Summary for Managing Organizational Design

Managing organizational
design and change

Table of contents
1. Introduction to organizational management
2. Managing The organizational change
3. Creating change and vision .
4. Responses to change and introduction to organizational culture
5. Role of the leader and diagnosis for change
6. Types and causes of the organizational change
7. The recipient of change and resistance to change
8. Implementing Change : Organization development
9. Sense Making Approaches, change management contingency and process approaches
10. Mergers and acquisition
11. Communicating changes

Organization structure – the
pattern of jobs and groups of jobs
organization.
It is an important cause of
group behavior.

Organizational Design Decisions
1. Managers decide how to divide the overall task into
successively smaller jobs
2. Managers decide the bases by which to group the jobs
3. Managers decide the appropriate size of the group reporting
to each superior
4. Managers distribute authority among the jobs

Unity of command
• The concept that a person should have one boss and should report
only to that person

Departmentalization – process in
which an organization is
divided by combining jobs in
departments according to some
characteristic or basis.

Functional Geographic
Product Customer
Departmentalization Bases

Departmental Bases:
Functional Departmentalization
• Jobs are combined according to the functions of the
organization
• The principal advantage is efficiency
• By having departments of specialists, management creates
efficient units
• A major disadvantage is that organizational goals may be
sacrificed in favor of departmental goals

Engineering Reliability Finance
Manufacturing Distribution
Human
Resources
Public
Relations
Purchasing
OBM Company
Functional Departmentalization Structure

Departmental Bases:
Geographic Departmentalization
• Establish groups according to geographic area
• The logic is that all activities in a given region should be
assigned to a manager
• Advantageous in large organizations because physical
separation of activities makes centralized coordination
difficult
• Provides a training ground for managerial personnel

Northeast Midwest Southeast Pacific
OBM
Company
Southwest
Geographic Departmentalization Structure

Departmental Bases:
Product Departmentalization
• All jobs associated with producing and selling a product
or product line will be placed under the direction of one
manager
• Product becomes the preferred basis as a firm grows by
increasing the number of products it markets
• Concentrating authority, responsibility, and
accountability in a specific product department allows
top management to coordinate actions

OBM Company
Small
Household
Appliances
Large
Household
Appliances
Commercial
Appliances
Building
Materials and
Products
Lawn and
Garden
Products
Automotive
Products
Product Departmentalization Structure

Departmental Bases:
Customer Departmentalization
•The importance of customer satisfaction has stimulated
firms to search for creative ways to serve people better
•Organizations with customer-based departments are better
able to satisfy customer-identified needs than
organizations that base departments on non-customer
factors

Retail
Stores
Mail Order
On-Line
Sales
Government
Contracts
OBM
Company
Institutional
Sales
Customer Departmentalization Structure

Silo mentality functional organization
Customer
Geographical
Product

Span of Control
• Number of individuals who report to a specific manager
• Narrow span
• Wide span
• The frequency and intensity of actual relationships is the critical
consideration in determining the manager’s span of control

Span of Control
• If we shift our attention
from potential to actual
relationships as the bases
for determining optimum
span of control, three
factors appear to be
important:
Key Factors
Required Contact
Degree of
Specialization
Ability to
Communicate

Line and Staff Authority
• Line Authority -
management with formal
power to direct and
control immediate
subordinates
• Staff Authority - granted
to staff specialists in their
area of expertise

Company philosophy
• Innovation or value creation
• Value innovation is the right philosophy
• BOS

Organizational change and planning

Planning horizons
• Short term
• Medium term
• Long term

Planning model SOST + 6 M
• Situational analysis
• Objectives
• Strategy
• Tactics
• Money
• Men
• Machines
• Materials
• Minutes
• Measurements

Change management and
continuous self development

Contents
• Forces for Change
• Principles of Change
• Five Activities Contributing to Effective Change Management
• Motivating Change
• Creating Vision of Change
• Developing Political Support
• Managing the Transition
• Sustaining Momentum
• Elements of Change Enablement

Question
• We will start the training with the following question
38
Who of the followings likes change?
1. Babies
2. Sportsmen
3. Celebrities
4. Risk takers
5. Policemen
6. Young people

Business transformation is difficult

Organizational change management
Organizational change management (OCM)
-Organizational change management
Organizational change management (OCM) is a framework for
managing the effect of new business processes, changes in
organizational structure or cultural changes within an enterprise.
-Simply put, OCM addresses the people side of change
management.

