CH-13-15 Designing Organizational Structures – Organisational Behaviour: Emerging Knowledge, Global Insights : Chapter Notes

This Document Contains Chapters 13 to 15 Designing Organizational 13 Structures LEARNING OBJECTIVES After reading this chapter, students should be able to: LO1. Describe three types of coordination in organizational structures. LO2. Discuss the role and effects of span of control, centralization, and formalization, and relate these elements to organic and mechanistic organizational structures. LO3. Identify and evaluate six types of departmentalization. LO4. Explain how the external environment, organizational size, technology, and strategy are relevant when designing an organizational structure. CHAPTER GLOSSARY centralization -- the degree to which formal decision making authority is held by a small group of people, typically those at the top of the organizational hierarchy. divisional structure – An organizational structure
in which employees are organized around geographic areas, outputs (products or services), or clients. formalization -- the degree to which organizations standardize behaviour through rules, procedures, formal training, and related mechanisms. functional structure – an organizational structure in which employees are organized around specific knowledge or other resources. globally integrated enterprise – an organizational structure in which work processes and executive functions are distributed around the world through global centres, rather than developed in a home country and replicated in satellite countries or regions matrix structure -- an organizational structure that overlays two structures (such as a geographic divisional and a functional structure) in order to leverage the benefits of both. mechanistic structure -- an organizational structure with a narrow span of control and a high degree of formalization and centralization. network structure -- An alliance of several organizations for the purpose of creating a product or serving a client. organic structure -- an organizational structure with a wide span of control, little formalization and decentralized decision making. organizational strategy -- the way the organization positions itself in its setting in relation to its stakeholders, given the organization's resources, capabilities, and mission. organizational structure -- the division of labour as well as the patterns of coordination, communication, workflow, and formal power that direct organizational activities. span of control -- the number of people directly reporting to the next level in the hierarchy. team-based structure – an organizational structure built around self-directed teams that complete an entire piece of work. CHAPTER SUMMARY BY LEARNING OBJECTIVE 13-1 Describe three types of coordination in organizational structures. Organizational structure is the division of labour, as well as the patterns of coordination, communication, workflow, and formal power that direct organizational activities. All organizational structures divide labour into distinct tasks and coordinate that labour to accomplish common goals. The primary means of coordination are informal communication, formal hierarchy, and standardization. 13-2 Discuss the role and effects of span of control, centralization, and formalization, and relate these elements to organic and mechanistic organizational structures. The four basic elements of organizational structure are span of control, centralization, formalization, and departmentalization. The optimal span of control—the number of people directly reporting to the next level in the hierarchy—depends on what coordinating mechanisms are present other than formal hierarchy, whether employees perform routine tasks, and how much interdependence there is among employees within the department. Centralization occurs when formal decision authority is held by a small group of people, typically senior executives. Many companies decentralize as they become larger and more complex, but some sections of the company may remain centralized while other sections decentralize. Formalization is the degree to which organizations standardize behaviour through rules, procedures, formal training, and related mechanisms. Companies become more formalized as they get older and larger. Formalization tends to reduce organizational flexibility, organizational learning, creativity, and job satisfaction. Span of control, centralization, and formalization cluster into mechanistic and organic structures. Mechanistic structures are characterized by a narrow span of control and a high degree of formalization and centralization. Companies with an organic structure have the opposite characteristics. 13-3 Identify and evaluate six types of departmentalization. Departmentalization specifies how employees and their activities are grouped together. It establishes the chain of command, focuses people around common mental models, and encourages coordination through informal communication among people and subunits. A simple structure employs few people, has minimal hierarchy, and typically offers one distinct product or service. A functional structure organizes employees around specific knowledge or other resources. This structure fosters greater specialization and improves direct supervision, but it weakens the focus on serving clients or developing products. A divisional structure groups employees around geographic areas, clients, or outputs. This structure accommodates growth and focuses employee attention on products or customers rather than tasks. However, this structure also duplicates resources and creates silos of knowledge. Team-based structures are very flat, with low formalization, and organize self-directed teams around work processes rather than functional specialties. The matrix structure combines two structures to leverage the benefits of both types. However, this approach requires more coordination than functional or pure divisional structures, may dilute accountability, and increases conflict. A network structure is an alliance of several organizations for the purpose of creating a product or serving a client. 13-4 Explain the relevance of the external environment, organizational size, technology, and strategy for designing an organizational structure. The best organizational structure depends on whether the environment is dynamic or stable, complex or simple, diverse or integrated, and hostile or munificent. Another contingency is the organization’s size. Larger organizations need to become more decentralized and more formalized. The work unit’s technology— including variability of work and analyzability of problems— influences whether it should adopt an organic or mechanistic structure. The above-stated contingencies influence but do not necessarily determine structure. Instead, corporate leaders formulate and implement strategies that shape both the characteristics of these contingencies and the organization’s resulting structure. LECTURE OUTLINE (WITH POWERPOINT® SLIDES) Designing Organizational Structures — Slide 1 Valve Corporation’s Organizational Structure Valve Corporation has a flat, organic organizational structure to leverage the creative and entrepreneurial potential of its 300 employees. • Employees at the Bellevue Washington, software and entertainment Valve Corporation’s Organizational Structure company have no bosses or departments to determine their job duties Slide 2 or location • Valve employees organize themselves into self-directed teams—each team has a lead member to coordinate the team, but he or she is not a traditional manager Organizational Structure Defined Division of labour and patterns of coordination, communication, workflow, and formal power that direct organizational activities • More than just an organizational chart Organizational Structure • Relates to job design, team dynamics, power relationships, etc. Defined — Slide 3 Division of Labour and Coordination Division of labour results in job specialization • Work subdivided into separate jobs, assigned to different people ! • Improves work efficiency Division of labour and Coordination Coordination of work Slide 4 • Dividing labour is limited to ability to coordinate that work • Coordinating work can be costly, which also limits work division • Every organization uses one or more of three coordinating mechanisms ➡ informal communication ➡ formal hierarchy ➡ standardization Coordination through Informal Communication • All organizations use informal communication to coordinate work • Sharing information, forming common mental models • Vital in nonroutine and ambiguous situations – media rich channels Coordination through Informal Communication Slide 5 • Easiest in small firms, but information technologies extends use of informalcommunication in large firms • Larger organizations also apply informal communication through: 1. Liaison roles – employees who are expected to communicate and shareinformation with co-workers in other work units 2. Integrator roles – Employees responsible for coordinating a work processby encouraging others to share information 3. Temporary teams – cross-functional project team from variousdepartments Other Coordinating Mechanisms Slide 6 Other Coordinating Mechanisms Formal hierarchy • Direct supervision -- the chain of command • Assigns formal (legitimate) power to people who direct work processes andallocate resources • Necessary in larger firms, but has problems: a) reduces firm’s agile in complex/novel situations b) creates costly bureaucracy c) conflicts with employee autonomy and involvement Standardization Creating routine patterns of behaviour or output Three forms of standardization 1. Standardized processes -- job descriptions and procedures 2. Standardized outputs -- clear goals and outputs (e.g. sales targets) 3. Standardized skills -- extensive training for precise role behaviours Elements of Organizational Structure Slide 7 Elements of Organizational Structure Four basic elements of organizational structure 1. Span of control 2. Centralization 3. Formalization 4. Departmentalization Span of Control Number of people directly reporting to the next level Wider span of control is possible when: Span of Control 1. Other coordinating mechanisms are present Slide 8 ➡ e.g. self-directed teams coordinate through informal communication and specialized knowledge (standardization) 2. Tasks are routine ➡ require less direction/advice from supervisors 3. Low employee interdependence ➡ less interpersonal conflict and clearer roles/responsibilities, so less supervisor intervention needed Tall vs. Flat Structures Span of control is interconnected with organizational size (number of employees) and number of layers in the hierarchy As companies grow, they (a) build a taller hierarchy and/or (b) widen Tall vs. Flat Structures Slide 9 span of control Problems with tall hierarchies • Information to execs is filtered, distorted, slowed up hierarchy • Higher overhead costs – more managers per employee • Undermines employee empowerment/engagement -- hierarchies drawpower away from front line jobs Svenska Handelsbanken’s Decentralized Structure Svenska Handelsbanken supports better customer service and higher empowerment by giving its branch managers and staff considerable ! autonomy to run the local branches Svenska Handelsbanken’s Decentralized Structure Slide 10 Centralization/Decentralization Centralization • Formal decision making authority is held by a small group of people, typically at the top of the hierarchy Centralization/ Decentralization Slide 11 Decentralization • Decision authority/power is dispersed throughout the organization • Firms decentralize as they get larger and older Centralization/decentralization varies in different parts of the organization • e.g. marketing decentralized, IT centralized Formalization Slide 12 Formalization Standardizing behaviour through rules, procedures, formal training, and related mechanisms. • More formalization with firm’s age, size, regulationsProblems with formalization • Less organizational flexibility – employees follow prescribed behaviours evenwhen the situation calls for a customized response • Discourages organizational learning and creativity • Less work efficiency – work rules become convoluted • Increases job dissatisfaction and work stress • Rules/procedures become the focus of attention Mechanistic vs. Organic Structures Slide 13 Mechanistic vs. Organic Structures Mechanistic structure • Narrow span of control, high formalization, high centralization • Many rules and procedures; limited decision-making at lower levels • Tall hierarchy, specialized roles; communicate through management • Tasks are rigidly defined; altered only when sanctioned by higher mgt • Better in stable environments — rely on efficiency and routine behaviours Organic structure • Wide span of control, decentralized decision-making, and little formalization • Tasks are fluid, adjusting to new situations and organizational needs • Decentralized decision making • Work better in rapidly changing (dynamic) environments because they aremore flexible and responsive to these changes   Departmentalization Specifies how employees and their activities are grouped together – reflected in organizational chart Three functions of departmentalization: 1. Establishes chain of command (supervision structure) 2. Creates common mental models, measures of performance 3. Encourages staff to coordinate through informal communication – memberstypically work near each other Features of Simple Structures 1. Employ only a few people and typically offer only one distinct product orservice 2. Minimal hierarchy – employees usually report to the owners 3. Roles are broadly defined – to maintain flexibility 4. Informal communication for coordination – minimizes walls betweenemployees 5. Centralized structure – owners provide direct supervision to coordinatetasks Functional Organizational Structure Organizes employees around specific knowledge or resources (marketing, production) Typically centralized – to coordinate diverse activities Functional Organizational Structure Most firms have functional structure at some level of the hierarchy or at Slide 14 some time in their history Evaluating Functional Structures Benefits • Economies of scale – specialized pools of talent • Supports employee identity with the specialization or profession Evaluating Functional • Direct supervision is easier – employees have common issues Structures Slide 15 Limitations • More emphasis on skills/professional needs than on the company’s product,service, or client needs • Higher dysfunctional conflict across units • Poorer coordination – requires more controls Divisional Structure Different forms of divisional structure • Geographic – organizes employees around distinct regions • Product – organizes employees around distinct outputs Divisional Structure • Client – organizes employees around specific customer groups Slide 16 Best form depends on main environmental diversity or uncertainty • e.g. product structure if company sells several types of products • e.g. geographic structure if clients needs vary across regions Geographic divisional structures becoming less common because: • Less need for local representation – clients can purchase online andcommunicate with businesses from anywhere • Reduced geographic variation – consumer preferences are convergingaround the world • More global clients who demand one global point of purchase Globally Integrated Enterprise Globally integrated enterprise • Work processes and executive functions are distributed around the worldthrough global centres, rather than developed in a home country and replicated in satellite countries or regions • Functional heads are geographically distributed – sensitive to cultural andmarket differences • Firm’s “home” country is no longer focus of business – divisional Evaluating Divisional Structures Benefits • Building block structure – accommodates growth • Focuses employee attention on products/customers, not own skills Evaluating Divisional Structures Limitations Slide 17 • Duplicates resources-- inefficient use of resources, not pooled • Creates silos of knowledge -- expertise isolated across divisions • Executive power affected by shifting divisional structure (e.g., from regionto product) -- common due to complex environment Team-Based Structure Built around self-directed work teams, organized around work processes • Typically an organic structure ➡ wide span of control -- teams operate with minimal supervision Team-Based Structure ➡ decentralized -- team makes day-to-day decisions Slide 18 ➡ low formalization -- teams use more communication, less strict procedures • Usually found within