Business and Economics

Organizational Change and Development – MGW 3130Berwick Campus, 2013

Tutorial 5 – Week 6mulyadi.robin@monash.edu

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Assessment Reminders Assessment Task 1

– Online discussion postings– You need to continue to contribute to a minimum of FIVE

postings over FIVE different weeks.– Most of you have NOT contributed over the past few weeks.

Assessment Task 3– 20 minute presentation + report (due on day of presentation)– Research and analyze a change issue– You need to INTEGRATE case examples in answering your

questions– You need to include an activity in your presentation.– Distribute handouts to the rest of the class.

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Week 6 (chapter 1, 2)1. “ Without Organisational Development, organisations that are

characterised by rapid technological changes and functioning in a highly competitive market, would fail.” Comment.

2. “ Applying any change model to a planned change guarantees success for the organisation.” Discuss with examples.

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Week 7 (chapter 3, 4)3. “Burnout is prevalent among change agents. Explain why this

could be, and how it could be averted or managed ?

4. “ One of the most baffling and recalcitrant of the problems which business executives face is employee resistance to change.” Comment.

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Week 8 (Chapters 5, 6)5. Institutionalization or the refreezing stage is seen as a key

element of the organizational change process. However, with the rapid proliferation of change in the environment, some argue that institutionalizing change is an oxymoron. Discuss.

6. Double-loop learning is aimed at changing the status quo. How does this differ with knowledge management? Discuss

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Week 9 (Chapters 7, 8)7. “Process consultation is a technique which helps group

members to understand, diagnose, and improve their behaviour. “ Discuss how process consultation can be used, and both the advantages and disadvantages of this technique.

8. “Despite many instances of it backfiring, downsizing is still on the rise”. Discuss.

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Week 10 (chapters 9, 10)9. An organisation's culture can be both supported and stifled by

having well -mapped processes and clear lines of authority (eg McDonald's). Discuss.

10. How can Not for profit organisations, NGO's and Global social change organisations benefit from applying Org development to their organisation, and what adjustments must be made for it's international use ? Use examples to demonstrate.

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Week 11 (chapters 11, 12)

11. In the documentary "How Kevin Bacon cured cancer" (available free at <http://www.smh.com.au/tv/science/connected-how-kevin-bacon-cured-cancer-2733474.html>), it was discovered that networks can provide astonishing advantages in providing solutions and access to information by members. Briefly explain the documentary ideas about the advantages (and also discuss the disadvantages) of using networks as a collaborative strategy, and discuss how OD can be applied for the effectiveness of those networks.

12. In week 2, some of the big drivers of external change were identified as Globalisation; Information Technology and Managerial Innovation. Explain how OD can help organisations adjust to these massive continuing waves of change.

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Agenda Lecture Reviews

– Interventions– Resistance

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Interventions (lecture review)An intervention is •a set of sequenced planned actions or events, that are •intended to help an organisation increase its effectiveness

•3 Criteria define an effective intervention :– the extent to which it fits the needs of the organisation, – the degree to which it is based on causal knowledge of

intended outcomes, and – the extent to which it transfers competence to manage change to organisation members

OD Practitioners need to craft a change program according to the needs and dynamics of the situation (p155-7)

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OD Interventions

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Intervention Focus• Strategic issues

– focus on the big picture ensuring that the organisation is competitive, well-positioned in the market and ready to meet new challenges

• Technology and structure issues– focus on ensuring that the design structure and the technology are

aligned to the strategic goals of the organisation

• Human resource issues– focus on ensuring that personnel practices are aligned to recruiting

and retaining the best people for the organisation

• Interpersonal issues– focus on developing people and their interpersonal skills

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Managing Resistance (Kotter & Schlesinger)

n Education and communicationn Participationn Facilitation and supportn Negotiationn Manipulationn Coercion

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Education & Communication When to use

– lack of information– inaccurate information

Approaches– one to one discussion– presentations to groups– reports– demonstrations

