COB6IM17.docx

Organizational Change Learning Objectives After reading this chapter, students should be able to: Describe the elements of Lewin’s force field analysis model. Outline six reasons why people resist organizational change. Discuss six strategies to minimize resistance to change. Outline the condition...

Organizational Change Learning Objectives After reading this chapter, students should be able to: Describe the elements of Lewin’s force field analysis model. Outline six reasons why people resist organizational change. Discuss six strategies to minimize resistance to change. Outline the conditions for effectively diffusing change from a pilot project. Describe the action research approach to organizational change. Outline the “Four-D” model of appreciative inquiry and explain how this approach differs from action research. Explain how parallel learning structures assist the change process. Discuss four ethical issues in organization change. Chapter Glossary action research A data-based, problem- oriented process that diagnoses the need for change, introduces the intervention, and then evaluates and stabilizes the desired changes. appreciative inquiry An organizational change intervention that directs the group’s attention away from its own problems and focuses participants on the group’s potential and positive elements. change agent Anyone who possesses enough knowledge and power to guide and facilitate the organizational change effort. force field analysis Lewin’s model of systemwide change that helps change agents diagnose the forces that drive and restrain proposed organizational change. future search Systemwide group sessions, usually lasting a few days, in which participants identify environmental trends and establish strategic solutions for those conditions. parallel learning structures Highly participative groups constructed alongside (i.e. parallel to) the formal organization with the purpose of increasing the organization’s learning and producing meaningful organizational change. refreezing The latter part of the change process in which systems and conditions are introduced that reinforce and maintain the desired behaviours. unfreezing The first part of the change process whereby the change agent produces disequilibrium between the driving and restraining forces. Chapter Synopsis Lewin’s force field analysis model states that all systems have driving and restraining forces. Change occurs through the process of unfreezing, changing, and refreezing. Unfreezing produces disequilibrium between the driving and restraining forces. Refreezing realigns the organization’s systems and structures with the desired behaviours. Restraining forces are manifested as employee resistance to change. The main reasons why people resist change are direct costs, saving face, fear of the unknown, breaking routines, incongruent organizational systems, and incongruent team dynamics. Resistance to change may be minimized by keeping employees informed about what to expect from the change effort (communicating); teach employees valuable skills for the desired future (learning); involve them in the change process; help employees cope with the stress of change; negotiate trade-offs with those who will clearly lose from the change effort; and use coercion (sparingly and as a last resort). Organizational change also requires driving forces. This means that employees need to have an urgency for change by becoming aware of the environmental conditions that demand change in the organization. The change process also requires refreezing the new behaviours by realigning organizational systems and team dynamics with the desired changes. Every successful change requires a clear, well-articulated vision of the desired future state. Change agents rely on transformational leadership to develop a vision, communicate that vision, and build commitment to the vision of a desirable future state. The change process also often applies a diffusion process in which change begins as a pilot project and eventually spreads to other areas of the organization. Action research is a highly participative, open-systems approach to change management that combines an action-orientation (changing attitudes and behaviour) with research orientation (testing theory). It is a data-based, problem-oriented process that diagnoses the need for change, introduces the intervention, and then evaluates and stabilizes the desired changes. Appreciative inquiry embraces the positive organizational behaviour philosophy by focusing participants on the positive and possible. It tries to break out of the problem-solving mentality that dominates organizational change through the action research model. The four stages of appreciative inquiry include discovery, dreaming, designing, and delivering. A third approach, called, parallel learning structures, relies on social structures developed alongside the formal hierarchy with the purpose of increasing the organization's learning. They are highly participative arrangements, composed of people from most levels of the organization who follow the action research model to produce meaningful organizational change. One significant concern with organizational change originating from North America is that they potentially conflict with cultural values in some other countries. Also, organizational change practices can raise one or more ethical concerns, including increasing management’s power over employees, threatening individual privacy rights, undermining individual self-esteem, and making clients dependent on the change consultant. Five strategies that assist personal development in organizational settings are: understand your needs and values, understand your competencies, set career goals, maintain networks, and get a mentor. PowerPoint® Slides Canadian Organizational Behaviour includes a complete set of Microsoft PowerPoint® files for each chapter. (Please contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the lecture outline that follows, a thumbnail illustration of each PowerPoint slide for this chapter is placed beside the corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip slides that you don’t want to show to the class. (To jump ahead or back to a particular slide, just type the slide number and hit the Enter or Return key.) The transparency masters for this chapter are very similar to the PowerPoint files. Lecture Outline (with PowerPoint® slides) Organizational Change Slide 1 Continuous Change at Freisens Slide 2 Force Field Analysis Model Slide 3 Organizational Change Continuous Change at Freisens Corp. • Freisens, of Altona, Manitoba, is the first Canadian printer to enter the industry’s hall of fame. The company keeps pace with rapid technological change by extensively training workers to acquire the knowledge and skills they need to adapt. This ensures employees embrace change rather than resist it. Lewin’s Force Field Analysis Model Model to help us understand how the change process works Involves unfreezing the current situation and refreezing the system in the desired state • Unfreezing involves producing disequilibrium between the driving and restraining forces • Stability occurs when the driving and restraining forces are roughly in equilibrium Driving forces • Forces for change • External forces include information technology and a changing workforce • Internal forces