CH-1-3 Managing Change: Stories and Paradoxes – Managing Organizational Change: A Multiple Perspectives Approach : Book Guide

This Document Contains Chapters 1 to 3 Chapter 1 Managing Change: Stories and Paradoxes Learning Objectives On completion of this chapter you should be able to: •Understand how stories of change can contribute to our knowledge of theory and practice. •Explain why managing organizational change is both a creative and rational process. •Identify the main tensions and paradoxes in managing organizational change. •Evaluate the strengths and limitations of our current understanding of this field. Chapter Summary This chapter begins the textbook’s treatment of the management of organizational change by immediately exposing students to three specific examples of organizational change—Beth Israel Deaconess Medical Centre, Sears, and J. C. Penney. The examples—‘stories’—are presented ‘up front’ so that the students’ journey through the textbook is grounded, right from the beginning, in an understanding of the sorts of situations that managers and other organizational members may face during organizational change. While three stories cannot capture the full range of options involved in organizational change—even 100 stories would be hard pressed to do this – three stories presented with a reasonable amount of detail are enough to provide a ‘taster’—a sense of the sort of issues that may be part of an organizational change process. Each of the three examples is accompanied by a list of ‘Issues to Consider as you Read this Story’ which guides students through their reading. These Issues can also form the basis for classroom discussion of the stories. As this is the first set of cases for the students to consider, we have provided sample answers within the chapter rather than within the Instructors’ Guide. We have done this so that the students have easy access to samples of how such issues might be addressed. In subsequent chapters, such debriefing notes are provided in the Instructors’ Manual, not in the chapter itself. If you wish to update each of these stories, or encourage students to research change further, useful sources of information are: •Business Week: http://www.businessweek.com/ •Economist: http://www.economist.com/ •Fast Company Magazine http://www.fastcompany.com/ •Forbes: http://www.forbes.com/ •Fortune: http://www.fortune.com/fortune/ •Time: http://www.time.com/time/ •The New York Times: http://www.nytimes.com/ •Wall Street Journal: http://online.wsj.com/public/us While these three stories have been provided, individual instructors may wish to replace one or more with cases/stories that they prefer to use. There is no reason that this should not be done especially when the debrief of the Chapter’s three stories is available to students to consult independent of the instructor. In the section of the chapter entitled ‘Tension and Paradox: The State of the Art,’ we introduce students to the idea that the management of organizational change is a challenging area of management practice, because this management is rarely just a matter of applying a set ‘recipe’ of actions and ‘sitting back and watching’ a predictably successful outcome result. That is, we present a view of the management of organizational change that is complicated and messy, not simple and neat. In fact, if a successful outcome could consistently be achieved by applying a known set of actions, the management of change would be unlikely to be something that is such a time-consuming challenge for managers in organizations. Thus, we introduce students at this early point in the textbook to the ideas such as what works well in one setting might not work in another, that different stakeholders may have very different perspectives on the need for change and/or how it should be managed, that change can be transformational or via a series of incremental steps, that change capabilities may be systemic (organizational) or personal (individual), that leadership of change may be invested in one change leader or more widely distributed, etc. Exercises and Answers EXERCISE 1.1 (p.26) Writing Your Own Story of Change Purpose Stories of change can illuminate key issues in managing change. By inviting students to consider both personal and professional change, this exercise is relevant to all students regardless of their degree of work experience. It also builds a bridge between the personal experience of change that people have had in non-business settings and the range of issues discussed in the book. By doing this, change becomes a personal rather than abstract concept. Options/Techniques/Requirements Format: •Option 1 - individually, then in groups of three to four •Option 2 - groups of five to six Materials: •Figure 1.2 To be an Effective Change Manager, this is what you need… (Text p.20) •Flip chart/easel and paper for group work •Own story of change Time Required: The time required for this exercise is likely to vary depending on the experience of the students. For those with considerable work experience, change stories are likely to emerge without too much difficulty and without the need for prior notification of the exercise. For others with less work experience (e.g. undergraduate students), this exercise might work best if they are given either extra time or advanced notice before class. The group work will need to be monitored so that the “telling” of the change stories does not take up all the discussion time. The aim of the exercise is for students to analyze their stories to find commonality, lessons, and differences and to help them increase their awareness of the issues involved in change. Expected time (in the class room) would be three to four minutes per student to share their story in the group and about twenty minutes for the group discussion time. Undergraduate: To assist undergraduate students or those with limited professional experience who may find it difficult to select a story of change, it may be helpful if the instructor provides his/her own personal