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C H A P T E R

16
Organizational
Change and
Development

McShane/ Von Glinow 2/e

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Driving Change at EDS


Richard H. Dick Brown
drove the change effort at
EDS by:
 listening to customer complaints
 changing the firms structure
 monitoring the change process
 communicating the change
directly with employees

 replacing several executives

McShane/ Von Glinow 2/e

AP/ Wide World

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Some External Forces for Change


Information
Technology
Globalization
& Competition

Demography

McShane/ Von Glinow 2/e

Easier information transfer


Facilitates global structures
Requires new competencies
and expectations
Facilitates telecommuting; new
employment relationships
More emphasis on knowledge
management

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Some External Forces for Change


Information
Technology
Globalization
& Competition

Demography

McShane/ Von Glinow 2/e

Global competition
Technology makes it easier to
compete quickly
Results in restructuring,
outsourcing, mergers

 produces many employment


changes

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Some External Forces for Change


Information
Technology
Globalization
& Competition

Demography

More educated workforce


 want involvement; interesting work
Younger generation
 less intimidated by status
 want a more balanced work life
Cultural changes
 more individualism in traditionally
collectivist countries

McShane/ Von Glinow 2/e

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Force Field Analysis


Restraining
Forces

Desired
Conditions
Restraining
Forces

Restraining
Forces

Current
Conditions

Driving
Forces

Driving
Forces
Driving
Forces

Before
Change
McShane/ Von Glinow 2/e

During
Change

After
Change

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Resistance to Change at BP Norge


Employees initially resisted selfdirected work teams (SDWTs) at BP
Norges North Sea drilling rigs.
We already have teams!
SDWTs dont work on rigs!
This creates more work -- we
want higher pay!
I dont know how to work in
teams.
SDWTs will threaten my job as a
supervisor!

McShane/ Von Glinow 2/e

AP/ Wide World

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Resistance to Change
Direct Costs
Saving Face
Fear of the Unknown

Forces for
Change

Breaking Routines
Incongruent Systems
Incongruent Team Dynamics

McShane/ Von Glinow 2/e

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Creating an Urgency for Change


Need to motivate employees to change
Most difficult when organization is doing well
Must be real, not contrived
Customer-driven change
 Adverse consequences for firm
 Human element energizes employees

McShane/ Von Glinow 2/e

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Reducing Restraining Forces at Unilever


Gary Calveley (right) brought in
team coaches to train
employees throughout the
process of changing Unilevers
Elida Faberge factory into
Europes best factory. A
theatrical production helped to
communicate the changes that
Calveley was trying to achieve
through coaching.

McShane/ Von Glinow 2/e

Dean Smith/The Camera Crew

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Minimizing Resistance to Change


Communication

Coercion

Negotiation

Training

Minimizing
Resistance
to Change

Employee
Involvement

Stress
Management

McShane/ Von Glinow 2/e

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Refreezing the Desired Conditions


Creating organizational systems and team
dynamics to reinforce desired changes

 alter rewards to reinforce new behaviors


 new information systems guide new behaviors
 recalibrate and introduce feedback systems to
focus on new priorities

McShane/ Von Glinow 2/e

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Strategic Vision & Change Agents


Strategic Vision and Change
 Need vision of desired future state
 Minimizes employee fear of the unknown
 Clarifies role perceptions
Change Agents
 Possess knowledge and power to facilitate the
change effort
 Usually internal change champion
 Need to be transformational leaders

McShane/ Von Glinow 2/e

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Conditions for Diffusing Change


Successful pilot study
Favorable publicity
Top management support
Labor union involvement
Diffusion strategy described well
Pilot program people moved around

McShane/ Von Glinow 2/e

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Organization Development Defined


A planned system wide effort, managed from
the top with the assistance of a change
agent, that uses behavioral science
knowledge to improve organizational
effectiveness.

McShane/ Von Glinow 2/e

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Action Research Process


Establish
Client-Client
Consultant
Relations

Diagnose
Need for
Change

Introduce
Change

Evaluate/
Stabilize
Change
Disengage
Consultants
Services

McShane/ Von Glinow 2/e

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Parallel Learning Structures


Parallel Learning
Structure

McShane/ Von Glinow 2/e

Organization

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

Appreciative Inquiry at Hunter Douglas


The Hunter Douglas Window
Fashions Division in Colorado
relied on appreciative inquiry as
well as a search conference to
create a collective vision, reinstill a sense of community
among employees, and build
leadership within the company.

McShane/ Von Glinow 2/e

Courtesy of Amanda Trotsen-Bloom

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

What is Appreciative Inquiry?


Directs the groups attention
away from its own problems
and focuses participants on
the groups potential and
positive elements.
Reframes relationships
around the positive rather
than being problem oriented

McShane/ Von Glinow 2/e

Courtesy of Amanda Trotsen-Bloom

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

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

McShane/ Von Glinow 2/e

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

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

McShane/ Von Glinow 2/e

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

C H A P T E R

16
Organizational
Change and
Development

McShane/ Von Glinow 2/e

Copyright 2003 by The McGraw-Hill Companies, Inc. All rights reserved.