Organizational Behavior Chp 15
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Transcript of Organizational Behavior Chp 15
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Instructors Manual to Accompany
Organizational Behavior 5/eemerging knowledge and practice for the real world
by Steven L. McShane and Mary Ann von Glinow
Chapter 15Organizational Change
Prepared by:Steven L. McShane, University of Western Australia
ThisInstructorsManual1ileispartoftheInstructorsResourceCDROMforOrganizationalBehavior:EmergingKnowledgeandPracticefortheRealWorld,5thedition.10digitISBN:007336434713digitISBN:9780073364346PublishedbyMcGrawHill/Irwin,abusinessunitofTheMcGrawHillCompanies,Inc.,1221AvenueoftheAmericas,NewYork,NY,10020.Copyright2010,2008,2005,2003,2000byTheMcGrawHillCompanies,Inc.Allrightsreserved.Nopartofthispublicationmaybereproducedordistributedinanyformorbyanymeans,orstoredinadatabaseorretrievalsystem,withoutthepriorwrittenconsentofTheMcGrawHillCompanies,Inc.,including,butnotlimitedto,inanynetworkorotherelectronicstorageortransmission,orbroadcastfordistancelearning.Someancillaries,includingelectronicandprintcomponents,maynotbeavailabletocustomersoutsidetheUnitedStates.
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Organizational Change
LEARNING OBJECTIVESAfterreadingthischapter,studentsshouldbeableto:1. DescribetheelementsofLewinsforce1ieldanalysismodel.2. Outlinesixreasonswhypeopleresistorganizationalchange.3. Discusssixstrategiesforminimizingresistancetochange.4. Outlinetheconditionsforeffectivelydiffusingchangefromapilotproject.5. Describetheactionresearchapproachtoorganizationalchange.6. OutlinetheFourDmodelofappreciativeinquiryandexplainhowthisapproachdiffersfromactionresearch.7. Explainhowparallellearningstructuresassistthechangeprocess.8. Discussthreeethicalissuesinorganizationalchange.CHAPTER GLOSSARY
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actionresearchaproblemfocusedchangeprocessthatcombinesactionorientation(changingattitudesandbehavior)andresearchorientation(testingtheorythroughdatacollectionandanalysis).appreciativeinquiryanorganizationalchangestrategythatdirectsthegroupsattentionawayfromitsownproblemsandfocusesparticipantsonthegroupspotentialandpositiveelements.force1ieldanalysisKurtLewinsmodelofsystemwidechangethathelpschangeagentsdiagnosetheforcesthatdriveandrestrainproposedorganizationalchange
futuresearchsystemwidegroupsessions,usuallylastingafewdays,inwhichparticipantsidentifytrendsandidentifywaystoadapttothosechangesparallellearningstructurehighlyparticipativearrangements,composedofpeoplefrommostlevelsoftheorganizationwhofollowtheactionresearchmodeltoproducemeaningfulorganizationalchange.refreezingthelatterpartofthechangeprocessinwhichsystemsandconditionsareintroducedthatreinforceandmaintainthedesiredbehaviors.unfreezingthe1irstpartofthechangeprocesswherebythechangeagentproducesdisequilibriumbetweenthedrivingandrestrainingforces.
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CHAPTER SYNOPSISLewinsforce1ieldanalysismodelstatesthatallsystemshavedrivingandrestrainingforces.Changeoccursthroughtheprocessofunfreezing,changing,andrefreezing.Unfreezingproducesdisequilibriumbetweenthedrivingandrestrainingforces.Refreezingrealignstheorganizationssystemsandstructureswiththedesiredbehaviors.Restrainingforcesaremanifestedasemployeeresistancetochange.Resistancetochangeshouldbeviewedasaresource,notaninherentobstacletochange.Themainreasonswhypeopleresistchangearedirectcosts,savingface,fearoftheunknown,breakingroutines,incongruentteamdynamics,andincongruentorganizationalsystems.Resistancetochangemaybeminimizedbykeepingemployeesinformedaboutwhattoexpectfromthechangeeffort(communicating);teachingemployeesvaluableskillsforthedesiredfuture(learning);involvingtheminthechangeprocess;helpingemployeescopewiththestressofchange;negotiatingtradeoffswiththosewhowillclearlylosefromthechangeeffort;andusingcoercion(sparinglyandasalastresort).Organizationalchangealsorequiresdrivingforces.Thismeansthatemployeesneedtohaveanurgencyforchangebybecomingawareoftheenvironmentalconditionsthatdemandchangeintheorganization.Thechangeprocessalsorequiresrefreezingthenewbehaviorsbyrealigningorganizationalsystemsandteamdynamicswiththedesiredchanges.Everysuccessfulchangealsorequireschangeagentswithaclear,wellarticulatedvisionofthedesiredfuturestate.Thechangeprocessalsooftenappliesadiffusionprocessinwhichchangebeginsasapilotprojectandeventuallyspreadstootherareasoftheorganization.Actionresearchisahighlyparticipative,opensystemsapproachtochangemanagementthatcombinesanactionorientation(changingattitudesandbehavior)withresearchorientation(testingtheory).Itisadatabased,problemorientedprocessthatdiagnosestheneedforchange,introducestheintervention,andthenevaluatesandstabilizesthedesiredchanges.Appreciativeinquiryembracesthepositiveorganizationalbehaviorphilosophybyfocusingparticipantsonthepositiveandpossible.Ittriestobreakoutoftheproblemsolvingmentalitythatdominatesorganizationalchangethroughtheactionresearchmodel.Thefourstagesofappreciativeinquiryincludediscovery,dreaming,designing,anddelivering.Largegroupinterventions,suchasfuturesearchconferences,arehighlyparticipativeeventsthattypicallytrytogettheentiresystemintotheroom.Afourthorganizationalchangeapproach,calledparallellearningstructures,reliesonsocialstructuresdevelopedalongsidetheformalhierarchywiththepurposeofincreasingtheorganization'slearning.Theyarehighlyparticipativearrangements,composedofpeoplefrommostlevelsoftheorganizationwhofollowtheactionresearchmodeltoproducemeaningfulorganizationalchange.Onesigni1icantconcernisthatorganizationalchangetheoriesdevelopedwithaWesternculturalorientationpotentiallycon1lictwithculturalvaluesinsomeothercountries.Also,organizationalchangepracticescanraiseoneormoreethicalconcerns,includingincreasingmanagementspoweroveremployees,threateningindividualprivacyrights,underminingindividualselfesteem,andmakingclientsdependentonthechangeconsultant.POWERPOINT SLIDESOrganizationalBehaviorFifthEditionincludesacompletesetofMicrosoftPowerPoint1ilesforeachchapter.(PleasecontactyourMcGrawHill/Irwinrepresentativeto1indouthowinstructorscanreceivethese1iles.)Inthelectureoutlinethatfollows,athumbnailillustrationofeachPowerPointslideforthischapterisplacedbesidethecorrespondinglecturematerial.Theslidenumberhelpsyoutoseeyourlocationintheslideshowsequenceandtoskipslidesthatyoudontwanttoshowtotheclass.(Tojumpaheadorbacktoaparticularslide,justtypetheslidenumberandhittheEnterorReturnkey.)
