Leadership & change management, lecture 5, by rahat kazmi

LEADERSHIP AND CHANGE
MANAGEMENT
- NATURE OF ORGANIZATIONAL CHANGE
- REASONS FOR RESISTANCE TO CHANGE

- MANAGEMENT OF ORGANIZATIONAL CHANGE

- IMPORTANCE OF ORGANIZATIONAL HEALTH AND PERFORMANCE

LECTURE 2
BY
RAHAT KAZMI PREPARED BY: RAHAT KAZMI

SEPTEMBER 2010

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Objectives

 To explain the nature of organizational change and
explore reasons for resistance to change
 To examine the management of organizational
change, and human and social factors of change
 Review the importance of organizational health and
performance, and ability of the organization to
adapt to change


Culture

People Process


Why Change?

 Adaption of new ideas

 Organisations need to continually
adapt to new situations if they
are to survive and prosper

 Constant Change keeps
Organisations Agile


Don’t Try to Change Me…….


Old & New Change Models

Old Learning Model New Learning Model

Why Change? Other Factors

 Market Transparency

 Labour Mobility

 Global Capital Flows


What is System?

S SHRAED VISION

Y YOU ARE ACCOUNTABLE

S SHAREHOLDER INVOLVEMENT

TOOLS & SKILLS
T

E ENABLING BEHAVIOUR

MEASURES & PROCESSES
M

Change We can Believe in


10 Principals of Change Management

1) Address the Human Side Systematically
2) Start at the Top
3) Involve every Layer
 a) Define Strategy
 b) Setting Targets
 c) Design
 d) Implement
4) Make the Formal Case
 a) First confront reality and articulate a convincing need for change
 b) Demonstrate faith that company has a viable future and the leadership to get
there
 c) Provide a roadmap to guide behaviour and decision making
5) Create Ownership
6) Communicate the Message
7) Assess the Cultural Landscape
 Values-Beliefs-Behaviours and Perceptions
8) Address Culture Explicitly
9) Prepare for the Unexpected
10) Speak to the Individual

Change Is.....

 The human experience consists of matching our
capabilities against the challenges we face. A sense
of balance, is maintained in our lives when:

=

Challenge = • Capability

Ability/willingness Danger/Opportunity

We seek this kind of balance because it makes us feel that things are
predictable and thus easier to manage.

Change Is.....

 Change occurs when this balance is disrupted. There
are two ways the status quo can be disrupted;
positive change or negative change:

=

>Positive Change
or


Change Is.....

 When people believe their capabilities exceed a challenge, they
generally feel positive because the outcome is not only desirable but
expected (for example the birth of a child.) When the reverse is true,
people feel negative not only because the outcome is undesirable, but
also because such situations lack predictability.:

=

>Negative Change
Most people find it is extremely uncomfortable to face situations filled with the
unknown because of the loss of predictability. We are attracted to situations that
are familiar because they allow us the feeling of being in control.

KURT-LEWIN’S CHANGE MODEL

UNFREEZE

CHANGE

REFREEZE


KURT-LEWIN’S CHANGE MODEL

Kurt Lewin‟s model of change
Stage Characteristics Organizational impact
People in the organization
made aware of This diagnosis stage is often driven by
Unfreezing
problems/performance gap a change agent
and need for change
People experiment with new This intervention stage features specific
Changing workplace behaviour to deal training plans for managers and
with needed change employees
People employ new skills and
Changes are institutionalized in the
Refreezing attitudes and are rewarded by
corporate culture
organization

THE CHANGE PROCESS

Present Transition Desired
Desired
State State
State
State

The above model for change can be used to understand and plan for
change. It uses the analogy of an arrow to explain the change process of an
organization.
The 1st circle in its original shape represents the current state of the
organization. In order to change, the 1st circle must be unfrozen, moulded to
its new shape, and then, refrozen. Similarly the organization, in order to
change positively, must melt any forces, which resist change and create a
climate of acceptance and trust that will reinforce or refreeze the new state
of the organization.

Characteristics of the Transition State

 Low stability.
 High, often undirected energy.
 Past patterns of behaviour become highly valued.
 High emotional stress.
 Control becomes a major issue.
 Conflict increases.


Managing Change - Examples

CASE 1: Shake-up at the GTE Corporation
A deregulation in the telephone industry that was capped by the antitrust
Situation settlement broke up the Bell system and triggered the great shake-up at the
GTE Corporation.

