0. Organizational Change and Stress Management18
Organizational Change and Stress Management
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

1. Chapter Learning Objectives
After studying this chapter, you should be able to:
Identify forces that act as stimulants to change, and contrast planned and unplanned change.
List the forces for resistance to change.
Compare the four main approaches to managing organizational change.
Demonstrate two ways of creating a culture for change.
Define stress and identify its potential sources.
Identify the consequences of stress.
Contrast the individual and organizational approaches to managing stress.
Explain global differences in organizational change and work stress.
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2. Forces for Change Nature of the Workforce Technology Economic Shocks
Greater diversity
Technology
Faster, cheaper, more mobile
Economic Shocks
Mortgage meltdown
Competition
Global marketplace
Social Trends
Baby boom retirements
World Politics
Iraq War and the opening of China
There are many things that force change in an organization such as the nature of the workforce, technology, competition, economic forces, social trends, and world politics.
E X H I B I T 18-1
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3. Planned Change Change Planned Change Change Agents
Making things different
Planned Change
Activities that are proactive and purposeful: an intentional, goal-oriented activity
Goals of planned change
Improving the ability of the organization to adapt to changes in its environment
Changing employee behavior
Change Agents
Persons who act as catalysts and assume the responsibility for managing change activities
Organizations often face change that is unexpected and sudden but it can also be a purposeful decision that organizations undertake. There are ways to foster an environment that is able to adapt and change with the demands of the marketplace. Planned change is engaging in activities that are proactive and purposeful to improve the ability of the organization to handle change and to change employee behavior. Through this process change agents, those acting as leaders in the change process, are essential for successfully achieving the desired change.
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4. Resistance to Change
Resistance to change appears to be a natural and positive state
Forms of Resistance to Change:
Overt and Immediate
Voicing complaints, engaging in job actions
Implicit and Deferred
Loss of employee loyalty and motivation, increased errors or mistakes, increased absenteeism
Deferred resistance clouds the link between source and reaction
Whenever change is present, there is resistance to change. Individuals and groups become comfortable with things that are familiar, and change threatens the status quo. There are different ways that change is resisted by employees. It can be overt and immediate where complaints are voiced and people will fail to engage in job actions or perform negative actions that hinder productivity. It can also be implicit and deferred when employees lose their loyalty and their motivation. As the resistance is deferred, it becomes more difficult to find the link between the source and the reaction.
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5. Sources of Resistance to Change
There are many sources of resistance to change, as seen in the visual in this slide. It can take the form of individual resistance, such as fear of the unknown or security issues or organizational resistance such as threat to expertise, structural inertia, or limited focus of change.
E X H I B I T 18-2
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6. Tactics for Overcoming Resistance to Change
Education and Communication
Show those effected the logic behind the change
Participation
Participation in the decision process lessens resistance
Building Support and Commitment
Counseling, therapy, or new-skills training
Implementing Change Fairly
Be consistent and procedurally fair
Manipulation and Cooptation
“Spinning” the message to gain cooperation
Selecting people who accept change
Hire people who enjoy change in the first place
Coercion
Direct threats and force
When managers face resistance to change there are some useful tactics they can utilize to help people overcome it. These tactics include education and communication, getting people to participate in the process, and building support and commitment. It can also include being sure to implement the change fairly by applying a consistent and fair process, using manipulation and cooptation to spin the message to gain cooperation or selecting people from the beginning who are more willing to accept change. Finally, a manager can resort to coercion, using direct threats and force to make people change. This is not often a good option.
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7. The Politics of Change
Impetus for change is likely to come from outside change agents, new employees, or managers outside the main power structure.
Internal change agents are most threatened by their loss of status in the organization.
Long-time power holders tend to implement incremental but not radical change.
The outcomes of power struggles in the organization will determine the speed and quality of change.
Change includes many political factors as the impetus for change is likely to come from outside those who are responsible for making the change happen. This can threaten those change agents within the organization and force them to implement incremental but not radical change. Embedded in the change dynamics will be the issue of power. Power struggles will have results that determine the speed and quality of change.
