Organization Development

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change, learn, development and perform

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Organization Change, Handling Conflict and Stress management:

Organization Change, Handling Conflict and Stress management www.humanikaconsulting.com

Continuous Change at Nokia:

Courtesy National Board of Antiquities, Finland Continuous Change at Nokia Nokia has continually adapted to its changing environment. The Finnish company began as a pulp and paper mill in 1865, then moved into rubber, cable wiring, and computer monitors. In the 1980s, Nokia executives sensed an emerging market for wireless communication. Today, Nokia is a world leader in cellular telephones.

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Organizational Change: An International Phenomenon 0 10 20 30 40 50 60 70 80 0 10 20 30 40 50 60 70 80 Percentage of Respondents by Country International expansion Reduction in employment Mergers, divestitures, acquisitions Major restructuring Hungary Mexico S. Korea Germany United States Japan (Source: Kanten , R., 1991.)

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Forces for Change :

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C://windows 3.11 > Technology : // Faster, cheaper, and more mobile computers , On-line music sharing , Deciphering of the human genetic code

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Economic shocks : Rise and fall of dot-com stocks 2000–02 stock market collapse Record low interest rates

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Competition Global competitors Mergers and consolidations Growth of e-commerce

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Social trends Internet chat rooms Retirement of Baby Boomers Rise in discount and “big box” retailers

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Iraq–U.S. war Opening of markets in China War on terrorism following 9/11/01

What is Organizational Change?:

What is Organizational Change? Movement of an organization away from its present state and toward some desired future state to increase its effectiveness Reengineering TQM Innovation Restructuring

Organizational targets for change:

Organizational targets for change Tasks – People – Culture – Technology - Structure

Change: Organizational and Individual Perspectives:

Change: Organizational and Individual Perspectives

Types of Organizational Change:

Types of Organizational Change Anticipatory changes: planned changes based on expected situations. Reactive changes: changes made in response to unexpected situations. Incremental changes: subsystem adjustments required to keep the organization on course. Strategic changes: altering the overall shape or direction of the organization.

Tuning:

The most common, least intense, and least risky type of change. Also known as preventive maintenance and kaizen (continuous improvement). Key is to actively anticipate and avoid problems rather than waiting for something to go wrong . Tuning

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Incremental changes that are in reaction to external problems, events, or pressures.

Re-Orientation:

Re-Orientation Change that is anticipatory and strategic in scope and causes the organization to be significantly redirected. Also called “frame bending” (Nadler and Tushman ).

Re-Creation:

Intense and risky decisive change that reinvents the organization. Also called “frame breaking” (Nadler and Tushman ). Re-Creation

Managing Planned Change:

Managing Planned Change Goals of Planned Change: Improving the ability of the organization to adapt to changes in its environment. Changing the behavior of individuals and groups in the organization. Change Making things different. Planned Change Activities that are intentional and goal oriented. Change Agents Persons who act as catalysts and assume the responsibility for managing change activities.

Categories of Change : Evolutionary Change: Change that is gradual, incremental, and narrowly focused:

Categories of Change : Evolutionary Change: Change that is gradual, incremental, and narrowly focused

Instruments of Evolutionary Change:

Instruments of Evolutionary Change

Instruments of Evolutionary Change:

Instruments of Evolutionary Change

Categories of Change:

Categories of Change : Revolutionary Change: Change that is rapid, dramatic, and broadly focused. Categories of Change

Instruments of Revolutionary Change:

Instruments of Revolutionary Change Reengineering , involves the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance.

Instruments of Revolutionary Change:

Instruments of Revolutionary Change Restructuring , involves reducing differentiation and integration by eliminating divisions, departments, or levels in the hierarchy and downsizing by getting rid of employees to lower operating costs.

Instruments of Revolutionary Change:

Instruments of Revolutionary Change Innovation , is the successful use of skills and resources to create new technologies or new goods and services so that an organization can change and better respond to the needs of customers.

