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Change Management Change .Management DIPL.

-ING VERENA MANNINGER
DIPL.-ING. ELISABETH PLANKENAUER HON. PROF. DIPL.-ING. DR. ALFRED JANES
Lecture VERENA 2011/12 DIPL.-ING. Notes WTMANNINGER

Lecture Notes WT 2010/11

Institute of Production Science and Management
Member of Frank Stronach Institute [FSI]

Univ.-Prof. Dipl.-Ing. Dr.techn. Christian Ramsauer i

TABLE OF CONTENTS
TABLE OF CONTENTS ............................................................................................................................... II 1 THEORETICAL BASICS ON ORGANIZATIONAL REDESIGN ............................................................ 1 1.1 Drivers for Organizational Redesign .............................................................................. 3 1.1.1 1.1.2 1.2 Internal Drivers ................................................................................................. 3 External Drivers ................................................................................................. 3

Organizational Redesign ................................................................................................ 6 1.2.1 1.2.2 1.2.3 Organizational Development ............................................................................ 7 Change Management ........................................................................................ 9 Transformation Management......................................................................... 10

1.3 1.4 2

The Model of Transformation Energy.......................................................................... 12 Change Formula ........................................................................................................... 15

MODELS FOR ORGANIZATIONAL REDESIGN ............................................................................. 16 2.1 2.2 2.3 The Eight-Stage Process Model by KOTTER ................................................................. 16 The Three Step Model by LEWIN ................................................................................. 21 The Congruence Model by NADLER and TUSHMAN.................................................... 23

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STRUCTURE AND ORGANIZATION OF CHANGE PROJECTS ....................................................... 25 3.1 3.2 Role Models and Characteristics ................................................................................. 25 Stakeholder Analysis .................................................................................................... 30

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HANDLING EMOTIONS AND CONFLICTS................................................................................... 32 4.1 4.2 Handling a conflict by structuring the process ............................................................ 32 Handling a conflict by rules.......................................................................................... 34

LIST OF FIGURES .................................................................................................................................... 38 LIST OF TABLES ...................................................................................................................................... 39 LIST OF REFERENCES .............................................................................................................................. 40

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1 THEORETICAL BASICS ON ORGANIZATIONAL REDESIGN
The term change is used in various contexts today. When managers and consultants talk about changes, they mean different concepts, such as evolution, change management, organizational development, modification, transformation or crisis management. This chapter aims to clarify the most relevant terms. Change Management or Organizational Management is the management technique that deals with steering of organizational changes. Changes may occur proactive (e.g. mergers and acquisitions, growth) or are initiated as reactions to crises.1

Figure 1.1 Aspects of Organizational Redesign

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Organizational redesign does not take place without considering the human factor. Therefore it basically affects the following components: 3

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LAUER, T. (2010), pp. 3-5 LAUER, T. (2010), p. 6 3 LAUER, T. (2010), pp. 6-7

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1. Individuals: Without active participation of individuals, organizational redesign would not be possible. Individuals have to develop abilities that welcome adoptions to new challenges as well as positive attitudes to the goals of the change. 2. Structures cover the company organization structure as well as the process organization, strategies and resources. The transformation of the corporate structure seems simple since it is easily implemented on the paper – the informal structures often react against these changes. 3. Culture: The persistent, more informal structures which are responsible for values are called corporate culture – the culture is most often independent from individuals.

Organizational redesign that only focuses on individuals and corporate structures is most often problematic. All three aspects have to be considered in order to ensure a successful organizational redesign project. Figure 1.1 demonstrates the three aspects of organizational redesign.

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(2001). since the hedgehog rolls itself up and withdraws from the environment when dangers from outside appear. M. outsourcing. concentration on core competences. 4 1. which requires new structures and processes. etc. LAUER. They need a market for their survival. 18-21 LAUER.1 Drivers for Organizational Redesign Organizational redesign may be caused by two different aspects. This chapter deals with both aspects – internal and external drivers of transformation activities. Some changes may be necessary because of the normal lifecycle of an organization.1. In the context of organizations. organizational redesign might be necessary when an organization is growing. SCHULTE-DERNE. processoptimizations. T.1. K. A. PRAMMER. new processes. Further internal drivers for transformation projects are mergers and acquisitions.1. 12-13 3 . 4 5 JANES. 1. (2001).2 External Drivers Companies as open systems: Organizations and companies are embedded into the market. pp. When it grows. structures and sometimes a new corporate culture have to be implemented. An organization’s environment is always in move and companies may react in two ways on this dynamics: 5 • Isolation from the environment (as much as possible): This way is also known as “hedgehog-tactics”.. • Adaption to the changing environment: Organizations that cannot take the isolationmethod have to adapt to their changing environment to ensure a successful survival. pp. due to necessary adoptions to the changing environment of the organization and second.. First. this approach is only applicable with reservations. (2010). T.1 Internal Drivers Organizational change processes may be caused by internal factors. introduction of project management.

and the fall of communist and social regimes worldwide. and reduce new-product development times by 30 to 80 percent. over the course of eighteen to thirty-six month.Based on the second aspect. organizations need to deal with more and more complexity.2) “People of my generation or older did not grow up in an era when transformation was common. would be trying to increase the productivity by 20 to 50 percent. improve quality by 30 to 100 percent. don’t fix it. If you had told a typical group of managers in 1960 that businesspeople today. the norm back then was stability and the ruling motto was: ‘If it ain’t broke. With less global competition and a slower-moving business environment. Following list shows some drivers according to the second theory (adaption): • • Change in market-conditions Globalization • • • • • Virtual project management Leading intellectual teams Knowledge management Management training New legal entities • Privatization: monopolists become competitors • • • Change of Leadership New technology New ways of working KOTTER summarized the main forces for globalization that require organizational redesign activities in four categories: the technological change. they would have laughed at 4 . maturation of markets in developed countries.’ Change occurred incrementally and infrequently. (see Figure 1. international economic integration.

