C H A P T E R

15
F I F T E E N

Organizational Change
and Development
McGraw-Hill Ryerson 1 The McGraw-Hill Companies, Inc. 2001
Continuous Change at Nokia
Nokia has
continually
adapted to its
changing
environment. The
Finnish company
began as a pulp
and paper mill in
Courtesy National Board of Antiquities, Finland
1865, then moved
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.

McGraw-Hill Ryerson 2 The McGraw-Hill Companies, Inc. 2001

Some External Forces for Change

Information
Technology

Globalization
& Competition
Courtesy National Board of Antiquities, Finland

Demography

McGraw-Hill Ryerson 3 The McGraw-Hill Companies, Inc. 2001

Force Field Analysis

Restraining
Desired Forces
Conditions

Restraining
Forces Driving
Forces
Restraining
Forces
Current Driving
Conditions Forces
Driving
Forces

Before During After

Change Change Change
McGraw-Hill Ryerson 4 The McGraw-Hill Companies, Inc. 2001
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

McGraw-Hill Ryerson 5 The McGraw-Hill Companies, Inc. 2001

Resistance to Change

Direct Costs

Saving Face

Fear of the Unknown

Forces for
Change Breaking Routines

Incongruent Systems

Incongruent Team Dynamics

McGraw-Hill Ryerson 6 The McGraw-Hill Companies, Inc. 2001

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

McGraw-Hill Ryerson 7 The McGraw-Hill Companies, Inc. 2001

Minimizing Resistance to Change

Communication

Coercion Training
Minimizing
Resistance
Negotiation
to Change Employee
Involvement

Stress
Management

McGraw-Hill Ryerson 8 The McGraw-Hill Companies, Inc. 2001

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

McGraw-Hill Ryerson 9 The McGraw-Hill Companies, Inc. 2001

Strategic Vision & Change at CHC
Courtesy of CHC Helicopter Corp.
McGraw-Hill Ryerson
CHC Helicopter Corp.s four
strategic principles have helped
its employees adapt to rapid
growth at the St. Johns, Nfld.
firm. These principles include
safety first, quality service,
teamwork, and profitable
growth.
10 The McGraw-Hill Companies, Inc. 2001
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
Courtesy of CHC Helicopter Corp. Build commitment to the vision

McGraw-Hill Ryerson 11 The McGraw-Hill Companies, Inc. 2001

Successfully Diffusing Change

Successful pilot study

Favourable publicity
Top management support
Labour union involvement
Diffusion strategy
described well
Pilot program people
Courtesy of CHC Helicopter Corp.
moved around

McGraw-Hill Ryerson 12 The McGraw-Hill Companies, Inc. 2001

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.

McGraw-Hill Ryerson 13 The McGraw-Hill Companies, Inc. 2001

Action Research Process

Establish
Client-
Consultant
Relations

Diagnose Evaluate/
Introduce
Need for Stabilize
Change
Change Change

Disengage
Consultants
Services

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Parallel Structures
Parallel
Organization
Structure

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Appreciative Inquiry Process

Discovery Dreaming Designing Delivering

Forming Engaging in Developing

Discovering
ideas about dialogue objectives
the best of
what might about what about what
what is
be should be will be

McGraw-Hill Ryerson 16 The McGraw-Hill Companies, Inc. 2001

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

McGraw-Hill Ryerson 17 The McGraw-Hill Companies, Inc. 2001

C H A P T E R

15
F I F T E E N

Organizational Change
and Development
McGraw-Hill Ryerson 18 The McGraw-Hill Companies, Inc. 2001
Discussion of Activity 15.3
Strategic Change Management

McGraw-Hill Ryerson 19 The McGraw-Hill Companies, Inc. 2001

Scenario #1: Greener Telco
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

McGraw-Hill Ryerson 20 The McGraw-Hill Companies, Inc. 2001

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 Courtesy of Bell Canada

wasteful behaviour, eg.

removed garbage bins

McGraw-Hill Ryerson 21 The McGraw-Hill Companies, Inc. 2001

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

McGraw-Hill Ryerson 22 The McGraw-Hill Companies, Inc. 2001

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)
Courtesy of Continental Airlines
! Customers as drivers of change

McGraw-Hill Ryerson 23 The McGraw-Hill Companies, Inc. 2001