Beitrge aus der Praxis der beruflichen Bildung Nr.

15

Managing Change and Innovation:

A Challenge for Modern Organizations
Imprint
Published by: Deutsche Gesellschaft fr
Internationale Zusammenarbeit (GIZ) GmbH

Registered offices: Bonn and Eschborn

Kthe-Kollwitz-Strae 15
68169 Mannheim, Germany
[email protected]
www.giz.de

Academy for International Cooperation

Human Capacity Development (HCD) for Vocational Education and Training

Responsible: Martin Purpur

On behalf of: Federal Ministry for Economic

Cooperation and Development (BMZ)

Authors: Antonio Amors M.A. / Office for International Cooperation (BIZ)

Prof Dr. Rudolf Tippelt / Ludwig-Maximilian-University Munich

Graphic Design: Rendel Freude, Kln

Graphics: Prof. Dr. Rudolf Tippelt, Ludwig-Maximilians-University Munich, Germany,

Dean of Faculty of Psychology and Education (No. 1-5, 7, 10-19)

Prof. Karl-Otto Dbber, University of Karlsruhe,

Institute of Vocational Pedagogy and General Pedagogy, Section of Vocational Pedagogy (No. 8)

Picture: GIZ / Nicole Herzog

Date of Publication: Second revised edition November 2012

ISBN 3-937235-74-4
Managing Change and Innovation:
A Challenge for Modern Organizations
 Introduction

The services delivered by the Deutsche Gesellschaft fr These reports

Internationale Zusammenarbeit (GIZ) GmbH draw on a
wealth of regional and technical expertise and tried and originate in the partner countries, taking into account
tested management know-how. As a federal enterprise, we the specific local context
support the German Government in achieving its objec-
tives in the field of international cooperation for sustain- will be tested with and for experts in vocational training
able development. We are also engaged in international in the partner countries, in conjunction with relevant
education work around the globe. practice-oriented training programmes, and

GIZ operates in more than 130 countries worldwide. In will be improved and adapted prior to publication with
Germany, we have offices in nearly all the federal states. a view to global learning, according to the recommen-
Our registered offices are in Bonn and Eschborn. GIZ dations of the partners or the results of the pilot events.
has more than 17,000 staff members across the globe.
We look forward to critical and constructive feedback
The section Human Capacity Development (HCD) for from all readers and users of this special series.
Vocational Education and Training is seated in Mannheim,
Germany and conducts competence development pro- This manual is part of a series of GIZ publications that
grammes under the banner of sustainable development. Its have been produced as a result of training seminars and
dialogue and training programmes are targeted at decision courses. At the end of this publication you will find an
makers from the public and private sectors, junior man- overview of all available titles in this series.
agers and multipliers from vocational training systems.
Our special thanks go to all the people who made
Since 2003, GIZ's Academy for International Coopera- invaluable contributions to these activities.
tion, Human Capacity Development (HCD) for Voca-
tional Education and Training section has been present-
ing a series on everyday practice in vocational training.
Academy for International Cooperation
The intention of this series is described in the title itself Human Capacity Development (HCD) for Vocational Education
(Beitrge aus der Praxis der beruflichen Bildung series and Training
on everyday practice in vocational training). The section
aims to support its international human capacity develop- Deutsche Gesellschaft fr
ment programmes in the above-mentioned areas with Internationale Zusammenarbeit (GIZ) GmbH, Germany
technical documentation in both printed and electronic [email protected]
form.

4
Table of Contents

Imprint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Introduction to the Topic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

1 Framework Conditions for Change Management and Innovation . . . . . . . . . . . . . . . . . . . . . 7

2 Types of Change and the Objectives of Change Management . . . . . . . . . . . . . . . . . . . . . . . . 8

3 Labor Psychology Aspects of Change Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

4 Phases of Change Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

5 Developing a Strategy to React to Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

6 Organizational Culture and Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

7 From Knowledge Management to a Learning Organization . . . . . . . . . . . . . . . . . . . . . . . . 17

8 Organizational Learning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

9 Instruments for Organizational Diagnosis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

10 Options for Organizational Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

11 Resistance and the Change Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

12 Key Factors in Change Management: Organizational Culture . . . . . . . . . . . . . . . . . . . . . . . 26

Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

GIZ Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Publications available . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

