Organizations have to keep pace with the current issues related to quality, technology, diversity, globalization, and ethics. This requires managing change and also managing resistance to change. All organizations face forces for change that are internal and external to the organization There is a host of organization development interventions available to managers. Diagnosis and needs analysis are essential first steps in any change management effort.
After reading this chapter, you should be able to do the following:
1. Identify the major external and internal forces for change in organizations.
2. Define the terms incremental change, strategic change, transformational change, and change agent.
3. Describe the major reasons individuals resist change, and discuss methods organizations can use to manage resistance.
4. Apply force field analysis to a problem.
5. Explain Lewin's organizational change model.
6. Describe the use of organizational diagnosis and needs analysis as a first step in organizational development.
8. Identify the ethical issues that must be considered in organization development efforts.
The following key terms are introduced in Chapter 16.
planned change
unplanned change
incremental change
strategic change
transformational change
change agent
disengagement
disidentification
disenchantment
disorientation
unfreezing
moving
refreezing
organization development (OD)
survey feedback
management by objectives (MBO)
quality program
team building
process consultation
skills training
sensitivity training
management development
role negotiation
job redesign
I. THINKING AHEAD: Transformation of the American Red Cross Biomedical Services
II. FORCES FOR CHANGE IN ORGANIZATIONS
The forces for change are everywhere in the organization. Tom Peters has said that if an organization does not make drastic changes every three or four years, it will not survive. Adaptiveness, flexibility, and responsiveness are terms used to describe the organizations that will succeed in meeting the competitive challenges that businesses face. Planned change results from deliberate decisions to alter an organization. Unplanned change is imposed on the organization and is often unforeseen.
A. External Forces
The four themes of this text are the major drivers of change in organizations.
Although we anticipate changes, we are still lagging behind in acting on the changes. Two examples of planned change are the European Community and the North American Free Trade Agreement. Regardless of the degree of planning involved in these ventures, there are numerous unplanned circumstances surrounding the events.
1. Globalization
Multinational and transnational organizations are heavily involved in global changes. Many of these organizations are pursuing joint ventures with firms from other countries.
2. Workforce Diversity
The work force is aging, and there will be tremendous diversity in the workforce in the next century. One avenues for contribution has been made available to the disabled, with the passing of the Americans with Disabilities Act in 1990. This act aids employment for disabled individuals by requiring that employers make "reasonable accommodations" for their entry into the position.
3. Technological Change
Many changes will alter the way in which we think about work and the way we interact with others in organizations. Tools like executive support systems have been developed. The value of these tools lies in the ability to share external information, in a concise, useful fashion with all organizational members. Many of the technological changes will require a surrendering of power and control.
4. Managing Ethical Behavior
Ethical behavioral practices continue to receive attention from executives and the mass media. It is probably telling that the movie Wall Street was such a flagrant example of misconduct, and was released in the 1980s. The concern about ethical practices is amplified because of the dynamics and complexity involved with international business partnerships. The number of codes of ethics has reached a purported all time high in industry.
B. Internal Forces
The news carries internal restructuring information about large organizations, almost daily. A recent study has determined that there is an increase in layoff policies in existence in organizations.
III. CHANGE IS INEVITABLE
A. The Scope of Change
Change may take one of three forms. Incremental change is relatively small in scope, and as such, makes small improvements. Strategic change is a larger scale approach that is similar in magnitude to a restructuring effort. Transformational change moves the organization in a radically different, and sometimes, unknown, future state.
B. The Change Agent’s Role
The change agent's role can be exciting, innovative, and difficult, since these individuals introduce and manage change in an organization. Organizations using change agents external to the organization may have advantages with openness and trust in organizational members. However, internal change agents may have greater access to a breadth and depth of information.
IV. THE PROCESS OF CHANGE IN ORGANIZATIONS
A. Resistance to Change
Individuals often resist change because they feel their freedom is threatened.
1. Fear of the Unknown
Uncertainty is the logical extension of change. Most individuals choose uncertainty avoidance in work situations.
2. Fear of Loss
The most obvious fear of organizational members is being replaced by technology.
3. Fear of Failure
Many individuals are comfortable with entry level skills with computers, but realize that the skills are dated within a short time frame. This fear of failure might also be termed fear of keeping up.
4. Disruption of Interpersonal Relationships
New technologies often reduce the amount of interpersonal interaction necessary on the job. This can be threatening to some individuals.
5. Personality Conflicts
Conflict can occur because of the seemingly insensitive personality of the change agent.
6. Politics
There are organizational structural dynamics connected with technology. Many organizations have created new positions related to information computing.
7. Cultural Assumptions and Values
Cultures with high uncertainty avoidance may not be as receptive to change.
B. Managing Resistance to Change
Communication is a key to effectively managing change.
C. Behavioral Reactions to Change
Disengagement is the psychological withdrawal from change. Disidentification is the feeling that one's identity is being threatened by a change. Disenchantment is a negative feeling or anger toward a change. Disorientation is the feelings of loss and confusion due to a change. Disorientation is evident in many computer training sessions. At least one person asks, "what do I do if this happens?" thereby sidetracking an entire session. Often, the question is obscure and is accompanied by a story of disaster.
D. Lewin's Change Model
The Lewin change model was a theory long before it was fashionable to apply the model to technology. Behavior is the product of two opposing forces, one force pushes toward preserving the status quo, while the other pushes for change. Before a change can be implemented, the organization requires a necessary step of unfreezing. This involves encouraging individuals to discard old behaviors by shaking up the equilibrium state. The second step in the change process is the moving stage which involves new attitudes, values, and behaviors substituted for old ones. One of the neglected stages of the change model in organizations is the refreezing step. This step is necessary to establish new attitudes, values, and behaviors to become the new status quo.
V. ORGANIZATION DEVELOPMENT INTERVENTIONS
Organizational development (OD) is the systematic approach to organizational improvement that applies behavioral science theory and research in order to increase individual and organizational well-being and effectiveness.
A. Diagnosis and Needs Analysis
Organizational development includes diagnosis before any steps are taken for implementation. The diagnosis process can be divided into purpose, structure, reward system, support system, relationships, and leadership. Not all organizations will benefit from OD. The best prospects for success are organizations with organic structures and Theory Y assumptions.
1. Survey Feedback
Survey feedback is a widely used method of intervention whereby employee attitudes are solicited using a questionnaire. One of the major differences between traditional questionnaires and survey feedback is the attempt to share the information with the individuals supplying the responses.
2. Management by Objectives
MBO is an organization-wide intervention technique that involves joint goal setting between employees and managers. One of the criticism of MBO is that a great deal of time needs to be invested in the process for it to be successful.
3. Product and Service Quality Programs
Quality programs embed product and service excellence into the organizational culture. In many organizations these programs have joined with, or taken the place of more traditional organizational development efforts.
4. Team Building
Team building can improve the effectiveness of a work group. OD practitioners use team building as one of the most successful OD techniques in practice. Chrysler Corp. has used team building to reduce conflicts between unionized employees and managers.
Among the newer techniques for managing change are larger group interventions; these are intended to create a critical mass of people within an organization to support a change.
6. Process Consultation
Process consultation is an OD method that helps managers and employees improve the processes that are used in organizations. In most instances an external organization consultant is used.
