ORGANIZATIONAL CHANGE (4TH ED.)Barbara Senior & Stephen Swailes

Chapter 1: Organizations and their changing environments

LEARNING OBJECTIVESBy the end of the this chapter you will be able to Describe the general characteristics of

organizations Identify triggers for change in a range of

organizations Discuss the concept of organizations as systems

operating in multidimensional environments and the implications for understanding the causes of organizational change

Analyze the level of turbulence in organizational environments

KEY ELEMENTS OF AN ORGANIZATION

What are the key defining characteristics of an organization?

WHAT IS AN “ORGANIZATION”?

A social entity that has a purpose, has a boundary, so that some participants are considered inside while others are considered outside, and patterns the activities of participants into a recognizable structure (Daft, 1989).

WHAT IS AN “ORGANIZATION”?

1) A social entity that2) has a purpose,3) has a boundary, so that some

participants are considered inside while others are considered outside, and

4) patterns the activities of participants into a recognizable structure (Daft, 1989).

WHAT IS AN “ORGANIZATION”?

1) Nadler (1988) saw the organization as interlinked systems.

2) What does Stacey (2003) mean by the phrase “shadow system”?

3) Silverman (1970) challenges the idea of organizations as systems and says “social action” defines the organization.

ORGANIZATION AS A FLOWCHART

Is it possible to have an organization without a physical structure to house it?

ORGANIZATION AS A SYSTEM

HISTORICAL CONTEXT FOR CHANGE

The agricultural age which prevailed until the early 1700s in Europe was affected by the markets and weather.

The industrial age emerged in the late 1700s in Europe and later in America, and was the predominate factor until well into the 20th century. Inventions and innovations drove change. Scientific management affected the workplace and production methods.

Currently, we are in the information age and knowledge is the key resource. Traditional organizations are trying to reinvent themselves.

HISTORICAL CONTEXT FOR CHANGE

ACTIVITY 1.1Consider how you would describe BHU. For instance: Which business sector does it operate in? Does the organization operate at a local, regional,

national or international level? Does it supply domestic or international markets –

or both? In what ways does the organization need creativity

and innovation to survive? What is the mix of employees – unskilled, skilled,

professional? Can it attract and keep high-performing

employees? Do employees have autonomy or do decisions

come primarily from the top-down?

UNCERTAIN FUTURE Read the “Organizations as symphony

orchestras” metaphor on page 10 and discuss implications of the metaphor as it relates to organizations.

Can there be a conductorless orchestra?

Can there be more than one conductor at the same time?

What does Drucker say will become of middle management? Has his prophesy proven true?

ENVIRONMENTAL TRIGGERS FOR CHANGE

What are “environmental triggers” for change?

List the changes in America since Obama has become president.

Does it take a major event to incite change, or can small and imperceptible events result in significant change?

Name an organization that you are familiar with that has recently made significant changes.

What precipitated those changes?

PEST FACTORS

POLITICAL TRIGGERS

“Perhaps the most important role for governments is the bringing of economic prosperity to their countries.” How do governments do this?

ECONOMIC TRIGGERS

What economic factors does the organization have to consider?

What four key economic factors do governments in developed countries work to keep in balance?

SOCIO-CULTURAL TRIGGERS

What socio-cultural triggers do organizations have to consider?

Standard of living Demographic changes: age, nationality,

gender Family structures Equality and intolerance of unfair unethical

practices Sensitivity to cultural and religious

differences

TECHNOLOGICAL TRIGGERS

Discuss the technological changes you have seen within your lifetime and how they have affected the organizations you have worked in.

Identify some now defunct organizations that failed to respond to technological changes. Why do you think they failed to respond and change with the technology?

What are some of the benefits and potential pitfalls of new technology?

INTERNAL TRIGGERS AND BIG IDEAS Activity 1.7

What do you think are the five most powerful ideas to occur to the human mind?How did they change society?Can you identify a particularly big idea that has led to change?Have there been any “big ideas” that have substantially changed the church in the last decade?

INTERNAL TRIGGERS AND BIG IDEAS Examples of internal triggers for change:

To recognize unions or not to recognize unions A new CEO or other senior manager Facing the brutal facts of poor performance Redesign of jobs and working relationships Redesign of factory or office layout Adoption of new technology New marketing strategy Decision to sell or acquire a business unit A cut in overtime working Labor shortages or surpluses

ORGANIZATIONAL RESPONSE TO CHANGE

What are the “three types of environment,” which together make up the total “operating environment”?First Type: Temporal Environment Second Type: PEST FrameworkThird Type: Internal Environment

ORGANIZATIONAL RESPONSE TO CHANGE Ansoff and McDonnell (1990) state that a firm’s performance is optimized when its aggressiveness and responsiveness match its environment. They propose 5 levels of environmental turbulence (p. 24): Level 1: Predictable Level 2: Forecastable by Extrapolation Level 3: Predictable by Threats and Opportunities Level 4: Partially Predictable Opportunities Level 5: Unpredictable SurprisesWhat level of environmental turbulence is BHU

facing?

TYPES OF CHANGE Closed change: We can say what happened,

why it happened and what the consequences are.

Contained change: Can only say what probably happened, why it probably happened and what the probable consequences were.

Open-ended change: Explanations do not command anything like widespread acceptance by those involved. They cannot explain why the change occurred or predict what will occur next.Stacey, R. D. (1996). Strategic management and

organizational dynamics (2nd ed.). London: Pitman.

CONCLUSIONS Organization operate in multiple

environments (temporal, external, and internal)

Organizations have to continually achieve “external adaptation and internal integration” (Schein, 1988, p. 94).

Must be responsive, adaptable, and flexible. A continuous process of identifying,

collecting, and translating progressive information about external influences will benefit strategic decision making toward establishing a preparatory stance to environmental factors.

Ultimately the winds of change are variable and unpredictable, but they are inevitable.

QUIZ NEXT WEEK What are PEST factors? Give 5 examples of each. Define “Organization” What are the three types of environment,

which together make up the total “operating environment”

Explain the major factors driving organizational change in 2014.