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8. Lewin’s Three-Step Change Model
Unfreezing
Change efforts to overcome the pressures of both individual resistance and group conformity
Refreezing
Stabilizing a change intervention by balancing driving and restraining forces
Unfreeze
Move
Refreeze
Lewin offers a three-step model to help facilitate the change process. He sets forth that change efforts need to “unfreeze” individual resistance and group conformity to help them move forward and then you need to refreeze the changes by balancing driving and restraining forces. This will help to move people through the change process and solidify the desired behaviors/outcomes moving forward.
E X H I B I T 18-3
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9. Lewin: Unfreezing the Status Quo
Driving Forces
Forces that direct behavior away from the status quo
Restraining Forces
Forces that hinder movement from the existing equilibrium
In the unfreezing stage Lewin identifies driving and restraining forces. Driving forces are those that direct behavior away from the status quo. Restraining forces are those that hinder movement from the existing equilibrium.
E X H I B I T 18-4
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10. Kotter’s Eight-Step Plan
Builds from Lewin’s Model
To implement change:
Establish a sense of urgency
Form a coalition
Create a new vision
Communicate the vision
Empower others by removing barriers
Create and reward short-term “wins”
Consolidate, reassess, and adjust
Reinforce the changes
Unfreezing
Kotter also offers a model to look at change that builds on the initial ideas of Lewin. He sets forth the following eight steps:
Establish a sense of urgency
Form a coalition
Create a new vision
Communicate the vision
Empower others by removing barriers
Create and reward short-term “wins”
Consolidate, reassess, and adjust
Reinforce the changes
Movement
Refreezing
E X H I B I T 18-5
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11. Action Research Process steps: Action research benefits:
A change process based on systematic collection of data and then selection of a change action based on what the analyzed data indicates
Process steps:
Diagnosis
Analysis
Feedback
Action
Evaluation
Action research benefits:
Problem-focused rather than solution-centered
Heavy employee involvement reduces resistance to change
Action research is another theory about change that says that the change process is based on a systematic collection of data and then selection of a change action based on what the data tells you. The process would be to diagnose the situation, analyze the data, obtain feedback from the data, take action, and then evaluate. The benefits of this approach is that it focuses on the problem instead of jumping to the solution and it also gets employees involved, thereby reducing their resistance to change.
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12. Organizational Development
Organizational Development (OD)
A collection of planned interventions, built on humanistic-democratic values, that seeks to improve organizational effectiveness and employee well-being
OD Values
Respect for people
Trust and support
Power equalization
Confrontation
Participation
Organizational development is an area of study that is set up to determine what an organization needs to improve their effectiveness and employee well being. Some organizational development values include respect for people, trust and support, power equalization, confrontation, and participation.
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13. Six OD Techniques Sensitivity Training Survey Feedback Approach
Training groups (T-groups) that seek to change behavior through unstructured group interaction
Provides increased awareness of others and self
Increases empathy with others, listening skills, openness, and tolerance for others
Survey Feedback Approach
The use of questionnaires to identify discrepancies among member perceptions; discussion follows and remedies are suggested
Process Consultation (PC)
A consultant gives a client insights into what is going on around the client, within the client, and between the client and other people; identifies processes that need improvement.
There are six commonly used organizational development techniques. The first is sensitivity training that sets up groups that seek to change behavior through unstructured group interaction by providing an environment of increased awareness of others and of themselves. This increases their empathy, listening skills, openness, and tolerance for others.
The second technique is the survey feedback approach where the organization will use a questionnaire to identify discrepancies among member perceptions and then follow up with discussions and plans for improvement.
Process consultation is the third technique. In this technique there is a consultant involved who gives the clients some insights into what is happening in the organization and helps to identify a process for improvement.