C. Individual-Focused Techniques
1. Skills Training
Skills training is the attempt to increase job knowledge, skills, and abilities that are necessary to do a job effectively. The Ford Glass Plant in Tulsa, Oklahoma has hired public school teachers to be on site for classes related to literacy and mathematics.
2. Sensitivity Training
Sensitivity training is designed to help individuals understand how their behavior affects others. There are a number of names for sensitivity training: encounter groups, T-groups, training groups, but all seek to change behavior through unstructured group interaction. Sensitivity training attempts to combine individuals and keep them focused on the "here and now," rather than past situations in which all may not be involved. Its focus is on enhancing interpersonal skills.
3. Management Development Training
Management development encompasses techniques designed to enhance manager's skills. A number of the programs are fast-track programs.
4. Role Negotiation
Role negotiation is a simple technique whereby individuals meet and clarify their psychological contract.
5. Job Redesign
Job redesign is an OD intervention method that alters jobs to improve the fit between individual skills and the demands of the job. Students may enjoy an impromptu job redesign for positions like toll booth operators, computer input operators, or traffic directors. They quickly discover that the task is not as easy as it appears.
6. Health Promotion Programs
Companies are increasingly recognizing the importance of health promotion programs for reducing their health care costs. Coors has one of the most comprehensive health promotion programs in the country.
7. Career Planning
The benefits of career planning to the organization are that the workforce is more confident and assured of their abilities. In addition, areas have been identified that need improvement, in a less threatening manner than the typical performance appraisal.
VI. ETHICAL CONSIDERATIONS IN ORGANIZATION DEVELOPMENT
OD consultants must be careful not to direct their value system toward the organization. There should not be pressure on individuals to participate, and confidentiality is of the utmost concern. Organizational interventions must not be used to gain information about a problem for control. OD consultant cannot work for both the organizational members and the overriding control group. In order to facilitate change, conflict is encouraged, but must be handled carefully, by trained, concerned professionals.
VII. ARE ORGANIZATION DEVELOPMENT EFFORTS EFFECTIVE?
It is important to understand that no one OD method will be effective in all cases. Organizations must find the methods that work best for them and for their particular change situation. Research seems to indicate that OD programs can have positive effects on performance if managed properly.
VIII. MANAGERIAL IMPLICATIONS: MANAGING CHANGE
IX. LOOKING BACK: Technology Keeps the American Red Cross Running Smoothly
CHAPTER SUMMARY
Organizations face many pressures to change. Some forces are external, including globalization, workforce diversity, technological innovation, and ethics. Other forces are internal, such as declining effectiveness, crises, changing employee expectations, and a changing work climate.
Organizations face both planned and unplanned change. Change can be of an incremental, strategic, or transformational nature. The individual who directs the change, known as a change agent, can be internal or external to the organization.
Individuals resist change for many reasons, and many of these reasons are rooted in fear. Organizations can help manage resistance by educating workers and openly communicating the change, encouraging worker participation in the change efforts, and providing empathy and support to those who have difficulty dealing with change.
Reactions to change may be manifested in behaviors reflecting disengagement, disidentification, disenchantment, and disorientation. Managers can use separate interventions targeted toward each reaction.
Force field analysis states that when the forces for change are balanced by the forces restraining change, an equilibrium state exists. For change to occur, the forces for change must increase, or the restraining forces must decrease.
Lewin's change model proposes three stages of change: unfreezing, moving, and refreezing.
A thorough diagnosis and needs analysis is a critical first step in any organization development (OD) intervention.
OD interventions targeted toward organizations and groups include survey feedback, management by objectives, product and service quality programs, team building, and process consultation.
OD interventions that focus on individuals include skills training, sensitivity training, management development training, role negotiation, job redesign, stress management programs, and career planning.
When properly conducted, organization development can have positive effects on performance.
1. What are the major external and internal forces for change in organizations?
The four major themes of the text are the four external forces: globalization, work force diversity, technological change, and managing ethical behavior. Internal forces are things like a crisis, declining effectiveness, changes in employee expectations, and changes in the work climate.
2. Contrast incremental, strategic, and transformational change.
Incremental change is small in scope resulting in only small improvements, but they tend to be ongoing occurrences. On the other hand, strategic changes are on a large scale like organizational restructuring. A transformational change moves the organization to a radical, and sometimes unknown, future state.
3. What is a change agent? Who plays this role?
The term change agent comes from Rosabeth Moss Kanter and refers to individuals or groups who undertake the task of introducing and managing change in organizations. Individuals outside the organization may be consultants and organizational development experts. In contrast, an insider could be the change agent.
4. What are the major reasons individuals resist change? How can organizations deal with resistance?
Change is difficult for all participants, even for those that advocate the change. Some change is resisted because of the necessity of surrendering power bases that have been developed over time. Many individuals are fearful they will not be able to fulfill expectations of the new role.
5. Name the four behavioral reactions to change. Describe the behavioral signs of each reaction and identify an organizational strategy for dealing with each reaction.
Disengagement is the psychological withdrawal from change and can be seen with withdrawal. Managers should confront the disengaged employee and draw him or her out. Disidentification is typified by behavior that is exhibited with sadness or worry. Encourage these employees to explore their feelings and to transfer their positive feelings into the new situation. Disenchantment behavior is evident in anger. The anger of these employees must be neutralized. Disorientation can be understood when the individual is confused. Managers should explain the change to disoriented individuals in a way that reduces the ambiguity of the situation.
6. Describe force field analysis and its relationship to Lewin's change model.
This process categorizes events in terms of forces that pushes for the status quo, versus those that pull for change. For change to take place the pull factors must outweigh the push factors. Lewin's change model parallels the unfreezing aspect to the analysis of push factors, and refreezing to the pull factors of change.
7. What is organization development? Why is it undertaken by organizations?
Organizational development is the systematic approach to organizational improvement that applies behavioral science theory and research in order to increase individual and organizational well-being and effectiveness. OD is needed for guiding employees through significant change in the organization.
8. Name six areas to be critically examined in any comprehensive organizational diagnosis.
The organization's purpose, structure, reward system, support systems, relationships, and leadership.
9. What are the major organization-focused and group-focused OD intervention methods? The major individual-focused methods?
Organization focused and group-focused interventions include survey feedback, management by objectives, product and service quality programs, team building, process consultation. Individual focused methods include skills training, sensitivity training, management development training, role negotiation, job redesign, stress management programs, and career planning.
10. Which OD intervention is most effective?
No single method of OD is effective in every instance. Often, multiple-method OD approaches are best.
1. What are the major external forces for change in today's organizations?
Students may include competition as one of the forces along with globalization, technology, ethics, and workplace diversity.
2. What are the advantages of using an external change agent? An internal change agent?
External consultants are often viewed without bias and are not suspect as having political loyalties. On the other hand they may not understand the organization and culture as quickly as they might need to. Internal agents are aware of the problems, yet may be viewed as unobjective.
3. Review Challenge 16.1 What can you learn from this Challenge about how individuals' tolerance for ambiguity can lead to resistance?
Students own experiences of dealing with change will be instructive here. They might also consider others they have observed dealing with change and make some assumptions about the relationship between those individuals’ tolerance for ambiguity and their resistance to change.
4. Can organizations prevent resistance to change? If so, how?
There are many techniques, including the utilization of professionals (OD specialists) to assist in change. Communication is an essential aspect to aid employees to adjust effectively. Research substantiates the need for participation from those that will be involved in the change. Emotional support is also considered critical for acceptance of change. It is probably unrealistic to think that all resistance to change can be prevented.