example of change as a way of suggesting how students might go about providing one. MBA/Executive: Students with professional experience will be more aware of their stories of change. However, the instructor may wish to indicate to such students whether they should report a “big picture” story of organizational change or a story emphasizing their own personal reaction to change. Potential Problems and Helpful Hints •Students may only select negative stories of change. If the exercise is completed in groups, encourage students to report at least one positive story. •Encourage students to report not only “the facts” but also the emotional or more subjective dimension(s) of the stories. •Change stories can be smaller parts of bigger processes, and there is not necessarily a resolution to all situations. Some stories may be ongoing. Encourage students to recognize this in telling their stories. •Stories of change will touch on a number of aspects of change detailed in Figure 1.2. It is likely that some of the issues will not be addressed, so these can be covered in the class discussion. Debriefing A helpful approach is to summarize the key conclusions derived from the stories of change and relate them to the lecture and “road map” provided in Figure 1.2. This step makes a connection between the students’ stories of change and the content of the text. It assists them in identifying the range of issues and complexities associated with managing organizational change. Guidelines for Answers to Questions The answers to the questions in the exercise will need to be assessed according to the experience and education level of the students. Think back to a change that you have experienced in either your personal or professional life. Plan A Instructions Write down your experience of change in about one page, and then answer these questions What made this experience a “story?’ Answer: Part of the attraction of a story is that it will usually have a main character or groups of characters to whom the reader/listener can relate. A story usually has tension and an emotional perspective, as well as factual information. In the text, the change stories include both subjective and factual details. The stories have just enough information to set the scene and explain the importance of the situation. Each story tells of an incident or situation, along with the consequence(s) or choice(s) that the character/company has to resolve or face. What lessons for managing change can you take from your story Answer: This question is designed to encourage students to refer to Figure 1.2 and think through the different aspects involved in change. From my story of transitioning to remote work, I learned several key lessons for managing change: 1. Adaptability is Crucial: Being open to new routines and environments is essential for a smooth transition. 2. Proactive Communication: Regular and clear communication can help alleviate feelings of isolation and ensure everyone is on the same page. 3. Embrace Uncertainty: Viewing change as an opportunity for growth can lead to personal and professional development. 4. Emotional Resilience: Managing stress and maintaining a positive outlook are vital in navigating change successfully. Compare these with the lessons from the Beth Israel, Sears, and J. C. Penney stories. Which are the same? Answer: This question is designed to help students begin to develop a sense that some change issues are commonly found while others may be present less frequently. The lessons from my remote work transition share similarities with those from the Beth Israel, Sears, and J.C. Penney stories: 1. Adaptability: Similar to how Beth Israel adapted its healthcare practices, embracing change is essential for success in any environment. 2. Proactive Communication: Just as Sears failed due to poor communication and leadership, the importance of clear communication aligns across all stories. 3. Embrace Uncertainty: Like J.C. Penney’s attempt to revamp its brand, viewing change as an opportunity, though risky, can lead to growth. 4. Emotional Resilience: Similar to how leaders at Beth Israel managed morale, maintaining emotional resilience is critical during periods of significant change. These commonalities highlight the universal importance of adaptability, communication, and resilience in effectively managing change. From your experience, what new lessons have you added, particularly for future changes in which you might be involved? Answer: Students may be unable to answer this question in detail, although they will have an impression that there are other “lessons.” This question could be asked again later in the course. 1. Flexibility: Being open to adjusting plans and approaches as circumstances evolve is crucial. 2. Continuous Learning: Actively seeking new knowledge and skills can help in navigating change more effectively. 3. Stakeholder Engagement: Involving and considering the perspectives of all those affected by the change leads to better outcomes. 4. Self-Care: Prioritizing well-being during change ensures sustained productivity and resilience. These lessons will help me approach future changes with greater preparedness and adaptability. In small groups, share your lessons with colleagues. Which lessons are similar, and what are the differences among you? Answer: This is an exercise to compare and contrast answers in order to consider information from others in relation to the changes they have experienced. These similarities and differences may highlight the generic ways that organizations deal with change. There may be issues that could be highlighted here specifically for small to medium enterprises in comparison to large organizations. In small groups, similar lessons include the importance of adaptability, effective communication, and resilience. Differences often arise in approaches to change—whether proactive or reactive—the emotional impact, and the scope of change (personal vs. organizational). These variations reflect individual experiences and perspectives