ORGANIZATIONAL BEHAVIOR

14. ORGANIZATIONAL CHANGE

July 23, 2020

Kwansei Gakuin University

 COURSE OVERVIEW (2)

Team
8. INTERPERSNAL CONFLICT AND NEGOTIATION: Interpersonal conflict
handling styles / Basic types of negotiation strategies.
9. INTERPERSONAL COMMUNICATION: Basic elements of the communication
process / Interpersonal communication networks and relationships among
employees.
10. DEVELOPING AND LEADING TEAMS: Characteristics of groups, including
informal groups / Distinguishing features of teams / Model of team
development / Key factors that influence team effectiveness.
11. LEADING EFFECTIVELY (foundations): Essentials of leadership / Traits and
behavioral, situational model of leadership.

Organizational
12. ORGANIZATIONAL DESIGN: Environmental, strategic, and technological
factors affecting the design of organizations / Differences between
mechanistic and organic organizations / Contemporary organization designs;
multi-national, network, and virtual.
13. ORGANIZATIONAL CULTURE: How organizational cultures are formed,
sustained and changed / Types of organizational culture.
14. ORGANIZATIONAL CHANGE: Pressures for change and how to perform an
organizational diagnosis / Reasons for individual and organizational
resistance to change and describe methods for overcoming it.

鈴木 修 7/22/2020 関西学院大学専門職大学院経営戦略研究科 -2-

 KEY MESSAGES FOR SESSION 14

Your change efforts will be strongly resisted, no matter how

appropriately and rationally they’re designed and
implemented
 Organizations are built to be stable and enduring
 Organizational inertia as a source of strength

Therefore, your change efforts should be accompanied by

extensive support for people to change
 People have millions of reasons NOT to change
 Feel necessary ≠ Understand what to do ≠ Capable to
do ≠ Accept the role ≠ Take action

鈴木 修 7/22/2020 関西学院大学専門職大学院経営戦略研究科 -3-

 EXAMPLES OF CULTURAL CHANGES

Examples

From engineering to marketing NTT DoCoMo

From public interest focused to private

JR, Japan Post
profit driven

Shinsei Bank
From paternalism to individualism
Aozora Bank

From specification-driven to proposal-

Denso
oriented

How do you want to change your organization?

鈴木 修 7/22/2020 関西学院大学専門職大学院経営戦略研究科 -4-

 ORGANIZATIONAL ROUTINES CROWD OUT CHANGE EFFORTS
Why Soviet made no efforts to hide its missiles in Cuban Missile Crisis (1962)?

Organizations are built to be stable and enduring

Source: Allison, Graham T. （1971） Essence of Decision: Explaining the Cuban Missile Crisis, Little Brown and Company .

鈴木 修 7/22/2020 関西学院大学専門職大学院経営戦略研究科 -5-

 ORGANIZATIONAL ROUTINES ARE THE SOURCE OF STRENGTH

“The generic term “routines” includes the forms, rules, procedures,

Definition conventions, strategies, and technologies around which organizations are
constructed and through which they operate. It also includes the structure
of beliefs, frameworks, paradigms, codes, cultures, and knowledge that
buttress, elaborate, and contradict the formal routines.” (Levitt and March,
1988, p.320)

“It (routine) may refer to a repetitive pattern of activity in an entire

organization, to an individual skill, or, as an adjective, to the smooth
uneventful effectiveness of such an organizational or individual
performance.” (Nelson and Winter, 1982, p.97)

Uniqueness in “…transmitted through socialization, education, imitation,

organizational
context
professionalization, personnel movement, mergers, and acquisitions.”
(Levitt and March, ibid)

Advantages
“We argue that the modern world favors collective actors that can
in selection demonstrate or at least reasonably claim a capacity for reliable
performance and can account rationally for their actions….Selection
within organizational populations tends to eliminate organizations with
low reliability and accountability.” (Hannan and Freeman, 1984, pp.153
-154)