5
 Introduction to the Topic

Change, innovation, quality, expertise and creativity are prerequisites such as a management policy which fosters
familiar concepts when it comes to organizational communication and dialog and a certain hierarchical
change. During the past decades numerous theories and structure at the individual levels. Ultimately, change or
concepts have been developed to face the challenges of transformation cannot be enforced from the top level
complex societies and to fundamentally improve organi- down, but need to be understood and adapted by all
zational structures. To give an example: as early as in the involved in order to minimize resistance against changes,
1950s a number of different models aimed at bringing preventing the obstruction of these types of processes.
about organizational change were proposed, e.g. Lewins We must not forget that to the individual, change and
Three-Step Change Model (1951), distinguishing three transition always pose a threat to his or her current status
individual phases for any process of change: Unfreezing- or even to his or her means of income. Let us not forget
Changing-Refreezing. that restructuring measures can result in the loss of jobs.
Above all, and this may seem contradictory, changes are
During the course of the last decades all industries, from slow processes that are crucial in order to meet unforeseen
the agricultural to the telecommunications sector, have and urgent needs.
felt the need to gradually introduce new organizational
concepts, exposing themselves to a plethora of changes in
order to meet the growing challenges posed by markets
and new competitors. Currently, in a phase defined by
learning organizations, the only viable solution to adapt
to increasingly competitive and globalized markets is
becoming ever more obvious; change management, the
driving force behind new economies and organizational
development, is on the rise, developing in step with
knowledge management. At present, managing change is
one of the major challenges confronting not only organi-
zations but also individuals who, on the one hand, have
to stay in stride with organizations as they undergo their
process of change or, on the other hand, are in charge of
enabling change by implementing and coordinating
processes of change and innovation within the organiza-
tional structures. At some point it becomes necessary to
develop and systemize the concept of change manage-
ment and to consider what prerequisites are necessary in
order to introduce a change management system to an
organization.

Obviously, change management is not an isolated concept

that simply appeared out of thin air, nor is it the mere
result of a simple decision taken at the top hierarchical
levels. To introduce and implement a process of change,
companies and organizations need to fulfill some basic

6
1 Framework Conditions for Change Management
and Innovation
As mentioned earlier, there are a number of variables This in itself requires the staff members of an organization
specific to the business, technical, environmental or labor to develop a completely new set of skills and competencies,
environment that, in one way or the other, can result in in order to adapt to these rapid and constant changes and
changes or transformations in the different activities of to successfully meet the challenges of the new and changing
organizations. infrastructure. This new environment specifically calls for:

Though it is impossible to anticipate when, how and an institution capable of learning, as new situations
where changes will take place, there are some variables and challenges require new approaches,
which, at a general level and given the significant impact
they have on day-to-day reality, represent changes to our an institution that allocates its human resources to the
societies as well as to the economy. (Refer to chart 1) core activities of the organization, as it is the people

1) Social Framework Conditions in Change Management and Innovation

Technological innovations, specifically information and telecommunication technologies

Reduction of manufacturing time

Intercultural cooperation and the effects of globalization (intercultural competence)

Reduction of financial resources

Drastic increase in complexity

Chart 1, although just an example, does describe a situation who are responsible for its success, development and
as it could occur in a real organization, demonstrating governance,
that a strategy to meet change must take the variables
determining changes into account. This enables the an institution that develops a system for change
organization to develop a strategy for change that allows management, specifically meaning a system that
it to adapt to technical innovations, specifically new enables the organization to meet the new challenges,
information and communication technologies, such as new variables and new demands as they arise.
e.g. local networks, interactive systems, graphic design,
improved allocation of resources to increase competi-
tiveness, (e.g. quality control, zero-stock, etc.), foster
intercultural cooperation to meet the challenges of glob-
alization (intercultural competence) and reduce expenses,
all the while operating in an increasingly complex and
interdependent environment.

