© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1

Chapter Objectives Identify and describe four types of organizational change according to the Nadler-Tushman model. Explain how people tend to respond differently to changes they like and those they dislike. List at least six reasons why employees resist change and discuss what management can do about resistance to change. Describe how the unfreezing-change-refreezing metaphor applies to organization development (OD). © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2

Chapter Objectives (cont’d) Describe tempered radicals and identify the 5Ps in the checklist for grassroots change agents. Contrast competitive and cooperative conflict styles. Identify and describe five conflict resolution techniques. Identify and describe the elements of effective negotiation and explain the advantage of added value negotiating (AVN). © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3

Change: Organizational & Individual Perspectives Types of Organizational Change Anticipatory changes: Planned changes based on expected situations Reactive changes: Changes made in response to unexpected situations Incremental changes: Subsystem adjustments required to keep the organization on course Strategic changes: Altering the overall shape or direction of the organization © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4

Figure 15.1: Four Types of Organizational Change © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5

Organizational & Individual Perspectives Tuning The most common, least intense, and least risky type of change Also known as preventive maintenance and kaizen (continuous improvement) Key is to actively anticipate and avoid problems rather than waiting for something to go wrong Adaptation Incremental changes that are in reaction to external problems, events, or pressures © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6

Organizational & Individual Perspectives Reorientation Change that is anticipatory and strategic in scope and causes the organization to be significantly redirected Also called “frame bending” (Nadler and Tushman) Re-Creation Intense, risky, and decisive change that reinvents the organization Also called “frame breaking” (Nadler and Tushman) © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7

Individual Reactions to Change Change happens on an individual level, even in the workplace How People Respond to Changes They Like Three-stage process Unrealistic optimism Reality shock Constructive direction © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8

Figure 15.2: How People Tend to Respond to Changes They Like © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 9

Individual Reactions to Change (cont’d) On-the-Job changes generally are more feared than welcomed How People Respond to Changes They Fear and Dislike Stages Getting off on the wrong track Laughing it off Growing self-doubt Buying in Constructive direction © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10

Figure 15.3: How People Respond to Changes They Fear and Dislike © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11

Table 15.1: How to Help Individuals Deal with Change: A Contingency Approach © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12

Table 15.1: How to Help Individuals Deal with Change: A Contingency Approach (cont.) © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13

Why Do Employees Resist Change? Surprise Unannounced significant changes threaten employees’ sense of balance in the workplace. Inertia Employees have a desire to maintain a safe, secure, and predictable status quo. Misunderstanding/Ignorance/Lack of Skills Without introductory or remedial training, change may be perceived negatively. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14

Why Do Employees Resist Change? (cont’d) Emotional Side Effects Forced acceptance of change can create a sense of powerlessness, anger, and passive resistance to change. Lack of Trust Promises of improvement mean nothing if employees do not trust management. Fear of Failure Employees are intimidated by change and doubt their abilities to meet new challenges. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 15

Why Do Employees Resist Change? (cont’d) Personality Conflicts Managers who are disliked by their employees are poor conduits for change. Poor Timing Other events can conspire to create resentment about a particular change. Lack of Tact Not showing sensitivity to feelings can create resistance to change. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 16

Why Do Employees Resist Change? (cont’d) Threat to Job Status/Security Employees worry that change threatens their job or security. Breakup of Work Group Changes can tear apart established on-the-job social relationships. Passive-Aggressive Organizational Culture The more things change, the more they stay the same. Competing Commitments Change can disrupt employees in their pursuit of other goals. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 17

Strategies for Overcoming Resistance to Change Education and communication Participation and involvement Facilitation and support Negotiation and agreement Manipulation and co-optation Explicit and implicit coercion © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 18

Table 15.2: Dealing with Resistance to Change © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 19

Making Change Happen Two Approaches to Organizational Change Organization Development (OD) A planned change programs intended to help people and organizations function more effectively Formal top-down approach Grassroots change Unofficial and informal bottom-up approach © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 20

Objectives of OD Deepen sense of organizational purpose. Strengthen interpersonal trust. Encourage problem solving rather than avoidance. Develop a satisfying work experience. Supplement formal authority with knowledge and skill-based authority. Increase personal responsibility for planning and implementing. Encourage willingness to change. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 21