include cross-departmental competition and encouraging new practices and values Restraining forces -- resistance to change • Employee behaviours that block the change process • Takes many forms e.g. complaints, absenteeism, passive noncompliance etc. • Some concerned with change outcomes, others concerned with change process Resistance to Change Slide 4 Restraining Forces The main reasons people resist change 1. Direct costs • Believe changes will have higher costs or lower benefits -- e.g. lower wages, reduced job security, lost power 2. Saving face • Proving that another’s decision is wrong or that the change agent is incompetent because your preference was not implemented 3. Fear of the unknown • People worry that they cannot adopt the new behaviours 4. Breaking routines • People want to stay in their comfort zones and maintain existing routines 5. Incongruent Organizational Systems • Organizational control systems (selection, training, rewards etc.) maintain status quo • Need to alter systems to fit the desired change 6. Incongruent Team Dynamics • Team norms may reinforce status quo, resist change Resisting Change at the FBI Slide 5 The FBI has been slow to shift from law enforcement to domestic intelligence due to: • Incongruent systems -- career paths, reward system, decentralized structure • Breaking routines -- unfamiliar with intelligence gathering roles • Saving face -- past turf wars with CIA created anti-investigation mindset Creating an Urgency for Change Slide 6 Unfreezing, Changing, and Refreezing • Shouldn’t increase driving forces alone -- increase restraining forces to counterbalance driving forces • Preferred strategy is to destabilize status quo by: 1. increasing driving forces (create urgency for change) 2. decreasing the restraining forces -- minimize resistance Creating an Urgency for Change • Inform employees about driving forces e.g. competitors, changing consumer trends, etc. • Avoid creating false drivers for change -- must be real Customer-Driven Change • Dissatisfied customers are powerful force for change: -- have adverse consequences for organization’s survival -- human element further energizes employees • Involves listening directly to customers, monitoring their satisfaction and behaviour, engaging them in company practices Urging Change Without External Forces • Need to create sense of urgency for change even when business is good • Managers must help employees visualize future competitive threats and shifts. Minimizing Resistance to Change (communication) Slide 7 1. Communication • Highest priority and first strategy for change • Improves urgency to change • Reduces fear of the unknown • Problems -- time-consuming and potentially costly Minimizing Resistance to Change (learning) Slide 8 Minimizing Resistance to Change (involvement) Slide 9 Minimizing Resistance to Change (stress) Slide 10 2. Learning • Learn new knowledge and skills -- includes coaching and action learning • Learn new role patterns, break routines • Problem -- time consuming and potentially costly 3. Employee involvement • Employees participate in change effort • Future search -- large group sessions, last a few days -- putting entire system in the room -- participants identify the environmental trends and establish strategic solutions for those conditions • Advantages -- psychological ownership of decision (saves face) -- less fear of the unknown • Problems – very time consuming, conflicts, and poor decisions if employee interests differ with organizational needs 4. Stress Management • Stress management programs, supportive leadership Helps employees cope with change • Useful when previous strategies do not reduce stress • Potential benefits -- More motivation to change -- Less fear of unknown -- Fewer direct costs • Problem -- time-consuming, may be expensive, may not reduce stress for everyone Minimizing Resistance to Change (negotiation) Slide 11 5. Negotiation • Promise of benefits or resources in exchange for compliance with request • Use for those who lose out from change • Influence by exchange -- potentially reduces direct costs • Problems -- may be expensive, produces compliance (not commitment) Minimizing Resistance to Change (coercion) Slide 12 6. Coercion • Necessary when other strategies ineffective • Assertive influence tactics e.g. monitoring behaviours to ensure compliance, confronting, threats of sanctions etc. • Radical form of organizational ‘unlearning’ -- dismissals • Problems -- reduces trust -- may be more subtle resistance, antagonism with the change agent Refreezing the Desired Conditions Slide 13 Refreezing the Desired Conditions • Realigning organizational systems and team dynamics with the desired changes -- alter rewards to reinforce new behaviours Feedback systems -- help employees learn how well they are moving toward desired objectives -- provide permanent architecture to support the new behaviour patterns for long-term Strategic Vision and Change Slide 14 Strategic Visions, Change Agents, and Diffusing Change Strategic Vision and Change • Vision provides direction and critical success factors • Minimizes employee fear of the unknown • Clarifies behaviours employees need to demonstrate Change Agents Slide 15 Diffusing Change with MARS Model Slide 16 Change Agents • Anyone who possesses enough knowledge and power to guide and facilitate the change effort • May be external consultant, but typically people within organization with leadership competencies • Need to be transformational leaders – form a vision of desired future state, communicate the vision, behave consistently with the vision and build commitment Diffusion of Change • Successful change usually begin as a pilot project -- greater flexibility, less risk • Motivation -- Successful pilot project -- Supervisor support and reinforcement • Ability -- Competencies to adopt pilot project -- Role modeling from people in pilot project • Role perceptions -- Translating pilot project practices -- neither too specific nor too general • Situational factors -- Resources and time to implement pilot project elsewhere Action Research Philosophy Slide 17 THREE APPROACHES TO CHANGE 1. Action Research Approach Action research philosophy • Dominant approach since 1940’s • Data-based, participative, problem-oriented process • Change needs both action and research focus • Action orientation -- Solve problems and change the organizational system • Research orientation -- Concepts guide the change -- Data needed to diagnose problem, identify intervention, evaluate change Action Research Process Slide 18 Action Research Process 1. Form Client-Consultant Relationship Client readiness -- client’s motivation, open to meaningful change, possess abilities to complete change process Process consultation vs. technical expertise -- help people solve their own problems 2. Diagnose the Need for Change • Organizational diagnosis -- gathering and analyzing data about an ongoing system • Data analysis and feedback -- consultant typically summarizes data -- clarifies symptoms, problems, and solutions • Employee involvement -- agreeing on appropriate change methods -- determine expected standards of successful change 3. Introduce Change • Applies one or more actions e.g. managing conflict, team building, changing corporate culture • Incremental change -- fine tunes the system and takes small steps to desired state -- risky