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Organizational change

Retirement or divestiture | Challenges in managing demand for services | Activity-based Demand Management | Business activity patterns and user profiles | Core services and supporting services | Developing differentiated offerings | Service level packages | Advantage of core service packages | Organizations | Organizational development |


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No matter what type of change the organization decides on, there remains the problem of getting the organization to change. Implementing change can be thought of as a three-step process, as in Figure 6.9.

Figure 6.9 Three-step change process

Resistance to change will force the organization to revert to previous behaviours unless steps are taken to refreeze the new changes. Role and task changes are not enough. Managers must actively manage the process.

  1. The first step to change is diagnosis. Namely, acknowledge the need for change and the factors prompting it. For example, complaints about service quality have increased or operating costs have escalated. Or morale is low while turnover is high. There is little point in focusing on improving costs if the customer is concerned about quality.
  2. The second step is determining the desired state. While this can be a difficult planning process with alternative courses of action, it begins with the organization ’s strategy and desired structure. Is the strategy based on reducing costs or improving quality? Should the organization adopt a product or geographic structure?
  3. The third step is implementation. This three-step process begins with identifying possible impediments to change. What obstacles are anticipated? For example, functional managers may resist reductions in power or prestige. The more severe the change then the greater the difficulties encountered. Next, decide who will be responsible for implementing changes and controlling the change process. These change agents can be external, as in consultants, or internal, as in knowledgeable managers. External change agents tend to be more objective and less likely to be perceived to be influenced by internal politics, while internal agents tend to have greater local knowledge. Last, decide on which change strategy will most effectively unfreeze, change and refreeze the organization. These techniques fall into two categories: top-down and bottom-up. Top-down is a dramatic restructuring by senior managers while bottom-up is a gradual change by low-level employees. Example techniques include:


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Case example 12 (solution)| Organizational departmentalization

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