English Assignment: Case Study 2: Zappos

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Organization Change: Theory and Practice, Sixth Edition Chapter 6: Levels of Organization Change: Individual, Group, and Larger System

Change in Organizations at the Individual Level (1 of 9)

Deciding a direction for change.

Rarely affecting the total system.

6.1. Describe change in organizations at the individual level.

Change in Organizations at the Individual Level

Deciding a direction for change:

An important pretext for addressing any level of change is to decide an overall direction for organization change.

Changes at the individual level are designed and implemented to help the organization to move in its new direction.

Rarely affecting the total system:

Many changes at the individual level in organizations are not in the service of moving the total system in a new direction.

Training programs are often conducted because another competitor in the industry is doing it, and “to remain competitive, we had better do it, too.”

This “keeping up with the Joneses” mentality accounts for many changes at an individual level that rarely affect the whole.

Change in Organizations at the Individual Level (2 of 9)

Recruitment, Selection, Replacement, and Displacement

Right people in right roles.

Likert’s System 4.

Objective, principles of selection process.

Details of the two-day process.

6.1. Describe change in organizations at the individual level.

Recruitment, Selection, Replacement, and Displacement

Right people in the right roles: This category of individual change concerns getting, placing, and keeping the right people in the right roles and jobs to facilitate the larger change effort.

Likert’s System 4:

Major tasks would be accomplished by teams and that first-line supervisors would be team leaders rather than operate more traditionally as supervisors by giving close individual supervision.

Status differences among all employees were to be minimized.

There would be no executive dining room, for example, but one cafeteria for all, and a participative approach to management was to be practiced.

The top management group for the plant, the general manager and three operating managers (operations service, manufacturing, and technical) had been selected by corporate headquarters according to the new plant design criteria.

Objective, principles of selection process:

To find people who were compatible with a participative approach.

Team leaders would be expected to manage participatively.

The selection process was managed by the top team with the assistance of an organization development consultant.

All selection decisions would be made by the people who were to work with those selected.

Decisions would be based on how applicants behaved in collaborative and conflicting group situations.

All applicants would receive feedback from the decision makers on why they did or did not receive job offers.

Contact between those who were already members of the organization and those who were strong prospects would gradually become more extensive and open as the selection process progressed.

Details of the two-day process: The process included a plant visit, a detailed description of the new organization, role-playing exercises, a battery of psychological tests, group decision-making tasks, and simulation exercises of plant work.

Change in Organizations at the Individual Level (3 of 9)

Recruitment, Selection, Replacement, and Displacement

Early success, lack of diffusion.

Reasons for lack of diffusion.

Volvo of Sweden: an exception.

6.1. Describe change in organizations at the individual level.

Recruitment, Selection, Replacement, and Displacement

Early success, lack of diffusion:

Nine months after the start-up of the plant, only two people had left the organization, absenteeism was less than 1%, and productivity had exceeded original expectations.

This early success was sustained, but the managerial and change process associated with it did not spread to the overall parent company.

Reasons for lack of diffusion:

An inadequate pilot project, a poor model for change, confusion over what was to be diffused, and deficient implementation.

Innovative enclaves in organizations that are incompatible with the overall culture and are unprofitable remain isolated and do not diffuse whatever innovation they develop.

Volvo of Sweden was an exception:

The success of an initial pilot effort there was effectively diffused into other parts of the overall organization.

This more effective diffusion was due to an effective pilot project, a better model for change, less confusion about what to diffuse, and better implementation than the other organizational examples.

Change in Organizations at the Individual Level (4 of 9)

Recruitment, Selection, Replacement, and Displacement

Opportunity to systematically select people.

Replacement and displacement.

Key replacement tactic.

6.1. Describe change in organizations at the individual level.

Recruitment, Selection, Replacement, and Displacement

Opportunity to systematically select people:

The opportunity to select people for a new organization in a planned, systematic way is rare.

Many difficult problems in overcoming resistance to change are obviated.

New norms, different from traditional norms in industry, can be developed.

The Saturn automobile division of General Motors was started and has continued to operate according to many of these more participative ways of selecting and working with people.

Procter & Gamble has used similar practices, and some of the newer high-tech companies like those in Silicon Valley do the same.

Replacement and displacement:

Replacement and displacement in the interest of organization change also occurs.

The brief story of revolutionary change at British Airways (BA) began in part with reducing the workforce by more than 20,000 people.

This displacement occurred over some period of time, because early retirements and other forms of natural attrition were predominantly used.

The main objective on the part of the CEO at the time, Colin Marshall, was to reduce bureaucracy and move BA toward a more market-oriented, customer service enterprise.

This huge reduction in the workforce was in support of the overall organization direction and change effort.

Key replacement tactic:

A key replacement tactic in many organization changes is to recruit a new leader from inside the organization, but more often from the outside.

A deliberate tactic for organization change at the individual level is to infuse the system with new leadership, especially at the top.

