MoC_WEEK_4_-_Diagnosis_of_Change_178225ce97ce3cc199abc57609129d40

Class Objectives

• Explore the levels at which organizational change can be diagnosed.

• Examine the tools used to diagnose organizational change.

• Assess organizations’ capacity to respond to change.

• Examine the case study of Huawei.

The Diagnostic Stage of Change

• Change diagnosis involves understanding change problems, the organizational environment, types of changes, and responses to those changes.

• It employs scanning techniques and analysis methods, such as SWOT, PEST, and Industry Analysis.

• The goal is organizational effectiveness.

Organizational Environment

General Environment

• Composed of demographic, cultural, economic, governmental, international, and environmental forces.

Specific Environment

• Involves relationships with customers, suppliers, competitors, unions, and technological forces.

Static vs. Dynamic Factors

• Static: Does not change often.

• Dynamic: Changes frequently.

Other Characteristics

• Simple: Few elements; easier to manage.

• Complex: Many interacting components.

• Benign: Favorable conditions; supportive.

• Hostile: Unfavorable conditions; challenging.

Relationships Between Structure & Environment

• Dynamic Environment: More organic organization structure required.

• Complex Environment: Necessitates decentralized decision-making with differentiation.

• Hostile Environment: Creates pressure for centralized decision-making.

Levels of Change Diagnosis

1. Individual: Focus on personal change and adjustment.

2. Group: Examines team dynamics and collective response.

3. Open Systems: Considers wider environmental interactions.

External Analysis

• Uses analytical tools for evaluating the external environment to justify organizational adaptation. This includes:

  • Customers

  • Competitors

  • Market trends

  • Suppliers and Partners

  • Social changes

  • New technology

  • Economic impact

  • Political and regulatory frameworks.

Change Models, Diagrams, and Theories

• Frameworks to measure:

  • Current state of the organization

  • Need and capacity for change

  • Resistance factors.

• Some models include:

  • Change Iceberg

  • Theory of Planned Behavior

  • Force Field Analysis

  • PEST Analysis

  • SWOT Analysis

  • Institutional Arrangement Analysis.

Change Management Iceberg (Krüger)

• Visual representation distinguishing between:

  • Issue Management: Cost, Quality, Time

  • Hidden Dimensions: Acceptance levels, behavior, attitudes, and power dynamics.

• Emphasizes that management often focuses on surface issues while deeper challenges remain unaddressed.

SWOT Analysis

• Framework for identifying:

  • Strengths: Internal advantages (e.g., resources, reputation).

  • Weaknesses: Internal disadvantages (e.g., lack of expertise).

  • Opportunities: External prospects (e.g., new markets).

  • Threats: External challenges (e.g., competition).

• Important to leverage supporting analyses (PEST, Environmental Analysis).

Institutional Arrangement Analysis

• Refers to frameworks that promote or restrict change, including:

  • Policies

  • Regulations and Laws

  • Organizations (e.g., state agencies)

  • Treaties and trade agreements.

Force Field Analysis (Lewin)

• Analyzes driving and restraining forces affecting change:

  • Identifies key stakeholders and their influence on change processes.

• Steps to conduct:

  1. Describe current and desired situations.

  2. List driving and restraining forces.

  3. Assess the significance of these forces.

Capacity to Manage Change

Organizational Capacity for Change (OCC)

• Refers to the ability to:

  • Enhance employee skills sustainably.

  • Align organizational learning with performance targets.

Change Readiness Levels

• Major/transformational changes at the organization level.

• Incremental departmental changes.

• Culture/attitude changes at the employee level.

Critical Capacity Factors

• Ability to identify challenges, opportunities, and threats.

• Leadership capacity and resources (HR, equipment, adaptability).

• Technological systems and organizational structure.

Pettigrew and Whipp's Five Factors for Managing Change

1. Environmental assessment (internal and external).

2. Human resources as assets and liabilities.

3. Link strategic and operational change (planning and implementation).

4. Leading the change effectively.

5. Ensuring overall coherence in strategies.

Final Comments

• Change is complex and requires a thorough assessment of the environment when planning.

• Employ the right scanning tools and approaches for effective change management.

Case for Next Class

• "Resistance to Change in Organisations: The Case of General Motors and Nokia" by Khan, Raza, and George, 2017.

Questions?

• Please feel free to ask!