Trigger External environmental change triggered by government laws.

Driver/Barrier Environmental

The company was forced to refocus its telecommunications business and
Actions Taken
discontinue its other unrelated industrial businesses.

GTE is attempting to integrate local phone service with cellular business to
Results create a streamline network. This would allow customers to easily call almost
anywhere.

Managing Change - Examples

CASE 2: Need for quicker product deliveries at Black Box

Black box wants to improve the efficiency of the organization by delivering
Situation
their products quicker to the customers

Internal organization problem in which slow employees triggered the
Trigger
change.

Driver/Barrier Incentive

A change agent at Black Box used action in the form of a reward system to
Actions Taken incentives employees. He dramatized the need for faster deliveries by
implementing a new bonus plan for the employees.

Warehouse fulfillment teams worked overtime taking extra orders and
Results sending out same-day shipments. Employees earned 140% of their bonuses
and nothing else suffered.

Triggers of Change - Internal

Human Resource Issues
 Organizational learning requires humans as agents.
 Accordingly, changes in human resources within any organization pose major
impetus for OL.
 In Virany, Tushman, and Romanelli (1992), the researchers examine how changes
in the chief executive officer triggered off necessary organizational learning
among members in the top management team.
 In a study on expatriation, Vink and Schapink (1994) argued that organizations
must learn to work beyond Western ethnocentric theories of behaviour.
 Effective intercultural managers are those who have acquired and shared their
collective experiences on unfamiliar and different cultures.
 On the relationship between personnel turnover and organizational learning,
Carley (1992) showed that hierarchies were less affected by high turnover rates
than teams, particularly when the task is non-decomposable.



Implementation Issues

 The introduction of a new technology, innovation, or R&D often triggers need
for
 organizational learning (see George 1983; Bessant and Buckingham 1993;
Carlsson and Kean1976).
 Implementing a new innovation often alters existing work routines, reward
structures, or communication patterns to the extent that organizations must
ensure sufficient slack resources to support learning activities to incorporate
the innovations successfully and to obtain full benefits of the innovation.



Inter-organizational Relations

 Organizational learning is an emerging paradigm for the study of strategy
making when firms diversify into new practices, products or services and
collaborate with other firms in creating new interorganizational relationships
or IOR (Alaharkonen and Rutenberg 1990) (Kazanjian and Drazin 1987).
 The need for close collaboration and cooperation with others in IOR such as
strategic alliances imposes an unprecedented emphasis on organizational
learning as parties to the relationship need to institutionalize and
amalgamate distinct organizational practices, new job definitions, new ways
of managing and even redefining the nature of the firm (Lewis 1991).


Triggers of Change - External

Business Environment Issues
 Business turbulence comprises one of the most significant environmental jolts
faced by firms.
 Rapidly changing dynamics of industries and competitive forces require firms
to learn faster than competitors in order to achieve sustainable competitive
advantage.
 To survive, organizations must learn to shift from managing and producing in
the world of stable markets to one with short product lifecycles, continual
innovation, and rapid changes in customer demands.
 Organizations must build a capacity to learn: to conduct quick studies and
tackle novel problems (Maccoby 1993; Hosley, Lau, Levy, and Tan, 1994)



E-Commerce



Digital Convergence



Acquisitions



Technological Environment Issues
 The greatest jolt from the environment is the unprecedented pace of change
in technologies. Because of the high rate of technological change, formal
education in schools will never be able to totally prepare workers for their
lifetime‟s technological work demands.
 It is thus paramount that firms create a learning environment within their
organizations to promote on-the-job learning and growth.
 Continual learning and investing in the full spectrum of employee talents with
teamwork are cornerstones for coping with relentless pace of change in
technology (Benett and O‟Brien 1994; Atkinson 1994).



Economic Environment Issues
 Economic environment issues take on many forms. With globalization of
markets, organizations must learn to break the limited mindsets of national
markets to compete on a worldwide basis (Ghoshal and Butler 1992).
 Firms in economic recessionary regimes must learn new survival skills to re-
vitalize the organization, steering the organization from danger to opportunity
(Hollingworth 1992).
 Organizations in East European economies and other communist regimes face
great challenges when reforms coverted centrally planned markets to free,
open markets (Swiderski and Seiderski 1986).
 Firms had to erase old organizational memories and routines of a socialist
economy and generate new rules, standard operating procedures to compete
in a new open market economy.


