Question 4 ESS Assignment 4

Question 5 Organizational Change

Pulling it Altogether for Total Organizational Consulting Perspective

PETS
P: People (Week 1-11; Micro & Meso OB)
E: Environment (Macro OB)
T: Technology (Macro OB)
S: (Strategy and Structures (Macro OB)

The client will speak to you: I want to be a leader and be differentiated or whatever their
dream is. But we look into their environmental forces and their strategy and structures.

What is Organizational Structures? (PETS)

The manner in which an organization divides its labour into specific tasks and achieves
coordination among these tasks.

To achieve its goals, an organization has to:

- Divide labour among its members

- Coordinate what has been divided

The structure is always asking if the form follows the function.

The form of a new condo is really a new form of a function.

Structural Elements

What are the 6 basic elements of all structuring organizations?

1. Job Specialization
2. Departation
3. Integration/Coordination
4. Span of Control/ First versus Tall
5. Formalization
6. Centralization

(manager and formalized you are,

 1. Division of Labour
Labour must be divided because everyone cannot do everything

Two Dimensions: Vertical ^ and Horizontal ->

Vertical Division of Labour

Assigning authority for planning and decision making

“Who gets to tell whom what to do”

Autonomy & Control

● Domain of authority is decreased as the number of levels in the hierarchy
increases

Communications
● With more levels, communication and coordination are harder to achieve

Filtering, chain of command, process losses, slowness

Labour should be divided vertically enough but not so much to cause communication
and coordination issues.

Specialized in the amount of responsibilities of organizing tasks assign to a role

Horizontal DIvision of Labour

Groups the basic tasks that must be performed into jobs and then into de

DIfferentiation:
● A horizontal division increases, so does differentiation
● Tendency for managers in separate functions or departments to differ

6 types of common Departments to recognize

Departmentation

Functional Departmentation:
Advantages: everyone speaks the same language, easy to measure and evaluate
performance, too high of a degree to let in differences, need to be coordinated, more
integration.

Product Departmentation: Departments are formed on the basis of a particular product,

product line or service (e.g, shampoo division

Advantages:

DIsadvantages: ( Economies of scale are threatened ) the sharing of resources are not being
spoken across.

Matrix Departmentation:

Conceptually the most efficient set of organization but it could be a ministrator nightmare. Looks
elegant but very messy.

Advantages:

Disadvantages:

Why should we change?

Change can foster creativity, stimulate new thinking, squash the status quote, pushes
people to grow, and keeps you from being redundant or failing when other are making
required changes.

We can experience, and lead change, internal or external. The change feels upon us and
overwhelming and unknown. You feel fear and confusion.

Why do Organizations Change?

External sources of pressure (eg, “E” & “T” issues; global competition; deregulation;
advanced technologies all bring about changes in structure and strategy)

Internal sources of pressure (eg, “P” issues; lower productivity; internal conflict; strikes;
high absenteeism and turnover bringing about changes in structure and strategy)

External: Organizations change because of the environment or you can initiate the
change. Dynamic environments require a high degree of organizational change.
Internal: Organizations change because of people and their issues. Change its job design
and system. Doing a CRA how ready are people to handle changes in the internal
environment?

The Perfect Storm (“S”)

● Strategic change responses

● Structural change responses

The eternal and internal environment knocks. We see an organization respond with
strategic and structural changes to be effective and to exist.

Strategic and Structural Change Responses

- Department reorganizations
- Mergers
- Acquisition
- ‘Buyouts
- Downsizing or expansion
- Restructuring
- Launch of new product
- Outsourcing of major organizational activities
- Business model changes or new business ventures
- Opening new national/ international branches
- Business process design projects (reengineering)
- Installation of new technology
- System upgrade/replacement
- Implementation of a new incentive system
- Shutting down particular manufacturing lines
- New marketing campaigns or changes to marketing programs
- Redesign of jobs
- Changes impacting suppliers and/or customers

We do these because of the external pressures and external and internal environment.

What Organizations Can Change

● Goals and Strategies

● Technology
● Job Design
● Structure
● Process
● Culture
● People
Three Important points about the areas that organizations can change:

Change in one area very often calls for changes in other areas. A domino effect.
● E.g, change policy affects how things are done elsewhere
Change in most areas requires serious attention to be given to people.
● E.g., often resist change
Change requires employees to learn new skills and change their attitudes
● E.g., learn new computer software

Definition of Change
- A variation of alteration… passing from one state or form to another
- A disruption of expectations
- (large star) The important change is not the physical equipment or technology
change, rather it's what happens inside a person’s head.

Change versus Transition

Change
● Organization
● External
● Immediate
● Process-Structural
● Beginning
● No Resistance

Transition
● Individual
● Internal
● Takes Time
● Behavourial
● Ending
● Resistance

Psychological Dynamics of Change (How we change)

1. Sense of Loss
2. Lack of Clarity
3. Self Preservation
4. Personal (in the gut then to head)
5. Loss in performance
Sense of Loss: Change is normally experienced as losing something like a restructuring
usually people feel right away what this means in terms of a loss to me.