when organization is seriously misaligned with environment Quantum change -- system is over-hauled decisively and quickly -- usually traumatic for employees 4. Evaluate and Stabilize Change • Comparing change outcomes against standards established earlier in action research process • Problems -- outcomes aren’t apparent for a long time -- difficult to separate effects of external changes (e.g. changing market share) Appreciative Inquiry Philosophy Slide 19 Appreciative Inquiry Approach Slide 20 2. APPRECIATIVE INQUIRY Approach Appreciative Inquiry at Canadian Tire • Canadian Tire CEO Wayne Sales (see photo) and his executive team relied on appreciative inquiry by asking staff to describe events that have made Canadian Tire successful. The company’s core values were then rebuilt around those positive experiences. Store employees were also involved in an appreciative inquiry exercise to reinforce these values Appreciative Inquiry Philosophy • Directs the group’s attention away from its own problems and focuses participants on the group’s potential and positive elements. • Reframes relationships around the positive rather than being problem oriented Appreciative Inquiry Process Slide 21 Four Stages of Appreciative Inquiry Process 1. Discovery -- discovering positive elements of the observed organization (may involve interviewing, documenting positive events and elements) 2. Dreaming -- considering what might be possible in an ideal organization -- safer revealing aspirations about an ideal than their own situation 3. Designing -- participants listen to each others' models and assumptions, and eventually form a collective model for thinking within the team 4. Delivering -- participants establish specific objectives and direction for their own organization based on their model of what should be Parallel Learning Structure Approach Slide 22 3. PARALLEL LEARNING STRUCTURES • Social structure alongside the formal hierarchy with the purpose of increasing the organization’s learning • Highly participative arrangements • Includes people from most organizational levels • Uses action research model to produce change Parallel Learning Structures Slide 23 • Sufficiently free from firm’s constraints • Develop solutions for organizational change which are then applied back into the larger organization Cross-Cultural and Ethical Concerns Slide 24 CROSS-CULTURAL AND ETHICAL CONCERNS Cross-Cultural Concerns • Techniques mainly from North America and may conflict with cultural values in some other countries • Linear and open conflict assumptions about change -- not held in cultures that try to minimize conflict to respect others and save face • Needs a more contingency-oriented perspective Ethical Concerns with Organizational Change 1. May threaten the individual’s privacy rights -- action research data collection – employees might not want to reveal 2. May increase management’s power -- demands employee compliance, uncertainty re-establishes management control 3. May undermine the individual’s self-esteem -- unfreezing -- participants disconfirm their existing beliefs and competence -- some change processes involve direct exposure to personal critique 4. Consultant’s role in the client relationship -- difficult to remain detached -- maintain objectivity, avoiding client dependence Rules for the Road Ahead Slide 25 Organizations are About People Slide 26 PERSONAL CHANGE FOR THE ROAD AHEAD Understand Your Needs and Values • Apply the career alignment concept in Holland’s theory • Do self-assessments; identify work you enjoy Understand Your Competencies • Self-assessments, performance results, and feedback • Alignment of career with competencies affects self-efficacy Set Career Goals • Benchmarks to evaluate career progress • Become a “career activist” -- writing your own script, being vigilant, separate your self-identity from your job title or organization Maintain Networks • People with large, nonredundant networks have more career success • Extend networks beyond current sphere of work to accommodate more dramatic career changes Get a Mentor • Learning the ropes of organizational life from a senior person within the company • Mentors provide more visible and meaningful work opportunities as well as ongoing career guidance Organizations 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 (1835-1919) Solutions to Discussion Questions 1. Chances are that the school you are attending is currently undergoing some sort of change to adapt more closely with its environment. Discuss the external forces that are driving these changes. What internal drivers for change also exist? There are many possible changes that your college is currently experiencing. Some of the more common changes might be: (a) shift from quarter to semester schedule; (b) introduction of online learning; (c) changing library hours; (d) new courses and disciplines; (e) reassignment of physical space due to new construction or closure of old buildings. There are just as many possible external forces for change to consider, including: (a) increased competition for students; (b) emerging technologies; (c) cost pressures (restricted budgets); (d) changing student expectations (e.g. new course content, more flexible learning); (e) college ratings. Internal forces for change mainly come from such things as leadership, physical structures (e.g. aging buildings), and student and faculty coalitions. It is important to distinguish the changes from the forces for change. For example, the introduction of online learning might have resulted from both new technologies and increased competition for students. 2. Use Lewin’s force field analysis to describe the dynamics of organizational change at Nissan Motor Company (see GLOBAL Connections 17.1). The Nissan story identifies mounting debt and declining market share as the main forces for change. The opening story also mentions a few sources of resistance to change, although some of these are implied or not specifically mentioned in the vignette. Direct costs. This source of resistance is mostly implied by the fact that the radical changes cost many people financial and employment loss. The vignette mentions that suppliers were cut by half. What the vignette did not mention (due to space limitations) but is mentioned under “direct costs” in the chapter is that Nissan suppliers actively lobbied the public and government to prevent Carlos Ghosn from implementing the Nissan Revival Plan because it threatened their highly profitable contracts with the automaker and, in some cases, put their own companies in jeopardy. Saving Face. Again, this source of resistance is implied and a logical factor from the facts presented. Specifically, Ghosn asked middle managers to identify better ways to run the company, so the Revival Plan would likely cause some senior managers to lose face. Potentially, they could have used their power to undermine or slow down some of the change process. Fear of the Unknown. This source of resistance is probably apparent by the slow start of the task forces – they were unfamiliar with this degree of empowerment, and had not worked with such a diverse group of people in the past. The massive changes required to save Nissan also suggests that the lack of urgency to change prior to Ghosn’s arrival may have been due to management’s fear of the unknown when making radical changes. Breaking Routines. This is the least apparent as a source of resistance in the case. However, the radical level of change probably caused some resistance because employees had to learn new practices. Incongruent Systems. The existing reward and promotion system at Nissan discouraged innovation and initiative, which explains why Ghosn moved quickly toward a performance-based reward system. Incongruent Team dynamics. Ghosn clearly referred to the lack of urgency among Nissan managers, suggesting that this group’s norms reinforced inaction. No other team dynamics issues are apparent in this vignette. 