on managing change. What three main conclusions can you take from these stories about managing change? Answer: The key conclusions may either reinforce or supplement the information in the three Case Diagnostics (pp.21-26). The instructor can then highlight the way in which certain themes have been repeated or emphasize the fact that the information in the Change Diagnostics is indicative but not exhaustive of the broad range of change issues. Plan B Instructions In small groups of around four to six people, ask each of the group members to tell his or her story of change, taking only three or four minutes each. Record key elements of each story on flip-chart paper. When everyone has told their story, answer the following questions: What are the common themes and issues across these stories? Answer: Common Themes and Issues: 1. Adaptability: Most stories likely highlight the need to adapt quickly to new circumstances, whether in personal or professional settings. 2. Emotional Impact: Many stories may touch on the emotional challenges faced during change, such as stress, anxiety, or excitement. 3. Communication: Effective communication emerges as a critical factor in successfully navigating change, whether it’s within a team, with leaders, or personally. 4. Learning and Growth: Many stories may emphasize how change led to personal or professional growth, learning new skills, or gaining new perspectives. What are the differences between these stories? Answer: Once the key elements in each story have been recorded, students should identify the common issues and the differences between the stories. This will help students practice their new skills in reading the Road Map and applying these concepts to short stories of change. Differences Between Stories: 1. Scope of Change: Some stories may focus on minor, personal changes, while others might describe significant organizational shifts. 2. Reactions to Change: Emotional responses can vary widely, with some viewing change as a positive opportunity, while others may have experienced it as a negative or challenging period. 3. Strategies Used: Different coping strategies or approaches may be highlighted, such as proactive planning versus reactive problem-solving. 4. Outcomes: The final impact of the change might differ, with some stories ending in success and growth, while others may have ongoing or unresolved issues. Of the change lessons from Beth Israel, Sears, and J. C. Penney, which are revealed in the groups’ stories, and which are absent? What are the implications of this? Answer: 1. Revealed and Absent Lessons: • Revealed: Adaptability (Beth Israel), communication (Sears), and emotional resilience (J.C. Penney) are commonly reflected in the group’s stories. • Absent: Strategic alignment and consistent leadership (Sears and J.C. Penney) might be less evident in personal stories, suggesting these areas need more focus in personal change management. • Implications: The absence of strategic alignment may indicate a gap in how individuals perceive and manage change, highlighting the need to better integrate long-term planning and leadership consistency in future changes. Are there any further lessons embedded in these stories that could apply to future changes in which group members may be involved? Answer: Further Lessons: • Collaboration: The importance of teamwork and support systems in navigating change was likely emphasized. • Flexibility in Approach: Stories may reveal the value of adjusting methods and strategies as the change process unfolds. What three key conclusions can you take from these stories about managing change? Answer: Three Key Conclusions: 1. Effective communication and adaptability are essential for successful change management. 2. Emotional resilience plays a crucial role in coping with and overcoming challenges during change. 3. Strategic alignment and leadership are vital but often overlooked in personal change scenarios, requiring more focus in future endeavors. Refer to the information for the same questions in Option One. ADDITIONAL EXERCISE (not in textbook) Experiencing Change In most organizational change situations there are people who can be categorized into one (or sometime more) of three groups : •Change Strategists who authorize the change (often senior managers) •Change Implementers •Change Recipients Questions for Change Strategists: 1. Which type of change did you attempt? Answer: • I attempted a strategic organizational restructuring to streamline operations and improve efficiency across departments. 2. How was the change received by those likely to be affected? Answer: • The change was received with mixed reactions; while some employees understood and supported the rationale, others resisted due to uncertainty and fear of job loss. 3. What was the most frustrating part of the process? Answer: • The most frustrating part was the resistance from key stakeholders who were crucial to the success of the change but were initially unwilling to embrace it. 4. How would you rate the success of the change? Answer: • I would rate the change as moderately successful. While we achieved some of our objectives, the overall impact was limited due to the resistance and lack of full buy-in from all parties. 5. What would you do differently if you had your time over again? Answer: • If I had the opportunity to do it again, I would engage with stakeholders earlier in the process, providing more communication and involvement to build trust and reduce resistance, ensuring a smoother implementation. Questions for Change Implementers: 1. Which type of change did you attempt? Answer: I attempted the implementation of new technology systems to enhance operational efficiency and improve data management. 