14-1 Michael A. Hitt C. Chet Miller Adrienne Colella Chapter 14 Organization Organization al Change al Change and and Development Development Slides by Ralph R. Braithwaite
Organizational Change and Development14-*
The Evolution of Starbucks
As Starbucks grew, they realized that the informal techniques were
not sufficient and needed to have a more formalized process in
place. Why were these changes difficult for the organization?
Starbucks is faced with new challenges today. It has dominated the
marketplace. Have they grown too fast? Will changes in the
marketplace require a different approach?
What do you think the future will hold for them?
Exploring Behavior in Action
Organizational Change and Development
Polaroid introduced instant photography to the market. They were
one of the top 50 companies in the U.S. But they, like many others,
were slow to change.
What would you have done differently if you were a senior manager
at Polaroid?
Can you think of any other companies that were too slow to change
and suffered the consequences?
Why is change so difficult to manage?
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Identify and explain six major external pressures for change
Describe the three-phase model of planned change.
Discuss important tactical choices involving the speed and style of
a change effort.
Explain the four general causes of resistance to change and the
tactics that can be used to address each cause.
Discuss the role of the DADA syndrome in organizational
change.
Describe the basic organization development (OD) model and discuss
OD interventions, including relationship techniques and structural
techniques.
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Adapted from Exhibit 14-1: Internal and External Pressures for
Organizational Change
Introduction
Life-Cycle
Forces
Aspiration-Performance Discrepancies
Gaps between what an individual, unit, or organization wants to
achieve and what it is actually achieving.
Three important factors in the role of aspirations
Past aspirations
Past performance
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When an individual, work group, division, or organization is not
meeting its own expectations, changes in tactics, strategies, and
processes often follow.
Past aspirations – High expectations yesterday will likely mean
high expectations today and tomorrow.
Past performance – If recent performance is below target levels,
aspirations are likely to be reduced. If recent performance was
above target levels, aspirations are likely to be increased to some
degree.
Comparison with others – One employee may compare himself or
herself to other employees at the same level. Organizations do this
too. The level of performance of others helps to determine the
aspirations one has for oneself.
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Life-Cycle Forces
Natural and predictable pressures that build as an organization
grows and that must be addressed if the organization is to continue
to grow.
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Need for additional people
Need for balance
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Entrepreneurial Stage – Founders and perhaps a few initial managers
and associates develop ideas for products and services, acquire
financial capital, and take actions to enter a niche in the
marketplace. Processes must be introduced for selecting, training,
and coordinating staff. Informal real-time decision making and
coordination typically occur.
Collectivity Stage – Founders, managers, and associates continue to
focus on product/service development, continue to focus on the
acquisition of financial capital. A family feeling as vision is
pursued. Strong commitment among growing pool of managers and
associates. Long hours often for low pay, informal coordination but
more consistency than before.
Formalization and Control Stage – Managers and associates are
guided by formal processes and rules and an efficiency of
operations, strict division of labor happens with an increase in
professional managers, an increase in the number of formal
departments, and an increase in number of levels in the
hierarchy
Elaboration Stage – managers and associates experienced a more
balanced and mature organization, the focus is on efficiency and
innovation. Formal rules and procedures exist alongside empowered
lower-level managers and associates. Efficiency concerns coexist
with concerns for innovation and renewal.
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Changes in societal values
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Technological advances - Can lead to incremental or radical changes
in how services and products are designed, produced, and delivered.
Technology that is inconsistent with existing culture may cause
resistance to change among managers and associates.
Introduction and removal of government regulations - Firms in
deregulated industries typically must adapt to a more competitive
environment. Firms that prosper in a regulated environment may fail
in one that is deregulated
Changes in societal values - Changing values influence consumer
purchases. Society’s values are evidenced in employee attitudes,
behaviors, and expectations. Society’s values are represented in
government regulations.
Shifting political dynamics – political pressures – both national
and international – can influence organizational operations. The
political philosophy of those elected to office, interpretation of
legislation, and government policies play a role.
Changes in demographics - May cause alteration of internal
practices to ensure fair treatment for people of all races and
ages.
Growing international interdependence – Reliance on imports,
various treaties, and the impact of struggles and conflicts in
other countries.
