Chapter 4:

Managing Change
and Culture
 Types of Change in Organizations

• Technological changes
– Changes in such things as new equipment and
new processes.
– Machines
– Equipment
– Processes
– Automation
– Computers
– New raw materials
– Robots

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 Types of Change in Organizations

• Environmental changes
– All non-technical changes that occur outside
the organization.
• Laws • Interest rates
• Taxes • Consumer trends
• Social trends • Competition
• Fashion trends • Suppliers
• Political trends • Population trends
• Economic trends

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 Types of Change in Organizations

• Internal changes
– Budget adjustments, policy changes,
personnel changes, etc.
• Policies • Restructuring of jobs
• Procedures • Personnel
• New methods • Management
• Rules • Ownership
• Reorganization • Products / services
• Budget adjustment sold

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 Lewin’s Three-Step
Model for Change
1. Unfreezing
– Deals with breaking down the forces supporting
or maintaining the old behavior.
– Forces can include the formal reward system,
reinforcement from the work group, and the
individual’s perception of proper role behavior.
2. Presenting a new alternative
– Involves offering a clear and attractive option
representing new patterns of behavior.

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 Lewin’s Three-Step
Model for Change
3. Refreezing
– Requires that the change behavior be reinforced
by the formal and informal reward systems and
by the work group. It is in this step that the
manager can play a pivotal role by positively
reinforcing employee efforts to change.

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 Resistance to Change
• Frequent reasons employees resist change:
• Fear of the unknown.
• Economics.
• Fear that skills and expertise will lose value.
• Threats to power.
• Additional work and inconvenience.
• Threats to interpersonal relations.

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 Typical Change Scenarios
1. If employees cannot foresee how change will affect
them, they will resist the change or be neutral at
best.
2. If employees perceive that the change does not fit
their needs and hopes, they will resist the change.
3. If employees see that the change is inevitable, they
may first resist and then resign themselves to the
change.
4. If employees view the change as being in their best
interests, they will be motivated to make the
change work. 8
 Directing Change
Recommended steps in issuing a change directive:
2. Determine the response needed from the employee to
accomplish the task effectively.
3. Estimate the expected response if the directive is simply
published or orally passed to the employee (as many are).
4. If a discrepancy exists between the needed response and
the estimated response, determine how the two responses
can be reconciled (opposition is never an acceptable
response).

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 Reducing Resistance to
Change
• Build trust
• Discuss upcoming changes
• Involve the employees
• Make sure the changes are reasonable
• Avoid threats
• Follow a sensible time schedule

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 Overcoming Resistance to Change
Approach Commonly Advantages Drawbacks
Used in
Situations
Education + Where there is a Once persuaded, Can be time-
Communication lack of information people will often help consuming if many
or inaccurate with implementation people are involved
information and of the change.
analysis
Participation + Where the initiators People who Can be time-
Involvement do not have all the participate will be consuming if
information they committed to participants design
need to design the implementing an inappropriate
change, and where change, and any change
others have relevant information
considerable power they have will be
to resist integrated into the
change plan

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 Overcoming Resistance to Change
Approach Commonly Advantages Drawbacks
Used in
Situations
Facilitation + Where people are No other approach Can be time-
Support resisting because of works as well with consuming and
adjustment adjustment expensive and still
problems problems fail

Negotiation Where someone or Sometimes it is a Can be too

+ Agreement some group will relatively easy way expensive in many
clearly lose out in a to avoid major cases if it alerts
change, and where resistance others to negotiate
that group has for compliance
considerable power
to resist

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 Overcoming Resistance to Change
Approach Commonly Advantages Drawbacks
Used in
Situations
Manipulation + Where other It can be a Can lead to future
Co-optation tactics will not relatively quick and problems if people
work or are too inexpensive feel manipulated
expensive solution to
resistance
problems
Explicit + Where speed is It is speedy and Can be risky if it
Implicit essential and the can overcome any leaves people mad
Coercion change initiators kind of resistance at the initiators
possess
considerable
power
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 Model for Leading Change
Establish a sense of urgency

Create the guiding coalition

Develop a vision and strategy

Communicate the change vision

Empower broad-based action

Latent conflict
Consolidate gains and
produce more change

Anchor new approaches in

the culture 14
 Organizational Development
Diagnosis
• Review available records
• Survey questionnaires
• Personal interviews
• Direct observation
Change planning
• Identify specific problems
• Outline resolution steps

Intervention / education
• Direct feedback
• Team building
• Sensitivity training
Evaluation
• Did the OD process produce
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the desired results?
 Managing Innovation
Four essential principles:
2. An organization’s approach to innovation must be
comprehensive.
3. Innovation must include systematic, organized,
and continual search for new opportunities.
4. Organizations must involve everyone in the
innovation process.
5. An organization must work constantly to improve
its climate for innovation.
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 Learning Organizations
Five principles:
2. Systems Thinking: Managers must learn to see the big
picture and not concentrate only on their part.
3. Personal Mastery: Individual managers and employees
must be empowered to experiment, innovate, and explore.
4. Mental Models: Managers and employees should be
encouraged to develop mental models to find new and
better ways of doing things.
5. Shared Vision: Managers should develop and communicate
a shared vision that can be used as a framework for
addressing problems and opportunities.
6. Team Learning: Team learning is the process of aligning a
team so as to avoid wasted energy and to get the desired
results.
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 Organization Culture
Seven identifying characteristics:
1. Individual autonomy
2. Structure
3. Support
4. Identification
5. Performance-reward
6. Conflict tolerance
7. Risk tolerance

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 Organization Culture
Five justifications for large-scale change:
1. The organization has strong values that do not fit into a
changing environment.
2. The industry is very competitive and moves with lightning
speed.
3. The organization is mediocre or worse.
4. The organization is about to join the ranks of the very
large companies.
5. The organization is small but growing rapidly.

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