Chapter 10

Chapter 10
ORGANIZATIONAL
CHANGE AND
DEVELOPMENT
15-1
Organizational
Change
McGraw-Hill/Irwin
McShane/Von Glinow OB
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights
Umpqua
Bank’s
Organizational
Change
Umpqua Bank has
become the largest
regional community
bank in the Pacific
Northwest by
applying effective
organizational
change practices
15-3
Lewin’s Force Field Analysis Model


Developed by Kurt Lewin
Driving forces
Restraining
Forces
• Push organizations toward change
• External forces or leader’s vision

Restraining forces
• Resistance to change -- employee
behaviors that block the change
process
Driving
Forces
15-4
Force Field Analysis Model
Restraining
Forces
Desired
Conditions
Restraining
Forces
Restraining
Forces
Driving
Forces
Driving
Forces
Current
Conditions
Driving
Forces
Before
Change
During
Change
After
Change
15-5
Not Hoppy About Change
Mina Ishiwatari(front) wanted to
improve Hoppy drink’s brand image,
but most staff didn’t want to change.
“I tried to take a new marketing
approach to change the image of
Hoppy . . . but no one would listen to
me.” She improved Hoppy’s
popularity with limited support or
budget. Most employees who
opposed Ishiwatari’s changes have
since left the company.
15-6
Restraining Forces (Resistance to
Change)
Many forms of resistance
• e.g., complaints, absenteeism,
passive noncompliance
View resistance as a resource
1.
2.
3.
Symptoms of deeper problems in
the change process
A form of constructive conflict -may improve decisions in the
change process
A form of voice – helps procedural
justice
15-7
Why People Resist Change
1.
Direct costs
• Losing something of value due to change
2.
Saving face
• Accepting change acknowledges own imperfection,
past wrongdoing
3.
Fear of the unknown
• Risk of personal loss
• Concern about being unable to adjust
15-8
Why People Resist Change
(con’t)
4.
Breaking routines
• Organizational unlearning is part of change
process
• But past practices/habits are valued by employees
due to comfort, low cognitive effort
5.
Incongruent organizational systems
• Systems/structures reinforce status quo
• Career, reward, power, communication systems
6.
Incongruent team dynamics
• Norms contrary to desired change
15-9
Creating an Urgency for Change

Inform employees about driving forces

Most difficult when organization is doing well

Customer-driven change
• Adverse consequences for firm
• Human element energizes employees

Sometimes need to create urgency to change
without external drivers
• Requires persuasive influence
• Use positive vision rather than threats
15-10
Minimizing Resistance to Change
Communication
Learning
Involvement
Stress Mgt

Highest priority and first strategy
for change
 Improves urgency to change
 Reduces uncertainty (fear of
unknown)
 Problems -- time consuming and
costly
Negotiation
Coercion
15-11
Minimizing Resistance to Change
Communication
Learning
Involvement
Stress Mgt

Provides new knowledge/skills
 Includes coaching and other
forms of learning
 Helps break old routines and
adopt new roles
 Problems -- potentially time
consuming and costly
Negotiation
Coercion
15-12
Minimizing Resistance to Change
Communication

Learning
Involvement
Stress Mgt
Negotiation
Employees participate in change
process
 Helps saving face and reducing
fear of unknown
 Includes task forces, future search
events
 Problems -- time-consuming,
potential conflict
Coercion
15-13
Minimizing Resistance to Change
Communication

Learning

When communication, learning,
and involvement are not enough
to minimize stress
Potential benefits
• More motivation to change
Involvement
• Less fear of unknown
• Fewer direct costs
Stress Mgt

Negotiation
Problems -- time-consuming,
expensive, doesn’t help everyone
Coercion
15-14
Minimizing Resistance to Change
Communication
Learning

Involvement

Stress Mgt
Negotiation
Coercion

Influence by exchange -- reduces
direct costs
May be necessary when people
clearly lose something and won’t
otherwise support change
Problems
• Expensive
• Gains compliance, not commitment
15-15
Minimizing Resistance to Change
Communication
Learning
Involvement


Stress Mgt


Negotiation
When all else fails
Assertive influence
Radical form of “unlearning”
Problems
• Reduces trust
• May create more subtle resistance
Coercion
• Encourage politics to protect job
15-16
Refreezing the Desired Conditions
“When you are leading for
growth, you know you are
going to disrupt comfortable
routines and ask for new
behavior, new priorities, new
skills… Even when we want
to change, and do change,
we tend to relax and the
rubber band snaps us back
into our comfort zones.”
Ray Davis, CEO, Umpqua Bank
15-17
Refreezing the Desired Conditions

