C H A P T E R

F I F T E E N

Organizational Change and Development

Continuous Change at Nokia
Nokia has continually adapted to its changing environment. The Finnish company began as a pulp and paper mill in Courtesy National Board of Antiquities, Finland 1865, then moved into rubber, cable wiring, and computer monitors. In the 1980s, Nokia executives sensed an emerging market for wireless communication. Today, Nokia is a world leader in cellular telephones.

1991. acquisitions Major restructuring 0 10 20 30 40 50 60 70 80 Percentage of Respondents by Country Hungary Mexico S.) 3 . R.Organizational Change: An International Phenomenon 0 International expansion 10 20 30 40 50 60 70 80 Reduction in employment Mergers.. divestitures. Korea Germany United States Japan (Source: Kanten.

Changing People: Some Basic Steps Step 3: Refreezing Incorporating the changes. creating and maintaining a new organizational system Step 2: Changing Attempting to create a new state of affairs Step 1: Unfreezing Recognizing the need for change 4 .

Sensitivity groups Objective data Group members recognize problem Diagnose group’s strengths and weaknesses Develop desired change goals Develop action plan to make changes Implement plan Team Building: Its Basic Steps Evaluate plan if successful Process completed if unsuccessful Restart process 5 .

When Will It Occur? If benefits exceed costs Amount of dissatisfaction with current conditions Change is made Availability of a desirable alternative Benefit of making change Compared to Cost of making change Existence of a plan for achieving a desirable alternative Change is not made If costs exceed benefits 6 .

Some External Forces for Change Information Technology Globalization & Competition Courtesy National Board of Antiquities. Finland Demography .

Force Field Analysis Desired Conditions Restraining Forces Restraining Forces Driving Forces Restraining Forces Current Conditions Driving Forces Driving Forces Before Change During Change After Change .

‖ • ―SDWTs will threaten my job as a supervisor!‖ AP Worldwide . • ―SDWTs don’t work on drilling rigs!‖ • ―We already have teams!‖ • ―This creates more work — will we get higher pay?‖ • ―I don’t know how to work in teams.Resistance to Change at BP Norge Employees initially resisted selfdirected teams BP Norge’s North Sea drilling rigs.

Resistance to Change Direct Costs Saving Face Fear of the Unknown Forces for Change Breaking Routines Incongruent Systems Incongruent Team Dynamics .

not contrived • Customer-driven change – Adverse consequences for firm – Human element energizes employees .Creating an Urgency for Change • Need to motivate employees to change • Most difficult when organisation is doing well • Must be real.

Minimizing Resistance to Change Communication Coercion Training Negotiation Minimizing Resistance to Change Stress Management Employee Involvement .

Refreezing the Desired Conditions Creating organizational systems and team dynamics to reinforce desired changes – alter rewards to reinforce new behaviours – new information systems guide new behaviours – recalibrate and introduce feedback systems to focus on new priorities .

Change Agents • Anyone who possesses enough knowledge and power to guide and facilitate the change effort • Change agents apply transformational leadership – – – – Help develop a vision Communicate the vision Act consistently with the vision Build commitment to the vision Courtesy of CHC Helicopter Corp. .

Successfully Diffusing Change • Successful pilot study • Favourable publicity • Top management support • Labour union involvement • Diffusion strategy described well Courtesy of CHC Helicopter Corp. • Pilot program people moved around .

Organization Development Defined A planned system wide effort. . that uses behavioural science knowledge to improve organizational effectiveness. managed from the top with the assistance of a change agent.

. profit) (Source: Porras and Robertson.g.55) 20 Individual outcomes (e.Organizational Development: How Effective Is It? Percentage of Studies Showing Positive Changes 50 Organizational outcomes more often benefited from OD interventions than did individual outcomes (48. job satisfaction) Organizational outcomes (e.g.. 1992.) 17 .70) 40 30 (23.

Action Research Process Establish ClientConsultant Relations Diagnose Need for Change Introduce Change Evaluate/ Stabilize Change Disengage Consultant’s Services .

Parallel Structures Parallel Structure Organization .

Appreciative Inquiry Process Discovery Dreaming Designing Delivering Discovering the best of ―what is‖ Forming ideas about ―what might be‖ Engaging in dialogue about ―what should be‖ Developing objectives about ―what will be‖ .

Organization Development Concerns • Cross-Cultural Concerns – Linear and open conflict assumptions different from values in some cultures • Ethical Concerns – – – – Management power Employee privacy rights Employee self-esteem Consultant’s role .

especially on the job • Abuse comes from individuals. coercive and manipulative • Potential for abuse 22 . not from the technique itself.The Ethics of OD: Summary of the Debate OD is ethical • The imposition of values is an inherent part of life. which is neither good nor evil OD is unethical • Imposes values of the organization.

Discussion of Activity 15.3 Strategic Change Management 23 .

Scenario #1: “Greener Telco” Scenario #1 refers to Bell Canada’s Zero Waste program. Courtesy of Bell Canada . which successfully changed wasteful employee behaviours by altering the causes of those behaviours.

food disposal Role perc. removed garbage bins Courtesy of Bell Canada .Bell Canada’s Change Strategy Relied on the MARS model to alter behaviour: Motivation -.taught paper reduction.employee involvement. eg. respected steering committee Ability -.communicated importance of reducing waste Situation -.Created barriers to wasteful behaviour. -. email.

Scenario #2: “Go Forward Airline” Scenario #2 refers to Continental Airline’s ―Go Forward‖ change strategy. Courtesy of Continental Airlines . which catapulted the company ―from worst to first‖ within a couple of years.

communicate  Introduced 15 performance measures  Established  Replaced stretch goals (repainting planes in 6 months) 50 of 61 executives  Rewarded new goals (on-time arrival. stock price) as drivers of change Courtesy of Continental Airlines  Customers . communicate.Continental Airlines’ Change Strategy  Communicate.

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