Business

(1) Nadler and Tushman’s Congruence Model History and Environment Strategy The Transformation Process Work The Formal Organization The Informal Organization People Outputs An Example Using Nadler and Tushman’s Congruence Model Evaluating Nadler and Tushman’s Congruence Model

(2) Sterman’s Systems Dynamics Model (3) Quinn’s Competing Values Model (4) Greiner’s Model of Organizational Growth (5) Stacey’s Complexity Theory Summary Key Terms End-of-Chapter Exercises

Chapter 4. Building and Energizing the Need for Change Understanding the Need for Change

Seek Out and Make Sense of External Data Seek Out and Make Sense of the Perspectives of Stakeholders Seek Out and Make Sense of Internal Data Seek Out and Assess Your Personal Concerns and Perspectives

Assessing the Readiness for Change Heightening Awareness of the Need for Change Factors That Block People From Recognizing the Need for Change

Developing a Powerful Vision for Change The Difference Between an Organizational Vision and a Change Vision Examples of Organizational Change Visions

Google’s Implied Vision for Change in Telecommunications Xerox’s Vision for Creating Agile Business Processes IBM—Diversity 3.0 Ronald McDonald House Charities (RMHC) Vision Tata’s Vision for the Nano World Wildlife Fund: Vision for Its Community Action Initiative—Finding Sustainable Ways of Living Vision for the “Survive to 5” Program Change Vision for “Reading Rainbow”

Summary Key Terms A Checklist for Change: Creating the Readiness for Change End-of-Chapter Exercises

Chapter 5. Navigating Change Through Formal Structures and Systems Making Sense of Formal Structures and Systems Impact of Uncertainty and Complexity on Formal Structures and Systems Formal Structures and Systems From an Information Perspective

Aligning Systems and Structures With the Environment Structural Changes to Handle Increased Uncertainty Making Formal Structure and System Choices

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Using Structures and Systems to Influence the Approval and Implementation of Change

Using Formal Structures and Systems to Advance Change Using Systems and Structures to Obtain Formal Approval of a Change Project Using Systems to Enhance the Prospects for Approval Ways to Approach the Approval Process

Aligning Strategically, Starting Small, and “Morphing” Tactics The Interaction of Structures and Systems With Change During Implementation Using Structures and Systems to Facilitate the Acceptance of Change Developing Adaptive Systems and Structures Summary Key Terms Checklist: Change Initiative Approval End-of-Chapter Exercises

Chapter 6. Navigating Organizational Politics and Culture Power Dynamics in Organizations Departmental Power Organizational Culture and Change

How to Analyze a Culture Tips for Change Agents to Assess a Culture

Understanding the Perceptions of Change Identifying the Organizational Dynamics at Play

Summary Key Terms Checklist: Stakeholder Analysis End-of-Chapter Exercises

Chapter 7. Managing Recipients of Change and Influencing Internal Stakeholders Stakeholders Respond Variably to Change Initiatives

Not Everyone Sees Change as Negative Responding to Various Feelings in Stakeholders

Positive Feelings in Stakeholders: Channeling Their Energy Ambivalent Feelings in Stakeholders: They Can Be Useful Negative Reactions to Change by Stakeholders: These Too Can Be Useful

Make the Change of the Psychological Contract Explicit and Transparent Predictable Stages in the Reaction to Change Stakeholders’ Personalities Influence Their Reactions to Change Prior Experience Impacts a Person’s and Organization’s Perspective on Change Coworkers Influence Stakeholders’ Views Feelings About Change Leaders Make a Difference

Integrity Is One Antidote to Skepticism and Cynicism Avoiding Coercion But Pushing Hard: The Sweet Spot? Creating Consistent Signals From Systems and Processes Steps to Minimize the Negative Effects of Change

Engagement Timeliness Two-Way Communication

Make Continuous Improvement the Norm Encourage People to Be Change Agents and Avoid the Recipient Trap Summary

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Key Terms Checklist: How to Manage and Minimize Cynicism About Change End-of-Chapter Exercises

Chapter 8. Becoming a Master Change Agent Factors That Influence Change Agent Success

The Interplay of Personal Attributes, Situation, and Vision Change Leaders and Their Essential Characteristics

Developing Into a Change Leader Intention, Education, Self-Discipline, and Experience What Does Reflection Mean?

