978-0132729833 Chapter 14 Solution Manual

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C H A P T E R F O U R T E E N

Managing

Organizational

Change: Strategic

Planning and

Organizational

Development

Lecture Outline

The Prevalence of Change in Organizations

The Message is Clear: Change or

Disappear!

Change is a Global Phenomenon

The Nature of the Change Process

Targets: What, Exactly is Changed?

Magnitude: How Much is Changed?

Environmental Forces

Strategic Planning: Deliberate Change

Basic Assumptions About Strategic

Planning

The Strategic Planning Process

Resistance to Change: Maintaining the

Status Quo

Individual Barriers to Change

Organizational Barriers to Change

When Will Organizational Change

Occur?

Organizational Development Interventions:

Implementing Planned Change

Management by Objectives (MBO)

Survey Feedback

Appreciative Inquiry

Action Labs

Quality of Work Life Programs

Three Critical Questions About

Organizational Development

Is Organizational Development

Inherently Unethical

Does OD Really Work?

Is OD A6ected by National Culture?

Managing organizational change and organizational

development are discussed in this chapter. Di6erent

types of change in organizations are explored.

Organizational change is promoted by advances in

technology, changing employee demographics,

performance gaps, government regulation, and

global economic competition. Management engages

in a process of strategic change planning in respond

to these changes. Strategic change is the process of

formulating, implementing, and evaluating

organizational changes in ways that enable an

organization to achieve its objectives. The ten step

process is presented in detail: (1) de9ning goals, (2)

de9ning the scope of product or service, (3)

assessing internal resources, (4) assessing the

external environment, (5) analyzing internal

arrangement, (6) assessing competitive strategy, (7)

developing competitive strategy, (8) communicating

the strategy, (9) implementing the strategy, and (10)

evaluating the outcome. Four conditions are likely to

prompt organizational change. Resistance to change

is an important consideration. There are a number of

reasons that change is resisted including: economic

insecurity and perceived threats to the stability of the

work environment. Organizational development is a

set of techniques for systematically planning

organizational change to enhance personal and

organizational outcomes. The three techniques most

commonly deployed are: (1) survey feedback, (2)

management by objectives (MBO), and (3)

appreciative inquiry. The chapter concludes with a

discussion of ethical considerations concerning OD.

ANNOTATED OUTLINE

1. THE PREVALENCE OF CHANGE IN ORGANIZATIONS

Organizational change – planned or unplanned transformation in an

organization’s structure, technology, and/or people

A. The message is clear: change or disappear

1. Research shows that leaders of successful organizations support

change 94 percent of the time, whereas others support change only 76

percent of the time

2. Change is a global phenomenon

1. Change is a fact of life in organizations around the world –

surveys across 25 countries revealed the same change factors

a. Large restructurings

b. Mergers

c. Divestitures and acquisitions

d. Reductions in employment

e. International expansion

2. THE NATURE OF THE CHANGE PROCESS

What happens when organizational change occurs?

What forces are responsible for unplanned organizational change?