5. What organization development techniques are the easiest to implement? What techniques are the most difficult to implement? Why?
Survey feedback is non-threatening and allows for anonymity. There is little investment on the employees' time. Management by Objectives on the other hand is a high investment technique that requires training in the technique, and is a long process to discover change. Quality programs are certainly in vogue, yet a number of companies have been disappointed at the time involved and the disappointment of the employees as to the slowness of change.
6. Suppose your organization experiences a dramatic increase in turnover. How would you diagnose the underlying problem?
Students could mention any of the techniques that have been listed for organizational analysis. A thorough process of gathering information should be emphasized.
7. Downsizing has played a major role in changing U.S. organizations. Analyze the internal and external forces for change regarding downsizing an organization.
Students may tend to focus on the external forces that lead to downsizing. Be sure students are aware that internal factors may also serve as forces for downsizing.
8. If you were in charge of designing the ideal management development program, what topics would you include? Why?
Students may select trendy topics rather than topics that are based in theories. Be sure students provide justification for their responses.
9. Find an article that describes an organization that has gone through change and managed it well. Develop an “Organizational Reality” feature of your own about the example you find using the format in this book. Prepare a brief oral presentation of your Organizational Reality for your class.
Following the class presentations, discuss the similarities and differences that exist in how the companies managed change. Students should consider why different approaches to change were effective and identify any commonalties that they see in managing change effectively.
10. Think of a change you would like to make in your life. Using Figure 16.1 as a guide, prepare your own force field analysis for that change. How will you overcome the forces for the status quo? How will you make sure to “refreeze” following the change? Summarize your analysis in an action plan.
Students should be very specific in the action plan. You may also want students to consider a plan for evaluating their effectiveness at implementing the change.
1. What constitutes abuse of a change agent's power? How can organizations prevent this?
Unlike some professions, OD specialists do not have to pass an exam to qualify for practice, although reputations are critical. If a change agent attempts to implement their values or perspective into the process, they are manipulating the process. Violating confidentiality is also an abuse of power.
2. Is it ethical for an organization to coerce individuals to change?
Coercion implies manipulation through power. Students might want to review the chapter on power.
3. You are leading a management development seminar, and the supervisor of one of the participants asks how his employee is performing in the seminar. Should you reveal this information?
It would probably depend on the type of seminar being conducted. If it is a sensitivity training workshop the information is absolutely confidential. However, if this is a class training for new computer applications, this becomes a factual question rather than a behavioral attitude question.
4. Suppose you are a consultant, and an organization asks you to deliver a team-building intervention. You know a little about team building, but not a lot. You do know that a competitor will probably get the job if you do not do it. What should you do?
This is extremely dangerous and risky for you and those involved with the process. It is better to let the competitor have the program if you are not trained for the intervention. There is a good chance your lack of knowledge would backfire on you if you proceeded.
5. Suppose you are a consultant, and a company asks you to assist in rewriting its policies and procedures manual to help eliminate the company's excessive absenteeism. From your limited knowledge about the company, you suspect that the problem lies elsewhere, and that changing the manual will not solve the problem. What should you do?
Go through the logical steps for needs analysis and outline those issues with the individuals that are encouraging the project.
CHALLENGES
16.1 TOLERANCE FOR AMBIGUITY
This scale will give students a sense of their comfort with change in organizations. This challenge might be a good lead-in to a class discussion of the reasons individuals resist change and of how organizations can better manage the change process given that everyone does not tolerate ambiguity to the same degree.
16.2 APPLYING FORCE FIELD ANALYSIS
This challenge can be tied to Discussion and Communication Question #10 that asks students to prepare a force field analysis of A change they desire to make in their lives. Prior to students completing this analysis, select an example and walk the students, as a class, through a force field analysis so that they understand better how to apply this type of analysis to their own experience.
Instructor's Notes:
This exercise is intended to give students experience in organizational diagnosis with an environment in which they are familiar. It is useful to point out that they may not know enough about all aspects of the university to proceed through the diagnosis. You might want to query them on how they would gather significant information on the areas where they are least comfortable. It is also interesting to ask them if they believe they are too biased in any of the areas because of personal experiences that may not be true for the majority of students. Finally, would they be better change agents than an outside consultant?
Instructor's Notes:
This exercise is a team building effort stressing change. This is a good closure exercise for the end of the semester. If you use peer evaluation or group grading this might be a good follow-up to the evaluation. Most students have a tendency to paint a better picture of their group than where they actually performed because they believe we expect them to be positive. Emphasize that if their group was a disaster, it is useful to analyze why this happened, and how they could have prevented the outcome knowing what they know at the end of the semester.
Adapted from Ken Kozar, The University of Colorado, Boulder
This exercise points out the difficulties for individuals in dealing with change. Students are divided into groups of three or four, with one person as Crusty Rusty, the curmudgeon opposing the computer change, and Jesse, the young junior accountant sent to convince Rusty that a change is needed. In addition, there is an observer that records the interactions. I ask the Jesses to leave the room with me, and have the Rustys spread out across the room and the observers select a group to observe. The Jesses are instructed to approach the Rustys as if they are actually in their office, beginning with hello.
Students enjoy this exercise. Try to assign students to roles that they would least likely be in.
You are a junior accountant for the National Quik Service Company (QSC) out of Dallas. You have been working at this job for six months, this being your first "real" job since graduating from the University. You have just completed a computerized statistical analysis system for payroll which was well received by the terminal managers. It provided more relevant and current information than they have ever had before. Both you and the managers are enthusiastic about the success of the system and the potential of other computerization for the company. Suddenly, your opportunities have expanded throughout the organization.
This afternoon you have a meeting with Rusty Griffen, the specialist in the division concerning dispatching, which is the next project the managers have jokingly said "couldn't be undertaken before Rusty retires." At the present time, dispatching is determined manually, resulting in numerous errors and requiring a great deal of memory for one individual. The major problem is that often two trucks would be dispatched to pick up the same loads at different times. You feel that a computerized inventory system similar to ones used by other transportation industries could be used as a model.
You have tried to work with Griffen in the past. You feel all of your ideas have been bucked at every opportunity, particularly regarding anything remotely involving change. You feel Griffen's idea of automation is to get a larger piece of paper divided into more columns and a copier that could reproduce this master to the same size in color.
Rusty does not trust the computer ever since there was a deduction taken out of a paycheck in 1982. Rusty will retire in 8 years and it seems to you that any change now will threaten the security that this position has built over the years. With Rusty's attitude toward change, you feel the trucking industry would still be in the pony express days. You sincerely believe the proposed system could improve and set your organization apart in the freight hauling industry.
Well, time to head up to Rusty's office for that chat.
You are the dispatcher in charge of 400+ trucks. In another 8 years you will be retiring from the company with 30 years service. Prior to the dispatcher job, you worked as an independent operator and were noticed by your supervisors for your meticulous and accurate reporting of your trips, and consequently, you were promoted to the dispatcher position. You have the task of summarizing the day to day activities and projecting future loading points. You have quite a system worked out with west coast trucks indicated in blue, inbound noted by red, unloaded and ready for the trip back, another color, etc.
