1 Initiating Change & Interaction Of Context & Chnage
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Organization Change
Learning outcomes
Learning outcome
Factors initiating change The meaning of organization change The interaction between change and context Analyze the process managers should use in evaluating the need for change Describe the process of organizational change Understand the comprehensive organizational change approaches
Learning outcome
Understand the change problem and its solution
The eight-stage process
Implication of organization for the future
Organization Change Session 1 Initiating Change The interaction of context and change
Organization Change: An introduction
Managers initiate or experience change so regularly
Many organizations see change as the normal state of affairs
They want people to see change as a norm
An introduction
The external environment is the main source of change such as:
Political Economic Social Technical
These development lead to change
An introduction
Persuade managers to change the way they operate to meet these new expectations
Numerous research has found that the major reasons for organization changes were a need to create:
Closer customer relations Significant financial pressure to improve performance Intensified competition
Introduction
Most accept the need for change but many are critical of the way their organization introduce it.
Managers will still experience great difficulty in implementing major organizational changes
1 Initiating Change Initiating change External context Perceived performance gap Internal context
1.1 The external context
The external context (the forces for change) consists of elements beyond the organization such as competitors, or the wider PESTEL factors (we will look into details later)
This will place new demand for the organizations
Eg- the spread of globalization Rapid development of information and communication technologies Deregulation and privatization of former state businesses
Transforming the competitive landscape of the firms operate.
The external context
They face competition from unexpected quarters Threatening their prosperity or even their survival
(eg-BA and KLM or MAS have to respond to the pressure of new competition from low cost airlines)
Legal/Political developments Economics conditions Societal and demographic shifts Technology developments Competitors actions
1.2 Perceived performance gap A perceived performance gap arises when people believe that the actual performance of a unit or business is out of line with the level they desire.
Fall below customers expectation is a performance gap.
Hence, cumulatively this will lead to other performance gap emerging – such as revenue from sales being below the level needed to secure further resources. If uncorrected this would eventually cause the business to fail.
Perceived performance gap
In a very uncertain business world the scope for log term planning is seriously limited.
Successful businesses are likely to be those develop high degree of strategic and organizational flexibility
Maintaining efficiency and stable process.
There’s a need for performance imperatives (Prastacos 2002). Performance Imperatives are aspects of performance which are especially important for an organization to do well, such as flexibility and innovation.
Perceived performance gap
Other imperatives identified by Prastacos is:
innovation – the ability to generate a variety of successful new products or services (embedding technological innovation)
And to continuously innovate in all aspects of the business.
1.3 The internal context (also forces for change)
Meeting performance expectations depend on the organization – the internal context of management.
The internal context consists of elements within the organization such as its technology, structure or business processes.
The internal context
The set of elements within an organization that shape behavior.
Change begins to happen when:
Sufficient influential people believe, for example, that outdated technology or a confusing structure is causing a performance by inhibiting flexibility or innovation.
The internal context
They notice external or internal events and interpret them as being a threat to the performance that influential stakeholders expect.
This interpretation and their implicit theory of change, encourages them to propose a change to one or more aspects of the organization.
Internal context
They then persuade enough people that the matter is serious enough to earn a place on the management agenda.
The need for change is a subjective matter – what some see as urgent and others will leave until later.
People can affect that process by managing external information – magnifying customer complaints to make the case for change or minimizing them if they wish to avoid change.
Internal context
Whatever the underlying motivations, organization change is a deliberate attempt to improve organizational performance by changing one or more aspects of the organization, such as its technology, structure or business processes.
A change means that there will be also to have an implications in other areas.
Once they perceived a need for change, those promoting it set up a formal or informal change process and then implement in relevant organization units.
How well people manage the steps in this process determines the effect on the performance gap which in turn feeds back to the context of the organization.
Internal context
The two most important internal forces for change are there: Managerial decisions Have certain authority to make changes the higher up in an organization, the more power they have in making changes. Most critical leadership issues facing managers is accurately evaluating change. Decision can affect status quo in major ways. Employee preferences and suggestions Are excellent sources of innovative suggestion for change. Some companies consider best methods for discovering new ways to cut costs and improved procedures. Employees cab be a stimulus for change that frequently cannot or should not ignored.