What Is Change?
• Organizational Change
• Any alterations in the people, structure, or technology of an
organization
• Characteristics of Change
• Produces uncertainty yet is not completely unpredictable
• Creates both threats and opportunities
• Managing change is an integral part
of every manager’s job.

Personal Reasons
• Aspiring for a title
• Aspiring for self
Actualization
• More Money
Professional Reasons
• Market Shares
• Revenues
• Profitability

Attitude components
• Cognition
• Affect
• Conation

Types of attitude
• Enthusiastic
• Positive
• Indifferent
• Negative
• Hostile

The Manager as Change Agent
• Change Agents
• People who act as catalysts and assume the responsibility for changing
process are called change agents.
• Types of Change Agents
• Managers: internal entrepreneurs
• Non-managers: change specialists
• Outside consultants: change implementation experts

Change Process Viewpoints
• Unfreezing the status quo
• Changing to a new state
• Refreezing to make the change permanent

Change Initiators
• It is also called the strategic triangle including:
1-Awareness
2-Motive
3-Willing

“When the rate of change outside exceeds the rate of change
inside, the end is in sight”
Rate of Change
Jack Welch

5 Steps to Breaking Bad Habits

1. Decide that you really want to change and
convince yourself that you can.

2. Gain insight on what's causing the habit.

3. Set reasonable goals at first

4. Measure your progress and don't be discouraged by
occasional slips

5. Seek additional support if your habits are proving
harder to change

Forces for Change...
Electronic
commerce
Virtual organizations
Digital convergence
“Knowledge
economy”
“Information Superhighway”
... are transforming the world of business
Mergers &
acquisitions
Privatizations
A-2

Adoption process
???????????????????????

Not Very
Successful
Very Successful
Moderately Successful
Too soon to tell
Unsure
33%
27%
27%
9%
4%
Rate of Success in Change Efforts

Technical Side of Change Human Side of Change
Two Sides of Change

Stimulating Innovation
• Creativity
• The ability to combine ideas in a unique way or to make an
unusual association.
• Innovation
• Turning the outcomes of the creative process into useful
products, services, or work methods

Group exercise
You will be divided into 3 groups each group will be
responsible for discussing the way of managing one element
of the innovation variable

Key Steps in Becoming an Innovative
Organization

Innovation Strategies
• Possible Events
• Radical breakthroughs in products.
• Application of existing technology to new uses.
• Strategic Decisions about Innovation
• Basic research
• Product development
• Process innovation
• First Mover
• An organization that brings a product innovation to market or use
a new process innovations
• Blue ocean strategy

How Adobe Funded 1,000 Experiments
• With a 20-year-career as a serial innovator, entrepreneur, and
founder, Mark Randall has fielded over a dozen products which
combined have sold over a million units and generated over $100
million. As an inventor, he holds 10 U.S. patents.
• As VP of creativity at Adobe, Randall has taken on the challenge of
creating a culture that supports experimentation..

The Elements Of Organizational Innovation
3 key elements of a culture of innovation, based on their research.
• Environment: Giving permission to challenge assumptions, creating
openness to new ideas, and giving freedom to experiment, fail, and
learn.
• Talent: Implementing training and development programs for
innovation, setting and managing innovation performance objectives,
and building diverse teams.
• Process: Considering broad sources for idea generation and having a
process to incubate innovative concepts.