2. How was the change received by those likely to be affected? Answer: The change was initially met with resistance due to unfamiliarity with the new technology, though acceptance improved as users became more comfortable with it. 3. What was the most frustrating part of the process? Answer: The most frustrating part was the lack of clear communication from leadership, which led to confusion and uncertainty among the team. 4. How would you rate the success of the change? Answer: I would rate the change as fairly successful. The technology was eventually integrated and met the project goals, but the process was challenging and required adjustments. 5. What would you do differently if you had your time over again? Answer: I would provide more comprehensive training and support to users and ensure clearer communication from the start to facilitate a smoother transition. Questions for Change Recipients: 1. Which type of change was attempted? Answer: The change involved the introduction of a new workflow process aimed at increasing efficiency and reducing bottlenecks. 2. How did you react to the attempted change? Answer: Initially, I was skeptical about the change due to its impact on my daily tasks and the perceived disruption, but I adapted over time as the benefits became more apparent. 3. What was the most frustrating part of the process? Answer: The most frustrating part was the inadequate communication regarding the details and benefits of the new process, which led to confusion and resistance. 4. How would you rate the management of the change process? Answer: I would rate the management of the change process as average. While the change was eventually successful, the process felt rushed and lacked sufficient support. 5. What would you want to see done differently next time? Answer: Next time, I would want to see more thorough communication and engagement with employees, including clearer explanations of the changes and more opportunities for feedback throughout the process. Purpose The purpose of this exercise is bring to the surface the various reactions to organizational change processes and to highlight how the experience of change can depend on the position from which one views the change process. Options/Techniques/Requirements Format: •Divide the class into three groups: change strategists, change implementers, and change recipients. While this can be done randomly, it is recommended to see whether reasonable sized groups can be formed by putting those with change strategist experience in one group, then of the remainder put those with some change implementer experience in one group, leaving the rest as the change recipient group. •Where there is a large class involved, multiple change strategist, implementer and recipient groups can be created. •If there are not at least 3-4 change strategists, run a combined strategist/implementer group. Materials: •Flip chart/easel and paper for group work. Time Required: Time for the class exercise is 25 minutes to respond to the questions specific to the change groups. This is followed by a five minute response presentation by each group to the rest of the class and concludes with a 10 minute general discussion (i.e. around 40- 45 minutes in total). Undergraduate: This exercise is designed for people who have had some experience of organizational change. For those who lack this experience, this exercise can help them anticipate the types of issues which might be uppermost in their mind when confronted with change. Alternatively, try to ensure that some experienced people are in each group. MBA/Executive: This exercise will work best for people who have had some experience of organizational change. Potential Problems and Helpful Hints •Students with limited work experience will find this exercise difficult. Debriefing The debriefing for this exercise takes the format of a discussion led by the instructor following the five minute presentations from the group spokespersons. This exercise can highlight that organizational change processes may generate some quite strong responses from people involved in the process. Sometimes this exercise can bring to the surface such things as a change strategist’s frustration at the lack of progress and perceived resistance, while change implementers may feel that they became the “meat in the sandwich,” and change recipients may express frustration at “lack of consultation” or something similar. Having some exposure to the range of emotions that organizational change processes can produce is quite a useful way to begin a course that is going to deal with a lot of issues involved in the management of organizational change. Chapter 2 Images of Change Management Learning Objectives On completion of this chapter you should be able to: •Evaluate the use that different authors make of the terms change agent, change manager, and change leader. •Understand the importance of organizational images and mental models. •Compare and contrast six different images of managing change and change managers. •Explain the theoretical underpinnings of different change management images. •Apply these six images of managing change to your personal preferences and approach and to different organizational contexts. Chapter Summary Chapter 2 focuses on the six images of change managers outlined in Table 2.1 of the text. Images of Managing Change (p.35)
Images of Managing
Controlling… (activities) Shaping… (capabilities)
Images of Change Outcomes Intended DIRECTOR COACH
Partially Intended NAVIGATOR INTERPRETER
Unintended CARETAKER NURTURER