Phases of planned change:

Unfreezing The phase in which a situation is prepared for change and felt needs for change are developed. Changing The phase in which something new takes place in the system, and change is actually implemented. Refreezing The phase of stabilizing the change and creating the conditions for its long-term continuity. Phases of planned change

Lewin’s three phases of planned organizational change.:

Management 9/e - Chapter 12 Lewin’s three phases of planned organizational change .

Force-coercion strategy of change:

Force-coercion strategy of change Uses power bases of legitimacy, rewards and punishments to induce change. Relies on belief that people are motivated by self-interest. Direct forcing and political maneuvering. Produces limited and temporary results. Most useful in the unfreezing phase.

Rational persuasion strategy of change:

Rational persuasion strategy of change Bringing about change through persuasion backed by special knowledge, empirical data, and rational argument. Relies on expert power. Relies on belief that reason guides people’s decisions and actions. Useful in the unfreezing and refreezing phases. Produces longer-lasting and internalized change.

Shared power strategy of change:

Shared power strategy of change Engages people in a collaborative process of identifying values, assumptions, and goals from which support for change will naturally emerge. Time consuming but likely to yield high commitment. Involves others in examining sociocultural factors related to the issue at hand. Relies on referent power and strong interpersonal skills in team situations. Relies on belief that people respond to sociocultural norms and expectations of others.

Alternative change strategies and their leadership implications:

Alternative change strategies and their leadership implications

Sources of Individual Resistance to Change:

Sources of Individual Resistance to Change

Sources of Organizational Resistance to Change:

Sources of Organizational Resistance to Change

Methods for dealing with resistance to change:

Methods for dealing with resistance to change Education and communication Participation and involvement Facilitation and support Facilitation and agreement Manipulation and co-optation Explicit and implicit coercion

Two Approaches to Organization Change:

Two Approaches to Organization Change Organization Development (OD) Formal top-down approach Grassroots Change An unofficial and informal bottom-up approach

Change Agent Characteristics:

Change Agent Characteristics Foresight Responsiveness Flexibility Adaptability

Organization development (OD):

Organization development (OD) is a comprehensive approach to planned organizational change that involves the application of behavioral science in a systematic and long-range effort to improve organizational effectiveness.

Objectives of OD:

Objectives of OD Deepen the sense of organizational purpose. Strengthen interpersonal trust. Encourage problem solving rather than avoidance. Develop a satisfying work experience. Supplement formal authority with knowledge and skill-based authority. Increase personal responsibility for planning and implementing. Encourage willingness to change.

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Organizational Development: How Effective Is It? 20 30 40 50 Percentage of Studies Showing Positive Changes Individual outcomes (e.g., job satisfaction) Organizational outcomes (e.g., profit) (23.55) (48.70) Organizational outcomes more often benefited from OD interventions than did individual outcomes (Source: Porras and Robertson, 1992.)

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Top values associated with O. D. today : Increasing effectiveness and efficiency Creating openness in communication Empowering employees to act Enhancing productivity Promoting organizational participation Values considered to be most important: Empowering employees to act Creating openness in communication Facilitating ownership of process and outcome Promoting a culture of collaboration Promoting inquiry and continuous learning ORGANIZATIONAL DEVELOPMENT

The organization development process:

The organization development process

Kotter’s Eight-Step Plan for Implementing Change:

Kotter’s Eight-Step Plan for Implementing Change Establish a sense of urgency by creating a compelling reason for why change is needed. Form a coalition with enough power to lead the change. Create a new vision to direct the change and strategies for achieving the vision. Communicate the vision throughout the organization. Empower others to act on the vision by removing barriers to change and encouraging risk taking and creative problem solving. Plan for, create, and reward short-term “wins” that move the organization toward the new vision. Consolidate improvements, reassess changes, and make necessary adjustments in the new programs. Reinforce the changes by demonstrating the relationship between new behaviors and organizational success.