19 5 . (1996). 17-20 KOTTER. J.” 6 Figure 1.P. (1996).P.you. pp. That magnitude of change in that short a period of time would have been too far removed from their personal experience to be credible. p. J.2 Economic and Social Forces Driving the Need for Major Change in Organizations 7 6 7 KOTTER.

3 shows the three approaches regarding two aspects – the integration of the involved people and the speed of the process. They do not automatically change or grow according to natural laws. pp. and transformation management. (2001). PRAMMER. Furthermore. A. This basically means that change is neither good nor bad – sometimes it is necessary to survive.2 Organizational Redesign Organizations are social systems that do not have a “change-gene”. Organizational Redesign has to deal with three issues: 8 • Process Design: One central aspect in organizing change projects is the process design which has to consider various aspects. Another important topic while designing the process is the roles of externals and internals and to consider emotions from the beginning of the process. Employees only welcome change when they see an advantage for them. change management. information and concepts. M. Change is necessary in order to ensure the organization’s survival. • Emotions: Every change process within organizations has to deal with emotions of various types. It is an essential tool to gain preconditions for the change process within the organizations. The results of a learning design often lead to organizational rules. Organizational redesign has to deal with the problem of increasing pace – the development of the different approaches of organizational redesign is a response to the speed of the economic world today. • Learning Design: The learning design considers possibilities to deal with new views. How the affected people deal with changes is most often influenced by feelings. 8 JANES. responsibilities and tasks are shared within the project team. Figure 1... The following sections describe the three approaches of organizational redesign: organizational development. K. how competences.1. 12-15 6 . the process needs a clear structure and a predefined timeframe. It has to be clarified. SCHULTE-DERNE.

organizational development and change process of organizations and its employees.1 Organizational Development In the 1970ies a new form of corporate development established which was called organizational development.2. Change Management (CM). 89 7 .Figure 1. and Transformation Management (TM). C. but also taking into consideration individual expectations of managers. DOPPLER. K. This process relies on 9 Cf. (2008). The main focus of this approach was not only to concentrate on structural and economic dimensions when doing analyses and deriving development processes in organizations.3 Acceleration and Integration – two basic aspects of ORD concepts Three concepts should be clarified here in regards of organizational redesign: Organizational Development (OD). institutions and departments. 9 Organizational development can be defined as long-term related. 1. p. employees and directly affected people in the same level. LAUTERBURG..

the different transformation goals are not defined by externals (e.learning of all affected people through to direct involvement and practical experience. consultants) or by the management – goals are developed together with the involved people. C. Furthermore. A. p. (2008).. pp. the theory says that the time-period of such a process is unlimited. 10 11 DOPPLER. and accumulation of the characteristics which prove to be superior in the battle for survival. M. This process of adaption is regulated by the random generation. K. groups. K. Its goal is to improve the effectivity of an organization. The central focus of organizational development is the reflection of what exists and what is necessary in order to survive. while improving the quality of the organizational culture. regulating and shaping organizational development processes always means to regulate the reflection and the learning process of people. The main principles of organizational development are: 11 • • • To preserve the cultural identity of the affected organization/system To involve everyone affected to actively participate and carry out changes by themselves To regulate and shape the actions necessary for continuous changes in a process-like manner The paradigm on which organizational development is based on is Darwin’s theory of evolution which states that development is the process of a species adapting to its environment. developmental approach. changes are integrated into an organization’s long-term development process. and organizations concerned. 89 JANES. Transformations do not mainly aim to increase the productivity and fulfill the interests of the shareholders but at the same level of importance to increase the prosperity of the affected employees.g. SCHULTE-DERNE.. (2001). evolutionary. 4-5 8 . 10 According to the organizational development approach. This approach was more a philosophy than a concept with tools and methods to ensure a quick and successful transformation process. Furthermore. selection. PRAMMER. The concepts of organizational development have been influenced by a process-like. LAUTERBURG.. Basically.