The two variables that determine the image of a change manager are the images of managing and of change outcomes. These can be defined as follows: •Images of managing: o Controlling: This is representative of many of the dominant views associated with top-down management. It is based on controlling the activities in the organization. It can be illustrated by Fayol’s characteristics of management—planning, organizing, commanding, coordinating and controlling. •Shaping: This illustrates a more participative style of management. It attempts to mold change outcomes through encouraging a variety of players within the organization to be involved in the various stages of change. This view focuses on improving the capabilities of the organization. •Images of change outcomes: o Intended: This view regards change as a result of planned action instigated and influenced by a change manager. This can be achieved through three broad strategies: empirical rational strategies, normative-re-educative strategies, and power coercive strategies. o Partially intended: Research in change management has shown that there is often a discrepancy between the change that is planned and that which occurred. The intended outcomes of change may require re-modification during the implementation process, the result of which is partially intended change. o Unintended: Often there are forces beyond the control of the change manager that greatly influence the outcomes of change and these can impede any attempts to achieve intended change within an organization. There are a plethora of internal or external factors that prevail over the impact of the change manager. Based on these variables, the six images of change and their theoretical underpinning are described. Director: •This is based on an image of management as control and of change outcomes as being achievable. •Theoretically, this image is supported by the n-step models and contingency theory. Navigator: •Here, control is still seen as at the heart of management action, although a variety of factors external to managers mean that while they may achieve some intended change outcomes, others will occur over which they have little control. •Theoretically, this image is supported by the contextualist and processual theories of change. Caretaker: •Although the management action is still focused on control in this image, the change manager’s ability to control is severely impeded by a variety of internal and external forces beyond the scope of the manager. The caretaker is seen as shepherding their organizations along as best they can. •This image is supported by theories that focus on the external environment such as life-cycle, population-ecology, and institutional theories. Coach: •In this image the change manager relies upon building in the right set of values, skills, and “drills” that are deemed to be the best ones that organizational members, as players, will be able to draw on adeptly in order to achieve desired organizational outcomes. •Theoretically, this is based on organizational development approaches. Interpreter: •The manager creates meaning for other organizational members, helping them to make sense of various organizational events and actions. Only some of these meanings are realized as change outcomes, however, and these must be legitimized by the change manager. •Theoretically, this is supported by the sense-making theory of organizational change. Nurturer: •This image assumes that even small changes may have a large impact on organizations, and managers are not able to control the outcome of these changes. However, they may nurture their organizations, facilitating organizational qualities that enable positive self-organizing to occur. Specific change outcomes cannot be controlled but rather they are shaped and emerge by the organizational qualities and capabilities. •Theoretically, this is based on chaos and Confucian/Taoist theories. These six images of change managers have three core uses: 1. They highlight a variety of assumptions change managers make about change and increase the awareness of different interpretations of change. 2. They draw attention to the dominant images of change within an organization. 3. They highlight a range of perspectives available to change managers. Sidebars in the Text The following table provides a brief summary of the content of each sidebar.
Sidebar Page
Interpreters at Work: Four Conditions for Changing Mindsets •Fleshes out some aspects of what is meant by change manager as interpreter. It draws attention to the importance of changed mindsets if deep organizational change is to be achieved. 43
Semco: A Chaotic Business •Illustrates some aspects of change manager as nurturer. •Semco is well known in management literature, possibly because it seems to break all the rules of how a company “should” be managed if it is to succeed. •The management approach of this company contrasts strongly with the more familiar hierarchical organization that most students have experienced. •It is important for students to understand that in management (and change), “not everything has to be controlled from the top.” •Raises awareness that there are alternative models for running a business successfully. 44
Taos Approach to Change Leadership •Provides another perspective on the change manager as nurturer, this time through a non-Western view on how change is achieved. •Introduces students to the idea of looking at the management of change in cultural context, which may mean both that (i) cultural context may be central to how well particular ideas about how to manage change work, and also (ii) familiarizing ourselves with how change is managed in other cultures may give us new ideas that we could apply in our own culture. 45
Exercises and Answers EXERCISE 2.1 (pp.52-53) Assessing Change Managers’ Images Purpose Understanding the importance of organizational images and mental models is part of the process of working successfully with change. Listening to stories from change managers will help students gain an idea of the different situations, attitudes, and perspectives that are possible in managing change. This exercise familiarizes students with the six images framework, its assumptions, and theoretical underpinnings. Options/Techniques/Requirements Format: •Individually or small groups Materials: •Use Table 2.1 Images of Change Management (p.35), Table 2.2 Life-Cycle Stages and Caretaker Activities (p.40), Table 2.3 Chaos Theory and Change Management ( p.45), and Table 2.4 Six Images of Change Management (p.52.). Time Required: Expected time for each interview is approximately 20 minutes (if the students go to the change manager’s workplace), or about 10 to 15 minutes each if a number of change managers present to the class. Analyzing the information from