A. Targets: what, exactly, is changed?

1. Three prospective targets:

a. Changes in organizational structure

b. Changes in technology

c. Changes in people

i. Unfreezing – recognizing the need for change

(a). Doomsday management – creating a sense of

urgency in employees by introducing the idea

that there is an impending crisis

ii. Changing – implementing planned change

iii. Refreezing – accepting newly changed state

B. Magnitude: how much is changed?

1. First-order change (incremental change) ― change that is

continuous in nature and involves no major shifts in how an

organization operates

2. Second-order change (quantum change) ― radical change involving

major shifts in di6erent levels of the origination and di6erent aspects

of the business

C. Environmental forces: why does unplanned change occur?

1. Shifting employee demographics

a. U.S. workforce more diverse

2. Performance gaps

a. Discrepancies between real and expected levels of

organizational performance

3. Government regulation

a. Imposing and eliminating regulations

4. Global competition

a. Key driver of change

5. Fluctuating economic conditions

a. Key driver of change

6. Advances in technology

a. Most potent impetus for change

3. STRATEGIC PLANNING: DELIBERATE CHANGE

Strategic planning – the process of formulating, implementing, and

evaluating changes that enable an organization to achieve its objectives

A. Basic assumptions about strategic planning

1. Strategic planning is deliberate

a. Changes tend to be radical

2. Strategic planning occurs when current objectives no longer can be

met

a. If present strategy is e6ective, no change is necessary

3. New organizational objectives require new strategic plans

B. About what do companies make strategic plans

1. Products and services

2. Organizational structure

a. Outsourcing – hiring outside 9rms to perform noncore

business

b. O&shoring – using outsourcing services of overseas companies

C. The strategic planning process: making change happen

1. The strategic planning process involves ten steps:

a. De9ne goals ― clearly stated goals

b. De9ne the scope of products or services

i. If scope is de9ned too broadly, it will dilute its

e6ectiveness

ii. If scope is de9ned too narrowly, it will overlook

opportunities

c. Assess internal resources

i. Funds, physical assets, and human assets

d. Assess the external environment

e. Analyze internal arrangements

f. Assess the competitive advantage

i. A company has a competitive advantage when its

resources cannot easily be imitated, resources will not

depreciate soon, and competitors do not have better

resources

(a). Superiority must be assessed in terms of quality,

price, reliability of performance, etc.

g. Develop a competitive strategy – the means by which the

organization achieves its goal

h. Communicate the strategy to stakeholders

i. Stakeholders ― individual or group in whose interest

the organization is run

i. Implement the strategy

j. Evaluate the outcome

Self-Assessment Exercise Developing a Strategic Plan

Students should consider the following upon completion of the exercise.

1. How easy or diKcult was it to develop this plan? What would have made the process

easier?

2. Which of the ten steps do you imagine would be easiest to implement? Which do you

think would be the most challenging? Explain your answers.

3. What special challenges, if any, would the employees of your company face as they

attempted to implement this plan? How would you overcome these challenges?

4. RESISTANCE TO CHANGE: MAINTAINING THE STATUS QUO

Resistance to change – stems from both individual and organizational

variables

A. Individuals barriers to change:

1. Economic insecurity

B. Organizational barriers to change

1. Structural inertia ― jobs are designed to have stability, often diKcult

C. When will organizational change occur?

1. Change is more likely when:

a. There is dissatisfaction with the current conditions

D. How can resistance to change be overcome?

1. Gain leadership support

a. Key organizational leaders endorse change

2. Identify and neutralize change resisters

3. Educate the workforce

a. Upper management must show emotional sensitivity

7. Create a learning organization – organizations that have developed

the capacity to adapt and change continuously

a. Establish commitment to change

Winning

Practices

Making Changes Stick: How Three Successful Organizations Do It

Use Winning Practices for a discussion on using the technique of CI to facilitate change

5. ORGANIZATIONAL DEVELOPMENT INTERVENTIONS: IMPLEMENTING PLANNED CHANGE

Organizational development (OD) – set of social science techniques

A. Management by objectives: clarifying organizational goals

1. Management by objectives (MBO): Four basic steps:

a. Goals are jointly selected by management and subordinates

b. An action plan indicating exactly what needs to be done is

c. Implementation ― carrying out the plan and assessing its

B. Survey feedback: inducing change by sharing information

1. Survey feedback method – employees must understand the

C. Appreciative inquiry

1. Appreciative inquiry (AI) – focus on the positive and the possible

2. Four steps:

a. Discovery ― identify positive aspects of the company (what is)

D. Action labs

1. Action lab – teams of participants work o6-site to develop and

E. Quality of work life programs: humanizing the workplace

1. Quality of work life (QWL) programs – designed to increase

a. Quality circles (QCs)

6. THREE CRITICAL QUESTIONS ABOUT ORGANIZATIONAL DEVELOPMENT

A. Is organizational development inherently unethical?

1. Useful from perspective of management

2. From an individual’s perspective:

B. Does OB really work?

1. OD interventions are more e6ective among blue-collar employees than

2. Bene9cial e6ects of OD can be enhanced by using a combination of

3. OD techniques must have support of top management

C. Is OD a6ected by national culture?

1. OD depends, in part, on the extent to which the values of the

You Be the Consultant Suggested Answers

1. Besides new operating procedures, what other planned and unplanned changes

would you suspect as being responsible for the employees’ negative responses?

Student answers will vary. Key points are presented in bullet form.

2. What barriers to change are likely to be encountered in this situation and what steps

would you propose to overcome them?

3. Do you think that an OD intervention would help in this case? If so, which one (or

ones) do you propose, and why?

All three techniques could be used