3. Employee resistance is a symptom, not a problem, in the change process. What are some of the real problems that may underlie employee resistance? The textbook outlines six main reasons why employees resist change. The following reasons explain the real problems that employees experience and are concerned about with change processes. Direct costs. Resistance may be a symptom that underlies employee job security concerns or fears the change may affect their career development potential. Saving face. When change involves implementing a decision that was not recommended by an individual, the individual may try to “prove” that the decision was wrong or that the person encouraging change is incompetent. Fear of the unknown. People resist change because they are worried they will not be able to adopt the new behaviours required. Breaking routines. People do not want to give up their comfort zones and daily routines that provide predictability. Incongruent organizational systems. Organizational systems may actually be discouraging employees from adopting new ways. For example, the organization’s reward, selection, training and other control systems may be causing employees to maintain the status quo. Incongruent team dynamics. Team norms may conflict with the desired change and consequently reinforce conformity to the status quo. 4. Senior management of a large multinational corporation is planning to restructure the organization. Currently, the organization is decentralized around geographical areas so that the executive responsible for each area has considerable autonomy over manufacturing and sales. The new structure will transfer power to the executives responsible for different product groups; the executives responsible for each geographic area will no longer be responsible for manufacturing in their area but will retain control over sales activities. Describe two types of resistance senior management might encounter from this organizational change. The answer to this question should include direct costs as one type of resistance to change among the geographic executives. They will lose status, power, and responsibility from the change effort. The other type of resistance to change might be incongruent organizational systems, incongruent team dynamics, or breaking routines. Unless the company has taken specific steps to alter organizational systems, these systems might still support the decentralized organizational structure. For example, communication patterns and physical structures might still be configured around the geographic rather than product structure. Regarding team dynamics, departmental norms might support the geographic executive. For example, employees might have developed a “we-they” attitude toward product leaders in headquarters. Although the restructuring placed regional product groups under product executives, these antagonistic norms may continue. Finally, some students might argue that resistance will occur because employees will be breaking routines. For instance, geographic executives and their employees may have formed habits regarding relations between sales and production units. Now that production units are no longer under the executives’ control, these habits must be altered and perhaps sales practices changed to fit the new reporting structure. 5. Web Circuits Ltd. is an Ottawa-based custom manufacturer for high-technology companies. Senior management wants to introduce lean management practices to reduce production costs and remain competitive. A consultant has recommended that the company start with a pilot project in one department and, when successful, diffuse these practices to other areas of the organization. Discuss the advantages of this recommendation and identify three ways (other than the pilot project's success) to make diffusion of the change effort more successful. A pilot project is usually an effective change management strategy. It is more flexible and less risky than centralized organization wide programs. There are several ways to make diffusion of the change effort more successful. Several strategies are described in the textbook around the four elements of the MARS model. Here is a summary of these recommendations: Motivation: Ensure that employees see that the pilot project is successful and that people in the pilot project receive recognition and rewards for changing their previous work practices. Supervisors need to actively support and reinforce the desired behaviours. They also need to remove sources of resistance that act as counter-motivators to diffusion of change. Ability: employees must have the ability – the required skills and knowledge -- to adopt the practices introduced in the pilot project. Also, people adopt ideas more readily when they have an opportunity to interact and learn from others who have already applied the new practices. Role Perceptions: Employees need to understand how the practices in a pilot project apply to them even though in a completely different functional area. This requires guidance that is neither to specific, because it might not seem relevant to other areas of the organization, nor too abstract. Situational Factors: Employees require supportive situational factors, including the resources and time necessary to adopt the practices demonstrated in the pilot project 6. Suppose that you are vice-president of branch services at the Bank of Lethbridge. You notice that several branches have consistently low customer service ratings even though there are no apparent differences in resources or staff characteristics. Describe an appreciative inquiry process in one of these branches that might help to overcome these problems. Appreciative inquiry reframes relationships around the positive and the possible. The bank branches should look at another branch that has been successful. This increases open dialogue by redirecting attention away from internal problems. There are four main stages to appreciative inquiry. The process begins with the discovery stage, whereby the participants identify the positive elements of the observed organization. As they discuss their findings, participants shift into the dreaming stage by considering what might be possible in an ideal organization. The third stage of appreciative inquiry is known as designing, in which participants listen with selfless receptivity to each other’s models and assumptions, and eventually form a collective model for thinking within the team. Throughout this stage, team members shift the focus back to their own organization and eventually enter the delivering stage. This is the phase in which participants begin discussing their own organization again. They establish specific objectives and direction for their own organization based on their model of what