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14. Six OD Techniques (Continued)
Team Building
High interaction among team members to increase trust and openness
Intergroup Development
OD efforts to change the attitudes, stereotypes, and perceptions that groups have of each other
Appreciative Inquiry
Seeks to identify the unique qualities and special strengths of an organization, which can then be built on to improve performance
Discovery: Recalling the strengths of the organization
Dreaming: Speculation on the future of the organization
Design: Finding a common vision
Destiny: Deciding how to fulfill the dream
The fourth technique is engaging in team building tools to increase trust and openness through increased interactions.
Intergroup development is an organizational development tool that attempts to change the attitudes, stereotypes, and perceptions that groups may have of each other.
Finally, the sixth commonly used technique is appreciative inquiry. This process seeks to identify the unique qualities and special strengths of an organization which they then use to build on to improve performance through a process. This process includes discovery (identifying the strengths of the organization), dreaming (speculating on the future of the organization), designing (finding a common vision), and destiny (deciding how to fulfill the dream).
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
(c) 2008 Prentice-Hall, All rights reserved.

15. Creating a Culture for Change: Innovation
Stimulating a Culture of Innovation
Innovation: a new idea applied to initiating or improving a product, process, or service
Sources of Innovation:
Structural variables: organic structures
Long-tenured management
Slack resources
Interunit communication
Idea Champions: Individuals who actively promote the innovation
Many organizations attempt to create a culture for change through encouraging innovation. There are many sources of innovation or the process of coming up with a new idea that helps to improve a current process, product or service. Innovation can occur through structural variables, long-tenured management, limitation in resources, or increased communication between units. For innovation to occur, there needs to be an idea champion who actively promotes the innovation.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
(c) 2008 Prentice-Hall, All rights reserved.

16. Creating a Culture for Change: Learning
Learning Organization
An organization that has developed the continuous capacity to adapt and change
Characteristics
Holds a shared vision
Discards old ways of thinking
Views organization as system of relationships
Communicates openly
Works together to achieve shared vision
Learning is another key component of creating a culture for change. A learning organization is one that has developed the continuous capacity to adapt and change. Learning organizations share some common characteristics such as sharing the same vision, getting rid of old ways of thinking, viewing the organization as a system of relationships, open communication, and working together to achieve a shared vision.
E X H I B I T 18-6
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17. Creating a Learning Organization
Overcomes traditional organization problems:
Fragmentation
Competition
Reactiveness
Manage Learning by:
Establishing a strategy
Redesigning the organization’s structure
Flatten structure and increase cross-functional activities
Reshaping the organization’s culture
Reward risk-taking and intelligent mistakes
To create a learning organization, managers must overcome some traditional organizational problems such as fragmentation, competition, and reactiveness. Learning can be managed by establishing a strategy that everybody understands and can buy into. Redesigning the organization’s structure to increase communication and interactions and reshaping the organization’s culture to reward risk-taking and good mistakes will help to increase the effectiveness of the learning initiatives.
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18. Work Stress Stress Types of Stress
A dynamic condition in which an individual is confronted with an opportunity, constraint, or demand related to what he or she desires and for which the outcome is perceived to be both uncertain and important
Types of Stress
Challenge Stressors
Stress associated with workload, pressure to complete tasks, and time urgency
Hindrance Stressors
Stress that keeps you from reaching your goals, such as red tape
Cause greater harm than challenge stressors
When change occurs stress is found throughout the organization. Stress is defined as a dynamic condition in which an individual is confronted with an opportunity, constraint, or demand related to what he or she desires and for which the outcome is perceived to be both uncertain and important. There are different types of stress. There is challenge stress which is stress associated with workload, pressure to get work done, and time constraints. Hindrance stressors are those things that keep you from reaching your goals such as uncooperative employees or red tape. This can cause more stress than challenge stress often does.
E X H I B I T 18-7
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19. Demands-Resources Model of Stress
Responsibilities, pressures, obligations, and uncertainties in the workplace
Resources
Things within an individual’s control that can be used to resolve demands
Adequate resources help reduce the stressful nature of demands
There is a model that contrasts demands and resources. If there are high demands and the resources to meet those demands, stress is limited. However, if demands are high and the resources are not available to meet the demands, then stress is high.