Lack of Clarity: Confusion because of Change why is this happening and what will my
future look like?

Self-Preservation: What’s in it for me? How will I protect myself from what the
Organization has just announced? How will I get through this? What is this all going to
mean for my job and my future? Rarely in change do other people worry about the other
guy a colleague.

Personal (in the gut then to head): In the head, worries, anxiety, panic, and in the gut. The
key is to get it in the head. That is How do I find a job, rewrite a resume, how do I network
and get myself out there?

Loss in Performance: is normal to make mistakes learning something, this is before we

can see an upswing in their performance.

Stage of Transition: Individual Change

Change is a personal journey in 3 stages (Double star)

Unfreeze to Change to Refreeze. (K. Lewin)

When a human is presented with change these are the three stages you endure.
The unfreezing, the actual change, then there’s a refreeze.

Lewin’s Three-Step Model

1. Unfreeze

The recognition that some current state of affairs is unsatisfactory

Employee attitude surveys, customer, surveys, and accounting data are often used to
anticipate problems and initiate change before crises are reached.

2. Change

The implementation of a program or plan to move the organization or it's members to a

more satisfactory state.

Change efforts can range from minor to major

 3. Refreeze

The condition that exists when newly developed, attitudes, or structures become an
enduring part of the organization.

The effectiveness of the change is examined and the desirability of extending change
further can be considered.

What are the issues or problems that must be overcome if the change process is to be
effective?

Make sure to overcome diagnosis, diagnosis, resistance evaluation and

institutionalization issues to successfully move from unfreeze to change and refreeze.

Diagnosis: collecting information on the problem that is causing the need for unfreezing.
So at the diagnosis stage, they use a change agent these are consultants that are hired
to understand the what the why and the how. They make diagnoses and
recommendations for changes to organizations by applying behavioural science
knowledge. Which is the entire commerce 1BA3 course. They use the information to
make sure the companies stay ahead of the curve.

Resistance: the pattern of thirds, active and passive resistor, overt, and cohort. You
would want active but you have to realize there could be overt and cohort failure by
organizational members to support the change efforts. They could be walking or
hindering you. And we call this resistance.
Resistance patterns of thirds you got to have the fence sitters to be with you. The two-
thirds will help move through change. Do you know the people in the organization and
did you measure them properly?

Evaluation and Insitutualization: Did the changes accomplish what was intended? Did we
get people to learn what they needed to learn? Did we make the people make the
behaviour changes? Did we get the bottom-line outcome? that we wanted to do in
refreezing the new normal and walking through the new structure, using the new
technology. Successfully in your new job design. Did you measure that and stay on top
of that?

Causes of Resistance
● Politics and self-interest
● Low individual tolerance for change
● Lack of trust
● Different assessments of the situation
● Strong emotions
● Strong organizational identification
● A resistant organizational culture
Time and Resistance

There are considerable differences in how people react to change over time

Champions: Welcome change from the beginning and maintain change-supportive

perceptions over time

Doubters: Resist change from the get-go and persist in their resistance

Converts: Resistant at first but come to see the value of change

Defectors: Have initial change-supportive perceptions but become resistant over

time.

Major Change Challenges

Organizational Development

Organizational development (OD) is a planned, ongoing effort to change organizations to

be more effective and more human.

- Team Building
- Survey Feedback
- Total Quality Management (TQM)
- Reengineering

Does Org Development Work?

Most OD techniques have a positive impact on productivity, job satisfaction, or other

work attitudes.
OD seems to work better for supervisors or managers than for blue-collar workers.
Changes that use more than one technique seem to have more impact.

The Innovation Process

Innovation is the process of developing and implementing new ideas in an organization.

Innovation requires:
Creative ideas and creative people
People who will fight for new ideas.
Good communication.
The proper application of resources and rewards.

Creativity refers to the production of novel but potentially useful ideas.

- Idea champions are people who are the kernel of an innovative idea and help
guide it through to implementation.
- The role of idea is often informal and emergent.
- It involves sponsorship and support.

The Knowing-Doing Gap

Many managers know what to do, but have considerable trouble implementing this
knowledge in the form of action.
Why does the knowing-doing gap happen?

The tendency for some organizational cultures to reward short-term talk rather than
longer-term action.
Many organizations foster internal competition that is not conducive to the cooperation
between units that many changes require.
When managers do manage to make changes, they sometimes fail because techniques
are adopted without understanding their underlying philosophy.

“Top Twelve Takeaways”

Organizational Change (Ch. 15)

1. Why do organizations change?

2. What do organizations change?
3. Describe Lewin’s 3-Stage Model of the Change Process
4. What is meant by Diagnosis during the Change Process?
5. What is a Change Agent?
6. What is meant by Resistance during the Change Process? What are the common
causes of Resistance? What are the four ways that people react to change over time?
7. What is meant by Evaluation and Institutionalization during the Change Process?
8. What is Organizational Development(OD)?
9. What are specific OD strategies?
10. Does OD work?
11. What is the Innovation Process and how is it connected to the Change Process?
12. What is the “Knowing-Doing Gap?