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LECTURE OUTLINE (WITH POWERPOINT SLIDES)
Organizational ChangeSlide 1
Organizational Change
Suncor Embraces Continuous ChangeSlide 2
Umpqua Banks Organizational Change
Umpqua Bank has become the largest regional community bank in the Pacific Northwest by applying effective organizational change practices
Lewins Force Field Analysis ModelSlide 3
Lewins Force Field Analysis Model
Highly respected model of change developed by social psychologist Kurt Lewin
Consists of driving and restraining forces in the change process
Driving forces Push organizations toward a new state of affairs Includes external forces -- e.g., competitors, technologies may be developed from leader -- divine discontent -- urge
employees to strive for higher standards or new innovations
Restraining forces resistance to change -- employee behaviors that block the change
process try to maintain the status quo
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Force Field Analysis ModelSlide 4
Force Field Analysis Model
Effective change occurs by unfreezing the current situation, moving to a desired condition, and then refreezing the system
Unfreezing producing disequilibrium between the driving and restraining forces
Stability when driving and restraining forces are roughly in equilibrium
Refreezing introducing organizational systems and structures aligned with the
desired behaviors support and reinforce the new role patterns
Not Hoppy About ChangeSlide 5
Not Hoppy About Change
Mina Ishiwatari (front) wanted to improve Hoppy drinks brand image, but most staff didnt want to change. I tried to take a new marketing approach to change the image of Hoppy . . . but no one would listen to me. She improved Hoppys popularity with limited support or budget. Most employees who opposed Ishiwataris changes have since left the company.
Restraining Forces (Resistance to Change)Slide 6
Restraining Forces (Resistance to change)
Many forms -- complaints, absenteeism, passive noncompliance etc.
Subtle resistance is much more common than overt resistance -- more difficult to address because not as obvious
Need to view resistance as a resource, not impediment to change
1. resistance incidents are symptoms of deeper problems in the change process signal need for better change mgt practices occurs when employees worry about the consequences of change, or about
the process of change itself
2. A form of constructive conflict -- may produce better change decisions
3. Resistance is a form of voice -- may improve procedural justice and motivate people to act towards change
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Why People Resist ChangeSlide 7
Why People Resist Change
Related to motivation, ability, and role perceptions Motivation -- perceive negative consequences of change Ability -- lack of skills/knowledge to change Role perceptions -- not clear what change is required
1. Direct costs Losing something of value due to change FBIs new intelligence mandate would reduce status in law
enforcement
2. Saving face Accepting change acknowledges own imperfection, past wrongdoing New FBI mandate acknowledges value of CIA work (source of past turf
wars)
3. Fear of the unknown Risk of personal loss Concern about being unable to adjust
Why People Resist Change (cont)Slide 8
Why People Resist Change (cont)
4. Breaking routines Organizational unlearning is part of change process But past practices/habits are valued by employees due to comfort, low
cognitive effort
5. Incongruent organizational systems Systems/structures reinforce status quo FBI career, reward, power, communication systems supported law
enforcement, not intelligence
6. Incongruent team dynamics Norms contrary to desired change
Unfreezing, Changing, and Refreezing
Shouldnt increase driving forces alone increase restraining forces to counterbalance driving forces
Preferred strategy is to destabilize status quo by:1. increasing/exposing driving forces (create urgency for change)
2. decreasing the restraining forces -- minimize resistance
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Creating an Urgency for ChangeSlide 9
Creating an Urgency for Change
Inform employees about driving forces -- competitors, changing consumer trends, etc
Most difficult when organization is doing well
Customer-driven change Dissatisfied customers have real consequences for the firm Human element energizes employees
Sometimes need to create urgency to change without external drivers e.g., when company is successful Requires persuasive influence -- employees visualize future
competitive threats and environmental shifts Use positive vision of future rather than threats as driver Problem: Creating illusory drivers for change produces cynicism to
change
Minimizing Resistance to Change: CommunicationSlide 10
Minimizing Resistance to Change: Communication
Highest priority and first strategy for change
Improves urgency to change
Reduces uncertainty (fear of unknown)
Problems -- time consuming and costly
Minimizing Resistance to Change: LearningSlide 11
Minimizing Resistance to Change: Learning
Provides new knowledge and skills
Includes coaching and other forms of learning
Helps break old routines and adopt new roles
Problems -- potentially time consuming and costly
Minimizing Resistance to Change: InvolvementSlide 12
Minimizing Resistance to Change: Involvement
Employees participate in change process
Almost essential part of change process these days Employees feel personally responsible for success of change Minimizes saving face and reducing fear of unknown
Problems -- time-consuming, potential conflict
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Minimizing Resistance to Change: StressSlide 13
Minimizing Resistance to Change: Stress
Change process potentially threatens self-esteem and creates uncertainty about the future
Communication, learning, and involvement reduce stress to some degree, but may require other strategies to minimize stress
Potential benefits More motivation to change Less fear of unknown Fewer direct costs
Problems -- time-consuming, expensive, doesnt help everyone
Minimizing Resistance to Change: NegotiationSlide 14
Minimizing Resistance to Change: Negotiation
Influence support for change by negotiating benefits or resources in exchange for compliance with request (e.g. supporting change)
May be necessary when people clearly lose something and wont otherwise support change
Reduces resistance due to perceived direct costs
Problems Expensive Gains compliance, not commitment
Minimizing Resistance to Change: CoercionSlide 15
Minimizing Resistance to Change: Coercion
Necessary when all other strategies fail
Assertive influence tactics e.g. monitoring behaviors to ensure compliance, confronting, threats
of sanctions etc.
Radical form of organizational unlearning -- dismissals
Problems Reduces trust May create more subtle resistance More politics to protect job security
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Refreezing the Desired ConditionsSlide 16
Refreezing the Desired Conditions
When you are leading for growth, you know you are going to disrupt comfortable routines and ask for new behavior, new priorities, new skills Even when we want to change, and do change, we tend to relax and the rubber band snaps us back into our comfort zones.