7
 2 Types of Change and the
Objectives of Change Management
Once the possible variables of change have been defined, Chart 2 shows that initiatives aimed at increasing the
taking the concept of innovation as the outset for further organizations ability to compete can do so by pursuing
deliberations, the next step is to determine which objec- structural changes such as mergers, reduction or relocation
tives we want to achieve when introducing changes and of operative units or the introduction of business systems,
innovations in an organization. e.g. the lean organization, in comparison to an approach
to change focused on the issue of human resources, which
In this context, the different objectives which may pro- revolves around questions of personal development, job
voke the introduction of changes can be sub-divided in efficiency and employee satisfaction.
two specific concepts: an economic approach, aimed at
the swift improvement of the organizations competitive
edge and an approach reforming the corporate culture,
focusing on the organizations human resources. In the
extreme, these two types of change are very differentiated
and respond or may respond to very distinct organiza-
tional and personal contexts and modes of conduct. Is the
objective to maximize the organizations economic value
or to develop and build the organizations capacities?

2) Objectives of Change Management

Competitive Capacity Human Resources

Mergers,
acquisitions and Personal development
joint ventures

Delocalization of Ergonomic work place

operative units

Level of satisfaction with

Lean organization the job

8
Obviously, these are two very distinct focal points of Beyond doubt, the introduction of a new change man-
change, leaving it up to the individual company or agement concept is a challenge for any educational insti-
institution to choose one or, ideally, a combination of tution; on behalf of the institution it requires strong leader-
both approaches, based on the institutions specific ship, flexible structures, people who are used to change
objectives and options. According to Beer and Noria, and welcome it and, in an ideal case, a systematic approach
companies that efficiently combine both of these to processes of change. In this case, the institutions ability
approaches can expect remarkable results in both prof- to adapt to new environments, new variables and new
itability and productivity. challenges will be decisive in achieving the goals.

In addition to the above mentioned types of change, a

number of other concepts related to change management
have been developed and implemented. These concepts
span from Business Reengineering, Lean Management
to Total Quality Management (TQM) (refer to chart 3)

3) Change Management

Business Reengineering
Radical change, top down, new organizational structure

Lean Management
Combating inefficiency (e.g. reducing energy waste, delay in services,
personnel turnover, absenteeism, level of job involvement, etc.)

Total Quality Management (TQM)

Customer-oriented approach, the entire organization is responsible
for enforcing quality standards

9
 3 Labor Psychology Aspects of Change Management

Amongst other, initiatives to introduce change always have In this context, managing competencies as a way to
a number of social and personal implications that need to manage human resources play a crucial part: An organiza-
be taken into consideration. Involving an organization in tions success largely depends on the efficient implemen-
a process of change also means involving every person tation of a human resources strategy based on the genera-
working for the organization. Thus, before embarking on tion, structuring and transference of new organizational
any type of change process it is necessary to analyze a and personal knowledge, also known as competency
number of labor psychological factors as described below. management.

4) Labor Psychology Aspects of Change Management

Are the employees in command of the necessary skills?
Introduction of new technologies
New manufacturing methods
Joint ventures with other companies

Is there a predisposition towards change?

Will change bring advantages or disadvantages?

Could they result in situations that are unacceptable or too demanding?

Company lay-offs
Limitations to the participative structures of the organizational development

10
4 Phases of Change Management

There are a multitude of models and methodologies Phase 2: Developing a strategy aimed at innovation and
which can be applied to change strategies. But, generally change: Generally speaking, strategies can be divided in
speaking, most initiatives to introduce change develop two groups according to their main focus. A top down
along the lines of several basic phases as described in the approach has the organizations top management levels
following chapter: setting up the goals for employees at the lower levels. The
bottom up approach proceeds in opposite order to the
1. Defining the objectives of change as precisely and above mentioned approach. In this case the representatives
clearly as possible. of the lower levels define the targets and objectives to be
achieved by the upper levels.
2. Developing a strategy aimed at innovation and change
top down or bottom up. Phase 3: Engineering organizational change: implementing
an initiative for change will probably not be successful if
3. Engineering the organizations/companys change, the organization and its members are not prepared for
(impetus, feedback, change agents, set date, workshop, change. Change most severely affects the people involved;
further training courses, multipliers, intranet, informa- consequently it is necessary to develop human aspects
tion leaflets...). which help people to adapt to change. In order to mobilize
an institution and to obtain a successful implementation,
4. Uphold and strengthen the innovational process each and every person in the organization must be indi-
(resistance, crisis, overcoming difficult phases). vidually motivated. This means that the organization has
to encourage a culture based on feedback, meaning that
Progress along the lines of these four phases is sequential sufficient information concerning the results which are to
and, in general, changes are only introduced at the small be achieved through the applied strategies is made available
scale and, if successful, expanded to other units or to the organizations employees.
departments which were not affected by the changes that
took place in the initial program. In this context it is also crucial that a change agent, a
person responsible for coordinating the changes, is
Phase 1: Defining the objectives: this phase is aimed at involved in the process. Generally, this is a person from
setting up the objectives that are to be achieved via the outside of the organization (an external consultant) who
implementation of a strategy for change. The following can also assist in identifying change and setting the
aspects must be established for each objective in order to process in motion. There are a number of measures
ensure that it is clearly defined: which can help to facilitate the implementation phase,
such as workshops, courses on perfecting and tools such
A. Priority: Define the objectives level of importance. as intranet services, information leaflets, etc.

