Chapter 14

Organizational
Change

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Chapter Outline

Forces for Change

Types of Organizational Change
What Do Organizations Change?
Undergoing Change to Improve Products and Services
Managing Organizational Change
Communicating Effectively When Undergoing Change
Resistance to Change
Caveats on Undergoing Change

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Organizational Change
Questions for Consideration
What forces create the need for
organizational change?
What kinds of changes do organizations
make? Can organizations stop changing?
What causes resistance to change? How
can it be overcome?
Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Forces for Change

Force

Examples

Nature of the work force

More cultural diversity

Increase in professionals
Many new entrants with
inadequate skills

Technology

More computers and automation

TQM programs

Economic shocks

Reengineering programs
Dot-com crashes

Competition

Ethics scandals
Interest rate fluctuations
Foreign currency fluctuations
Global competitors
Mergers and consolidations
Growth of specialty retailers

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Managing Change
Change
Making things different.

Planned Change
Change activities that are intentional and goal oriented.

First-Order Change
Linear and continuous.

Second-Order Change
Change that is multidimensional, multilevel,
discontinuous, and radical.
Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Exhibit 14-1
Change Options
What are
the change
options?

Culture

Structure

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Technology

Physical
setting

People

What Do Organizations
Change?
Culture
changing the underlying values and goals of the
organization

Structure
altering authority relations, coordination mechanisms, job
redesign, or similar structural variables

Technology
modifying how work is processed and methods and
equipment used

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

What Do Organizations
Change?
Physical Settings
altering the space and layout arrangements in the
workplace

People
changes in employee skills, expectations and/or
behaviour

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Undergoing Change to
Improve Products and
Services

TQM and Continuous Improvement

Processes
Re-engineering Work Processes
Flexible Manufacturing Systems

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Total Quality Management

Philosophy of management thats driven by
the constant attainment of customer
satisfaction through the continuous
improvement of all organizational processes
seeks to reduce variability in output, resulting in
lower costs and higher quality

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Exhibit 14-2 What Is Total

Quality Management?
Intense focus on the customer
Concern for continuous improvement
Improvement in the quality of everything the
organization does
Accurate measurement
Empowerment of employees

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Exhibit 14-3 The PDCA

Cycle
Act

Plan

Check

Do

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Why TQM Fails

Some firms were not performing TQM, just calling it
that
Some managers have unrealistic expectations, and
effect results too quickly
Some programs did not assure employees job
security
Some firms did not provide adequate training
Some firms did not appreciate the complexity of
changes involved
Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Elements of Reengineering
Identifying an organizations distinctive
competencies
Assessing core processes
Reorganizing horizontally by process

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Re-engineering versus
TQM
TQM
Incremental
improvements
Bottom-up participative
decision-making

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Re-engineering
Quantum leaps in
performance
Driven by top
management

Flexible Manufacturing
Systems
Integration of computer-aided design, engineering, and
manufacturing to produce low-volume products at massproduction costs
Change happens by changing computer programs, not
producing new parts
Pratt and Whitney in Halifax can produce 127 different engine
models, up from 20 models for the flexible mfg. system was
introduced

Best used with

Employees: high tech skills, initiative, self-managing
Organizations: organic structures, teams
Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Exhibit 14-4 Lewins ThreeStep Change Model

Unfreezing

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Moving

Refreezing

Implementing Change
Unfreezing: getting ready for change
Minimizing resistance

Moving: making the change

Changing people (individuals and groups); Tasks;
Structure; Technology

Refreezing: stabilizing the change

Reinforcing outcomes, evaluating results, making
constructive modifications
Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Exhibit 14-5
Unfreezing the Status Quo
Desired
state

Restraining
forces

Status
quo
Driving
forces
Time
Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Unfreezing
Arouse dissatisfaction with the current state
Tell them about deficiencies in organization