Ray Davis, CEO, Umpqua Bank
Refreezing the Desired ConditionsSlide 17
Refreezing the Desired Conditions
Realigning organizational systems and team dynamics with the desired changes
Alter rewards to reinforce new behaviors Change career paths Revise information systems
Change AgentsSlide 18
Change Agents
Change agent -- anyone who possesses enough knowledge and power to guide and facilitate the change effort
Change agents apply transformational leadership Help develop a vision Communicate the vision Act consistently with the vision Build commitment to the vision
Strategic Vision & ChangeSlide 19
Strategic Vision & Change
Need a vision of the desired future state
Identifies critical success factors for change
Minimizes employee fear of the unknown
Clarifies role perceptions
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Diffusion of ChangeSlide 20
Diffusion of Change
Successful change initiatives usually begin as pilot projects Pilot projects offer greater flexibility, less risk
Effective diffusion of pilot project success considers MARS model
1. Motivation Pilot project is successful Reward and support diffusion of pilot project elsewhere
2. Ability Train employees with skills/knowledge necessary to adopt pilot project Role modeling from people in pilot project
3. Role perceptions Help employees translate pilot project practices to their specific work
environment
4. Situational factors Provide resources to implement pilot project elsewhere
Action Research ApproachSlide 21
Action Research Approach
Action orientation and research orientation Action to achieve the goal of change Research testing application of concepts
Action research principles1. Open systems perspective
2. Highly participative process
3. Data-driven, problem-oriented process
Action Research ProcessSlide 22
Action Research Process
1. Form client-consultant relationship Client readiness -- clients motivation, open to meaningful change, possess
abilities to complete change process
2. Diagnose the need for change Organizational diagnosis -- gathering and analyzing data about an ongoing
system
Includes employee involvement -- agree on change methods, determine objectives of successful change
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3. Introduce intervention Applies one or more actions -- e.g. managing conflict, team building,
changing corporate culture
Incremental change vs. quantum change -- small steps or massive overhaul -- advantages and perils for either approach
4. Evaluate and stabilize change Comparing change outcomes against standards established earlier in action
research process
Problems -- (a) outcomes arent apparent for a long time, (b) difficult to separate effects of external changes
Refreeze conditions to stabilize change
BBC Takes the Appreciative JourneySlide 23
BBC Takes the Appreciative Journey
To become a more creative organization, the British Broadcasting Company sponsored an appreciative inquiry process of employee consultation, called Just Imagine. It gave me a powerful mandate for change, said BBCs chief executive at the time.
Appreciative Inquiry ApproachSlide 24
Appreciative Inquiry Approach
Frames change around positive and possible future, rather than traditional problem-focus
Builds change process around strengths, not weaknesses Form of behavioral modeling -- finding and replicating examples of
positive events Positive focus minimizes defensiveness, conflict
Application of positive OB -- success and well-being grounded in positive rather than negative aspects of life
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Four-D Model of Appreciative InquirySlide 25
Four-D Model of Appreciative Inquiry
1. Discovery discovering positive elements of the observed organization (may involve
interviewing, documenting positive events and elements)
2. Dreaming considering what might be possible in an ideal organization safer revealing aspirations about an ideal than their own situation
3. Designing participants listen to each others' models and assumptions, and eventually
form a collective model for thinking within the team
4. Delivering participants establish specific objectives and direction for their own
organization based on their model of what should be
Evaluating Appreciative Inquiry
Several successful change stories from this approach, but not always successful
Requires positive rather than problem-oriented mindset Not yet clear what other conditions are best for appreciative inquiry
(i.e. contingencies not yet known)
Large Group InterventionsSlide 26
Large Group Interventions
Future search, open space, and other interventions that involve the whole system
Large group sessions May last a few days High involvement with minimal structure
Limitations of large group interventions Limited opportunity to contribute Risk that a few people will dominate Focus on common ground may hide differences Generates high expectations about ideal future
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Parallel Learning Structure ApproachSlide 27
Parallel Learning Structure Approach
Highly participative social structures
Members representative across the formal hierarchy
Sufficiently free from firms constraints
Develop solutions for organizational change which are then applied back into the larger organization
Parallel Learning StructuresSlide 28
Parallel Learning Structures
Cross-Cultural and Ethical ConcernsSlide 29
Cross-Cultural and Ethical Concerns
Cross-Cultural Concerns Linear and open conflict assumptions different from values in some
cultures
Ethical Concerns Privacy rights of individuals Management power Individuals self-esteem
Organizations are About PeopleSlide 30
Organizations are About People
Take away my people, but leave my factories, and soon grass will grow on the factory floors. Take away my factories, but leave my people, and soon we will have a new and better factory.
Andrew Carnegie (1835-1919)
Organizational ChangeSlide 31
Organizational Change
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Discussion of Activity 15.3: Strategic Change IncidentsSlide 32
Discussion of Activity 15.3: Strategic Change Incidents
Scenario #1: Greener TelcoSlide 33
Scenario #1: Greener Telco
Scenario #1 refers to Bell Canadas Zero Waste program, which successfully changed wasteful employee behaviors by altering the causes of those behaviors.
Bell Canadas Change StrategySlide 34
Bell Canadas Change Strategy
Relied on the MARS model to alter behavior: Motivation -- employee involvement, respected steering committee Ability -- taught paper reduction, email, food disposal Role perceptions -- communicated importance of reducing waste Situation -- Created barriers to wasteful behavior, e.g.. removed
garbage bins
Scenario #2: Go Forward AirlineSlide 35
Scenario #2: Go Forward Airline
Scenario #2 refers to Continental Airlines Go Forward change strategy, which catapulted the company from worst to first within a couple of years.
Continental Airlines Change StrategySlide 36
Continental Airlines Change Strategy Communicate, communicate, communicate Introduced 15 performance measures Established stretch goals (repainting planes in 6 months) Replaced 50 of 61 executives Rewarded new goals (on-time arrival, stock price) Customers as drivers of change
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SOLUTIONS TO CRITICAL THINKING QUESTIONS
1. Chancesarethattheschoolyouareattendingiscurrentlyundergoingsomesortofchangetoadaptmorecloselywithitsenvironment.Discusstheexternalforcesthataredrivingthesechanges.Whatinternaldriversforchangealsoexist?Therearemanypossiblechangesthatyourcollegeiscurrentlyexperiencing.Someofthemorecommonchangesmightbe:(a)shiftfromquartertosemesterschedule;(b)introductionofonlinelearning;(c)changinglibraryhours;(d)newcoursesanddisciplines;(e)reassignmentofphysicalspaceduetonewconstructionorclosureofoldbuildings.Therearejustasmanypossibleexternalforcesforchangetoconsider,including:(a)increasedcompetitionforstudents;(b)emergingtechnologies;(c)costpressures(restrictedbudgets);(d)changingstudentexpectations(e.g.newcoursecontent,more1lexiblelearning);(e)collegeratings.Internalforcesforchangemainlycomefromsuchthingsasleadership,physicalstructures(e.g.agingbuildings),andstudentandfacultycoalitions.Itisimportanttodistinguishthechangesfromtheforcesforchange.Forexample,theintroductionofonlinelearningmighthaveresultedfrombothnewtechnologiesandincreasedcompetitionforstudents.
