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Organizational Behavior

16.2 Organizational Change

Organizational Behavior16.2 Organizational Change
  1. Preface
  2. 1 Management and Organizational Behavior
    1. Introduction
    2. 1.1 The Nature of Work
    3. 1.2 The Changing Workplace
    4. 1.3 The Nature of Management
    5. 1.4 A Model of Organizational Behavior and Management
    6. Key Terms
    7. Summary of Learning Outcomes
    8. Chapter Review Questions
    9. Critical Thinking Case
  3. 2 Individual and Cultural Differences
    1. Introduction
    2. 2.1 Individual and Cultural Factors in Employee Performance
    3. 2.2 Employee Abilities and Skills
    4. 2.3 Personality: An Introduction
    5. 2.4 Personality and Work Behavior
    6. 2.5 Personality and Organization: A Basic Conflict?
    7. 2.6 Personal Values and Ethics
    8. 2.7 Cultural Differences
    9. Key Terms
    10. Summary of Learning Outcomes
    11. Chapter Review Questions
    12. Management Skills Application Exercises
    13. Managerial Decision Exercises
    14. Critical Thinking Case
  4. 3 Perception and Job Attitudes
    1. Introduction
    2. 3.1 The Perceptual Process
    3. 3.2 Barriers to Accurate Social Perception
    4. 3.3 Attributions: Interpreting the Causes of Behavior
    5. 3.4 Attitudes and Behavior
    6. 3.5 Work-Related Attitudes
    7. Key Terms
    8. Summary of Learning Outcomes
    9. Chapter Review Questions
    10. Management Skills Application Exercises
    11. Managerial Decision Exercises
    12. Critical Thinking Case
  5. 4 Learning and Reinforcement
    1. Introduction
    2. 4.1 Basic Models of Learning
    3. 4.2 Reinforcement and Behavioral Change
    4. 4.3 Behavior Modification in Organizations
    5. 4.4 Behavioral Self-Management
    6. Key Terms
    7. Summary of Learning Outcomes
    8. Chapter Review Questions
    9. Management Skills Application Exercises
    10. Managerial Decision Exercises
    11. Critical Thinking Case
  6. 5 Diversity in Organizations
    1. Introduction
    2. 5.1 An Introduction to Workplace Diversity
    3. 5.2 Diversity and the Workforce
    4. 5.3 Diversity and Its Impact on Companies
    5. 5.4 Challenges of Diversity
    6. 5.5 Key Diversity Theories
    7. 5.6 Benefits and Challenges of Workplace Diversity
    8. 5.7 Recommendations for Managing Diversity
    9. Key Terms
    10. Summary of Learning Outcomes
    11. Chapter Review Questions
    12. Management Skills Application Exercises
    13. Managerial Decision Exercises
    14. Critical Thinking Case
  7. 6 Perception and Managerial Decision Making
    1. Introduction
    2. 6.1 Overview of Managerial Decision-Making
    3. 6.2 How the Brain Processes Information to Make Decisions: Reflective and Reactive Systems
    4. 6.3 Programmed and Nonprogrammed Decisions
    5. 6.4 Barriers to Effective Decision-Making
    6. 6.5 Improving the Quality of Decision-Making
    7. 6.6 Group Decision-Making
    8. Key Terms
    9. Summary of Learning Outcomes
    10. Chapter Review Questions
    11. Management Skills Application Exercises
    12. Managerial Decision Exercises
    13. Critical Thinking Case
  8. 7 Work Motivation for Performance
    1. Introduction
    2. 7.1 Motivation: Direction and Intensity
    3. 7.2 Content Theories of Motivation
    4. 7.3 Process Theories of Motivation
    5. 7.4 Recent Research on Motivation Theories
    6. Key Terms
    7. Summary of Learning Outcomes
    8. Chapter Review Questions
    9. Management Skills Application Exercises
    10. Managerial Decision Exercises
    11. Critical Thinking Case
  9. 8 Performance Appraisal and Rewards
    1. Introduction
    2. 8.1 Performance Appraisal Systems
    3. 8.2 Techniques of Performance Appraisal
    4. 8.3 Feedback
    5. 8.4 Reward Systems in Organizations
    6. 8.5 Individual and Group Incentive Plans
    7. Key Terms
    8. Summary of Learning Outcomes
    9. Chapter Review Questions
    10. Management Skills Application Exercises
    11. Managerial Decision Exercises
    12. Critical Thinking Case
  10. 9 Group and Intergroup Relations
    1. Introduction
    2. 9.1 Work Groups: Basic Considerations
    3. 9.2 Work Group Structure
    4. 9.3 Managing Effective Work Groups
    5. 9.4 Intergroup Behavior and Performance
    6. Key Terms
    7. Summary of Learning Outcomes
    8. Chapter Review Questions
    9. Management Skills Application Exercises
    10. Managerial Decision Exercises
    11. Critical Thinking Case
  11. 10 Understanding and Managing Work Teams
    1. Introduction
    2. 10.1 Teamwork in the Workplace
    3. 10.2 Team Development Over Time
    4. 10.3 Things to Consider When Managing Teams
    5. 10.4 Opportunities and Challenges to Team Building
    6. 10.5 Team Diversity
    7. 10.6 Multicultural Teams
    8. Key Terms
    9. Summary of Learning Outcomes
    10. Chapter Review Questions