Developmental Stages of Change Leaders Four Types of Change Leaders Internal Consultants: Specialists in Change External Consultants: Specialized, Paid Change Agents

Provide Subject-Matter Expertise Bring Fresh Perspectives From Ideas That Have Worked Elsewhere Provide Independent, Trustworthy Support Limitations of External Consultants

Change Teams Change From the Middle: Everyone Needs to Be a Change Agent Rules of Thumb for Change Agents Summary Key Terms Checklist: Structuring Work in a Change Team End-of-Chapter Exercises

Chapter 9. Action Planning and Implementation Without a “Do It” Orientation, Things Won’t Happen Prelude to Action: Selecting the Correct Path Plan the Work

Engage Others in Action Planning Ensure Alignment in Your Action Planning

Action Planning Tools 1. To-Do Lists 2. Responsibility Charting 3. Contingency Planning 4. Surveys and Survey Feedback 5. Project Planning and Critical Path Methods 6. Tools to Assess Forces That Influence Outcomes and Stakeholders 7. Leverage Analysis 8. Operation Management Tools

Working the Plan Ethically and Adaptively Developing a Communication Plan Timing and Focus of Communications Key Principles in Communicating for Change Influence Strategies

Transition Management Summary Key Terms Checklist: Developing an Action Plan End-of-Chapter Exercises

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Chapter 10. Measuring Change: Designing Effective Control Systems Selecting and Deploying Measures

Focus on Key Factors Use Measures That Lead to Challenging but Achievable Goals Use Measures and Controls That Are Perceived as Fair and Appropriate Avoid Sending Mixed Signals Ensure Accurate Data Match the Precision of the Measure With the Ability to Measure

Control Systems and Change Management Controls During Design and Early Stages of the Change Project Controls in the Middle of the Change Project Controls Toward the End of the Change Project

Other Measurement Tools Strategy Maps The Balanced Scorecard Risk Exposure Calculator The DICE Model

Summary Key Terms Checklist: Creating a Balanced Scorecard End-of-Chapter Exercises

Chapter 11. Summary Thoughts on Organizational Change Putting the Change Path Model Into Practice Future Organizations and Their Impact Becoming an Organizational Change Agent: Specialists and Generalists Paradoxes in Organizational Change Orienting Yourself to Organizational Change Summary End-of-Chapter Exercises

Case Studies Case Study 1: Building Community at Terra Nova Consulting Case Study 2: Food Banks Canada: Revisiting Strategy 2012 Case Study 3: “Not an Option to Even Consider:” Contending With the Pressures to Compromise Case Study 4: Diego Curtiz at Highland State University Case Study 5: Ellen Zane—Leading Change at Tufts/NEMC Case Study 6: Ellen Zane at Tufts Medical Center: Spring 2011

Notes Index About the Authors

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Preface

Since the publishing of the second edition of this text, the world has continued to churn in very challenging ways. Uneven and shifting global patterns of growth, sluggish Western economies, continuing fallout from the financial crisis, stubbornly high unemployment levels in much of the world, and heightened global uncertainty in matters related to health, safety, and security define the terrain. Their consequences continue to unfold. The massive credit crisis was followed by unprecedented worldwide government stimulus spending, followed by sovereign debt crises, followed by . . . ??? Wars and insurrections in parts of Africa, the Ukraine, and much of the Middle East; deteriorating international relationships involving major powers; fears of global pandemics (Ebola and MERS); and the rise of ISIS and Boko Haram and their unprecedented inhumanity have shaken all organizations, big or small, public or private. They have also made us, your authors, much more aware of the extreme influence of the external environment on the internal workings of an organization. As we point out in our book, even the smallest of firms have to adapt when banks refuse them normal credit, and even the largest and most successful of firms have to learn how to adapt when disruptive technologies or rapid social and political changes alter their realities.

Our models have always included and often started with events external to the organization. We have always argued that change leaders need to scan their environments and be aware of trends and crises in those environments. The events of the past two years have reinforced our sense of this even more. Managers must be sensitive to what happens around them, know how to make sense of this, and then have the skills and abilities that will allow them to both react effectively to the internal and external challenges and remain constant in their visions and dreams of how to make their organizations and the world a better place to live.

