© MSM 2001
Organizational Change
Processes in China
Dr. Geert . Heling
Maastricht
April, 2002
© MSM 2002
Program (1)
1. Introduction
2. Basics of Change
3. Current trends in China
4. Fundamental issues in Organizational Change
5. Phases in Change Processes: a model of Change
6. Diagnosis: instruments and methods
7. Designing a Change Program
8. Structuring a Change Program
© MSM 2002
Program (2)
9. Dynamics of Change
10. Interventions
11. Implementation
12. Resistance and how to handle it
13. Role and position of Change agents
14. Case presentations
15. Integration
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Basics of Change
What is change?
Different ways of conducting change
Context of organizational change
Responses to Change
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Current trends in China
Political shift towards more Market
orientation
Boosting production and economy
Opening up to international market
Entrance to WTO
From inward to outward orientation
New identity in global politics
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“Organizations that are able to
conduct changes faster and more
effectively than their competitors
have better chances to survive.”
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WTO and China
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Consequences ?
Advantages
Disadvantages
Threats
Opportunities
Time scope
PETS-dimensions
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Issues in Chinese business
Structure
Culture
Leadership & Management
New versus Old
Differences with ‘western’ style business
Development
Etc.
….
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Fundamental Issues in
Organizational Change
Types of change
Ways of changing
Dimensions of Change Programs
Responses to Change
Core principles
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Types of Change
Improvement
Innovation
Transformation
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Two ways of changing
Imposed Change
Easy
Quick
Short term
Resistance
Evoked Change
Complex
Long term
Commitment
Sustaining
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Dimensions of Change
Programs
Strategic considerations
Technical preferences
Economic/Financial Dimension
Social (HR) considerations
Cultural aspects
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Small versus Large Scale
Type of business
Size of organization
Urgency of problems (need)
History of organization
Maturity of people
Attitude of Top Management
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Responses to change
squeezed
Top-management
Middle
management
Working floor/
employees resistant
isolated
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Core principles (1)
(How to make it work)
1. Use Goal orientation
There must be Clarity about:
problem situation
Goals
Criteria for success
Organization
Planning
Control
2. Make a Good diagnosis
Seek information
Summarize
Analyze
Feedback
© MSM 2002
Core principles (2)
(How to make it work)
3. Use Systems thinking: always keep the
whole system in mind
Structures
Behavior
Culture
4. Use participation for commitment
Better decisions
Stimulate motivation
Identification with organization
© MSM 2002
Core principles (3)
(How to make it work)
5. Give support in order to stimulate
self-management
Use feedback
Training
Facilitate communication
Give support
Delegate authorities for use of resources
6. Manage the Process of Change
Analyse process continuously
Deal with resistance and conflicts
Use flexible planning
© MSM 2002
Core principles (4)
(How to make it work)
7. Communicate intensively
Communicate, communicate, communicate
8. Carefully select key-persons
who are potential allies
Who are opinion leaders
Who will show resistance
Who can be a leader
© MSM 2002
Phases of a Change Program
Step 0: determine internal and external pressure/demands for
change
Step 1: Make up diagnosis
Step 3: Determine vision and strategy
Step 4: Action Planning: design and develop the Change Program
Step 5: Structure the Change Process
Step 6: Determine Change dynamics
Step 7: Determine Change Strategies and Methods
Step 8: Implement
Step 9: Evaluate and Adjust/Correct
© MSM 2002
Goals Culture Structure Technology
Behaviour & Processes
Output
Group
Performance
Individual
Performance
Quality of
Working Conditions
Group composition
Structure
Technology
Individual
characteristics
Group Behaviour
Processes
Culture
Individual attitudes
Motivation
Convictions
Sources
Sources
Human
Resources
Organization
level
Group
level
Individual
level
ENVIRONMENT
Source: Harrison, 1978, p. 51
ENVIRONMENT
= influence
= feedback
© MSM 2002
Internal/external
pressure/demands
leading
to change
Step 0
Evaluate
Change Results
Step 7
Determine
Change Strategies
and Implementation
methodologies
Step 6
Determine the
Change Dynamics
Step 5
Structure the
Change Process
Step 4
Design and
Develop
Step 3
Determine Vision
And Strategy
Step 2
Draw up
diagnosis
Step 1
Change
Goals
Change
Situation
Change
Strategy
Change
Effectiveness
Organizational Expertise
Change Management Expertise
Source: Cozijnsen & Vrakking, 1996.