B. Measurement criteria: Established objectives, both Phase 4: Upholding and strengthening the process of
quantitative and qualitative, must always be measurable. change: once the desired changes have been achieved it is
important to ensure that they are permanent and to consol-
C. Level of success: Define the desired results to be idate them. This is achieved by strengthening the positive
achieved by setting up a number of standards or levels aspects in order to reach more and improved changes.
that benchmark the level of success achieved or, sim- Changes severely affect people and cause them to reject and
ply, if expectations were met or not. oppose change. That is why it is so important to work on
the human aspects which help people to adapt to change.

11
 5 Developing a Strategy to React to Change

Every process of change tends to undergo different phases Denial: a fake sense of safety and security, exaggerated
linked directly to the reactions of the organizations perception of the procedures and behavioral competencies.
members. This is a process during which we slowly begin (During this phase people overestimate their capability to
to readjust our perception and our behavior to the new deal with the new situation);
situation and to the changed reality with which we are
confronted. Realizing the need for new procedures and approaches.
(At this point the idea of taking some risks becomes more
Obviously, we are referring to emotional processes or bearable and people begin to explore the pros and cons of
psychological phases and how these are related to the the changes at hand).
change process and its progress. Below you will find a
description of the individual phases that people go Accepting the new situation: rejecting the procedures and
through when dealing with a process of change: approaches from the previous phase (Entering into the phase
of acceptance requires the rejection of the old situation and
Shock: a huge discrepancy between our own expectations the ability to recognize the present requirements);
and outside expectations plus the new situation. (During
the shock phase people tend to feel threatened by the per- Experimenting and searching for new procedures and
ceived changes. They may be resistant to changes because approaches. Success failure, problems frustration.
their expectations strongly differ from the expectations (During this phase the institution can prove its ability to
posed by those promoting the changes). explore change).

5) Development of a Change Process

Shock: huge discrepancy between one's own expectations and the demands
that others and the new reality pose

Denial: fake sense of safety and security, exaggerated perception of procedures and competencies

Realizing the need for new procedures and new approaches

Accepting the new situation, rejection of previous procedures and approaches

Experimenting and searching for new procedures and approaches.

Success failure, problems frustration

Understanding why certain procedures and approaches are successful and why others result in failure

Integration: integrating successful procedures and approaches into a daily routine

12
Understanding why certain procedures and approaches
are successful and why others fail. (People understand
that the quality standards serve as an indicator for the
institutions, as well as for the individuals success).

Integration: integrating the successful new procedures

and approaches into the regular routines. (Ultimately, the
integration and change phase signify that the process has
been completed. This is a creative phase during which
past and present procedures merge. Depending on the
extent to which integration is consolidated, the application
of the required procedures and approaches does not
originate in the outside of the organization but derives
from the personal contributions of each individual who
adopts them and turns them into his or her own).

6) Evolution of a Change Process

high
Perceived personal ability to steer change

7. Integration
(demonstration of an evolution)

2. Denial 6. Recognition
Innovative
changes and
challenges
3.Realization 5. Experimentation

1. Shock

4. Acceptance
low
Initiation of change time

Parallel to change: Information Communication Training Coaching Monitoring

13
 6 Organizational Culture and Change

The concept of organizational culture stems from the organizations culture is not adequate or because necessary
perception that organizations develop their own system changes to the culture cannot be achieved.
of values and beliefs shared by all members of the organi-
zation. Based on this perception we can state that every Obviously, there are a number of factors which can, at
organization has its own culture which distinguishes it least partially, influence and change the organizations
from all others. culture, thus bringing about a modification to the culture.

