October 27, 2012

MU0018 [Change Management] Set1 Q1

Q.1 What are the types of organizational change?

Ans:

There are many types of organisational changes:
Organisation-wide versus subsystem change: Usually, organisations undertake organisation-wide change to evolve into a different level in their life cycle. Examples for organisation-wide changes are major restructuring, collaboration, cultural change. Examples of subsystem change include addition or removal of a product or service, reorganisation of certain department, or implementation of a new process to deliver products or services.

Transformational versus incremental change: Transformational change is also referred to as quantum change. Examples of transformational change include changing an organisation’s structure and culture from the traditional top-down, hierarchical structure to a large amount of self-directing teams, Business Process Re-engineering. Examples of incremental change include continuous improvement as a quality management process or implementation of new computer system to increase efficiencies. Sometimes, organisations experience incremental change, but its leaders fail to recognise that change.

Remedial versus developmental change: Change can be used as a remedy to the current situation. Examples for remedial changes are to improve the poor performance of a product or the entire organisation, reduce burnout in the workplace, and help the organisation to become more proactive and less reactive, or address large budget deficits. Change can be developmental i.e., it can be applied to a successful situation and make it more successful. Examples for developmental change are, expand the amount of customers served, or duplicate successful products or services.

Unplanned versus planned change: Unplanned change occurs because of a major, sudden surprise to the organisation, which forces its members to respond in a highly reactive and disorganised fashion. Planned change occurs when leaders in the organisation recognise the need for a major change and proactively organise a plan to accomplish the change. Note that the planned change often does not occur in a highly organised fashion. Instead, it occurs in a chaotic and disorderly fashion than expected by participants.

Organizational change occurs when an organization restructures resources to increase the ability to create value and improve effectiveness. A declining company seeks ways o regain customers; a growing organization designs new products. Change is prevalent. In the past 10 years, over 50 percent of all Fortune 500 companies have undergone significant restructuring. While the external environment (competitive, regulatory, and so on) will continue to play a role in an organization's ability to deliver goods and services, the internal environment within the organization will increasingly inhibit it from delivering products required to meet the demands of the marketplace unless it is able to adapt quickly.

The major areas of changes in a company's internal environment include:
Strategic: Sometimes in the course of normal business operation it is necessary for management to adjust the firm's strategy to achieve the goals of the company, or even to change the mission statement of the organization in response to demands of the external environments. Adjusting a company's strategy may involve changing its fundamental approach to doing business: the markets it will target, the kinds of products it will sell, how they will be sold, its overall strategic orientation, the level of global activity, and its various partnerships and other joint-business arrangements.

Structural: Organizations often find it necessary to redesign the structure of the company due to influences from the external environment. Structural changes involve the hierarchy of authority, goals, structural characteristics, administrative procedures, and management systems. Almost all change in how an organization is managed falls under the category of structural change. A structural change may be as simple as implementing a no-smoking policy, or as involved as restructuring the company to meet the customer needs more effectively.

Process-oriented: Organizations may need to reengineer processes to achieve optimum workflow and productivity. Process-oriented change is often related to an organization's production process or how the organization assembles products or delivers services. The adoption of robotics in a manufacturing plant or of laser-scanning checkout systems at supermarkets are examples of process-oriented changes.

People-centered: This type of change alters the attitudes, behaviors, skills, or performance of employees in the company. Changing people-centered processes involves communicating, motivating, leading, and interacting within groups. This focus may entail changing how problems are solved, the way employees learn new skills, and even the very nature of how employees perceive themselves, their jobs, and the organization.

Some people-centered changes may involve only incremental changes or small improvements in a process. For example, many organizations undergo leadership training that teaches managers how to communicate more openly with employees. Other programs may concentrate on team processes by teaching both managers and employees to work together more effectively to solve problems.

Remember that strategic, structural, process-oriented, and people-centered changes occur continuously in dynamic businesses. Often, changes in one of these areas impact changes in the other areas.