Creating the “Right” Environment for
Innovation
• Structural Variables
• Adopt an organic structure
• Make available plentiful resources
• Engage in frequent inter unit communication
• Minimize extreme time pressures on creative activities
• Provide explicit support for creativity

Innovation
• Cultural Variables
• Accept ambiguity
• Tolerate the impractical
• Tolerate risk taking
• Tolerate conflict
• Focus on ends rather than means
• Develop an open-system focus
• Provide positive feedback

Innovation
• Human Resource Variables
• Actively promote training and development to keep employees’
skills current.
• Offer high job security to encourage risk taking.
• Encourage individual to be “champions” of change.

https://www.forbes.com/innovative-
companies/list/#tab:rank

iPHONE (2007) &
APP STORE
(2008)
Reconstruction of the Mobile Phone Industry
© INSEAD Blue Ocean Strategy Institute 2012

Strategy Canvas of the Mobile Phone Industry
High
Low
PC-like
Performan
ce
Style & Fun
Price Number of
Physical
Buttons
Mobile
Internet
Business
Application
s
Ease of Use
Variety of
Models
Offering
Level

High
Feature Phones
Low
PC-like
Performan
ce
Style & Fun
Price Number of
Physical
Buttons
Mobile
Internet
Business
Application
s
Ease of Use
Variety of
Models
Offering
Level
Feature Pho

S
High
Feature Phones
Low
PC-like
Performan
ce
Style & Fun
Price Number of
Physical
Buttons
Mobile
Internet
Business
Application
s
Ease of Use
Variety of
Models
Offering
Level
martphones
Feature Pho

iPhone

iPhone
Eliminate
Variety of models

iPhone
Eliminate Raise
Variety of models Mobile internet
Style & Entertainment
Ease of use & Simplicity

iPhone
Eliminate Raise
Reduce
Number of physical buttons
Embedded business applications
PC-like performance (through
higher operating system)

iPhone
Eliminate Raise
Reduce Create
Embedded business Freedom to customize applications
through App Store
PC-like performance (through (from 2008)

iPhone
The Internet in Your Pocket
© INSEAD Blue Ocean Strategy Institute
Eliminate Raise
Reduce Create
Embedded business Freedom to customize applications
through App Store
PC-like performance (through (from 2008)

Strategy Canvas of iPhone
High
Low
PC-like
Performan
ce
Style & Fun Customization
via App Store
(from 2008)
Price Number of
Physical
Buttons
Mobile
Internet
Business Ease of
Use
Variety of
Models Applications
Offering
Level

High
Low
PC-like
Performan
ce
via App Store
(from 2008)
Price Number of
Physical
Buttons
Mobile
Internet
Business Ease of
Use
Variety of
Models Applications
Offering
Level
Feature Phones
Smartphones

High
Low
PC-like
Performan
ce
via App Store
(from 2008)
Price Number of
Physical
Buttons
Mobile
Internet
Business Ease of
Use
Variety of
Models Applications
Offering
Level iPhone
Feature Phones
Smartphones

Reduce Create
Eliminate Raise
High
Low
PC-like
Performan
ce
via App Store
(from 2008)
Price Number of
Physical
Buttons
Mobile
Internet
Business Ease of
Use
Variety of
Models Applications
Offering
Level iPhone
Feature Phones
Smartphones

1. Change is a process that can be enabled, not
managed
2. The change process must be linked to business
and performance goals
3. Building capacity to change is a strategic
imperative
4. Building capacity for change is an evolutionary
process
Principles of Change

5. Effective change processes require a systemic
view of the organization
6. The change process involves both organizational
and personal transitions
7. Behavioral change is a function of perceived need
and occurs at the emotional, not the intellectual
level

8. Resistance to change is predictable reaction to
an emotional process and depends on a person’s
perception of a change situation
9. A handful of change enablement best practices
account for the success of most change
processes
10.Change strategies are situational

Five Activities Contributing to
Effective Change Management

Five Activities Contributing to Effective
Change Management
1. Motivating Change
2. Creating Vision of
Change
3. Developing Political
Support
4. Managing the
Transition of Change
5. Sustaining Momentum
Effective Change
Management

1. Motivating Change
Motivating change
and creating
readiness for
change
Sensitize
organizations to
pressure for
change
Reveal
discrepancies
between current
and desired states
Convey credible
positive
expectations for
the change

Force Field Analysis Model
Current
Situation
Restraining Forces for Change
Driving Forces for Change