Source: Nelson, Richard R. and Sidney G. Winter (1982) An Evolutionary Theory of Economic Change, Cambridge, MA: Harvard University Press.
Levitt, Barbara and James G. March (1988) “Organizational Learning,” Annual Review of Sociology, Vol.14, pp.319-340.
Hannan, M. T. and Freeman, J. (1984) “Structural inertia and organizational change,” American Sociological Review, 49(2): 149-164.
鈴木 修 7/22/2020 関西学院大学専門職大学院経営戦略研究科 -6-
 ONE WAY TO START IS
TO SHOW HOW SERIOUS OUR SITUATION IS

Looks like it’s

getting a little
hot…

To often, people are not aware the depth of their crisis

until they get boiled to death

鈴木 修 7/22/2020 関西学院大学専門職大学院経営戦略研究科 -7-

 MANAGEMENT OF CHANGE: A THORNY ROAD

Organizational development
Economic approach approach

Locus of Profit Develop employees’

manipulation competencies

Leadership Top-down Participative

Focus Structure and strategy Culture

Motivation Incentives and lead Incentives lag performance

performance

Obstacles People bad-mouth you It takes very long time…

The issue for you is which obstacles are more tolerable

鈴木 修 7/22/2020 関西学院大学専門職大学院経営戦略研究科 -8-

 THE RESULT OF CHANGE EFFORT IS AFFECTED
BY PEOPLE FACTOR

Capacity for change in individual

 Degree of employee satisfaction with the status quo
 Perceived personal risk involved in changing the status quo
 Employee expectations on the balance between change efforts
and change outcome

Capacity for change in whole organization

 Organizational culture
 Managers’ commitment
 Other factors
– Available resources
– Munificence of competitive environment
 Customers’ choice
 Competitive intensity

These items need to be thoroughly examined in

organizational diagnosis

鈴木 修 7/22/2020 関西学院大学専門職大学院経営戦略研究科 -9-

 PEOPLE NEED TO BE SUPPORTED TO OVERCOME THE
SEQUENCE OF OBSTACLES

Don’t see the Don’t Not capable Don’t see the Too afraid to
Obstacle
need for understand to change personal be the first
change what to do benefit of
changing

Support Talk, talk and Show Training Reward Prepare role

talk specific design models for
directions them

Different supports are required for each obstacle

鈴木 修 7/22/2020 関西学院大学専門職大学院経営戦略研究科 - 10 -
 DISCUSSION QUESTION
Unbundling the Structure of Inertia: Resource Versus Routine Rigidity

1. What are the differences between “resource rigidity” and “routine

rigidity”? How about similarities?

2. Why “routine rigidity” is more difficult to overcome?

3. How do you evaluate author’s recommendations? Do you agree or

disagree? Why?

鈴木 修 7/22/2020 関西学院大学専門職大学院経営戦略研究科 - 11 -
 DISCUSSION TAKEAWAY
Unbundling the Structure of Inertia: Resource Versus Routine Rigidity

Gilbert proposes to unbundle inertia into 2 sub-categories

 “Resource rigidity” hinders resource allocation for adaptation
 “Routine rigidity” maintains existing patterns of behavior,
reinforced by multi-layered interdependencies and repeated use

These 2 sub-categories differ in their effects upon perception of threat

 Resource rigidity can be reduced (i.e., financial and organizational
commitment to new initiatives expands) upon perception of threat
 Routine rigidity is exacerbated upon perception of threat
– “Contraction of authority” (centralization and increased
control) increases reliance on existing routines
– “Reduced experimentation” due to corporate control and
increased financial as well as organizational commitment
– “Focus on existing resources” resulted from the fear of
cannibalization

Both rigidities could be overcome by separating organizational units

 Maintain threat perception for flexible resources allocation
 Secure “outside influence” and “opportunity framing” to properly
adapt organizational routines to evolving environments

鈴木 修 7/22/2020 関西学院大学専門職大学院経営戦略研究科 - 12 -
 KEY MESSAGES FOR SESSION 14

Your change efforts will be strongly resisted, no matter how

appropriately and rationally they’re designed and
implemented
 Organizations are built to be stable and enduring
 Organizational inertia as a source of strength

Therefore, your change efforts should be accompanied by

extensive support for people to change
 People have millions of reasons NOT to change
 Feel necessary ≠ Understand what to do ≠ Capable to
do ≠ Accept the role ≠ Take action

鈴木 修 7/22/2020 関西学院大学専門職大学院経営戦略研究科 - 13 -