should be. 7. This chapter suggests that some organizational change activities face ethical concerns. Yet, several consultants actively use these processes because they believe they benefit the organization and do less damage to employees than it seems on the surface. For example, some activities try to open up the employee’s hidden area (see Johari Window in Chapter 3) so that there is better mutual understanding with co-workers. Discuss this argument and identify where you think organizational change interventions should limit this process. The textbook identifies four ethical problems with organizational change. Students are basically asked to consider reasons why each of these practices is acceptable rather than unethical. The idea here is that situations are rarely purely good or bad. There are usually two sides to the argument. Individual Privacy Rights. Action research collects information from employees, some of which they may not want to divulge. Some interventions may threaten individual privacy rights because employees are asked to publicly disclose their personal beliefs and experiences. The counterpoint here is change is both a personal and interpersonal journey. Change agents need to understand individual attitudes toward the change, not just the structural need for change. In using change techniques that involve individual disclosure, organizations need to ensure that employees maintain control over their level of disclosure and are not unduly pressured to reveal more personal information that they are comfortable with. Management Power. Many change interventions create uncertainty and re-establish management’s position in directing the organization. Students might counter with the notion that most changes require the use and strengthening (at least temporarily) of management power to bring about meaningful change. As noted in the textbook, nearly two-thirds of companies rely on some coercion to bring about change. However, organizations can deal with this concern by ensuring that coercion is only used as a last resort and by ensuring that consideration and care is used at all times in dealing with the organization’s most important resources—people. Individual Self-Esteem. Some change activities may undermine the individual’s self-esteem. The unfreezing process requires participants to disconfirm their existing beliefs, sometimes including their own competence at certain tasks or interpersonal relations. Some specific change practices involve direct exposure to personal critique by co-workers as well as public disclosure of one's personal limitations and faults. Students might suggest in support of this practice that any change requires giving up some self-esteem. It involves recognizing past imperfections, which motivates people to change for the future. Employees may require support and/or resources to sustain high levels of self-efficacy. Client Relationship. Consultants face the ethical dilemma of their role in the client relationship. Although they should occupy “marginal” positions with their clients, consultants may have difficulty maintaining objectivity and avoiding having the client becoming too dependent on them. The other side of the coin (as one consultant recently told us) is that many clients don’t want to take control of the process. They are happy to have consultants do the job, even if that means bringing them back later. To deal with the issue, organizations need to ensure the client-consultant relationship is well-defined including roles, deliverables and time frames for engagement and disengagement. In addition, a plan is needed to ensure the client maintains accountability for outcomes and does not put the consultant in a position where he/she is making decisions that should be made by the organization’s managers. 8. Career activism is a concept that is gaining interest because it emphasizes managing your own development in organizations. What concepts introduced throughout this book are compatible with the career activist concept? In what ways might a person be a career activist? Students should be able to identify several relevant concepts throughout this book. Here are a few of the most obvious or important concepts related to career activism: Self-leadership (Chapter 6). The textbook refers to self-leadership when discussing the list of rules for the road ahead. Employees set their own career goals, visualize their future career direction, and reinforce themselves for their step-by-step achievements. Empowerment (Chapter 6). The career activist concept revolves around the notion that individuals (not the companies that employ them) need to take control of their own career destiny. This is related to empowerment in the sense that career activists have the freedom and responsibility to take control of their careers. Contingent work (Chapter 1). At first glance, contingent work is quite different from career activism because the former is an employment relationship and the latter is a personal practice. Yet, the description of career activism explicitly mentions becoming an “independent agent”, rather like the free agent in contingent work. Furthermore, both concepts – contingent work and career activism – are influenced by the shift to employability psychological contracts. Case Analysis 17.1: The Excellent Employee These case notes were prepared by the case author, Mary Gander, Winona State University Use of the Case This organizational behavior case is useful for exposing students to a real situation in which there is resistance to change. It illustrates the importance of the perspective of front-line employees and supervisors, of soliciting their thinking and ideas, and involving them in change initiatives. Managing the change process: it can be used to illustrate the application of several methods to overcome employee resistance to change discussed in the text. The instructor may begin by having the students read the short case, then get into groups of about five and discuss the answers to the questions at the end of the case. After the small groups have had time to discuss the questions, they may share their thoughts and solutions with the whole class, bringing out important issues and strategies for dealing with organizational change and employee resistance to change. Background and Context of the Case: This case describes a real situation that took place in a furniture manufacturing plant. The company’s traditional production processes were designed to take advantage of economies of scale, mass production methods, hence they are high volume and inflexible. The company operates on the traditional philosophy of, “If it ain’t broke, don’t fix it – and if it does break, don’t really fix it, just patch it up and get it running again as soon as you can so we can meet production schedules!” – this is the “quick fix” mentality in contrast to a “continuous improvement mentality.” There are many disconnects in communication and lack of mutual understanding between employees in upstream processes and those downstream, as well as cross-functionally and throughout the hierarchically organized company structure. This, along with an incentive pay system that reinforces a very immediate, self-centered, “quantity over quality” perspective, contributes to resistance to cross training. In a Continuous Improvement company culture, downstream workers are