divisionalized structure, but some firms arecompletely team-based structures (e.g., Valve, W.L. Gore) Evaluating Team-Based Structures Evaluating Team-Based Structures Slide 19 Limitations • Costly interpersonal skill training • Takes longer to coordinate during team development (compared tocoordinating work through formal hierarchy) • Role ambiguity increases employee stress • Team leader issues -- less power, ambiguous roles and careers • Duplication of resources across teams, potential competition Geographic-Product Matrix Structure at ABB Simplified example of example ABB Group’s matrix structure): • Organized around products (power systems, process automation) and regions (North America, Europe) Geographic-Product • One person in each region reports to both country head and product head Matrix Structure at ABB Slide 20 • Product and region heads might not have equal power • Matrix sometimes created only for some regions due to large size, high potential, and/or low visibility to CEO’s office (e.g., China) Project-based matrix structure (see bonus slide) • Most employees assigned permanently to a functional unit (engineering, design, marketing) but located temporarily in a specific project unit (Game #1, Game #2, etc) Evaluating Matrix Structures Benefits • Uses resources/expertise effectively – good for fluctuating workloads • Potentially better communication, project flexibility, innovation Evaluating Matrix Structures Slide 21 • Focuses employees on serving clients or creating products • Supports knowledge sharing within specialty across groups • Solution when two divisions deserve equal importance Limitations • More conflict among managers who share power -- different priorities • Two bosses dilutes accountability • More dysfunctional conflict and stress Network Structure Alliance of firms creating a product/service • Emphasis on core competencies – outsource to specialists • More common with changing technology, complex work processes Evaluating Network Structures • Benefits • Highly flexible – easy to change alliances • Potentially better use of skills and technology • Not saddled with nonessential facilities and resources • Limitations • Exposed to market forces – risk of higher costs • Less control over subcontractors than in-house External Environment & Structure Slide 22 External Environment & Structure Preferred structure depends on external environment contingencies 1. Dynamic vs. stable environments • Dynamic environments: (high rate of change, novel situations) – organicstructures are best e.g. team-based, network • Stable environments: (regular cycles of activity) – mechanistic structuresare best (when environment is predictable) 2. Complex vs. simple environments • Complex environment – more elements to consider • Simple environments – few things to monitor • Decentralize -- better decisions for complex environments External Environment & Structure (con’t) 3. Diverse vs. integrated environments • Diverse environment – more varied products/services, clients, regions • Integrated environment – only one client, product, and geographic area External Environment & Structure (con’t) • Align division/matrix with greatest diversity (e.g. product division in firms Slide 23 where products vary but clients similar across regions) 4. Hostile vs. munificent environments • Hostile environment – dynamic, so resource scarcity, more competition • Munificent environment – plenty of resources and product demand • Organic structures better for hostile environments • Centralization occurs in extremely hostile environments, but could lead toworse decisions and too slow decentralization later Effects of Organizational Size As organizations grow, they: 1. Increase division of labour (job specialization) 2. Increase coordination through standardization and formal hierarchy Effects of Organizational Size 3. Increase decentralization – push decision making down hierarchy Slide 24 Technology and Structure Technology refers to mechanisms or processes by which an organization turns out its product or service Technology and Two contingencies: (see job design in Chapter 6) Structure • Variability – the number of exceptions to standard procedure that tend Slide 25 to occur • Analyzability – the predictability or difficulty of the work • Example: when employees perform tasks with high variety and low analyzability an organic structure should be used e.g. research organization’s goals Organizational Strategy Structure follows strategy Slide 26 • Strategy points to the environments in which the organization will operate • Leaders decide which structure to apply – results from conscioushuman decisions Compete through innovation • Providing unique products or attracting clients who wantcustomization – more organic structure is preferred Cost leadership strategy (low-cost strategy) • Maximize productivity to offer competitive pricing – mechanistic Designing Organizational Structures Slide 27 [Bonus Slide] Project-based Matrix Structure Most employees assigned permanently to a functional unit (engineering, design, marketing) but located temporarily in a specific project unit (Game #1, Game #2, etc) Project-based Matrix Structure In this example (similar to BioWare’s matrix structure): Slide 28 • Organized around functions (art, audio, programming) and team-based game development projects • Employees are assigned to a cross-functional team responsible for a specific game project, yet also belong to a permanent functional unit from which they are reassigned Organizational 14 Culture LEARNING OBJECTIVES After reading this chapter, students should be able to: LO1. Describe the elements of organizational culture and discuss the importance of organizational subcultures. LO2. List four categories of artifacts through which corporate culture is deciphered. LO3. Discuss the importance of organizational culture and the conditions under which organizational culture strength improves organizational performance. LO4. Compare and contrast four strategies for merging organizational cultures. LO5. Describe five strategies for changing and strengthening an organization’s culture, including the application of attraction-selection-attrition theory. LO6. Describe the organizational socialization process and identify strategies to improve that process. CHAPTER GLOSSARY adaptive culture -- an organizational culture in which employees are receptive to change, including the ongoing alignment of the organization to its environment and continuous improvement of internal processes. artifacts -- the observable symbols and signs of an organization’s culture. attraction-selection-attrition (ASA) theory -- A theory which states that organizations have a natural tendency to attract, select, and retain people with values and personality characteristics that are consistent with the organization’s character, resulting in a more homogeneous organization and a stronger culture bicultural audit – a process of diagnosing cultural relations between the companies and determining the extent to which cultural clashes will likely occur. ceremonies -- planned displays of organizational culture, conducted specifically for the benefit of an audience. organizational culture -- the values and assumptions shared within an organization. organizational socialization -- the process by which individuals learn the values, expected behaviours, and social knowledge necessary to assume their roles in the organization. psychological contract -- The individual’s beliefs about the terms and conditions of a reciprocal exchange agreement between that person and another party (typically the employer). realistic job preview (RJP) -- A method of improving organizational socialization in which job applicants are given a balance of positive and negative information about the job and work context. reality shock -- the stress that results when employees perceive discrepancies between their pre-employment expectations and on-the-job reality. rituals -- the programmed routines of daily organizational life that dramatize the organization's culture. CHAPTER SUMMARY BY LEARNING OBJECTIVE 14-1 Describe the elements of organizational culture and discuss the importance of organizational subcultures. Organizational culture consists of the values and assumptions shared within an organization. Shared assumptions are nonconscious, taken-for-granted perceptions or beliefs that have worked so well in the past that they are considered the correct way to think and act toward problems and opportunities. Values are stable, evaluative beliefs that guide our preferences for outcomes or courses of action in a variety of situations. Organizations differ in their cultural content, that is, the relative ordering of values. There are several classifications of organizational culture, but they tend to oversimplify the wide variety of cultures and completely ignore the underlying assumptions of culture. Organizations have subcultures as well as the dominant culture. Subcultures maintain the organization’s standards of performance and ethical behaviour. They are also the source of emerging values that replace misaligned core values. 