2. UseLewinsforceAieldanalysistodescribethedynamicsoforganizationalchangeatUmpquaBank(seeopeningvignettetothischapter).Theopeningvignettetothischapteridenti1iesthechangingmarketplaceasthemainexternalforceforchange.UmpquaBankwouldnotlastlongunlessitdifferentiateditself.ItisalsoclearthatCEORayDaviswasapowerfulforceforchange,particularlyhisvisionandenthusiasmforthatvision.Theopeningvignetterefersbrie1lytosomeinstancesofresistancetochange,suchasgettingthewrongpeopleoffthebus.Thespeci1iccausesofthatresistancearenotstated,butDavisreferstobreakingroutineswhenhetalksabouttherubberbandeffect.StudentsmightspeculateotherreasonswhyUmpquaBankemployeesmightresistchange.Forexample:Directcosts.Someemployeesmightlosetheirpowerandstatusinthenewbankformat.SavingFace.EmployeesresponsibleforcorporatestrategyandmarketingmightfeelslightedbyhavingtheCEOsuggestasuperioridea.FearoftheUnknown.Thissourceofresistancewouldlikelyhavebeenquiteapparent.Thevignettedescribeshowthechangesweremuchmoreradicalthanatypicalbank,soemployeeswouldnothavemuchclarityaboutthefuture.BreakingRoutines.Theradicalnatureofthechangesprobablycausedsomeresistance,becauseemployeeshadtolearnnewpractices,andadoptnewvaluesinorderforthecompanytomovetowardanadaptiveculture.IncongruentSystems.Althoughnotstatedinthecase,Umpquabankmighthavehadarewardsystem,corporateculture,informationsystemetcthatworkedagainsttheproposedchanges.IncongruentTeamdynamics.Aswiththeabove,thisfactorisnotapparentasasourceofresistanceinthecase.
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3. Employeeresistanceisasymptom,notaproblem,inthechangeprocess.Whataresomeoftherealproblemsthatmayunderlieemployeeresistance?Thetextbookoutlinessixmainreasonswhyemployeesresistchange.Thefollowingreasonsexplaintherealproblemsthatemployeesexperienceandareconcernedaboutwithchangeprocesses.Directcosts.Resistancemaybeasymptomthatunderliesemployeejobsecurityconcernsorfearsthechangemayaffecttheircareerdevelopmentpotential.Savingface.Whenchangeinvolvesimplementingadecisionthatwasnotrecommendedbyanindividual,theindividualmaytrytoprovethatthedecisionwaswrongorthatthepersonencouragingchangeisincompetent.Fearoftheunknown.Peopleresistchangebecausetheyareworriedtheywillnotbeabletoadoptthenewbehaviorsrequired.Breakingroutines.Peopledonotwanttogiveuptheircomfortzonesanddailyroutinesthatprovidepredictability.Incongruentorganizationalsystems.Organizationalsystemsmayactuallybediscouragingemployeesfromadoptingnewways.Forexample,theorganizationsreward,selection,trainingandothercontrolsystemsmaybecausingemployeestomaintainthestatusquo.Incongruentteamdynamics.Teamnormsmaycon1lictwiththedesiredchangeandconsequentlyreinforceconformitytothestatusquo.
4. Seniormanagementofalargemultinationalcorporationisplanningtorestructuretheorganization.Currently,theorganizationisdecentralizedaroundgeographicalareassothattheexecutiveresponsibleforeachareahasconsiderableautonomyovermanufacturingandsales.Thenewstructurewilltransferpowertotheexecutivesresponsiblefordifferentproductgroups;theexecutivesresponsibleforeachgeographicareawillnolongerberesponsibleformanufacturingintheirareabutwillretaincontroloversalesactivities.Describetwotypesofresistanceseniormanagementmightencounterfromthisorganizationalchange.Theanswertothisquestionshouldincludedirectcostsasonetypeofresistancetochangeamongthegeographicexecutives.Theywilllosestatus,power,andresponsibilityfromthechangeeffort.Theothertypeofresistancetochangemightbeincongruentorganizationalsystems,incongruentteamdynamics,orbreakingroutines.Unlessthecompanyhastakenspeci1icstepstoalterorganizationalsystems,thesesystemsmightstillsupportthedecentralizedorganizationalstructure.Forexample,communicationpatternsandphysicalstructuresmightstillbecon1iguredaroundthegeographicratherthanproductstructure.Regardingteamdynamics,departmentalnormsmightsupportthegeographicexecutive.Forexample,employeesmighthavedevelopedawetheyattitudetowardproductleadersinheadquarters.Althoughtherestructuringplacedregionalproductgroupsunderproductexecutives,theseantagonisticnormsmaycontinue.Finally,somestudentsmightarguethatresistancewilloccurbecauseemployeeswillbebreakingroutines.Forinstance,geographicexecutivesandtheiremployeesmayhaveformedhabitsregardingrelationsbetweensalesandproductionunits.Nowthatproductionunitsarenolongerundertheexecutivescontrol,thesehabitsmustbealteredandperhapssalespracticeschangedto1itthenewreportingstructure.
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5. Discusstheroleofrewardsystemsinorganizationalchange.SpeciAically,identifywhererewardsystemsrelatetoLewinsforceAieldmodelandwheretheyunderminetheorganizationalchangeprocess.Studentsshouldrecognizethatrewardsystemscanbeeitherasourceofresistancetochangeorasystemthatreinforcesthedesiredchange(i.e.refreezesthesystem).Asasourceofresistance,rewardswouldbeanincongruentorganizationalsystem,suchaswhererewardsreinforceef1iciencybuttheorganizationistryingtochangetowardacustomerfocus.Asamechanismforrefreezing,rewardsareintroducedorchangesotheyarecompatiblewiththedesiredbehaviors.
6. WebCircuitsisaMalaysianbasedcustommanufacturerforhightechnologycompanies.Seniormanagementwantstointroduceleanmanagementpracticestoreduceproductioncostsandremaincompetitive.Aconsultanthasrecommendedthatthecompanystartwithapilotprojectinonedepartmentand,whensuccessful,diffusethesepracticestootherareasoftheorganization.Discusstheadvantagesofthisrecommendationandidentifythreeways(otherthanthepilotproject'ssuccess)tomakediffusionofthechangeeffortmoresuccessful.Apilotprojectisusuallyaneffectivechangemanagementstrategy.Itismore1lexibleandlessriskythancentralizedorganizationwideprograms.Thereareseveralwaystomakediffusionofthechangeeffortmoresuccessful.SeveralstrategiesaredescribedinthetextbookaroundthefourelementsoftheMARSmodel.Hereisasummaryoftheserecommendations:Motivation:Ensurethatemployeesseethatthepilotprojectissuccessfulandthatpeopleinthepilotprojectreceiverecognitionandrewardsforchangingtheirpreviousworkpractices.Supervisorsneedtoactivelysupportandreinforcethedesiredbehaviors.Theyalsoneedtoremovesourcesofresistancethatactascountermotivatorstodiffusionofchange.Ability:employeesmusthavetheabilitytherequiredskillsandknowledgetoadoptthepracticesintroducedinthepilotproject.Also,peopleadoptideasmorereadilywhentheyhaveanopportunitytointeractandlearnfromotherswhohavealreadyappliedthenewpractices.RolePerceptions:Employeesneedtounderstandhowthepracticesinapilotprojectapplytothemeventhoughinacompletelydifferentfunctionalarea.Thisrequiresguidancethatisneithertospeci1ic,becauseitmightnotseemrelevanttootherareasoftheorganization,nortooabstract.SituationalFactors:Employeesrequiresupportivesituationalfactors,includingtheresourcesandtimenecessarytoadoptthepracticesdemonstratedinthepilotproject.