Activate and strengthen top management support

Need to break down power centres

Use participation in decision making

Get people involved

Build in rewards
Tie rewards to change/use recognition, status symbols,
praise to get people to go along
Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Moving
Establish goals
E.G. Make business profitable by end of next year

Institute smaller, acceptable changes that reinforce

and support change
E.G. Procedures and rules, job descriptions, reporting
relationships

Develop management structures for change

E.G. Plans, strategies, mechanisms that ensure change
occurs

Maintain open, two-way communication

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Refreezing
Build success experiences
Set targets for change, and have everyone work toward targets

Reward desired behaviour

GOOD - reward behaviour that reinforces changes
BAD - reward old system (e.g., people relying on old systems while
computerization is going on)

Develop structures to institutionalize the change

Organizational retreats, appropriate computer technology,
performance appraisals that examine change efforts

Make change work

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Communicating When
Undergoing Change

CEO commitment to communication

Matching actions and words
Commitment to two-way communication
Emphasis on face-to-face communication
Shared responsibility for employee communication
Positive ways of dealing with bad news
Shaping messages for intended audience
Treating communication as an ongoing process

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Exhibit 14-7 Sources of

Individual Resistance to
Change
Selective
information
processing

Habit

Individual
Resistance
Fear of
the unknown

Economic
factors

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Security

Cynicism About Change

Feeling uninformed about what was
happening
Lack of communication and respect from
ones supervisor
Lack of communication and respect from
ones union representative
Lack of opportunity for meaningful
participation in decision-making
Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Exhibit 14-9 Sources of

Organizational Resistance to
Change
Threat to established
resource allocations

Threat to established
power relationships

Organizational
Resistance

Threat to
expertise
Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Structural
inertia

Limited focus
of change

Group
inertia

Overcoming Resistance to
Change
Education and Communication
This tactic assumes that the source of resistance lies in
misinformation or poor communication.

Participation
Prior to making a change, those opposed can be brought
into the decision process.

Facilitation and Support

The provision of various efforts to facilitate adjustment.

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Overcoming Resistance to
Change
Negotiation
Exchange something of value for a lessening of
resistance.

Manipulation and Cooperation

Twisting and distorting facts to make them appear more
attractive.

Coercion
The application of direct threats or force upon resisters.

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Summary and Implications

The real world is turbulent, requiring
organizations to face the prospect of change.
Change must be managed, it is not an easy
process

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

OB at Work

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

For Review
1. What are the types of planned change?
2. What are the different parts of the organization that
can be changed?
3. What are the implications for employees of a
continuous improvement program?
4. What are the implications for employees of a reengineering program?
5. What are flexible manufacturing systems?
Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

For Review
6. How does Lewins three-step model of change deal
with resistance to change?
7. What is the difference between driving forces and
restraining forces?
8. What are the factors that lead individuals to resist
change?
9. What are the factors that lead organizations to resist
change?
Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

For Critical Thinking

1. How have changes in the workforce during the past 20
years affected organizational policies?
2. Managing today is easier than at the start of the 20th
century because the years of real change took place
between Confederation and World War I. Do you
agree or disagree? Discuss.
3. What is meant by the phrase We live in an age of
discontinuity?
4. Resistance to change is an irrational response. Do
you agree or disagree? Explain.
Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

HR Implications: Managing
Change in a Unionized
Environment

Requirements

An effective system for resolving day-to-day issues

A jointly administered business education process
A jointly developed strategic vision for the
organization
A non-traditional, problem-solving method of
negotiating collective agreements

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.

Concepts to Skills:
Managing Effective
Change

Build an intricate understanding of the business

Encourage uncompromising straight talk
Manage from the future
Harness setbacks
Promote inventive accountability
Understand the quid pro quo
Create relentless discomfort with the status quo

Chapter 14, Stephen P. Robbins and Nancy Langton, Organizational Behaviour, 3rd ed.
Copyright 2004 by Pearson Education Canada Inc.