MGMT 312:

M
Managing
i O Organizational
i ti l Ch
Change
If we want things to stay as they are, things will have to change.
Giuseppe di Lampedusa 1896-1957, Italian writer

Today:
• Article Summary Presentations

• Lecturette on Change

• Discuss cases

• Exercise

• Review Upcoming Deliverables

2

Basic Questions for Change

Agents
• Why should we change?

• What are the forces acting upon me?

• What should we change?

• How should we change it?

3
External Forces that Stimulate
Change
• New competition

• Shift in customer preferences

• Demographic
D hi characteristics
h t i ti

• Technological advancements

• Market changes

• Social and political pressures

4

Internal Forces that Stimulate

Change
• Human Resource Issues
– Inadequate recruiting and selection systems
– Ill-conceived (or unfair) performance
management, compensation, and training
systems
t
• Leadership Behavior/Decisions
– Change in leadership
– Mergers and acquisitions
– Excessive interpersonal conflict
– Inadequate direction or support
5

Leading vs. Managing

Change
• Leadership – “What
would be right?”
– Focus – what are the
priorities?
Change
• Management– “How do we
do it right?”
– Acceptance – how do we
prevent/minimize resistance?

– Credibility – what would be – Attention – how do we get

believable? employees to pay attention?

– Culture – does it make – Right people – do our

sense given our values and employees have the KSAs to
mission? pull this off?

– Momentum and Energy – how

do we keep it going? 6
Types of Change
• Strategic Change

• Technological Change

• Structural Change

• People/Behavioral/Cultural Change

Is a New Structure Required?

• Market advantage test • Difficult-links test

• Parenting advantage test • Redundant-hierarchy test

• People test • Accountability test

• Feasibility test • Flexibility test

• Specialist culture test

8

Steps Not Involving a Major Design

Change
• Modifying the units
– Refine the allocation of responsibilities
– Refine reporting and/or lateral relationships
– Refine accountabilities
• Redefine skills requirements and incentives
– Modify criteria for selecting people
– Redefine skill development needs
– Develop incentives
• Shape informal context
– Clarify the leadership style needed
– Define or redefine the culture
Source: Adapted from Michael Goold and Andrew Campbell, “Do You Have a 9
Well-Designed Organization?” Harvard Business Review, March 2002, p. 124.
Steps Involving a Major Design
Change
• Make substantial changes in units
– Make major adjustments to unit boundaries
– Change unit roles
– Introduce new units or merge units
• Change the organizational structure
– Change reporting lines
– Create new divisions

Source: Adapted from Michael Goold and Andrew Campbell, “Do You Have a 10
Well-Designed Organization?” Harvard Business Review, March 2002, p. 124.
FIGURE 8–2b

Why Do People Resist Change?

• Lack of information, resentment, or honest
disagreement over the facts concerning
change
• Personal and emotional fear of loss of jjob,,
relationships, and/or status
• Personality traits: poor self-image, low
tolerance for ambiguity and risk
• Change creates competing commitments
11

Overcoming Resistance to Change

Approach Commonly Used in Advantages Drawbacks
Situations Where:

Education and There is a lack of Once persuaded, Can be very time

Communication information or people will often help consuming if lots of
inaccurate information with implementation people are involved
& analysis of change

Participation and The initiators do not People who Can be very time
Involvement have all the participate will be consuming if
information they need committed to the participators design
to design the change implementation of an inappropriate
& others have change change
considerable power to
resist

Facilitation and Support People are resisting No other approach Can be very time
because of works as well with consuming, expensive
adjustment problems adjustment problems and still fail
12
 Overcoming Resistance to Change
(cont)
Approach Commonly Used in Advantages Drawbacks
Situations Where:

Negotiation and Someone or some Sometimes it is a Can be too expensive

Agreement group will clearly lose relatively easy way to in may cases if it
out in a change and avoid major change alerts other to
where that group has negotiate for
considerable power to compliance
resist

Manipulation and Other tactics will not It can be relatively Can lead to future
Co-optation work or are too quick and inexpensive problems if people
expensive feel manipulated

Explicit and Implicit Speed is essential It is speedy and can Can be very risky ad
Coercion and where the change overcome any kind of leave people mad at
initiators possess resistance the initiators
considerable power
13

Kurt Lewin’s Model of Change

• Unfreezing
– Creates the motivation to change
• Changing or Moving
– Provides new information, new behavioral
models, or new ways of looking at things
• Refreezing
– Helps employees integrate the changed
behavior or attitude into their normal way of
doing things

14

Forces for Failure

Right Thing Wrong Thing
Done well

3 Refreeze
3. 1 Unfreeze
1.

Done poorly
2. Movement

Adapted from Exhibit 2.4: Change Failure Framework

15
Source: Hitt, Black, and Porter (2006) Management
 Pitfalls – Per Phase

16
Source: Hitt, Black, and Porter (2006) Management

Unfreezing: The Failure to See

• The power of past mental maps
– The longer a mental map has been successful, the
harder it is to see the need for a new one
• Overly simplistic view of the past and future
– Difference in the context/situation may not be seen
• Maintaining equilibrium
– Doing “nothing” is easier than doing “something”

17
Source: Hitt, Black, and Porter (2006) Management

Overcoming the Failure to See

• Create high contrast
– Focus people’s attention on key differences or core
contrasts
– Help people see and remember those key
differences ((create images)
g )
• Create confrontation
– Present the contrasts repeatedly
– Involve as many of the senses—touch, smell, sight,
sound, taste—as possible

18
Source: Hitt, Black, and Porter (2006) Management
Adapted from Exhibit 2.5: Declining Contrast
Movement: The Failure to Move
• Change uncertainty
– Not knowing what change will work, people may
intensify their efforts on doing what they know
• Outcome uncertainty
– Concern that if we make the change, it won’t work, or
it won’t matter
• Requirement uncertainty
– Concern that I don’t have the KSAs to make the
change and do the “new” work

19
Source: Hitt, Black, and Porter (2006) Management

Overcoming the Failure to Move

• Educate employees as to the desired
change
• Help employees see the new destination
and the anticipated benefits of going there
• Know and understand what it takes to
execute the change
• Assess the level of employee capabilities
• Provide training, tools, or other resources

20
Source: Hitt, Black, and Porter (2006) Management

Refreezing: The Failure to Finish

• Most significant change does not produce
instant, positive consequences

• The lack of reinforcement of the new

behaviors allows old behaviors to
reappear

21
Source: Hitt, Black, and Porter (2006) Management
 Overcoming the Failure to Finish
• Create early wins and reinforce desired
behavior
• Help people see the progress of the
change
– Inform them of their personal progress
– Inform them of collective progress
• Repeat messages of old and new maps
often
• Create high impact, inescapable
confrontations
22
Source: Hitt, Black, and Porter (2006) Management

Change Acceleration Process

• Create vision
• Identify stakeholders and position
• Gain buy in

23
Source: Hitt, Black, and Porter (2006) Management

BikeStuff Simulation

24
Source: Hitt, Black, and Porter (2006) Management
Big Shoes to Fill
• Key players
• Strategic and operational problems
• Solutions

25

Upcoming Classes
• Friday and Monday – NO CLASS

• Wednesday

– Read
R d Google
G l case

• Friday

– Bring copy of resume for Resume Workshop

– Mid term at beginning of 2nd half of class 26