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Organizational Change Processes in China Dr.Geert W.J.HelingMaastrichtApril,2002Program(1)1.Introduction2.Basics of Change 3.Current trends in China 4.Fundamental issues in Organizational Change 5.Phases in Change Processes:a model of Change6.Diagnosis:instruments and methods7.Designing a Change Program8.Structuring a Change ProgramProgram(2)9.Dynamics of Change10.Interventions11.Implementation12.Resistance and how to handle it13.Role and position of Change agents14.Case presentations15.IntegrationBasics of ChangeqWhat is change?qDifferent ways of conducting changeqContext of organizational changeqResponses to ChangeCurrent trends in ChinaqPolitical shift towards more Market orientationqBoosting production and economyqOpening up to international marketqEntrance to WTOqFrom inward to outward orientationqNew identity in global politics“Organizations that are able to conduct changes faster and more effectively than their competitors have better chances to survive.”WTO and ChinaConsequences?qAdvantagesqDisadvantagesqThreatsqOpportunitiesqTime scopeqPETS-dimensionsIssues in Chinese businessqStructureqCultureqLeadership&ManagementqNew versus OldqDifferences with western style businessqDevelopmentqEtc.q.Fundamental Issues in Organizational ChangeqTypes of changeqWays of changingqDimensions of Change ProgramsqResponses to ChangeqCore principlesTypes of ChangeqImprovementqInnovationqTransformationTwo ways of changingImposed ChangeEasyQuickShort termResistance Evoked ChangeComplexLong termCommitmentSustaining Dimensions of Change ProgramsvStrategic considerationsvTechnical preferencesvEconomic/Financial DimensionvSocial(HR)considerationsvCultural aspectsSmall versus Large ScaleqType of businessqSize of organizationqUrgency of problems(need)qHistory of organizationqMaturity of peopleqAttitude of Top Management Responses to changesqueezedTop-managementMiddle managementWorking floor/employeesresistantisolatedCore principles (1)(How to make it work)1.Use Goal orientationThere must be Clarity about:qproblem situationqGoalsqCriteria for successqOrganizationqPlanningqControl2.Make a Good diagnosisqSeek informationqSummarizeqAnalyze qFeedback Core principles (2)(How to make it work)3.Use Systems thinking:always keep the whole system in mindqStructuresqBehaviorqCulture4.Use participation for commitmentqBetter decisionsqStimulate motivationqIdentification with organizationCore principles (3)(How to make it work)5.Give support in order to stimulate self-managementqUse feedbackqTrainingqFacilitate communicationqGive supportqDelegate authorities for use of resources6.Manage the Process of ChangeqAnalyse process continuouslyqDeal with resistance and conflictsqUse flexible planningCore principles (4)(How to make it work)7.Communicate intensivelyqCommunicate,communicate,communicate8.Carefully select key-personsqwho are potential alliesqWho are opinion leadersqWho will show resistanceqWho can be a leaderPhases of a Change ProgramStep 0:determine internal and external pressure/demands for changeStep 1:Make up diagnosisStep 3:Determine vision and strategyStep 4:Action Planning:design and develop the Change ProgramStep 5:Structure the Change ProcessStep 6:Determine Change dynamicsStep 7:Determine Change Strategies and MethodsStep 8:ImplementStep 9:Evaluate and Adjust/CorrectGoals Culture Structure Technology Behaviour&ProcessesOutputGroup PerformanceIndividualPerformanceQuality of Working ConditionsGroup compositionStructureTechnologyIndividualcharacteristicsGroup BehaviourProcessesCultureIndividual attitudesMotivationConvictionsSourcesSourcesHuman ResourcesOrganizationlevel GrouplevelIndividuallevelENVIRONMENT Source:Harrison,1978,p.51ENVIRONMENT=influence=feedbackInternal/external pressure/demandsleading to change Step 0Evaluate Change Results Step 7Determine Change Strategies and Implementation methodologies Step 6Determine theChange Dynamics Step 5Structure theChange Process Step 4Design and Develop Step 3Determine Vision And StrategyStep 2Draw up diagnosis Step 1ChangeGoalsChangeSituation