This afternoon you are to meet with Jesse Becker, the new computer whiz. Your supervisor heard about a computer system used to manage another company at a recent conference. You feel the afternoon will be wasted since you have many trucks to record and update since a fluid was not pure that was pumped into 15 outgoing trucks. You feel these computer kids don't understand the first principles of the trucking industry. If they did, they would not have all these fancy and costly ideas. Anyhow, you feel that if you put the data in the computer, you would never really be sure it's there, just like the time your paycheck got mixed up and then those computer people couldn't correct it.
Well, it is time for the meeting. You hope the kid, whose total years of age don't even come close to your years of experience, doesn't try to tell you how to do your job.
Did Jesse introduce himself/herself?
Were the objectives for the interview clear to Rusty?
Who talked the most?
Was there any small talk?
Were there any non-verbal indicators expressed by either person?
Was more time spent on obtaining information or obtaining acceptance?
What change strategy did Jesse take?
What conflict style did Jesse and Rusty adopt?
What type of power do each of the individuals have?
Other comments?
Exercise Learning Objectives:
a. Students will understand that managing change is not the same for everyone.
b. Students will understand that "change" is defined differently by various groups.
c. Students will comprehend that to affect an organizational change, managers must be attuned to the different ways change affects people.
Exercise Overview:
1. Students will form teams of like functional pairs (ST, SF, NF, and NT). The instructor should ensure that no more than six students are in a particular group. If necessary, make two groups of the same functional pair.
2. Students will construct a "Force Field Analysis" chart concerning managing change.
3. Students will report out their results and the instructor will summarize the exercise.
4. The instructor should know how to construct and interpret a force field analysis. We recommend that the students use Experiential Exercise 16.2 before this exercise.
Exercise Description:
a. Individually and silently, students will develop two lists. The first list is entitled, "reasons that I welcome change" and the second list is titled, "reasons that I resist change." Each list should take about five minutes. It is important that silence be enforced. Remember that those people who prefer introversion need time to reflect. This gives them that time and allows them to better participate in the exercise.
b. Students form teams of like functional pairs (ST, SF, NF, and NT).
c. On flip chart paper, students will first list the reasons they welcome change. The students should report in some sequential order until everyone states every item on his or her list.
d. Students do the same thing for the reasons that they resist change.
e. Using one piece of flip chart paper, students will draw a vertical line in the center and title the left side of the paper, "change welcomers" and on the right side the title is "change resistors."
f. Students will review their consolidated lists and pick out 10 items to write on each appropriate half of the paper. The instructor should encourage students to list the strongest "welcomers" and the strongest "resistors."
g. Students should now spend 10 minutes (5 minutes per side) talking about why these "welcomers" and "resistors" are so important to them.
h. Students report out.
g. Instructor summarizes the lesson.
What the instructor should expect:
a. "ST" groups may list in the resistor column such concepts/ideas as: goals are unclear, my job will change, I'll have to physically move, our organizational structure will change, I've never seen this before, it costs too much, and too much uncertainty.
b. "SF" groups may list in the resistor column such concepts/ideas as: I won't be working near or with my friends, I don't know anyone in that department, the boss is real hard to get along with, I don't know enough details, managers always keep us in the dark about these things, and it won't be fun any more.
c. "NF" groups may list in the resistor column such concepts/ideas as: our organizational structure will change, they never take into account the "human costs" of change, we won't know our role and place in the new organization, I don't understand how this will help the organization perform better, and the change will disrupt all of my work relationships.
d. "NT" groups may list in the resistor column such concepts/ideas as: we're changing just for the sake of changing, no thought was added to this process, we could have fixed the existing structure easier if someone had just asked us, I don't understand the reason for the change, this change doesn't fit the other things we're doing, and our energies are directed away from system improvement--we'll have to start all over again.
e. The "welcomers" side of the chart should list opposite ideas and concepts.
Instructor' Summary:
We can see from the discussion that the ST and SF groups have several things in common. These groups want to know the details concerning why we must move. Neither of these groups embraces change unless you can prove to them in "black and white" that this changes is necessary. The "STs" will want a logical explanation and the "SFs" will want you to show them how this change will enhance the working relationships of the employees.
We can see from the NF and NT groups that they also have a lot in common. Both of these groups want to know how this change will affect the internal and external relationships of the organization. The "NFs" wish to also ensure that any anticipated move clearly addresses the human engineering aspects. The "NTs" want to make sure that the change is logically planned and executed.
Remember that all organizations are composed of people who possess these MBTI functional pairings. In order to properly affect change, a manager needs to make sure that the concepts and ideas of the three pairs he or she does not prefer are taken into account.
EXTRA EXPERIENTIAL EXERCISES
Marcic, Dorothy & Seltzer, Joe. Organizational Behavior: Experiences and Cases, 5th Ed. South Western College Publishing Company, 1998.
Downsizing: Merger at Local Bank. p. 259-261. Time: 20-40 minutes.
Purpose: To discuss change issues regarding mergers and downsizing.
Organizational Assessment of Campus. p. 278-279. Time: 50 minutes.
Purpose: To apply organizational development concepts.
Fandt, Patricia M. Management Skills: Practice and Experience. West Publishing Company, 1994.
In Basket Exercise 1: Working with New, Changing and Ambiguous Situations. p. 44.
Exercise 1: Planning for Change. p. 461.
18 MANAGING CHANGE
Organizations have to keep pace with current issues related to quality, technology, diversity, globalization, and ethics. This requires managing both change and resistance to change. All organizations experience external and internal forces for change. There are numerous organization development interventions available to managers. Diagnosis and needs analysis are essential first steps in any change management effort.
After reading this chapter, you should be able to do the following:
1. Identify the major external and internal forces for change in organizations.
2. Define the terms incremental change, strategic change, transformational change, and change agent.
3. Describe the major reasons individuals resist change, and discuss methods organizations can use to manage resistance.
4. Apply force field analysis to a problem.
5. Explain Lewin's organizational change model.
6. Describe the use of organizational diagnosis and needs analysis as a first step in organizational development.
8. Identify the ethical issues that must be considered in organization development efforts.
Chapter 18 introduces the following key terms:
planned change
unplanned change
incremental change
strategic change
transformational change
change agent
disengagement
disidentification
disenchantment
disorientation
unfreezing
moving
refreezing
organization development (OD)
survey feedback
management by objectives (MBO)
quality program
team building
process consultation
skills training
sensitivity training
management development
role negotiation
job redesign
I. THINKING AHEAD: Changing with the Times
II. FORCES FOR CHANGE IN ORGANIZATIONS
The forces for change are everywhere in today’s highly competitive environment. Adaptiveness, flexibility, and responsiveness are terms used to describe the organizations that will succeed in meeting the competitive challenges faced by businesses. Planned change results from deliberate decisions to alter an organization. Unplanned change is imposed on the organization and is often unforeseen.
A. External Forces
The four themes of this text (i.e., globalization, workforce diversity, technological change, and managing ethical behavior) are the major external drivers of change in organizations. Two examples of planned change are the European Union (EU) and the North American Free Trade Agreement (NAFTA). Regardless of the degree of planning involved in these ventures, numerous unplanned circumstances still arise.
1. Globalization
Multinational and transnational organizations are heavily involved in global changes. Many of these organizations are pursuing joint ventures with firms from other countries.
2. Workforce Diversity
The workforce continues to see increased participation of females, persons with physical challenges, and persons from many different cultures, as well as a rise in the mean age of workers. All of these trends are expected to continue well into the next decade.