The organizational culture plays a vital part in every From our point of view, we can summarize the basic
process of change. Organizational cultures are not modi- principles of change to an organizations culture as follows:
fied easily and may become an obstacle or a facilitator to
the introduction of change. For many institutions orga- The organizational culture is directly linked to the
nizational change may signify leaving behind a traditional organizations productivity and profitability.
culture, based on bureaucratic structures and a climate of
conformity, and embracing a new culture that allows Basically, organizational culture can be defined as the
innovative ideas to flourish. Often, the introduced sum of all customs which distinguish a corporation
changes do not deliver the expected results because the from other businesses in the same industry.

7) Organizational Culture Reference Guide (can only partially be influenced)

Products/
services

Companys age Customers

and history

Production
Ownership methods
Organizational
structure
culture

Geographic Personnel
situation structure

Companys size
Nationality

14
 Managing change is a difficult task. It is only worth the Evidently, it is essential to understand the organizations
necessary effort if it results in a specific economic unique culture and to analyze to what extent it may become
benefit. an obstacle or a facilitator to change, before introducing
changes to the organization. An organizations culture can
Ideals, guiding principles and other moral deliberations only facilitate change if it enables and promotes dialogue,
are not efficient they only result in unnecessary in all other cases it becomes an obstacle.
feedback and repetitive evaluations!

Foster a culture that promotes learning at every level.

Do not pursue a global change strategy, but fully focus

on the central aspects that need to be changed most
urgently.

If this is not possible, introduce changes step by step

through a number of phases.

8) Organizational Culture Guiding Questions

The organizational culture is reflected in consistent behavioral patterns

that define every area of the organization:

What are the cultures strengths and weaknesses with regard to

Which traditions, objectives, visions
the effects that are to be achieved? (e.g. capacity to develop)
define the current organizational culture?
Guiding Questions concerning the organizational culture

Guiding questions
concerning
the organizational culture

What are the instruments necessary to

Which aspects are to be conserved?
change the culture and how to proceed?

15
 9) Efficient Communication
Efficient communication requires the following elements:

Balanced exchange of information

A critical culture. Taking pleasure in a free

Constructive discussion flow of information

Efficient
communication

Efficient Communication, Seminar on Personnel Development, Mannheim 2004

Communication is a key element in accepting changes to Consequently, it is essential for companies to develop a
the organizational culture. An organizations culture may communication system, as a key element of the change
be governed, e.g. through the dynamics of the interactions management strategy that allows open and transparent
between all of its members which include the transfer of communication to take place between all members of an
values, knowledge, experience and skills in order to organization (employees, departments, management, etc.)
achieve common goals. as well as with the customers and suppliers. This calls for
a consistent establishment of capacity-building programs
Depending on the individual structure of the organization, based on innovative strategies which allow the organization
communication can either be formal, meaning that already to develop numerous communication channels and net-
existing communication channels are taken advantage of, works, both of a formal and informal nature in order to
or informal, when communication processes take place manage knowledge successfully.
on the outskirts of the defined channels.

16
7 From Knowledge Management
to a Learning Organization
Basically, we can define a learning organization as a new Currently, knowledge management is considered to be a
organizational concept based on the continual integration prerequisite for the creation and development of a learning
of the work processes with the process of learning. organization. This does not imply that, in the past,
knowledge was not an essential part of the development
Faced with a situation of perpetual change, organizations of an organization. Still, there is a difference in the way
see themselves forced to respond to a new variable: their that knowledge is presently generated and presented.
ability to learn, to acquire new skills and new approaches. Currently, knowledge acts on itself in an accelerated spiral
It is generally accepted that an organizations and its spinning off innovation and change.
members ability to learn is a significant competitive
advantage. Ultimately, the learning organizations objective is to
continually generate knowledge, gathering, communicating
Beyond this, innovation has also become a critical factor and transferring this knowledge via the structures of
when it comes to being competitive. To be innovative organizational learning. In summary, we can say that
one needs new skills and expertise or has to apply already knowledge management is focused on how to make
existing skills in a more efficient manner. In this context, knowledge visible and transferable in order to optimize
continual learning is required and skills and expertise need an organizations objectives, while organizational learning
to be transferred using new communication channels which concentrates on channeling the generation of knowledge.
play an increasingly crucial role in the process.

