Chapter 15
Organisational
Change
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
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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
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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
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Force Field Analysis Model
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15-5
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
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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
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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
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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
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15-9
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
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Minimising Resistance to
Change
Communication
Learning
Involvement
Stress Mgt
• Highest priority and first
strategy for change
• Generates urgency to
change
• Reduces uncertainty (fear
of unknown)
• Problems—time-consuming
and costly
Negotiation
Coercion
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Minimising Resistance to
Change continued
Communication
Learning
Involvement
Stress Mgt
• Provides new
knowledge/skills
• Includes coaching and
other forms of learning
• Helps break old routines
and adopt new roles
• Problems—potentially timeconsuming and costly
Negotiation
Coercion
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15-12
Minimising Resistance to
Change continued
Communication
Learning
Involvement
Stress Mgt
Negotiation
• Employees participate in
change process
• Helps saving face and
reducing fear of unknown
• Includes task forces, future
search events
• Problems—timeconsuming, potential
conflict
Coercion
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15-13
Minimising Resistance to
Change continued
Communication
Learning
Involvement
Stress Mgt
Negotiation
Coercion
• 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—timeconsuming, expensive,
doesn’t help everyone
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Minimising Resistance to
Change continued
Communication
Learning
Involvement
Stress Mgt
Negotiation
• 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
Coercion
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Minimising Resistance to
Change continued
Communication
Learning
Involvement
Stress Mgt
Negotiation
•
•
•
•
When all else fails
Assertive influence
Radical form of ‘unlearning’
Problems
– Reduces trust
– May create more subtle
resistance
– Encourage politics to
protect job
Coercion
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15-16
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
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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
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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
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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
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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
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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
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Action Research Process
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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
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Four-D Model of Appreciative
Inquiry
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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
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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
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15-27
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
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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 (1835-1919)
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DISCUSSION OF
TEAM EXERCISE 15.1
STRATEGIC CHANGE
INCIDENTS
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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.
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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
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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
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Courtesy of Bell Canada
15-33
Bell Canada’s Change Strategy
Relied on the MARS model to alter
behaviour:
• Motivation—employee
involvement, respected steering
committee (photo)
• Ability—taught paper reduction,
email, food disposal
• Role perceptions—made waste
reduction salient (everyone’s
job) through banners, training
Courtesy of Bell Canada
• Situation—created barriers to
wasteful behaviour (e.g. coffee
mugs, removed garbage bins)
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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
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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
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Chapter 15
Organisational
Change