14-2 List four categories of artifacts through which corporate culture is deciphered. Artifacts are the observable symbols and signs of an organization’s culture. Four broad categories of artifacts include organizational stories and legends, rituals and ceremonies, language, and physical structures and symbols. Understanding an organization’s culture requires the assessment of many artifacts, because they are subtle and often ambiguous. 14-3 Discuss the importance of organizational culture and the conditions under which organizational culture strength improves organizational performance. Organizational culture has three main functions: a form of social control, the “social glue” that bonds people together, and a way to help employees make sense of the workplace. Companies with strong cultures generally perform better than those with weak cultures, but only when the cultural content is appropriate for the organization’s environment. Also, the culture should not be so strong that it drives out dissenting values, which may form emerging values for the future. Organizations should have adaptive cultures so that employees support ongoing change in the organization and their own roles. 14-4 Compare and contrast five strategies for merging organizational cultures. Organizational culture clashes are common in mergers and acquisitions. This problem can be minimized by performing a bicultural audit to diagnose the compatibility of the organizational cultures. The four main strategies for merging different corporate cultures are integration, deculturation, assimilation, and separation. 14-5 Describe five strategies for changing and strengthening an organization’s culture, including the application of attraction-selection-attrition theory. An organization’s culture begins with its founders and leaders, because they use personal values to transform the organization. The founder’s activities are later retold as organizational stories. Companies also introduce artifacts as mechanisms to maintain or change the culture. A related strategy is to introduce rewards and recognition practices that are consistent with the desired cultural values. A fourth method to change and strengthen an organization’s culture is to support workforce stability and communication. Stability is necessary because culture exists in employees. Communication activities improve sharing of the culture. Finally, companies strengthen and change their culture by attracting and selecting applicants with personal values that fit the company’s culture, by encouraging those with misaligned values to leave the company, and by engaging in organizational socialization— the process by which individuals learn the values, expected behaviours, and social knowledge necessary to assume their roles in the organization. 14-6 Describe the organizational socialization process and identify strategies to improve that process. Organizational socialization is the process by which individuals learn the values, expected behaviours, and social knowledge necessary to assume their roles in the organization. It is a process of both learning and adjustment. During this process, job applicants and newcomers develop and test their psychological contract—personal beliefs about the terms and conditions of a reciprocal exchange agreement between that person and another party (the employer). Employees typically pass through three socialization stages: pre-employment, encounter, and role management. To manage the socialization process, organizations should introduce realistic job previews (RJPs) and recognize the value of socialization agents in the process. These RJPs give job applicants a realistic balance of positive and negative information about the job and work context. Socialization agents provide information and social support during the socialization process.  LECTURE OUTLINE (WITH POWERPOINT® SLIDES) Organizational Culture Slide 1 Organizational Culture G Adventures’ Organizational Culture Slide 2 G Adventures’ Organizational Culture Toronto-based G Adventures, has become one of the world’s most successful adventure travel companies by maintaining a strong organizational culture aligned with its external environment • Founder Bruce Boon Tip tells staff that culture is the organization’s brand, “You have to believe that if you get your people and culture right, everything will fall into place.” Organizational Culture Defined Slide 3 Organizational Culture Defined The values and assumptions shared within an organization Defines what is important and unimportant and directs everyone in the organization toward the “right way” of doing things Company’s DNA – invisible to the eye, yet a powerful template that shapes employee behaviour in the workplace Elements of Organizational Culture Slide 4 Elements of Organizational Culture 1. Shared assumptions • Essence of organizational culture – unconscious • Taken-for granted perceptions or ideal prototypes of behaviour – only discovered by observing employees 2. Shared values • Employees have these in common (shared) and place near top of their values hierarchy • Enacted values -- actually used to guide decisions and behaviour • Not espoused values -- values the company wants others to believe guide the its decisions and actions, or hope will eventually guide 3. Artifacts • Observable symbols and signs of an organization’s culture Content of Organizational Culture Cultural content – the relative ordering of shared values Problems with measuring organizational culture: Content of • Oversimplifies the diversity of cultural values Organizational Culture • Ignores shared assumptions because they represent a deeper aspect Slide 5 of culture • Adopts an “integration” perspective – assumes that organizationshave a fairly clear, unified culture that is easy to decipher An organization’s culture is blurry/fuzzy: • Consists of diverse subcultures (fragmentation) • Values exist within individuals, not work units Organizational Culture Profile One of many models identifying content of org culture This model identifies 7 corporate cultural dimensions: Innovation, Organizational Culture Stability, Respect for people, Outcome orientation, Attention to Profile Slide 6 detail, Team orientation, Aggressiveness Problems with these org culture content models 1. Oversimplify -- many more values and combinations than areidentified in these models 2. Ignore assumptions -- models focus on values, not sharedassumptions 3. Assume cultures are “integrated” -- org cultures are actually “fragmented” (blurry, somewhat diverse, have subcultures) Organizational Subcultures Dominant culture • Values and assumptions shared most consistently and widely by the organization’s members Organizational Subcultures Subcultures Slide 7 • Located throughout the organization • May enhance or oppose (countercultures) firm’s dominant culture • Some firms have subcultures without a dominant culture Two functions of countercultures: • Surveillance and critical review of the dominant culture • Maintain standards of ethical behaviour • Source of emerging values that may eventually become dominant Cultural Artifacts at Goldman Sachs The language of Goldman Sachs employees may be artifacts of underlying cultural values. “Elephant trades” and “muppet” clients suggest that the investment firm values profitability and individual Cultural Artifacts at performance more than customer service. Goldman Sachs Slide 8 Organizational Culture Artifacts • Observable symbols and signs of culture • Maintain and transmit organization’s culture • Four broad categories – organizational