© MSM 2002
General Director
LHC’Cpmmunist Party’s
Omplementation Panel
Deputu General Director Deputy General Director Deputy General Director
Weaving Plant Dueing Plant Garment Plant Knitting Plant Support Units & Services
Administration Finance Dept. Import-Export Dept. Materials Dept. R&D Centre Planning & Sales Dept.
Legend: Officially designed reporting line
Delegated tasks to DGD by the GD,
But are subject to frequent changes
Organisation Chart of LHC
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Diagnostic Instruments
7 S - model
Organization Matrix model
Management Effectiveness Analysis
Etc. ….
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Structure
Staff
Style
Skills
Systems
Shared
Values
Strategy
Hard variables
Soft variables
The 7-S model
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© MSM 2002
•Box 1: Goals and methods
• Core activities
• Strategic planning
• Marketing
• Financing
• etc.
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•Box 2: Internal Structure
(Tasks & authorities)
• Organigram
• Task / project descriptions
• Need for information
• Procedures
• etc.
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•Box 3: Knowledge and skills
• Function needs
• Recruitment
• Know-how
• Salary system
• etc.
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•Box 4: Stakeholders
• CEO / Board of directors
• Pressure groups
• Customers
• Employees
• Financier
• etc.
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•Box 5: Decision taking
• Informal structure
• Participation in decision taking
• Review of results
• Consultation
• Negotiations
• etc.
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•Box 6: Autonomy
• Room for action
• Personal perspective
• Status
• Individual interests
• etc.
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•Box 7: Organizational
Climate
• Vision
• Commitment
• Elan
• House style
• etc.
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•Box 8: Co-operation
• Problem solving
• Team-play
• Co-ordination of ideas
• Meeting styles
• etc.
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•Box 9: Attitude
• Creativity
• Fellowship
• Trust
• Dedication
• etc.
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Management Effectiveness
Analysis
• Measures behavior + effectiveness
• Scientific approach
• Questionnaire (111 items)
• 21 behavioural sets
• Situation dependent
• Strategic + Feedback profiles
• Individual + group analyses
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© MSM 2002
Vision and Strategy
?
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Designing a Change Program
Grow or a Roll-out model
Timing
Need & want
Skills (ability)
attitude (culture)
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Change
Competence
Infrastructure
Strategic
Component
Organizational
Success
Institutional
Component
Human
Resources
Component
Change
Policy
Change
Capacity
Leading
Potential
Speed
Willingness
Infrastructure of
Change Competence
Source: Cozijnsen & Vrakking, 1995
© MSM 2002
Competing Values Framework: Organizational Effectiveness
(Quinn model 1)
Flexibility
ExternalInternal
Control
open systems model
Rational goal modelInternal process model
Human relations model
Means: cohesion, morale
Ends: human resource development
Means: planning, goal setting
Ends: productivity, efficiency
Means: flexibiity, readiness
Ends: growth, resource acquisition
Means: information management,
communication
Ends: Stability, control
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Quinn model 2
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4 conditions for changing
behaviour
need want
being
allowed
can
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Roll-out change
1. Preparation
2. Planning
3. Transition structures
4. Implementation
1. (= rolling-out)
5. Reward
© MSM 2002
Grow or Process Change
Preparation
Planning
Take first step
Check and Correct
Take next step
Etc.
…….
Terminate
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Dynamics of Change
Pain and desire
Losses and gains
Resistance
Involvement
Motivation
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Types of Loss
Change always implies losing some things.
Examples of things that people might fear
they could lose are:
® Security
® Status
® Competence
® Relationships
® Sense of direction
® Territory
© MSM 2002
Signs of Resistance
Individual resistance:
• Complaints
• Errors
• Anger
• Disobeying and stubbornness
• Apathy
• Absence due to illness
• Withdrawal
• . . . . .
© MSM 2002
Signs of Resistance
Organizational resistance:
Accidents
Increase in worker’s compensation claims
Increased absenteeism
Gossip
Sabotage
Increase in health care claims
Lowered productivity
© MSM 2002
Phases of Transition
From Danger to Opportunity
1. Denial 3. Exploration
1. 2. Resistance 4.