viewed as “internal customers” of upstream workers and therefore, their needs are solicited and considered. Upstream workers cooperate and coordinate with downstream workers to facilitate information flow and to smooth out the flow of materials and products. Teamwork is a high priority, and management solicits and listens to worker ideas and input. Not so in this company. Recently management decided to embark on a set of “programs” including unilateral cross training of employees, in hope of solving their failing profitability problem, by trying to become more flexible and reduce costs, not realizing that cross training employees is not generally effective when done as a rather isolated “program.” It can be effective when done as an integral part of larger plan for improving and restructuring a the production process, but only when combined with other OD efforts. In the case, the HR person “got orders from above” and is responsible for carrying them out. Chances are he or she will be evaluated on how many workers he or she is able to get cross-trained this month or this quarter. Management does not involve workers in planning the changes nor their implementation, nor are they using performance measures that will contribute to maintaining successful change. Suggested Answers to Discussion Questions 1. Identify the sources of resistance to change in this case. Direct costs. A main source of resistance in this case. If Jim, Emily’s supervisor, allows others to be trained on her machine and allows her to be cross trained for other work stations, he assumes he will be faced again with a situation in which other people will not be able to run her machine effectively, creating a lot of difficulty and problems in his unit, which he will have to solve. From his perspective, he “has been through this before” and it has not worked, it only causes him problems and causes problems for meeting production schedules and product quality standards. For Emily, it is predictable to her that, if cross trained, she will have to spend time working at other workstations where it is likely that she will not make as much piece-rate pay as she makes in her current job. This would be money out of her pocket. Plus, she may not be able to perform as well at another work station, it may be part of her self esteem that she is the only worker who can run her machine effectively, she could lose this “status.” Saving Face: Although the case does not give any direct information that saving face is an important issue in the resistance seen in both Jim and Emily, it is certainly a possibility. Emily has expressed her distain for current management because they would not listen to her ideas for improvement and that may be factor in her resistance. Fear of the unknown. Not an important source in this case. Actually, Jim has already tried training other workers on Emily’s equipment and found that they were not able to learn to do the job at the level of proficiency that Emily does, which caused a lot of problems. From Jim’s perspective, he already “knows” what will happen and it won’t be good. He would fear the results because he predicts major problems. Although the case does not expressly say that Emily has tried other work stations, it is implied because other workers have tried to learn her job, unsuccessfully. She may fear that she will not be able to make as much piece-rate pay working at a different work station. Also, she may fear that someone else might be able to learn how do run her machine as well as she can, and lose her job at that machine. If the company has had recent lay-offs, this fear would be intensified. If Emily is the only one who can run the machine effectively, this is a source of job security for her that she will not want to lose. Breaking routines. Clearly this change would force both Emily and Jim out of their comfort zones, so this is one source of their resistance. Incongruent organizational systems. This is a major issue in the case. In this traditionally managed and organized company, there are several factors in the system that have encouraged Jim and Emily to behave and think the way they do and, therefore, to resist the proposed change. (A). The piece-rate pay system helps create a culture in which employees are more likely to develop a self-serving attitude as opposed to more of a team spirit. They will tend to look more at their own immediate situation and how it can be optimized rather than the bigger picture of what might be good for the whole production line, for the customer, or for the company. Many companies that have piece-rate pay systems are so committed to them, they will not change them, nor admit the strong role they play in employee resistance to more modern practices. The piece-rate pay system is also a factor in why the upstream workers are not interested in cutting the wood to slightly tighter specifications to make Emily’s job downstream, easier to do. (B) Management obviously does not have a preventive maintenance program, nor do they solicit and use employee input to improve production processes. If they did, Emily’s machine would be easier for other employees to operate. This exacerbates the resistance. (C) It is obvious from the case that management’s priority is productivity, not quality. It is also evident that Jim is not concerned that, when Emily runs the machine, she is so productive that material piles up at the next downstream process (creates a bottleneck at the next workstation). Enlightened management would have production supervisors focus on the whole production stream with the goal of synchronizing flow of material through the production process, not just focus on their own department. It is no wonder the company is experiencing decreased profitability. Cross training is not a practice that this traditional culture or production system are designed to support, in fact, the system and culture would both “fight” such a change. Incongruent team dynamics. Although these workers do not function as teams, they do work in workgroup units and have norms that guide behavior, collectively this forms the company culture. One would expect, from reading the case, that the norms in Emily’s and other workgroups at the company, include employee feelings of “ownership” of a specific, well-defined job, equipment, and space, and protection of it. This is probably intensified in a company that has had recent layoffs. In addition, as mentioned above, piece-rate pay promotes norms of self-interest over teamwork. These group dynamics and norms would certainly act to promote resistance to cross training. 