stories/legends, rituals/ Organizational Culture ceremonies, organizational language, physical structures/symbols Artifacts Slide 9 • Need many artifacts to accurately decipher a company’s culture Artifacts: Stories and Legends Social prescriptions of desired (or dysfunctional) behaviour Realistic human side to expectations and performance standards Artifacts: Stories and Most effective stories and legends: Legends Slide 10 • Describe real people • Assumed to be true • Known by employees throughout the organization • Prescriptive – advise people what to do or not to do Artifacts: Rituals, Ceremonies. Language Rituals • Programmed routines of daily organizational life -- how meetings are conducted, how visitors are greeted, time employees take for lunch Artifacts: Rituals, Ceremonies, Language Slide 11 Ceremonies (more formal than rituals) • Planned activities conducted for an audience -- award ceremonies,celebrating new product launch Language • How employees address each other and outsiders, express emotions,describe stakeholders, etc. • May occur naturally (e.g. “muppets” at Goldman Sachs) or deliberate (e.g. Leaders use language to anchor or change culture) • Language differentiates subcultures (each uses unique language) Artifacts: Physical Structures/Symbols Slide 12 Artifacts: Physical Structures/Symbols • Building structure – may shape and reflect culture • Physical artifacts inside e.g. desks, chairs, office space, wall hangings(or lack of them) (Note: Photo show Vancouver’s Marine Building) Importance of a Strong Culture at Coastal.com Coastal.com founder and CEO Roger Hardy says corporate culture is the main reason for the Vancouver-based company’s success. “Our corporate culture has allowed us to do that,” says Hardy. “I think of it Importance of a Strong [the company’s culture] as having been our competitive advantage for a Culture at Coastal.com Slide 13 long time.” Coastal’s cultural values: hardworking, team work, bias to action, do more with less, always be innovating, agents of change Organizational Culture Strength How widely and deeply employees hold the company’s dominant values and assumptions Organizational Culture Strong cultures exist when: Strength • Most employees understand and embrace dominant values Slide 14 • Values/assumptions are institutionalized through well-established artifacts – makes it difficult to change the culture • Culture is long lasting – often traced back to founder Three functions of strong cultures to improve effectiveness: 1. Control system – influences employee decisions and behaviour 2. Social glue – bonds people together (social identity) 3. Sense-making – helps employees understand what is expected of them -increases role clarity Organizational Culture & Effectiveness Modestly positive relationship between culture strength and organizational effectiveness because relationship depends on: Organizational Culture 1. Good culture-environment fit and Effectiveness • Ensuring the organization’s culture content (dominant values and Slide 15 assumptions) fits the external environment 2. Avoid corporate “cult” strength • Strong cultures (i.e. corporate “cults”) are less effective than moderatelystrong cultures • Cults lock people into mental models which can blind them to newopportunities and suppress dissenting values from subcultures 3. Create an adaptive culture (employees are receptive to change) • External focus; recognize need for continuous change • Support changing internal work processes; flexibility in roles • Strong learning orientation e.g. experiment with new ideas/practices;view mistakes as part of learning Merging Cultures: Bicultural Audit Part of due diligence in merger Minimizes risk of cultural collision — diagnose companies before merger Merging Cultures: Bicultural Audit Slide 16 Three steps in bicultural audit: 1. Identify cultural differences between the merging companies 2. Analyze bicultural audit data to determine which differences will resultin conflict and which cultural values provide common ground 3. Identify strategies and prepare action plans to bridge the twoorganization’s cultures Merging Organizational Cultures Slide 17 Merging Organizational Cultures 1. Assimilation (rare) • Acquired company employees willingly embrace acquiring firm’s culture • Occurs when acquired company’s culture is weak or dysfunctional andacquiring company’s culture is strong and effective • Culture clash is rare – employees are looking for alternative 2. Deculturation • Acquiring firm imposes its culture and business practices • Necessary when acquired firm’s culture doesn’t work • Employees in acquired firm tend to resist 3. Integration • Combine both/all cultures into a new composite culture that preservesthe best features of both cultures • Slow and potentially risky – many forces preserving the existing cultures • Best when firms have relatively weak cultures, cultural values overlap, oremployees are motivated to adopt a new set of dominant values 4. Separation • Merged firms keep their own corporate cultures and practices i.e. remaindistinct entities • Best when merging firms are in unrelated industries or different countries Changing and Strengthening Organizational Culture Changing an organization’s culture is a considerable challenge Five strategies for changing/strengthening org cultures: Changing/Strengthening Organizational Culture Slide 18 • Actions of founders and leaders • Aligning artifacts with desired culture • Introducing culturally consistent rewards • Support workforce stability and communication • Attracting, selecting, and socializing employees Changing/Strengthening Organizational Culture Slide 19 Changing/Strengthening Organizational Culture 1. Actions of founders and leaders • Often based on founder’s personal values/personality ➡ authentic and transformational leadership ➡ also in later stories about the founder • Transformational leaders can reshape culture using organizational changepractices 2. Aligning artifacts • Artifacts keep the culture in place or help shift the culture to a new set ofshared values/assumptions Changing/Strengthening Organizational Culture Slide 20 Changing/Strengthening Organizational Culture (con’t) 3. Introducing culturally-consistent rewards • Powerful artifacts that strengthen or reshape an organization’s culture 4. Support workforce stability and communication • High turnover weakens org culture because: ➡ culture exists mostly in employee minds, not documented ➡ it takes time for culture to be understood • Strong culture depends on frequent, open communication -- sharelanguage, stories, rituals, other artifacts 5. Attracting, selecting and socialization of employees • ASA theory -- firms attract (A) and select (S) people who already embracethe cultural values, and attrition (A) occurs with people who don’t fit the culture • Organizational socialization practices further develop strong cultures   Attraction-Selection-Attrition Theory Organizations become more homogeneous and create a stronger culture through: • Attraction – applicants self-select -- don’t apply to firms with Attraction-Selection- incompatible values Attrition Theory • Selection – firms choose applicants whose values fit the company’s Slide 21 culture • Attrition – employees quit or are forced out when their values opposecompany values Organizational Socialization The process by which individuals learn the values, expected behaviours, and social knowledge necessary to assume their roles in the organization Organizational Socialization Learning Process Slide 22 • Newcomers form a cognitive map of the social, strategic, and cultural dynamics of the organization • Learn about performance expectations, power dynamics, corporateculture, company history, and jargon • Also need to form successful and satisfying relationships with otherpeople in order to “learn the ropes” Adjustment Process • Newcomers need to adapt to their new work environment • Develop new work roles – reconfigure their social identity • Adopt new team norms and practice new behaviours • Newcomers with diverse work experience adjust better Psychological contract Individual’s beliefs about the terms and conditions of a reciprocal exchange agreement between that person and another party (typically the employer) • Transactional contracts – primarily short-term economic exchanges;well-defined responsibilities • Relational