Organisational Change McShane-Olekalns-Travaglione OB Pacific Rim 3e © 2010 The McGraw-Hill...

Organisational Change

McShane-Olekalns-Travaglione OB Pacific Rim 3e

© 2010 The McGraw-Hill Companies, Inc. All rights reserved

1

Change at LG Electronics

LG Electronics’ employees are

going through a number of

changes as the company

becomes more globally and

customer focused.



2

Lewin’s Force Field Analysis Model

Developed by Kurt Lewin

Driving forces• Push organisations toward change• External forces or leader’s vision

Restraining forces• Resistance to change – employee

behaviours that block the change process



3

DrivingForces

RestrainingForces

Desiredconditions

Currentconditions

Beforechange

Afterchange

Force Field Analysis Model



4

Duringchange

DrivingForcesDrivingForces

RestrainingForces

RestrainingForces Driving

ForcesDrivingForces

RestrainingForces

RestrainingForces

DrivingForcesDrivingForces

RestrainingForces

RestrainingForces

Not Hoppy About Change

Mina Ishiwatari (front) wanted to

improve Hoppy Beverage Co.’s brand

image, but most staff didn’t want to

change. “I tried to take a new

marketing approach to change the

image of Hoppy . . . but no one would

listen to me.” She improved Hoppy’s

popularity with limited support or

budget. Most employees who

opposed Ishiwatari’s changes have

since left the company.



5

Restraining Forces(Resistance to Change)

Many forms of resistance• eg. complaints, absenteeism,

passive noncompliance

View resistance as a resource1. Symptoms of deeper problems in

the change process

2. A form of constructive conflict – may improve decisions in the change process

3. A form of voice – helps procedural justice



6

Why People Resist Change

1. Direct costs• Losing something of value due to change

2. Saving face• Accepting change acknowledges own imperfection,

past wrongdoing

3. Fear of the unknown• Risk of personal loss• Concern about being unable to adjust



7

Why People Resist Change (cont.)

4. Breaking routines• Organisational unlearning is part of change process• But past practices/habits are valued by employees

due to comfort, low cognitive effort

5. Incongruent organisational systems• Systems/structures reinforce status quo• Career, reward, power, communication systems

6. Incongruent team dynamics• Norms contrary to desired change



8

Creating an Urgency for Change

Inform employees about driving forces

Most difficult when organisation is doing well

Customer-driven change• Adverse consequences for firm• Human element energises employees

Sometimes need to create urgency to change without external drivers• Requires persuasive influence• Use positive vision rather than threats



9

Minimising Resistance to Change

Highest priority and first strategy for change

Improves urgency to change Reduces uncertainty (fear of

unknown) Problems – time consuming and

costly



10

Communication

Learning

Involvement

Stress Mgt

Coercion

Negotiation


Provides new knowledge/skills Includes coaching and other forms

of learning Helps break old routines and

adopt new roles Problems – potentially time

consuming and costly



11

Communication

Involvement

Stress Mgt

Coercion

Negotiation

Learning


Employees participate in change process

Helps saving face and reducing fear of unknown

Includes task forces, future search events

Problems – time-consuming, potential conflict



12

Learning

Involvement

Stress Mgt

Coercion

Negotiation

Involvement

Communication


When communication, learning, and involvement are not enough to minimise stress

Potential benefits• More motivation to change• Less fear of unknown• Fewer direct costs

Problems – time-consuming, expensive, doesn’t help everyone



13

Learning

Involvement

Coercion

Negotiation

Stress Mgt

Communication


Influence by exchange – reduces direct costs

May be necessary when people clearly lose something and won’t otherwise support change

Problems• Expensive• Gains compliance, not

commitment



14

Learning

Involvement

Stress Mgt

Coercion

Communication

Negotiation


When all else fails Assertive influence Radical form of “unlearning” Problems

• Reduces trust• May create more subtle resistance• Encourage politics to protect job



15

Coercion

Learning

Involvement

Communication

Stress Mgt

Negotiation

Refreezing the Desired Conditions

We tend to revert to previous behaviours and practices, unless systems and structures hold (refreeze) the desired changes.