Many employees believe that a change is often reactive and nothing more than a quick fix; then they brace themselves for more changes in the future. Management needs to realize that serious underlying problems in organizations must be addressed with long-term consequences in mind. Thus, when management implements changes, careful thought must be given to ensure that the new processes are for the long-term good of the company.

The following concepts related to the strategies are needed for the implementation of the organisational change. The concepts are:
• Formulating strategy.
• Leveraging structure.
• Leveraging systems.

Let us discuss each of the concepts as follows:
Formulating strategy: Formulating strategy involves the process of making the strategies for the successful implementation of the changes.The organisation strategy comes from the vision of the organisation. The strategy must be aligned with the change in market. The CEO is responsible for the strategy but CEO alone cannot bring about the change.It is desirable that the managers are like the leaders and are asked to provide a local input and provide the inputs to strategic thinking.

Leveraging structure: Leveraging structure involves the changes that have to made for structure for implementing the change successfully. There is an assumption that structure is a diagrammatic representation of the organisation chart. But the structure includes the factors like how the people relate to one another, way the things happen, which is influential, how politics can be used to bring the change.

Structure is reorganised in the organisation for bringing about the reduction in the cycle time, service time and become more responsive to customer needs.
Some new forms of structure are:
• Flat structure.
• Network organisation.
• Cellular organisation.

ORGANIZATIONAL CHANGE IS DEPENDENT ON INDIVIDUAL CHANGE:
Change is inevitable, but many companies don't handle it well. How organizations treat workers during a change initiative determines how successful the change--and the organization--will be, according to management experts Connie Hritz, senior vice president of research and development for Omega Performance Corp., and Nancy Moore, senior consultant. During a Society for Human Resource Management webcast presented in August, the two discussed why some change management practices are unsuccessful and how top leaders can make sure managers are prepared to guide employees to accept change and put new practices into action. When we consider changing our organisations, we are really talking about changing the behaviour and mind-sets of people, and changing the people-related and people-perpetuated systems that are involved in our work. In other words, without significant personal change there is no organisational change.

Carroll, Olian and Giannantonio, (1986), define many change methods are directed at individuals. Of course, if enough individuals change, a unit and the organization itself could change. If the individuals targeted for change are important in the organization, then only a few may need to be changed to improve an entire unit of organization.

Employee motivation at workplace is extremely important for managers to implement changes in organization. To be with sustaining development, business enterprises are kept on changing. Rao (2005) has stated that motivation scheme has positive effect on firm performance in manufacturing enterprises. Employees’ motivation and their commitment are crucial for organizational change. Moreover, employees’ motivation depends upon many factors such as organizational culture, managerial leadership style, structure of organization, HR policies and practices, job design as well as employees’ skills, knowledge and attitudes (Raymond, 2002). Those organizational and personal attributes help employees work better (Karatepe & Uludag, 2006).

THE STEPS IN THE PERSONAL CHANGE PROCESS:
The implication of the steps below is that individual change tends to happen over an extended period of time, as people adapt and assimilate change. That means that those involved in facilitating or leading organizational change must expect there will be extended periods of adjustment in the organization. In other words, the watchword is patience.

1 .PREPARATION STAGE:
Contact Stage: The earliest encounter a person has with the fact that change may take place or has already taken place.
Awareness Stage: The person knows that a change is being contemplated.

2. ACCEPTANCE PHASE:
Understanding Stage: The person demonstrates some degree of comprehension of the nature and intent of the change.
Positive Perception: The person develops a positive view toward the change.

3. COMMITMENT PHASE:
Installation Stage: The change is implemented and becomes operational.
Adoption Stage: The change has been used long enough to demonstrate worth, and a visible positive impact.
Institutionalization: The change has a long history of worth, durability and continuity and has been formally incorporated into the routine operating procedures of the organization.
Internalization: Persons are highly committed to change because it is congruent with their personal interests, goals or value systems.

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