structures. nanotechnology. This requires a new method how to deal with changes. Especially in the early stages of the process (information gathering. (2008). 5-7 9 . SCHULTE-DERNE. Firms have to adapt their processes to fit to and survive in its environment. They no longer cooperate with the heads of education. organizational and personnel development departments of the organizations but with the operational managers. step-by-step adoption but rather the powerful. analysis). and radical innovation. branch comparison. volatile change of the internal and external general framework of an organization which breaks with tradition. K. These projects are no longer driven by adoptions but by frame-breaking. etc. re-engineering.. benchmarks and best-practice concepts. new and rapidly changing forms of collaboration (co-operations. global political and economic conditions (laws. The affected organization aims to speed up the implementation of concepts and to break away from old process analysis methods. 13 The content of the transformation processes are based on goals that have been developed outside the system.2 Change Management Organizations today are increasingly influenced by external factors: technological developments (information & communication technology. LAUTERBURG. global competition. fast. C. PRAMMER. 12 Consultancy firms are no longer socio-psychologically / systemically oriented. The driving force behind the changes is not the organization member’s potential for reflection but the energy of the managers that are responsible for the transformation. even people from various hierarchical levels are involved 12 13 DOPPLER. shared value chains). A. Organizational development as implemented in the 1960ies and 1970ies was strongly focused on internal aspects: employees. pp. 96 JANES. based on as-is analyses. The underlying paradigm of the change management approach is no longer the continuous. labor costs. M. business fields. K. (2001). Today... structures and processes. change management has to go further and consider external factors as well. tax policy). Usually. alternative energy). they are brought in by external consultants and are then cleared with the management of the organization.1. pp. alliances.2. External consultants develop new business processes.

as humans. Today. (2008). processes. One or more managers from outside start the transformation process of the organization. 6-7 DOPPLER. pp. Transformation management is characterized by constantly process reviews during the important stages of the process. External consultants never make decisions that influence the affected people inside the system (as it is done in change management). have to develop concepts and processes that ensure the active participation and survival at the global markets. M. In contrast. pp. 14 1.. 95-96 10 . (2001). Change management projects might on the other hand often source problems and come to a standstill in the implementation phase.2. C. All further measures and decisions resulting from this initial commitment are recursively regulated: those that decide are always affected directly by what they decide. 14 15 JANES. K. The basic approach and the timeframe of the project have been committed by managers and external consultants. It combines aspects of organizational development and change management. the big strength of organizational development is the involvement and collaboration of the affected people in the change process.3 Transformation Management The original concept of organizational development has a deep focus on internal aspects.. LAUTERBURG. change management is far beyond that: Firms have to focus on its environment. a third approach of organizational redesign is to be discussed here – transformation management. K. Contrary to the organizational development approach – the concerned on the inside constantly make decisions affecting people on the inside.into the process. and structures. and internal reorganizations. product reassessments. A. SCHULTE-DERNE. 15 Comparing the two approaches of organizational development and change management. Therefore.. change management’s advantages are the dynamics and the speed of the change process. The disadvantage is that these processes are socially complex and might become tedious in the case of large projects. Examples of change management projects are mergers. Transformation management is not very different to the change management approach in the initial phase. outsourcings. PRAMMER.

Organizational Development Process Logic Pre-existing system logic Ideas are generated by the system itself Transformation Management Uses a combination of internal and external logic in order to create a tailor-made solution Change Management External logic imposed on the system Internal stakeholder involvement Total internal integration the of whole Internal different stakeholders tasks at Internal of stakeholders and stakeholders continuously involved in different times. Active evolutionary Fast – Start-Stop changes combined with step-wise changes Design Method Re-design reflection by internal Initial setting external goal External goal setting Co-operative process of goal identification and/or acceptance Time perspective Focus Long-term Area Development of – Middle – long-term Concerns Positioning. single Segment. Short – middle-term M&A. Market Business Structures.1 Overview about the three approaches of organizational redesign 11 . but all types of involvement are possible only involved in provision information analysis throughout process Process characteristics Flowing evolutionary process. Reduction. Cost- organizational development organizational units Outsourcing. Corporate Culture Table 1. Reorganization. BusinessProcess Optimization Restructuring.

PRAMMER.4 illustrates the model of transformation energy which outlines three aspects of change: the current situation (or situation before the transfer). SCHULTE-DERNE. A. Furthermore. Figure 1. M.. K.4 The Model of Transformation Energy (Transformation Energy Curve) 16 Figure 1. According to that following preconditions have to be given: 16 JANES. p.1. 19 12 . it is important to provide conditions that ensure a successful transformation process.3 The Model of Transformation Energy Organizational redesign and transformation requires a level of energy in order to ensure that the change is geared towards a common goal within the system. The involved people have to deal with following questions: • • • What are the deficiencies of the current situation? Is the expected situation attractive? What about the path between current and expected situation? Is it feasible and attractive? Experience shows that at least two of these questions have to be answered positively in order to ensure a successful transformation. (2001).. the expected situation (after the change) and the path between current and expected situation.

also on how the involved people assess the feasibility of the planned changes. JANES. It is not enough to have an attractive way to the expected situation and the expected situation is attractive. SCHULTE-DERNE. People are only motivated to change something.. transformation energy is not given if the expected situation is not attractive. PRAMMER. Every transformation requires deficiencies of the current situation. the path between current and expected situation seems feasible and the expected situation is attractive enough. M. The more aware the affected people are. p. (2001).. 20 Cf. M... especially experiences from previous 17 18 Cf. 17 Evaluation of the Expected Situation/Vision On the other hand. • All three aspects are given – the current situation shows deficiencies. (2001). A. 18 Evaluation of the Path The involvement of groups and individuals in change processes depends. if there is a visible deficit in the current situation. A. 21 13 . p. the more likely they welcome change initiatives. Even if the current situation is really problematic. K. K. Here. The current situation shows deficiencies and the path to the expected situation seems feasible and attractive. Evaluation of the Current Situation For analyzing the current situation. Without an explicit (or at least an implicit) awareness about weaknesses of the current situation. PRAMMER. besides to the need for change and the attractiveness of the expected situation. if the desired situation is not attractive enough there is as well not enough energy for a change. it is important having access to relevant information in order to be able to identify deficiencies.• • The current situation shows deficiencies and the expected situation seems attractive. SCHULTE-DERNE. JANES. no energy for transformation (within the system) occurs.