change managers (either individually through individual interviews or during class if they present in the lecture time) will take approximately 20 minutes for each change story. More time will need to be allowed for this exercise if students formally submit their work for assessment. Undergraduate: Students may have difficulty finding change managers to interview—the instructor could facilitate the exercise by inviting one or two change managers to the class to share their stories of change. The students could then individually, or in groups of two to three, complete the questions as a discussion in class time or as a project in their own time. MBA/Executive: Students with professional experience will have fewer problems organizing an interview than those without, as they are likely to have business contacts who know a change manager. It may be good to direct students towards different industries or organizations so that they can compare and contrast the responses to the questions. Potential Problems and Helpful Hints •During the interview, it is important for students to listen to the story the change manager is telling and note the language they use. •Students may try to ask the change manager about the change “images” they are learning in the course and which one(s) they use. This could be a problem as many change managers do not know what “image” they are using. It is important for students to listen to change stories and work out for themselves the image, type of change, phase of the change, stimulus, or any other factors that were part of the change. •An important skill for students to acquire is to be able to hear stories of change and interpret them into change terminology. Students would improve their skills by practicing telling stories with and without “change vocabulary,” as clear communication is very important for effective change management. Debriefing A helpful approach to debriefing is to summarize the broad conclusions reached by the groups. Revise the six images framework and mental models for approaching change—the three tables referenced above contain the basic information that students need to know at this stage of the course. The six change images are discussed throughout the text and are foundational to many of the subsequent chapters. Completing the exercise by briefly discussing some of the difficulties of finding a change manager will give students some ideas on how to approach others for an interview. Guidelines for Answers to Questions The answers to the questions in the exercises will need to be assessed according to the experience and education level of the students. The answers given here are only a guide. Your task, either individually or in a small group, is to find and interview two people who have managed organizational change or who have been directly involved in change implementation. Which images of change did those two managers illustrate? Answer: The answer could be one or more of the six images of change. Manager 1: • Image of Change: The Director - This manager exemplified a structured and planned approach to change, focusing on clear directives and a well-defined strategy to lead the organization through the change process. Manager 2: • Image of Change: The Coach - This manager highlighted a supportive and facilitative role, working to empower and motivate team members, encouraging participation, and adapting the approach based on feedback and team needs. How did these images affect the change management decisions and actions? Answer: The influence of the type of image on the actions of change managers should relate to the information found in Tables 2.1 and 2.4 and be supported by the description of the theoretical underpinnings of the image. Manager 1: The Director • Impact on Decisions and Actions: The structured approach led to clear, top-down directives and a focus on planning and control. Decisions were made centrally, ensuring a cohesive strategy but potentially limiting flexibility. Manager 2: The Coach • Impact on Decisions and Actions: The supportive approach encouraged team involvement and feedback, leading to more adaptive and flexible decisions. Actions focused on empowerment and motivation, fostering a collaborative environment and responsiveness to emerging needs. To what extent were these different images related to: Answer: •The type of change? Refer to Table 2.1 Images of Change Management. •The context of the change? The context of the change is found in the theoretical underpinnings of each of the change images. The answers for this question, at this stage of the course, will be fairly broad. •The phase of the change? Refer to Table 2.2 Life Cycles Stages and Change Management Issues. •Simultaneous involvement in multiple changes? Answer: This will depend on the stories that the change managers tell students. This question is for students to think about the fact that change is a complex venture and usually involves a number of changes at the same time. Manager 1: The Director • Extent of Involvement: Limited involvement in multiple changes simultaneously; preferred a focused, structured approach to each change, managing them sequentially to ensure control and alignment with the strategy. Manager 2: The Coach • Extent of Involvement: Greater involvement in multiple changes; facilitated a more flexible and adaptive approach, allowing for simultaneous management of various changes through team collaboration and ongoing feedback. • Were there any other factors that you identified? Answer: The answer to this question will depend on the information that the students have gathered from the interviews. Manager 1: The Director • Additional Factors: Emphasis on formal communication channels and adherence to planned schedules. Limited adaptability due to strict adherence to predefined processes. Manager 2: The Coach • Additional Factors: Strong focus on team dynamics and morale. Greater emphasis on iterative feedback and adaptability, which facilitated handling changes more dynamically. •What conclusions can