Realigning organizational systems and team
dynamics with the desired changes
• Alter rewards to reinforce new behaviors
• Change career paths
• Revise information systems
15-18
Change Agents

Change agent -- anyone who possesses
enough knowledge and power to guide and
facilitate the change effort

Engage in transformational leadership
• Develop the change vision
• Communicate the vision
• Act consistently with the vision
• Build commitment to the vision
15-19
Strategic Vision & Change

Need a vision of the desired future state
 Identifies critical success factors for change
 Minimizes employee fear of the unknown
 Clarifies role perceptions
15-20
Diffusion of Change

Begin change as pilot projects

Effective diffusion considers MARS model
• Motivation – pilot project is successful, reward
diffusion of pilot project
• Ability – Train employees to adopt pilot project
• Role perceptions –Translate pilot project to new
situations
• Situational factors – Provide resources to
implement pilot project elsewhere
15-21
Action Research Approach

Action orientation and research orientation
• Action – to achieve the goal of change
• Research – testing application of concepts

Action research principles
1. Open systems perspective
2. Highly participative process
3. Data-driven, problem-oriented process
15-22
Action Research Process
Form
clientconsultant
relations
Diagnose
need for
change
Introduce
intervention
Evaluate/
stabilize
change
Disengage
consultant’s
services
15-23
BBC Takes the Appreciative Journey
To become a more creative
organization, the British
Broadcasting Company
sponsored an appreciative
inquiry process of employee
consultation, called Just
Imagine. “It gave me a
powerful mandate for
change,” said BBC’s chief
executive at the time.
15-24
Appreciative Inquiry Approach

Frames change around
positive and possible
future, rather than
traditional problem focus.

Application of positive
organizational behavior
15-25
Four-D Model of Appreciative Inquiry
Discovery
Dreaming
Designing
Delivering
Discovering
the best of
“what is
Forming
ideas about
“what might
be”
Engaging in
dialogue
about “what
should be”
Developing
objectives
about “what
will be”
15-26
Large Group Interventions

Future search, open space, and other
interventions that involve “the whole system”
• Large group sessions
• May last a few days
• High involvement with minimal structure

Limitations of large group interventions
• Limited opportunity to contribute
• Risk that a few people will dominate
• Focus on common ground may hide differences
• Generates high expectations about ideal future
15-27
Parallel Learning Structure Approach

Highly participative social structures

Members representative across the formal
hierarchy

Sufficiently free from firm’s constraints

Develop solutions for organizational change
which are then applied back into the larger
organization
15-28
Parallel Learning Structures
Parallel
Structure
Organization
15-29
Cross-Cultural and Ethical Concerns

Cross-Cultural Concerns
• Linear and open conflict assumptions different from
values in some cultures

Ethical Concerns
• Privacy rights of individuals
• Management power
• Individuals’ self-esteem
15-30
Organizations are About People
“Take away my people, but leave
my factories, and soon grass will
grow on the factory floors. Take
away my factories, but leave my
people, and soon we will have a
new and better factory.”
Andrew Carnegie (1835-1919)
Source: Library of Congress
15-31
Discussion of
Activity 15.3
Strategic Change
Incidents
McGraw-Hill/Irwin
McShane/Von Glinow OB
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights
reserved.
Scenario #1: “Greener Telco”

Scenario #1 refers to Bell
Canada’s Zero Waste
program, which successfully
changed employee
behaviorby altering the
causes of thosebehaviors.

Pilot project in Toronto – 12
floor building of 1000 staff
reduced waste from 1800 lb
per day to just 75 lb per day
within 3 years.
Courtesy of Bell Canada
15-33
Bell Canada’s Change Strategy
Relied on the MARS model to
alter behavior:

Motivation -- employee
involvement, respected
steering committee (photo)

Ability -- taught paper
reduction, email, food disposal

Role perceptions – learned
importance of reducing waste

Situation -- created barriers to
wasteful behavior, eg. removed
garbage bins
Courtesy of Bell Canada
15-34
Scenario #2: “Go Forward Airline”

Scenario #2 refers to
Continental Airline’s “Go
Forward” change strategy,
which catapulted the
company “from worst to first”
within a couple of years.
15-35
Continental Airlines’ Change Strategy

Communicate, communicate,
communicate

Introduced 15 performance
measures

Established stretch goals
(repainting planes in 6
months)

Replaced 50 of 61 executives

Rewarded new goals (on-time
arrival, stock price)

Customers as drivers of
change
15-36
Organizational
Change
McGraw-Hill/Irwin
McShane/Von Glinow OB
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights
reserved.