ChangeStrategyChange EffectivenessOrganizational ExpertiseChange Management ExpertiseSource:Cozijnsen&Vrakking,1996.General DirectorLHCCpmmunist PartysOmplementation PanelDeputu General DirectorDeputy General DirectorDeputy General DirectorWeaving PlantDueing PlantGarment PlantKnitting PlantSupport Units&ServicesAdministrationFinance Dept.Import-Export Dept.Materials Dept.R&D CentrePlanning&Sales Dept.Legend:Officially designed reporting lineDelegated tasks to DGD by the GD,But are subject to frequent changesOrganisation Chart of LHCDiagnostic Instrumentsq7 S-modelqOrganization Matrix modelqManagement Effectiveness AnalysisqEtc.StructureStaffStyleSkillsSystemsShared ValuesStrategyHard variablesSoft variablesThe 7-S modelBox 1:Goals and methodsCore activitiesStrategic planningMarketingFinancingetc.Box 2:Internal Structure (Tasks&authorities)OrganigramTask/project descriptionsNeed for informationProceduresetc.Box 3:Knowledge and skillsFunction needsRecruitmentKnow-how Salary systemetc.Box 4:StakeholdersCEO/Board of directorsPressure groupsCustomers EmployeesFinancieretc.Box 5:Decision takingInformal structure Participation in decision takingReview of resultsConsultationNegotiationsetc.Box 6:AutonomyRoom for actionPersonal perspectiveStatusIndividual interestsetc.Box 7:Organizational ClimateVisionCommitmentElan House style etc.Box 8:Co-operationProblem solving Team-play Co-ordination of ideas Meeting styles etc.Box 9:AttitudeCreativity FellowshipTrust Dedication etc.Management Effectiveness AnalysisMeasures behavior+effectivenessScientific approachQuestionnaire(111 items)21 behavioural setsSituation dependentStrategic+Feedback profilesIndividual+group analyses Vision and Strategy?Designing a Change ProgramGrow or a Roll-out model TimingNeed&wantSkills(ability)attitude(culture)Change CompetenceInfrastructureStrategic ComponentOrganizationalSuccessInstitutionalComponentHumanResourcesComponentChange PolicyChange CapacityLeading PotentialSpeedWillingnessInfrastructure of Change CompetenceSource:Cozijnsen&Vrakking,1995Competing Values Framework:Organizational Effectiveness (Quinn model 1)FlexibilityExternalInternalControl open systems modelRational goal modelInternal process modelHuman relations modelMeans:cohesion,moraleEnds:human resource developmentMeans:planning,goal settingEnds:productivity,efficiencyMeans:flexibiity,readinessEnds:growth,resource acquisitionMeans:information management,communicationEnds:Stability,controlQuinn model 24 conditions for changing behaviourneedwantbeing allowedcanRoll-out change1.Preparation2.Planning3.Transition structures4.Implementation 1.(=rolling-out)5.RewardGrow or Process ChangeqPreparationqPlanningqTake first stepqCheck and CorrectqTake next stepqEtc.q.qTerminateDynamics of Changeq Pain and desireq Losses and gainsq Resistanceq Involvementq MotivationTypes of LossChange always implies losing some things.Examples of things that people might fear they could lose are:oSecurityoStatusoCompetenceoRelationshipsoSense of directionoTerritorySigns of ResistanceIndividual resistance:ComplaintsErrorsAngerDisobeying and stubbornnessApathyAbsence due to illnessWithdrawal.Signs of ResistanceOrganizational resistance:AccidentsIncrease in workers compensation claimsIncreased absenteeismGossipSabotageIncrease in health care claimsLowered productivityPhases of TransitionFrom Danger to Opportunity1.Denial3.Exploration1.2.Resistance4.CommitmentPhases in mourning process1.Denial2.Anger3.Hustle4.Depression5.Acquiescence6.AcceptanceReactions to Organizational Change (1)1.Denial“It will not be serious”“It has nothing to do with us”2.Anger“Whats wrong with what we have been doing the last few years?”“It Is this the reward for years of hard work?”3.Hustle“Now is a bad timing,because”“Well if we were having more money”Reactions to Organizational Change (2)4.Depression“I give up,they will never listen to me”“They are always just doing what they like”5.Acquiescence“Actually I dont really care anymore”“I will just let things happen”6.Acceptance“Actually it also has some benefits”“Well of course it was unacceptable to keep things as they were”How to handle these reactions?