you draw from your analysis about the effects of images and mental models on the way your interviewees approached their change management roles? Answer: The broad conclusions from the change stories should include information from both interviews, including a discussion of the types of images involved in the change and how these mental models will affect the approach to change. EXERCISE 2.2 (pp.53-55) Case Study: The turnaround story at Leonard Cheshire Our suggested responses to the three case questions are: 1. What image/s of change management does Clare Pelham illustrate? Answer: Pelham combined the director and caretaker images. When she took over, the charity had a large deficit and its reputation for care quality was threatened. Rapid action and decisions were required, and after meeting with all of the senior managers individually, Pelham made clear what was going to happen. One example was her deeply controversial decision to stop the ‘15 minute visits.’ However, she was also clear about working together, transparency, rapid problem solving, establishing procedures, and measuring progress with weekly reports. She explored with the management board how they would work together to address the challenges they faced. She met with staff to gather ideas and decide actions on fundraising. She observes that, ‘leadership is a caring profession.’ 2. What insights does this story have to offer concerning the role of the change leader? Answer: Work fast: It is usually desirable to act with speed and clarity when an organization is facing difficulties as severe as these, combining financial and reputational damage. Build credibility: Pelham was new to the organization, although she had previously worked there as a volunteer. She had to establish her credibility with existing management and staff, while recognizing that they had high expectations of her. Involve others (1): Pelham immediately involved the senior management team, capturing their ideas on working practices and on solutions to the organization’s problems. She quickly convened a management board to discuss working methods. Involve others (2): Staff was asked to develop ideas on fundraising tactics, as everyone became involved in that key part of the business. Symbolic actions: Pelham convened a board meeting with no agenda, signalling willingness to listen to the suggestions of others. She banned the words ‘blame,’ ‘fault,’ and ‘failure,’ signalling the desire to increase pride in the charity’s work. She encouraged a culture of ‘you don’t walk past,’ signalling that solving problems on personal initiative was to be expected and rewarded. She led the ‘15 minute visit’ campaign, which attracted external criticism, but which staff supported. She accepted responsibility should things go wrong. 3. What lessons about managing organizational change can we take from this experience and apply to other organizations, in healthcare and in other sectors? Answer: Acting rapidly to address severe problems, building personal credibility, involving others (at all levels), and using symbolic actions to signal changes in approach and organization culture, are tactics that change managers in other organizations and sectors should find useful. Chapter 3 Why Change? Contemporary Pressures and Drivers Learning Objectives On completion of this chapter you should be able to: •Understand the environmental pressures that can trigger organizational change. •Explain why not all organizations are affected equally by external pressures. •Explain why organizations often fail to change following crises. •Identify internal organizational factors that trigger change. •Relate differing images of managing change to pressures for change. Chapter Summary This chapter identifies the variety of pressures of organizational change. The theoretical position of why change occurs can be based on either the economic perspective of organizational change or the organizational learning perspective. •The economic perspective focuses on satisfying the shareholders of the organization and maintaining their investments, hence ensuring its survival. Change is conducted to improve organizational performance in the form of better balance sheet results. This position is most aligned with the “management as control” images of change managers, that is, the director, navigator and caretaker images. •The organizational learning perspective focuses on building the capabilities of an organization to give its members the ability to deal with change. This recognizes the complexity of organizations and human systems which cannot be accurately represented through a single linear objective. This is most aligned with the “management as shaping” perspective illustrated by the coach, interpreter and nurturer images of change managers. Pressures for change can come from a variety of sources including the environment, the discovery of deviations from standards, new desires and visions of the future, or the fundamental nature of organizations themselves. This chapter focuses on these reasons why organizations change through discussion of external and internal pressure for change. Images of Pressures for Change
Image of Managing Change Pressures for Change
Director Change is a result of strategic pressures and controllable by managers’ ability to direct the organization’s response
Navigator Strategic change is in response to internal and external pressures. Multiple pressures facing managers will need to be taken into account.
Caretaker Managers have little control over the inevitable pressures on the organization. Managers have little choice in the organization’s actions.
Coach Pressures for change are constant and result in the need to develop and shape the organization’s capabilities to better enhance organizational outcomes.
Interpreter Pressures for change are internal and external and managers need to understand and give meaning to these.
Nurturer Pressures for change are large and small and the manager’s role is to enhance the adaptive capacity of the organization.
