ORGANISATIONAL CHANGE

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.
Courtesy National Board of Antiquities, Finland

Focus
Change new state of things, different from old state of things Can be viewed as an opportunity or as a threat First order change (making moderate adjustments) Second order change (reinvent, reengineer, rewrite)

Change

What needs to be changed and how to go about it

OD consultants are experts in organizational change

When Will It Occur?

Change If benefits exceed costs is made Amount of dissatisfaction with current conditions

Availability of a desirable alternative

Benefit of making change

Compared to

Cost of making change

Existence of a plan for achieving a desirable alternative

Change is not made

If costs exceed benefits

Forces for Change

Force
Nature of the workforce

Examples
More cultural diversity Aging population Many new entrants with inadequate skills Faster, cheaper, and more mobile computers On-line music sharing Deciphering of the human genetic code Rise and fall of dot-com stocks 200002 stock market collapse Record low interest rates Global competitors Mergers and consolidations Growth of e-commerce

Technology

Economic shocks

Competition

Forces for Change

Force
World politics

Examples
IraqU.S. war Opening of markets in China War on terrorism following 9/11/01

Decentralization Downsizing Emphasis on quality Mergers , acquisition Restructuring International expansion

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First order change

Fundamental nature of the organization remains the same Transactional, evolutionary, continuous change Structure, Systems Management practices Organizational Climate(peoples perception and attitude )

Second order Change

Nature of the organization is fundamentally altered Transformational, radical or discontinuous change Mission and strategy Leadership Organisation culture(values and beliefs)

Managing Planned Change

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.

Goals of Planned Goals of Planned Change: Change: Improving the ability of Improving the ability of the organization to adapt the organization to adapt to changes in its to changes in its environment. environment. Changing the behavior of Changing the behavior of individuals and groups in individuals and groups in the organization. the organization.

Resistance to Change
Forms of Resistance to Change
Overt and immediate
Voicing complaints, engaging in job actions

Implicit and deferred

Loss of employee loyalty and motivation, increased errors or mistakes, increased absenteeism

Sources of Individual Resistance to Change

Sources of Organizational Resistance to Change

Minimizing Resistance to Change

Communication

Coercion

Training

Negotiation

Minimizing Resistance to Change

Stress Management

Employee Involvement

Lewins Three-Step Change Model

Unfreezing
Change efforts to overcome the pressures of both individual resistance and group conformity.

Refreezing

Stabilizing a change intervention by balancing driving and restraining forces.

Driving Forces

Forces that direct behavior away from the status quo.

Restraining Forces

Forces that hinder movement from the existing equilibrium.

Lewins Three-Step Change Model

Change is a three-stage process Stage 1 - Unfreezing the old behavior/ situation Stage 2 - Moving to a new level of behaviors Stage 3 - Refreezing the behavior at the new level

KURT LEWIN

Unfreezing the Status Quo

Force Field Analysis

Desired Conditions
Restraining Forces

Restraining Forces

Driving Forces

Restraining Forces

Current Conditions
Driving Forces

Driving Forces

Before Change

During Change

After Change

New manufacturing technique to be introduced

Assign a score to each force, from 1 (weak) to 5 (strong). Identify the Rfs and Dfs Reduce the RFs Increase the Dfs

Refreezing the Desired Conditions

Creating organizational systems and team dynamics to reinforce desired changes
alter rewards to reinforce new behaviours new information systems guide new behaviours recalibrate and introduce feedback systems to focus on new priorities

Kotters Eight-Step Plan for Implementing Change

1. 2. 3. 4. 5. 6. 7. 8. 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.

Action Research
Action Research A change process based on systematic collection of data and then selection of a change action based on what the analyzed data indicate.
Process Steps: Process Steps:
1. Diagnosis 1. Diagnosis 2. Analysis 2. Analysis 3. Feedback 3. Feedback 4. Action 4. Action 5. Evaluation 5. Evaluation

Action research benefits: Action research benefits: Problem-focused rather Problem-focused rather than solution-centered. than solution-centered. Heavy employee Heavy employee involvement reduces involvement reduces resistance to change. resistance to change.

Action Research
Data Collection Feedback of data to client system members Action planning based on the data Taking action Evaluating results of actions Diagnostic Types Diagnostic Participant Empirical Experimental

Researcher enters a problem situation, diagnoses it and make recommendations for remedial treatment (recommendations may not be put into effect by client group) People who are to take action are involved in the entire process from the beginning (involvement increases the likelihood of carrying out the actions once decided upon) Researcher keeps the systematic, extensive record of what he/ she did and what effects it had (may encounter situations too divergent from one another, which may not permit generalizations)

Participant

Empirical

Experimental It is controlled research on the relative effectiveness of various techniques (is difficult to do when client wants

Application of OB-----------OD

Start Point

ure Poor alignment to organizations strategy t uc str ion zat i an Po org e Low productivity or qu at alit pri ale ro y or pp m Ina or Po
ly or Po ks as dt ne sig de
oals ar g ncle U

Organization

Interpersonal conflicts
Inappropriat e leadership
or Po

Intergroup conflict ce an m or f er p am te

style

Definition(s) of OD
Organization Development is an effort (1) planned, (2) organization-wide, and (3) managed from top, to (4) increase organization effectiveness and health through (5) planned interventions in organizations processes, using behavioralscience knowledge. Beckhard, 1969 Organization Development is a process of planned change change of an organizations culture from one which avoids an examination of social processes (especially decision making, planning and communication) to one which institutionalizes and legitimizes this examination. Burke & Hornstein, 1972 Organization Development is a systematic application of behavioral science knowledge to the planned development and reinforcement of organizational strategies, structures, and processes for improving an organizations effectiveness.
Cummings & Worley, 1993

Organization development is a planned process of change in an organizations culture through the utilization of behavioral science technologies, research, and theory. Burke, 1994

Organizational Development
Organizational Development (OD) A collection of planned interventions, built on humanistic-democratic values, that seeks to improve organizational effectiveness and employee well-being. OD Values: OD Values:
1. Respect for people 1. Respect for people 2. Trust and support 2. Trust and support 3. Power equalization 3. Power equalization 4. Confrontation 4. Confrontation 5. Participation 5. Participation

Organizational Development Techniques

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.

Organizational Development Techniques (contd)

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

Organizational Development Techniques (contd)

Process Consultation (PC) 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.

Organizational Development Techniques (contd)

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

Organizational Development Techniques (contd)

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

Organizational Development Techniques (contd)

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