Force Field Analysis Model
Strengthening
or adding
driving forces
Removing or
reducing
restraining
forces
Changing the
direction of
some of the
forces
Change

Resistance to Change
20% 40% 60% 80% 100%
Source: Information Week, June 20, 1994
Limitations of Existing Systems
Lack of Executive Commitment
Lack of Executive Champion
Unrealistic Expectations
Lack of Cross-Functional Team
Inadequate Team and User Skills
Technology Users Not Involved
Project Charter Too Narrow
Barriers to Change

Individual Resistance
Individual
Resistance
Habit
Selective
Information
Processing
Economic
Factors
Job Security
Fear of the
Unknown

Organizational Resistance
Organizational
Resistance
Threat to Established
Power Relationship
Group Inertia
Threat to Established
Resource Allocations
Structural Inertia
Limited Focus of Change

112
MANAGING CHANGE IS DIFFICULT
The most common challenges experienced during change are employee resistance
and communication breakdown.
76%
72%
44%
36%
32%
0% 40% 80%
Employee resistance
Communication
breakdown
Insufficient time
devoted to training
Staff turnover during
transition
Costs exceeded
budget
Obstacles Experienced During Major Organizational Changes
Percentage of respondents indicating as an obstacle; n=307
Source: Society for Human Resource Management, 2007 Change
Management Survey Report, Alexandria: The Society for Human
Resource Management, 2007.

Emotional Responses to Change
Stress
Anxiety
Fear
Urgency
Creativity
Compassion
Ownership
General ability
Engagement
Interest
Negative emotion limits colleagues’ thought-action repertoire and can
severely impact level of contribution

Resistance To Change
WHY?
What’s in it for
me?
I am not ready
I will loose
ground
You go ahead, I
will wait and
see

Resistance to change
-Self interest in the present status
-Fear of the unknown
-Loss of confidence
-Work overload
-Lack of purpose
-Misunderstanding to the benefits of change
-Distrust
-Low tolerance for change

117
Launch Strategies
Pre-launch Strategies
 Acknowledge resistance and resisters
Announce the change early to allow time
 Anchor the change in the organizational cultural
 Clearly explain the case for change again
 Define success of the project
 Discourage apathy
 Don’t try to do everything yourself
 Encourage ownership
 Emphasize the risk of not changing
 Encourage the expression of opposition
 Engineer some quick wins
 Establish clear priorities
 Illustrate the new opportunities for employees
 Invite participation in implementation.
 Nail down each person’s responsibilities
 Stay positive
 Take all objections seriously
 Anticipate the barriers to implementation
 Be a change agent
 Begin to build momentum
 Challenge people – raise the expectations !
 Choose the right changes
 Form an influential coalition
 Get resistance out in the open
 Involve the opinion leaders.
 Look for potential resistance
 Make only the needed changes
 Plan ways to reduce impending job stress
 Remove potential obstacles to the vision
 Sell ( but don’t oversell ) the change
 Share the case for change
7 Building A case for Change – Key implementation
Strategies

118
Potentially Helpful Strategies
Perceived Threats-
Feelings of Loss
 Accept management responsibility for past failures
 Actively listen to employees; their perceptions may not match
management’s
 Present potential scenarios showing the benefits of the change.
 Present positive personal development plans
 Stress improved job prospects
 Loss of affiliation
 Loss of confidence
 Loss of power or status
 Loss of resources
 Loss of Security or
comfort
• Resistance caused by perceived threats

119
Fears
 Admit your fear and describe what convinced you to ignore them
 Address individual fears openly and honestly
 Be positive and enthusiastic
 Explain what the change means for individuals
 Express confidence in their ability to succeed
 Explain why personal advantages outweigh disadvantages
 Encourage and support any needs training
 Involve people in positive, quick –turnaround action
 Persuade people that change will mean opportunities
 Try to reinforce the idea that fear of the status quo should be
greater than fear of change
 Fear of the unknown
( ambiguity )
 Fear of success (more work,
higher expectations )
 Fear of failure ( feelings of
inadequacy (
• Resistance caused by Fear