10) Learning Organizations

Developing the individual members knowledge and skills

Organizational learning

Organizational expertise

17
 11) Managing Knowledge and Skills

Presenting Communicating
knowledge knowledge

Generating Transferring
knowledge knowledge

Organizational Organizational
innovation practice

Knowledge management calls for the development of the Ultimately, it boils down to the interaction of the companys
four dimensions of knowledge as described below: creativity with the employees creativity.

Generating Knowledge: The knowledge generated by a company can stem from

The challenges which modern organizations face when it its own resources or from external resources, as well as
comes to continuously generating knowledge are often from a combination of both of the above mentioned. The
underestimated. Fostering a spirit of creativity within the existing knowledge used to generate new knowledge may
organization is absolutely crucial to generate lasting have been obtained through selection, acquisition or prior
knowledge and to gather new experiences. A companys generation. Instruments or tools to generate knowledge
innovative capacity depends on the companys own can include learning communities, idea contests, thought
creativity as well as on its employees creative potential. groups, rotating jobs, etc.

18
Presenting Knowledge: viable practice it is necessary to break down organizational
A delicate task that comes with the management of and individual barriers and to create an infrastructure
knowledge is visualizing the available knowledge and (real and virtual) which promotes work and learning and
presenting it, so that it becomes accessible to all of the that enables the application of knowledge and skills. In
organizations members. The way in which knowledge is this context it is also important to develop a system
presented can open the door to a free flow of knowledge which provides incentives that maintain a high level of
throughout the organization. Instruments and tools which motivation.
can be used to present knowledge are knowledge maps,
databases, expert networks, etc. Identifying, preserving,
codifying, preparing, documenting and making implicit
knowledge accessible are part of this task. Communication
can turn a persons individual knowledge into collective
expertise.

Communicating Knowledge:
What do we communicate? Why do we communicate?
When do we communicate? With whom do we commu-
nicate? When answering each of these questions we become
aware of the crucial role that communication plays in
knowledge management. The culture of communication
and cooperation thus become two of the organizations
key, knowledge-based pillars. Communicating knowledge
also includes passing information and knowledge on,
transmitting knowledge, dividing and reconstructing
knowledge and knowledge-based cooperation. Internet and
intranet services, learning communities, multipliers, etc.
are some of the instruments and strategies at our disposal.

Applying Knowledge:
Knowledge can be generated, communicated, represented,
it can be used to certain ends or to establish indicators,
but the decisive factor is, how knowledge is utilized. The
utilization of knowledge extends to important processes
such as using knowledge in decision-making process or
when taking action, e.g. when translating knowledge into
products or services. In order to put this approach into

19
 8 Organizational Learning

As mentioned earlier, organizational learning is a process From this angle, the innovative aspect is the importance
aimed at acquiring (creating) new knowledge and new that is given to latent knowledge (knowledge stemming
skills to set the course for improvement and innovation. from experience), to knowledge that is not codified and
in converting it into explicit knowledge. This entails
Above all, organizational learning means renewing the turning the knowledge of an individual or a team within
organizations knowledge base, a procedure which can be the organization into collective knowledge. In this case
developed along several different guidelines: through learning via the internet or intranet makes knowledge
individual learning, by learning in teams, by gathering and skills transparent and accessible exactly when it is
and sharing knowledge within an organization or through needed. This process is elucidated in the subsequent chart:
institutionalizing it and applying it to specific products.
Still, a crucial prerequisite for the learning process of an
entire organization is that the employees can learn and
that experience and knowledge are continuously shared
and exchanged.

12) Organizational Learning

Expanding individual and departmental areas of activity

Selecting and developing personnel

Linking formal and informal learning

Offering more opportunities for interaction

and communication

Within groups

Between groups

Between organizations

20
From this point of view, organizational learning fosters In this context, it is worth noting the important part
which organizations are starting to give to informal learn-
a participative management model ing as a possibility to generate new knowledge and to
developing personnel skills. By establishing an effective
adaptation to change link between formal and informal learning that allows for
coordination and interaction between the two, organizations
an expansion of the individual and departmental can take advantage of the synergetic effects of learning
areas of activity and can make better use of the staff's potential and
expertise. According to Leonard Mertens formal learning,
staff selection and promotion based on codified knowledge, is too limited in its objectives
and its scope when set in an economic context that calls
an intertwining of formal and informal learning for dynamic organizations. This does not mean that formal
learning is disappearing, but that the areas in which it
an increment of opportunities to interact and to can be applied are becoming limited. This means that
communicate organizations have to develop adequate mechanisms and
within groups tools that can be effectively applied to informal learning.
between groups
between organizations

