1 ibus 681, dr. yang organizational change chapter 14

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1 IBUS 681, Dr. Yang Organizational Change Chapter 14

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Page 1: 1 IBUS 681, Dr. Yang Organizational Change Chapter 14

1IBUS 681, Dr. Yang

Organizational Change

Chapter 14

Page 2: 1 IBUS 681, Dr. Yang Organizational Change Chapter 14

2IBUS 681, Dr. Yang.

Learning ObjectivesDefine organizational changeLearn why managing change is an important part of international managementUnderstand the individual, group, and structural levels of changeKnow what internal and external factors influence organizational change

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Learning Objectives (cont.)Explain the role of national and organizational culture on organizational stability and changeUnderstand the processes involved in planning organizational change, including sources of resistance to change and ways to overcome themUnderstand how macro level theories of organizational change influence the management of change

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Roberto C. GoizuetaFormer Chairman and CEO

Coca-Cola Company

There is no permanent organizational chart for the world… It is of supreme importance to be ready at all times to take advantage of new opportunities.

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5IBUS 681, Dr. Yang

Organizational Change

Reconfigures components of an organization to increase efficiency and effectiveness Including any alternations in people, structure, or technology

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Levels of Organizational Change

Levels of analysis:Structural change Group changeIndividual change

Levels of analysis:Structural change Group changeIndividual change

Cross-culture variation in restructuring

U.S.JapanGermanyChinaSouth Africa

Cross-culture variation in restructuring

U.S.JapanGermanyChinaSouth Africa

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7IBUS 681, Dr. Yang

Internal Change FactorsTechnical Production Processes

ProductionNew TechnologiesQuality

Political ProcessesNew Organizational GoalsConflictNew Leadership

Organizational Culture

ValuesNormsNew Member Socialization

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External Change Factors

Immediate Environment

Domestic CompetitionPopulation TrendsSocial TrendsGovernment Actions

Immediate Environment

Domestic CompetitionPopulation TrendsSocial TrendsGovernment Actions

General Environment

Foreign CompetitionSocial MovementsPolitical-Economic MovementsTechnologyProfessionalizationCulture Contact

General Environment

Foreign CompetitionSocial MovementsPolitical-Economic MovementsTechnologyProfessionalizationCulture Contact

Page 9: 1 IBUS 681, Dr. Yang Organizational Change Chapter 14

IBUS 681, Dr. Yang 9

External Change Factors for Germany Inc.

Factors Post WWII How it is changingOrganizational

change

Ownership

Structure

Big companies and financial institutions controlled stakes in one another, offering mutual protection from hostile takeovers and outside pressures. This stability helped Germany rebuild shattered industries.

Companies are unwinding their stakes in on another to profit from a cut in the capital-gaining tax in 2001, free up capital for their main businesses and reduce the risk that non-core holdings will generate losses.

Companies are subject to more intense capital market pressures

MGMT-Labor

Relations

Co-determination gave labor 50% of seats on corporate management boards, laying the foundation for decades of labor peace.

A center-right government is likely to assume power and try to curtail unions, weakening ties between labor and management.

Supervisory boards are giving CEOs more decision-making power

Outside Capital

Foreign investors have little or no say in running companies or forcing management changes. Cross-border mergers were rare.

A glut of foreign investment, including private equity funds that now total $54 billion, is putting pressure on German companies to restructure.

Spin-offs, mergers and plant shutdowns are accelerating.

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National Culture and Organizational Change

Time Orientation: PastPresentFutureShort-term vs. long-term oriented

Resistance to Change

TraditionHabitResource LimitationsPower and InfluenceFear of the UnknownValues

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Resistance to Change in Different Clusters of Countries

Dimension ScoresResistance level PD ID UA Country Clusters

4 (strongest)

3 (strong)

high low high

med med high

high high high

high med high

high low med

Most of Latin America, Portugal,Korea, the former Yugoslavia

Japan

Belgium,France

Spain, Argentina, Brazil, Greece,Turkey, Arab Countries

Indonesia, Thailand, Taiwan,Iran, Pakistan, African countries

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Resistance to Change in Different Clusters of Countries (cont.)

Dimension ScoresResistance level PD ID UA Country Clusters

2 (medium)

1 (week)

0 (weakest)

high low low

low med

high

med high med

med high low

low high low

Philippines, Malaysia, India

Austria, Israel

Italy, Germany, Switzerland, South Africa

Singapore, Hong Kong, Jamaica

Anglo countries, Nordic countries, Netherlands

IBUS 681, Dr. Yang

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13IBUS 681, Dr. Yang

Managing ChangeOrganization developmentLewin’s model of changeManaging resistance to changeImpact of cultural values

OD modelConsultingPower versus employee participation

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Lewin’s Model of Change

Phase 1 - DiagnosisPhase 2 - UnfreezingPhase 3 - MovementPhase 4 - RefreezingPhase 5 - Renewal

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Managing Resistance to Change

Education and communicationParticipation and involvementNegotiation and agreementManipulation and cooptationCoercion

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The Interaction of National and Organizational Cultures

National cultureOrganizational culture

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Change Strategies for Different Groups of Countries

Change Strategy PD ID MA UA Country Clusters

5 (power)

4 (power,manipulation/persuasion)

High low high high

High low med high

Columbia, Ecuador, Venezuela, Mexico

Rest of Latin America, Spain, Portugal, former Yugoslavia, Greece, Turkey, Arab countries, Korea

Dimension Scores

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Change Strategies for Different Groups of Countries (cont.)

Change Strategy PD ID MA UA Country Clusters

Dimension Scores

3 (manipulation/persuasion)

2 (manipulation/persuasion,consultation)

1 (consultation,participation)

med med high highhigh high med highhigh low med low

high low med lowmed low high low

low med med highmed high high med

low high high lowlow high low low

JapanBelgium, FranceIndonesia, Thailand, Taiwan,Iran, Pakistan, African countriesPhilippines, Malaysia, IndiaSingapore, Hong Kong, Jamaica

Austria, IsraelItaly, Germany,Switzerland,South Africa

Anglo countriesNordic countries, Netherlands

IBUS 681, Dr. Yang

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1912-17IBUS 681, Dr. Yang

Macro-organizational Change Theories

Life-cycle theoryTeleological theoryDialectical theoryEvolutionary theoryCultural implications

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Convergence or Divergence?Competitive pressuresAttempts to standardize product quality on a worldwide basisDiffusion of advanced management techniquesTransfer of technological innovations

Competitive pressuresAttempts to standardize product quality on a worldwide basisDiffusion of advanced management techniquesTransfer of technological innovations

Problems with diffusion of organizational innovationsCulture and local conditions as barriers to changeCultural and legal conditions influence and limit change and methods for change.

Problems with diffusion of organizational innovationsCulture and local conditions as barriers to changeCultural and legal conditions influence and limit change and methods for change.

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Implications for ManagersCulture influences organizational change.

When formulating a change program, it is necessary to assess need for change, what changes are appropriate, nature of resistance to change, and how to implement planned changes.

Be aware of internal and external forces for change and how different cultures may respond to them.

Understand larger processes affecting organizational change and how they may limit change.