The OD Process Unfreezing, Change, Refreezing (Kurt Lewin) Unfreezing: Neutralizing resistance by preparing people for change Change: Introduction of the intervention Refreezing: Systematically following a change program for lasting results © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 22

Figure 15.4: A General Model of OD © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 23

Unofficial and Informal Grassroots Change Tempered Radicals People who quietly try to change the dominant organizational culture in line with their convictions Guidelines for tempered radicals: Think small for big results. Be authentic. Translate. Don’t go it alone. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 24

Figure 15.5: The 5P Checklist for All Change Agents © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 25

Managing Conflict Conflict One person’s incompatible behaviors that make another person’s actions less effective Dealing with the Two Faces of Conflict Competitive conflict: Parties pursuing directly opposite (win-lose) goals Cooperative conflict: A mutually reinforcing experience (win-win) that serves the best interests of both parties © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 26

Figure 15.6: Competitive Versus Cooperative Conflict © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 27

Managing Conflict (cont’d) Conflict Trigger Any factor that increases the chances of conflict Conflict Triggers Ambiguous or overlapping jurisdictions Competition for scarce resources Communication breakdowns Time pressure Unreasonable standards, rules, policies, or procedures Personality clashes Status differentials Unrealized expectations © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 28

Managing Conflict (cont’d) Resolving Conflict Doing nothing is usually not a viable option. Conflict Resolution Techniques Problem solving Superordinate goals Compromise Forcing Smoothing © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 29

Negotiating Negotiation A decision-making process among interdependent parties with different preferences Common Types of Negotiation Two-party negotiation (e.g., buyer and seller) Third party negotiation (e.g., agents and arbitrators) © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 30

Negotiating (cont’d) Elements of Effective Negotiation Adopting a win-win attitude Understanding that a mutually beneficial agreement addresses both parties’ interests Knowing your BATNA (best alternative to a negotiated agreement) Your “bottom line” for accepting or rejecting offers Identifying the bargaining zone Negotiation is useless if both parties involved have no common ground on which to maneuver during bargaining. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 31

Figure 15.7: The Bargaining Zone for Negotiators © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 32

Negotiating (cont’d) Added Value Negotiating (AVN) A practical five-step win-win process involving the development of multiple deals Clarify subjective and objective interests; seek common ground. Identify options and their marketplace values. Design alternative deal packages that foster a creative agreement. Select a mutually acceptable deal that is feasible for both parties. Perfect the deal by strengthening relationships for future negotiations. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 33

Summary The four types of change are tuning, adaptation, re- orientation (frame bending), and re-creation (frame breaking). People who like a change tend to go through three stages: unrealistic optimism, reality shock, and constructive direction. When someone fears or dislikes a change, a more complex process involving five stages tends to occur: getting off on the wrong track, laughing it off, experiencing growing self-doubt, buying in, and moving in a constructive direction. Employees resist change for many different reasons, including (but not limited to) surprise, inertia, ignorance, lack of trust, fear of failure, passive-aggressive behavior, and competing commitments. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 34

Summary (cont’d) Organization development (OD) is a systematic approach to planned organizational change. Unofficial and informal grassroots change can be initiated by tempered radicals, who quietly follow their convictions when trying to change the dominant organizational culture. Competitive conflict is characterized by a destructive cycle of opposing goals, mistrust and disbelief, and avoidance of discussion coupled with a win-lose attitude. In contrast, cooperative conflict involves a constructive cycle of cooperative goals, trust and reliance, and discussion coupled with a win-win attitude. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 35

Summary (cont’d) Conflict triggers can cause either constructive or destructive conflict. Three basic elements of effective negotiations are a win-win attitude, a BATNA (best alternative to a negotiated agreement) to serve as a negotiating standard, and the calculation of a bargaining zone to identify overlapping interests. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 36

Terms to Understand Anticipatory changes Reactive changes Incremental changes Strategic changes Organization development (OD) Unfreezing Refreezing Tempered radicals Conflict Conflict trigger Negotiation Bargaining zone Added value negotiating © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 37