Implementing Organizational

Change: Theory into Practice

Bert Spector

Chapter 1

Organizational
Change

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 Strategic Responsiveness

Successful organizations cannot remain static if they

hope to continue that success; they must change in
order to keep up with a changing world.

n Change implementation

n Strategic renewal

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Examples of Strategic
Responsiveness
Company Altered Strategy
Move from product to
IBM
service/consulting company
Move from providing DVDs through
Netflix mail to providing streaming on-demand
entertainment
Move from French-based to
Renault international-focused automobile
company
Move from selling through third parties
Pandora
to selling directly to end users
Move from restricted, college campus
Facebook only social network to become a
“universal utility” open to everyone

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Building a Vocabulary

n Turnaround: an attempt to improve the

immediate financial position of an
organization by focusing on the income
statement and the balance sheet
n Techniques and tools: organizational
processes, mechanics, and other interactions
intended to produce a product or service

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Three Faces of Change

Type Target Rationale

Improve short-term
Turnaround Internal resources bottom-line
performance

Tools and Increase internal

Processes
techniques efficiency

Enhance human
Transformation Behaviors
capabilities

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Popular Change Tools and Techniques

Company
Tool Key Points
Examples
Globe Metallurgical, Inc.
Align operational processes with the
Motorola
Total Quality Management requirement for customer-defined quality
Westinghouse
and continuous improvement.
GKN Aerospace
A process for product development, mainly
PNC Financial
Agile Development software, based on collaborative cross-
Acxiom
functional team effort.
Use of a measurement system that balances VW of Brazil
financial objectives alongside internal Ricoh
Balanced Scorecard business process, customer satisfaction, Weichert Relocation
and employee learning and growth.
Capture value by linking and coordinating ComputerWorld
the primary activities—inbound logistics, IBM Electronics
Value-Chain Integration production, outbound logistics, marketing, Microsoft
and sales—of the organization.
Sealy
Eliminate activities that do not add value
Lean from the perspective of the customer.
Toyota
Conmed
Ecological impact is considered at Nike
Considered Design beginning of new product design process Hewlett-Packard
rather than as an afterthought. Ford

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Transformational Change
n Effective strategic renewal efforts combine aspects
of turnaround, tools and techniques, and
transformational behavioral change.
n Transformational organizational change seeks to
create long-term, sustainable alterations in
employee behaviors.
n The way employees conduct themselves at work
impacts the bottom-line performance of the
company.
n Behavior comes from both the individual and the
organizational context in which the individual works.

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Building a Vocabulary

n Behavioral change: alterations in

employee behavior in order to enable the
organization to meet the demands of its
strategy while achieving and sustaining
outstanding performance
n Behavior: the enactment of roles,
responsibilities, and relationships by
employees within an organization

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Building a Vocabulary
n Organizational context: the setting and
circumstances in which employees work.

“Organizational culture and values,

the behaviors of leaders, as well as
rules and procedures to define a
context that shapes how employees
enact their roles, responsibilities,
and relationships”

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Sources of Behavior

Individual Organizational
Characteristics Context

Behavior
Organizational change seeks to
create long-term, sustainable
alterations in employee behaviors.

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Building a Vocabulary
n Resistance: efforts exerted by
employees either overtly or covertly to
maintain the status quo.

“Employee response to change runs across a

broad spectrum, ranging from commitment at one
end to aggressive resistance” on the other. Each
of these reactions to change helps shape the
behavior of individuals and, ultimately, the
success of a change effort.”

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Underlying Causes of Resistance
n Individuals may be satisfied with the status quo.
Because their needs are being met, they may view
any potential change as negative.

n Individuals may view change as a threat, fearing it

will adversely affect them in some significant way.

n Individuals may view change as potentially positive,

but may still resist because they believe that the
organization’s management is mishandling the
change process.

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Participation: A Key to Effective Change

n Participation: the process of allowing

employees a voice in work-related decisions.

“By diagnosing problems, understanding their

importance, and being part of the process of
formulating solutions, people develop a
psychological sense of ownership over the outcome.”

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Participation truths

Imposing change from above can

lead to employee resistance.
and
A participative process can help
build support for change efforts.

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Management’s Role in Creating
Resistance
Text in this color
Resistance Cause
Satisfied with status quo Employees not included

Employees see little opportunity to

Change is perceived as threat
get required skills

Cost outweighs benefits Inadequate articulation of goals

Belief that management is Employees’ voice and interest not

mishandling the process being included
Past change efforts lack sustained
Employees doubt success
success

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Building a Vocabulary
n Trigger event: a shift in the environment
that precipitates a need for organizational
change

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Reasons Why Globalization Might
Require Change
n They may seek to outsource certain activities that
had previously been performed in the home
country.

n They may seek to enter new, nondomestic markets.

n

n They may seek to locate research and development

activities in multiple nations as a way of better
understanding the needs of nondomestic customers.

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Strategic Renewal and
Organizational Change

Shifting Competitive
Environment

Strategic Organizational
Renewal Change

New
Opportunities
Altering Behavior
Patterns of
Employees

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