2. The interaction of context and change 2.1 People introduce change to alter Management attempts to change elements of the context its context to encourage behaviors that support its objectives (this is to close the performance gap)
eg, when tesco introduced online shopping, management needed to change technology, structure, people and business processes to enabled staff to deliver the new service.
People introduce change to alter the context People do not necessarily accept the new arrangement without questions.
They may themselves make further changes to the context.
As people begin to work on new changes or circumstances with new technology or new structure, they may make small adjustments to the original plan.
As they use a new information system, they decide which aspect to ignore, use or adapt.
People introduce change to alter the context As people become used to working with the
new system their behaviors become routine and taken for granted.
They become part of the context that created informally. These new contextual elements may add to, or replace, the context that those formally responsible for planning the change created
The interaction between people and context continues into the future.
The interaction of context and change 2.2 The context affects the ability to change
The culture – shares values, ideals and beliefs that hold a unit together, has strong influence on how people view a change.
Cultures develop as members work together to deal with problems and in so doing shared assumptions about external world and their internal processes.
Likely to resist one that conflicts with or challenges the culture.
The context affects the ability to change
The prevailing culture is a powerful influence on the success or failure of change.
Some may support and encourage change and some may resist
The context affects the ability to change
Some companies’ culture encourage change. Some encourage people to resist change or least cautious towards.
These values and beliefs are hard to change They are crucial factor in determining the organization’s respond to change.
The context affects the ability to change
The distribution of power also affects receptiveness to change.
Change threatens the status quo and is likely to be resisted by stakeholders who benefits from the prevailing arrangement.
2.3 The context has a history and several levels
The present context is the result of past decision and is usually focused on one of several ‘levels’ of context.
Both features influence the process of change.
Management seeks to implement change against a background of past decisions.
Past decisions shaped the organization context as it is today and its ability to change.
The context has a history and several levels Beliefs about the future also affects how people react to change.
Optimists are more receptive and open to change than those who feel threatened and vulnerable.
End of lecture
Learning outcomes
Learning outcome
Factors initiating change The meaning of organization change The interaction between change and context Analyze the process managers should use in evaluating the need for change Describe the process of organizational change Understand the comprehensive organizational change approaches
Learning outcome
Understand the change problem and its solution
The eight-stage process
Implication of organization for the future
Organization Change Session 1 Initiating Change The interaction of context and change
Organization Change: An introduction
Managers initiate or experience change so regularly
Many organizations see change as the normal state of affairs
They want people to see change as a norm
An introduction
The external environment is the main source of change such as:
Political Economic Social Technical
These development lead to change
An introduction
Persuade managers to change the way they operate to meet these new expectations
Numerous research has found that the major reasons for organization changes were a need to create:
Closer customer relations Significant financial pressure to improve performance Intensified competition
Introduction
Most accept the need for change but many are critical of the way their organization introduce it.
Managers will still experience great difficulty in implementing major organizational changes
1 Initiating Change Initiating change External context Perceived performance gap Internal context
1.1 The external context
The external context (the forces for change) consists of elements beyond the organization such as competitors, or the wider PESTEL factors (we will look into details later)
This will place new demand for the organizations
Eg- the spread of globalization Rapid development of information and communication technologies Deregulation and privatization of former state businesses
Transforming the competitive landscape of the firms operate.
The external context
They face competition from unexpected quarters Threatening their prosperity or even their survival
(eg-BA and KLM or MAS have to respond to the pressure of new competition from low cost airlines)
Legal/Political developments Economics conditions Societal and demographic shifts Technology developments Competitors actions
1.2 Perceived performance gap A perceived performance gap arises when people believe that the actual performance of a unit or business is out of line with the level they desire.
Fall below customers expectation is a performance gap.
Hence, cumulatively this will lead to other performance gap emerging – such as revenue from sales being below the level needed to secure further resources. If uncorrected this would eventually cause the business to fail.
Perceived performance gap
In a very uncertain business world the scope for log term planning is seriously limited.