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Companies’ Responses to Pressures for “Green” Policies and
Practices
Are companies becoming more “green” for reasons other than the
“bottom-line”? Give some examples.
What is your organization doing to become more “green”? What are
you doing personally?
Should becoming “green” be a choice or is legislation needed to
make it happen?
Managerial
Advice
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Planned Change
A process involving deliberate efforts to move an organization or a
unit from its current undesirable state to a new, more desirable
state
Awakening
Mobilizing
Reinforcing
Energizing
Envisioning
Enabling
Unfreezing
Moving
Refreezing
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Provide rationale for change
Create sense of psychological safety concerning change
Provide information that suspects proposed changes
Bring about actual shifts in behavior
Implement new evaluation systems
Implement new hiring and promotion systems
Unfreezing
Refreezing
Moving
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“Unfreezing” starts on mouse click followed by text after one
second. Arrow starts on mouse click followed by “moving” and then
text after one second each. Arrow starts on mouse click followed by
“refreezing” and text after one second each.
Unfreezing – A phase in the change process in which leaders help
managers and associates move beyond the past by providing a
rationale for change, by creating guilt and/or anxiety, and by
creating a sense of psychological safety concerning the
change.
Tactics for unfreezing include:
Reminding individuals that they have successfully changed in the
past
Communicating to individuals that managers and associates in other
organizations in similar circumstances have successfully
changed
Letting individuals know that support and training will be
available for the specific changes to be made
Moving – A phase in the change process in which leaders help to
implement new approaches by providing information that supports
proposed changes and by providing resources and training to bring
about actual shifts in behavior.
Refreezing - A phase in the change process in which leaders lock in
new approaches by implementing evaluation systems that track
expected behaviors, by creating reward systems that reinforce
expected behaviors, and by ensuring that hiring and promotion
systems support the new demands.
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Experiencing
also adapting its product line to better
satisfy the demand of customers.
What are your thoughts about the
steps they are taking regarding
these changes?
Do you think the new innovations and changes will have a positive
or a negative impact on their existing brands? Why?
What other changes would you suggest to help them remain
competitive?
Neville Isdell
Sandy Douglas
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Coca Cola logo has a soda can fizz sound when it enters. The other
graphics follow automatically. Text comes in on mouse clicks.
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Sources of Failure
Managers and associates should not expect all change activities to
occur sequentially.
A team of change leaders, rather than a single individual, should
guide an organization through a major change effort.
In addition to size, four factors to consider when forming change
teams:
Position Power
Informal Credibility
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Position power plays a role. Individuals with power based on their
formal positions can block change or at least slow it down.
Including some of these individuals on the team will leave fewer
potential resisters who have the power to slow or resist the
change.
Informal credibility is important. Individuals who have credibility
are admired and respected and can be effective in selling change.
Associates often are selected as change leaders based on this
criterion.
Expertise is a relevant factor. Individuals on the team should
possess knowledge related to the problems requiring the change
effort and should have diverse points of view on potential
solutions.
Proven leadership is crucial. The team needs individuals who can
lead other managers and associates through the transition.
The size of the team is also a concern. There is little agreement
on how large or small the team of change leaders should be, but the
size of the organization that will be changed plays a role. Six may
be sufficient in a smaller organization or in a division of a
larger organization. Fifteen or more may be required in a larger
organization. However, as the team grows, it will be more difficult
to coordinate and manage.
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Competitive environment
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come in on mouse clicks followed automatically by the text after
one second,
Urgency – If the change is urgent, a faster pace is
warranted.
Degree of support – If the change is supported by a wide variety of
people at the outset, a faster pace can be used.
Amount and complexity of change – If the change is small and
simple, a faster pace often can be used, but if the change is
large, more time may be required.
Competitive environment – If competitors are poised to take
advantage of existing weaknesses, a faster pace should be
considered.
Knowledge and skills available – If the knowledge and skills
required by the new approach exist in the firm or can be easily
acquired, a faster pace can be used.
Financial and other resources – If the resources required by the
change are on hand or easily acquired, a faster pace can be
considered.