(1)1.Denial make people awareConfrontation with figures,clients,publicity,etc.Elicit reactions(make people active)2.Anger Listen en build rapportShow understanding for emotionsLet early adaptors take initiative3.Hustle Be clear and make people accountable Communicate goals and visionNegotiate about implementation proposalsHow to handle these reactions?(2)4.Depression(silence)no return statementTake decisions and carry them out immediatelyMake implementation irreversible5.Acquiescence Give support“Let us go back to work”Support process of learning and adaptation6.Acceptance Reinforce Control,evaluate and celebrate successesUse team building,make up new goalsDos and Donts:(Some general Basic guidelines for effective Change)1.Have a good reason for making the change2.Involve people in the change3.Put a respected person in charge of the process4.Create transition management 5.Bring in outsider help6.Provide training in new values and behavior7.Establish symbols of change8.Acknowledge and reward peopleDos and Donts in PreparationPrepare your employeesDescribe the change as completely as you canResearch what happened during the last changeAssess the organizational readinessDont make additional changes that arent critical/necessaryDos and Donts in PlanningMake contingency plansAllow for the impact on personal performance and productivityEncourage employee inputAnticipate the skills and knowledge that will be needed to master the changeSet a time table and objectives so you can measure the progressTransition StructuresCreate a transition management group to oversee the change(project team).Develop temporary policies and procedures during the change.Demonstrate flexibility to try new things.Loosen control and procedures.Create new communication channels.Meet frequently to monitor the unforeseen to give feedback,or to check on what is happening.Dos and Donts in ImplementationProvide appropriate training in new skills and coaching in new values and behaviorsEncourage self-managementGive more feedback than usual to insure people always know where they standAllow for resistanceGive people a chance to step back and reflect on what is going onDos and Donts in Implementation(continued)Encourage people to think and act creativelyLook for any opportunity created by the changeAllow for withdrawal and return of people who are temporarily resistantCollaborateMonitor the change processThe ConsultantAcademic educationCommunicates wellCreative thinkerEthicalHas strong“network”PerseveranceSocially orientedOther(discuss)Roles of the consultantqRESOURCE:ConnectionsExpertiseProblem solving(content)ServiceqPROCESS:Change agentCoachProblem finder/solver(processes)Social methodologySparring partnerTrainerSkills of the ConsultantAnalytical&diagnostic Communication skills(360 degree)Influencing skills+adequate use of powerManagement skillsMarketing/sales abilitiesProblem finding/solvingSelf discipline/ethical sensibilitySocial skillsInternal vs ExternalqCostsqCommitmentqObjectivity/IndependenceqParticipates in implementationq“Political”involvementqSecond opinionqSpecific knowledge/experienceConsultant Selecting criteriaqProfessional integrityqProfessional competenceFirm and consultantKnowledge of industryUnderstanding of country and cultureSkills(hard and soft)Creativity and innovationqRapport with consultantqAssignment designqCapacity to deliverqAbility to mobilize resourcesqCostsqImage/reputationqOther(discuss.)ConclusionsvDifferent actors(management levels)have different rolesvManaging change requires skills and attitudevEvery change involves gains and lossesvOrganizational Change needs careful preparation and planningvRewarding is better than punishingvResistance is a natural reactionvThe Law of TransitionPeople dont hate to change.People hate to be changed!7 habits of highly successful peopleBe proactiveBegin with the end in mindPut first things firstThink Win-winSeek first to understand,then to be understoodSynergizeSharpen the sawAfter St.Covey
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