Change in Organizations at the Individual Level (5 of 9)

Training and Development

Directed toward managers.

“Managing People” training program.

Daniel Goleman’s emotional intelligence.

Study to begin the process.

6.1. Describe change in organizations at the individual level.

Training and Development

Directed toward managers: Most of the time the effort is directed toward individuals in managerial positions, assuming that a training program is designed and conducted to help bring about organization change.

“Managing People” training program:

Citicorp, now known as Citi, launched a unique training program, “Managing People,” early in 1977.

The corporation’s top management was concerned that, along with its rapid growth in the late 1960s and 1970s, the increasing strain on managers to continue to produce profits and adapt to rapid change had caused mounting “people problems” in the organization.

Particular attention had to be paid to managing people more effectively.

Daniel Goleman’s emotional intelligence:

William Spencer, president of the corporation, publicly stated that “The management of people is probably a greater skill mandated than individual brilliance. Even the most brilliant person, if there is little or no ability to manage people, is a lost cause in our operation”.

He was talking about what Daniel Goleman (1995) today calls emotional intelligence.

Study conducted to begin the process:

To begin the process, a study was conducted

To identify the best management talent within the organization,

To determine the specific set of management practices that seemed to distinguish the best from average managers, and

To design a training program based on these superior practices.

A criterion group of managers was thus established by asking senior executives to identify outstanding subordinate managers within their respective groups, and they identified 39 such managers.

The researchers then asked these same senior executives to identify 39 additional managers within their groups who were satisfactory managers but not as effective as the first group.

The researchers next arranged for 353 subordinates of these 78 managers (39 in the “A” group [outstanding] and 39 in the “B” group [satisfactory]) to rate their bosses on 59 management practices culled from a list of hundreds.

Change in Organizations at the Individual Level (6 of 9)

Training and Development

The 5-point Likert-type scales.

Basis for designing training program.

5-day program.

Results-only to people-focused.

6.1. Describe change in organizations at the individual level.

Training and Development

The 5-point Likert-type scales:

The ratings were done with 5-point Likert-type scales. Some of the practices rated were as follows:

Your manager communicates high personal standards informally.

Your manager tries to make the best use of staff members’ skills and abilities when making assignments.

Your manager works with staff members (subordinates) to reach mutual agreement on their performance appraisals.

Your manager uses recognition and praise to reward excellent performance.

The work group meetings your manager conducts serve to increase trust and mutual respect among the work group members.

Basis for designing training program:

The A group was rated significantly higher than the B group on 22 of the 59 practices, regardless of their management situation in the corporation.

Another eight practices differentiated between the two groups but only under structured conditions of management, such as in a back-office operation of check processing.

The A-group practices were then used as the basis for design of the training program.

Before the program began, managers were rated by their subordinates on the selected set of people-management practices.

5-day program: Training in five clusters:

The 5-day program consisted of training in clusters of selected practices, with each training day devoted to one cluster.

The five clusters were (1) getting commitment to goals and standards, (2) coaching, (3) appraising performance, (4) compensating and rewarding, and (5) building a team for continuity of performance.

Training techniques included case method, role practice, group problem-solving and decision-making exercises, and occasional short lectures.

For each day of the program, the managers received a computer printout of their ratings by their subordinates on that day’s cluster of practices.

This feedback for the manager was the most powerful part of the training program, because managers focused their learning and improvement objectives on the practices that received the lowest ratings.

Results-only to people-focused:

This Managing People program of Citicorp’s was designed to change the management of the organization from an insensitive and results-only mentality to a management group that focused more on people, with a better blend of getting results and managing subordinates in a more participatory and caring fashion.

The fact that the program continued for almost two decades supports the belief that it had value for Citicorp.

The value was primarily individual in nature and its value for the organization as a whole is unclear.

If change did occur, it was certainly evolutionary, not revolutionary.

Change in Organizations at the Individual Level (7 of 9)

Coaching and Counseling

Not exactly a new tool.

Individual needs and organizational goals.

Occurs informally.

6.1. Describe change in organizations at the individual level.

Coaching and Counseling

Not exactly a new tool: Counseling was recognized as a tool for individual development and organizational improvement at least 70 years ago, when the Hawthorne studies were conducted.

Integrating individual needs and organizational goals:

When counseling/coaching is used for purposes of furthering organizational change, we have the problem of integrating individual needs and organizational goals.

The new psychological contract is an attempt to integrate individual improvement objectives with organization change goals.

Occurs informally: Most of the time, coaching or counseling occurs informally with internal organizational professionals, usually in the human resource function, serving in the helping role.

Change in Organizations at the Individual Level (8 of 9)

Coaching and Counseling

Dealing with feedback.

Executive coaching.

Roles of executive coaches.

6.1. Describe change in organizations at the individual level.

Coaching and Counseling

Deal with feedback:

One of the most important times is when the coach is helping his or her client deal with feedback that the client experiences as negative.

Defensive feelings are the most common ones, and the more the coach can help the client talk about those feelings, the more the client will be able to move on to a problem-solving mode of behavior.