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First-order change- transactional, evolutionary, adaptive, incremental, or continuous change Second-order change- transformational, revolutionary, radical, or discontinuous change n.b .. O. D. programs are directed toward both first-order and second order change with an increasing emphasis on second –order transformational change . The Burke- Litwin Model of Organizational Change First-Order Second-Order Structure 1. Mission and Strategy Management Practices 2. Leadership Systems 3. Organizational Culture (Transactional) (Transformational) Distinguishing Organizational Climate and Organizational Culture. Climate - people’s perceptions and attitudes about the organization Culture - deep seated assumptions about values and beliefs that are enduring, often unconscious and difficult to change

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The Burke- Litwin Model of Organizational Change

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Porras & Robertson Model of Organizational Change

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Porras & Robertson Model of Organizational Change

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This theory views organizations as open systems in active exchange with their environments. Systems theory is one of the most powerful conceptual tools available for understanding the dynamics of organizations and organizational change. Definitions of Systems: A system is a “set of objects together with relationships between the objects and between their attributes.” A System is a set of “elements standing in interaction”. A system is “ an organized, unitary whole composed of two or more independent parts,components , or sub-systems, and delineated by identifiable boundaries from its environmental supra system” A system is an “arrangement of interrelated parts. A system denotes interrelatedness, interconnectedness and interdependency among elements in a set that constitutes an identifiable whole or gestalt. SYSTEMS THEORY-foundation of O. D.

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SYSTEM IN INTERACTION WITH ITS ENVIRONMENT

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All open systems are input-throughput-output mechanisms Every system is delineated by a boundary. What is inside the boundary and what is outside the boundary. More exchange takes place inside the boundary than outside the boundary. Open systems have purposes and goals The law of entrophy states that all systems “run down” and disintegrate unless they reverse the entropic process by importing more energy than they use. Information is important to systems in several ways. Feedback is information to the organization from the environment. Feedback can be positive or negative Deviation-correcting feedback e.g. satelite mission off target(negative): or return to earth (positive) Steady-state or dynamic homeostatis.Systems maintain a steady state or equilibrium point and seek to maintain this equilibrium against disruptive forces, either internal or external. All systems tend to get elaborated, differentiated,specialized & complex.Called Differentiation requires coordination & integration ISSUES REGARDING SYSTEMS THEORY

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CONGRUENCE MODEL SHOWING ORGN. AS A SYSTEM

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The process of systematically collecting data on an organization, feeding it back to the members for action planning, and evaluating results by collecting more data and repeating the process as necessary. Is initiated when someone senses a performance gap.

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a consultant or team of consultants are brought in by executives to "look them over," much as a patient might go to the doctor for an annual physical. The consultants are supposed to find out what is wrong with which part of the organization, and then, like a physician, recommend a program of treatment. Organizational Diagnostics : doctor-patient model

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Expert information and/or service is being bought by the client. Fo r successful outcome, this model depends on: whether the manager has correctly diagnosed his own needs whether he has correctly communicated these needs to the consultant whether he has accurately assessed the capability of the consultant to provide the right kind of information or service whether he has thought through the consequences of having the consultant gather information, and/or the consequences of implementing changes which may be recommended by the consultant." Exchange model

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Consultation Process Process consultation , by contrast to both of these models, focuses on joint diagnosis , and the passing on to the client of diagnostic skills. The key assumption is that the client sees the problem for himself, shares in its diagnosis, and is actively involved in generating a remedy.

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Gelinas -James Elements of Organizations Model What are the key areas for examining organizational functioning?

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The 7-S McKinsey model

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Burke-Litwin Model of Organizational Performance and Change What are the key areas? How are they connected?

Steps in the action research process:

Steps in the action research process

Implementing Action:

Implementing Action Identify possible impediments to change Decide who will be responsible External change agents Internal change agents Decide specific change strategy

Change Agents:

Change Agents External Outside consultants who are experts at managing change Internal Managers from within the organization who are knowledgeable about the situation

Types of Change:

Types of Change Top-down Implemented by managers at a high-level in organization Result of radical restructuring and reengineering More resistance Bottom-up Implemented by employees at low levels and rises over time All levels involved in change process Less resistance

Organizational Development Techniques:

Organizational Development Techniques

Sensitivity Training:

Sensitivity Training Training groups (T-groups) that seek to change behavior through unstructured group interaction. Provides increased awareness of others and self. Increases empathy with others, improves listening skills, greater openess , and increased tolerance for others.