120
Conflict
 Allow for constructive exceptions
 Be open to modifications
 Build rapport outside work
 Create discontent with the conflict in the present situation
 Clearly communicate the need for change
 Emphasize the areas of agreement
 Honor the conflicting parties and negotiate resolutions
 Involve all functional areas in the planning
 Practice full disclosure to build trust
 Conflicting roles
 Conflicting goals
 Control issues
 Functional perspectives
 Group loyalties
 Power plays
 Revenge
 Turf battles
 Saving face
• Resistance caused by Conflicts

121
Distrust
 Admit past mistakes and explain how they will be avoided this time
 Answer every question to the inquirer’s satisfaction
 Be open , honest ,and thorough
 Carefully explain the reasons for change
 Demonstrate ( using examples ) why the old ways won’s work anymore
 Emphasize past successes
 Hold meetings to communicate the details of the change agenda
 Invite and seek involvement
 Of the change
 Of the change agent
 Of management
 Of the immediate superior
• Resistance caused by Distrust

122
Different Perceptions
 Clarify any perceived role or goal conflicts
 Explain the plan with greater clarity and detail
 Explain what would happen if the company didn’t change
 Help employees weigh pros and cons of the alternatives
 Involve everyone in implementation teams
 Show why the new change is sustainable and not fad
 Use a bottom-up process for adapting systems and produces
to facilitate the change
 Different assessment of the need for
change
 Different views of the appropriateness
of this change
 Different judgments of the
meaningfulness of this change ) is it
just flavor of the month ? )
• Resistance caused by Different Perceptions

Characteristics of Successful Change
 Demonstrates relative advantage:
“Better than the idea it supersedes”
 Ensures compatibility:
“Consistent with existing values and needs”

Characteristics of Successful Change
 Avoids complexity:
“Simple to understand and use”
 Promotes trialability:
“Capable of experimentation on limited basis”
 Provides observability:
“Results are visible and communicated”

• Helps us understand how we personally respond to change
• Helps us understand how people typically respond to
change
• Helps us communicate more effectively with our
employees
• Includes stages of the change process
The Change Curve

The Change Curve
Stages of Transitions
CONFUSION/DENIAL
1
ANGER/BLAME
2
BARGAINING
3
DEPRESSION
4
TESTING
5
ACCEPTANCE
6
INTEGRATION/
MOVING ON
7
PERFORMANCE
PERIOD OF LOSS
INCREASING STRESS
DECREASING STRESS
POSITIVE GROWTH TIME

• Confusion and denial is one of the reactions people will
show
• “This can’t be real”
• “It doesn’t make sense”
• “It won’t affect our group”
• “They’ve talked this way before. Nothing really changed”
• “I’m in shock and can’t move; I’m frozen”
Confusion and denial

Manager’s role
Provide frequent pictures of reality; show and explain the
big picture

• “How could they do something so stupid?”
• “This is management’s fault; they make really bad decisions”
• “If they had listened to us years ago, we wouldn’t be in this mess”
Anger or blame

Manager’s role
Be patient; avoid angry response, communicate core
messages

• “I’ll tell them what they want to hear – that will calm them down”
• “If we go along with all of this now, it’ll probably get back to normal
in a few months”
• “I’ll change a little but no way am I going along with all of these
changes”
• This can slow down the change process when first line leaders are
not involved and not prepared for this kind of reactions from the
people. Many first line leaders join their people with their
complaints and are losing their leadership effectiveness
Bargaining

Manager’s role
-Show positive benefits of change
-Be clear with your core messages and repeat them
continuously!

• “This is really bad. My life is not good anymore”
• “I have no future here”
• “We’re in big trouble – no one cares about me”
• “Things will never get better, it’s all over now”
• “It’s not my company anymore; they’re only interested in money”
Depression

Manager’s role
• Give direction, focus, measures and feedback,
• Motive them

• how can we do it?
• “You know, maybe there are opportunities here”
• “I’m going to try to really make this work”
• “Other companies have gone through things like this and they
seem to be okay”
• “Maybe I can get more visibility in my job now”
• “Okay! I think I can deal with these changes”
Testing

Manager’s role
Tap positive energy to help team

• “The new organizational identity and direction are clear”
• “My new identity is clear and internalized”
• “I understand my role – how I ‘fit’ “
• “I’m energetic about my work”
• “I know I can contribute”
• “I feel comfortable with my colleagues”
• “I can see myself succeeding in the future”
Acceptance

Integration
Complete adoption for the change

Role of Manager
Challenge for peek performance!