Executive coaching:

Coaching occurs at all levels of management in an organization, but executive coaching has more panache as a term.

This form of coaching currently consists of providing help to a manager or executive in much the same way an athletic coach works.

Roles of executive coaches:

Coaching for skills: The focus is on tasks that a person has to accomplish and the skills and competencies required.

Coaching for performance: The focus here is broader and encompasses the executive’s entire job, and the help needed is how to perform the overall job effectively.

Coaching for development: Here, the focus is on the future; it is more about helping the executive with career choices and about the next job.

Coaching for the executive’s agenda: In this case, the executive decides what is needed.

Change in Organizations at the Individual Level (9 of 9)

Coaching and Counseling

Defining the coach’s role.

Coaching sequence.

Part of multirater feedback.

6.1. Describe change in organizations at the individual level.

Coaching and Counseling

Executive’s need for coaching defines the coach’s role:

Determining at the outset the need that the executive has for coaching more clearly defines the particular role the coach will play.

Distinguishing among four possibilities helps the coach respond more directly and precisely to what the executive may require.

Coaching sequence:

Gaining commitment to the coaching process with an agreement or contract between the coach and the executive about the work to be done.

Assessing the problem presented by the executive, which determines for the coach which of the four roles to play.

Action to be taken by the executive after a given coaching session.

Follow-up by the coach after the executive’s action(s), in which the coach helps the executive learn from his or her experience.

Coaching as part of multirater feedback:

Coaching is frequently conducted as part of multirater feedback in which help is provided in understanding the feedback more clearly and in planning changes in one’s behavior accordingly.

Coaching appears to make a helpful and positive difference

In any case, if the content of the feedback is congruent with organization change goals, then this individual process helps to leverage the change.

Individual Responses to Organization Change (1 of 7)

Elizabeth Kubler-Ross’s five stages.

Fight, embrace, or stay in-between.

All change is loss experience.

6.2. Discuss the different individual responses to organization change.

Individual Responses to Organization Change

Elizabeth Kubler-Ross’s five stages: The struggle begins with (1) shock and denial, (2) moves to anger, (3) to bargaining, or attempts to postpone the inevitable, on to (4) depression, and finally to (5) acceptance.

Fight, embrace, or stay in-between:

Some organizational members fight the change “to the death,” constantly denying that the change is necessary.

Others embrace the change readily and move with it.

Most people are somewhere in between and move through all stages.

All change is a loss experience: Levinson:

Whether change is resisted or embraced, all change is nevertheless a loss experience, particularly a loss of familiar routines.

The more psychologically important the loss, the more likely one’s behavior will take the form of resistance.

All loss needs to be mourned and people should have an opportunity to discuss and deal with their feelings if they are again going to be able to perform effectively on the job.

Individual Responses to Organization Change (2 of 7)

Resistance

Resistance to losing something valuable.

Experiencing a lack of choice.

Brehm’s theory of psychological reactance.

6.2. Discuss the different individual responses to organization change.

Resistance

Resistance to losing something of value:

The phenomenon of resistance to change is not necessarily that of resisting the change per se but is more accurately a resistance to losing something of value to the person.

Feelings of anxiety associated with such change are quite normal.

Experiencing a lack of choice:

Another form of loss that leads to resistance can come from one’s experiencing a lack of choice, that is, the imposition of change, or being forced to move to some new state of being and acting.

Brehm’s theory of psychological reactance:

When one’s feeling of freedom is in jeopardy, the immediate reaction is likely to be an attempt to regain the feeling of freedom.

This reaction is so strong that people frequently will not bother to defend their beliefs and may even change them to oppose others’ attempts at changing them.

When people believe themselves free to behave in a certain way, they will resist if that freedom is threatened or eliminated.

The degree of ease and success with which an organization change is introduced is therefore directly proportional to the amount of choice that people feel they have in determining and implementing the change.

Individual Responses to Organization Change (3 of 7)

Resistance

Blind Resistance.

Political Resistance.

Ideological Resistance.

6.2. Discuss the different individual responses to organization change.

Resistance

Blind Resistance:

Some people are simply afraid and intolerant of change.

One needs to provide as much reassurance as possible and allow time to pass.

Political Resistance:

Persons engaged in political resistance believe that they stand to lose something of value if the change is implemented, such as loss of one’s power base, status, job, income, and or the like.

With this kind of resistance, one needs to counter with negotiation, trading something of value with something else of value.

Ideological Resistance:

Some people may genuinely believe that the planned change is ill fated or in violation of deeply held values.

Under these circumstances, it can be useful to counter with strong persuasion based as much as possible on data, facts, and substance.

Individual Responses to Organization Change (4 of 7)

Resistance

Resistance not worse than apathy.

Shift from a known situation.

Coping with change constituting stress.

6.2. Discuss the different individual responses to organization change.

Resistance

Resistance not worse than apathy:

Resistance is a natural human response and, like one’s defense mechanisms, should be respected.

