1. Chapter Sixteen Change, Conflict, and Negotiation

2. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 2 Chapter Objectives Identify and describe four types of organizational change according to the Nadler-Tushman model. Explain how people tend to respond differently to changes they like and those they dislike. List at least six reasons why employees resist changes and discuss what management can do about resistance to change. Describe how the unfreezing-change-refreezing metaphor applies to organization development (OD).

3. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 3 Chapter Objectives (cont’d) Describe tempered radicals and identify the 5Ps in the checklist for grassroots change agents. Contrast competitive and cooperative conflict styles. Identify and describe five conflict resolution techniques. Identify and describe the elements of effective negotiation and explain the advantage of added value negotiating (AVN).

4. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 4 Change: Organizational Perspectives Types of Organizational Change –Anticipatory changes: Planned changes based on expected situations –Reactive changes: Changes made in response to unexpected situations –Incremental changes: Subsystem adjustments required to keep the organization on course –Strategic changes: Altering the overall shape or direction of the organization

5. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 5 Figure 16.1: Four Types of Organizational Change Source: Copyright © 1990, by The Regents of the University of California. Reprinted from the CALIFORNIA MANAGEMENT REVIEW, Vol. 32, No. 2. By permission of The Regents. All rights reserved. This article is for personal viewing by individuals accessing this site. It is not to be copied, reproduced, or otherwise disseminated without written permission from the California Management Review. By viewing this document, you hereby agree to these terms. For permission or reprints, contact: cmr@haas.berkeley.edu.

6. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 6 Change: Organizational Perspectives (cont’d) Tuning –The most common, least intense, and least risky type of change –Also known as preventive maintenance and kaizen (continuous improvement) –Key is to actively anticipate and avoid problems rather than waiting for something to go wrong Adaptation –Incremental changes that are in reaction to external problems, events, or pressures

7. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 7 Change: Organizational Perspectives (cont’d) Reorientation –Change that is anticipatory and strategic in scope and causes the organization to be significantly redirected –Also called “frame bending” (Nadler and Tushman) Re-Creation –Intense, risky, and decisive change that reinvents the organization –Also called “frame breaking” (Nadler and Tushman)

8. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 8 Individual Reactions to Change How People Respond to Changes They Like –Three-stage process Unrealistic optimism Reality shock Constructive direction

9. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 9 Figure 16.2: How People Tend to Respond to Changes They Like

10. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 10 Individual Reactions to Change (cont’d) How People Respond to Changes They Fear and Dislike –Stages Getting off on the wrong track Laughing it off Growing self-doubt Buying in Constructive direction

11. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 11 Figure 16.3: How People Tend to Respond to Changes They Fear and Dislike

12. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 12

13. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 13

14. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 14 Why Do Employees Resist Change? Surprise –Unannounced significant changes threaten employees’ sense of balance in the workplace. Inertia –Employees have a desire to maintain a safe, secure, and predictable status quo. Misunderstanding/Ignorance/Lack of Skills –Without introductory or remedial training, change may be perceived negatively.

15. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 15 Why Do Employees Resist Change? (cont’d) Emotional Side Effects –Forced acceptance of change can create a sense of powerlessness, anger, and passive resistance to change. Lack of Trust –Promises of improvement mean nothing if employees do not trust management. Fear of Failure –Employees are intimidated by change and doubt their abilities to meet new challenges.

16. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 16 Why Do Employees Resist Change? (cont’d) Personality Conflicts –Managers who are disliked by their employees are poor conduits for change. Poor Timing –Other events can conspire to create resentment about a particular change. Lack of Tact –Not showing sensitivity to feelings can create resistance to change.

17. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 17 Why Do Employees Resist Change? (cont’d) Threat to Job Status/Security –Employees worry that change threatens their job or security. Breakup of Work Group –Changes can tear apart established on-the-job social relationships. Passive-Aggressive Organizational Culture –The more things change, the more they stay the same. Competing Commitments –Change can disrupt employees in their pursuit of other goals.

18. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 18 Overcoming Resistance to Change Strategies for Overcoming Resistance to Change –Education and communication –Participation and involvement –Facilitation and support –Negotiation and agreement –Manipulation and co-optation –Explicit and implicit coercion

19. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 19

20. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 20 Making Change Happen Two Approaches to Organizational Change –Organization Development (OD) Formal top-down approach –Grassroots Change An unofficial and informal bottom-up approach

21. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 21 Organization Development (OD) Planned change programs intended to help people and organizations function more effectively Applying behavioral science principles, methods, and theories to create and cope with change

22. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 22 Objectives of OD Deepen sense of organizational purpose. Strengthen interpersonal trust. Encourage problem solving rather than avoidance. Develop a satisfying work experience. Supplement formal authority with knowledge and skill-based authority. Increase personal responsibility for planning and implementing. Encourage willingness to change.

23. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 23 The OD Process Unfreezing, Change, Refreezing (Kurt Lewin) –Unfreezing: Neutralizing resistance by preparing people for change –Change: Introduction of the intervention –Refreezing: Systematically following a change program for lasting results

24. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 24 Figure 16.4: A General Model of OD

25. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 25 Unofficial and Informal Grassroots Change Tempered Radicals –People who quietly try to change the dominant organizational culture in line with their convictions –Guidelines for tempered radicals: Think small for big results. Be authentic. Translate. Don’t go it alone.

26. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 26 Figure 16.5: The 5P Checklist for All Change Agents

27. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 27 Managing Conflict Conflict –One person’s incompatible behaviors that make another person’s actions less effective Dealing with the Two Faces of Conflict –Competitive conflict: Parties pursuing directly opposite (win-lose) goals –Cooperative conflict: A mutually reinforcing experience (win-win) that serves the best interests of both parties

28. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 28 Figure 16.6: A Competitive Versus Cooperative Conflict Source: Reprinted from LEARNING TO MANAGE CONFLICT: GETTING PEOPLE TO WORK TOGETHER PRODUCTIVELY by Dean Tjosvold. Copyright © 1993 Dean Tjosvold. First published by Lexington Books. All rights reserved. All correspondence should be sent to Lexington Books, 4720 Boston Way, Lanham, MD 20706.

29. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 29 Managing Conflict (cont’d) Conflict Trigger –Any factor that increases the chances of conflict Conflict Triggers –Ambiguous or overlapping jurisdictions –Competition for scarce resources –Communication breakdowns –Time pressure –Unreasonable standards, rules, policies, or procedures –Personality clashes –Status differentials –Unrealized expectations

30. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 30 Managing Conflict (cont’d) Resolving Conflict –Doing nothing is usually not a viable option. –Conflict Resolution Techniques Problem solving Superordinate goals Compromise Forcing Smoothing

31. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 31 Negotiating Negotiation –A decision-making process among interdependent parties with different preferences Common Types of Negotiation –Two-party negotiation (e.g., buyer and seller) –Third party negotiation (e.g., agents and arbitrators)

32. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 32 Negotiating (cont’d) Elements of Negotiation –Adopting a win-win attitude Understanding that a mutually beneficial agreement addresses both parties’ interests –Knowing your BATNA (best alternative to a negotiated agreement) Your “bottom line” for accepting or rejecting offers –Identifying the bargaining zone Negotiation is useless if both parties involved have no common ground on which to maneuver during bargaining.

33. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 33 Figure 16.7: The Bargaining Zone for Negotiators

34. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 34 Negotiating (cont’d) Added Value Negotiating (AVN) –A practical five-step win-win process involving the development of multiple deals Clarify subjective and objective interests; seek common ground. Identify options and their marketplace values. Design alternative deal packages that foster a creative agreement. Select a mutually acceptable deal that is feasible for both parties. Perfect the deal by hammering out unresolved details.

35. Copyright © Houghton Mifflin Company. All rights reserved.Chapter Sixteen | 35 Terms to Understand Anticipatory changes Reactive changes Incremental changes Strategic changes Organization development (OD) Unfreezing Refreezing Tempered radicals Conflict Conflict trigger Negotiation Bargaining zone Added value negotiating