Ecological & Political Environment Issues
 Occasionally, organizations learned from natural disasters (e.g., Bhopal
disaster).
 Disasters make explicit organizational policies on safety measures (Bowman
and Kunreuther 1988).
 As nations become more concerned with the ecological environment, and as
new laws and statutes are enacted to protect the natural environment,
organizations need to develop new rules, behaviors and business practices to
abide by the “green” laws (Mylonadis 1994).
 Organizations also need to learn to cope with new regulation following
changes in political leadership and regimes (Godkin and Montano 1991).



Changes in socioeconomic values
 Jurgen Kadtler discusses how „social movements‟ and „interest groups‟ act as
Triggers for organizational learning.
 Some organizations are forced to adapt to surrounding social, environmental,
or Regulational factors (Dierkes, Antal, Child, & Nonaka, 2003).
 Often these factors are outside their control and they must react to them.
“Whether the organization acquires the capacity to manage the crisis and
deal with the concern of social movements or interest groups is determined by
organizational learning.
 This refers to the tension between and analytical and a normative perspective
on organizational learning” .


Triggers of Change - Other

Technological Visions
 Although visions have been heralded as an all important component of
organizational leadership, there has been – up till now, little research
conducted to better understand the concept of visions.
 New insight, however, confirms that visions facilitate vicarious learning and
serve as “points of orientation…based on core values and shared perceptions



Creativity as a Trigger
 Cunha, Cunha and Kamoche (2002) suggest that an open minded and, indeed,
creative approach to errors may serve as the trigger for organizational
improvisation and learning.
 Rather than simply rewarding employees and managers for fixing problems,
we should encourage their use as stimuli for further learning.
 Consider, “an example from Nordstrom's department store where employees
are encouraged to "respond to unreasonable customer requests." Stories
circulate about an employee paying a customer's parking ticket when the
store's gift wrapping took too long”.
 This type of accommodation should be rewarded and viewed as a departure
point for a learning journey aimed at discovering what caused the process to
fail to produce the desired result.


Anxiety as a Trigger
 Edgar Schein, as cited in Coutu, (2002), provides a useful and realistic view of
the essential triggers of organizational learning. He maintains that anxiety is
necessary as a trigger for learning.
 Adopting a distinctly unpopular stance, Schein maintains that learning is
coercive. He believes that anxiety, or more correctly, “learning anxiety” occurs
when we are afraid of trying something new out of fear of failure,
embarrassment, or the desire not to give up old paradigms.
 Conversely, “survival anxiety” is the realization that survival of the individual
or the organization depends on change.
 Schein tells us that “the evidence is mounting that real change does not begin
to occur until the organization experiences some real threat of pain that in
some way dashes its expectations or hopes” .

Ford Motor Company – Case Study

 Ford Motor Company has been advertising in gay and lesbian
magazines, recently.
 Some in the special interest evangelical movement has strongly
objected to Ford‟s advertising practices and see it as a
promotion of a lifestyle to which they object.
 They have sought to use boycotts to convince Ford to change it
advertising policies.
 How Ford responds can have negative financial implications on
either side.
 However Ford reacts in the above situation will be a learning
organization challenge.
 In whatever direction it goes, “new organizational competencies
have to be acquired if critical issues are to be addressed
successfully”

The Role of Web in Change

“Twenty years from now we‟ll look back
and say this was the embryonic period.
The Web is only going to get more
revolutionary”

Tim Berners-Lee, 2006


The Role of Web in Change

The Web is a
fundamentally new
way of getting
things done
The Web is
a bigger megaphone

References

 Laurie J Mullins (2007) Management and Organisational behaviour, 7th edition
 Richard L Daft (2007) Organization theory and design, 8th edition
 John Pearson and Robinson (2005) Strategic management; Formulation,
implementation and control, 7th edition
 IAM Diploma in Administrative Management: Study guide


Contact Us

Soft Skills Experts
138 Wandsworth Bridge Road
Fulham
London SW6 2UL
United Kingdom

Tel: +44 772 822 9192
Email: rahat@SoftSkillsExperts.com


Leadership & change management, lecture 5, by rahat kazmi

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Leadership & change management, lecture 5, by rahat kazmi