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The Evolution of Starbucks
As Starbucks grew, they realized that the informal techniques were not sufficient and needed to have a more formalized process in place. Why were these changes difficult for the organization?
Starbucks is faced with new challenges today. It has dominated the marketplace. Have they grown too fast? Will changes in the marketplace require a different approach?
What do you think the future will hold for them?
Exploring Behavior in Action
Organizational Change and Development
Polaroid introduced instant photography to the market. They were one of the top 50 companies in the U.S. But they, like many others, were slow to change.
What would you have done differently if you were a senior manager at Polaroid?
Can you think of any other companies that were too slow to change and suffered the consequences?
Why is change so difficult to manage?
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Identify and explain six major external pressures for change
Describe the three-phase model of planned change.
Discuss important tactical choices involving the speed and style of a change effort.
Explain the four general causes of resistance to change and the tactics that can be used to address each cause.
Discuss the role of the DADA syndrome in organizational change.
Describe the basic organization development (OD) model and discuss OD interventions, including relationship techniques and structural techniques.
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Adapted from Exhibit 14-1: Internal and External Pressures for Organizational Change
Introduction
Life-Cycle
Forces
Aspiration-Performance Discrepancies
Gaps between what an individual, unit, or organization wants to achieve and what it is actually achieving.
Three important factors in the role of aspirations
Past aspirations
Past performance
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When an individual, work group, division, or organization is not meeting its own expectations, changes in tactics, strategies, and processes often follow.
Past aspirations – High expectations yesterday will likely mean high expectations today and tomorrow.
Past performance – If recent performance is below target levels, aspirations are likely to be reduced. If recent performance was above target levels, aspirations are likely to be increased to some degree.
Comparison with others – One employee may compare himself or herself to other employees at the same level. Organizations do this too. The level of performance of others helps to determine the aspirations one has for oneself.
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Life-Cycle Forces
Natural and predictable pressures that build as an organization grows and that must be addressed if the organization is to continue to grow.
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Need for additional people
Need for balance
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Entrepreneurial Stage – Founders and perhaps a few initial managers and associates develop ideas for products and services, acquire financial capital, and take actions to enter a niche in the marketplace. Processes must be introduced for selecting, training, and coordinating staff. Informal real-time decision making and coordination typically occur.
Collectivity Stage – Founders, managers, and associates continue to focus on product/service development, continue to focus on the acquisition of financial capital. A family feeling as vision is pursued. Strong commitment among growing pool of managers and associates. Long hours often for low pay, informal coordination but more consistency than before.
Formalization and Control Stage – Managers and associates are guided by formal processes and rules and an efficiency of operations, strict division of labor happens with an increase in professional managers, an increase in the number of formal departments, and an increase in number of levels in the hierarchy
Elaboration Stage – managers and associates experienced a more balanced and mature organization, the focus is on efficiency and innovation. Formal rules and procedures exist alongside empowered lower-level managers and associates. Efficiency concerns coexist with concerns for innovation and renewal.
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Changes in societal values
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Technological advances - Can lead to incremental or radical changes in how services and products are designed, produced, and delivered. Technology that is inconsistent with existing culture may cause resistance to change among managers and associates.
Introduction and removal of government regulations - Firms in deregulated industries typically must adapt to a more competitive environment. Firms that prosper in a regulated environment may fail in one that is deregulated
Changes in societal values - Changing values influence consumer purchases. Society’s values are evidenced in employee attitudes, behaviors, and expectations. Society’s values are represented in government regulations.
Shifting political dynamics – political pressures – both national and international – can influence organizational operations. The political philosophy of those elected to office, interpretation of legislation, and government policies play a role.
Changes in demographics - May cause alteration of internal practices to ensure fair treatment for people of all races and ages.
Growing international interdependence – Reliance on imports, various treaties, and the impact of struggles and conflicts in other countries.
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Companies’ Responses to Pressures for “Green” Policies and Practices
Are companies becoming more “green” for reasons other than the “bottom-line”? Give some examples.
What is your organization doing to become more “green”? What are you doing personally?
Should becoming “green” be a choice or is legislation needed to make it happen?
Managerial
Advice
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Planned Change
A process involving deliberate efforts to move an organization or a unit from its current undesirable state to a new, more desirable state
Awakening
Mobilizing
Reinforcing
Energizing
Envisioning
Enabling
Unfreezing
Moving
Refreezing
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Provide rationale for change
Create sense of psychological safety concerning change
Provide information that suspects proposed changes
Bring about actual shifts in behavior
Implement new evaluation systems
Implement new hiring and promotion systems
Unfreezing
Refreezing
Moving
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“Unfreezing” starts on mouse click followed by text after one second. Arrow starts on mouse click followed by “moving” and then text after one second each. Arrow starts on mouse click followed by “refreezing” and text after one second each.
Unfreezing – A phase in the change process in which leaders help managers and associates move beyond the past by providing a rationale for change, by creating guilt and/or anxiety, and by creating a sense of psychological safety concerning the change.
Tactics for unfreezing include:
Reminding individuals that they have successfully changed in the past
Communicating to individuals that managers and associates in other organizations in similar circumstances have successfully changed
Letting individuals know that support and training will be available for the specific changes to be made
Moving – A phase in the change process in which leaders help to implement new approaches by providing information that supports proposed changes and by providing resources and training to bring about actual shifts in behavior.
Refreezing - A phase in the change process in which leaders lock in new approaches by implementing evaluation systems that track expected behaviors, by creating reward systems that reinforce expected behaviors, and by ensuring that hiring and promotion systems support the new demands.
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Experiencing
also adapting its product line to better
satisfy the demand of customers.
What are your thoughts about the
steps they are taking regarding
these changes?
