Organizational Change and Development

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Organizational Change and Development
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C H A P T E R
F I F T E E N
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Continuous Change at Nokia

• Nokia has continually adapted to its changing
  environment. The Finnish company began as a pulp
  and paper mill in 1865, then moved

Courtesy National Board of Antiquities, Finland
into rubber, cable wiring, and computer monitors.
In the 1980s, Nokia executives sensed an emerging
market for wireless communication. Today, Nokia
is a world leader in cellular telephones.
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Organizational Change An International Phenomenon
International expansion
Reduction in employment
Mergers, divestitures, acquisitions
Major restructuring
(Source Kanten, R., 1991.)
Percentage of Respondents by Country
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Changing People Some Basic Steps
Incorporating the changes, creating and
maintaining a new organizational system
Step 3 Refreezing
Attempting to create a new state of affairs
Step 2 Changing
Current State
New State
Recognizing the need for change
Step 1 Unfreezing
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Sensitivity groups
Objective data
Group members recognize problem
Diagnose groups strengths and weaknesses
Team Building Its Basic Steps
Develop desired change goals
Restart process
Develop action plan to make changes
Implement plan
Evaluate plan
if unsuccessful
if successful
Process completed
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When Will It Occur?
Change is made
If benefits exceed costs
Amount of dissatisfaction with current conditions
Compared to
Cost of making change
Benefit of making change
Availability of a desirable alternative
Existence of a plan for achieving a
desirable alternative
Change is not made
If costs exceed benefits
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Some External Forces for Change
Information Technology
Globalization Competition
Courtesy National Board of Antiquities, Finland
Demography
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Force Field Analysis
Desired Conditions
Current Conditions
BeforeChange
AfterChange
DuringChange
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Resistance to Change at BP Norge
Employees initially resisted self-directed teams
BP Norges North Sea drilling rigs.

• SDWTs dont work on drilling rigs!
• We already have teams!
• This creates more work will we get higher
  pay?
• I dont know how to work in teams.
• SDWTs will threaten my job as a supervisor!

AP Worldwide
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Resistance to Change

• Direct Costs
• Saving Face
• Fear of the Unknown
• Breaking Routines
• Incongruent Systems
• Incongruent Team Dynamics

Forces for Change
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Creating an Urgency for Change

• Need to motivate employees to change
• Most difficult when organisation is doing well
• Must be real, not contrived
• Customer-driven change
• Adverse consequences for firm
• Human element energizes employees

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Minimizing Resistance to Change
Communication
Minimizing Resistance to Change
Training
Coercion
Employee Involvement
Negotiation
Stress Management
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Refreezing the Desired Conditions

• Creating organizational systems and team dynamics
  to reinforce desired changes
• alter rewards to reinforce new behaviours
• new information systems guide new behaviours
• recalibrate and introduce feedback systems to
  focus on new priorities

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Change Agents

• Anyone who possesses enough knowledge and power
  to guide and facilitate the change effort
• Change agents apply transformational leadership
• Help develop a vision
• Communicate the vision
• Act consistently with the vision
• Build commitment to the vision

Courtesy of CHC Helicopter Corp.
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Successfully Diffusing Change

• Successful pilot study
• Favourable publicity
• Top management support
• Labour union involvement
• Diffusion strategy described well
• Pilot program people moved around

Courtesy of CHC Helicopter Corp.
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Organization Development Defined

• A planned system wide effort, managed from the
  top with the assistance of a change agent, that
  uses behavioural science knowledge to improve
  organizational effectiveness.

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Organizational Development How Effective Is It?
Organizational outcomes more often benefited
from OD interventions than did individual outcomes
(48.70)
50
40
30
(23.55)
Percentage of Studies Showing Positive Changes
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Individual outcomes (e.g., job satisfaction)
Organizational outcomes (e.g., profit)
(Source Porras and Robertson, 1992.)
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Action Research Process
Establish Client- Consultant Relations
Diagnose Need for Change
Disengage Consultants Services
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Parallel Structures
Parallel Structure
Organization
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Appreciative Inquiry Process
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Organization Development Concerns

• Cross-Cultural Concerns
• Linear and open conflict assumptions different
  from values in some cultures
• Ethical Concerns
• Management power
• Employee privacy rights
• Employee self-esteem
• Consultants role

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The Ethics of ODSummary of the Debate

• OD is
• ethical
• The imposition of values
• is an inherent part of life,
• especially on the job
• Abuse comes from
• individuals, not from
• the technique itself,
• which is neither good
• nor evil

• OD is
• unethical
• Imposes values of the
• organization coercive
• and manipulative
• Potential for abuse

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Discussion of Activity 15.3Strategic Change
Management
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Scenario 1 Greener Telco

• Scenario 1 refers to Bell Canadas Zero Waste
  program, which successfully changed wasteful
  employee behaviours by altering the causes of
  those behaviours.

Courtesy of Bell Canada
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Bell Canadas Change Strategy

• Relied on the MARS model to alter behaviour
• Motivation -- employee involvement, respected
  steering committee
• Ability -- taught paper reduction, email, food
  disposal
• Role perc. -- communicated importance of reducing
  waste
• Situation -- Created barriers to wasteful
  behaviour, eg. removed garbage bins

Courtesy of Bell Canada
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Scenario 2 Go Forward Airline

• Scenario 2 refers to Continental Airlines Go
  Forward change strategy, which catapulted the
  company from worst to first within a couple of
  years.

Courtesy of Continental Airlines
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Continental Airlines Change Strategy

• Communicate, communicate, communicate
• Introduced 15 performance measures
• Established stretch goals (repainting planes in 6
  months)
• Replaced 50 of 61 executives
• Rewarded new goals (on-time arrival, stock price)
• Customers as drivers of change

Courtesy of Continental Airlines