Organizational Change

IND 305. Perancangan Organisasi

Jurusan Teknik Industri
UNPAR, 2014
What is organizational change?
Organizational change
The process by which organization move from
their present state to some desired future state to
increase their effectiveness

Target of change:
Human resources
Functional resources
Technology capability
Organizational capability

Forces for Organizational Change
Competitive forces
Competition is a forces for change because unless
organization matches or surpasses its competitors in
efficiency, quality, or its capability to innovate new or
improved goods or services it will not survive.

Economic, Political and Global forces
International organization (NAFTA, EU, etc)
Expansion into foreign market

Demographic and Social forces

Ethical forces

Resistance to Changes
Organizational level
Structure
Culture
Strategy

Functional level
Differences in subunit
orientation
Power and conflict
Group level
Norms
Cohesiveness
Groupthink

Individual level
Cognitive biases
Uncertainty and insecurity
Selective perception and
retention
Habit

Lewins Force Fields Theory of Change
A theory of organizational change which argues that two
sets of opposing forces within an organization determina
how change will take place
Evolutionary and Revolutionary
Change in Organization
Evolutionary change
Change that is gradual, incremental and
specifically focused

Revolutionary change
Change that is sudden, drastic, and organization-
wide
Development in Evolutionary Change
Socio-technical system 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 W. Edward Deming to
continuously improve the effectiveness of fllexible
works team

Flexible work team and flexible workers
A group of workers who assume responsibility for
performing all the operations necessary for completing
a specified stage in the manufacturing process

Development in Revolutionary Change
Restructuring
A process by which managers change task and
authority relationship and redesign organization
structure and culture to improve organizational
effectiveness

Innovation
The process by which organization uses their skills and
resources to develop new goods and services or to
develop new production and operating system so that
they can better responds to the needs of their
customers
Figure 10-4: Improving Integration in
Functional Structure
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Managing Change
Lewins three step change process
Action Strategy
A strategy for generating and acquiring knowledge that
managers can use to define an organizations desired
future state and to plan a change program that allows the
organization to reach that state
Diagnosing
the
organization
Determining
the desired
future state
Implementing
action
Evaluating
the action
Institutionalzing
action research
External vs.
Internal
change agents
Top down change
Bottom up change
Organizational Development
A series of techniques and methods that
managers can use in their action research
program to increase the adaptability of their
organization
Organizational
Development
Techniques
OD technique to deal with resistance
to change
Education and communication
Participation and empowerment
Facilitation
Bargaining and negotiation
Manipulation
Coercion

OD technique to promote change
Sensitivity training
An OD technique that consists of intense counseling in
which group members, aided by a facilitator, learn how
others perceive them and may learn how to deal more
sensitively with others

Process consultation
An OD technique in which a facilitator works closely with a
manager on the jib to help the manager improve his or her
interactions with other group member

Team building
An OD technique in which a facilitator first observes the
interactions of groups members and then help them
become aware of ways to improve their work interactions
OD technique to promote change
Intergroup training
An OD technique that uses team building to improve the
work interactions of different functions or divisions

Organizational mirroring
An OD technique in which a facilitator helps two
interdependent groups explore their perception and
relations in order to improve their work interaction

Organizational confrontation meeting
An OD technique that brings together all of the managers of
an organization meet to confront the issue of whether the
organization is effectively meeting its goals
Organizational Transformation:
Birth, Growth, Decline, Death
Organisasi dan Manajemen Industri
Jurusan Teknik Industri
UNPAR, 2010
Figure 11-1: Model of the
Organizational Life Cycle
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Organizational Birth
Entrepreneurs

The founding of an organization: a dangerous
life cycle stage associated with the greatest
chance of failure
Developing a Business Plan
Figure 11-3: Strategies for Competing
in the Resource Environment
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A Population Ecology Model of
Organizational Birth
According to this theory, the rate of birth in a
new environment increases rapidly at first and
then tapers off as resources become less plentiful
and competition increases

Natural selection
The process that ensures the survival of the
organizations that have the skills and abilities that best
fit with the environment
The Institutional Theory of
Organizational Growth
A theory that studies how organizations can
increase their ability to grow and survive in a
competitive environment by satisfying their
stakeholders

Organizational Isomorphism: the similarity
among organizations in a population
Coercive isomorphism
Mimetic isomorphism
Normative isomorphism
The Institutional Theory of
Organizational Growth (cont.)
Coercive isomorphism: exists when an
organization adopts certain norms because of
pressures exerted by other organizations and by society
in general
Increasing dependence of one organization on
another leads to greater similarity
Mimetic isomorphism: exists when organizations
intentionally imitate one another to increase their
legitimacy
Environmental uncertainty increases the likelihood
of imitation
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The Institutional Theory of
Organizational Growth (cont.)
Normative isomorphism: exists when
organizations indirectly adopt the norms and values of
other organizations in the environment
Organizations acquire norms and values when:
Employees move from one organization to another and
bring with them the norms and values of their former
employer
They participate in the activities of industry, trade, and
professional associations

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Greiners Model of Organizational Growth
Organizational Decline and Death
Organizational decline: the life-cycle stage
that an organization enters when it fails to
anticipate, recognize, avoid, neutralize, or adapt
to external or internal pressures that threaten its
long-term survival
May occur because organizations grow too much
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Organizational Decline and Death
Effectiveness and Profitability (profit profitability)
Organizational Inertia
Forces inside organization that make it resistant
to change
Risk aversion
The desire to maximize rewards
Overly-bureaucratic culture
Weitzel and Jonssons Model or Organizational Decline