There are reasons for defenses to be in place.

Understanding these reasons is important if the organizational change agent wishes to be successful.

Shift away from a known situation:

Change usually involves a shift away from a known situation, with all its familiarity, comfort, and advantages.

The people affected are exchanging the known for the unknown, certainty for uncertainty, existing patterns of behavior and adaptation for new patterns, or tried rewards for untested ones.

Need to cope with change constitute stress:

In psychological terms, newness and the need to cope with it constitute stress.

If the long-term rewards to be gained from the change are no greater than those enjoyed formerly, the stress cost outweighs the future advantage.

Only if the new advantages are greater and are desired sufficiently to outweigh the efforts required to make the transition are people likely to embrace change willingly.

Individual Responses to Organization Change (5 of 7)

Resistance

Not a universal human phenomenon.

Responses differing in four ways.

Reponses not consistent.

6.2. Discuss the different individual responses to organization change.

Resistance

Not a universal human phenomenon: Resistance is not a universal human phenomenon. Individuals do indeed differ in their responses to organization change.

Responses differ in four primary ways:

In the extent to which they seek routine, react emotionally, take a short-term focus, and react in a cognitively rigid way.

The more organizational members tended to be optimistic, possessed high self-esteem, or had high internal locus of control, the more open to and supportive of organization change they were.

Reponses neither consistently negative nor consistently positive:

Most people do not easily fall into an either/or category of resistance versus acceptance of change.

Most of us when confronted with the possibility of change are likely to be ambivalent.

Responses to change are “neither consistently negative nor consistently positive”.

Individual Responses to Organization Change (6 of 7)

Individuals Coping With Change

Helping members deal with change.

William Bridges' framework.

Three phases of transition.

6.2. Discuss the different individual responses to organization change.

Individuals Coping With Change

Ways to help members deal with change:

Conceptually, by achieving closure, and through participation.

Giving people a way of thinking about what they are experiencing can be useful.

William Bridges' framework:

Change is something that “starts and stops, or when something that used to happen in one way starts happening in another.

Transition is a psychological process extending over a long period of time that cannot be managed in a rational way, whereas change can be.

Three phases of transition:

Surrender: People must give up who they were and where they have been if they are to make a successful transition.

The “no man’s land”: People in this second phase experience ambiguity, confusion, and perhaps despair and a sense of meaninglessness.

A new beginning: People may begin to learn new skills and competencies, make new relationships, and develop a new vision for the future.

Individual Responses to Organization Change (7 of 7)

Individuals Coping With Change

Achieving closure.

Involvement leading to commitment.

Lack of psychological commitment.

6.2. Discuss the different individual responses to organization change.

Individuals Coping With Change

Achieving closure:

Achieving closure is most relevant to the surrender or disengagement phase, letting go of the past.

When newness is thrust on organization members, replacing, say, formal ways of doing things, with no time to disengage and “finish the business” of the former way, they will spend energy trying to deal with the incompleteness.

What is referred to as “resistance to change” often amounts to attempts to gain closure.

Providing ways for organization members to disengage from the past, at least to some extent, helps them focus on the change and the future.

Involvement leads to commitment:

Getting people involved, or participating in making the change work, can go a long way toward resolving resistance.

The degree to which people will be committed to an act is a function of the degree to which they have been involved in determining what the act will be.

Lack of psychological commitment:

When a single person or small group of people plan a change that will involve a much larger group of other people and fail to involve the others in the planning, the likelihood of successful implementation is diminished.

The larger group is likely to perceive the plan as something imposed on them, and their reactance is aroused.

Although they may agree that the plan is intrinsically logical and appropriate, there will be no psychological commitment to it.

This lack of psychological commitment does not necessarily cause complete resistance to implementation, but the best that can be expected is slow, reluctant compliance.

Change in Organizations at the Group Level (1 of 7)

Primary work group.

Important for organizational effectiveness.

Individual vs groups of specialists.

6.3. Explain how organization change happens at the group level.

Change in Organizations at the Group Level

Primary work group is the most important subsystem:

The primary work group, whether it is a top management team, a packaging unit at plant level, or a district sales team, is the most important subsystem within an organization.

The work group serves as the context and locus for (1) the interface between the individual and the organization, (2) the primary social relationships and support of the individual employee, whether or not he or she is a manager, and (3) a determination of the employee’s sense of organizational reality.

Important for organizational effectiveness:

The extent to which members of a group work well together and the extent to which they, as a group, work well with other groups in the organization will determine in part the overall effectiveness of the organization.

Work groups have always been important for organizational effectiveness. This importance is increasing.

Single individual vs groups of specialists:

The single individual who knows many of the functions and specialties within an organization is becoming more and more a rarity.

Groups of various specialists attempting to produce something that is greater than the total of their individual specialties are becoming more the rule than the exception.

Newer organizational structures, such as the matrix design and networks, require an increase in group activities.

