1. Organizational Design:
Organizational Change and
Learning
QSB2413 Management Science

2. Introduction
• Change is about aligning people, resources and
culture with a shift in organizational direction.
• Changes are often initiated by critical events such
as:
Globalization and competition
New CEO
Mergers or acquisitions
Deregulation or market shifts
Failure in operating results

3. 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 in order to increase
an organization’s ability to create value.

4. Organizational Change
• An alteration of an organization’s
environment, structure, culture, technology,
or people.
–A constant force
–An organizational reality
–An opportunity or a threat
• Change Agent - A person who initiates and
assumes the responsibility for managing a
change in an organization.

5. Basic Questions for Change Agent
• What are the forces acting upon me?
– What are the pressures I should take into
consideration as I decide what to change and how
I should change it?
• What should we change?
– Should the changes be strategic and companywide
or relatively limited?
• How should we change it?
– How should we actually implement the change?

6. The Drivers of Change
1. Technological factors
2. Organizational factors
3. Economic factors
4. Governmental influences
5. Societal / Cultural influences
6. Clients have changed

7. (1) Technological Factors
The industry and its building
• Structure and fabric – since mid 19th Centuries
• Building services – last 50 years
• Construction methods – mechanization,
industrialization
Society and industry generally
• Information technology (system)
• Manufacturing, business processes (taking place
in buildings)

8. (2) Organizational Factors
Increasing specialization
• Driven by technology, business strategy,
legislation.
Separation of function
• Especially design from construction
• Growth for professional boundaries
• The professional “hierarchy”

9. (3) Economic Factors
The importance of the industry
• E.g. Construction industry contributes 6% to 7%
of UK economic activity, 5% - 6% of Malaysia
economic activity.
The economic cycle – “boom and bust”
• Why construction suffers more and for longer
The industry as economic regulator
• Governmental intention often overstressed
• General economic controls affect industry
becoming hard

10. (4) Governmental Influences
Control of economy
• As client of the industry – approximate 25% of
output is commissioned by public sector
• Current changes in procurement – public or
private project (PAM/JKR form of contract)
Legislation and Taxation
• Direct impact – Planning, building regulations,
safety
• Indirect impact – Tax concessions, development
areas, etc.

11. (5) Societal/Cultural Influences
Greater influence of general public
• Less accepting of authority – government,
professions
• Environmental consciousness - protest
Broader cultural influences
• Changing population, easier world travel
Entrepreneurial attitudes
• Have varied with time
• Increase in small businesses since late 70’s

12. (6) Changing Clients
Growth of the corporate client
• Compared with 19th C, it was about the importance of
individual & sole trader
Globalization
• Changing market for business & clients they generate
Business priorities
• Increasing concentration on time & cost performance
• Less tolerant of failings – more litigious
Transfer of management methods
• Project Management, procurement methods

13. Change Agent

15. Types of Organizational Change
Radical Change
• Major makeovers of organizations.
• Major makeovers of their component systems.
Gradual Change
• Occurs more frequently and with less dramatic
impact.
• E.g. New products, new technologies, new
systems.

16. Phases Of Change
3-Stage Process
Unfreezing: Getting people and things ready for
change
Changing: Implementing the change
Refreezing: Making sure the change sticks as
part of the new routine

17. Targets of Change
• Targets of change include improving
effectiveness at four different levels:-
(1) Human resources
(2) Functional resources
(3) Technological capabilities
(4) Organizational capabilities

18. Target For Change
• Purpose: Clarify or create new missions, visions
and objectives.
• Objectives: Due to change in the environment,
specific performance standards have to be
modified or new performance standards set.
• E.g. In construction industry, firms are
encouraged to apply the technology in order to
improve the productivity instead of using the
conventional methods of construction (BIM or
IBS).

19. Target For Change
• Tasks: Updating job designs and scope for
individuals and groups.
• People:
- Update recruiting and selection practices.
- Improving training and development.

20. Target For Change
• Structure: Update organizational design and
coordination mechanism.
• E.g. team structure, virtual organization,
boundaryless organization (eliminate chain of
commands).