(2001). PRAMMER. A highly attractive vision may influence an assessment of deficiencies and may release additional energy for the transformation.projects play a significant role. Furthermore. a positive path may be ensured by designing a slow step-wise process that provides clear structures and short-term wins. SCHULTE-DERNE. 19 Cf. K. the vision and the path) play a significant role when analyzing the transformation energy for an organizational change. This may also be true the other way around. M. 19 All single aspects (the current situation. A.. p. JANES. 21 14 ..

(2009).1. R. 20 21 CAMERON. HARRIS. B. p. If any person or group whose commitment is needed is not sufficiently dissatisfied with the present state of affairs [A]. T. although very simply.. as shown in Figure 1. and secure the need for commitment from the resistant party. Figure 1. […] resistance is normal and to be expected in any change effort.” This implies that all of the three factors need to be considered and it provokes major problems of the likelihood of change if that is not the case. 117 BECKHARD. and D must outweigh the perceived costs [X] for the change to occur. reduce it. F. This formula expresses in a very incisive way the identified factors which are crucial for a change to happen. eager to achieve the proposed end state [B] and convinced of the feasibility of the change [D]. (1987) 15 . and that person will resist the change. M.5: Beckhard’s and Harris’ change formula 20 Beckhard and Harris are explaining this formular in the following way: 21 “Factor A. extremely useful as it can be easily integrated at any stage of a change process and explained to all parties involved. GREEN. In short. therefore each of them need to be emphasized.4 Change Formula According to these considerations BECKHARD and HARRIS developed the so called change formula. R.5. E. the factors A. then the cost [X] of changing is too high. This formula is. Resistance to change takes many forms.. B and D do not compensate for each other. change managers need to analyze the type of resistance in order to work with it.

However. the perspective of the authors varies. The following chapter contains three different ORD models in order to provide an overview about the common processes. J.000) Error #5: Permitting obstacles to block the new vision Error #6: Failing to create short-term wins Error #7: Declare victory too soon Error #8: Neglecting to anchor changes firmly in the corporate culture Making any of those mistakes can provoke serious consequences such as not well implemented new strategies. ORD models are crucial in order to understand and structure a change process. (1996). Although some aspects can be found in several models. including the eight-stage process model by KOTTER. p. KOTTER. 16 16 .2 MODELS FOR ORGANIZATIONAL REDESIGN In order to drive the change.1 The Eight-Stage Process Model by KOTTER The development of the eight-stage process model started with the question “Why firms fail” at a change process. not getting costs under control by downsizing and not delivered hoped-for results by quality programs. KOTTER discovered that there are several common made errors which he describes as follows: 22 • • • • • • • • Error #1: Allowing too much complacency Error #2: Failing to create a sufficiently powerful guiding coalition Error #3: Underestimation the power of vision Error #4: Undercommunicating the vision by a factor of 10 (or 100 or even 1. 23 22 23 KOTTER. J. P. different models which are leading to a successful change are proposed by various authors. (1996). P. too long and too costly reengineering. pp. 4 Cf. not achieved expected synergies through acquisitions. 2. the three-step model by LEWIN and the congruence model by NADLER and THUSHMAN.

Create a vision .Assembling a group with enough power to lead the change effort . manager or strategic-planning executive rather than a senior line 3.Teaching vision new behaviors by the example of the guiding coalition 17 .Examining market and competitive Pitfalls . Stage 1. The eight stages are supposed to be passed through in sequence.Based on those considerations.Encouraging the top work .Identifying driving people from their comfort and discussing crises. KOTTER developed the eight-stage change process associated with the eight most often made errors mentioned above while clearly emphasizing that change is not an event.Undercommunicating the vision . although it even can be operated in multiple phases at once.Underestimating the difficulty of realities .Using every vehicle possible to .Presenting a vision or that’s to too be change effort .No prior experience in teamwork at potential crises or major opportunities .Creating a vision to help direct the .Relegating team leadership to an HR. Each stage requires specific actions needed and has common pitfalls. the group to together as a team quality. but missing even one single step or progressing too fast without a solid base almost always causes problems.Developing strategies for achieving complicated vague communicated in five minutes that vision 4.Behaving in ways antithetical to the communicate the new vision and strategies . as described in detail in Table 2. but rather a process. Form a powerful guiding coalition Actions Needed .1. Communicate the vision .Becoming paralyzed by risks . Establish a sense of urgency 2. zones .