21
 9 Instruments for Organizational Diagnosis

Before setting a process of change in motion it is It is important to have a precise vision of the goals that
important to get a preliminary diagnosis of the organiza- are to be achieved through the change process. This
tion. Specifically, this means gaining insight into the requires the use of indicators and instruments that assist
organizations current situation and potential in order to us in finding information and in identifying the potential
spark an internal debate concerning the organizations benefits to be gained for each individual or group. They
strengths and weaknesses. The simple act of diagnosing can also help us in anticipating possible obstacles which
does not necessarily entail that the organization is ill. could occur during the implementation phase.
Every evaluation, how-ever, sets out to challenge the
norm, to search for ways to improve things, to see whether In order to proceed with the organizational diagnosis
or not the current situation equates the paradigm that is usually the organizational culture is best assessed through
being followed. interviews different approaches can be used, e.g.
interviews and workshops. Obviously, the choice of the
most suitable diagnostic instrument
depends on the type of change or on
the objectives that are to be achieved.
13) Instruments for Organizational Diagnosis The level of analysis may be determined
depending on the characteristics of the
individual case, the available time and
the logistic complexity involved.
Interviews with individuals

Group interviews

Hearings

Diagnostic workshop

Written questionnaire

Qualifications:
(mediating a conversation, group dynamics,
leading an interview, feed-back methods)

22
10 Options for Organizational Development

As mentioned earlier, a general definition of organizational With regard to the addressee (individual, group, organiza-
change covers every type of substantial modification to tion) there are a number of activities, programs, learning
any part of an organization. Naturally, theses changes may strategies, rewarding systems, etc. that enable and
impact everyone, starting with the employees working in strengthen the implementation of change initiatives.
the affected department to all of the organizations staff
members.

This is why it is important to precisely define which

objective(s) are to be achieved with the instruments that
are to be introduced within the framework of change
management and in which manner this intervention is to
take place.

14) Options for Organizational Development

The Measures Addressee (Intervention)

Individual person

A group

The company (or departments)

The companys environment

Type of Intervention

Weak spots
(knowledge and skills, attitudes and
approaches)

Strengths
(structures, processes and standards)

23
 15) The Individual Addressee 16) The Group of Addressees

Capacity building
Quality circles
Social skills training
Team development
Coaching

17) The Company as Addressee

Organizational development

Employee interviews

Strengthening the companys vision

Improving the direction:

(communication, decision-making, conflict mangement,

competency management, controlling)

24
11 Resistance and the Change Process

Lewin pointed out that every type of intervention within an 18) Change Management Errors
organization will provoke forces that are opposed to change.
Proposing change may entail the need for people to adapt
their approaches in order to include changes; these people Trying to change everything at once
may have to face the challenge of having to learn something Talk about the changes in advance
new; they may have to leave behind past approaches; they
may have to accept a disadvantageous shift of power and/or Everything good comes from above
influence within the institution, etc. This is why resistance Participation
is to be expected and perfectly normal.
Wrong questions, wrong problems
Resistance can be subdivided into three types of forces Correct diagnosis
opposing change. They can be of an individual, an inter-
personal or of an organizational nature: Obvious and partial solutions
Take all departments into consideration
a) individual: e.g. uncertainty, the impression that the
job is at risk, Appealing for certain modes of conduct
Take real action
b) interpersonal: e.g. differing points of view among the
members of one department
Assumptions
Tell the truth even if it hurts
c) organizational: e.g. inert structures
Dramatization
Although there is no foolproof way to defeat resistance to
Do not give rise to fear
change, there are a number of basic rules which can be of
great help when trying to overcome this resistance:
Islands of credibility
Build confidence
1. Rule: Where there is change, there is resistance!

2. Rule: Resistance always contains a hidden message! Formal learning

Hidden agenda informal learning
3. Rule: Ignoring resistance will result in a gridlock!