21. Target For Change
• Technology: Improve equipment, facilities and
workflow.
• Culture: Core beliefs and values have to be
clarified and modified to adapt to the
changing environment.

22. Target For Change
• Strategy: Strategic and operational plans have to
be clarified, modified or new ones created
including:
- External interface
- Mission
- Managing organization mission
- Prescribed networks
- Organizational process
- Motivation of people
- Emergent networks

23. What is resistance to change?

24. Resistance To Change
• Individual resistance (e.g. loss of position,
power, status, quality of life and authority).
• Organizational resistance (e.g. change in the
balance of power and structural inertia).

25. Why do people often resist to change?

26. Resistance To Change
• Information: “What’s going to happen?”
• Personal involvement: “Will I survive the
change?”
• Implementation: “How do I get started on the
change?”
• Impact: “How will the change benefit us and
organization?”

27. Overcoming Resistance:
A framework For Change

28. References:
Management: Challenges for tomorrow’s leaders/Pamela S. Lewis – edition 6

29. A Framework For Change
Step 1: Establishing a Sense of Urgency
• The need for change
• Discuss changes in the market or competitive
conditions
• Condition might be negative/crisis or
positive/opportunity for the organization
• Clearly stated and shared throughout the
organization (communicate)

30. A Framework For Change
Step 2: Creating the Guiding Coalition
• A team of people who are charged with taking,
initiating and effecting the change
• Manager must select those who have an
emotional commitment to change and who have
the right skills to effect the change
• An effective guiding coalition must have the right
composition, a significant level of trust from
others and a shared objective for their work

31. A Framework For Change
Step 3: Developing a change vision
• Change vision – how the organization will look
once the change has been implemented.
• The vision should be compelling, motivating,
realistic and time specific.
• Vision is a very powerful tool for enabling
others to see the proposed change’s impact
and understand how the future will be.

32. A Framework For Change
Step 4: Communicating the Vision
• The most important part of the change process
is effective communication.
• The message should go out to every
constituent affected by the change.
• The message should be simple and repeatable.
• Communication is two-way and open dialogue.

33. A Framework For Change
Step 5: Empowering Broad-Based Action
• Empowering organizational members to
implement the change.
• Managers must provide training and
educational opportunities to help employees
learn the new behaviors, develop new
technical skills, interpersonal skills and
attitudes.

34. A Framework For Change
Step 6: Generating Short-term Wins
• Ensuring short-term goals are established that
are highly visible and achievable.
• Short-term wins not only encourage
supporters of the change, but also can turn
neutral people into supporters and reluctant
supporters into active helpers.

35. A Framework For Change
Step 7: Never Letting Up
• Persistence – critical for successful change
initiatives.
• Leaders must continue to push the
organization towards the ultimate goals.
• New behaviors and practices must be fully
absorbed by the organization to ensure that
the change will be long-lasting.

36. A Framework For Change
Step 8: Incorporating Changes in the Culture
• Organizational culture is a deeply rooted
phenomenon.
• New practices must grow deep roots in order
to remain firmly planted in the culture.

37. Some general rules about cultural
change

38. Cultural Change
• You must be able to prove that the new way is
superior to the old.
• The success must be visible and well
communicated.
• You will lose some people in the process.
• You must reinforce new norms and value with
incentives and rewards – including promotions.
• Reinforce the culture with every new employee.

39. Summary
• It is impossible to change one aspect of an
organization without affecting other aspects.
• Changes in products or services offered may
require new technology, a new distribution
system, new employee skills or different
relationships with customers.
• Learning to recognize and manage change is one
of the most important skills a manager can
develop.
• Change is natural. Managers must help
organizations work with it, not against it.

40. Discussion
• What is the cause to change in an construction
organization?
- Competitive environment
- Customer preferences
- Information technology (IBS/BIM)
- Globalization
• List the reasons of resistance to change.
- Rigid culture
- Personality

41. Discussion
• Do you think change is good to construction
industry? Example using BIM.
• What about other industries, says
manufacturing? Auto industry – car producing
(hybrid / electronic technology)
• Innovation – key to success
• http://www.strategy-
business.com/article/rr00006?gko=643d0

42. The End