Sessions two

Focus of Organization Changes

Why planned change is needed
 Planned change defined:

 The systematic attempt to redesign an

organization in a way that will help it adapt to
changes in the external environment or to
achieve new goals.

 Planned change aims to prepare the entire

organization or a major part of it to adapt
significant changes in the organization goals
and direction.
Why planned change is needed
 A detailed definition of planned change is ‘the
deliberate and implementation of a structural
innovation, a new policy or goal or a change
in operating philosophy, climate or style.

 Change programs are necessary today

precisely because of shift in time and the
relationships that we have seen throughout
the organizational world.
Planned change
 The sophistication of information processing
technology, together with the increased in the
globalization of organizations means managers are
bombarded with more new ideas, new products,
new challenges than ever before.

 Many large organizations have change

management programs to increase the ability of
people throughout the organization to anticipate and
learn from the changes that are occurring.
Introduction to focus of organizational
change
 When managers decide that change is
needed, or when they realize that they have
no choice but to make changes, one of the
issues they face is:

 What to change?
 In organizational settings, at least many component or
context can be affected and most change involve
several.
Introduction to focus of Organizational
changes
 Especially complex and comprehensive
changes will involved six of the following:

 Technology
 Culture
 Strategy
 Structure
 Processes/procedures
 people
1. Technology
 For many organizations, the most obvious and most
frequent object of changes is technology.

 Always been the case in manufacturing and capital

intensive companies where replacing and upgrading
equipment and technology have been the keys to
organizational survival and an ability to keep ahead
of competition.

 Recent years, virtually all types of companies,

government agencies and non-business
organization have been increasing attention to
improving and expanding their information
technology.
Technology
 Any organization at the beginning of the 21st
century making changes in technology
becomes a prime and a continual focal point.

 Critical issues for managers, therefore,

involve the significant and often unexpected
spillover effects of changes in technology on
other areas such as structure, processes and
people.
Technology
 New equipment, for example, can result in entirely
different patterns of work relationships among
employees, and that in turn can create considerable
confusion.

 Such effect, if they are major or last a long time can dilute
or even cancel the positive effects of the improvement.

 A focus of technology is therefore, a frequent

starting point of changes but it is not necessarily a
good indicator of where major problems may occur.
Culture
 The culture of an organization is a second
potential focus for change.

 In its way, changing an organization’s culture

can be as potent in its consequences as
making major changes in technology.

 The embedded traditions and accepted ways

of doing things that constitute an
organization’s culture can be extremely
difficult to change successfully.
Culture
 Example of a case
 The founder and chairman of apparel distributor Lands’ End asked
for the resignation of the CEO and also the director of human
resources and proceeded to scrap three years of efforts that had
tried to change Lands’ End’s culture.

 Those efforts had included new personnel evaluation methods, new

project tams, increases in meetings and various devices (eg,
posters, banners) to proclaim the organization’s rewritten mission
statement.

 Veteran Lands End employees resented all these changes,

believing that they were counter to the company’s long-standing
family-like culture.

 Their reaction doomed the culture-change attempt.

Culture
 A key to changing an organization’s culture is to
start by trying to change its values, since what is
valued is the underlying essence of the culture.

 Substituting new values for old values is hardly a

simple process.

 The assertion of new values in a mission statement

is easy.
 Getting them accepted and ‘institutionalized’ it is extremely
difficult.
Culture
 Changing a culture, by whatever means, may
take a long time.

 Culture does represent a significant target for

fundamental changes.
Strategy
 Since an organization’s overall strategy,
along with its basic mission statement and
espoused values, provides major direction for
its activities, it can serve as another potent
focus of managerial change effort.

 In contrast to its culture, an organization’s

strategy or set of strategies may be less
difficult for managers to change.
Strategy
 Top management typically is more in control
in setting strategy than other parts of the
organization.

 Thus, by announcing strategic changes,

which may occur after extensive consultation
with all parts of the organization, managers at
highest levels can influence change.

 Whether strategic changes are effective or

not is another matter.
Structure
 Changing structure makeup of an
organizations is sometimes one of the most
valuable tools for managers have to create as
improved productivity or more creative
problem solving.

 Many structural changes such as

reorganizing on a product basis rather than a
geographic one or consolidating major
division, can be made at the macro or total
organization level. (e.g Cocoa cola bottling
and can division)
Structure
 Example
 The top management of AT&T capital Leasing Services at the
end of 1980s decided to redesign major elements of the
company.

 The new structure included greater centralization of operations, a

flattened hierarchy and related changes in personnel evaluation
criteria.

 Before implementing the structural changes throughout the

organization. A pilot program was tested in one of the company’s
main offices.

 The pilot program revealed several potentially disastrous flaws

that if the organization had been put in place as originally
planned, would resulted in failure of the entire organization
change program.
Structure
 Other structural changes can be made at the
immediate level, involving such actions as
combining or dividing departments or
changing locations and reporting relationship
within or among units.

 Still other structural changes can be made at

very micro level, such as forming new project
groups or altering the composition of
particular jobs or position.
Structure
 As with changes in strategy, changes in
structure are not especially difficult to pull off
initially, but making them work to generate
the desired effects can be particularly
challenging for managers.

 Strategy changes may affect the structure to

changes too.
 Eg, a diversification strategy may necessary
resulted altering structure changes such as new
change of command structure.
Processes/procedures
 Another major object of change can be the
processes or procedures used in, and by, an
organization.

 Such changes involve attention to the

sequence and manner in which work
activities and operations are carried out.

 Changes in processes and procedures often

come about because of prior changes in
technology or structure.
Processes/procedures

 In this sense, modifications of the way which

work is performed, whether by individuals or
groups, can be considered residual changes.

 The purchase of new equipment, for instance,

would be primary change, as in the case of the
adoption of new procedures because of this
equipment would be the secondary change.
People
 Finally people, both individuals and groups,
can be the focus of major changes.

 Essentially, changes that focus on people

involve one or more of four elements:

 Who the people are.

 What their attitudes and expectation are.
 How they interact interpersonally
 How they are trained or developed.
People
 In the first instance, change can be brought
about by adding, subtracting or interchanging
people.

 Bringing in new supervisor or transferring a

difficult employee from one unit to another
are examples of change focusing on the
selection and placement of people.
People
 The second element, attitudes and
expectation, often can be an important focus
because people act on the basis of them and
they sometimes can be modified without
excessive effort or cost by the managers.

 Providing people with new information or a new

way to look at problems, issues, or events has the
potential but, no certainty of, creating significant
change in their behavior.
People

 Attempt to alter how people relate to each

other – such as by being more cooperative
with, and more supportive of, each other –
represent a third people oriented change
focus.
People
 The fourth and often most lasting people-
change approach involves direct
enhancement of their knowledge, skills, and
abilities, typically through education, training,
and personal development activities.

 Such change can improve the performance of

individuals, groups and even larger units,
regardless of any other changes a manager
initiated.
People
 As with other types of changes, however,
efforts to change people can be costly.

 Managers need to weigh the costs of managerial

time and effort, and frequently significantly
budgetary expenditures, against potential benefits
such as a more capable workforce, increased
creativity and innovation, better morale, and
perhaps, decreased turnover.
End of lecture