Commitment
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Phases in mourning process
1. Denial
2. Anger
3. Hustle
4. Depression
5. Acquiescence
6. Acceptance
© MSM 2002
Reactions to Organizational
Change (1)
“It will not be serious”
“It has nothing to do with us”
“What’s wrong with what we have been doing the last few years?”
“It Is this the reward for years of hard work?”
“Now is a bad timing, because …”
“Well if we were having more money …”
© MSM 2002
Reactions to Organizational
Change (2)
“I give up, they will never listen to me”
“They are always just doing what they like”
“Actually I don’t really care anymore”
“I will just let things happen”
“Actually it also has some benefits”
“Well of course it was unacceptable to keep things as they were”
© MSM 2002
How to handle these
reactions? (1)
1. Denial make people aware
» Confrontation with figures, clients, publicity, etc.
» Elicit reactions (make people active)
2. Anger Listen en build rapport
» Show understanding for emotions
» Let early adaptors take initiative
3. Hustle Be clear and make people
accountable
» Communicate goals and vision
» Negotiate about implementation proposals
© MSM 2002
How to handle these
reactions? (2)
4. Depression (silence)
no return statement
» Take decisions and carry them out immediately
» Make implementation irreversible
5. Acquiescence Give support
» “Let us go back to work”
» Support process of learning and adaptation
6. Acceptance Reinforce
» Control, evaluate and celebrate successes
» Use team building, make up new goals
© MSM 2002
Do’s and Don’ts:
(Some general Basic guidelines for effective Change)
1. Have a good reason for making the change
2. Involve people in the change
3. Put a respected person in charge of the process
4. Create transition management
5. Bring in outsider help
6. Provide training in new values and behavior
7. Establish symbols of change
8. Acknowledge and reward people
© MSM 2002
Do’s and Don’ts in Preparation
Prepare your employees
Describe the change as completely as you
can
Research what happened during the last
change
Assess the organizational readiness
Don’t make additional changes that aren’t
critical/necessary
© MSM 2002
Do’s and Don’ts in Planning
Make contingency plans
Allow for the impact on personal performance
and productivity
Encourage employee input
Anticipate the skills and knowledge that will
be needed to master the change
Set a time table and objectives so you can
measure the progress
© MSM 2002
Transition Structures
Create 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.
© MSM 2002
Do’s and Don’ts in
Implementation
Provide appropriate training in new skills and
coaching in new values and behaviors
Encourage self-management
Give more feedback than usual to insure
people always know where they stand
Allow for resistance
Give people a chance to step back and reflect
on what is going on
© MSM 2002
Do’s and Don’ts in
Implementation (continued)
Encourage people to think and act creatively
Look for any ‘opportunity’ created by the
change
Allow for withdrawal and return of people who
are temporarily resistant
Collaborate
Monitor the change process
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The Consultant
Academic education
Communicates well
Creative thinker
Ethical
Has strong “network”
Perseverance
Socially oriented
Other (discuss)
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Roles of the consultant
RESOURCE:
Connections
Expertise
Problem solving
(content)
Service
PROCESS:
Change agent
Coach
Problem
finder/solver
(processes)
Social methodology
Sparring partner
Trainer
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Skills of the Consultant
Analytical & diagnostic
Communication skills (360 degree)
Influencing skills + adequate use of power
Management skills
Marketing/sales abilities
Problem finding/solving
Self discipline/ethical sensibility
Social skills
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Internal vs External
Costs
Commitment
Objectivity/Independence
Participates in implementation
“Political” involvement
Second opinion
Specific knowledge/experience
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Consultant Selecting criteria
Professional integrity
Professional competence
Firm and consultant
Knowledge of industry
Understanding of country
and culture
Skills (‘hard’ and ‘soft’)
Creativity and innovation
Rapport with consultant
Assignment design
Capacity to deliver
Ability to mobilize
resources
Costs
Image / reputation
Other (discuss...)
© MSM 2002
Conclusions
Different actors (management levels) have
different roles
Managing change requires skills and attitude
Every change involves gains and losses
Organizational Change needs careful
preparation and planning
Rewarding is better than punishing
Resistance is a natural reaction
The ‘Law’ of Transition
© MSM 2002
People don’t hate to change.
People hate to be changed!
© MSM 2002
7 habits of highly successful people
Be proactive
Begin with the end in mind
Put first things first
Think Win-win
Seek first to understand, then to be understood
Synergize
Sharpen the saw
After St. Covey