    11. Management Skills Application Exercises
    12. Managerial Decision Exercises
    13. Critical Thinking Case
  12. 11 Communication
    1. Introduction
    2. 11.1 The Process of Managerial Communication
    3. 11.2 Types of Communications in Organizations
    4. 11.3 Factors Affecting Communications and the Roles of Managers
    5. 11.4 Managerial Communication and Corporate Reputation
    6. 11.5 The Major Channels of Management Communication Are Talking, Listening, Reading, and Writing
    7. Key Terms
    8. Summary of Learning Outcomes
    9. Chapter Review Questions
    10. Management Skills Application Exercises
    11. Managerial Decision Exercises
    12. Critical Thinking Case
  13. 12 Leadership
    1. Introduction
    2. 12.1 The Nature of Leadership
    3. 12.2 The Leadership Process
    4. 12.3 Leader Emergence
    5. 12.4 The Trait Approach to Leadership
    6. 12.5 Behavioral Approaches to Leadership
    7. 12.6 Situational (Contingency) Approaches to Leadership
    8. 12.7 Substitutes for and Neutralizers of Leadership
    9. 12.8 Transformational, Visionary, and Charismatic Leadership
    10. 12.9 Leadership Needs in the 21st Century
    11. Key Terms
    12. Summary of Learning Outcomes
    13. Chapter Review Questions
    14. Management Skills Application Exercises
    15. Managerial Decision Exercises
    16. Critical Thinking Case
  14. 13 Organizational Power and Politics
    1. Introduction
    2. 13.1 Power in Interpersonal Relations
    3. 13.2 Uses of Power
    4. 13.3 Political Behavior in Organizations
    5. 13.4 Limiting the Influence of Political Behavior
    6. Key Terms
    7. Summary of Learning Outcomes
    8. Chapter Review Questions
    9. Management Skills Application Exercises
    10. Managerial Decision Exercises
    11. Critical Thinking Case
  15. 14 Conflict and Negotiations
    1. Introduction
    2. 14.1 Conflict in Organizations: Basic Considerations
    3. 14.2 Causes of Conflict in Organizations
    4. 14.3 Resolving Conflict in Organizations
    5. 14.4 Negotiation Behavior
    6. Key Terms
    7. Summary of Learning Outcomes
    8. Chapter Review Questions
    9. Management Skills Application Exercises
    10. Managerial Decision Exercises
    11. Critical Thinking Case
  16. 15 External and Internal Organizational Environments and Corporate Culture
    1. Introduction
    2. 15.1 The Organization's External Environment
    3. 15.2 External Environments and Industries
    4. 15.3 Organizational Designs and Structures
    5. 15.4 The Internal Organization and External Environments
    6. 15.5 Corporate Cultures
    7. 15.6 Organizing for Change in the 21st Century
    8. Key Terms
    9. Summary of Learning Outcomes
    10. Chapter Review Questions
    11. Management Skills Application Exercises
    12. Managerial Decision Exercises
    13. Critical Thinking Case
  17. 16 Organizational Structure and Change
    1. Introduction
    2. 16.1 Organizational Structures and Design
    3. 16.2 Organizational Change
    4. 16.3 Managing Change
    5. Key Terms
    6. Summary of Learning Outcomes
    7. Chapter Review Questions
    8. Management Skills Application Exercises
    9. Managerial Decision Exercises
    10. Critical Thinking Case
  18. 17 Human Resource Management
    1. Introduction
    2. 17.1 An Introduction to Human Resource Management
    3. 17.2 Human Resource Management and Compliance
    4. 17.3 Performance Management
    5. 17.4 Influencing Employee Performance and Motivation
    6. 17.5 Building an Organization for the Future
    7. 17.6 Talent Development and Succession Planning
    8. Key Terms
    9. Summary of Learning Outcomes
    10. Chapter Review Questions
    11. Management Skills Application Exercises
    12. Managerial Decision Exercises
    13. Critical Thinking Case
  19. 18 Stress and Well Being
    1. Introduction
    2. 18.1 Problems of Work Adjustment
    3. 18.2 Organizational Influences on Stress
    4. 18.3 Buffering Effects of Work related Stress
    5. 18.4 Coping with Work related Stress
    6. Key Terms
    7. Summary of Learning Outcomes
    8. Chapter Review Questions
    9. Management Skills Application Exercises
    10. Critical Thinking Case
  20. 19 Entrepreneurship
    1. Introduction
    2. 19.1 Overview of Entrepreneurship
    3. 19.2 Characteristics of Successful Entrepreneurs
    4. 19.3 Business Model Canvas
    5. 19.4 New Venture Financing
    6. 19.5 Design Thinking
    7. 19.6 Optimal Support for Entrepreneurship
    8. Key Terms
    9. Summary of Learning Outcomes
    10. Chapter Review Questions
    11. Management Skills Application Exercises
    12. Managerial Decision Exercises
    13. Critical Thinking Case
  21. A | Scientific Method in Organizational Research
  22. B | Scoring Keys for Self-Assessment Exercises
  23. References
  24. Index
  1. What are the fundamental dimensions of change?