3 and p. Plan for and create short-term wins 7.Using increased credibility to change . and change agents 8.Declaring victory too soon – with the systems.Hiring. 7 18 . and actions 6.Reinvigorating the process with new projects. P.Promoting people into leadership leadership succession development and positions who don’t personify the new approach 24 Table 2.Leaving short-term successes up to improvements .Encouraging risk taking and nontraditional ideas. (2007). Consolidate improvements and produce more change . activities.Planning for visible performance .5.Failing to score successes early enough involved in the improvements . themes.Articulating the connections between .Changing systems or structures that .Getting rid of obstacles to change . Institutionalize new approaches .Not creating new social norms and the new behaviors and corporate success .Creating those improvements . and policies that don’t fit the vision .Failing to remove powerful individuals who resist the change effort seriously undermine the vision . J.Allowing resistors to convince “troops” that the war has been won employees who can implement the vision . p. promoting.1: The eight-stage process of creating major change according to KOTTER 24 KOTTER. and developing first performance improvement .Developing the means to ensure shared changes values consistent with . structures.Recognizing and rewarding employees chance . Empower others to act on the vision .

Create a crisis by allowing a financial loss. productivity. Send more data about customer satisfaction and financial performance to more employees. 5. Use consultants and other means to force more relevant data and honest discussion into management meetings. Insist that people talk regularly to unsatisfied customers. gourmet executive dining rooms). 4. Too much sources of complacency exist. J. unhappy suppliers. Stop measuring subunit performance based only on narrow functional goals. and cycle-time targets so high that they can’t be reached by conducting business as usual. a large air force. 25 KOTTER. especially information that demonstrates weaknesses vis-à-vis the competition. customer satisfaction. (1996). company-owned country club facilities. 44 19 .g. therefore it is absolutely crucial to push up the level of urgency at the very beginning of a change process. income. KOTTER determines the following nine possible ways: 25 1. and disgruntled shareholders. Eliminate obvious examples of excess (e. 2. Bombard people with information on future opportunities. 8. 3.There are a lot of reasons why people are more afraid of a change and rather stick to the well-known ways of doing things. or allowing errors to blow up instead of being corrected at the last minute. Stop senior management “happy talk”. p. on the wonderful rewards for capitalizing on those opportunities. Put more honest discussions of the firm’s problems in company newspapers and senior management speeches. exposing managers to major weaknesses vis-à-vis competitors. 6. 9. Set revenue. P. Insist that more people be held accountable for broader measures of business performance. 7. and on the organization’s current inability to pursue those opportunities.

27 26 27 Cf. 26 The eight-stage model by KOTTER is directed towards a managerial perspective and is a very practical approach. 114 20 . The key lessons for a successful change derived from KOTTER’s consulting experience are converted into a useful process model. J. However.. KOTTER. skipping stage one always seems to catch up and cause major troubles when facing the first problems. p.Some initial movement may also be achieved with a low level of urgency and people are tempted to directly move on to stage two. M. P. CAMERON. GREEN. (2009). 49 Cf. (1996). pp. E.

110 LAUER. p.1: Lewin’s force field analysis 28 LEWIN emphasizes that in order to realize a successful change.. (2010). or better. etc. to actually make changes and involve the people. In the course of this he also established the force field analysis. (2009). GREEN. including the definition of the current state. increasing respectively decreasing the driving and resisting forces. 29 This force field analysis is an integrated part of LEWIN’s three-step model. Figure 2. In the first step the major task is to unfreeze the status quo. new technologies.2. either the driving forces need to increase or the resisting forces need to decrease. as well as from internal occurrences. Figure 2. M. plus defining the desired end state. which is shown in Figure 2. Once unfreezed the status quo. the next step is to move. T. p.1 shows an example where the change is to speed up the executive reporting process. Increasing forces can derive from external sources such as environmental changes. whereas the basic principle is that the driving forces for a change must overbalance the resisting forces against it. analyzing.2. E. LEWIN’s model concludes 28 29 CAMERON. both of it takes place. 56 21 .2 The Three Step Model by LEWIN LEWIN developed a model of organizational change which today is well known and also often used by managers.

Because of the natural tendency of an organization to go back to the original steady state where it has been before the change. pp. establishing new way of things plus rewarding the success. M. p.2 Lewin’s three-step model The three-step model by LEWIN emphasizes the very last step. GREEN. (2009). i. E.31 30 31 CAMERON. 111 22 . M. GREEN. 110 CAMERON.with the third and last step which is to refreeze the new standards. this step is at least as crucial as unfreezing the current status and moving it towards the desired status.. to refreeze the new status quo.. (2009).e. E. 30 Figure 2. focusing on making the change permanent.

How are things formally organized? 32 33 NADLER. as illustrated in Figure 2. M. the emphasis is put on the elements the organization consists of.3: Congruence model by NADLER and TUSHMAN 32 These elements which cannot be considered isolated but depending on each other are described as follows: 33 • Work: This is the actual day-to-day activities carried out by individuals. Therefore... p. GREEN. (2009). systems and policies in place. A. (1997) CAMERON. D. what are their backgrounds? • Formal organization: This refers to the structure. Process design. which involves work and people as well as the formal and informal organization. pressures on the individual and available rewards must all be considered under this element. E. 120 23 . • People: This is about the skills and characteristics of the people who work in an organization. M.3 Figure 2. L. What are their expectations.3 The Congruence Model by NADLER and TUSHMAN The change management model by NADLER and TUSHMAN provides a more system-oriented instead of a process-oriented perspective.2. TUSHMAN.

the components depend on each other. in the retro perspective this model helps to analyze why changes failed. As mentioned above. A very similar approach is established by McKinsey named the seven ‘S’ model. this means that an effective management of change has to be addressed to each of them. use of resources Structure: the organization chart 34 PASCALE. the building of a guiding coalition are missing in this model.• Informal organization: This consists of all the unplanned. It also represents the various parts of an organization as interconnected and interdependent subsystems. (1990) 24 . influence.g. unwritten activities that emerge over time such as power. What is more. However. The seven ‘S’ are to be understood as abbreviations for the following categories: 34 • • • • • • • Staff: important categories of people Skills: distinctive capabilities of key people Systems: routine processes Style: management style and culture Shared values: guiding principles Strategy: organizational goals and plan. values and norms. which provides a useful checklist for those who want to make the change happen. the setting of goals or e. R.