A corollary of this is that organizations need a response capability that is unprecedented, because we’re playing on a global stage of increasing complexity and uncertainty. If you are a bank, you need a capital ratio that would have been unprecedented a few years ago. If you are a major organization, you need to build in flexibility into your structures, policies, and plans. If you are a public sector organization, you need to be sensitive to how capricious granting agencies or funders will be when revenues dry up. In today’s world, organizational resilience and adaptability gain new prominence.

Further, we are faced with a continuing reality that change is endemic. All managers are change managers. All good managers are change leaders. The management job involves creating, anticipating, encouraging, engaging others, and responding positively to change. This has been a theme of this book which continues. Change management is for everyone. Change management emerges from the bottom and middle of the organization as much as from the top. It will be those key leaders who are embedded in the organization who will enable the needed adaptation of the organization to its environment. Middle managers need to be key change leaders.

In addition to the above, we have used feedback on the second edition to strengthen the pragmatic orientation that we had developed. The major themes of action orientation, analysis tied with doing, the management of a nonlinear world, and the bridging of the “Knowing– Doing” gap continue to be central. At the same time, we have tried to shift to a more user- friendly, action perspective. To make the material more accessible to a diversity of readers,

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some theoretical material has been altered, some of our models have been clarified and simplified, and some of our language and formatting has been modified.

As we stated in the preface to the first edition, our motivation for this book was to fill a gap we saw in the marketplace. Our challenge was to develop a book that not only gave prescriptive advice, “how-to-do-it lists,” but one that also provided up-to-date theory without getting sidetracked by academic theoretical complexities. We hope that we have captured the management experience with change so that our manuscript assists all those who must deal with change, not just senior executives or organizational development specialists. Although there is much in this book for the senior executive and organizational development specialist, our intent was to create a book that would be valuable to a broad cross section of the workforce.

Our personal beliefs form the basis for the book. Even as academics, we have a bias for action. We believe that “doing is healthy.” Taking action creates influence and demands responses from others. While we believe in the need for excellent analysis, we know that action itself provides opportunities for feedback and learning that can improve the action. Finally, we have a strong belief in the worth of people. In particular, we believe that one of the greatest sources of improvement is the untapped potential to be found in the people of the organization.

We recognize that this book is not an easy read. It is not meant to be. It is meant as a serious text for those involved in change—that is, all managers! We hope you find it a book that you will want to keep and pull from your shelf in the years ahead, when you need to lead change and you want help thinking it through.

Your authors,

Tupper, Gene, and Cynthia

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Acknowledgments

We would like to acknowledge the many people who have helped to make this book possible. Our students and their reactions to the ideas and materials continue to be a source of inspiration. Cynthia’s Leadership and Organizational Change course, spring 2014, included Mshael Alessa, Daniella Comito, Katrice Krumplys, Jill Peterson, and other students who applied the concepts in this book and made a difference through their change projects at Simmons College.

Managers, executives, and frontline employees that we have known have provided insights, case examples, and applications while keeping us focused on what is useful and relevant. Ellen Zane, former CEO of Tufts Medical Center, Boston, is an inspiring change leader; her turnaround story at Tufts Medical Center appeared in the second edition of this book and is published again in this third edition. Cynthia has also been fortunate to work with and learn from Gretchen Fox, founder and former CEO, FOX Relocation Management Corporation. The story of how she changed her small firm appeared in the second edition of the book and the case continues to be available through Harvard Business Publishing (http://hbr.org/product/fox-relocation-management-corp/an/NA0096-PDF-ENG). Katharine Schmidt, a former student of Gene‘s and the CEO of Food Banks Canada, is another of the inspiring leaders who opened her organization to us and allowed us to learn from their experience, and share it with you in this edition.

Several colleagues have provided guidance and feedback along the way that have helped us test our logic and develop our thinking and writing. Cynthia would like to especially thank Professor Mary Shapiro, a colleague at the School of Management, Simmons College, who read each chapter thoroughly and gave insightful feedback on the manuscript. Dr. Paul Myers, consultant, Boulder, CO, read Chapters 2 and 3 with a fine-tooth comb and gave us astute criticism, allowing us—paradoxically—to both simplify and add complexity to those chapters.

Our research assistants have provided valuable support. John Schappert and Charles Newell assisted with the search for relevant research articles, reports of change initiatives, and websites of interest.