7. SupposethatyouarevicepresidentofbranchservicesattheBankofEastLansing.Younoticethatseveralbrancheshaveconsistentlylowcustomerserviceratingseventhoughtherearenoapparentdifferencesinresourcesorstaffcharacteristics.Describeanappreciativeinquiryprocessinoneofthesebranchesthatmighthelptoovercometheseproblems.Appreciativeinquiryreframesrelationshipsaroundthepositiveandthepossible.Thebankbranchesshouldlookatanotherbranchthathasbeensuccessful.Thisincreasesopendialoguebyredirectingattentionawayfrominternalproblems.Therearefourmainstagestoappreciativeinquiry.Theprocessbeginswiththediscoverystage,wherebytheparticipantsidentifythepositiveelementsoftheobservedorganization.Astheydiscusstheir1indings,participantsshiftintothedreamingstagebyconsideringwhatmightbepossibleinanidealorganization.Thethirdstageofappreciativeinquiryisknownasdesigning,inwhichparticipantslistenwithsel1lessreceptivitytoeachothersmodelsandassumptions,andeventuallyformacollectivemodelforthinkingwithintheteam.Throughoutthisstage,teammembersshiftthefocusbacktotheirownorganizationandeventuallyenterthedeliveringstage.Thisisthephaseinwhichparticipantsbegindiscussingtheirownorganizationagain.Theyestablishspeci1icobjectivesanddirectionfortheirownorganizationbasedontheirmodelofwhatshouldbe.
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8. Thischaptersuggeststhatsomeorganizationalchangeactivitiesfaceethicalconcerns.YetseveralconsultantsactivelyusetheseprocessesbecausetheybelievetheybeneAittheorganizationanddolessdamagetoemployeesthanitseemsonthesurface.Forexample,someactivitiestrytoopenuptheemployeeshiddenarea(reviewtheJohariWindowdiscussioninChapter3)sothatthereisbettermutualunderstandingwithcoworkers.Discussthisargument,andidentifywhereyouthinkorganizationalchangeinterventionsshouldlimitthisprocess.Thetextbookidenti1iesthreeethicalproblemswithorganizationalchange.Studentsareaskedtoconsiderreasonswhyeachofthesepracticesisacceptableratherthanunethical.Theideahereisthatsituationsarerarelypurelygoodorbad.Thereareusuallytwosidestotheargument.IndividualPrivacyRights.Actionresearchcollectsinformationfromemployees,someofwhichtheymaynotwanttodivulge.Someinterventionsmaythreatenindividualprivacyrightsbecauseemployeesareaskedtopubliclydisclosetheirpersonalbeliefsandexperiences.Thecounterpointhereischangeisbothapersonalandinterpersonaljourney.Changeagentsneedtounderstandindividualattitudestowardthechange,notjustthestructuralneedforchange.Inusingchangetechniquesthatinvolveindividualdisclosure,organizationsneedtoensurethatemployeesmaintaincontrolovertheirlevelofdisclosureandarenotundulypressuredtorevealmorepersonalinformationthattheyarecomfortablewith.ManagementPower.Manychangeinterventionscreateuncertaintyandreestablishmanagementspositionindirectingtheorganization.Studentsmightcounterwiththenotionthatmostchangesrequiretheuseandstrengthening(atleasttemporarily)ofmanagementpowertobringaboutmeaningfulchange.Asnotedinthetextbook,nearlytwothirdsofcompaniesrelyonsomecoerciontobringaboutchange.However,organizationscandealwiththisconcernbyensuringthatcoercionisonlyusedasalastresortandbyensuringthatconsiderationandcareisusedatalltimesindealingwiththeorganizationsmostimportantresourcespeople.IndividualSelfEsteem.Somechangeactivitiesmayunderminetheindividualsselfesteem.Theunfreezingprocessrequiresparticipantstodiscon1irmtheirexistingbeliefs,sometimesincludingtheirowncompetenceatcertaintasksorinterpersonalrelations.Somespeci1icchangepracticesinvolvedirectexposuretopersonalcritiquebycoworkersaswellaspublicdisclosureofone'spersonallimitationsandfaults.Studentsmightsuggestinsupportofthispracticethatanychangerequiresgivingupsomeselfesteem.Itinvolvesrecognizingpastimperfections,whichmotivatespeopletochangeforthefuture.Employeesmayrequiresupportand/orresourcestosustainhighlevelsofselfef1icacy.
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CASE STUDY 15-1: TRANSACT INSURANCE CORPORATION
Case SynopsisTransActInsuranceCorporation(TIC)providesautomobileinsurancethroughouttheSoutheasternUnitedStates.JimLeonwashiredasvicepresidentofClaimsandimmediatelybeganaseriesofchanges.Hedecidedtomakemoraleandsupervisoryleadershiphistoppriority.OneofLeonsmostpronouncedsymbolsofchangewasthe"ClaimsManagementCredo"outliningthephilosophythateveryclaimsmanagerwouldfollow.Afterthecredowasapprovedbyclaimsmanagers,Leonannouncedplanstofollowupwithanannualsurveytoevaluateeachclaimsmanager'sperformance.Oneyearlater,asurveyofclaimscenteremployeeswasheld.ClaimsmanagersdidntbelievethatLeonwouldreallyconductthesurvey.Thesurveyhadahighresponserate,withmostmanagersreceivingmoderateorpoorratingsonthetencredoitems.Thesurveyresults,includingeverycommentmadebyemployeesatthatclaimscenter,wereshowntoemployees.Claimscentermanagerswereshocked.Discussionmeetingswithemployeeswereattendedbytheregionaldirectortocontroloravoidconfrontations.Soonafterthesemeetings,someclaimsmanagersquitoraskedfortransfersintononmanagementjobs.Epilogue.Shortlyafterthe1irstsurvey,thenewsletterwassuspended.Jimhadmanymoremeetingswithhismanagersanddirectors.Jimeventuallyconcludedthattoomanyofhismanagersweretechnicalexpertsininsuranceandlackedthepeopleskillsnecessaryformanagement.Toresolvethisproblem,managerswereaskedtocompeteforrevisedpositionswithagreateremphasisonmanagementabilityratherthantechnicalprowess.Afewnewmanagerswerebroughtinbutmostofthesuccessfulcandidateswereselectedfromtheexistingrosterofmanagers.Employeesurveysstoppedafterfouryears.Jimleftandwentintosemiretirement.Suggested Answers to Case Questions
1. Whatsymptom(s)existinthiscasetosuggestthatsomethinghasgonewrong?ThereareseveralsymptomssuggestingthatJimLeonschangeprocessisnotgoingwell.First,employeesandmanagersalikearedissatis1iedwiththeprocess,althoughfordifferentreasons.someofthedebrie1ingsessionsrevealedlevelsofunhealthycon1lict.Afewmanagershavequittheirjobsoraskedfortransfers.Earlier,managersquietlyresistedthechangesbynottakingtheprocessseriously(i.e.theyignoredituntilthenextroundofevents).2. Whataretherootcausesthathaveledtothesesymptoms?JimLeonwasunsuccessfulwiththischangeprocess.Althoughhissmallchangesdescribedatthebeginningofthecaseseemtohaveworked,thesurveyprocesscreatedsuchresistanceandreactionfrommanagersthatchangeprobablybecamemoredif1icultafterwards.Bylookingattheactionresearchmodel,wecanseethatatleastthe1irsttwostageswerenotconductedsuf1icientlywell.Themaincausescanbeidenti1iedfromevidenceof(a)thelackofurgencytochangeamongmanagers,(b)varioussourcesofresistancetochange,and(c)lackofdiagnosisforthechangeintervention.
