Managing Change
Lecture 1
The Change Environment
1
Lecture Outline
Introduction
Change Forces
Factors/drivers for Change
Change and Its Types
Organizations in Change.
2
INTRODUCTION
• Managing change has become an increasingly
•
•
important task for all managers
Today’s organizations need to continuously
adapt to new situations if they are to survive
and prosper
Pressure to change comes from:
– External, environmental pressures
– Internal, organizational pressures
3
Organizational Change
• The adoption of a new idea of behavior by
•
•
•
an organization (Daft, 2008).
Any alterations in the people, structure, or
technology of an organization (Robbins &
Coulter, 2007)
A product change is a change in the
organization’s product or service outputs.
A technology change is a change in the
organization’s production process – how
the organization does its work.
4
CHANGE FORCES
External forces
Market
Government Technology
Labour
Economy
Internal forces
Strategy
Work force
New
equipment
Employee
attitudes
5
Why Organizations Change?
• Some Examples:
• Timex – Failed to understand the market
change “hand dialed watches to automatic
quartz watches”
• Kodak – Able to change to from film roles
to digital cameras
• Any more examples?
6
Why Organizations Change?
• To change an organization, step away from
•
the edifice in which we stand in awe, and
step closer to those who make it move
through their daily actions (Peter de Jager,
2004)
Change is a constant feature of organizational
life and the ability to manage it is seen as a
core competence of successful organizations
(Burnes, 2004).
7
Kurt Lewin’s 3 Phases of Change
• Present – A system of equilibrium
• Transition – A period of uncertainty,
movement, departure
• Desired – The final, arrival point.
8
DRIVERS OF
CHANGE
•
•
•
•
•
•
•
Strong support from CEO
Incentive program
Help from vendors
Customer demands
Legislative sanctions
Pressure from Competitors
Porter’s Competitive Forces
– Threat of new entry,
Intensity of rivalry,
Substitute products,
Barganing powers of
buyers and suppliers
RESISTORS OF
CHANGE
• Mistrust amongst mgrs.
•
•
•
•
•
& employees
‘Worn out’ by constant
change
Staff reluctance to use
new technology
Union resistance
Poor communication
channels
Low resources
9
Example: Changing Traditional to
Just-In-Time Inventory Systems
Exhibit 11.7
Source: Daft, 2008
10
External Drivers for Change
PESTLE Analysis
• Political
• Economic
• Social
• Technological
• Legal
• Environmental
11
Internal Drivers for Change
• Owners & shareholders
• Employees
• Customers
• Suppliers
• The local community
• Job design & skill requirement
• Product design
• Technology
12
CHANGE AND ITS TYPES
• Reactive (top-down) & proactive (bottomsup) change
• Planned and Spontaneous (Emergent)
change
• Episodic (Infrequent, discontinuous and
intentional) versus Continuous change
(Ongoing, evolving & cumulative)
• Discontinuous versus incremental change
13
Robbin & Finlay’s (1997)
4 Styles of Change
• Pummel – top-down change - change is
enforced
• Push – fear is used to stimulate action
• Pull – empowers workers to improve the
current situation
• Pamper – style is symbolized by a lack of
control
14
Tom Peter’s Circle of Innovation
• Advocates a ‘slash and burn’ approach to
change – in which existing systems are
destroyed in oredr to let new and more
productive systems thrive.
15
ACKERMAN’S (1997) 3 TYPES
OF CHANGE
• Developmental – Either planned or
emergent or incremental – change that
enhances or corrects existing aspects of an
organization.
• Transitional – seeks to achieve a known
desired state – episodic, planned or radical
• Transformational – Radical and differs
significantly in terms of structure, process,
culture & strategy
16
Three Categories of Change
Source: Robbins, S.P. and Coulter, M. (2007). Management, 9th Edition. Prentice-Hall, USA.
17
ORGANIZATIONS IN CHANGE
Strategies to Facilitate Change
• Empirical-Rational – people are rational
and will follow their interest once revealed
• Normative-Reeducative – Adhere to
cultural norms and value
• Power-coercive – basically compliant and
do what is told to be done – authority
• Environmental – Adaptive – adapt readily
18
to new circumstances
ORGANIZATIONS IN CHANGE
• Quality Circles – employee participation
method
• Total Quality Management
• Business Reengineering
• Customer oriented and radical improvement
• Delayering
• The learning organization
• Customer focus
• Empowerment
19
References
• Daft, R.L. (2008). The New Era of
Management, 2nd Edition. Thomson
South-Western, Ohio.
• Robbins, S.P. and Coulter, M. (2007).
Management, 9th Edition. Prentice-Hall,
USA.
20