1. Organizational Change and Development15
C H A P T E R
F I F T E E N
Organizational Change and Development

2. Continuous Change at Nokia
Nokia has continually adapted to its changing environment. The Finnish company began as a pulp and paper mill in 1865, then moved
Courtesy National Board of Antiquities, Finland
into rubber, cable wiring, and computer monitors. In the 1980s, Nokia executives sensed an emerging market for wireless communication. Today, Nokia is a world leader in cellular telephones.

3. Organizational Change: An International Phenomenon
International
expansion
Hungary
Mexico
S. Korea
Germany
United States
Japan
Reduction in
employment
Mergers,
divestitures,
acquisitions
Major
restructuring
(Source: Kanten, R., 1991.)
Percentage of Respondents by Country

4. Current State New State
Changing People: Some Basic Steps
Incorporating the changes,
creating and maintaining a
new organizational system
Step 3: Refreezing
Attempting to
create a new state
of affairs
Step 2: Changing
Current State New State
Recognizing the
need for change
Step 1: Unfreezing

5. Team Building: Its Basic Steps
Sensitivity
groups
Objective
data
Group members
recognize problem
Diagnose group’s
strengths and
weaknesses
Team Building: Its Basic Steps
Develop desired
change goals
Restart process
Develop action plan
to make changes
Implement plan
Evaluate plan
if unsuccessful
if successful
Process
completed

6. When Will It Occur? If benefits exceed costs Compared to
Change
is made
If benefits exceed costs
Amount of dissatisfaction
with current conditions
Compared to
Cost of
making
change
Benefit of
making
change
Availability of a
desirable alternative
Existence of a plan for
achieving a desirable
alternative
Change is
not made
If costs exceed benefits

7. Some External Forces for Change
Information
Technology
Globalization
& Competition
Courtesy National Board of Antiquities, Finland
Demography

8. Force Field Analysis Driving Forces Desired Conditions Current
Restraining
Desired
Conditions
Driving
Forces
Restraining
Driving
Forces
Restraining
Current
Conditions
Before Change
During Change
After Change

9. Resistance to Change at BP Norge
Employees initially resisted self-directed teams BP Norge’s North Sea drilling rigs.
“SDWTs don’t work on drilling rigs!”
“We already have teams!”
“This creates more work — will we get higher pay?”
“I don’t know how to work in teams.”
“SDWTs will threaten my job as a supervisor!”
AP Worldwide

10. Resistance to Change Forces for Change Direct Costs Saving Face
Fear of the Unknown
Breaking Routines
Incongruent Systems
Incongruent Team Dynamics
Forces for
Change

11. Creating an Urgency for Change
Need to motivate employees to change
Most difficult when organisation is doing well
Must be real, not contrived
Customer-driven change
Adverse consequences for firm
Human element energizes employees

12. Minimizing Resistance to Change
Communication
Minimizing
Resistance
to Change
Coercion
Training
Negotiation
Employee
Involvement
Stress
Management

13. Refreezing the Desired Conditions
Creating organizational systems and team dynamics to reinforce desired changes
alter rewards to reinforce new behaviours
new information systems guide new behaviours
recalibrate and introduce feedback systems to focus on new priorities

14. Change Agents
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
Courtesy of CHC Helicopter Corp.

15. Successfully Diffusing Change
Successful pilot study
Favourable publicity
Top management support
Labour union involvement
Diffusion strategy described well
Pilot program people moved around
Courtesy of CHC Helicopter Corp.

16. Organization Development Defined
A planned system wide effort, managed from the top with the assistance of a change agent, that uses behavioural science knowledge to improve organizational effectiveness.

17. Organizational Development: How Effective Is It?
Organizational outcomes
more often benefited from
OD interventions than did
individual outcomes
(48.70) 50 40
Percentage of Studies Showing Positive Changes 30
(23.55) 20
Individual
outcomes
(e.g., job
satisfaction)
Organizational
outcomes
(e.g., profit)
(Source: Porras and Robertson, 1992.)

18. Action Research Process
Establish
Client-
Consultant
Relations
Diagnose
Need for
Change
Introduce
Change
Evaluate/
Stabilize
Change
Disengage
Consultant’s
Services

19. Parallel Structures
Parallel
Structure
Organization

20. Appreciative Inquiry Process
Discovery
Discovering the best of “what is”
Dreaming
Forming ideas about “what might be”
Designing
Engaging in dialogue about “what should be”
Delivering
Developing objectives about “what will be”

21. Organization Development Concerns
Cross-Cultural Concerns
Linear and open conflict assumptions different from values in some cultures
Ethical Concerns
Management power
Employee privacy rights
Employee self-esteem
Consultant’s role

22. The Ethics of OD: Summary of the Debate
OD is
ethical
The imposition of values
is an inherent part of life,
especially on the job
Abuse comes from
individuals, not from
the technique itself,
which is neither good
nor evil
OD is
unethical
Imposes values of the
organization; coercive
and manipulative
Potential for abuse

23. Discussion of Activity 15.3 Strategic Change Management

24. Scenario #1: “Greener Telco”
Scenario #1 refers to Bell Canada’s Zero Waste program, which successfully changed wasteful employee behaviours by altering the causes of those behaviours.
Courtesy of Bell Canada

25. Bell Canada’s Change Strategy
Relied on the MARS model to alter behaviour:
Motivation -- employee involvement, respected steering committee
Ability -- taught paper reduction, , food disposal
Role perc. -- communicated importance of reducing waste
Situation -- Created barriers to wasteful behaviour, eg. removed garbage bins
Courtesy of Bell Canada

26. Scenario #2: “Go Forward Airline”
Scenario #2 refers to Continental Airline’s “Go Forward” change strategy, which catapulted the company “from worst to first” within a couple of years.
Courtesy of Continental Airlines

27. 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
Courtesy of Continental Airlines