“For there to be Change,
there has to be a Plan,
that leads to Objectives”
Johnd D.Kotter

SOSTAC®
SITUATION
ANALYSIS
OBJECTIVES
STARTEGIES
TACTICS
ACTIONS
CONTROL

Organizational Change Management

Set the Stage
1.Create a Sense of Urgency
2.Pull Together the Guiding Team
Decide What to Do
3.Develop the Change Vision and Strategy
Make it Happen
4.Communicate for Understanding and Buy In
5.Empower Others to Act
6.Produce Short Term Wins
7.Don’t Let Up
Make It Stick
8.Create a New Culture
Kotter’s 8 Steps Process of Successful
Change

Head
(Executive Sponsor)
Head
Organizational
Development
(Change Leaders)
Communication Role
(Change Agents)
Human Resources Role
(Change Agents)
• Corporate Management
• Key project accountability and ownership
• Report to CEO on project outcomes/success
• Coordinate overall change program
• Develop clear change strategies for change
• Responsible and accountable for overall success
• Develop individual and team change capability
• Provide clear communication to all key stakeholders
on change related issues
• Develop 2-way communication channels to foster
ongoing organizational change
• Provide expert HR advice on personal transitions and
support
• Provide Change Office & project based HR
infrastructure
Change Management Team : Roles Example

Project Leaders
• Take responsibility for key initiatives
• Coordinate project team
• Report to business unit GM and Change Office on
project progress
• Develop leadership change management capability
• Provide ongoing change advice to leaders
• Coordinate project infrastructure & integration
• Prioritize and plan overall project timeframes
• Establish clear project performance measures and
reporting systems
• Manage ongoing project performance
• Report to Executive on overall progress
Leadership Advisory
Role
Process Co-ordination
Role
Performance
Management Role
C - 5
Change Management Team : Roles Example

Critical Skills of Change Agents
Understands
change dynamics
Appreciates
diversity
Anticipates and
manages
resistance
Understands
power and
influence
Has high
credibility
Manages
multiple tasks

Leaders’ values and behaviors are aligned with
the business vision; leaders possess the skills to
drive the change process to completion, and
accept the responsibility for doing so
Leadership
Capacity
Team &
Individual
Capacity
Actions have been taken to increase individuals’
and teams’ ability to enact the business vision and
operate effectively in the new environment.
Change Enablement – Best Practices

The organization has assessed the alignment of
the current culture with the change process and
built new values and behaviors as appropriate to
support it.
Cultural
Capacity
Change Enablement – Best Practices

Everyone thinks of changing the world,
But no one thinks of changing
himself/herself
LEO TOLSTOY

152
And…be sure
You can make the difference.

What is a Personal Development Plan?
Organisations are increasingly using Personal Development Plans as
a way to form the basis of training and career development of
individuals.
Learners hoping to continue studies into higher education are likely to be
expected to complete a Personal Development Plan.

Where am I now?
Identifying strengths
Identifying weaknesses
Identifying existing skills/qualifications
What are the features of a Personal Development
Plan

Plan
Where do I want to go?
Identifying future required
skills/qualifications
Identifying long term aims

Plan
How am I going to get there?
Setting short-term goals
Setting timeline

Benefits and risks
What are the benefits of completing a Personal Development Plan?
What are the risks of completing a Personal Development Plan?

The benefits
There are both benefits for the individual and employer:
• Individual: The plan can be a motivating factor
• Become focused on self-improvement and understand the long-term
implications of efforts
• Employer’s point of view: The plans encourage employees to
be proactive about their career planning

The risks
• Businesses will be constantly assessing
whether raising expectations of the
opportunities that may be presented to
employees could cause more damage than
not offering a PDP programme at all.

Summary for Managing Organizational Design

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