Do you think the new innovations and changes will have a positive or a negative impact on their existing brands? Why?
What other changes would you suggest to help them remain competitive?
Neville Isdell
Sandy Douglas
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Sources of Failure
Managers and associates should not expect all change activities to occur sequentially.
A team of change leaders, rather than a single individual, should guide an organization through a major change effort.
In addition to size, four factors to consider when forming change teams:
Position Power
Informal Credibility
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Position power plays a role. Individuals with power based on their formal positions can block change or at least slow it down. Including some of these individuals on the team will leave fewer potential resisters who have the power to slow or resist the change.
Informal credibility is important. Individuals who have credibility are admired and respected and can be effective in selling change. Associates often are selected as change leaders based on this criterion.
Expertise is a relevant factor. Individuals on the team should possess knowledge related to the problems requiring the change effort and should have diverse points of view on potential solutions.
Proven leadership is crucial. The team needs individuals who can lead other managers and associates through the transition.
The size of the team is also a concern. There is little agreement on how large or small the team of change leaders should be, but the size of the organization that will be changed plays a role. Six may be sufficient in a smaller organization or in a division of a larger organization. Fifteen or more may be required in a larger organization. However, as the team grows, it will be more difficult to coordinate and manage.
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Competitive environment
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Urgency – If the change is urgent, a faster pace is warranted.
Degree of support – If the change is supported by a wide variety of people at the outset, a faster pace can be used.
Amount and complexity of change – If the change is small and simple, a faster pace often can be used, but if the change is large, more time may be required.
Competitive environment – If competitors are poised to take advantage of existing weaknesses, a faster pace should be considered.
Knowledge and skills available – If the knowledge and skills required by the new approach exist in the firm or can be easily acquired, a faster pace can be used.
Financial and other resources – If the resources required by the change are on hand or easily acquired, a faster pace can be considered.
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Style of Change
Participatory – change leaders seek the ideas and advice of associates and then use many of those ideas. Criteria for evaluating the degree to which the participatory style should be used:
Non-participatory – top down, leaders design the change and plan its implementation
Urgency
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Urgency – If the change is urgent, a participatory approach should not be used, as it tends to be time consuming.
Degree of support – If the idea of changing is supported initially by a wide variety of people, a participatory approach is less necessary.
Referent and expert power of change leaders – When change leaders are admired and are known to be knowledgeable about pertinent issues, a participatory approach is less necessary.
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Resistance to change – Efforts to block the introduction of new approaches. Some of these efforts are passive in nature, involving such tactics as verbally supporting the change while continuing to work in the old ways; other efforts are active in nature, involving tactics such as organized protests and sabotage.
Lack of understanding – Communicate clearly what the change entails.
Different assessments – Include potential or actual resisters in the decision-making process.
Self-interest – Reason with resistors, transfer or coerce them.
Low tolerance for change – Offer or assure support for the resistors during the learning process.
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Experiencing
British Airways: The Yin and Yang of Organizational Change
Do you think there was any incentive for British Airways to change prior to deregulation?
Why do you think the changes were effective?
Given the problems faced by all the major airlines at the time, why do you think there was still so much resistance to the changes?
What other changes would you recommend at this time?
Willie Walsh
Anger – individuals facing unwanted change become angry about the change
Depression – individuals experience emotional lows
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The DADA Syndrome – A sequence of stages – denial, anger, depression, and acceptance—through which individuals can move or in which they can become trapped when faced with unwanted change.
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Fully consistent with the high-involvement management approach
A planned, organization-wide, continuous process designed to improve communication, problem solving, and learning through the application of behavioral science knowledge
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Diagnosis of Situation
Introduction of interventions
Introduction of interventions - Organization development interventions include t-group training, team building, and job redesign.
Progress Monitoring - Surveys and other techniques may be reused to determine what progress has been made toward solving the problem.
The main criterion for evaluation is whether the original objective has been accomplished.
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Organization
Development
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T-group training – Group exercises in which individuals focus on their actions, how others perceive their actions, and how others generally react to them; participants often learn about unintended negative consequences of certain types of behaviors.
Team building - A process in which members of a team work together and with a facilitator to diagnose task, process, and interpersonal problems within the team and create solutions.
Survey feedback - Data obtained from questionnaires; managers receive the data for their units and are expected to hold unit meetings to discuss problems.
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Team Building Tips
Get the right people together for a large block of uninterrupted time to work on high-priority problems or opportunities that they have identified and have them work in ways that are structured to enhance the likelihood of realistic solutions and action plans, which are then implemented enthusiastically and followed up to assess actual versus expected results.
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Job redesign - Enlargement or enrichment of jobs; enrichment is the better method to enhance motivation for effective problem solving, communication, and learning.
Management by objectives (MBO) - A management process in which individuals negotiate task objectives with their managers and then are held accountable for attainment of the objectives.
Supplemental organizational processes - Processes in which associates and/or managers have ongoing meetings for the purpose of identifying and solving important problems.
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Exploitative learning – learning how to more effectively use current knowledge
Exploratory learning – creating new knowledge and being innovative
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Managers hoping to implement an OD program in a culture different from their own must avoid an ethnocentric attitude (assuming that everyone is similar to those back home) as well as stereotyping.
Flexibility – openness to new approaches, ideas, and beliefs and willingness to change one’s own behavior.
Knowledge of specific cultures – understanding of the beliefs and behavior patterns of different cultures.
Interpersonal sensitivity – the ability to listen to and resolve problems with people from different cultures.
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The Strategic Lens
Why do organizations need to make changes on a regular basis? What are the major causes of these changes?
Why is it so difficult for people to change their behavior, even when they know it is important to do so?
If you were in a managerial position and believed that a major change in your unit’s structure was needed, what actions would you take to ensure that the change was made effectively?
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Questions