Creating and Managing Change Chapter 18 McGraw-Hill/Irwin Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.

Organization Development Organization development (OD) The system wide application of behavioral science knowledge to develop, improve, and reinforce the strategies, structures, and processes that lead to organizational effectiveness.

Organization Development Strategic interventions, helping organizations conduct mergers and acquisitions, change their strategies, and develop alliances Technostructural interventions relating to organization structure and design, employee involvement, and work design

Organization Development Human resources management interventions Attracting good people, setting goals, and appraising and rewarding performance Human process interventions Conflict resolution, team building, communication, and leadership.

Achieving Greatness Strategy Execution focused on customers, continually fine-tuned based on marketplace changes, and clearly communicated to employees. Execution good people, with decision-making authority on the front lines, doing quality work and cutting costs.

Achieving Greatness Culture one that motivates, empowers people to innovate, rewards people appropriately, entails strong values, challenges people, and provides a satisfying work environment

Achieving Greatness Structure making the organization easy to work in and easy to work with, characterized by cooperation and the exchange of information and knowledge throughout the organization

Managing Change Shared leadership is crucial to the success of most change efforts—people must be not just supporters of change but also implementers Change agents People who create change

Motivating People to Change General reasons for resistance Inertia Timing Surprise Peer pressure

Motivating People to Change Change-specific reasons for resistance Self-interest Misunderstanding Different assessments Management tactics

Reasons for Resistance to Change Figure 18.1

Motivating People to Change Figure 18.2

A General Model for Managing Resistance Unfreezing Realizing that current practices are inappropriate and that new behavior is necessary Performance gap The difference between actual performance and desired performance.

A General Model for Managing Resistance Moving Instituting the change Refreezing Strengthening the new behaviors that support the change

Force-field Analysis Force-field analysis An approach to implementing the unfreezing/ moving/refreezing model by identifying the forces that prevent people from changing and those that will drive people toward change

Force-field Model of Change Desired state Restraining forces Status quo Driving forces Time

Specific Approaches to Enlist Cooperation Education and communication Participation and involvement Facilitation and support Negotiation and rewards Manipulation and cooptation Explicit and implicit coercion

Methods for Managing Resistance to Change Table 18.2

Methods for Managing Resistance to Change Table 18.2

Harmonizing Multiple Changes Total organization change Introducing and sustaining multiple policies, practices, and procedures across multiple units and levels.

Leading Change Figure 18.3

Sources of Complacency Figure 18.4

Shaping the Future Reactive change Proactive change A response that occurs under pressure; problem driven change. Proactive change A response that is initiated before a performance gap has occurred.

Creating the Future Adapters Shapers Companies that take the current industry structure and its evolution as givens, and choose where to compete Shapers Companies that try to change the structure of their industries, creating a future competitive landscape of their own design.

Adding Value, Personally Table 18.3

Learning Cycle: Explore, Discover, Act Figure 18.6

Level 5 Hierarchy Figure 18.7

Destination CEO: Coca Cola Co. What examples can you provide of Isdell’s efforts to deliver Coke back to the world-class status it had once enjoyed? Brainstorm some new beverage ideas that Coke might consider for the future. BusinessWeek TV’s Destination CEO Name: Coca Cola Co. CEO of Company: Neville Isdell   Themes: Change, Strategy Suggested chapters: 18, 4 Short paragraph about the video. Change doesn’t come easy to a 120-year old company. Atlanta-based Coca Cola faced flat sales and increasing competition as a result of its unwillingness to move into product lines outside its carbonated beverage line. The solution? The Board of Directors brought a former executive out of retirement and appointed him CEO. Neville Isdell left Coke in 2001 after 35 years with the company, but he returned three years later. Isdell’s job became initiating change necessary to deliver Coke back to the world-class status it had once enjoyed. Rather than diversify into new businesses, Isdell led the company on a charge to acquire or develop new beverage brands. Since his arrival, Isdell has been credited with introducing a new corporate branding campaign showing Coke as “the total beverage company.” With his degree in sociology, Isdell is known for his people skills. He is credited with boosting employee morale and trying to change Coke’s culture, which made it slow to recognize health trends that competitors such as PepsiCo. seized. Isdell accelerated the rollout of new beverages like coffee-flavored Coke Blak. Green tea product, Inviga, a diet soda that burns calories, hit the U.S. market in 2006. Coke acquired Glacéau and its line of products including Vitamin Water in 2007 to expand the company’s non-carbonated beverage line. Coke is the largest beverage company in the world and trades under the symbol KO on the NYSE. 3-4 multiple choice questions with answers regarding video topics Where is the headquarters for Coca Cola located? Chicago New York Atlanta Los Angeles Isdell is one of few CEOs who earned a college degree in ______________________. sociology biology anthropology psychology Coke introduced a coffee-cola beverage named ___________. Inviga Blak Simba LavAzza 2-3 essay or discussion questions with suggested answers regarding video topics What examples can you provide of Isdell’s efforts to deliver Coke back to the world-class status it had once enjoyed? Students’ responses will vary. Under Isdell’s leadership, Coke has delivered innovative new products and is shedding its prior culture in which change was feared. Discuss the pros and cons of a corporate strategy of diversification for a company such as Coke. Students’ responses will vary. Unlike key competitor PepsiCo, Coke has decided not to pursue diversified businesses. The goal of diversification is to help reduce risk. PepsiCo has chosen a concentric diversification with Frito Lay, Quaker, Tropicana, and Gatorade; while Coke is choosing to concentrate on a more focused portfolio of beverages. Brainstorm some new beverage ideas that Coke might consider for the future. Students’ responses will vary. This question would work especially well for small groups of students to brainstorm and then poll groups on their ideas.