Change in Organizations at the Group Level (2 of 7)

Team Building

Change efforts relying on work group.

Team-building activities supporting change.

Criteria for team building.

Purposes of team building.

6.3. Explain how organization change happens at the group level.

Team Building

Change efforts rely on use of work group:

Organization change efforts typically rely heavily on the use of work groups.

These family units within the organization have to make changes in the way they conduct their work.

Their unit goals may need to be entirely different, their roles within the unit may need to be modified, and so forth.

Team-building activities support change:

Conducting team-building activities often supports the larger organization change.

The more the work unit has at least one goal that is common to all group members and the accomplishment of that goal (or goals) requires cooperative interdependent behavior on the part of all members, the more likely a team-building activity is in order.

Criteria for team building:

To help determine whether team building is needed, for example, in the case of difficulty between the team leader and members or difficulty among team members.

Purposes of team building:

To set goals or priorities;

To analyze or allocate the way work is performed according to team members’ roles and responsibilities;

To examine the way the group is working;

To examine interpersonal relationships among members.

Unless one purpose is defined as the primary purpose, there tends to be considerable misuse of energy.

Change in Organizations at the Group Level (3 of 7)

Team Building

Ordering of the purposes.

Benefits of smoothly operating groups.

Adverse consequences.

Six dilemmas.

6.3. Explain how organization change happens at the group level.

Team Building

Ordering of the purposes:

Interpersonal problems could be a consequence of group members’ lack of clarity on team goals, roles and responsibilities, or procedures and processes; problems with procedures and processes could be a consequence of group members’ lack of clarity on team goals or roles and responsibilities; and problems with roles and responsibilities may be a result of group members’ lack of clarity about team goals.

To begin a team-building effort with work on interpersonal relationships may be a misuse of time and energy because it is possible that problems in this area are a result of misunderstanding in one of the other three domains.

Benefits of smoothly operating groups: A smoothly operating group of people in a work unit, or in a temporary task force, for that matter, can be highly beneficial to an overall organization change effort, particularly if the group is the top management team of the organization.

Adverse consequences: A well-honed, highly cohesive, smoothly operating work unit or task force can have adverse consequences for the overall good of the organization, however.

Six dilemmas:

Suboptimization: Too much team spirit can cause insularity, with members losing sight of their team’s role and function in the larger organization.

Turnover: A highly cohesive team has a difficult time accepting new members.

Problem of fixed decisions: Norms and ground rules can become rigid, and prior decisions may become immutable.

Stepping on toes and territories: A highly cohesive team can feel powerful and believe that no one else can understand what they know; their expertise should therefore have great influence in the larger system.

NIH: “Not invented here” is the problem of ownership and transfer, a reluctance to share and to be influenced by other individuals and groups.

Change in Organizations at the Group Level (4 of 7)

Self-Directed Groups

“Flatten” organization’s hierarchy.

Growth of self-management.

Hackman’s criteria and conditions.

6.3. Explain how organization change happens at the group level.

Self-Directed Groups

“Flatten” organization’s hierarchy: As part of a larger change effort, management may decide to “flatten” the organization’s hierarchy, that is, to eliminate several layers of supervision.

Growth of self-management:

Organizational members need to learn more about how to manage themselves individually and in work units.

The growth of self-management has significantly increased with many organizations downsizing and delayering to become nimbler and more adaptable to rapid changes.

Hackman’s criteria and conditions: Hackman has:

Delineating the key features of self-directed groups, paying particular attention to the authority and leadership issues,

Specifying the behaviors that distinguish self-directing from the more traditional modes of operating, for example, taking personal responsibility, mentoring and managing one’s own performance, actively seeking guidance when needed, and helping others in the group.

Suggesting conditions that foster and support the kinds of self-direction that will contribute both to personal satisfaction and to group achievements, such as having clear and engaging goals, a supportive structure for the unit, expert coaching and consultation, and adequate material resources.

Change in Organizations at the Group Level (5 of 7)

Self-Directed Groups

Successful self-directed groups.

Problems to overcome.

Increasing reliance on self-directed groups.

6.3. Explain how organization change happens at the group level.

Self-Directed Groups

Self-directed groups can be successful: A comprehensive meta-analysis of 70 studies concludes that self-directed groups had a positive impact on productivity and that attitudes on the job were favorably influenced as well.

Problems to overcome:

Group members must learn to share power and leadership.

Effectively managing differences and conflicts within the group is critical to success.

Not all group members are equal with respect to skill and ability, experience, knowledge, and expertise.

Managing these differences is key to success.

Increasing reliance on self-directed groups:

For overall organization change to be successful, there will need to be more and more reliance on self-directed groups.

Because of the demand for organizations to be as flexible and adaptable as possible for future survival.

A part of this greater adaptability is a flatter hierarchy with more rapid decision making and less bureaucracy.

Change in Organizations at the Group Level (6 of 7)

Intergroup

Mutual dependence.

Research in intergroup conflict.

Phony conflict.

