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Organizational Behavior: Solutions for Management
Paul D. Sweeney, University of Central Florida
Dean B. McFarlin, University of Dayton
Creating and Implementing Organizational Change

Chapter Outline

  1. Why Should Your Organization Change?

    2. The bottom line is the fact that organizational change is inevitable.
    1. Microsoft is an example of an organization that "looked into the future".
    2. Many firms take the position that stability helps them cope with an unpredictable future.
    3. Stability provides a sense of direction for the firm and provides clarity about what it is trying to accomplish. Firms are finding that stability in core values is crucial to their success.
    4. Companies face many pressures to change including planned and unplanned forces.
  2. What Should Be Changed?
    1. Strategic Change:
      • Firms often change goals and tactics
      • Corporate examples discussed include GE, IBM, Pepsi, and Xerox
      • Strategic change is one major option for organizational transformation.
    2. Technological Change:
      • This type of change can also range form minor to colossal.
      • Technological changes include:
      • Computerization
      • Inventory management systems
      • Cellular manufacturing technologies
      • Technological change is one of the most common ways in which organizations are transformed.
    3. Structural Change:
      • A common change involves flattening a firm to reduce bureaucratic red tape and increase employee initiative.
      • Reengineering and downsizing are options for structural change.
      • Structural adjustment often follows technological or other change.
    4. People Change:
      • There is often considerable resistance to change among employees and managers alike.
      • Plans for people-related change should be integrated into corporate strategy and can include:
      • Training opportunities.
      • Hiring new people or firing existing ones.
      • This area of change is referred to as organizational development.
  3. Implementing Change: The Hard Part
    4. Managing the change process is a tricky and uncomfortable matter.
    1. Creating Readiness for Change:
      • The real trick is to create a sense of readiness to change while things still seem to be going well.
      • Methods to increase readiness include long-term (i.e. education), short-term (i.e. co-option), and extreme methods (i.e. doomsday management).
      • A more positive approach has been taken by some maverick organizations. These organizations are called learning organizations,.
    2. Identifying Resistance to Change:
      • The failure to recognize and deal with sources of resistance is an important predictor of a stalled or collapsed change effort.
      • Diagnosing the correct reason for the resistance to change can help determine how you should deal with the resistance.
        1. Individual-Level Resistance to Change:
          • Fear of the unknown is a common source of resistance.
          • Another related reason is the economic threat it poses to people.
          • Selective perception also plays a part in the individual's resistance to change.
          • Habit is another individual-level factor that can cause resistance.
        2. Organizational-Level Resistance to Change:
          • Company inertia is the organizational-level equivalent to habit.
          • The organizational structure and culture, itself, can reinforce existing company habits and make change all the more difficult.
          • Mechanistic structures and stable cultures tend to create some resistance to change.
          • Change also represents a threat to existing power structures.
          • A more common example of a threat to power is the employee involvement movement among American firms.
          • Another organizational-level threat is previous failed attempts to change.
    3. Overcoming Resistance to Change:
      4. Managers sometimes underestimate the tenacity with which people resist change.
      1. Education and Communication:
        • This is one of the most common ways to overcome resistance.
        • Communication programs can be especially useful in overcoming resistance when:
        • Resistance seems to be based on either misinformation about the change or an inadequate circulation of relevant information.
      2. Participation and Involvement:
        • Refers to listening and including the employees and managers who will be affected by a change.
        • Participation can help the affected employees buy into the proposed changes.
        • Participation is probably the best way to deal with resistance when top management lacks the same hands-on grasp of operational details as those employees who are lower in the ranks.
        • However, participation can backfire when poorly managed.
      3. Facilitation and Support:
        • Another way to dodge employee resistance to change is to be supportive.
        • Ways to be supportive include such things as simply listening and empathizing to providing material support for the problems associated with organizational change.
        • Choices of how to be supportive will vary from firm to firm.
      4. Negotiations and Agreements:
        • A good way to deal with resistance of any sort is to negotiate an agreement that provides pluses for both those who want change and those who will be affected by it.
        • Negotiation may also prove helpful when organizational inertia accounts for the resistance to change.
        • Perhaps the best application of negotiation might be after you have analyzed the effects of proposed changes and found that some person or group might lose out as a result.
        • Negotiation requires skill
      5. Manipulation and Co-optation:
        • Covert attempts to eliminate resistance to change are probably more common than most people think.
        • Manipulation can involve doling out information selectively.
        • Co-optation is related to manipulation because it usually involves getting someone involved in the change effort not because their input is really wanted, but to subvert their resistance.
        • Manipulation may work when everything else has failed.
        • These methods may have to be resorted to when time is of the essence.
      6. Coercion:
        • Coercion is usually a blatant use of force.
        • Narcissistic leaders usually prefer this method.
        • Managerial Implications:
        • Some suggestions for choosing the method that best matches the situation include:
        • Consider the magnitude of resistance.
        • Consider how much you need others.
        • Consider what is at stake.
        • Consider using more than one method.
    4. Using Outside Consultants:
      • Managers often assume the role of change agent.
      • Outsiders can provide a fresher more dispassionate analysis of the firm, its context, and its employees that can ultimately lead, in consultation with management, to a plan for executing change efforts.
    5. Techniques That Can Promote Change:
      • There are some tried and true methods for promoting change.
      • These techniques can be targeted at the interpersonal, group, or organizational level.
      1. Interpersonal Methods:
        • These techniques focus on people who are having problems fitting in with others or dealing with change and include:
        • Sensitivity training
        • Group-based organizational development techniques such as team building.
      2. Group Methods:
        • The purpose of group techniques is to get a handle on group performance problems.
        • Team-building techniques
        • Process consultation
      3. Organizational Methods:
        • These methods are designed to improve information flow and feedback throughout the larger organization.
        • Survey methods
        • Survey feedback process
  4. Evaluating Change Efforts
    5. Given all the time and money involved, you may be surprised to learn that very few companies actually systematically evaluate the success or failure of their efforts.
    • Most experts suggest building in an evaluation component from the start.
    • Develop goals for the program at the outset
    • Specify the criteria or measures that should be affected by your change efforts.
    • The biggest lesson for any organization to learn is to be as precise as possible in defining the goals of any particular OD program.




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