contracts – long-term attachments that include a broadrange of mutual obligations Stages of Socialization Stage 1: Pre-employment Socialization • All learning and adjustment before first day of work • Involves collecting information Stages of Socialization Slide 23 • Forming psychological contract Stage 2: Encounter • Begins first day in new work environment • Newcomers test how pre-employment expectations fit reality • Reality shock – stress from perceived discrepancies between pre-employment expectations and on-the-job reality Stage 3: Role Management • Most active as employees transition from newcomers to insiders • Strengthen relationships with co-workers and supervisors • Practice new role behaviours and adopt attitudes and valuesconsistent with their new positions and organization • Resolve conflicts between work-nonwork activities Improving Organizational Socialization Realistic job preview (RJP) • Balance of positive/negative information about job and work context • Helps applicants estimate their fit with the job and organization Improving Organizational Socialization • Scare away some applicants; reduce turnover and increase job Slide 24 performance; minimizes reality shock Socialization agents • Socialization occurs mainly through socialization agents • Supervisors – provide technical information, performance feedback,buffering them from excessive demands, help them form social ties with co-workers • Co-workers – easily accessible, answer questions, serve as rolemodels, being flexible and tolerant with new hires Organizational Culture Slide 25 Organizational 15 Change LEARNING OBJECTIVES After reading this chapter, students should be able to: LO1. Describe the elements of Lewin’s force field analysis model. LO2. Discuss the reasons why people resist organizational change and how change agents should view this resistance. LO3. Outline six strategies for minimizing resistance to change, and debate ways to effectively create an urgency to change. LO4. Discuss how leadership, coalitions, social networks, and pilot projects assist organizational change. LO5. Describe and compare action research, appreciative inquiry, large group interventions, and parallel learning structures as formal approaches to organizational change. LO6. Discuss two cross- cultural and three ethical issues in organizational change. CHAPTER GLOSSARY action research -- a problem-focused change process that combines action orientation (changing attitudes and behaviour) and research orientation (testing theory through data collection and analysis). appreciative inquiry -- an organizational change strategy that directs the group’s attention away from its own problems and focuses participants on the group’s potential and positive elements. force field analysis -- Kurt Lewin’s model of systemwide change that helps change agents diagnose the forces that drive and restrain proposed organizational change large group interventions -- highly participative events that view organizations as open systems (i.e., involve as many employees and other stakeholders as possible) and adopt a future and positive focus of change. parallel learning structure -- highly participative arrangements, composed of people from most levels of the organization who follow the action research model to produce meaningful organizational change. refreezing -- the latter part of the change process in which systems and conditions are introduced that reinforce and maintain the desired behaviours. unfreezing -- the first part of the change process whereby the change agent produces disequilibrium between the driving and restraining forces. CHAPTER SUMMARY BY LEARNING OBJECTIVE 15-1 Describe the elements of Lewin’s force field analysis model. Lewin’s force field analysis model states that all systems have driving and restraining forces. Change occurs through the process of unfreezing, changing, and refreezing. Unfreezing produces disequilibrium between the driving and restraining forces. Refreezing realigns the organization’s systems and structures with the desired behaviours. 15-2 Discuss the reasons why people resist organizational change and how change agents should view this resistance. Restraining forces are manifested as employee resistance to change. The main reasons why people resist change are the negative valence of change, fear of the unknown, not-invented-here syndrome, breaking routines, incongruent team dynamics, and incongruent organizational systems. Resistance to change should be viewed as a resource, not an inherent obstacle to change. Change agents need to view resistance as task conflict rather than relationship conflict. Resistance is a signal that the change agent has not sufficiently strengthened employee readiness for change. It is also seen as a form of voice, so discussion potentially improves procedural justice. 15-3. Outline six strategies for minimizing resistance to change, and debate ways to effectively create an urgency to change. Organizational change requires employees to have an urgency for change. This typically occurs by informing them about driving forces in the external environment. Urgency to change also develops by putting employees in direct contact with customers. Leaders often need to create an urgency to change before the external pressures are felt, and this can occur through a vision of a more appealing future. Resistance to change may be minimized by keeping employees informed about what to expect from the change effort (communicating); teaching employees valuable skills for the desired future (learning); involving them in the change process; helping employees cope with the stress of change; negotiating trade-offs with those who will clearly lose from the change effort; and using coercion (sparingly and as a last resort). 15-4. Discuss how leadership, coalitions, social networks, and pilot projects assist organizational change. Every successful change also requires transformational leaders with a clear, well-articulated vision of the desired future state. They also need the assistance of several people (a guiding coalition) who are located throughout the organization. Change also occurs more informally through social networks. Viral change operates through social networks using influencers. Many organizational change initiatives begin with a pilot project. The success of the pilot project is then diffused to other parts of the organization. This occurs by applying the MARS model, including motivating employees to adopt the pilot project’s methods, training people to know how to adopt these practices, helping to clarify how the pilot can be applied to different areas, and providing time and resources to support this diffusion. 15-5. Describe and compare action research, appreciative inquiry, large group interventions, and parallel learning structures as formal approaches to organizational change. Action research is a highly participative, open-systems approach to change management that combines an actionorientation (changing attitudes and behaviour) with research orientation (testing theory). It is a data-based, problem-oriented process that diagnoses the need for change, introduces the intervention, and then evaluates and stabilizes the desired changes. Appreciative inquiry embraces the positive organizational behaviour philosophy by focusing participants on the positive and possible. Along with this positive principle, this approach to change applies the constructionist, simultaneity, poetic, and anticipatory principles. The four stages of appreciative inquiry include discovery, dreaming, designing, and delivering. Large-group interventions are highly participative events that view organizations as open systems (i.e., involve as many employees and other stakeholders as possible), and adopt a future and positive focus of change. Parallel learning structures rely on social structures developed alongside the formal hierarchy with the purpose of increasing the organization’s learning. They are highly participative arrangements, composed of people from most levels of the organization who follow the action research model to produce meaningful organizational change. 15-6. Discuss two cross-cultural and three ethical issues in organizational change. One significant concern is that organizational change theories developed with a Western cultural orientation potentially conflict with cultural values in some other countries. Also, organizational change practices can raise one or more ethical concerns, including increasing management’s power over employees, threatening individual privacy rights, and undermining individual self-esteem.  LECTURE OUTLINE (WITH POWERPOINT® SLIDES) Organizational Change Slide 1 Organizational Change at Mitel Networks Mitel Networks’ chief marketing officer Martyn Etherington relied on communication, involvement, and organizational systems