3. Technological Change
Technological changes alter the way in which we perform work, structure work and organizations, and interact with each other. Examples include advances in communication technology and information systems that allow for virtual teams, and radio frequency identification tags that are significantly faster, more flexible, reusable, and carry more information than bar codes.
4. Managing Ethical Behavior
Society expects organizations to behave in an ethical manner in all of their activities, both internal and external. Ethical dilemmas are sometimes highly visible, public issues, but more often they are issues that arise in the everyday lives of employees. Success in this area requires that organizations establish a pervasive culture of ethical behavior that all employees embrace.
B. Internal Forces
Internal forces for change include things like declining effectiveness, crises (e.g., strikes, resignations, or major accidents), changes in employee expectations, and changes in the work climate.
III. CHANGE IS INEVITABLE
A. The Scope of Change
Change may take one of three forms. Incremental change is relatively small in scope, and as such, results in small improvements. Strategic change is a larger scale approach that is similar in magnitude to a restructuring effort. Transformational change moves the organization toward a radically different, and sometimes, unknown, future state.
B. The Change Agent’s Role
A change agent is an individual or group that undertakes the task of introducing and managing a change in an organization. Change agents can be either internal or external, and both have advantages and disadvantages. Internal change agents know the past history of the organization, its political system, and its culture, but may be too close to be objective or may not have the trust of coworkers. External change agents may have a greater ability to be objective and impartial, but possess limited information about the organization and may be view with suspicion.
IV. THE PROCESS OF CHANGE IN ORGANIZATIONS
A. Resistance to Change
Individuals often resist change because they feel that their freedom is threatened.
1. Fear of the Unknown
All change brings some uncertainty and creates resistance because it introduces ambiguity to what was a comfortable environment. Communication helps reduce fear of the unknown.
2. Fear of Loss
Employees often fear losing their jobs or their status as a result of change.
3. Fear of Failure
Employees may experience anxiety as they anticipate increased workloads or task difficulty, an increase in performance expectations, or they may fear that the change itself will not occur.
4. Disruption of Interpersonal Relationships
Change sometimes limits meaningful interpersonal relationships at work that are important to employees, which can create additional anxiety.
5. Personality Conflicts
Conflict can occur because of the seemingly insensitive personality of the change agent.
6. Politics
Organizational change often involves shifting the balance of power. Threatened loss of power can generate strong resistance to change.
7. Cultural Assumptions and Values
Employees in cultures with high uncertainty avoidance may not be as receptive to
change as those in cultures with low uncertainty avoidance. Also, some
individuals tolerate ambiguity more readily than do others.
B. Managing Resistance to Change
Communication, participation, and empathy and support are key strategies for effectively managing resistance to change.
C. Behavioral Reactions to Change
Disengagement is psychological withdrawal from change. Disidentification is the feeling that one's identity is being threatened by a change. Disenchantment is a negative feeling or anger toward a change. Disorientation involves feelings of loss and confusion due to a change.
D. Lewin's Change Model
The Lewin change model asserts that behavior is the product of two opposing forces, one force pushing to preserve the status quo, and the other pushing for change. The model includes three steps: unfreezing, moving, and refreezing. Unfreezing involves encouraging individuals to discard old behaviors by shaking up the equilibrium state that maintains the status quo. In the moving step, new attitudes, values, and behaviors are substituted for old ones. Finally, refreezing establishes the new attitudes, values, and behaviors as the new status quo.
V. ORGANIZATION DEVELOPMENT INTERVENTIONS
Organizational development (OD) is a systematic approach to organizational improvement that applies behavioral science theory and research in order to increase individual and organizational well-being and effectiveness.
A. Diagnosis and Needs Analysis
Organizational development begins with the essential first step of diagnosis. Diagnosis should include examinations of the organization’s purpose, structure, reward system, support system, relationships, and leadership. Needs analysis involves careful investigation into the skills and competencies employees must have in order to change successfully.
B. Organization- and Group-Focused Techniques
1. Survey Feedback
Survey feedback is a widely used method of intervention method whereby employee attitudes are solicited using a questionnaire. Individual responses should be confidential and anonymous, feedback should be report on the group level, employees should feel confident that they will suffer no repercussions from their responses, and they should be informed of the purpose of the survey.
2. Management by Objectives
Management by objectives (MBO) is an organization-wide intervention technique that involves joint goal setting between employees and managers. It clarifies what is expected of employees, provides knowledge of results, and provides an opportunity for coaching and counseling by the manager. However, the MBO process can be extremely time-consuming when done correctly.
3. Product and Service Quality Programs
Quality programs embed product and service quality excellence in the organizational culture. Success or failure of an organization is directly linked not only to the quality of its product, but also to the quality of its customer service.
4. Team Building
Team building is an intervention designed to improve the effectiveness of a work group. Although very popular as an intervention, team building is a relatively new OD technique, and the assessment of its effectiveness remains incomplete.
5. Large Group Interventions
Large group interventions bring all of the key members of a group together in one room for an extended period of time as a means of creating a critical mass of people within the organization to support a change.
6. Process Consultation
Process consultation is an OD method that helps managers and employees improve the processes that are used in organizations. In most instances, an external organization consultant is used.
C. Individual-Focused Techniques
1. Skills Training
Skills training increases the job knowledge, skills, and abilities that are necessary to do a job effectively. It can be accomplished in the classroom, on the job, or through computer-based-training (CBT).
2. Sensitivity Training
Sensitivity training is an intervention designed to help individuals understand how their behavior affects others. Also known as T-groups, sensitivity training seeks to change behavior through unstructured group interaction. The focus is on enhancing interpersonal skills.
3. Management Development Training
Management development encompasses many techniques designed to enhance manager’s skills in an organization. It focuses on verbal information, intellectual skills, attitudes, and development.
4. Role Negotiation
Role negotiation is a simple technique whereby individuals meet and clarify their psychological contract.
5. Job Redesign
Job redesign is an OD intervention method that alters jobs to improve the fit between individual skills and the demands of the job. Students may enjoy an impromptu job redesign for positions like tollbooth operators, computer input operators, or traffic directors. They quickly discover that the task is not as easy as it appears.
6. Health Promotion Programs
Companies are increasingly recognizing the importance of health promotion programs for reducing their health care costs. The goal is to help employees manage stress before it becomes a problem.
7. Career Planning
Career planning benefits both the organization and the individual. Employees identify skills and skill deficiencies. The organization plans training and development efforts based on that information. Also, the career planning process facilitates the identification and nurturing of talented employees for future promotions.
VI. ETHICAL CONSIDERATIONS IN ORGANIZATION DEVELOPMENT
OD methods must be chosen in accordance with the problem as diagnosed, the organization’s culture, and the employees involved. Individuals should not be forced to participate, and confidentiality for those who do participate is of the utmost concern. Finally, participants should be given complete knowledge of the rationale for change, what to expect from the change process, and the details of the intervention technique and process.
VII. ARE ORGANIZATION DEVELOPMENT EFFORTS EFFECTIVE?
The success of any OD intervention depends on many factors, and no one OD method will be effective in all cases. Research indicates that OD programs have positive effects on productivity when properly applied and managed.
