m a n a g e m e n t 2e
Hitt/Black/Porter
Chapter 15:
Organizational Change and
Development
PowerPoint slides by
Susan A. Peterson, Scottsdale Community College
Learning Objectives
After studying this chapter, you should be able to:
Identify the internal and external forces for change
in an organization
Discuss the focus of change, including strategy,
structure, systems, technology, culture, and staff
Analyze the process managers should use in
evaluating the need for change
Describe the process of organizational change
© 2008 Prentice-Hall Business Publishing
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Learning Objectives
Explain common sources of resistance during the
process of change
Discuss key approaches to overcoming such
resistance
Outline the choices managers must make in
managing change
Describe the most important elements involved in
evaluating change outcomes
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Learning Objectives
Describe three approaches to comprehensive
organizational change and compare their similarities
and differences
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Fundamental Issues of Change
How much change is enough?
How fast should change take place?
How should the need for continual
changes be balanced against the
need for a minimum level of stability
and continuity?
Who should be the major players in
change processes, and what should
their roles be?
Who, exactly, is likely to benefit and
who could be harmed by particular
changes?
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Forces for Change
Economic
Conditions
Managers’ visions,
ideas, and actions
Employees’ suggestions
and actions
Adapted from Exhibit 15.1
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Focus of Organizational Changes
Strategy
Structure
Systems
Focus
Technology
Shared values and culture
Staff
Adapted from Exhibit 15.2
Adapted from Exhibit 17.2: Forces of Organizational Changes
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Examples of Focus of Changes
Focus
Examples
Strategy


Structure


Systems


Change from niche market to general market focus
Change focus from individual customer to large
corporate customer
Change from a geographic to a customer structure
Implement an international division
Replace batch with continuous flow manufacturing
Change from last in/first out to first in/first out
inventory valuation
Adapted from Exhibit 15.3
Adapted from Exhibit 17.3: Some Specific Examples of Focus of Changes
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Examples of Focus of Changes
Focus
Examples
Technology