 to change attitudes and behaviours in the telecommunication company’s Organizational Change marketing group. at Mitel Networks Slide 2 • The Kanata, Ontario, company has embarked on a major transformation to keep ahead of new technologies and improve its competitive position Highly respected model of change developed by social psychologist, Kurt Lewin Force Field Analysis Driving forces Model • Push organizations toward change Slide 3 • Includes external forces e.g. new competitors, technologies • Leader’s vision inspires employees to strive for higher standards Restraining forces • Resistance to change – block the change process • Try to maintain the status quo Force Field Analysis Model Effective change occurs by unfreezing the current situation, moving to a desired condition, and then refreezing the system so it remains in the desired state Force Field Analysis Model Unfreezing Slide 4 • Producing disequilibrium between the driving and restraining forces Stability • When driving and restraining forces are roughly in equilibrium i.e.approximately equal strength in opposite directions Refreezing • Introducing systems and conditions that reinforce and maintain thedesired behaviours • Support and reinforce the new role patterns and prevent theorganization from slipping back into the old ways Restraining Forces (Resistance to change) Many forms of resistance – complaints, overt work stoppages, passive noncompliance Restraining Forces Subtle resistance is much more common than overt resistance – more (Resistance to Change) difficult to address because not as obvious Slide 5 Productive approach is to view resistance as task conflict 1. Form of voice – may improve procedural justice a decision making 2. Motivational – engages people to think about the change strategy andprocess Why Employees Resist Change 1. Negative valence of change • Negative cost-benefit analysis (expectancy theory/subjective expected utility) Why People Resist Change Slide 6 ➡ more negative than positive outcomes ➡ negative outcomes have a high probability of occurring • Usually considers perceived organizational outcomes, not just personal outcomes 2. Fear of the unknown • Uncertainty has two negative effects on change perceptions ➡ people assume the worst (negative valence of outcomes) ➡ people perceive lack of control, which is also undesirable 3. Not-invented-here-syndrome • Staff oppose the change to prove their ideas were better • Occurs among those who are normally responsible for these ideas --successful change threatens their self-esteem Why People Resist Change Slide 7 Why Employees Resist Change (con’t) 4. Breaking routines • Cost of moving away from our “comfort zones” • Requires time/effort to learn new routines and role patterns 5. Incongruent team dynamics • Existing team norms contrary to the desired change 6. Incongruent organizational systems • Old systems/structures reinforce status quo -- pull people back into pastattitudes and behaviour • Include rewards, information systems, patterns of authority, career paths,selection criteria Unfreezing, Changing, and Refreezing Increase driving forces (e.g. describe external forces, use fear or threats) • Strategy rarely works alone because employees respond with increase inrestraining forces Weaken/remove restraining forces • Strategy rarely works alone -- enables but doesn’t motivate change Preferred option -- increase driving forces and reduce/remove restraining forces Creating an Urgency for Change Inform employees about driving forces -- competitors, changing consumer trends, changing government regulations – most difficult to change when organization is doing well Creating an Urgency for Change Slide 8 Customer-driven change • Human element energizes employees to change behaviours • Reveals problems and consequences of inaction -- dissatisfied customersdescribe why company’s products are inferior Create urgency for change without external drivers • Requires persuasive influence – employees visualize future competitivethreats and environmental shifts • Use positive vision of future (makes current situation less appealing)rather than threats Reducing the Restraining Forces Slide 9 Reducing the Restraining Forces 1. Communication • Highest priority and first strategy for change • Generates an urgency to change • Reduces uncertainty (fear of unknown) • Problems – time-consuming and potentially costly 2. Learning • Provides new knowledge and skills to fit evolving needs • Includes coaching and other forms of learning • Helps break old routines and adopt new roles • Problems – time-consuming and potentially costly Reducing the Restraining Forces (con’t) Slide 10 Reducing the Restraining Forces (con’t) 3. Involvement • Employees participate in change process – often essential • Reduces not-invented here effect and fear of unknown – creates sense ofownership in the change solution • Includes task forces, future search events • Problems – time-consuming, potential conflict 4. Stress Management • When communication, learning, and involvement are not enough tominimize stress – to help employees cope with change • Potential benefits – more motivation to support the change; less fear ofunknown; fewer direct costs • Problems – time-consuming, expensive, doesn’t help everyone Reducing the Restraining Forces (con’t) 5. Negotiation • Influence tactic for change by negotiating benefits or resources in exchange for compliance with request (e.g. supporting change) Reducing the Restraining Forces (con’t) Slide 11 • May be necessary when people clearly lose something and won’totherwise support change • Problems – expensive; gains compliance, not commitment 6. Coercion • Necessary when all other strategies fail • Assertive influence tactics -- persistently reminders, frequent monitoring • Radical form of organizational “unlearning” – dismissals • Problems – reduces trust, may create subtle resistance, more politics toprotect their own job security Refreezing the Desired Conditions We tend to revert to previous behaviours and practices, unless systems and structures hold (refreeze) the desired changes Refreezing realigns organizational systems and team dynamics so they support the desired change • Alter rewards to reinforce new behaviours • Change career paths • Revise information systems e.g. feedback mechanisms help employeeslearn how well they are moving toward the desired objectives – “what gets measured, gets done” Change Agents Change agent – anyone who possesses enough knowledge and power to guide and facilitate the change effort Change Agents Transformational leaders are the primary agents of change Slide 12 Strategic visions and change • Provides a sense of direction • Identifies critical success factors to evaluate change • Links employee values to the change -- emotional foundation • Minimizes employee fear of the unknown -- sense of direction • Clarifies role perceptions – clarifies what behaviours to learn Coalitions, Social Networks, and Viral Change Change agents need a guiding coalition • Several people with a similar degree of commitment to the change • Membership extends beyond the executive team – ideally includes diagonal Coalitions, Social Networks, and Viral Change Slide 13 swath of employees from different functions and most levels of the organization • Sometimes formed from a special task force – should be influential leaders Social Networks and Viral Change • Change also occurs more informally through social networks – socialstructures of individuals or social units (e.g. departments) that are connected through one or more forms of interdependence • Viral change process – adopts principles found in word-of-mouth andviral marketing (information seeded to a few people is transmitted through friendship connections) • Not easily controlled, but many benefits • High trust — more persuasive to change others • Behaviour observation — easier learning by watching others Diffusion of Change Successful change initiatives usually begin as pilot projects – pilot projects offer greater flexibility, less risk Diffusion of Change Effective diffusion of pilot project considers MARS model Slide 14 1. Motivation • Employees see that pilot project is successful • Reward people in the pilot project for changing their previous workpractices 2. Ability • Give employees the opportunity to interact with and learn from those inthe pilot project • Disperse employees in the original pilot to other work units as rolemodels and knowledge sources 3. Clear role perceptions • Help employees understand how the practices in a pilot project apply tothem (even in completely different areas) 4. Supportive situational factors • Provide resources and time necessary to adopt the practicesdemonstrated in the pilot project Four Approaches to Organizational Change 1. Action research 2. Appreciative inquiry 3. Large group interventions 4. Parallel learning structures Action Research Approach Meaningful change combines action orientation (changing attitudes/ behaviour) and research orientation (testing theory) • Action orientation Action Research ➡ diagnose current problems Approach ➡ apply interventions that resolve those problems Slide 15 • Research orientation ➡ research study approach ➡ collect data to diagnose problems ➡ systematically evaluate how well the theory works in practice Action Research Principles 1. Open systems perspective • Change agents need to anticipate intended and unintended consequencesof interventions 2. Highly participative process • Requires employee knowledge and commitment • Employees are co-researchers and participants 3. Data-driven, problem-oriented process • Problem analysis through data collection/analysis Action Research Process 1. Form client-consultant relationship • Assumes change agent originates outside the system • Client readiness – client’s motivation, open to meaningful change, possess Action Research abilities to complete change process Process Slide 16 2. Diagnose need for change • Organizational diagnosis – gathering and analyzing data about anongoing system e.g. interviews and surveys • Includes employee involvement – agree on change methods, schedule,expected standards of successful change 3. Introduce intervention • Applies one or more actions e.g. managing conflict, team building,changing corporate culture • Incremental change vs. rapid change – small steps or massive overhaul 4. Evaluate and stabilize change • Evaluating effectiveness of the intervention against the standardsestablished in the diagnostic stage • Problems – outcomes aren’t apparent for a long time, or might be difficultto separate effects from other factors • Refreeze conditions to stabilize change Appreciative Inquiry at Toronto Western Hospital Toronto Western Hospital (TWH) held an appreciative inquiry (AI) retreat at which staff discussed the hospital’s past successes and crafted a vision for its future. TWH’s executive team felt the AI Appreciative Inquiry at philosophy should guide daily leadership behaviour, so they developed Toronto Western Hospital and taught a leadership program based in AI principles. Slide 17 Appreciative Inquiry Approach Frames change around positive and possible future, rather than traditional problem-focus 1. Positive principle – focus on positive events and potential Appreciative Inquiry Approach 2. Constructionist principle – conversations don’t describe reality, they Slide 18 shape reality 3. Simultaneity principle – inquiry and change are simultaneous, notsequential 4. Poetic principle – organizations are open books so we can choosehow to perceive, frame, and describe them 5. Anticipatory principle – people are motivated by desirable visions ofthe future i.e. use inspiring and engaging images Four-D Model of Appreciative Inquiry 1. Discovery • Discovering positive elements of the observed event/organization e.g. documenting positive customer experience Four-D Model of 2. Dreaming Appreciative Inquiry • Envisioning what might be possible in an ideal organization Slide 19 • Participants feel safer revealing their hopes and aspirations thendiscussing their own organization or predicament 3. Designing • Dialogue in which participants listen with receptivity to each other’s models and assumptions – create a common image of what should be 4. Delivering • Participants establish specific objectives and direction for their ownorganization based on their “should be” model Evaluating Appreciative Inquiry Many examples of effective change from this approach, but not always successful • Participants need to avoid problem-oriented mindset (blame game) • Not yet clear what conditions are best for appreciative inquiry (i.e.contingencies not yet known) Large Group Interventions Large Group Interventions Slide 20 • Large group sessions • May last a few days • High involvement with minimal structure – search for emergingtrends or issues; may also develop solutions Future search, open space, and other interventions that “put the entire system in the room” – involve as many employees and stakeholders as possible Limitations of large group interventions • Limited opportunity to contribute • Risk that a few people will dominate • Focus on common ground may hide differences • Generates high expectations about ideal future Parallel Learning Structure Approach • Highly participative social structures • Members from across the formal hierarchy who follow the actionresearch model to produce meaningful change Parallel Learning • Sufficiently free from firm’s constraints – social structures developed Structure Approach alongside the formal hierarchy Slide 21 • Develop solutions for organizational change which are then appliedback into the larger organization Cross-Cultural & Ethical Concerns with Managing Change Cross-Cultural Concerns • Linear and open conflict assumptions • Change viewed as a linear sequence in North America, often viewed Cross-Cultural and Ethical Concerns with as cyclical in some other cultures Managing Change • Task-oriented conflict built in to some change practices, but overt Slide 22 conflict isn’t consistent with some cultures Ethical Concerns • Privacy rights of individuals – may not want to share personalinformation and emotions required by action research • Management power – required (vs. voluntary) employee participation • Individuals’ self-esteem may be undermined – unfreezing requiresemployees to disconfirm beliefs, task competence Organizations are About People “Take away my people, but leave my factories, and soon grass will grow on the factory floors. Take away my factories, but leave my people, and soon we will have a new and better factory.” Organizations are About People Andrew Carnegie (1835-1919) Slide 23 Organizational Change Slide 24 Discussion of Team Exercise: Strategic Change Incidents Slide 25 Scenario #1: “Greener Telco” Refers to Bell Canada’s Zero Waste program, which successfully changed wasteful employee behaviours by altering the causes of those behaviours Scenario #1: “Greener Telco” Pilot project in Toronto – 12 floor building of 1000 staff reduced waste Slide 26 from 1800 lb. per day to just 75 lb. per day within 3 years Bell Canada’s Change Strategy Relied on the MARS model to alter behaviour: • Motivation – employee involvement, respected steering committee • Ability – taught paper reduction, email, food disposal Bell Canada’s Change Strategy • Role perceptions – communicated importance of reducing waste Slide 27 • Situation – created barriers to wasteful behaviour, e.g. removed garbage bins Chapter 15: Organizational Change Scenario #2: “Go Forward Airline” Refers to Continental Airline’s “Go Forward” change strategy, which catapulted the company “from worst to first” within a couple of years. Scenario #2: “Go Forward Airline” Slide 28 Continental Airlines’ Change Strategy • Communicate, communicate, communicate • Introduced 15 performance measures • Established stretch goals (repainting planes in 6 months) Continental Airlines’ • Replaced 50 of 61 executives Change Strategy • Rewarded new goals (on-time arrival, stock price) Slide 29 • Customers as drivers of change Instructor Manual for Organisational Behaviour: Emerging Knowledge, Global Insights Steven McShane, Mara Olekalns, Alex Newman, Angela Martin 9781760421649, 9780071016261