1. 14-1
Michael A. Hitt
C. Chet Miller
Adrienne Colella
Chapter 14
Organizational
Change and
Development
Slides by Ralph R. Braithwaite
2. 14-2
The Evolution of Starbucks
Exploring Behavior in Action
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?
Howard Schultz
Dave Olsen
Dawn Pinaud
3. 14-3
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?
4. 14-4
Knowledge Objectives
1. Describe two major internal pressures for change.
2. Identify and explain six major external pressures for
change
3. Describe the three-phase model of planned change.
4. Discuss important tactical choices involving the speed
and style of a change effort.
5. Explain the four general causes of resistance to
change and the tactics that can be used to address
each cause.
6. Discuss the role of the DADA syndrome in
organizational change.
7. Describe the basic organization development (OD)
model and discuss OD interventions, including
relationship techniques and structural techniques.
5. 14-5
Pressures for Change
Adapted from Exhibit 14-1: Internal and External Pressures for Organizational Change
Introduction
or Removal of
Government
Regulations
Life-Cycle
Forces
Growing
International
Interdependence
Changes in
Demographics
Shifting
Political
Dynamics
Changes in
Societal Values
Technological
Advances
Aspirations
Pressure for
Change
6. 14-6
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
• Comparison with others
7. 14-7
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.
8. 14-8
Integrative Life-Cycle Model
Adapted from Exhibit 14-2: Integrative Life-Cycle Model
Entrepreneurial
Stage
Collectivity
Stage
Formalization and
Control Stage
Elaboration
Stage
Need for
additional
people
Need for stability
and structure
Need for
balance
9. 14-9
External Pressures for Change
Technological
advances
Introduction and
removal of government
regulations
Changes in
societal values
Shifting political
dynamics
Changes in
demographics
Growing international
interdependence
10. 14-10
Managerial
Advice
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?
11. 14-11
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
12. 14-12
Process of Planned Change
Adapted from Exhibit 14-3: Process of Planned Change
Unfreezing Refreezing
Moving
• Provide rationale
for change
• Create minor
levels of
guilt/anxiety about
not changing
• Create sense of
psychological
safety concerning
change
• Provide information
that suspects
proposed changes
• Bring about actual
shifts in behavior
• Implement new
evaluation systems
• Create minor levels
of guilt/anxiety about
not changing
• Implement new
hiring and promotion
systems
Kurt Lewin
13. 14-13
Experiencing
Strategic OB
Coca-Cola Is Finding a New Fizz
Neville Isdell Sandy Douglas
Coca-Cola is changing its culture, and
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?
14. 14-14
Sources of Failure
1. Managers and associates should not expect all
change activities to occur sequentially.
2. A team of change leaders, rather than a single
individual, should guide an organization through a
major change effort.
John Kotter
In addition to size, four factors to consider
when forming change teams:
Position Power Informal Credibility
Expertise Proven Leadership
15. 14-15
Speed of Change
Criteria to
Consider
Urgency
Degree of support
Amount and complexity of change
Competitive environment
Knowledge and skills available
Financial and other resources
16. 14-16
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
Degree of
Support
Referent and
Expert Power
of Leaders
17. 14-17
Resistance to Change
Four Factors
Lack of
understanding
Different
assessments
Self-interest Low tolerance
for change
Effort to block new
ways of doing things
18. 14-18
Experiencing
Strategic OB
British Airways: The Yin and
Yang of Organizational Change
Willie Walsh
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?
19. 14-19
The DADA syndrome
Denial – ignore possible or current change
Anger – individuals facing unwanted change
become angry about the change
Depression – individuals experience
emotional lows
Acceptance – individuals embrace the
reality of the situation and make the best of it
20. 14-20
Organization Development (OD)
• Roots in humanistic psychology
• Grounded in values of individual empowerment and
interpersonal cooperation
• 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
24. 14-24
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.
28. 14-28
The Strategic Lens
1. Why do organizations need to make changes on a
regular basis? What are the major causes of these
changes?
2. Why is it so difficult for people to change their
behavior, even when they know it is important to do
so?
3. 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?