4. Rule: Dont fight against the resistance, go with it!

Regardless of the specifics of the change project, it is results are not achieved, immediate disappointment will
crucial to pursue certain normative standards in order to follow suite. Subsequently, before initiating the change
prevent a vicious circle that may be difficult, expensive and process, it is essential that all goals to be obtained are
time-consuming to break. The following recommendations analyzed carefully. Consider how and where within the
can serve as good practice guidelines for general use. organization, with which resources, with whom, how and
when this can be achieved and what results and benefits
Evidently, before implementing a change management are to be expected. It is definitively not about beginning
model, it is highly recommendable to undertake every with change management, but about finding out how to
precaution to ensure that the first encounters with change do it best, using the adequate methods and parameters
are positive. When considering these kinds of initiatives, and using the available resources most efficiently and
false hopes are easily given rise to, but, if the desired productively.

25
 12 Key Factors in Change Management:
Organizational Culture
Successful companies realize that, on the one hand, the achieved by establishing an organizational culture which
key to their success lies in the high level of motivation, is defined by the exchange of knowledge and open
commitment and effort of their staff members and, on the communication within and between the different levels
other hand, in their capacity to generate new knowledge and departments of the organization. This creates an
and to incorporate it in their products and services. environment that promotes innovation and life-long
learning.
These institutions distinguish themselves by giving impetus
to an organizational culture that fosters innovation and
creativity thus creating an infrastructure that facilitates
change and helps overcome resistance. This can only be

19) Key Factors of Organizational Culture

Spirit of creativity

Communication
Overcoming
conflicts

Transmitting values
Cohesion
and organizational
identity

26
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27
 For your Notes:

28
GIZ

An innovative partner for the global challenges of tomorrow

The wide range of services offered by the Deutsche Gesellschaft fr Internationale Zusammenarbeit (GIZ) GmbH are
based on a wealth of regional and technical expertise and on tried and tested management know-how.

We are a German federal enterprise and offer workable, sustainable and effective solutions in political, economic and
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Most of our work is commissioned by the German Federal Ministry for Economic Cooperation and Development
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29
 Publications Available

Serial No. Title Language

1 Competency-based Training English, Arabic, Farsi, Indonesian
1 "Formation base sur la comptence French
Compilation des thmes d'un sminaire: Formation des formateurs"
2 Curricular Design and Development English, Arabic, Farsi, Indonesian
3 Innovative and Participative Learning-teaching Approaches within English, Indonesian
a Project Based Training Framework
4 New Forms of Teaching-learning for In-company Training English
5 The Project Method in Vocational Training English
6 Training and work: Tradition and Activity Focused Teaching English
7 "Instrumentos para la Gestin del Conocimiento - Spanish
Estrategias Organizacionales"
8 "Instrumentos para la Gestin del Conocimiento - Spanish
Estrategias Individuales"
9 Developmental Psychology in Youth English
10 Theory and Practice of the Project-based Method English
11 The Labor Market Information System as an Instrument of English, Arabic, Farsi
Active Labor Market Policies
11 Le systme d'information sur le march du travail comme French
instrument de la politique active du march du travail
12 Selecting and Structuring Vocational Training Contents English, Arabic, Indonesian
12 Slection et structure des contenus de la formation professionnelle French
13 Activity Analysis and Identification of Qualification Needs English
14 Structures and Functions of CBET: a Comparative Perspective English
14 Structures et fonctions de l'ducation et de la formation bases French
sur la comptence (CBET): une perspective comparative
15 Managing Change and Innovation: A Challenge for Modern English, Arabic
Organizations

30
Serial No. Title Language
15 Gestin del Cambio y la Innovacin: un Reto de las Spanish
Organizaciones Modernas
16 Financing Technical and Vocational Education and Training (TVET) English
17 Corporate Human Resource Development I: English
From Organization to System
18 Corporate Human Resource Development II: From Competence English
Development to Organizational Learning
19 E-learning in Vocational Education and Training (VET) Arabic
Basics, Problems and Perspectives
20 The Training and Qualification of Target Groups in the Informal Sector English
21 Ecological sustainability in TVET - Planning aid to initiate and English
implement environmentally relevant topics in selected programmes
and offerings of the development cooperation (DC)
22 E-learning in Vocational Education and Training (VET) English, Arabic
Didactic Design of E-learning Measures
23 Desarrollo de competencias sistmico Una estrategia del Desarrollo Spanish
de Capacidades (Capacity Building)

31
Deutsche Gesellschaft fur
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