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Style of Change
Participatory – change leaders seek the ideas and advice of
associates and then use many of those ideas. Criteria for
evaluating the degree to which the participatory style should be
used:
Non-participatory – top down, leaders design the change and plan
its implementation
Urgency
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Urgency – If the change is urgent, a participatory approach should
not be used, as it tends to be time consuming.
Degree of support – If the idea of changing is supported initially
by a wide variety of people, a participatory approach is less
necessary.
Referent and expert power of change leaders – When change leaders
are admired and are known to be knowledgeable about pertinent
issues, a participatory approach is less necessary.
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click. Man with four factors dissolves in on mouse click. Time
bombs zoom in automatically at one second intervals.
Resistance to change – Efforts to block the introduction of new
approaches. Some of these efforts are passive in nature, involving
such tactics as verbally supporting the change while continuing to
work in the old ways; other efforts are active in nature, involving
tactics such as organized protests and sabotage.
Lack of understanding – Communicate clearly what the change
entails.
Different assessments – Include potential or actual resisters in
the decision-making process.
Self-interest – Reason with resistors, transfer or coerce
them.
Low tolerance for change – Offer or assure support for the
resistors during the learning process.
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Experiencing
British Airways: The Yin and Yang of Organizational Change
Do you think there was any incentive for British Airways to change
prior to deregulation?
Why do you think the changes were effective?
Given the problems faced by all the major airlines at the time, why
do you think there was still so much resistance to the
changes?
What other changes would you recommend at this time?
Willie Walsh
Anger – individuals facing unwanted change become angry about the
change
Depression – individuals experience emotional lows
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each on the mouse click and the rest follow after two
seconds.
The DADA Syndrome – A sequence of stages – denial, anger,
depression, and acceptance—through which individuals can move or in
which they can become trapped when faced with unwanted
change.
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Fully consistent with the high-involvement management
approach
A planned, organization-wide, continuous process designed to
improve communication, problem solving, and learning through the
application of behavioral science knowledge
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Diagnosis of Situation
Introduction of interventions
Introduction of interventions - Organization development
interventions include t-group training, team building, and job
redesign.
Progress Monitoring - Surveys and other techniques may be reused to
determine what progress has been made toward solving the
problem.
The main criterion for evaluation is whether the original objective
has been accomplished.
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Organization
Development
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T-group training – Group exercises in which individuals focus on
their actions, how others perceive their actions, and how others
generally react to them; participants often learn about unintended
negative consequences of certain types of behaviors.
Team building - A process in which members of a team work together
and with a facilitator to diagnose task, process, and interpersonal
problems within the team and create solutions.
Survey feedback - Data obtained from questionnaires; managers
receive the data for their units and are expected to hold unit
meetings to discuss problems.
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Team Building Tips
Get the right people together for a large block of uninterrupted
time to work on high-priority problems or opportunities that they
have identified and have them work in ways that are structured to
enhance the likelihood of realistic solutions and action plans,
which are then implemented enthusiastically and followed up to
assess actual versus expected results.
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Job redesign - Enlargement or enrichment of jobs; enrichment is the
better method to enhance motivation for effective problem solving,
communication, and learning.
Management by objectives (MBO) - A management process in which
individuals negotiate task objectives with their managers and then
are held accountable for attainment of the objectives.
Supplemental organizational processes - Processes in which
associates and/or managers have ongoing meetings for the purpose of
identifying and solving important problems.
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Exploitative learning – learning how to more effectively use
current knowledge
Exploratory learning – creating new knowledge and being
innovative
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text strips in from left to right on a mouse click.
Managers hoping to implement an OD program in a culture different
from their own must avoid an ethnocentric attitude (assuming that
everyone is similar to those back home) as well as
stereotyping.
Flexibility – openness to new approaches, ideas, and beliefs and
willingness to change one’s own behavior.
Knowledge of specific cultures – understanding of the beliefs and
behavior patterns of different cultures.
Interpersonal sensitivity – the ability to listen to and resolve
problems with people from different cultures.
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The Strategic Lens
Why do organizations need to make changes on a regular basis? What
are the major causes of these changes?
Why is it so difficult for people to change their behavior, even
when they know it is important to do so?
If you were in a managerial position and believed that a major
change in your unit’s structure was needed, what actions would you
take to ensure that the change was made effectively?
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Questions