6.3. Explain how organization change happens at the group level.

Intergroup

Mutual dependence: Natural setting for conflict:

Work units or groups in organizations that normally depend on one another will experience problems and issues with one another.

Each group has its own mission, but for that mission to be accomplished, each group occasionally must rely on the other.

This mutual dependence, or interdependence, is a natural setting for conflict.

Research in intergroup conflict:

Strong in-group feelings with two separate groups can be developed by creating opportunities for success.

The feelings can be translated into competitive behavior when the two groups are placed in a win-lose situation.

Experiments were also conducted in reducing conflict and in establishing a cooperative attitude between the two groups by focusing on a superordinate goal that could only be accomplished with cooperation.

Phony conflict:

Real conflict involves substantive differences.

Phony conflict consists of negative, even hostile blaming behavior that occurs when agreement is mismanaged.

As a symptom, conflict may reflect real differences, or it may be symptomatic of agreement that people are not willing to acknowledge.

Change in Organizations at the Group Level (7 of 7)

Intergroup

Real and phony conflict.

Real conflict involving substantive issues.

Action to resolve conflict.

6.3. Explain how organization change happens at the group level.

Intergroup

Failure to distinguish between real and phony conflict:

When managers and consultants fail “to distinguish between real and phony conflict they collude with maintaining the problem they are attempting to solve”.

In a phony conflict, all members know what the problem is and what solution is required.

They are reluctant to act because of action anxiety, negative fantasies, fear of separation, real risk, or psychological reversal of risk and certainty

It is highly important to bring this agreement to the surface and help manage it toward action.

Real conflict involves substantive issues:

Real conflict between groups involves substantive issues, and the two (or more) groups express competitive behavior, not merely blaming one another.

Within each group, we are likely to find that members are close and loyal to one another.

Their internal differences are submerged; group climate is formal, serious, and task oriented, rather than informal, playful, and oriented toward members’ psychological needs.

The group leader is more directive and less participative; activities are structured and organized.

Strong norms exist that demand loyalty to the group from each member; and there is considerable energy to resist the other group.

Action to resolve conflict:

Once it has been determined that real conflict exists and that there is motivation within both groups to work on the problems, action to resolve the conflict is warranted.

The first action step for resolving conflict among groups is to establish a superordinate goal.

Group Responses to Organization Change

“Turf ” protection and competition.

Closing ranks.

Changing allegiances or ownership.

The demand for new leadership.

6.4. Explore different group responses to organization change.

Group Responses to Organization Change

“Turf “ Protection and Competition: The work group, function, department, or business unit is fighting for survival and will muster every rationale, fact, and guilt-inducing behavior to justify its continuation.

Closing Ranks:

“Circle the wagons”; “One for all and all for one.”

In response to a recent structural change at a university, anthropologists refused to divide themselves among two or three new academic departments, citing that would lead to destroy their identity and function in the university.

Changing Allegiances or Ownership:

To avoid having to deal with the organization change, a group may opt for becoming a separate entity, that is, formally departing from the parent organization.

The group can be “spun off “ as a separate business, may separate as Leveraged buyout (LBO), may join another division within the organization but remain intact, or may become a “wholly owned” subsidiary and have to survive on its own but remain intact and maintain its autonomy.

A spin-off, LBO, or subsidiary may be a carefully planned and deliberate action as part of an overall change effort for the organization.

Just as likely, these kinds of actions are ways of avoiding conflict and having to deal with difficult change issues.

The Demand for New Leadership:

There are times and circumstances in which the group leader is simply not capable of dealing with and leading a change effort. Under these conditions, perhaps the leader should be replaced.

On the other hand, the leader is quite capable, but the followers in the group revolt as a way of resisting the change.

This form of resistance is a deeper psychological process and may reside more in the collective unconscious of the group than in its consciousness.

Theoretical distinction between a work group and a “basic assumption” group is useful for more thoroughly understanding this form of resistance.

Ways of dealing with change for individuals apply to groups as well.

Achieving closure at a group level, for example, conducting a brief “funeral” for a former program or the past ways of operating and then celebrating the new way or program, may be more beneficial than closure at an individual level.

Conducting group problem-solving meetings off-site, where members can participate in determining the specific change actions that will directly affect them, may be highly beneficial.

Finally, it may make sense to recompose a group, not changing its function necessarily, but changing its membership.

Change in Organizations at the Larger-System Level (1 of 6)

Orders of Change

First-order change.

Second-order change.

Third-order change.

Documenting change.

6.5. Identify the larger-system level change in organizations.

Orders of Change

First-order change:

The initial focus is some subsystem of the organization.

The change would occur as a result of an intervention in a particular unit or division (subsystem) within the organization.

Change within in an initial subsystem will be short lived, unless other complementary and supplementary changes are also occurring in related parts of the total system.

Second-order change:

The focus is frequently a category or a particular set of subsystems within the organization.

An intervention may take place with one group of employees when the ultimate objective for the change effort is to affect all workers below them in the organizational hierarchy.

