Organizational change; the process by which organizations move from their present
state to some desired future state to increase their effectiveness. The goal is to find
new or improved ways of using resources and capabilities to increase an
organization’s ability to create value and improve returns to its stakeholders.
Planned organizational change is normally targeted at improving effectiveness at
one or more of four different levels:
- Human resources: an organization’s distinctive competences lie in the skills
and abilities of its employees. Because these skills and abilities give an
organization a competitive advantage, organizations must continually monitor
their structures to find the most effective way of motivating and organizing
human resources to acquire and use their skills. E.g. investments in training
and development activities so employees acquire new skills and abilities
- Functional resources: an organization can improve the value that its functions
create by changing its structure, culture and technology. E.g. the change from
functional to a product team structure.
- Technological capabilities: the ability to develop a constant stream of new
products or to modify existing products so they continue to attract customers
is one of an organization’s core competences.
- Organizational capabilities: through the design of organizational structure
and culture, an organization can harness its human and functional resources
to take advantage of technological opportunities. E.g. changing the
relationships between people and functions to increase their ability to create
value.
These four levels at which change can take place are obviously interdependent: it is
often impossible to change one without changing another.
, Figure 10.1 forces for and resistances for change
Forces for change Resistances to change
- Competitive forces - Organizational level
- Economic forces o Structure
- Political forces o Culture
- Global forces o Strategy
- Demographic forces - Functional level
- Social forces o Differences in subunit
- Ethical forces orientation
o Power and conflict
- Group level
o Norms
o Cohesiveness
o Groupthink
- Individual level
o Cognitive biases
o Uncertainty and insecurity
o Selective perception and
retention
o habit
Force-field theory: a theory of organizational change that argues that two sets of
opposing forces within an organization determine how change will take place.
Evolutionary change: change that is gradual, incremental and specifically focused.
Revolutionary change: change that is sudden, drastic, and organization-wide.
Sociotechnical systems theory: a theory that proposes the importance of changing
role and task or technical relationship to increase organizational effectiveness.
Total quality management (TQM): a technique developed by Deming to continuously
improve the effectiveness of flexible work teams. An ongoing and constant effort by
all of an organization’s functions to find new ways to improve the quality of the
organization’s goods and services.
Quality circles: groups of workers who met regularly to discuss the way work is
performed in order to find new ways to increase performance.
Flexible work teams: a group of workers who assume responsibility for performing all
the operations necessary for completing a specified stage in the manufacturing
process.
Reengineering: fundamental rethinking and radical redesign of business processes
to achieve dramatic improvements in critical, contemporary measures of
performance such as cost, quality, service and speed. Instead of focusing on
state to some desired future state to increase their effectiveness. The goal is to find
new or improved ways of using resources and capabilities to increase an
organization’s ability to create value and improve returns to its stakeholders.
Planned organizational change is normally targeted at improving effectiveness at
one or more of four different levels:
- Human resources: an organization’s distinctive competences lie in the skills
and abilities of its employees. Because these skills and abilities give an
organization a competitive advantage, organizations must continually monitor
their structures to find the most effective way of motivating and organizing
human resources to acquire and use their skills. E.g. investments in training
and development activities so employees acquire new skills and abilities
- Functional resources: an organization can improve the value that its functions
create by changing its structure, culture and technology. E.g. the change from
functional to a product team structure.
- Technological capabilities: the ability to develop a constant stream of new
products or to modify existing products so they continue to attract customers
is one of an organization’s core competences.
- Organizational capabilities: through the design of organizational structure
and culture, an organization can harness its human and functional resources
to take advantage of technological opportunities. E.g. changing the
relationships between people and functions to increase their ability to create
value.
These four levels at which change can take place are obviously interdependent: it is
often impossible to change one without changing another.
, Figure 10.1 forces for and resistances for change
Forces for change Resistances to change
- Competitive forces - Organizational level
- Economic forces o Structure
- Political forces o Culture
- Global forces o Strategy
- Demographic forces - Functional level
- Social forces o Differences in subunit
- Ethical forces orientation
o Power and conflict
- Group level
o Norms
o Cohesiveness
o Groupthink
- Individual level
o Cognitive biases
o Uncertainty and insecurity
o Selective perception and
retention
o habit
Force-field theory: a theory of organizational change that argues that two sets of
opposing forces within an organization determine how change will take place.
Evolutionary change: change that is gradual, incremental and specifically focused.
Revolutionary change: change that is sudden, drastic, and organization-wide.
Sociotechnical systems theory: a theory that proposes the importance of changing
role and task or technical relationship to increase organizational effectiveness.
Total quality management (TQM): a technique developed by Deming to continuously
improve the effectiveness of flexible work teams. An ongoing and constant effort by
all of an organization’s functions to find new ways to improve the quality of the
organization’s goods and services.
Quality circles: groups of workers who met regularly to discuss the way work is
performed in order to find new ways to increase performance.
Flexible work teams: a group of workers who assume responsibility for performing all
the operations necessary for completing a specified stage in the manufacturing
process.
Reengineering: fundamental rethinking and radical redesign of business processes
to achieve dramatic improvements in critical, contemporary measures of
performance such as cost, quality, service and speed. Instead of focusing on
