14-1 Michael A. Hitt C. Chet Miller Adrienne Colella Organizational Change and Development Chapter 14 Organizational Change and Development Slides by Ralph R. Braithwaite

14-2 The Evolution of Starbucks Exploring Behavior in Action As Starbucks grew, they realized that the informal techniques were not sufficient and needed to have a more formalized process in place. Why were these changes difficult for the organization? Starbucks is faced with new challenges today. It has dominated the marketplace. Have they grown too fast? Will changes in the marketplace require a different approach? What do you think the future will hold for them? Howard Schultz Dave Olsen Dawn Pinaud

14-3 Organizational Change and Development Polaroid introduced instant photography to the market. They were one of the top 50 companies in the U.S. But they, like many others, were slow to change. What would you have done differently if you were a senior manager at Polaroid? Can you think of any other companies that were too slow to change and suffered the consequences? Why is change so difficult to manage?

14-4 Knowledge Objectives 1.Describe two major internal pressures for change. 2.Identify and explain six major external pressures for change 3.Describe the three-phase model of planned change. 4.Discuss important tactical choices involving the speed and style of a change effort. 5.Explain the four general causes of resistance to change and the tactics that can be used to address each cause. 6.Discuss the role of the DADA syndrome in organizational change. 7.Describe the basic organization development (OD) model and discuss OD interventions, including relationship techniques and structural techniques.

14-5 Pressures for Change Adapted from Exhibit 14-1: Internal and External Pressures for Organizational Change Introduction or Removal of Government Regulations Life-Cycle Forces Growing International Interdependence Changes in Demographics Shifting Political Dynamics Changes in Societal Values Technological Advances Aspirations Pressure for Change

14-6 Aspiration-Performance Discrepancies Gaps between what an individual, unit, or organization wants to achieve and what it is actually achieving. Three important factors in the role of aspirations Past aspirations Past performance Comparison with others

14-7 Life-Cycle Forces Natural and predictable pressures that build as an organization grows and that must be addressed if the organization is to continue to grow.

14-8 Integrative Life-Cycle Model Adapted from Exhibit 14-2: Integrative Life-Cycle Model Entrepreneurial Stage Collectivity Stage Formalization and Control Stage Elaboration Stage Need for additional people Need for stability and structure Need for balance

14-9 External Pressures for Change Technological advances Introduction and removal of government regulations Changes in societal values Shifting political dynamics Changes in demographics Growing international interdependence

14-10 Managerial Advice Companies’ Responses to Pressures for “Green” Policies and Practices Are companies becoming more “green” for reasons other than the “bottom-line”? Give some examples. What is your organization doing to become more “green”? What are you doing personally? Should becoming “green” be a choice or is legislation needed to make it happen?

14-11 Planned Change A process involving deliberate efforts to move an organization or a unit from its current undesirable state to a new, more desirable state Awakening Mobilizing Reinforcing Energizing Envisioning Enabling Unfreezing Moving Refreezing

14-12 Process of Planned Change Adapted from Exhibit 14-3: Process of Planned Change UnfreezingRefreezing Moving Provide rationale for change Create minor levels of guilt/anxiety about not changing Create sense of psychological safety concerning change Provide information that suspects proposed changes Bring about actual shifts in behavior Implement new evaluation systems Create minor levels of guilt/anxiety about not changing Implement new hiring and promotion systems Kurt Lewin

14-13 Experiencing Strategic OB Coca-Cola Is Finding a New Fizz Neville IsdellSandy Douglas Coca-Cola is changing its culture, and also adapting its product line to better satisfy the demand of customers. What are your thoughts about the steps they are taking regarding these changes? Do you think the new innovations and changes will have a positive or a negative impact on their existing brands? Why? What other changes would you suggest to help them remain competitive?

14-14 Sources of Failure 1.Managers and associates should not expect all change activities to occur sequentially. 2.A team of change leaders, rather than a single individual, should guide an organization through a major change effort. John Kotter In addition to size, four factors to consider when forming change teams: Position PowerInformal Credibility ExpertiseProven Leadership

14-15 Speed of Change Criteria to Consider Urgency Degree of support Amount and complexity of change Competitive environment Knowledge and skills available Financial and other resources

14-16 Style of Change Participatory – change leaders seek the ideas and advice of associates and then use many of those ideas. Criteria for evaluating the degree to which the participatory style should be used: Non-participatory – top down, leaders design the change and plan its implementation UrgencyUrgency Degree of Support Referent and Expert Power of Leaders

14-17 Resistance to Change Four Factors Lack of understanding Different assessments Self-interest Low tolerance for change Effort to block new ways of doing things

14-18 Experiencing Strategic OB British Airways: The Yin and Yang of Organizational Change Willie Walsh Do you think there was any incentive for British Airways to change prior to deregulation? Why do you think the changes were effective? Given the problems faced by all the major airlines at the time, why do you think there was still so much resistance to the changes? What other changes would you recommend at this time?

14-19 The DADA syndrome Denial – ignore possible or current change Anger – individuals facing unwanted change become angry about the change Depression – individuals experience emotional lows Acceptance – individuals embrace the reality of the situation and make the best of it

14-20 Organization Development (OD) Roots in humanistic psychology Grounded in values of individual empowerment and interpersonal cooperation Fully consistent with the high-involvement management approach A planned, organization-wide, continuous process designed to improve communication, problem solving, and learning through the application of behavioral science knowledge

14-21 Basic Organization Development Model Adapted from Exhibit 14-4: Basic Organization Development Model Diagnosis of Situation Introduction of interventions Progress Monitoring Feedback

14-22 Organization Development Interventions Organization Development Structural TechniquesRelationship Techniques T-group Training Team Building Survey Feedback Job Redesign Management by Objectives Supplemental Organizational Processes Adapted from Exhibit 14-5: Organization Development Interventions

14-23 Relationship Techniques T-group Training Team Building Survey Feedback

14-24 Team Building Tips Get the right people together for a large block of uninterrupted time to work on high-priority problems or opportunities that they have identified and have them work in ways that are structured to enhance the likelihood of realistic solutions and action plans, which are then implemented enthusiastically and followed up to assess actual versus expected results.

14-25 Structural Techniques Job Redesign Management by Objectives (MBO) Supplemental Organizational Processes

14-26 Organizational Learning Exploitative Learning Exploratory Learning

14-27 Organization Development Across Cultures Ethnocentric Attitude and Stereotyping Flexibility Knowledge of Specific Cultures Interpersonal Sensitivity

14-28 The Strategic Lens 1.Why do organizations need to make changes on a regular basis? What are the major causes of these changes? 2.Why is it so difficult for people to change their behavior, even when they know it is important to do so? 3.If you were in a managerial position and believed that a major change in your unit’s structure was needed, what actions would you take to ensure that the change was made effectively?

14-29 Questions