Lackofurgency.JimLeondidnotdiagnosethereadinessforchangeofhisclaimsmanagersandemployees.Theclaimsmanagersdidnotbelievethatthesurveywouldbeconducted,theydoubtedtheimportanceoftheClaimsManagementcredo,andtheydidnotsupporttheopensurveyfeedbackprocess.Consequently,Leondidnotprovideenoughevidenceandargumenttomotivatetheclaimsmanagerstoembraceoratleastpreparethemselvesforthechangeprocess.SourcesofResistance.Theclaimsmanagersengagedinpassiveresistancetothechange.Studentsshouldbeabletoidentifylikelyreasonsforthisresistance.Theinterventionmightrequirechangingmanagerialpractices,whichrelatestobreakingroutines,fearoftheunknown,andpossiblydirectcosts(wheremanagerslosepower,resources,orstatus).Managerialnormsofbehaviormightalsobepresentthatinterferewiththedesiredchanges.Wedonthaveinformationaboutsystemsorstructures,buttheymightalsoactasbarriers.Studentsmightnotethelackof
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involvementofmanagersinthechangeprocess.Althoughtheyidenti1iedthesurveyperformancefactors,thislistwasreallyrestrictedtothepointthatLeonwasmoreincontrolofthefactorstobeconsidered.DiagnoseNeedforChange.Theemployeesurveyisanintervention,becauseitwasintendedtobeanongoingsysteminmanagementdevelopmentatTransAct.However,theinitialsurveywasalsoadiagnostictooltohelpLeonandclaimsmanagersidentifyareasthatneedimprovement.Althoughstudentsmaydebatetheappropriatenessofasurveyfordatacollection,themainproblemisthatthedatawerenotfedbacktoclaimsmanagersinawaythatminimizesperceptualdefense.Thisisimportant,becauseitaffectsthewillingnessofparticipantstocontinuewiththeintervention.Forexample,thesurveydatawerebothanevaluationtoolandaorganizationalchangeassessmenttool.Moreover,theprocesswasdelayedforoneyear,somanagersmayhavelostanyinertiatowardchangethatoccurredwhenthecredowasformedayearearlier.Anotherconcernisthatsomeofthesurveyitemsmayrelatetofactorsoverwhichtheclaimsmanagershavenocontrol.EmployeeshadlowmoraleandoverworkbeforeLeontookoverasVPofclaims.Severalyearsofpentupfrustrationwereventedinthesurvey,andclaimsmanagerswerenotcompletelyresponsibleforthosefeelings.Thereareargumentsinfavorofusingtheemployeesurveyprocess,suchasthatthisiscostef1icientforalargegroupofpeople.However,thesurveydesignandfeedbackshouldbechangedtoimprovetheirrelevanceandacceptabilitytoeveryoneinvolved.Theclaimsmanagersshouldbeputinabetterstateofreadinesstoparticipateinthesurveydesignprocess.Thequestionsshouldbeclearlyandobjectivelyrelatedtotheclaimsmanagersjobs.Thesurveyfeedbackshouldbemorecon1idential,perhapswithfeedbacksessionsbasedonlyonoverallstatisticalresultsacrosstheclaimsdivision(i.e.,notwithinthesmallclaimscentersandnotwithindividualcomments).
3. Whatactionsshouldthecompanytaketocorrecttheseproblems?Thecompanyshouldbeginthechangeprocessagain.Thiswouldbeginbyidentifyingonwhatneedstochange(morecustomerfocus?costef1iciency?employeeengagement?).Next,thechangeprocessrequiresstrongermechanismstocreateanurgencytochange,suchasmoredirectevidenceofcompanyproblems,ofincreasedcompetition,orofagreaterpotentialeffectiveness.Third,employeeandmanagementinvolvementintheprocessneedstoberealratherthanhighlyrestricted.Thus,inlinewithactionresearch,thepreferredinterventionandindicatorsofitseffectivenessshouldrelyoninputfromthesestakeholders,notjustJimLeonortheCEO.Thelattermayhaveultimatedecisioncontrol,butinvolvementiscriticalforbuyin.TheCEOandLeonmightalsoconsiderapilotprojectifthechangeisdif1icultandrisky.However,sincetheunitisintegrated,apilotprojectmaybedif1icult.Finally,thechoiceofinterventionneedstobecarefullychosensuchthatitisalignedwiththechangeobjectives.Thismayinvolvetraining,changingrewardsandinformationsystems,orothersystemsalterations.StudentsshouldalsodiscussJimLeonasachangeagent.Speci1ically,thereisreasontobelievethatLeonhaslosttrust,respect,andcredibilitytoleadthechangeprocess.Thisdoesnotnecessarilymeanthatheneedstobereplacedasheadofclaims.Rather,anexternalconsultantwhoworkswithmanagementandemployeesmayberequiredtoengageinthenextattempttochange.
