C H A P T E R

Organizational Change and Development

15
F I F T E E N

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.

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

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 w Ne e tat S re ur C n e tat tS 4 .Changing People: Some Basic Steps Step 3: Refreezing Incorporating the changes.

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 Evaluate plan Team Building: Its Basic Steps if successful Process completed Restart process if unsuccessful 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 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.” • “SDWTs will threaten my job as a supervisor!” AP Worldwide .

Resistance to Change Direct Costs Saving Face Forces for Change Fear of the Unknown 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 .

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

g..Organizational Development: How Effective Is It? Percentage of Studies Showing Positive Changes 50 40 30 Organizational outcomes more often benefited from OD interventions than did individual outcomes (48.g. 1992.) 17 .. job satisfaction) Organizational outcomes (e.55) 20 Individual outcomes (e. profit) (Source: Porras and Robertson.70) (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 Forming ideas about “what might be” Designing Engaging in dialogue about “what should be” Delivering Developing objectives about “what will be” Discovering the best of “what is” .

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 .

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

Discussion of Activity 15.3 Strategic Change Management 23 .

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

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

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

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

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