Survey Feedback Approach:

Survey Feedback Approach The use of questionnaires to identify discrepancies among member perceptions; discussion follows and remedies are suggested.

Process Consultation:

Process Consultation A consultant gives a client insights into what is going on around the client, within the client, and between the client and other people; identifies processes that need improvement.

Team Building:

Team Building Team Building Activities: Goal and priority setting. Developing interpersonal relations. Role analysis to each member’s role and responsibilities. Team process analysis. High interaction among team members to increase trust and openness.

Intergroup Development:

Intergroup Development Intergroup Problem Solving: Groups independently develop lists of perceptions. Share and discuss lists. Look for causes of misperceptions. Work to develop integrative solutions. OD efforts to change the attitudes, stereotypes, and perceptions that groups have of each other.

Appreciative Inquiry:

Appreciative Inquiry Appreciative Inquiry (AI): Discovery: recalling the strengths of the organization. Dreaming: speculation on the future of the organization. Design: finding a common vision. Destiny: deciding how to fulfill the dream. Seeks to identify the unique qualities and special strengths of an organization, which can then be built on to improve performance.

Organization-wide OD interventions:

Organization-wide OD interventions Survey feedback Confrontation meeting Structural redesign Management by objectives (MBO)

Unofficial and Informal Grassroots Change:

Unofficial and Informal Grassroots Change Grassroots Change Change that is spontaneous, informal, experimental, and driven from within. Tempered Radicals People who quietly try to change the dominant organizational culture in line with their convictions. Guidelines for tempered radicals Think small for big results. Be authentic. Translate. Don’t go it alone.

Technology in the Workplace:

Technology in the Workplace Continuous Improvement Processes Good isn’t good enough. Focus is on constantly reducing the variability in the organizational processes to produce more uniform products and services. Lowers costs and raises quality. Increases customer satisfaction. Organizational impact Additional stress on employees to constantly excel. Requires constant change in organization.

Technology in the Workplace:

Technology in the Workplace Process Reengineering “Starting all over” Rethinking and redesigning organizational processes to produce more uniform products and services. Identifying the organization’s distinctive competencies —what it does best. Assessing core processes that add value to the organization’s distinctive competencies. Reorganizing horizontally by process using cross-functional and self-managed teams.

Contemporary Change Issues for Today’s Managers: Stimulating Innovation:

Contemporary Change Issues for Today’s Managers: Stimulating Innovation Innovation A new idea applied to initiating or improving a product, process, or service. Sources of Innovation: Structural variables Organic structures Long-tenured management Slack resources Interunit communication Organization’s culture Human resources

Contemporary Change Issues for Today’s Managers: Stimulating Innovation (cont’d):

Contemporary Change Issues for Today’s Managers: Stimulating Innovation (cont’d) Idea Champions Individuals who take an innovation and actively and enthusiastically promote the idea, build support, overcome resistance, and ensure that the idea is implemented.

Creating a Learning Organization:

Creating a Learning Organization Characteristics: Holds a shared vision Discards old ways of thinking. Views organization as system of relationships. Communicates openly. Works together to achieve shared vision. Learning Organization An organization that has developed the continuous capacity to adapt and change.

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KNOWLEDGE – DRIVEN ORGANIZATION

Creating a Learning Organization:

Creating a Learning Organization Single-Loop Learning Errors are corrected using past routines and present policies. Double-Loop Learning Errors are corrected by modifying the organization’s objectives, policies, and standard routines.

Creating a Learning Organization:

Creating a Learning Organization Fundamental Problems in Traditional Organizations: Fragmentation based on specialization. Overemphasis on competition. Reactiveness that misdirects attention to problem-solving rather than creation.