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CASE STUDY 15-2: INSIDE INTEL
Case SynopsisForyears,IntelthrivedonabusinessmodelthatcofounderAndyGroveperfectedandreinforcedunderhisleadershipandtheleadershipofhissuccessor,CraigBarrett.ButIntelslatestCEO,PaulOtellinihasdifferentplans.RatherthancontinuingtobuildfasterchipsjustforPCcomputers,Otelliniseesbiggeropportunitiesinnewplatforms.Otellinialsowantstoraisethepro1ileofmarketing,ratherthanletengineersdeterminewhatproductsaredeveloped.EventhefamousIntellogo(withalowerede)isbeingditchedforamorecontemporarydesign.ThisBusinessWeekcasestudyreviewsthechangesthatPaulOtelliniisintroducingatIntelandexplainshowheisbuildingmomentumtowardthesechanges.Thearticlealsodescribeshowemployeesarerespondingtothesechanges.Suggested Answers to Case Questions
1. WhatchangemanagementstrategieshasPaulOtelliniusedtohelpintroducethevariouschangesatIntel?Otellinihasengagedinafewpracticesforchange.Onestrategywastoreorganizeemployeesintoproductareas.ThishadtheeffectofdissipatingthecreosoteeffectofthePCchipdevelopmentoperations,nowallowingvariousinitiativestodevelop.Similarly,hehasstructuredproductdevelopmentaroundcrossfunctionalteamsratherthanallowingengineerstoworkinisolation.Anotherstrategyistohireavarietyofpeoplewithdifferentbackgrounds.Theirexperienceandvalueswillultimatelyreshapethecompanysvaluesandculture.Relatedtothisstrategyistheactionofhiringstarpeople,suchasaformermarketingguruatSamsung.Anotherstrategyistoalterpositionpower(probablythroughrestructuringandbudgets)suchthatsomeengineeringgroupsnolongerwieldthemostpower.Changehasalsobeeinstitutedthroughsymbolicactions,suchasslowlyphasingoutthePentiumbrandandalteringIntelslogo.2. Discussevidencethatsomeemployeesareresistingthesechanges?What,ifanything,canOtellinidoto
minimizethisresistance?Themainevidenceofresistanceisthefrustrationthatemployeessaytheyareexperiencing.ToidentifywhatactionsOtellinishouldtake,studentsshouldexaminethevariouswaystoreduceresistancetochange,particularlycommunication,training,andinvolvement.
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TEAM EXERCISE 15-3: STRATEGIC CHANGE INCIDENTS
PurposeThisexerciseisdesignedtohelpstudentstoidentifystrategiestofacilitateorganizationalchangeinvarioussituations.InstructionsStep1:Theinstructorwillplacestudentsintoteams,andeachteamwillbeassignedoneofthescenariospresentedinthisexercise.Step2:Eachteamwilldiagnoseitsassignedscenariotodeterminethemostappropriatesetofchangemanagementpractices.Whereappropriate,thesepracticesshould(a)createanurgencytochange,(b)minimizeresistancetochange,and(c)refreezethesituationtosupportthechangeinitiative.EachofthesescenariosisbasedonrealeventsthatoccurredintheUnitedStatesandelsewhere.Step3:Eachteamwillpresentanddefenditschangemanagementstrategy.Classdiscussionregardingtheappropriatenessandfeasibilityofeachstrategywilloccurafterallteamsassignedthesamescenariohavepresented.Theinstructorwillthendescribewhattheorganizationsactuallydidinthesesituations.Comments for InstructorsIhaveusedthisexerciseseveraltimesinMBAclassesandexecutivedevelopmentprograms,withconsistentlygoodresults.Theactivityshouldalsoworkwellwithundergraduateuniversityandcollegeclassesbecauseitisstraightforwardandappliesconceptsfromthetextbook.TheactivityismademoreinterestingbythefactthatthesescenariosinvolveREALCOMPANIES,sotheinstructorcanadvisestudentsthattheirstrategieswillbecomparedwithwhatthecompaniesactuallydid.ThePowerPoint1ileforthischapterincludesasummaryofthesescenarios,includingtheactionstakenbythetworealorganizations.(ThesePowerPointslidesappearaftertheslidesforthechaptercontent.)Scenario 1: Greener TelcoTheBoardofDirectorsatalargetelephonecompanywantitsexecutivestomaketheorganizationmoreenvironmentallyfriendlybyencouragingemployeestoreducewasteintheworkplace.Therearealsoexpectationsbygovernmentandotherstakeholdersforthecompanytotakethisactionandbepubliclysuccessful.Consequently,themanagingdirectorwantstosigni1icantlyreducetheuseofpaper,refuse,andotherwastethroughoutthecompanysmanywidespreadof1ices.Unfortunately,asurveyindicatesthatemployeesdonotvalueenvironmentalobjectivesanddonotknowhowtoreduce,reuse,recycle.AsVPAdministration,youhavebeenaskedtodevelopastrategythatmightbringaboutmeaningfulbehavioralchangetowardtheseenvironmentalgoals.Whatwouldyoudo?WhatActuallyHappened:ThisincidentdescribestheZeroWasteprogramseveralyearsagoatBellCanada.BellCanadaisthelargesttelephonecompanyinthatcountry.Althoughtheinterventionoccurred15yearsago,itisatimelessincidentfordiscussionbecauseitappliestobehaviorchangethatmightoccurinanyorganizationandwouldinvolveemployeesatalllevels.BellCanadainvokedchangebyapplyingseveralstrategiestominimizeresistancetochange.HerearethestepsthetelephonecompanytooktobringaboutZerowaste:Communication:EmployeesattendedinformationsessionsandsawbannersatthefrontentranceaboutthebeginningofZeroWaste.Ataskforceofemployeerepresentativeskepteveryoneinformedaboutdevelopmentsleadinguptothe1irstdayofzerowaste.Training.Employeeswereshownhowtoreducepaperwastebyusingbothsidesofpaper,usingscrappaperasmemopads,reusingof1iceenvelopes,andrelyingmoreonemailandvoicemailthanwrittenmemos.Inthecafeteria,theylearnedtoseparateleftoverfoodanddeposititintotheappropriatecompostbin.Thecompanyalsoinstalledaspecialtelephonehotlinetoanswerquestionsaboutrecycling.BellCanadaemployeesalsoreceivedfeedbackabouttheir