Our discussion about organizational structure to this point has focused on the forms that an organization might take and the options that are available to managers as they design structures for their organizations. However, organizations are constantly evolving. One common refrain is that "there is nothing so constant as change." Because of this, there is no one best way to organize in all circumstances. Effective managers need to be aware of the various factors that drive the need for change. There advantages and disadvantages of each the various forms of organizing we have discussed. Managers need to adapt the organization so that it is ideally situated to accomplish current organizational goals. Thus, effective managers need to know how to plan and implement change to achieve organizational success.

We will begin this section by reviewing the types of changes that may occur in an organization. Then we will explore the organizational life cycle model, which explains how the structural needs of an organization evolve over time.4

Types of Change

There are many different types of changes in organizations. The first, consistent with what we talked about so far in this chapter, is structural change. This has to do with the changes in the overall formal relationships within an organization. Examples of structural change include reorganizing departments or business units, adding employee positions, or revising job roles and assignments. These changes should be made to support broader objectives such as to centralize or decentralize operations, empower employees, or find greater efficiencies.

Another common type of change is technological change. Implementation of new technologies is often forced upon an organization as the environment shifts. For example, an industry upgrade in a commonly used software platform may require that employees learn new ways of working. Upgraded machinery or hardware may require employees to learn new procedures or restructure the way that they interact with one another. The advent of web-based cloud technologies is an example from the last decade and an example of ways which new forms of collaboration are becoming more available. Technological change often induces structural change because it requires different ways of connecting across an organizational system.

A third type of organizational change is culture change. Organizational culture refers to the common patterns of thinking and behaving within an organization. Culture is rooted in the underlying beliefs and assumptions that people hold of themselves and of the organization. These beliefs and assumptions create mindsets that shape the culture. Culture change is among the most difficult kinds of changes to create within an organizational system. It often involves reshaping and reimagining the core identity of the organization. A typical culture change process, if it is successful, requires many years to achieve.5

The Organizational Life Cycle

Most organizations begin as very small systems that feature very loose structures. In a new venture, nearly every employee might contribute to many aspects of an organization’s work. As the business grows, the workload increases, and more workers are needed. Naturally, as the organization hires more and more people, employees being to specialize. Over time, these areas of specialization mature through differentiation, the process of organizing employees into groups that focus on specific functions in the organization. Usually, differentiated tasks should be organized in a way that makes them complementary, where each employee contributes an essential activity that supports the work and outputs of others in the organization.

The patterns and structures that appear in an organization need to evolve over time as an organization grows or declines, through four predictable phases (see Exhibit 16.5). In the entrepreneurship phase, the organization is usually very small and agile, focusing on new products and markets. The founders typically focus on a variety of responsibilities, and they often share frequent and informal communication with all employees in the new company. Employees enjoy a very informal relationship, and the work assignments are very flexible. Usually, there is a loose, organic organizational structure in this phase.

A two-way table shows the patterns and structures that appear in an organization through four phases.
Exhibit 16.5 Organizational Life Cycle (Attribution: Copyright Rice University, OpenStax, under CC-BY 4.0 license)

The second phase, survival and early success, occurs as an organization begins to scale up and find continuing success. The organization develops more formal structures around more specialized job assignments. Incentives and work standards are adopted. The communication shifts to a more formal tone with the introduction of hierarchy with upper- and lower-level managers. It becomes impossible for every employee to have personal relationships with every other employee in the organization. At this stage, it becomes appropriate for introduce mechanistic structures that support the standardization and formalization required to create effective coordination across the organization.

