful individuals and cohesive teams. • Manipulation and cooptation reduce resistance to change by refocusing the attention of employees or bribing them to cooperate. Such techniques will not be effective in the long-run. • Coercion forces the acceptance of change. Even though it works quickly in most situations, it will not build commitment and may backfire in the long-run.