C H A P T E R

F I F T E E N

Organizational Change and Development

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.

Organizational Change: An International Phenomenon

0 International expansion 10 20 30 40 50 60 70 80

Reduction in employment

Mergers, divestitures, acquisitions Major restructuring 0 10 20 30 40 50 60 70 80 Percentage of Respondents by Country

Hungary Mexico S. Korea Germany United States Japan

(Source: Kanten, R., 1991.)

Changing People: Some Basic Steps

Step 3: Refreezing Incorporating the changes, creating and maintaining a new organizational system

Step 2: Changing Attempting to create a new state of affairs

Step 1: Unfreezing Recognizing the need for change

Sensitivity groups

Objective data

Group members recognize problem Diagnose groups strengths and weaknesses Develop desired change goals Develop action plan to make changes Implement plan

Team Building: Its Basic Steps

Evaluate plan

if successful
Process completed

if unsuccessful

Restart process

When Will It Occur?

If benefits exceed costs
Amount of dissatisfaction with current conditions
Change is made

Availability of a desirable alternative

Benefit of making change

Compared to

Cost of making change

Existence of a plan for achieving a desirable alternative

Change is not made

If costs exceed benefits

6

Some External Forces for Change

Information Technology

Globalization & Competition

Courtesy National Board of Antiquities, Finland

Demography

Force Field Analysis

Desired Conditions
Restraining Forces

Restraining Forces

Driving Forces

Restraining Forces

Current Conditions
Driving Forces

Driving Forces

Before Change

During Change

After Change

Resistance to Change at BP Norge

Employees initially resisted selfdirected 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

Resistance to Change
Direct Costs
Saving Face Fear of the Unknown

Forces for Change

Breaking Routines Incongruent Systems Incongruent Team Dynamics

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

Minimizing Resistance to Change

Communication

Coercion

Training

Negotiation

Minimizing Resistance to Change

Stress Management

Employee Involvement

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

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.

Successfully Diffusing Change

Successful pilot study

Favourable publicity
Top management support Labour union involvement Diffusion strategy described well
Courtesy of CHC Helicopter Corp.

Pilot program people moved around

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.

Organizational Development: How Effective Is It?

Percentage of Studies Showing Positive Changes

50

Organizational outcomes more often benefited from OD interventions than did individual outcomes

(48.70)

40

30

(23.55)

20

Individual outcomes (e.g., job satisfaction)

Organizational outcomes (e.g., profit) (Source: Porras and Robertson, 1992.)

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Action Research Process

Establish ClientConsultant Relations

Diagnose Need for Change

Introduce Change

Evaluate/ Stabilize Change

Disengage Consultants Services

Parallel Structures
Parallel Structure Organization

Appreciative Inquiry Process

Discovery

Dreaming

Designing

Delivering

Discovering the best of what is

Forming ideas about what might be

Engaging in dialogue about what should be

Developing objectives about what will be

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

The Ethics of OD: Summary 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

22

Discussion of Activity 15.3 Strategic Change Management

23

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

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

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

Continental Airlines Change Strategy

Communicate,

communicate,

communicate
Introduced

15 performance

measures
Established Replaced

stretch goals (repainting planes in 6 months) 50 of 61 executives

Rewarded

new goals (on-time arrival, stock price)

as drivers of change
Courtesy of Continental Airlines

Customers