2. Discuss whether this resistance is justified or could be overcome. Apparently management has not evaluated the situation in light of Lewin’s model. Nor have they assessed restraining forces and considered what approaches might be most effective for reducing these restraining forces and thereby managing the change more successfully. Looking over the discussion of Question #1, the reasons for the resistance can be analyzed. When analyzed, the resistance is understandable. However, this resistance could be managed more effectively, if one considers the variety of methods for dealing with resistance to change that are presented in the text. 3. Recommend ways to minimize resistance to change in this incident or in future incidents. Considering a number of the methods for minimizing resistance to, there are several approaches that could be used to manage this change more effectively. (A) Management could help employees feel the need for change (create a sense of urgency) by informing employees about the driving forces promoting the changes, e.g., failing profits, complex or inefficient production systems, and dissatisfied customers. This motivates employees to see the importance for the change. (B) Management could provide workers with a clear, well-articulated vision of the desired future state, informing workers how and why cross training will improve the company, Emily’s unit, and, in the longer run, create better job security because the company will be more profitable. If this is not enough, perhaps management could negotiate an agreement that workers who participate in the change will be given increased job security. (C) Management could begin the cross training as a pilot project. A “test” example would serve to reduce fear, show employees how the changes can take place without negative impacts on workers, and prove to both management and workers how the changes may (or may not) be a real improvement, before rolling it out to the whole plant. (D) Management could use action research to design this change and plan its effective implementation. Perhaps management has not thought through then need for this change in enough depth, or how it might be a part of a larger change process to reduce production time and costs as well as improve quality, in order to boost failing profits. This would also involve designing new performance measures to effectively assess “before and after” (current and future state) conditions in order to better understand and document successful changes, and to maintain the changes, once implemented. (E) Worker involvement: has management considered more involvement of employees in improving production processes, physical layout, or work distribution and rotation? For example, they might involve a team of workers to plan and implement a pilot project on cross training. If some workers fear that the training being proposed by management is not going to be effective, they could help ensure it would be by being involved in the planning of it. Not only do workers have a lot of key information to make the change more successful, but their involvement creates a sense of “ownership” of the change and a vested interest in making it work. (F). Today, many successful companies are involving the workers in continuous improvement activities. An appreciative inquiry approach could be used. This method can help educate workers involved in planning the change, as they study the situation and dialogue on the issues and factors involved, it can help unfreeze old mind sets and ways of thinking, creating change in group norms and attitudes. (G) Management must analyze restraining factors and resistance to discover any possible incongruent organization systems working against the proposed change. As discussed in Question #1 above, there appear to be a number of incongruent organization systems contributing to resistance. This are factors only management can do something about, and may involve other, rather fundamental changes. A key example is evaluation of the piece-rate pay system to see if it’s detriments outweigh its benefits. Current management style (top-down) should also be analyzed for potential change. Team exercise 17.2: Strategic Change Incidents Purpose This exercise is designed to help students to identify strategies to facilitate organizational change in various situations. Instructions Step 1: The instructor will place students into teams, and each team will be assigned one of the scenarios presented in this exercise. Step 2: Each team will diagnose its assigned scenario to determine the most appropriate set of change management practices. Where appropriate, these practices should (a) create an urgency to change, (b) minimize resistance to change, and (c) refreeze the situation to support the change initiative. Each of these scenarios is based on real events that occurred in the United States and elsewhere. Step 3: Each team will present and defend its change management strategy. Class discussion regarding the appropriateness and feasibility of each strategy will occur after all teams assigned the same scenario have presented. The instructor will then describe what the organizations actually did in these situations. Comments for Instructors I have used this exercise several times in MBA classes and executive development programs, with consistently good results. The activity should also work well with undergraduate university and college classes because it is straightforward and applies concepts from the textbook. The activity is made more interesting by the fact that these scenarios involve REAL COMPANIES, so the instructor can advise students that their strategies will be compared with what the companies actually did. The PowerPoint file for this chapter includes a summary of these scenarios, including the actions taken by the two real organizations. (These PowerPoint slides appear after the slides for the chapter content.) Scenario 1: Greener Telco The Board of Directors at a large telephone company want its executives to make the organization more environmentally friendly by encouraging employees to reduce waste in the workplace. There are also expectations by government and other stakeholders for the company to take this action and be publicly successful. Consequently, the managing director wants to significantly reduce the use of paper, refuse, and other waste throughout the company’s many widespread offices. Unfortunately, a survey indicates that employees do not value environmental objectives and do not know how to “reduce, reuse, recycle.” As V-P Administration, you have been asked to develop a strategy that might bring about meaningful behavioral change toward these environmental goals. What would you do? What Actually Happened: This incident describes the “Zero Waste” program several years ago at Bell Canada. Bell Canada is the largest telephone company in that country. Although the intervention occurred 15 years ago, it is a timeless incident for discussion because it applies to behavior change that might occur in any organization and would involve employees at all levels. Bell Canada invoked change by applying several strategies to minimize resistance to change. Here are the steps the telephone company took to bring about Zero waste: Communication: Employees attended information sessions and saw banners at the front entrance about the beginning of “Zero Waste”. A task force of employee representatives kept everyone informed about developments leading up to the first day of zero waste. Training. Employees were shown how to reduce paper waste by using both sides of paper, using scrap paper as memo pads, re-using office envelopes, and relying more on email and voice mail than written memos. In the cafeteria, they learned to separate leftover food and deposit it into the appropriate compost bin. The company also installed a special telephone hotline to answer questions about recycling. Bell Canada employees also received feedback about their progress toward the waste reduction goal. The task force weighed the garbage twice each week and publicly displayed these results on charts. The garbage was occasionally ‘audited’ for