VIII. MANAGERIAL IMPLICATIONS: MANAGING CHANGE
IX. LOOKING BACK: Did the Change Process at Harley-Davidson Get Results?
CHAPTER SUMMARY
Organizations face many pressures to change. Some forces are external, including globalization, workforce diversity, technological innovation, and ethics. Other forces are internal, such as declining effectiveness, crises, changing employee expectations, and a changing work climate.
Organizations face both planned and unplanned change. Change can be of an incremental, strategic, or transformational nature. The individual who directs the change, known as a change agent, can be internal or external to the organization.
Individuals resist change for many reasons, and many of these reasons are rooted in fear. Organizations can help manage resistance by educating workers and openly communicating the change, encouraging worker participation in the change efforts, and providing empathy and support to those who have difficulty dealing with change.
Reactions to change may be manifested in behaviors reflecting disengagement, disidentification, disenchantment, and disorientation. Managers can use separate interventions targeted toward each reaction.
Force field analysis states that when the forces for change are balanced by the forces restraining change, an equilibrium state exists. For change to occur, the forces for change must increase, or the restraining forces must decrease.
Lewin's change model proposes three stages of change: unfreezing, moving, and refreezing.
A thorough diagnosis and needs analysis is a critical first step in any organization development (OD) intervention.
OD interventions targeted toward organizations and groups include survey feedback, management by objectives, product and service quality programs, team building, and process consultation.
OD interventions that focus on individuals include skills training, sensitivity training, management development training, role negotiation, job redesign, stress management programs, and career planning.
When properly conducted, organization development can have positive effects on performance.
1. What are the major external and internal forces for change in organizations?
The four major themes of the text are the four external forces: globalization, workforce diversity, technological change, and managing ethical behavior. Internal forces are things like a crisis, declining effectiveness, changes in employee expectations, and changes in the work climate.
2. Contrast incremental, strategic, and transformational change.
Incremental change is small in scope resulting in only small improvements. Strategic changes occur on a large scale, such as organizational restructuring. Transformational changes move the organization to a radical, and sometimes unknown, future state.
3. What is a change agent? Who plays this role?
The term change agent comes from Rosabeth Moss Kanter and refers to individuals or groups who undertake the task of introducing and managing change in organizations. Change agents may be outside consultants or organizational development experts, or they may be internal employees who have the necessary skills to perform in such a role.
4. What are the major reasons individuals resist change? How can organizations deal with resistance?
Individuals resist change because of fear of the unknown, fear of loss, fear of failure, disruption of interpersonal relationships, personality conflicts, politics, and cultural assumptions and values. Organizations can manage resistance to change through communication, participation, and empathy and support.
5. Name the four behavioral reactions to change. Describe the behavioral signs of each reaction, and identify an organizational strategy for dealing with each reaction.
Disengagement is psychological withdrawal from change and is evident in withdrawal behaviors. Managers should confront disengaged employees to draw them out. Sadness or worry typifies disidentification. Managers should encourage these employees to explore their feelings and to transfer their positive feelings into the new situation. Disenchantment is displayed in angry behavior. The anger of these employees must be neutralized. Disorientation is apparent when individuals show confusion. Managers should explain the change to disoriented individuals in a way that reduces the ambiguity of the situation.
6. Describe force field analysis and its relationship to Lewin's change model.
This process categorizes events in terms of forces that push for the status quo, versus those that push for change. For change to take place, the factors pushing for change must outweigh the factors pushing against change. In Lewin's change model, the unfreezing step requires that individuals be convinced to give up their old behaviors (forces for change must overcome forces against change) in favor of a new set of behaviors.
7. What is organization development? Why is it undertaken by organizations?
Organizational development is the systematic approach to organizational improvement that applies behavioral science theory and research in order to increase individual and organizational well-being and effectiveness. OD is needed to guide employees through significant change in the organization.
8. Name six areas to be critically examined in any comprehensive organizational diagnosis.
The organization's purpose, structure, reward system, support systems, relationships, and leadership must be examined.
9. What are the major organization-focused and group-focused OD intervention methods? The major individual-focused methods?
Organization-focused and group-focused interventions include survey feedback, management by objectives, product and service quality programs, team building, and process consultation. Individual-focused methods include skills training, sensitivity training, management development training, role negotiation, job redesign, stress management programs, and career planning.
10. Which OD intervention is most effective?
No single method of OD is effective in every instance. It is typically best to use multiple-method OD approaches.
1. What are the major external forces for change in today’s organizations?
Students may include competition as one of the forces, along with globalization, technology, ethics, and workplace diversity.
2. What are the advantages of using an external change agent? An internal change agent?
External consultants can be more objective and are not suspected of having political loyalties. On the other hand, they may not fully understand the organization and culture as well as an internal agent. Internal agents have better knowledge of the organization, its history, its culture, and its political processes, but may experience difficulty in being objective, and may lack the necessary expertise to handle the change effectively.
3. Review Challenge 18.1. What can you learn from this challenge about how individuals’ tolerance for ambiguity can lead to resistance?
Students’ own experiences of dealing with change will be instructive here. They might also consider others they have observed dealing with change and make some assumptions about the relationship between those individuals’ tolerance for ambiguity and their resistance to change.
4. Can organizations prevent resistance to change? If so, how?
There are many techniques, including the utilization of professionals (OD specialists) to assist with resistance to change. Communication is an essential aspect of helping employees adjust effectively. Research substantiates the need for participation from those who will be involved in the change. Emotional support is also critical to acceptance of change. It is probably unrealistic to think that organizations can prevent all resistance to change.
5. What organization development techniques are the easiest to implement? What techniques are the most difficult to implement? Why?
Survey feedback is non-threatening and allows for anonymity. There is little investment on the employees’ part. Management by objectives is a high investment technique that requires training and involves a lengthy process. Quality programs are certainly in vogue, yet a number of companies have been disappointed with the time required and the slowness of change.
6. Suppose your organization experiences a dramatic increase in turnover rates. How would you diagnose the underlying problem?
Students could mention any of the techniques that have been listed for organizational analysis. A thorough process of information gathering should be emphasized.
7. Downsizing has played a major role in changing U.S. organizations. Analyze the internal and external forces for change regarding downsizing an organization.
Students may tend to focus on the external forces that lead to downsizing. Be sure they are aware that internal factors may also serve as forces for downsizing.
8. If you were in charge of designing the ideal management development program, what topics would you include? Why?
Students may select trendy topics rather than topics based on theories. Be sure they provide justification for their responses.
9. Find an article that describes an organization that has gone through change and managed it well. Develop an “Organizational Reality” feature of your own about the example you find using the format in the book. Prepare a brief oral presentation of your Organizational Reality for your class.
Following the class presentations, discuss the similarities and differences that exist in how the companies managed change. Students should consider why different approaches to change were effective and identify any commonalties that they see in managing change effectively.
10. Think of a change you would like to make in your life. Using Figure 18.1 as a guide, prepare your own force field analysis for that change. How will you overcome the forces for the status quo? How will you make sure to “refreeze” following the change? Summarize your analysis in an action plan.
Students should be very specific in the action plan. You may also want students to consider a plan for evaluating their effectiveness at implementing the change.
1. What constitutes abuse of a change agent's power? How can organizations prevent this?
Unlike some professions, OD specialists do not have to pass an exam to qualify for practice, although reputations are critical. When change agents attempt to insert their own values into the process, they are manipulating the process. Violating confidentiality is also an abuse of power.
2. Is it ethical for an organization to coerce individuals to change?
Coercion implies manipulation through power. Students might want to review the chapter on power.
3. You are leading a management development seminar, and the supervisor of one of the participants asks how his employee is performing in the seminar. Should you reveal this information?
It would probably depend on the type of seminar being conducted. If it is a sensitivity training workshop the information is absolutely confidential. However, if it is training for new computer applications, it becomes a factual question rather than a behavioral attitude question.
4. Suppose you are a consultant, and an organization asks you to deliver a team-building intervention. You know a little about team building, but not a lot. You do know that a competitor will probably get the job if you do not do it. What should you do?
This is extremely dangerous and risky for you and those involved with the process. It is better to let the competitor have the program if you are not trained for the intervention. There is a good chance your lack of knowledge will backfire on you if you proceed.
5. Suppose you are a consultant, and a company asks you to assist in rewriting its policies and procedures manual to help eliminate the company’s excessive absenteeism. From your limited knowledge about the company, you suspect that the problem lies elsewhere, and that changing the manual will not solve the problem. What should you do?
Go through the logical steps for needs analysis and outline those issues with the individuals who are encouraging the project.
CHALLENGES
18.1 TOLERANCE FOR AMBIGUITY
This scale will give students a sense of their comfort level with change. This challenge might be a good lead-in to a class discussion of the reasons individuals resist change and how organizations can better manage the change process, given that everyone does not tolerate ambiguity to the same degree.
18.2 APPLYING FORCE FIELD ANALYSIS
This challenge can be tied to Discussion and Communication Question #10 that asks students to prepare a force field analysis of a change they desire to make in their lives. Prior to students completing this analysis, select an example and walk the students, as a class, through a force field analysis so that they understand better how to apply this type of analysis to their own experience.
Instructor's Notes:
This exercise is intended to give students experience in organizational diagnosis with an environment in which they are familiar. It is useful to point out that they may not know enough about all aspects of the university to proceed through the diagnosis. You might want to query them on how they would gather significant information on the areas where they are least comfortable. It is also interesting to ask them if they believe they are too biased in any of the areas because of personal experiences that may not be true for the majority of students. Finally, would they be better change agents than an outside consultant?
Instructor's Notes:
This exercise is a team building effort that stresses change. This is a good closure exercise for the end of the semester. If you use peer evaluation or group grading this might be a good follow-up to the evaluation. Most students have a tendency to paint a better picture of their group than where they actually performed because they believe we expect them to be positive. Emphasize that if their group was a disaster, it is useful to analyze why this happened, and how they could have prevented the outcome knowing what they know at the end of the semester.
Adapted from Ken Kozar, The University of Colorado, Boulder
This exercise points out the difficulties for individuals in dealing with change. Students are divided into groups of three or four, with one person as Crusty Rusty, the curmudgeon opposing the computer change, and Jesse, the young junior accountant sent to convince Rusty that a change is needed. In addition, there is an observer that records the interactions. I ask the Jesses to leave the room with me, and have the Rustys spread out across the room and the observers select a group to observe. The Jesses are instructed to approach the Rustys as if they are actually in their office, beginning with hello.
Students enjoy this exercise. Try to assign students to roles that they would least likely be in.
You are a junior accountant for the National Quik Service Company (QSC) out of Dallas. You have been working at this job for six months, this being your first "real" job since graduating from the University. You have just completed a computerized statistical analysis system for payroll that was well received by the terminal managers. It provided more relevant and current information than they have ever had before. Both you and the managers are enthusiastic about the success of the system and the potential of other computerization for the company. Suddenly, your opportunities have expanded throughout the organization.
This afternoon you have a meeting with Rusty Griffen, the specialist in the division concerning dispatching, which is the next project the managers have jokingly said "couldn't be undertaken before Rusty retires." At the present time, dispatching is determined manually, resulting in numerous errors and requiring a great deal of memory for one individual. The major problem is that often two trucks would be dispatched to pick up the same loads at different times. You feel that a computerized inventory system similar to ones used by other transportation industries could be used as a model.
You have tried to work with Griffen in the past. You feel all of your ideas have been bucked at every opportunity, particularly regarding anything remotely involving change. You feel Griffen's idea of automation is to get a larger piece of paper divided into more columns and a copier that could reproduce this master to the same size in color.
Rusty does not trust the computer ever since there was a deduction taken out of a paycheck in 1982. Rusty will retire in 8 years and it seems to you that any change now will threaten the security that this position has built over the years. With Rusty’s attitude toward change, you feel the trucking industry would still be in the pony express days. You sincerely believe the proposed system could improve and set your organization apart in the freight hauling industry.
Well, time to head up to Rusty’s office for that chat.
You are the dispatcher in charge of 400+ trucks. In another 8 years you will be retiring from the company with 30 years service. Prior to the dispatcher job, you worked as an independent operator and were noticed by your supervisors for your meticulous and accurate reporting of your trips, and consequently, you were promoted to the dispatcher position. You have the task of summarizing the day to day activities and projecting future loading points. You have quite a system worked out with west coast trucks indicated in blue, inbound noted by red, unloaded and ready for the trip back, another color, etc.
This afternoon you are to meet with Jesse Becker, the new computer whiz. Your supervisor heard about a computer system used to manage another company at a recent conference. You feel the afternoon will be wasted since you have many trucks to record and update since a fluid was not pure that was pumped into 15 outgoing trucks. You feel these computer kids don't understand the first principles of the trucking industry. If they did, they would not have all these fancy and costly ideas. Anyhow, you feel that if you put the data in the computer, you would never really be sure it's there, just like the time your paycheck got mixed up and then those computer people couldn't correct it.
Well, it is time for the meeting. You hope the kid, whose total years of age don't even come close to your years of experience, doesn't try to tell you how to do your job.
Did Jesse introduce himself/herself?
Were the objectives for the interview clear to Rusty?
Who talked the most?
Was there any small talk?
Were there any non-verbal indicators expressed by either person?
Was more time spent on obtaining information or obtaining acceptance?
What change strategy did Jesse take?
What conflict style did Jesse and Rusty adopt?
What type of power do each of the individuals have?
Other comments?
Exercise Learning Objectives:
a. Students will understand that managing change is not the same for everyone.
b. Students will understand that "change" is defined differently by various groups.
c. Students will comprehend that to affect an organizational change, managers must be attuned to the different ways change affects people.
Exercise Overview:
1. Students will form teams of like functional pairs (ST, SF, NF, and NT). The instructor should ensure that no more than six students are in a particular group. If necessary, make two groups of the same functional pair.
2. Students will construct a "Force Field Analysis" chart concerning managing change.
3. Students will report out their results and the instructor will summarize the exercise.
4. The instructor should know how to construct and interpret a force field analysis. We recommend that the students use Experiential Exercise 18.2 before this exercise.
Exercise Description:
a. Individually and silently, students will develop two lists. The first list is entitled, "reasons that I welcome change" and the second list is titled, "reasons that I resist change." Each list should take about five minutes. It is important that silence be enforced. Remember that those people who prefer introversion need time to reflect. This gives them that time and allows them to better participate in the exercise.
b. Students form teams of like functional pairs (ST, SF, NF, and NT).
c. On flip chart paper, students will first list the reasons they welcome change. The students should report in some sequential order until everyone states every item on his or her list.
d. Students do the same thing for the reasons that they resist change.
e. Using one piece of flip chart paper, students will draw a vertical line in the center and title the left side of the paper "change welcomers" and on the right side the title is "change resistors."
f. Students will review their consolidated lists and pick out 10 items to write on each appropriate half of the paper. The instructor should encourage students to list the strongest "welcomers" and the strongest "resistors."
g. Students should now spend 10 minutes (5 minutes per side) talking about why these "welcomers" and "resistors" are so important to them.
h. Students report out.
g. Instructor summarizes the lesson.
What the instructor should expect:
a. "ST" groups may list in the resistor column such concepts/ideas as: goals are unclear, my job will change, I'll have to physically move, our organizational structure will change, I've never seen this before, it costs too much, and too much uncertainty.
b. "SF" groups may list in the resistor column such concepts/ideas as: I won't be working near or with my friends, I don't know anyone in that department, the boss is real hard to get along with, I don't know enough details, managers always keep us in the dark about these things, and it won't be fun any more.
c. "NF" groups may list in the resistor column such concepts/ideas as: our organizational structure will change, they never take into account the "human costs" of change, we won't know our role and place in the new organization, I don't understand how this will help the organization perform better, and the change will disrupt all of my work relationships.
d. "NT" groups may list in the resistor column such concepts/ideas as: we’re changing just for the sake of changing, no thought was added to this process, we could have fixed the existing structure easier if someone had just asked us, I don't understand the reason for the change, this change doesn't fit the other things we're doing, and our energies are directed away from system improvement--we'll have to start all over again.
e. The "welcomers" side of the chart should list opposite ideas and concepts.
Instructor’s Summary:
We can see from the discussion that the ST and SF groups have several things in common. These groups want to know the details concerning why we must move. Neither of these groups embraces change unless you can prove to them in "black and white" that this change is necessary. The "STs" will want a logical explanation and the "SFs" will want you to show them how this change will enhance the working relationships of the employees.
We can see from the NF and NT groups that they also have a lot in common. Both of these groups want to know how this change will affect the internal and external relationships of the organization. The "NFs" wish to also ensure that any anticipated move clearly addresses the human engineering aspects. The "NTs" want to make sure that the change is logically planned and executed.
Remember that all organizations are composed of people who possess these MBTI functional pairings. In order to properly affect change, a manager needs to make sure that the concepts and ideas of the three pairs he or she does not prefer are taken into account.
EXTRA EXPERIENTIAL EXERCISES
Marcic, Dorothy, Seltzer, Joseph, & Vaill, Peter. Organizational Behavior: Experiences and Cases, 6th Ed. South Western College Publishing Company, 2001.
An Ancient Tale. p. 225-226. Time: 40 minutes.
Purpose: To analyze issues of organization, boundary, membership, and responsibility
for change.
Fandt, Patricia M. Management Skills: Practice and Experience. West Publishing Company, 1994.
In Basket Exercise 1: Working with New, Changing and Ambiguous Situations. p. 44.
Exercise 1: Planning for Change. p. 461.
CASE QUESTIONS: SUGGESTED ANSWERS
The following external forces have affected, or are affecting, Enron:
The following internal forces have affected, or are affecting, Enron:
Incremental change involves making small improvements in the organization or fine-tuning the organization. Strategic change involves moving the organization from an old state to a known new state during a controlled period of time. Transformational change occurs when the organization moves to a radically different, and sometimes unknown, future state.
No substantive evidence exists regarding incremental change. Several instances of strategic and/or transformational change exist in this case. All of the following could be considered examples of strategic change:
One might also argue that Enron’s use of the Web to expand far beyond its traditional businesses is a transformational change. The proposed then aborted merger with Dynegy Corporation. might be considered to be a transformational change as well.
Students can adapt Challenge 18.2: Applying Force Field Analysis in discussing this question. Students can begin developing an answer to this question by drawing on the discussion of questions (1) and (2). Nearly all of the items mentioned in the suggested responses to these two questions were are forces driving change. However, the size and complexity of the two merged companies may be forces that restrain change. The dominant forces that restrained change were Enron’s questionable accounting practices and financial dealings.
Students should be encouraged to speculate a bit and go beyond the case facts. They could brainstorm on the forces restraining change and the forces driving change in the global energy industry in general and in the other commodities (e.g., as metals, forest products, bandwidth capacity, and steel) in which the combined company makes markets.
Since the Enron bankruptcy is the largest in business history, its effect will be widespread and long term. In addition, new developments in the Enron situation occur on almost a daily basis. Therefore, students should be encouraged to look to current business news regarding Enron to update their knowledge of how Enron is dealing with change.
COHESION CASE -- PART IV
PROCTER & GAMBLE (D)
Three very powerful lessons evolve from P&G’s Organization 2005 initiative. First, as a complex multinational business organization, P&G has discovered what may be an important key to true global success. P&G is seeking to simultaneously be both global and local in its operations. It is global in the sense of developing and marketing product lines around the world. It is local in terms of developing strategies and establishing distribution channels to effectively market the company’s entire portfolio of products to customers in different countries and regions. Second, organizational change efforts should improve a company’s capability to achieve challenging goals. In this context, the intent of the Organization 2005 initiative is to improve P&G’s ability to attain its stretch, innovation, and speed objectives. Third, achieving the stretch, innovation, and speed objectives requires a highly integrated organization. The Organization 2005 initiative is intended to create such an organization through its emphasis on a holistic approach to change that reaches throughout the company. Moreover, the components of the change program (i.e., the four structural pillars and cultural change) should be mutually supportive and reinforcing.
Stretch involves reaching “for the highest upside possible on all the opportunities” that P&G pursues. Innovation involves setting the toughest product performance standards in the world, and then continually exceeding those standards with improvements on existing products and the development of new products. Speed concerns getting P&G’s products into the global marketplace faster than any competitor anywhere.
The structural pillars work together in achieving the stretch, innovation, and speed objectives. The global business units focus on developing and marketing product lines for sale throughout the world. The market development organizations work in tandem with the GBUs in developing and implementing marketing strategies and distribution channels to serve the tastes and preferences of customers in each local market. global business services centers and corporate functions support the work of the GBUs and MDOs.
Cultural change also facilitates the achievement of the stretch, innovation, and speed objectives. P&G focuses on creating a culture that rewards appropriate goal attainment, supports risk taking, stimulates innovations, encourages visionary leadership, values speed, fosters fast streamlined decision making, and capitalizes on diversity. Collectively, these cultural features support and reinforce the stretch, innovation, and speed objectives.
As noted in the solution for question (2), P&G has focused on creating a culture that rewards appropriate goal attainment, supports risk taking, stimulates innovations, encourages visionary leadership, values speed, fosters fast streamlined decision making, and capitalizes on diversity. Most, if not all, of these cultural changes (or in some instances, cultural refinements) will enhance P&G’s ability to address the challenges of globalization and technology. Capitalizing on diversity confronts this challenge head-on; it makes diversity an asset rather than a liability. The ethics challenge will also be affected to the extent that these cultural changes promote, support, and reinforce ethical actions.
Of particular interest is the fact that P&G is willing to change anything that influences the nature of work and work relationships except its core values and guiding principles [see Procter & Gamble (A) for information on P&G’s guiding principles]. These guiding principles imply enduring commitments to corporate actions that clearly and directly reflect actions in the globalization, technology, diversity, and ethics arenas.
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