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Managing Change: Chapter Scan
Managing Change: Chapter Scan
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MANAGING CHANGE
CHAPTER SCAN
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.
LEARNING OBJECTIVES
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.
7. Discuss the major organization development interventions.
8. Identify the ethical issues that must be considered in organization development efforts.
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KEY TERMS
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
II.
The forces for change are everywhere in todays 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
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Free Trade Agreement (NAFTA). Regardless of the degree of planning involved in these
ventures, numerous unplanned circumstances still arise.
1.
Globalization
Workforce Diversity
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.
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.
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.
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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.
Resistance to Change
Individuals often resist change because they feel that their freedom is threatened.
1.
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
Politics
B.
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Communication, participation, and empathy and support are key strategies for effectively
managing resistance to change.
C.
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.
Organizational development begins with the essential first step of diagnosis. Diagnosis
should include examinations of the organizations 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.
Survey Feedback
Management by Objectives
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Team Building
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
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
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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.
OD methods must be chosen in accordance with the problem as diagnosed, the organizations
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.
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.
IX.
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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.
OD efforts should be managed ethically and should preserve individual freedom of choice and
privacy.
When properly conducted, organization development can have positive effects on
performance.
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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 wellbeing 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.
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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.
ETHICS QUESTIONS: SUGGESTED ANSWERS
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?
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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 companys 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.
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EXPERIENTIAL EXERCISES
18.1 ORGANIZATIONAL DIAGNOSIS OF THE UNIVERSITY
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?
18.2 TEAM BUILDING FOR TEAM EFFECTIVENESS
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.
ALTERNATIVE EXPERIENTIAL EXERCISE
CRUSTY RUSTY
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.
CRUSTY RUSTY
ROLE FOR JESSE BECKER, JUNIOR ACCOUNTANT
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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 Rustys 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 Rustys office for that chat.
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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.
Other comments?
MBTI EXERCISE:
Exercise Learning Objectives:
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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:
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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: were 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.
Instructors 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.
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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.
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2. Describe the internal forces for change that seem to be affecting Enron.
The following internal forces have affected, or are affecting, Enron:
3. Explain Enrons development from the perspectives of incremental change, strategic change,
and transformational change.
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:
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One might also argue that Enrons 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.
4. How could Enron have used force field analysis as an aid to understanding and managing
the changes that are necessary for a successful merger of the two companies?
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 Enrons 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.
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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&Gs 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&Gs 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.