15

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 10 20 30 40 50 60 70 80
International
expansion

Reduction in Hungary
employment Mexico
S. Korea
Germany
Mergers, United States
divestitures, Japan
acquisitions

Major
restructuring

0 10 20 30 40 50 60 70 80 (Source: Kanten, R., 1991.)

Percentage of Respondents by Country 3

Changing People: Some Basic
Steps
Step 3: Refreezing
Incorporating the changes,
creating and maintaining a
new organizational system

Step 2: Changing
Attempting to te
St a
create a new state w
of affairs Ne

Step 1: Unfreezing
Recognizing the
tate
need for change tS
re n
r
Cu

4
 Sensitivity Objective
groups data

Group members
recognize problem

Diagnose group’s
strengths and
weaknesses
Team
Building:

Restart process
Develop desired
change goals
Its Basic
Develop action plan
to make changes Steps
Implement plan

Evaluate plan
if unsuccessful
if successful
Process
completed
5
 When Will It Occur?

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

Compared Cost of
Benefit of to
Availability of a making
making
desirable alternative change
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

Restraining
Desired Forces
Conditions

Restraining
Forces Driving
Forces
Restraining
Forces

Current Driving
Conditions Forces
Driving
Forces

Before During After

Change Change Change
Resistance to Change at BP Norge
Employees initially resisted self-
directed teams BP Norge’s North
Sea drilling rigs.

• “SDWTs don’t work on drilling rigs!”

• “We already have teams!”
• “This creates more work — will we
get higher pay?”
• “I don’t 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
Minimizing
Resistance
Negotiation
to Change Employee
Involvement

Stress
Management
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
Courtesy of CHC Helicopter Corp. – Build commitment to the vision
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
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
Organizational outcomes
50 more often benefited from (48.70)
OD interventions than did
individual outcomes

40

30 (23.55)

20

Individual Organizational
outcomes outcomes
(e.g., job (e.g., profit) (Source: Porras and Robertson, 1992.)
satisfaction)
17
Action Research Process

Establish
Client-
Consultant
Relations

Diagnose Evaluate/
Introduce
Need for Stabilize
Change
Change Change

Disengage
Consultant’s
Services
Parallel Structures
Parallel
Organization
Structure
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”
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
– Consultant’s 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
OD is the technique itself,
unethical which is neither good
nor evil
• 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

Canada’s Zero Waste
program, which
successfully changed
wasteful employee
behaviours by altering the
causes of those
behaviours. Courtesy of Bell Canada
Bell Canada’s 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 Airline’s “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 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