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progresstowardthewastereductiongoal.Thetaskforceweighedthegarbagetwiceeachweekandpubliclydisplayedtheseresultsoncharts.Thegarbagewasoccasionallyauditedforincorrectbehaviors,suchasthrowingapplecoresinthepaperrecyclingbin.Offendingemployeeswerepolitelyencouragedtousethecompostbininstead.Employeeinvolvement.BellCanadadeliberatelyselectedthemorepopularemployeesineachdepartmenttoserveonaspecialtaskforcetodeveloptheZeroWasteprogram.Theseemployeesquicklybecamechampionsastheytookownershipoftheprogram.Theywerealsoconduitsofinformationandenthusiasmbacktothedepartmentswheretheyworked.Coercion.TheZeroWasteprogramcreatedbarrierstowastefulbehavior.Papertowelswerereplacedwithelectrichanddryersinthewashrooms.Styrofoamcupswerereplacedwithreusablemugsateachemployeesdesk.Metalgarbagecansateachworkstationwerereplacedwithplasticrecyclingbins.Employeeswereleftwithtinyreusablebagstocarrynonrecyclablestospeciallymarkedbinslocatedelsewhereinthebuilding.Alongwiththesestrategies,BellCanadabegantheprogramasapilotprojectinoneofitslargestbuildings.Thatpilotprojectreducedwasteby98percentfromnearly1,000poundsofwasteeachdaytolessthan25poundsofwasteeachday.Thecompanysubsequentlyappliedsimilarchangemanagementprinciplestoimproveenergyconservation.SomestudentsmightcorrectlysuggestthatthechangeprocessisessentiallyapplyingtheMARSmodeltoalterindividualbehavior.BellCanadamotivatedemployees,changedtheirroleperceptions,andimprovedtheirabilitythroughtrainingtoreducewaste.Perhapsmostimportant,BellCanadachangedtheenvironmentsothatsituationalfactorsmadeitmoredif1iculttoengageinwastefulbehavior.References:J.Mills,BellSetsExamplewithZeroWasteProgram,MontrealGazette,(February14,1993),p.C3;C.Mahood,BellZerosinonWaste,Globe&Mail,(May4,1992),pp.B1,B2;BellCanada,InsideGuide,(January1993),pp.4648;D.Hogarth,FirmsReapGreenHarvest,FinancialPost,(June1517,1991),p.18.Scenario 2: Go Forward AirlineAmajorairlinehadexperiencedadecadeofroughturbulence,includingtwoboutsofbankruptcyprotection,10managingdirectors,andmoralesolowthatemployeeshadrippedoffcompanylogosfromtheiruniformsoutofembarrassment.Servicewasterribleandtheairplanesrarelyarrivedorlefttheterminalontime.Thiswascostingtheairlinesigni1icantamountsofmoneyinpassengerlayovers.Managerswereparalyzedbyanxietyandmanyhadbeenwiththe1irmsolongthattheydidntknowhowtosetstrategicgoalsthatworked.One1ifthofall1lightswerelosingmoneyandthecompanyoverallwasnear1inancialcollapse(justthreemonthstodefaultingonpayrollobligations).ThenewlyhiredCEOandyoumustgetemployeestoquicklyimproveoperationalef1iciencyandcustomerservice.Whatactionswouldyoutaketobringaboutthesechangesintime?WhatActuallyHappened:Scenario#2describesthetroublesthatContinentalAirlinesexperiencedduringthe1980sandearly1990s.Theairlinewastheresultsofsevenmergedairlinesandhadbeenmanagedbadlyoverthepreviousdecade.ContinentalwentintobankruptcytwiceandwasalmostoutofcashwhenGordonBethuneandGregBrennemanwerehiredaschairmanandpresident,respectively.Thecompanywascontinuallylosingmoneyanditscontinuouscostcuttingonlymademattersworsebydestroyingcustomerserviceandemployeeloyalty.ContinentalexecutivesGordonBethuneandGregBrennemanappliedthefollowingchangemanagementstrategy:Communication.BethuneandBrennemanconstantlycommunicatedtheirGoForwardstrategicplantosavetheairline.GoForwardcoveredfourcornerstones:market,1inancial,product,andpeople.BethuneandBrennemanalsoworkedalongsidebaggagestaffandotheremployees,discussingtheirgoforwardplanwhileperformingthefrontlinework.Thecompanyalsopostednewsofthechangeprocessonbulletinboards,inweeklyvoicemailsfromBethune,andinmonthlyopenhousemeetingswithemployees.Training.TherewerenoapparenttrainingprogramstochangeContinentalairlines.BethuneandBrennemanarguedthatemployeesalreadyknewtheirjobs,butlackedtheopportunityandstrategytoputtheirskillsandknowledgetouse.However,Continentalintroducednewgoals(suchasontimedepartures)andusedDepartmentofTransportationmonthlymeasuresasfeedbackonhowwellthecompanyperformedontheseperformancemetrics.EmployeeInvolvement.BethuneandBrennemancollectedtheThouShaltnotmanualtheguidebookonwhatemployeesarenotallowedtodoandpubliclyburnedthemintheparkinglot.ThenBethuneandBrennemantoldemployeestomakecustomerservicehappen.
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Coercion.Fiftyoneofthe60executiveswerereplacedwithinacoupleofmonths.BethuneandBrennemanstatedthatitisdif1icultforpeoplewhogetacompanyintoamesstogetthemout.Moreover,theexecutiveswhomadethesemistakesforsolongwouldnotbetrustedbyemployeestoleadthemintothefuture.Alongwiththesestrategies,Continentalintroducedrewardsthatalignedemployeeswiththecompanysnewstrategicgoals.Ratherthanreducecosts,Continentalwasgoingtoimproveservice.Thus,employeeswereeachpaid$65foreachmonththatContinentalplacedinthetop1iveairlinesforontimeservice,accordingtotheDepartmentofTransportation.Inchangemanagement,rewardsrelatetointroducingsystemsandstructurestorefreezethedesiredconditions.BethuneandBrennemanalsobroughtaboutrapidchangebyhiringseniorexecutives(replacingthose1ired)withcompetenciesandvaluesthatweremorealignedwiththeGoForwardplan.References:G.Brenneman,RightAwayandAllatOnce:HowWeSavedContinental,HarvardBusinessReview,SeptemberOctober1998,pp.16279;T.Kennedy,Con1idencereturnswithContinental'sstrongcomeback,MinneapolisStarTribune,February1,1998,p.1A.
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SELF-ASSESSMENT 15-4: ARE YOU TOLERANT OF CHANGE?
NOTE: This self-assessment may be completed at the Online Learning Center.
PurposeThisexerciseisdesignedtohelpstudentsunderstandhowpeopledifferintheirtoleranceofchange.BackgroundSomepeoplearenaturallylesscomfortablethanotherpeoplewiththecomplexityanduncertaintyofchange.Thisselfassessmentprovidesanestimateofhowtolerantpeopleareofchange.Studentsareaskedtoreadeachofthestatementsandcircletheresponsethatbest1itstheirpersonalbelief.Theythenusethescoringkeytocalculatetheirresults.Thisselfassessmentiscompletedalonesothatstudentsratethemselveshonestlywithoutconcernsofsocialcomparison.However,classdiscussionwillfocusonthemeaningoftoleranceofchange,howthisscalemightbeappliedinorganizations,andthelimitationsofmeasuringtoleranceofchangeinworksettings.Feedback for the Tolerance of Change ScaleThismeasurementinstrumentisformallyknownasthetoleranceofambiguityscale.Althoughitwasdevelopedover40yearsago,theinstrumentisstillusedtodayinresearch.Peoplewithahightoleranceofambiguityarecomfortablewithuncertainty,suddenchange,andnewsituations.Thesearecharacteristicsofthehyperfastchangesoccurringinmanyorganizationstoday.ThefollowinggraphcomparesyourscoreonthisscaletoresultsforasampleofMBAstudents.Scoresonthisscalerangefrom16to112.Ahigherscoreindicatesahighertoleranceofchange.Score Interpretation
81 to 11263 to 8016 to 62
High tolerance of changeModerate tolerance of changeLow tolerance of change
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