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Participation When to use

– others have important information– others have the power to resist

Approaches– Assistance in design & implementation– Contribution of ideas & advice– Forming task forces / committees

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Facilitation and Support When to use:

– resistance is due to resource / adjustment problems

Approaches– providing socio-emotional support– listen to problems and complaints– provide training– help to overcome performance pressures

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Negotiation & Agreement When to use

– person / group will lose something

Approaches– offering incentives to actual or potential resistors– special benefits in exchange for assurance of cooperation

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Manipulation When to use:

– as a last resort

Approaches– cooptation– covertly influence others– selectively providing information– structure events

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Coercion When to use:

– speed of change– change agent has the power

Approaches– threaten

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Managing Resistance (Kotter & Schlesinger)

n Education and communicationn Participationn Facilitation and supportn Negotiationn Manipulationn Coercion

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Perrier Case Study (cont’d from last week) Perrier may well be the iconic brand in the world of mineral waters. However, regardless of the profile of the brand, the

company that produces the bottled sparkling mineral water is having a tough time. It is the focus of what one commentator describes as “a vicious struggle underway for the soul of the business.”

The origins of Perrier can be traced to 1898 when a local doctor, Louise-Eugène Perrier, bought the mineral water source near Vergèze, France. The company grew steadily, but demand really escalated in the late 1980s when it became highly fashionable to consume bottled mineral water. At its peak, Perrier sold 1.2 billion bottles, almost half to consumers in the United States.

The boom years were good for the Perrier workers. Buoyant profits were associated with regular pay-rises, social benefits and extra holidays. However, in 1990, the finding of a minute trace of benzene in a bottle led to the collapse of the U.S. sales. By 1992, annual output had halved and the company was close to bankruptcy. At this point, it was bought for $2.7 billion by Nestlé, the world’s largest food company. Attracted by a combination of bottled water as a fast-growing business and the world’s best-known mineral water, Nestlé identified Perrier as an attractive takeover target. However, Perrier struggled to turn a profit. In 2003 its pre-tax profit margin on $300 million of sales was only 0.6 percent, compared with 10.4 percent for the Nestlé Waters division overall. In 2004 it again recorded a loss.

The Perrier factory is on a 234 acre site on the Mediterranean coastal plain near Nimes. The factory itself is rather nondescript, so much so that from a distance it could be mistaken for a power station. Perrier employees work a 35-hour week and earn an average annual salary of $52,000, which is good for this part of France and relatively high for this industry. However, the average Perrier worker produces only 600,000 bottles a year, compared with 1.1 million bottles at Nestlé’s two other international French mineral water brands (Vittel and Contrex).

Relations between management and workers are not good. Almost all (93 percent) of Perrier’s 1,650 workers belong to the CGT, a union that is viewed by management as consistently resisting Nestlé’s attempts to improve Perrier’s financial performance. According to Nestlé’s CEO: “We have come to the point where the development of the Perrier brand is endangered by the stubbornness of the CGT.” Jean-Paul Franc, head of the CGT at Perrier, sees the situation differently. In regard to the company’s plan to cut 15 percent of its workforce, he protests, “Nestlé can do whatever it likes.” He says, “There are men and women who work here...Morally speaking the water and the gas stored below this ground belong to the whole region.”

When, in 2004, Danone launched a new product (Badoit Rouge) that was designed to directly compete with Perrier’s new super-bubbly band, Eau de Perrier, Perrier’s management put bottles of Badoit Rouge in the factory cafeteria. This had been done to emphasise the point to Perrier employees that they were involved in a head-to-head battle for that niche in the market. However, this act was not well received. “It was a provocation,” recalls one Perrier truck driver. “We took the bottles and dumped them in front of the factory director’s door, so he couldn’t get out of his office.”

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next week Presentations start

– reports are due

Homework– p189

• q 8,9,12,13– p190

• q 5

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