Successful businesses are likely to be those develop high degree of strategic and organizational flexibility
Maintaining efficiency and stable process.
There’s a need for performance imperatives (Prastacos 2002). Performance Imperatives are aspects of performance which are especially important for an organization to do well, such as flexibility and innovation.
Perceived performance gap
Other imperatives identified by Prastacos is:
innovation – the ability to generate a variety of successful new products or services (embedding technological innovation)
And to continuously innovate in all aspects of the business.
1.3 The internal context (also forces for change)
Meeting performance expectations depend on the organization – the internal context of management.
The internal context consists of elements within the organization such as its technology, structure or business processes.
The internal context
The set of elements within an organization that shape behavior.
Change begins to happen when:
Sufficient influential people believe, for example, that outdated technology or a confusing structure is causing a performance by inhibiting flexibility or innovation.
The internal context
They notice external or internal events and interpret them as being a threat to the performance that influential stakeholders expect.
This interpretation and their implicit theory of change, encourages them to propose a change to one or more aspects of the organization.
Internal context
They then persuade enough people that the matter is serious enough to earn a place on the management agenda.
The need for change is a subjective matter – what some see as urgent and others will leave until later.
People can affect that process by managing external information – magnifying customer complaints to make the case for change or minimizing them if they wish to avoid change.
Internal context
Whatever the underlying motivations, organization change is a deliberate attempt to improve organizational performance by changing one or more aspects of the organization, such as its technology, structure or business processes.
A change means that there will be also to have an implications in other areas.
Once they perceived a need for change, those promoting it set up a formal or informal change process and then implement in relevant organization units.
How well people manage the steps in this process determines the effect on the performance gap which in turn feeds back to the context of the organization.
Internal context
The two most important internal forces for change are there: Managerial decisions Have certain authority to make changes the higher up in an organization, the more power they have in making changes. Most critical leadership issues facing managers is accurately evaluating change. Decision can affect status quo in major ways. Employee preferences and suggestions Are excellent sources of innovative suggestion for change. Some companies consider best methods for discovering new ways to cut costs and improved procedures. Employees cab be a stimulus for change that frequently cannot or should not ignored.
2. The interaction of context and change 2.1 People introduce change to alter Management attempts to change elements of the context its context to encourage behaviors that support its objectives (this is to close the performance gap)
eg, when tesco introduced online shopping, management needed to change technology, structure, people and business processes to enabled staff to deliver the new service.
People introduce change to alter the context People do not necessarily accept the new arrangement without questions.
They may themselves make further changes to the context.
As people begin to work on new changes or circumstances with new technology or new structure, they may make small adjustments to the original plan.
As they use a new information system, they decide which aspect to ignore, use or adapt.
People introduce change to alter the context As people become used to working with the
new system their behaviors become routine and taken for granted.
They become part of the context that created informally. These new contextual elements may add to, or replace, the context that those formally responsible for planning the change created
The interaction between people and context continues into the future.
The interaction of context and change 2.2 The context affects the ability to change
The culture – shares values, ideals and beliefs that hold a unit together, has strong influence on how people view a change.
Cultures develop as members work together to deal with problems and in so doing shared assumptions about external world and their internal processes.
Likely to resist one that conflicts with or challenges the culture.
The context affects the ability to change
The prevailing culture is a powerful influence on the success or failure of change.
Some may support and encourage change and some may resist
The context affects the ability to change
Some companies’ culture encourage change. Some encourage people to resist change or least cautious towards.
These values and beliefs are hard to change They are crucial factor in determining the organization’s respond to change.
The context affects the ability to change
The distribution of power also affects receptiveness to change.
Change threatens the status quo and is likely to be resisted by stakeholders who benefits from the prevailing arrangement.
2.3 The context has a history and several levels
The present context is the result of past decision and is usually focused on one of several ‘levels’ of context.
Both features influence the process of change.
Management seeks to implement change against a background of past decisions.
Past decisions shaped the organization context as it is today and its ability to change.
The context has a history and several levels Beliefs about the future also affects how people react to change.
Optimists are more receptive and open to change than those who feel threatened and vulnerable.
End of lecture
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