A. Therefore. R. i. p.1 Role Models and Characteristics Within a change project. There are various relevant roles that are responsible for leading a change successfully as named in the following: 35 • • • • • • Patron Project team Project leader Decision making board Consultants Sounding board The following chapter provides an overview about the role models and explains their characteristics more detailed. EXNER. KÖNIGSWIESER. Specific structures need to be designed and organized to make a change project work. the “normal” organizational structures and the implied forms of communication are no more adequate. 35 Cf. 50 25 . in order combine them with the requirements from inside. (2008). from the outside. it attempts to explain the very specific structure and organization of change projects from an internal and external perspective.3 STRUCTURE AND ORGANIZATION OF CHANGE PROJECTS This chapter introduces different role models within change projects in the first place and concludes with a stakeholder analysis. The first part dealing with “Role Models and Characteristics” introduces the relevant roles which can be identified in a change project and discusses its characteristics. 3.. Later on. the “Stakeholder Analysis” represents a very useful tool for the identification and structuring of the different expectations of the affected stakeholders.e.

EXNER. the following points are of very high importance: • Find the right people .Appealing to the heart 36 37 Cf. p. but to build a coalition that can make change happen.With strong position power. especially the former • Create trust . R. p. KÖNIGSWIESER. 37 The project team is basically in charge of making the change happen and developing possible solution concepts.Sensible to the head . (1996). 51 KOTTER. (2008). Patron.Through carefully planned off-site events . Project Team. 36 The main functions of a patron are: • • • • • • Initiate the project Define the strategic orientation Define the project’s size and relevance Provide the budget Control the process and the results Role model and managerial function 2. P. and high credibility . broad expertise. J.With lots of talk and joint activities • Develop a common goal . 66 26 . A.With leadership and management skills..1. But in order that the project team does not consist of lone individuals.

to define the problems. KÖNIGSWIESER. P. 51 Cf. of the strategic and operative business. pp. Further. p. (1996). SCHULTE-DERNE. as their role is expected and perceived in various 38 39 Cf. 52 40 Cf.. the project leader enforces the decisions of the decision making board and takes the necessary steps and initiatives for their implementation. R. Further. JANES.. to set the goals. (2008). there is also a very close co-operation between the project leader and external consultants. the crucial functions are: • • • • Co-operating coordinator and facilitator Contact point to the external consultants Contact point to the internal organization Organizer 4. Consultants.. What is more. The main responsibilities are: • Management function: prepare and make necessary decisions. Project leader. The role of the external consultant has to be clarified as early and concrete as possible in the course of a change project. p. 5. EXNER. Decision making board. 40 Basically consultants are incorporated in a change project in order to clear the content. i. K.e. M. (2001).3. KOTTER. Therefore. to co-operate with the patron or other affected people such as employees or leaders. consultants can also be involved in order to develop the structure of the project’s process. A. However. 38 The project leader is in charge of the management of the project. which is made much easier when setting up clear defined contracts. it is not required to take over all accruing tasks – but. 31 27 . ensure the operative implementation • Controlling function: integrate feedback loops in order to see how the current change management process is performing or respectively if there are troubles and therefore intervene if necessary. to take over the responsibility that they are fulfilled on a high quality level within time and resource limits. A. 39 The decision making board is usually made up of 2-3 senior managers. J. PRAMMER.

instructions/recipes advices/expertise. observing Advising Answers. i.1: Comparison of different styles of consulting 28 . which are described in Table 3.The client for its implementation (this can even vary) Table 3.The client for the decision making solutions and the decisions . counseling and advising. Counseling Asking. There are two basic styles of consulting.ways.The consultant for the process and the .1. Primary consultant instrument Hypothesis Interventions Orientation models Intention Aid to self-help Facilitating the (internal) experts to bring Outside-help Bringing the best solution on the table of the patron / decision-making-board Solution the best solution(s) on the table of the patron or the decision-making-board .The consultant for the finding of Responsibility instruments .e.

As the decision making board cannot represent all relevant concerns within a company. etc. EXNER. KÖNIGSWIESER. Sounding board. R. important people or informal leaders.. to act as a sounding box. 41 The sounding board can be made up of members of the decision making board. necessary initiatives. the sounding board aims at supporting the decision making board. (2008). 41 Cf. 53 29 . The sounding board is basically supposed to “sound”. i.6. A. feasibility. the work council as well as other key persons. Their main functions are: • • Feedback of the perceptions concerning the project from different perspectives Information about the implication and the progress of the project in specific parts • Guidance and advices regarding previous defaults. the executive board.e. pp.