In a third phase, sustained success or maturity, the organization expands and the hierarchy deepens, now with multiple levels of employees. Lower-level managers are given greater responsibility, and managers for significant areas of responsibility may be identified. Top executives begin to rely almost exclusively on lower-level leaders to handle administrative issues so that they can focus on strategic decisions that affect the overall organization. At this stage, the mechanistic structures of the organization are strengthened, and functional structures may be introduced. Often, tension emerges over how to find balance in the structure. Most organizations at this stage of development need to have elements of a mechanistic bureaucracy while maintaining an environment that allows for the innovation and flexibility that is a feature of an organic structure.

A transition to the fourth phase, renewal or decline, occurs when an organization expands to the point that its operations are far-flung and need to operate somewhat autonomously. Functional structures become almost essential, and subunits may begin to operate as independent businesses. Often, the tensions in the company between mechanistic and organic inclinations may be out of balance. To address these issues, the organization has to be reorganized or restructured to achieve higher levels of coordination between and among different groups or subunits. Managers may need to address fundamental questions about the overall direction and administration of the organization.

To summarize, the key insight about the organizational life cycle is that the needs of an organization will evolve over time. Different structures are needed at different stages as an organization develops. The needs of employees will also change. An understanding of the organizational life cycle provides a framework for thinking about changes that may be needed over time.

Dimensions of Change

When considering how to assess the need for change in an organization, it can be helpful to think of three dimensions: the scope of change, the level of change, and the intentionality of change.

The first, the scope of change refers to the degree to which the required change will disrupt current patterns and routines. Incremental change refers to small refinements in current organizational practices or routines that do not challenge, but rather build on or improve, existing aspects and practices within the organization. Common incremental change practices are LEAN and Six Sigma, which are used to find relatively small changes that can generate greater efficiencies in a process. An organization can improve its product-line efficiencies by identifying small discrepancies in process, then fixing them in a systematic way. Incremental change does not typically challenge people to be at the edge of their comfort zone.6

In contrast, transformational change refers to significant shifts in an organizational system that may cause significant disruption to some underlying aspect of the organization, its processes, or structures. Transformational change can be invigorating for some employees, but also highly disruptive and stressful for others. Examples of transformational change include large systems changes and organizational restructuring. Culture change often requires transformational change to be successful.7

Finally, a strategic change is a change, either incremental or transformational, that helps align an organization’s operations with its strategic mission and objectives. This kind of change is necessary for an organization to achieve the focus it needs to make needed transfer missions and work it does feel to stay competitive in the current or larger organization, larger market environment, or societal environment.

A photo shows the rear view of an Uber Eats’ food delivery driver with a backpack, cycling along a busy Oxford Road in Manchester, England.
Exhibit 16.6 Uber Eats on bicycle An example of a small organizational structure is exemplified by jobs in the sharing economy like Uber and Lyft drivers. Here an Uber Eats food delivery driver cycles along a very busy Oxford Road in Manchester, England. (Credit: Shopblocks/ flickr/ Attribution 2.0 Generic (CC BY 2.0))

The level of change refers to the breadth of the systems that need to be changed within an organization. Individual-level change focuses on how to help employees to improve some active aspect of their performance or the knowledge they need to continue to contribute to the organization in an effective manner. Individual-level change programs include leadership development, training, and performance management. Group-level change centers on the relationships between people and usually focuses on helping people to work more effectively together. Team development, or teambuilding, is one of the most common forms of a team change process. Organization-level change is a change that affects an entire organizational system or several of its units. Strategic planning and implementation is perhaps the most common type of organization-level change. Higher-level change programs usually require changes at lower levels—an organization-level change may require change at both team and individual levels as well.

Intentionality is the final dimension of change and refers to the degree to which the change is intentionally designed or purposefully implemented. Planned change is an intentional activity or set of intentional activities that are designed to create movement toward a specific goal or end. Planned change processes often involve large groups of people and step-by-step or phase-by-phase activities that unfold over a period of time. Usually, effective leaders identify clear objectives for the change, the specific activities that will achieve those objectives, and the indicators of success.

In contrast, unplanned change is unintentional and is usually the result of informal organizing. It may or may not serve the aims of the organization as a whole. Unplanned change may be completely spontaneous, occurring simply because employees in some part of an organization want to initiate change. But sometimes it occurs as a byproduct of a planned change process. This is because it is difficult for leaders to anticipate all the consequences of a planned change effort. Employees react in unpredictable ways, technologies don't work as expected, changes in the marketplace don't happen as expected, or other actors may react in unanticipated ways.

As we will discuss below, some change models are designed to take advantage of the potential for spontaneous organizing among employees. Unplanned change can be harnessed as a positive force when employees are invited to be proactive about working toward common organizational goals.

Concept Check

  1. What is organizational change?
  2. What are the fundamental dimensions of change?
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