Third-order change:

Third-order change means the involvement of multiple factors in some causal sequence toward an ultimate goal.

Wherever the interventions or series of interventions are made, the ultimate objective of the change effort is larger, to increase productivity.

Multiple factors affect productivity, and no single first-order or even second-order change is likely to be successful.

For third-order change, there is likely to be a chain or sequence of factors that eventually leads to higher productivity.

Documenting change:

Documenting change at the first order is fairly straightforward; at the second level, it is more difficult; and at the third, very difficult.

Nevertheless, we must understand that changing the entire system is a third-order change.

Change in Organizations at the Larger-System Level (2 of 6)

Change Phases

Three-phase model: Kurt Lewin.

Phase 1: unfreeze the system.

Phase 2: movement.

Phase 3: refreeze.

6.5. Identify the larger-system level change in organizations.

Change Phases

Three-phase model: Kurt Lewin:

One of the first psychologists to help us understand organization change at the larger-system level was Kurt Lewin.

His rather simple three-phase model set the stage for the more elaborate and comprehensive models we embrace today.

The term step is often used in describing Lewin’s model, but phase is a better word because the steps are not discrete; they overlap.

Phase 1: Unfreeze the system:

This unfreezing phase may take a variety of forms: creating a sense of urgency about the need for change, educating managers to behave differently, merging with another organization, and so on.

But the underlying notion is that the system must be shaken up, must be confronted with a compelling need to do business differently, and must be thawed from its present way of doing things so that in a new, more malleable, perhaps even vulnerable state or condition, the system is accessible and amenable to change interventions.

Phase 2: Movement:

The second phase is movement or changing the organization: moving in new directions with different technologies and ways of operating.

The system will not move or change in any meaningful way unless and until an unfrozen condition has been achieved.

Phase 3: Refreeze:

Once change, or movement, is under way, the third phase, refreeze, must be initiated.

The change that has occurred cannot be allowed to dissipate or drift away.

The new, changed condition or state therefore needs to be reinforced, or undergirded, with a process and infrastructure in place to maintain the new system.

Change in Organizations at the Larger-System Level (3 of 6)

Change Focus

Where do we start?

Revolutionary or evolutionary change.

Focusing on the bigger picture.

6.5. Identify the larger-system level change in organizations.

Change Focus

“Where do we start?” :

The answer to depends on what is initiating the change in the first place, particularly from the organization’s external environment, and how deep the change should be.

Revolutionary or evolutionary change:

If revolutionary, then the focus is on deep issues such as the raison d’être of the organization, its purpose, its mission, and related matters, for example, strategy.

If evolutionary, then the changes needed are not as fundamental or transformational in nature.

The focus is on matters such as organizational design and structure, the information system, or perhaps management practices.

Focusing on the bigger picture:

In larger-system change, implying more transformational than transactional change, the focus is on the bigger picture followed by a focus on the more transactional dimensions.

The focus of change in the latter case is on the support and infrastructural aspects of the organization that will reinforce the transformational changes: organizational structure, the reward system, information technology, new roles and jobs for people, improving the climate of groups and teams, and so on.

Change in Organizations at the Larger-System Level (4 of 6)

Change Processes

Mechanisms facilitating overall change.

Large-group intervention.

Survey feedback.

6.5. Identify the larger-system level change in organizations.

Change Processes

Mechanisms facilitating overall change effort:

Process refers to mechanisms that facilitate the overall change effort, such as communication systems and training programs that focus on the new skills and behaviors needed to make the change work.

It refers to certain interventions meant to significantly implement the change effort.

Large-Group Intervention:

Large-group intervention involves bringing together a large, key group of organizational members into one room for a day or two to address a significant organization change issue, for example, determining the new mission and set of guiding values for the organization or responding to an organizationwide survey with action plans.

This kind of intervention requires a significant amount of design and logistical planning, yet it can be powerful for moving the organization toward the change goals.

Survey Feedback: In support of an overall change effort, an organizationwide survey helps to achieve the following:

Establish data points at a particular time that can serve as milestones or benchmarks for how well the change is progressing; further value is provided when a Time 1 assessment is compared with a Time 2 measure a year later.

Establish priorities about which aspects of the organization to emphasize for change and in what order to address them.

Send messages, by the content of the questions that are asked, to organizational members about what is important in the change process.

Keep the change effort based on data.

Involve a large number of people in the organization change effort through feedback and action planning.

Change in Organizations at the Larger-System Level (5 of 6)

Interorganizational

Larger-system change through mergers.

Reasons for joinings.

Failure of joinings.

6.5. Identify the larger-system level change in organizations.

Interorganizational

Larger-system change through mergers: Larger-system change comes about by way of mergers and acquisitions, strategic alliances, joint ventures, and the like.

Reasons for joinings:

The opportunity to share resources that neither organization by itself has and

The opportunity to improve cost-effectiveness by reducing redundancies.