JANES. 2. K. Significance Depict the stakeholders with circles of various sizes. Emotional reliance Arrange the circles in different distances to the centre (=system). (2001). A. especially in the beginning. It attempts to link the outside view to the inside view. the more emotional reliance to the system is given 4. A stakeholder analysis aims to support strategic decisions about the change by combining the expectations from outside with requirements from inside. Preparation Collecting the relevant stakeholders and choose the 6-8 most important ones..2 Stakeholder Analysis The stakeholder analysis supports the identification and structure of the different expectations of the stakeholders influenced by a change. It is a tool that helps. pp. 1 line = rarely 2 lines = normally 3 lines = frequently 42 Cf. SCHULTE-DERNE. 44-47 30 . Frequency of contact Connecting the circles with the system in the centre by using 1-3 lines..3. Size of the circle = significance for the system’s survival in the long term 3. PRAMMER. with the plans for change projects. The lines represent the frequency of contact to the stakeholder. M. The closer the circle is arranged. Following steps have to be observed: 42 1.

It is important keeping in mind the different stakeholders and their expectations during the whole change process. it shows which expectations have to be fulfilled in order to survive now and in the future.5. Quality of relationship Supplement the quality of communication using symbols of “emotional bias”:   ~ conflicts in communication positive communication indifferent 6. 31 . Furthermore. Expectations Using keywords about the stakeholder’s expectations from the system (and vice versa) The stakeholder analysis gives an overview about the various stakeholders and therefore answers in a single view which relationships are more important to the system and which are less.

because a change by itself induces fear concerning the new.1 Handling a conflict by structuring the process In order to handle respectively prevent a conflict a priori. which is emphasised in literature by various authors. the emphasis has to be put on building up and creating appropriate organizational structures for the change project. chapter 3 contains different role models within a change process plus their characteristics. However. Therefore. This refers of course to the project team respectively the guiding coalition itself. Because of that. the major question is how to deal with those arising conflicts. there are some crucial issues which need to be taken into account. This chapter presents two ways of dealing with conflicts in change projects. First it is by structuring the process in an appropriate way. and proceed according to it. they are real… 4. To start with. Additionally. 32 . it is crucial to introduce a change process. such as they are described in detail in chapter 2. concluding with all relevant stakeholders which are affected by it. • • • Introduce a change process at the very beginning and proceed according to it Building up and creating appropriate organizational structures for the change project Empowering people for a broad-based action To impede conflicts as good as possible from the very beginning. but also to other representatives of the affected system. • • • There are two contradicting interests coming up. the second part of this chapter provides certain rules how to deal with them. it is crucial to understand the nature of a conflict. both of them are true. with each person (or some persons) is (are) identified with. Therefore. which is based on the following considerations. if still some conflicts arise. which prevents conflicts a priori.4 HANDLING EMOTIONS AND CONFLICTS Change projects are by nature predestinated to provoke conflicts at some point of time.

(1996). 43 44 KOTTER. creative restlessness and eagerness to experiment are necessary characteristics of a changeculture. Pioneering spirit. is based on an established change-friendly corporate culture.. for making employees accept and support a change project.44 • Communicate a sensible vision to employees: If employees have a shared sense of purpose. As with discouraged and disempowered employees an enterprise can never become a winner in a globalising economic world. P. traditions and habits have to be replaced by something new. • Confront supervisors who undercut needed action: Nothing disempowers people the way a bad boss can. C. people feel disempowered. pp.KOTTER 43 particularly focuses not only on building the guiding coalition. • Make structures compatible with the vision: Unaligned structures block needed action. J. Different meanings. • Align information and personnel systems to the vision: Unaligned systems also block needed action. regulations. • Provide the training employees need: Without the right skills and attitudes.e. Change-friendly organizational culture The crucial fundament for realizing an appropriate structure. This is not often possible to realize without conflicts. but also on empowering people respectively employees for a broad-based action and support. 115 45 DOPPLER. • Ability to handle conflicts: If structures. behaviors. LAUTERBURG. information channels and decision paths change. i. (2009). which is characterized by the following five key-factors. 45 • Creative restlessness: Organizational changes not only cause restlessness but also require a certain degree of unrest within the system. (1996) KOTTER. K. p. 68-71 33 . it will be easier to initiate actions to achieve that purpose. P. he determines this source of power to be crucial for succeeding with a change project and therefore specifies the following issues. project team. J.

the more each individual understands and internalizes the importance of his or her contribution. An organizational culture that is based on trust. However.2 Handling a conflict by rules Although a change project should be aimed at being structured in such a way that conflicts don’t even occurs. • Conveying the meaning: This is the art of conveying the company’s philosophy and objectives. which are introduced in the following.interests and requirements collide. thus to provide orientation and ensure controlling. it still can happen. The basic principle is to talk to each other instead of producing paper. 34 . the more he or she will be committed to the company and therefore willing to accept additional burdens. This is of course much easier to realize in a rehabilitation clinic than in an armament factory. there are certain rules how to deal with it. Considering that a formal organization is basically not capable to ensure the degree of direct and personal communication which is crucial in times of changes in a company. Information events have to be organized across all operational levels of a company. the informal communication has to be enhanced consequently. What could happen at the most is to misinform. openness and acceptance. as well as of the significance of the individual’s contribution to every single employee. • Communication: The most important insight is that it is impossible to communicate too much. however. In order to understand what is going on in the company. the meaning of the acting as a service for the client and the society. 4. • Cultural Solidarity: „We“ instead of „the others“. Only a constructive culture is a success factor: the ability to early localize conflict potentials and not to simply pass over conflicts but deal with conflicts in a constructive way. “Management by wandering around” has become well-established. So if there is a conflict coming up between two or even more parties.