We owe a HUGE THANKS to Paige Tobie. She searched for articles and web-based materials, participated in our conference calls, made sure ideas and changes didn’t get lost, and kept us on track, on time, and working with the right versions of the manuscript. She provided valuable input on drafts of the manuscript from a student/practitioner’s perspective, and then read the entire manuscript one last time, catching problematic areas. She did all these tasks while retaining her sense of humor and remaining a pleasure to work with. Thank you so very much, Paige: You have been a wonderful project manager, researcher, and colleague!

As with the last edition, our partners Heather Cawsey, Bertha Welzel, and Steve Spitz tolerated our moods, our myopia to other things that needed doing, and the early mornings and late nights spent on the manuscript. They helped us work our way through ideas and sections that were problematic, and they kept us smiling and grounded when frustration mounted.

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Our editors at Sage have been excellent. They moved the project along and made a difficult process fun (well, most of the time). Thank you, Maggie Stanley, our acquisitions editor, for keeping us on task and on time (or trying to keep us on time . . . ). We appreciate your style of gentle nudges. Nicole Mangona, editorial assistant, was constantly on top of the various parts of the book and helped us push through to the end.

Finally, we would like to recognize the reviewers who provided us with valuable feedback on the second edition. Their constructive, positive feedback and their excellent suggestions were valued. We thought carefully about how to incorporate their suggestions into this third edition of the book. Thank you, Jeff Zimmerman, Northern Kentucky University; Lorraine M. Henderson, Nazareth College of Rochester; Ross A. Wirth, Franklin University; Ericka Kimball, Augsburg College; Whitney McIntyre Miller, Northern Kentucky University; Sandra R. Bryant, Tiffin University; John Anthony DiCicco, Curry College; and Paul M. Terry, University of South Florida. In short, our thanks to all who made this book possible.

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Chapter 1 Changing Organizations in Our Complex World

It is not the strongest of the species that survive, nor the most intelligent, but the most responsive to change.

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Chapter Overview The chapter defines organizational change as “planned alteration of organizational components to improve the effectiveness of organizations.” The orientation of this book is to assist change managers or potential change leaders to be more effective in their change activities. The social, demographic, technological, political, and economic forces pushing the need for change are outlined. Four types of organizational change are discussed: tuning, adapting, reorienting, and re-creating. Four change roles found in organizations are described: change initiators, change implementers, change facilitators, and change recipients and stakeholders. The terms change leader and change agent are used interchangeably and could mean any of the four roles. The difficulties in creating successful change are highlighted, and then some of the characteristics of successful change leaders are described.

Organizations fill our world. We place our children into day care, seek out support services for our elderly, and consume information and recreational services supplied by other organizations. We work at for-profit or not-for-profit organizations. We rely on organizations to deliver the services we need: food, water, electricity, and sanitation and look to governmental organizations for a variety of services that we hope will keep us safe, secure, well governed, and successful. We depend on health organizations when we are sick. We use religious organizations to help our spiritual lives. We assume that most of our children’s education will be delivered by formal educational organizations. In other words, organizations are everywhere. Organizations are how we get things done. This is not just a human phenomenon—it extends to plants and animals—look at a bee colony, a reef, a lion pride, or an elephant herd and you’ll see organizations at work.

And these organizations are changing—some of them declining and failing, while others successfully adapt or evolve, to meet the shifting realities and demands of their environments. What exactly is organizational change? What do we mean when we talk about it?

Defining Organizational Change When we think of organizational change, we think of major changes: mergers, acquisitions, buyouts, downsizing, restructuring, the launch of new products, and the outsourcing of major organizational activities. We can also think of lesser changes: departmental reorganizations, installations of new technology and incentive systems, shutting particular manufacturing lines, or opening new branches in other parts of the country—fine-tuning changes to improve the efficiency and operations of our organizations.

In this book, when we talk about organizational change, we refer to planned alterations of organizational components to improve the effectiveness of the organization. Organizational components are the organizational mission, vision, values, culture, strategy, goals, structure, processes or systems, technology, and people in an organization. When organizations enhance their effectiveness, they increase their ability to generate value for those they serve.*

The reasons for change are often ambiguous. Is the change internally or externally driven? In winter 2014, Tim Hortons (a Canada-based coffee restaurant chain) announced that it was aiming to open 1,000 new stores globally by 2018, joining their network of 3,468 outlets in Canada, 807 in the United States, and 29 in the Persian Gulf. It has also been busy revising its menu to shore up flattening same-store sales, adding Wi-Fi access, undertaking major store ******ebook converter DEMO Watermarks*******

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