ORGANIZATIONAL CHANGE

• The process by which organizations move from

their present state to some desired future state to
increase their effectiveness.
• Goal is to find improved ways of using resources
and capabilities.
 Four different levels
(Targets of Change)
• Human resources
• Functional resources
• Technological capabilities
• Organizational capabilities
 Human Resource Changes
• Investment in training and development
• Socializing employees into the organizational culture
• Changing organization norms and values to motivate
a multicultural and diverse workforce
• Promotion and reward systems
• Changing the composition of the topmanagement
team
 Functional Resources Changes
ØTransferring resources to the functions
ͦ Where the most value can be created in
response to environmental change
ØAn organization can improve the value
ͦ Its functions create by changing its
structure, culture and technology
Organizational Capabilities Changes
• Changing organizational design
ͦ Culture and structure
• Changing strategy
• Changes that permeate entire organization
Technological Capabilities Changes
ØEfforts intended to give an organization
the capacity to change itself in order to
exploit market opportunities
ØAdoption and use of new technologies
ØD e v e l o p m e n t o f n e w p r o d u c t s /
te c hnol og i e s a n d t h e c h a n g i n g o f
existing one’s
ØTe c h n o l o g i c a l c a p a b i l i t i e s a r e a
corecompetence
Stages of the Change Process
• Denial
• Resistance
• Exploration
• Commitment
 Type of Change in Organization
• Evolutionary change:
ͦ Change that is gradual, incremental,
and narrowly focused
• Revolutionary change:
ͦ Change that is sudden, drastic, and
broadly focused
 Developments in Evolutionary Change
• Sociotechnical system theory:
ͦ A theory that proposes the importance of changing role
a n d ta s k o r te c h n i ca l re l at i o n s h i ps to i n c re a s e
organizational effectiveness
• Total Quality Management (TQM)
ͦ An ongoing and constant effort by all of an organizations
functions to find new ways to improve the quality of the
organization’s goods and services
ͦ Flexible workers and flexible work teams
 Development in
Revolutionary Change
• Reengineering:
ͦ The process by which managers redesign
how task are bundles into roles and
functions to improve organizational
effectiveness

• E-engineering
ͦ Refers to companies’ attempts to use
information systems to improve their
performance
• Restructuring:
ͦ Changing task and authority relationship
and redesigning organizational structure
and culture to improve organizational
effectiveness
• Downsizing
ͦ The process of streamlining the
organizational hierarchy and laying off
managers and workers to red u ce
bureaucratic costs
• Innovation
ͦ The process by which organizations use their
skills and resources to:
§ Create new technologies
§ Develop new goods and services
§ Better respond to the needs of their
customers
§ One of the most difficult instruments of
change to manage
Three-step Change Process
Managing Change:
 Organizational Development (OD):
• A series of techniques and methods that
managers can use in their action research
program to increase the adaptability of their
organization
• Goal is to improve organizational effectiveness
and to help people in organizations reach their
potential and realize their goals and objectives
• Can be used to unfreeze, change and refreeze
attitudes and behaviors
OD Techniques to deal with resistance to change
• Education and communication: inform workers
about change and how they will be affected
• Participation and empowerment: involve workers
in change
• Facilitation: help employees with change
• Bargaining and negotiation
• Manipulation: change the situation to secure
acceptance
• Coercion:force workers to accept change
 OD techniques to promote change
• Counseling, sensitivity training, and process
consultation
• Team building, Intergroup training,
• Total organizational interventions
ͦ Organizational confrontation meeting
THANK YOU!