peace and harmony. as a matter of principle.1 illustrates a model of human behavior in conflicts.1: Model of human behavior in conflicts 48 46 47 Cf.. DOPPLER. (2009). Figure 4. K. (2009)..47 Figure 4.First. C. as they – if conducted in an adequate way – induce a constructive criticism and therefore improvement and innovation. clients. C. especially with superiors. a culture of love. LAUTERBURG. DOPPLER. LAUTERBURG. DOPPLER. even evokes more damage. Therefore.. the following competences are crucial: 46 • • • • Identify conflicts early enough Address conflicts in an open and unprejudiced way Fight the conflict in a constructive minded way as person affected Help to structure a conflict as a person non-affected In daily life it can be difficult to create an atmosphere of constructive debate. K. the attitude of determining conflicts to be harmful. K. C. However. p. p. prophylaxis is better than therapy. 440 35 . new business partners. p. 452 48 Cf. just to name a few. 451 Cf. Differences of opinions or respectively conflicts should not be repressed. (2009). LAUTERBURG.

. where negotiation and co-operation can take place. there are four different possibilities of human behavior. Enhance communication Enhancing continual communication between all parties involved Ensuring continual communication between all parties involved 49 Cf. Make an accurate diagnosis Understanding the backgrounds and causal relations of the conflict Understanding the dynamic of the incident 2.In a conflict situation. as shown in Figure 4. DOPPLER. 450 36 . (2009). there exist the following 10 golden rules. Proceed systemically Planning how to proceed No working without an appropriate concept A journey to the unknown doesn’t lead to success 3. LAUTERBURG. 49 1. In order to conduct a conflict as a conflict manager while ensuring an atmosphere of constructive debate and creating a win /win situation. ensuring that both the energy for enforcing the satisfaction of own and the partner’s needs reaches a high level. The main goal always has to be creating a win / win situation. i.1. pp. Define the roles Ensuring the same understanding of each one’s role and task Consequently staying with the defined role 4. K. C.e. Create acceptance Taking all involved parties seriously Trying to see things from the other’s perspective 5.

Stay open and honest Being transparent and credible Not behaving differently at a joint meeting or at a bilateral conversation 9.6. which actually does not exist. but instead to create an atmosphere of constructive debate as a basis for new ways of solutions. 7. not to preserve a harmony. Remain neutral Never taking someone’s side under any circumstances Remaining independent 8. Let emotions happen Not trying to prohibit emotions at any prize Emotions are important realities and therefore must not be repressed. 37 . Be patient Not expecting quick progress and results Value the small steps into the right direction 10. Remain modest Not feeling responsible by oneself for the success All parties need to be willing to resolve the conflict Nobody can perform miracles Considering those 10 golden rules is a highly important step in order not to repress conflicts.

.................... 1 Figure 1.......................................... 5 Figure 1................................................................3: Congruence model by NADLER and TUSHMAN ..........................................4 The Model of Transformation Energy (Transformation Energy Curve) ........1: Lewin’s force field analysis ................. 22 Figure 2............................................................2 Economic and Social Forces Driving the Need for Major Change in Organizations .....5: Beckhard’s and Harris’ change formula ..... 35 38 ..............LIST OF FIGURES Figure 1........1 Aspects of Organizational Redesign .................1: Model of human behavior in conflicts .............................................. 15 Figure 2......... 23 Figure 4...................................................3 Acceleration and Integration – two basic aspects of ORD concepts .... 7 Figure 1........................ 21 Figure 2..............2 Lewin’s three-step model .......... 12 Figure 1.........................

........................ 11 Table 2.................LIST OF TABLES Table 1.. 28 39 ............1 Overview about the three approaches of organizational redesign .............1: The eight-stage process of creating major change according to KOTTER......1: Comparison of different styles of consulting ............ 18 Table 3................

R. LAUTERBURG. 2007 LAUER.: Competing by Design: The power of organizational architecture.: Change Management. T. F. MA 1987 CAMERON. New York 1997 PASCALE.. A. Boston 1996 KOTTER.: Making Sense of Change Management – A complete guide to the models. Reading. A. Stuttgart 2008 KOTTER. Harvard Business Review.. Frankfurt 2008 JANES.LIST OF REFERENCES BECKHARD. TUSHMAN.: Leading Change – Why Transformation Efforts Fail. R. P. K. SCHULTE-DERNE. A.: Organizational Transitions: Managing complex change. HARRIS. : Transformations-Management. J.. R. M. EXNER. PRAMMER. & GREEN. T. P. Berlin Heidelberg 2010 NADLER. D.: Managing on the Edge.: Leading Change.. C. Wien 2001 KÖNIGSWIESER. J..: Change Management – Den Unternehmenswandel gestalten. M. R. tools & techniques of organizational change. London 1990 40 . L. E.: Systemische Intervention – Architekturen und Designs für Berater und Veränderungsmanager. London 2009 DOPPLER.