Managing a Learning Organization:

Managing a Learning Organization Establish a strategy Redesign the organization’s structure Reshape the organization’s culture Managing Learning

Mastering Change: It’s Culture-Bound:

Mastering Change: It’s Culture-Bound Questions for culture-bound organizations: Do people believe change is even possible? How long will it take to bring about change in the organization? Is resistance to change greater in this organization due to the culture of the society in which it operates? How will the societal culture affect efforts to implement change? How will idea champions in this organization go about gathering support for innovation efforts?

Too Much Work, Too Little Time:

Too Much Work, Too Little Time With companies downsizing workers, those who remain find their jobs are demanding increasing amounts of time and energy. A national sample of U.S. employees finds that they: Feel overworked 54% Are overwhelmed by workload 55% Lack time for reflection 59% Don’t have time to complete tasks 56% Must multi-task too much 45% Source: Business Week , July 16, 2001, p. 12.

Managing Conflict:

Managing Conflict Conflict Incompatible behaviors that make another person less effective Dealing with the Two Faces of Conflict Competitive conflict: parties are pursuing directly opposite (win-lose) goals. Cooperative conflict: a mutually reinforcing experience (win-win) that serves the best interests of both parties.

Managing Conflict (cont’d):

Managing Conflict (cont’d) Conflict Triggers Conflict trigger: any factor that increases the chances of conflict. Types of triggers Ambiguous or overlapping jurisdictions. Competition for scarce resources. Communication breakdowns. Time pressure. Unreasonable standards, rule, policies, or procedures. Personality clashes. Status differentials. Unrealized expectations.

Managing Conflict (cont’d):

Managing Conflict (cont’d) Resolving Conflict: Conflict Resolution Techniques Problem solving Superordinate goals Compromise Forcing Smoothing

Career Advancement Behaviors:

Career Advancement Behaviors Best Behaviors Perspective taking Creating solutions Expressing emotions Reaching out Worst Behaviors Avoidance Winning at all costs Displaying anger Demeaning others Retaliating

Work Stress and Its Management:

Work Stress and Its Management Stress A dynamic condition in which an individual is confronted with an opportunity, constraint, or demand related to what he or she desires and for which the outcome is perceived to be both uncertain and important.

Work Stress and Its Management:

Work Stress and Its Management Constraints Forces that prevent individuals from doing what they desire. Demands The loss of something desired.

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Source: The Far Side® by Gary Larsen © 1995 & 1991 Farworks, Inc./Distributed by Universal Press Syndicate. Reprinted with permission. All rights reserved.

Potential Sources of Stress :

Potential Sources of Stress Environmental Factors Economic uncertainties of the business cycle Political uncertainties of political systems Technological uncertainties of technical innovations Terrorism in threats to physical safety and security

Potential Sources of Stress :

Potential Sources of Stress Organizational Factors Task demands related to the job Role demands of functioning in an organization Interpersonal demands created by other employees Organizational structure (rules and regulations) Organizational leadership (managerial style) Organization’s life stage (growth, stability, or decline)

Potential Sources of Stress:

Potential Sources of Stress Individual Factors Family and personal relationships Economic problems from exceeding earning capacity Personality problems arising for basic disposition Individual Differences Perceptual variations of how reality will affect the individual’s future. Greater job experience moderates stress effects. Social support buffers job stress. Internal locus of control lowers perceived job stress. Strong feelings of self-efficacy reduce reactions to job stress.

Consequences of Stress:

© 2005 Prentice Hall Inc. All rights reserved. Consequences of Stress High Levels of Stress Physiological Symptoms Behavioral Symptoms Psychological Symptoms

A Model of Stress:

© 2005 Prentice Hall Inc. All rights reserved. A Model of Stress

Inverted-U Relationship between Stress and Job Performance:

© 2005 Prentice Hall Inc. All rights reserved. Inverted-U Relationship between Stress and Job Performance

Managing Stress:

Managing Stress Individual Approaches Implementing time management Increasing physical exercise Relaxation training Expanding social support network

Managing Stress:

Managing Stress Organizational Approaches Improved personnel selection and job placement Training Use of realistic goal setting Redesigning of jobs Increased employee involvement Improved organizational communication Offering employee sabbaticals Establishment of corporate wellness programs