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20. A Model of Stress
This graph shows the potential sources of stress, the individual differences that influence how we process stress, and the possible consequences.
E X H I B I T 18-8
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21. Potential Sources of Stress
Environmental Factors
Economic uncertainties of the business cycle
Political uncertainties of political systems
Technological uncertainties of technical innovations
Organizational Factors
Task demands related to the job
Role demands of functioning in an organization
Interpersonal demands created by other employees
Personal Factors
Family and personal relationships
Economic problems from exceeding earning capacity
Personality problems arising from basic disposition
There are a number of sources of stress. There are environmental factors that include economic uncertainties of the business cycle as we have seen recently, political uncertainties and technological changes that cause uncertainties. There are also organizational factors that cause stress such as task demands, role demands, and interpersonal demands. Finally, there are personal factors that can cause stress such as personal relationships, economic problems, and personality issues.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
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22. Consequences of Stress
Stressors are additive: high levels of stress can lead to the following symptoms
Physiological
Blood pressure, headaches, stroke
Psychological
Dissatisfaction, tension, anxiety, irritability, boredom, and procrastination
Greatest when roles are unclear in the presence of conflicting demands
Behavioral
Changes in job behaviors, increased smoking or drinking, different eating habits, rapid speech, fidgeting, sleep disorders
Stress also has consequences for the individual experiencing stress. These can include physiological factors such as blood pressure, headaches, and strokes. Psychological factors are also a result of stress including dissatisfaction, tension, and boredom. These outcomes are most prevalent when roles are unclear. Finally, there can also be behavioral consequences such as change in job behaviors, an increase in drinking and smoking, change in eating habits, and sleep disorders.
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23. Not All Stress Is Bad Some level of stress can increase productivity
Too little or too much stress will reduce performance
This model is not empirically supported
However, not all stress is bad. It has been suggested that as stress rises to a healthy level, productivity can increase. There needs to be a healthy balance as too much or too little stress will reduce performance as seen in the graph above.
E X H I B I T 18-9
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24. Managing Stress Individual Approaches Organizational Approaches
Implementing time management
Increasing physical exercise
Relaxation training
Expanding social support network
Organizational Approaches
Improved personnel selection and job placement
Training
Use of realistic goal setting
Redesigning of jobs
Increased employee involvement
Improved organizational communication
Offering employee sabbaticals
Establishment of corporate wellness programs
Stress needs to be managed and maintained at a healthy level. Individuals often manage stress through time management techniques, physical exercise or expanding their social support network. Organizations can also help employees manage stress by providing training, realistic goal setting, solid designing of jobs, offering employee sabbaticals, and establishing a wellness program.
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25. Global Implications Organizational Change Stress
Culture varies people’s belief in the possibility of change
Time orientation will affect implementation of change
Reliance on tradition can increase resistance to change
Power distance can modify implementation methods
Idea champions act differently in different cultures
Stress
Job conditions that cause stress vary across cultures
Stress itself is bad for everyone
Having friends and family can reduce stress
Organizational change will vary in different cultures depending on the people’s view of the possibility of change and their time orientation . Also, some cultures have strong traditions and this will create a higher resistance to change. The concept of power distance will impact how change is implemented as well as who is the best idea champion for leading the change.
Stress also varies by cultures as different issues will cause stress in different cultures. However, stress is bad for everyone no matter which culture they belong to. Also, across cultures having a good support system of family and friends can reduce stress.
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26. Summary and Managerial Implications
Organizations and the individuals within them must undergo dynamic change
Managers are change agents and modifiers of organizational culture
Stress can be good or bad for employees
Despite possible improvements in job performance caused by stress, such improvements come at the cost of increased job dissatisfaction
In summary, all organizations will go through change and managers are best set up to be the change agents to modify culture. Stress is a natural result of change but it has both positive and negative implications for employees so it is important to find ways to help balance stress through both individual and organizational methods to maximize performance and minimize job dissatisfaction.
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(c) 2008 Prentice-Hall, All rights reserved.

27. Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright ©2011 Pearson Education, Inc.  Publishing as Prentice Hall
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall