1. Organisational Change
Chapter 15
Organisational Change

2. Learning Objectives
15.1 Describe the elements of Lewin’s force field analysis model 15.2 Discuss the reasons why people resist organisational change and how change agents should view this resistance 15.3 Outline six strategies for minimising resistance to change and debate ways to effectively create an urgency for change 15.4 Discuss how leadership, coalitions, social networks and pilot projects influence organisational change 15.5 Describe and compare action research, appreciative inquiry, large group interventions and parallel learning structures as formal approaches to organisational change 15.5 Discuss two cross-cultural and three ethical issues in organisational change

3. Organisational Change at LG Group
LG Group chairman Koo Bon-moo (centre) is creating an urgency to change Korea’s second largest conglomerate into a more proactive marketplace leader rather than follower

4. Lewin’s Force Field Analysis Model
Developed by Kurt Lewin
Driving forces
Push organisations toward change
External forces or leader’s vision
Restraining forces
Resistance to change
Employee behaviours that block the change process

5. Force Field Analysis Model

6. Not Hoppy About Change
Mina Ishiwatari (front left) wanted to improve Hoppy drink’s brand image, but most staff resisted these changes. ‘I tried to take a new marketing approach to change the image of Hoppy... but no one would listen to me.’ Ishiwatari’s persistence improved Hoppy’s popularity in Tokyo with limited support or budget

7. Restraining Forces (Resistance to Change)
Many forms of resistance
E.g. complaints, absenteeism, passive non-compliance
View resistance as a resource
Symptoms of deeper problems in the change process
A form of constructive conflict—may improve decisions in the change process
A form of voice —helps procedural justice

8. Why People Resist Change
Direct costs
Losing something of value due to change
Saving face
‘Not invented here’ syndrome
Fear of the unknown
Risk of personal loss
Concern about being unable to adjust

9. Why People Resist Change continued
Breaking routines
Cost of moving away from our ‘comfort zones’
Requires time/effort to learn new routines
Incongruent team dynamics
Norms contrary to the desired change
Incongruent organisational systems
Systems/structures reinforce status quo
Career, reward, power, communication systems

10. Creating an Urgency for Change
Inform employees about driving forces
Most difficult when organisation is doing well
Customer-driven change
Adverse consequences for firm
Human element energises employees
Sometimes need to create urgency to change without external drivers
Requires persuasive influence
Use positive vision rather than threats

11. Minimising Resistance to Change
Communication
Highest priority and first strategy for change
Generates urgency to change
Reduces uncertainty (fear of unknown)
Problems—time-consuming and costly
Learning
Involvement
Stress Mgt
Coercion
Negotiation

12. Minimising Resistance to Change continued
Communication
Provides new knowledge/skills
Includes coaching and other forms of learning
Helps break old routines and adopt new roles
Problems—potentially time- consuming and costly
Learning
Involvement
Stress Mgt
Negotiation
Coercion

13. Minimising Resistance to Change continued
Communication
Employees participate in change process
Helps saving face and reducing fear of unknown
Includes task forces, future search events
Problems—time-consuming, potential conflict
Learning
Involvement
Involvement
Stress Mgt
Negotiation
Coercion

14. Minimising Resistance to Change continued
Communication
When communication, learning and involvement are not enough to minimise stress
Potential benefits
More motivation to change
Less fear of unknown
Fewer direct costs
Problems—time-consuming, expensive, doesn’t help everyone
Learning
Involvement
Stress Mgt
Negotiation
Coercion

15. Minimising Resistance to Change continued
Communication
Influence by exchange— reduces direct costs
May be necessary when people clearly lose something and won’t otherwise support change
Problems
Expensive
Gains compliance, not commitment
Learning
Involvement
Stress Mgt
Negotiation
Coercion

16. Minimising Resistance to Change continued
Communication
When all else fails
Assertive influence
Radical form of ‘unlearning’
Problems
Reduces trust
May create more subtle resistance
Encourage politics to protect job
Learning
Involvement
Stress Mgt
Negotiation
Coercion

17. Refreezing the Desired Conditions
Refreezing realigns organisational systems and team dynamics so they support the desired change
Alter rewards to reinforce new behaviours
Change career paths
Revise information systems

18. Change Agents
Change agent—anyone who possesses enough knowledge and power to guide and facilitate the change effort
Involves transformational leadership
Develop the change vision
Communicate the vision
Model the vision
Build commitment to the vision

19. Strategic Vision and Change
Need a vision of the desired future state
Identifies critical success factors for change
Minimises employee fear of the unknown
Clarifies role perceptions

20. Social Networks and Viral Change
Change agents need a guiding coalition
Representative across firm
Influence leaders—respected
Viral change
Information seeded to a few people is transmitted to others based on patterns of friendship
Relies on social networks, high trust, referent power
Change also occurs through behaviour observation

21. Diffusion of Change Begin change as pilot projects
Effective diffusion considers MARS model
Motivation: pilot project employees rewarded; motivate others to adopt pilot project
Ability: train employees to adopt pilot project
Role perceptions: translate pilot project to new situations
Situational factors: provide resources to implement pilot project elsewhere

22. Action Research Approach
Action orientation and research orientation
Action: to achieve the goal of change
Research: testing application of concepts
Action research principles
Open systems perspective
Highly participative process
Data-driven, problem-oriented process

23. Action Research Process

24. Appreciative Inquiry Approach
Frames change around positive and possible future, rather than traditional problem focus
Positive principle: focus on opportunities, not problems
Constructionist principle: conversations shape reality
Simultaneity principle: inquiry and change are simultaneous
Poetic principle: we can choose how to perceive events and situations
Anticipatory principle: people are motivated by desirable visions of the future

25. Four-D Model of Appreciative Inquiry

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

27. Parallel Learning Structure Approach
Highly participative social structures
Members representative across the formal hierarchy
Sufficiently free from firm’s constraints
Develop solutions for organisational change which are then applied back into the larger organisation

28. Cross-Cultural and Ethical Concerns with Managing Change
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

29. Organisations 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 ( )

30. Discussion of Team Exercise 15.1 Strategic Change Incidents

31. Scenario 1: ‘Latté Troubles’
Refers to Starbucks, which suffered from the financial downturn and competition, resulting in closing 900 stores and laying off staff
Chairman Howard Schultz lamented that aggressive growth had led to ‘a watering down of the Starbucks experience’.
Shultz stepped back into the CEO role with an agenda for change.

32. Starbucks’ Change Strategy
Schultz publicly apologised to employees for ‘letting our people down’; stated his commitment to transform the company
Sought customer feedback. Specially trained employees (‘idea partners’) hosted conversations and acted as advocates for customers’ suggestions
Introduced new products and quality control processes
Empowered employees to design better Starbucks experience

33. Scenario 2: ‘Greener Telco’
Scenario 2 refers to Bell Canada’s Zero Waste program, which successfully changed employee behaviour by altering the causes of those behaviours
Pilot project in Toronto—12 floor building of 1000 staff reduced waste from 1800 lb per day to just 75 lb per day within three years
Courtesy of Bell Canada

34. Bell Canada’s Change Strategy
Relied on the MARS model to alter behaviour:
Motivation—employee involvement, respected steering committee (photo)
Ability—taught paper reduction, , food disposal
Role perceptions—made waste reduction salient (everyone’s job) through banners, training
Situation—created barriers to wasteful behaviour (e.g. coffee mugs, removed garbage bins)
Courtesy of Bell Canada

35. Scenario 3: ‘Go Forward Airline’
Scenario 3 refers to Continental Airline’s ‘Go Forward’ change strategy, which catapulted the company ‘from worst to first’ within a couple of years

36. Continental Airlines’ Change Strategy
Communicate, communicate, communicate
Introduced 15 performance measures
Established stretch goals (repainting planes in six months)
Replaced 50 of 61 executives
Rewarded new goals (on-time arrival, stock price)
Customers as drivers of change

37. Organisational Change
Chapter 15
Organisational Change