By their very nature, these decisions and occurrences force organization change.

Failure of joinings:

Most of these joinings fail, especially mergers and acquisitions.

Using the criteria of what is promised by the leaders of merged and acquiring companies and the objectives of the decision to join, there are many more failures than successes.

Change in Organizations at the Larger-System Level (6 of 6)

Interorganizational

Reasons for failures.

Conditions for success.

Learnings from mergers.

6.5. Identify the larger-system level change in organizations.

Interorganizational

Reasons for failures:

Insufficient clarity about goals and how to measure progress toward the goals.

Imbalance of power and control between the two organizations when they merged or established a strategic alliance or joint venture.

Imbalance of expertise, status, or prestige between the two parties.

Overconfident and unrealistic notions about future success of the relationship, that is, holding an erroneous belief of having sufficient control over key variables.

Lack of a contingency plan.

Lack of perceived equity, for example, in distributions of key jobs and roles.

Conditions for success:

Having a superordinate goal, that is, a goal or goals that can be accomplished only through the cooperative efforts of the two parties.

Having a balance of power, expertise, and status.

Creating mutual gain.

Having a committed leader.

Aligning of rewards in the early stages of a merger or acquisition.

Having respect for differences.

Achieving equity.

Having realistic assumptions about what can be accomplished and in what time frame.

Having good luck.

Learnings from mergers:

Importance of having a vision for the future.

Having a rationale behind the joining and explaining this carefully to all those affected is critical.

Importance of being open and honest about the change.

It is important in the early stages to have informal relations between the two parties.

Rapid decision making was imperative even if some of the decisions would have to be changed later.

Importance of matching words with actions, or the absence of hypocrisy.

In midst of this kind of organization change, typically the customer is forgotten.

System Responses to Organization Change (1 of 3)

Revolution becomes evolution.

Insufficient sense of urgency.

This too shall pass.

6.6. Describe system responses to organization change.

System Responses to Organization Change

Revolution Becomes, at Best, Evolution:

When a transformational change is attempted, in the end, only some components of the organization are changed or perhaps just some fine-tuning occurs.

The old culture is simply too powerful, the bureaucracy too pervasive.

Even though the perturbation(s) from the external environment may have been strong, the organization’s response to this external shift is insufficient, and the deep structure (pattern) does not change.

Insufficient Sense of Urgency:

Many people in the organization lack the motivation to tackle an organization change process and program because they harbor disbelief about the need, serious skepticism, a lackadaisical attitude, or a combination of these responses.

For whatever reasons, not enough organizational members are convinced that change is required, and there is not a critical mass to move the organization in another direction.

“This Too Shall Pass”:

This response is typically a function of history.

And people believe the cliché “the more things change, the more they stay the same.” So, organizational members’ response is to “wait ‘em out.”

The response shows more apathy than it does active resistance.

System Responses to Organization Change (2 of 3)

Diversionary tactics.

Lack of followership.

Coping with responses to change.

6.6. Describe system responses to organization change.

System Responses to Organization Change

Diversionary Tactics:

This category of response is indeed resistance and reflects a strong desire on the part of organizational members to sabotage the effort in one way or another.

One way is to create a crisis that must be addressed before any change can get under way.

Another more common form is to argue that the timing for such a change is wrong.

Lack of Followership:

Potential followers collude or even conspire with one another to find fault with the leader.

And if there is no followership, by definition, there is no leadership.

Without leadership, intended change will not occur.

Coping With Responses to Change at the Larger-System Level:

Many of the coping mechanisms at the individual and group level are applicable at the larger-system level: achieving closure on the previous way of doing things, providing conceptual frameworks to help people understand more clearly what is happening to them, and involving organizational members in the process of planning and implementing the change.

System Responses to Organization Change (3 of 3)

Case: British Aerospace.

Combating apathy and responses.

Establishing priorities.

6.6. Describe system responses to organization change.

System Responses to Organization Change

Case: British Aerospace:

First and foremost is the issue of making a compelling case for the need to change.

A clear example is the change at British Aerospace.

The top 100 executives were complying with the CEO’s desire to bring about change, but a deep commitment on their part was lacking.

A senior and highly respected executive in the company was given the assignment of making the case for change.

He conducted an environmental scan and showed conditions in the past and in the present, and what the future would look like.

Critical to this senior executive’s success in getting the message across was his knowledge of the audience.

From that time to the present, there has been a significantly stronger commitment to the overall organization change effort.

Combating apathy and responses:

To combat apathy and responses, the change leaders must demonstrate as clearly and strongly as possible that (1) this time, the change initiative is different (because of a compelling and pervasive need) and (2) we are in this for the long haul, that is, showing at the outset that persistence will prevail.

Establishing priorities:

With respect to diversionary tactics, it is incumbent on the part of change leaders to be as clear and committed as possible to the organization change goals and objectives and to establish a set of priorities.

For the change to be successful may mean that certain saboteurs must be dealt with by job changes, early retirements, or outright severance from the organization.