Shared values
and Culture

Staff



Update computer systems
Use holography in product design
Is implement diversity awareness program
Institute participatory decision making throughout
organization
Encourage cooperation through cross-training
program
Increase number and availability of training
workshops for lower-level employees
Adapted from Exhibit 15.3
Adapted from Exhibit 17.3: Some Specific Examples of Focus of Changes
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Recognizing the Need for Change
Proactive recognition
- Effective managers recognize need for change at
earliest possible time
- Systematic monitoring of the environment
Reactive recognition
- Not all change needs can be identified in advance
- How and when to react rather than whether to
react
Crisis recognition
- Distinct threat to success of the organization and
the manager
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Relative Cost of Change
High
Cost
Crisis
Reactive
Low
Proactive
Early
Low
Time when change is begun
Late
Problem severity and immediacy
High
Adapted from Exhibit 15.4
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Process of Change
Change goes through three distinctive phases:
1. Unfreezing
2. Movement
3. Refreezing
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Phase 1: Unfreezing
Habits are strongly patterned
ways of behaving
We can also have patterned
ways of viewing and
interpreting events
1. Unfreezing
To change a patterned way of
behaving or thinking, that
pattern must be “unfrozen”
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Factors Causing Resistance to Unfreezing
Inertia
- Being comfortable with the
status quo
1. Unfreezing
Mistrust
- Of those communicating the
need for change
Lack of information
- About both the need for
change and its effects
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Phase 2: Movement
Major determinants of movement
Level of certainty or
uncertainty associated with the
change
2. Movement
Magnitude of the change
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Factors Causing Resistance to Movement
Lack of clarity
- If change is not clear, people
will likely resist
2. Movement
Lack of capabilities
- If people lack capabilities,
they will probably resist
Lack of sufficient incentives
- If negative consequences
outweigh positive ones
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Phase 3: Refreezing
Habitual behaviors and
perceptions are strong
Change may not be permanent
- After a change is made,
actions should be taken to
prevent reversion to old
patterns
3. Refreezing
- Reinforce the change until it
becomes more established
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Factors Causing Resistance to Refreezing
Pull of past competencies
- If previous actions were
successful, people see little
need for change
3. Refreezing
Non-immediate results
- If results are slow, people
will resist change
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Forces for Failure
Right thing
Wrong thing
Done well
3. Refreezing
1. Unfreezing
Done poorly
2. Movement
Adapted from Exhibit 15.5
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Overcoming Resistance to Change
Overcoming resistance to:
Create contrast to help
employees see differences
Provide training and
other tools
1. Unfreeze
2. Move
Celebrate early “wins” and
reinforce successful behavior
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3. Refreeze
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Dealing with Resistance to Change
Approach
Commonly Used in
Situations
Advantages
Disadvantages
Negotiation
and
Agreement
In which someone or
some group will clearly
lose out in a change, and
in which that group has
considerable power to
resist
Sometimes major
resistance can be reduced
or avoided
Can be expensive in
many cases if it alerts
other groups to want
to negotiate too
Participation
and
Involvement
In which the initiators do
not have all the
information they need to
design the change, and in
which others have
considerable power to
resist
People who participate
are more likely to be
committed to
implementing change, and
any relevant information
they have will be
integrated into the change
plan
Can be both timeconsuming and
awkward if
participants design an
inappropriate change
Adapted from Exhibit 15.6
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Dealing with Resistance to Change
(continued)
Approach
Commonly Used in
Situations
Advantages
Disadvantages
Communication
and Education
In which there is a lack
of information or
inaccurate information
and analysis
Once persuaded, people
will often help with the
implementation of the
change
Can be very timeconsuming if many
people are involved
Facilitation and
Support
In which people are
resisting because of
problems in adjusting to
the changes
No other approach works
as well with problems of
adapting to changes
Can be expensive,
and still fail
Explicit and
Implicit
Coercion
In which speed is
essential, and the
change initiators
possess considerable
power
It is speedy and can
overcome many kinds of
resistance
Can be risky if it
leaves people angry
at the initiators and
lowers trust in them
Adapted from Exhibit 15.6
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The Change Process
Planning
and
Preparation
Implementation
Evaluation
of outcomes
Dealing with
resistance to
change
Adapted from Exhibit 15.7
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Planning Choices for Change
How soon is change needed?
Whose support will be critical
for success?
Planning
How should the change be
communicated?
How can support for the
change be developed?
Timing
Method
Participation
Incentives
Adapted from Exhibit 15.8
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Force Field Analysis
Driving forces
(examples)
Restraining forces
(examples)
New technology
Cost of updating old
plant and equipment
Visionary leader
Employee groups
opposed to change
Pressure from managers for
workers to implement new products
Norms that punish
risk taking
Equilibrium
Driving forces = Restraining forces
© 2008 Prentice-Hall Business Publishing
Adapted from Exhibit 15.9
25
Matrix of Agreeability and Influence
High
Most Important
Supporters
Potential
Key Supporter
(if numbers are large)
Agreeability
Potential Key
Supporters
Least Important
Supporters
(if they listen to "most
important supporters")
Low
Low
High
Influence
Adapted from Exhibit 15.10
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Implementation Choices
Focus
Technology
Shared values and culture
Strategy
Structure
Systems
Staff
Amount
Small
Moderate
Major
Frequency
Seldom
Often
Implementation
Rate
Slow
Rapid
Adapted from Exhibit 15.11
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Evaluating Change Outcomes
Process
Issues
Compare
outcomes
against
goals
Collect
data
• Type of data:
• Quantitative
• Qualitative
• Amount
• Cost
• Timing
Goals,
standards and
benchmarks
to be used in
this step must
have been set
early on in
process
Feedback
of results
• To whom?
• How?
Adapted from Exhibit 15.12
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Organizational Development (OD)
Approach to Change
Organizational development (OD) approach
- Strong behavioral and people orientation
- Emphasis on planned, strategic, long-range efforts
- Focus on people and their interrelationships in
organizations
- Evolved from T-groups
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Organizational Development (OD)
Approach to Change
Values and assumptions
Basic approach to the process of change
- Change agents
- Interventions
- Behavioral process orientation
- Organizational renewal
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Types of OD Interventions
Intervention
Objective
Examples
Diagnostic
Activities
To determine the current state of
the organization or the parameters
of a problem
Interviews
Questionnaires
Surveys
Meetings
Individual
Enhancement
Activities
To improve understanding of an
relationships with others in the
organization
Sensitivity training (T groups)
Behavior modeling
Life and career planning
Team Building
To improve team operation,
abilities, cohesiveness
Diagnostic meetings
Role analysis
Responsibility charting
Intergroup
Activities
To improve cooperation between
groups
Intergroup team building
Adapted from Exhibit 15.13
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Types of OD Interventions (cont.)
Intervention
Objective
Examples
Technostructural or
Structural
Activities
To find solutions to problems
through the application of
technological and structural
changes
Job enrichment
Management by objectives
New technology introduction
Process
Consultation
To disseminate information
concerning the future diagnosis
and management of human
processes in organizations
including communication,
leadership, problem solving and
decision making, and intra- and
intergroup relationships
Agenda setting
Feedback and observation
Coaching and counseling
Structural change suggestions
Adapted from Exhibit 15.13
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Issues in Process Redesign
Objectives
Coverage
Potential Drawbacks
 Reduce Costs
 Breadth
 Requires high level of
 Shorten Cycle
 Depth
Times
 Improve Quality
persistence and
involvement of top
management
 Effort may be greater than
results
 High chaos factor
 High levels of resistance
Adapted from Exhibit 15.14
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Process Redesign (Reengineering)
Process redesign (reengineering)
- Fundamental redesign of business processes to
achieve dramatic improvements
- Technology driven
- Most successful efforts have both breadth and
depth (across units and core organizational
elements)
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Organizational Learning
Organizational learning
Occurs in a organization that is skilled at
- Creating, acquiring, and transferring knowledge,
- Modifying its behavior to reflect new knowledge and
insights
Factors that facilitate learning by organizations
- Central, core competencies of current personnel
- Organizational culture that supports continuous
improvement
- Organizational capabilities (such as managerial expertise)
to implement necessary changes
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Organizational Learning
Systematic, organized,and consistent approach to
problem solving
Experimentation to obtain new knowledge
Drawing lessons from past experiences
Learning from the best practices and ideas of
others
- Benchmarking
- Focus groups
Transferring and sharing knowledge
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Top Ten Business Processes Being
Benchmarked
Business Process
Ranking
Information systems technology
1
Customer service satisfaction
2
Employee development training
3
Human resources
4
Benchmarking
5
Billing
6
Facility management
7
Process improvement management
8
Project management
9
Service
10
Adapted from Exhibit 15.15
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Major U.S. Organizations Using
Benchmarking
Business Process
Ranking
Xerox
1
TRW Automotive
2
U. S. Army
3
U. S. Department of Veterans Affairs
4
Saudi Aramco
5
C. S. C.
6
Dyn McDermott
7
The North Highland Company
8
Social Security Administration
9
Corning
10
Adapted from Exhibit 15.16
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