“Even when we want to change, and do change, we tend to relax and the rubber band snaps us back into our comfort zones.”(Ray Davis, CEO, Umpqua Bank)



16

Umpqua Bank

Refreezing the Desired Conditions

Realigning organisational systems and team dynamics with the desired changes• Alter rewards to reinforce new behaviours• Change career paths • Revise information systems



17

Change Agents

Change agent – anyone who possesses enough knowledge and power to guide and facilitate the change effort

Engage in transformational leadership• Develop the change vision• Communicate the vision• Act consistently with the vision• Build commitment to the vision



18

Strategic Vision & Change

Need a vision of the desired future state

Identifies critical success factors for change

Minimises employee fear of the unknown

Clarifies role perceptions



19

Diffusion of Change

Begin change as pilot projects

Effective diffusion considers MARS model• Motivation – pilot project is successful, reward

diffusion of pilot project• Ability – train employees to adopt pilot project • Role perceptions – translate pilot project to new

situations• Situational factors – provide resources to implement

pilot project elsewhere



20

Action Research Approach

Action orientation and research orientation• Action – to achieve the goal of change• Research – testing application of concepts

Action research principles1.Open systems perspective

2.Highly participative process

3.Data-driven, problem-oriented process



21

Formclient-

consultantrelations

Disengageconsultant’s

services

Action Research Process



22

Diagnoseneed forchange

Introduceintervention

Evaluate/stabilisechange

BBC Takes the Appreciative Journey

To become a more creative

organisation, the British

Broadcasting Company

sponsored an appreciative

inquiry process of employee

consultation, called Just Imagine.

“It gave me a powerful mandate

for change,” said the BBC’s chief

executive at the time.



23

Appreciative Inquiry Approach

Frames change around positive and possible future, rather than traditional problem focus.

Application of positive organisational behaviour



24

Four-D Model of Appreciative Inquiry



25

DesigningDesigningDesigningDesigning

Engaging in dialogue about “what should be”

Engaging in dialogue about “what should be”

DreamingDreamingDreamingDreaming

Forming ideas about “what might be”

Forming ideas about “what might be”

DiscoveryDiscoveryDiscoveryDiscovery

Discovering the best of “what is”

Discovering the best of “what is”

DeliveringDeliveringDeliveringDelivering

Developing objectives about “what will be”

Developing objectives about “what will be”

Large Group Interventions

Future search, open space, and other interventions that involve “the whole system” • Large group sessions• May last a few days• High involvement with minimal structure

Limitations of large group interventions• Limited opportunity to contribute• Risk that a few people will dominate• Focus on common ground may hide differences• Generates high expectations about ideal future



26

Parallel Learning Structure Approach

Highly participative social structures

Members representative across the formal hierarchy

Sufficiently free from firm’s constraints

Develop solutions for organisational change which are then applied back into the larger organisation



27

OrganisationParallelStructure

Parallel Learning Structures



28

Cross-Cultural and Ethical Concerns with Managing Change

Cross-Cultural Concerns• Linear and open conflict assumptions different from

values in some cultures

Ethical Concerns• Privacy rights of individuals• Management power• Individuals’ self-esteem



29

Organisations are About People

“Take away my people, but leave my factories, and soon grass will grow on the factory floors. Take away my factories, but leave my people, and soon we will have a new and better factory.”

Andrew Carnegie (1835-1919)



30

Source: Library of Congress

Organisational Change



31

Discussion ofSkill Builder 15.1Strategic Change Incidents



32

Scenario #1: “Greener Telco”

Scenario #1 refers to Bell Canada’s Zero Waste program, which successfully changed employee behaviour by altering the causes of those behaviours.

Pilot project in Toronto – 12 floor building of 1000 staff reduced waste from 1800 lb per day to just 75 lb per day within 3 years.



33

Courtesy of Bell Canada

Bell Canada’s Change Strategy

Relied on the MARS model to alter behaviour:

Motivation – employee involvement, respected steering committee (see photo)

Ability – taught paper reduction, email, food disposal

Role perceptions – made waste reduction salient (everyone’s job) through banners, training

Situation – created barriers to wasteful behaviour (eg. coffee mugs, removed garbage bins)



34

Courtesy of Bell Canada

Scenario #2: “Go Forward Airline”

Scenario #2 refers to

Continental Airline’s “Go

Forward” change strategy,

which catapulted the

company “from worst to first”

within a couple of years.



35

Continental Airlines’ Change Strategy

Communicate, communicate, communicate

Introduced 15 performance measures

Established stretch goals (repainting planes in 6 months)

Replaced 50 of 61 executives

Rewarded new goals (on-time arrival, stock price)

Customers as drivers of change



36

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