incorrect behaviors, such as throwing apple cores in the paper recycling bin. Offending employees were politely encouraged to use the compost bin instead. Employee involvement. Bell Canada deliberately selected the more popular employees in each department to serve on a special task force to develop the Zero Waste program. These employees quickly became champions as they took ownership of the program. They were also conduits of information and enthusiasm back to the departments where they worked. Coercion. The Zero Waste program created barriers to wasteful behavior. Paper towels were replaced with electric hand dryers in the washrooms. Styrofoam cups were replaced with reusable mugs at each employee’s desk. Metal garbage cans at each workstation were replaced with plastic recycling bins. Employees were left with tiny reusable bags to carry nonrecyclables to specially marked bins located elsewhere in the building. Along with these strategies, Bell Canada began the program as a pilot project in one of its largest buildings. That pilot project reduced waste by 98 percent -- from nearly 1,000 pounds of waste each day to less than 25 pounds of waste each day. The company subsequently applied similar change management principles to improve energy conservation. Some students might correctly suggest that the change process is essentially applying the MARS model to alter individual behavior. Bell Canada motivated employees, changed their role perceptions, and improved their ability through training to reduce waste. Perhaps most important, Bell Canada changed the environment so that situational factors made it more difficult to engage in wasteful behavior. References: J. Mills, “Bell Sets Example with ‘Zero Waste’ Program,” Montreal Gazette, (February 14, 1993), p. C3; C. Mahood, “Bell Zeros in on Waste,” Globe & Mail, (May 4, 1992), pp. B1, B2; “Bell Canada,” Inside Guide, (January 1993), pp. 46-48; D. Hogarth, “Firms Reap Green Harvest,” Financial Post, (June 15-17, 1991), p. 18. Scenario 2: Go Forward Airline A major airline had experienced a decade of rough turbulence, including two bouts of bankruptcy protection, 10 managing directors, and morale so low that employees had ripped off company logos from their uniforms out of embarrassment. Service was terrible and the airplanes rarely arrived or left the terminal on time. This was costing the airline significant amounts of money in passenger lay-overs. Managers were paralyzed by anxiety and many had been with the firm so long that they didn’t know how to set strategic goals that worked. One-fifth of all flights were losing money and the company overall was near financial collapse (just three months to defaulting on payroll obligations). The newly-hired CEO and you must get employees to quickly improve operational efficiency and customer service. What actions would you take to bring about these changes in time? What Actually Happened: Scenario #2 describes the troubles that Continental Airlines experienced during the 1980s and early 1990s. The airline was the results of seven merged airlines and had been managed badly over the previous decade. Continental went into bankruptcy twice and was almost out of cash when Gordon Bethune and Greg Brenneman were hired as chairman and president, respectively. The company was continually losing money and its continuous cost-cutting only made matters worse by destroying customer service and employee loyalty. Continental executives Gordon Bethune and Greg Brenneman applied the following change management strategy: Communication. Bethune and Brenneman constantly communicated their “Go Forward” strategic plan to save the airline. Go Forward covered four cornerstones: market, financial, product, and people. Bethune and Brenneman also worked alongside baggage staff and other employees, discussing their go forward plan while performing the front-line work. The company also posted news of the change process on bulletin boards, in weekly voice mails from Bethune, and in monthly open house meetings with employees. Training. There were no apparent training programs to change Continental airlines. Bethune and Brenneman argued that employees already knew their jobs, but lacked the opportunity and strategy to put their skills and knowledge to use. However, Continental introduced new goals (such as on-time departures) and used Department of Transportation monthly measures as feedback on how well the company performed on these performance metrics. Employee Involvement. Bethune and Brenneman collected the “Thou Shalt not” manual – the guidebook on what employees are not allowed to do – and publicly burned them in the parking lot. Then Bethune and Brenneman told employees to make customer service happen. Coercion. Fifty-one of the 60 executives were replaced within a couple of months. Bethune and Brenneman stated that it is difficult for people who get a company into a mess to get them out. Moreover, the executives who made these mistakes for so long would not be trusted by employees to lead them into the future. Along with these strategies, Continental introduced rewards that aligned employees with the company’s new strategic goals. Rather than reduce costs, Continental was going to improve service. Thus, employees were each paid $65 for each month that Continental placed in the top five airlines for on-time service, according to the Department of Transportation. In change management, rewards relate to introducing systems and structures to “refreeze” the desired conditions. Bethune and Brenneman also brought about rapid change by hiring senior executives (replacing those fired) with competencies and values that were more aligned with the Go Forward plan. References: G. Brenneman, “Right Away and All at Once: How We Saved Continental,” Harvard Business Review, September-October 1998, pp. 162-79; T. Kennedy, “Confidence returns with Continental's strong comeback,” Minneapolis Star Tribune, February 1, 1998, p. 1A. Self-Assessment 17.3: Tolerance of Change Scale Some people are naturally less comfortable than other people with the complexity and uncertainty of change. This self-assessment provides an estimate of how tolerant people are of change. Students are asked to read each of the statements and circle the response that best fits their personal belief. They then use the scoring key to calculate their results. This self-assessment is completed alone so that students rate themselves honestly without concerns of social comparison. However, class discussion will focus on the meaning of tolerance of change, how this scale might be applied in organizations, and the limitations of measuring tolerance of change in work settings. Feedback for the Tolerance of Change Scale [NOTE: The following information is also provided in Appendix B and/or the Student OLC.] This measurement instrument is formally known as the “tolerance of ambiguity” scale. Although it was developed over 40 years ago, the instrument is still used today in research. People with a high tolerance of ambiguity are comfortable with uncertainty, sudden change, and new situations. These are characteristics of the hyperfast changes occurring in many organizations today. The following graph compares your score on this scale to results for a sample of MBA students. Scores on this scale range from 16 to 112. A higher score indicates a higher tolerance of change. Sco