The environmental pressures for change are one way of explaining why change occurs in organizations. Environmental Pressures for Change
Pressure Example Description Implications
Fashion pressures Boeing Co. Boeing underwent a number of structural and cultural changes based on what Jack Welch had done at GE. Neo-institutionalism: mimetic isomorphism. An organization imitates companies that are considered to be successful.
Demography Generation C The generation (born post 1990) take for granted the internet and social networking Generation C will have an impact on how organizations operate, on how managers manage.
External Mandate Chevron Texaco Chevron Texaco was sued for racial discrimination by employees. They changed company practices to ensure fair treatment of employees. Neo-institutionalism: coercive isomorphism. An organization changes through either formally or informally mandated requirements.
Geopolitical pressures 3M Once Europe become more unified and moved towards opening its borders 3M’s presence in various European countries was no longer suitable. This is when global changes (or crises) greatly impact an organization and change is necessary for survival.
Hyper- competition Linked-In The internet and smartphones have generated innovative business models such a ‘freemium’ where customers get the basic product free and pay a premium for more powerful functions. The increasingly rapid pace of business affects the way organizations respond to their consumers and their competitors
Maintaining corporate credibility and reputation Walt Disney Company Walt Disney faced serious criticism for the close ties between the directors and CEO and the lack of management experience. They changed structures and practices to rectify this. In light of recent corporate governance scandals in organizations, the pressure to maintain a good reputation and high level of credibility has increased.
Four debates about the role of the external environment alert change managers to potential issues that can arise. The debates are: •Organizational learning vs. threat-rigidity: whether external pressures facilitate or inhibit the process of change. Organizational learning theorists suggest that external changes lead to adaptive changes in an organization, whereas threat-rigidity theorists see these pressures as inhibitors of change by restricting the capacity of managers to engage in change. •Environment as an objective entity vs. environment as a cognitive construction: The former treats the environment as an objective entity to which managers must respond. The latter emphasizes the centrality of managers’ interpretations of environmental conditions as the key determinant of behavior. •Forces for change vs. forces for stability: External forces can vary they either promote change or promote stability. It is important that a change manager is aware of the interaction between these two types of forces. outside environment (bridging) or focusing on efficiency by avoiding change through shielding parts of it from the effects of the environment (buffering). The internal organizational pressures for change are another way of understanding why change Internal Organizational Change Drivers
Pressure Examples Description Implications
Growth Microsoft The systems and practices in place from Microsoft’s entrepreneurial roots were not able to be applied to the increased scale of operations as the company grew. Existing systems and processes in a small organization may no longer be applicable when its size increases.
Integration and coordination EDS EDS had pioneered IT services but found that its own internal system was lacking. There was a lack of co-ordination and communication between the different business units. The possibility of integrating parts of the organization and creating economies of scale can pressure change in organizations.
Corporate identity Forte Hotel Hotels under this banner were competing against each other and lacked a unified identity with Forte. The company was separated into four distinct market segments and organizational culture programs were put in place. A common organizational identity and the unified commitment of staff in different areas of an organization can be difficult to manage and may encourage change.
New Chief Executive Sears Arthur Martinez decided that the shocking sales record of the company would be rectified through changing products and markets, reengineering store operations and creating a service culture. New authority figures can herald a new era and often initiate significant internal changes in an organization.
Power and politics Morgan Stanley Post-merger at Morgan Stanley were political power plays for the CEO position. Power relationships and politicking can change internal processes and decision making. This has significant flow-on effects within the organization.
The following provides a brief summary of the key points in each sidebar.
Sidebar Page
The Hype Cycle Reports research evidence of the short life of most new management ideas as an example of the prevalence of fashion as a factor influencing initiatives introduced into organizations. 64
Nevertirement and Nevertirees •One form of demographic shift – workers staying at work well past the point where future generations would have retired. •This vignette could be used to open up discussion about what changes organizations might make to respond to this particular development. •Such a discussion could extent to considering how an organization might respond to the co-existence of Gen C’s and Nevertirees. 68
Coca-Cola: Thirsty for Sustainability •Notes Coca-Cola’s actions to reduce perceptions that it is not socially responsible. •This vignette could be used as a basis for a more detailed look at Coca-Cola, its actions and its critics, the latter including those who have targeted the sugar content of Coca-Cola products. 72
Cloud Control •This vignette notes, within the software firm Adobe (i) the effect on internal functions that followed a change in strategy to cloud-based products and (ii) how HR practices changed in response to the demands of a Gen Y workforce. 73
Pressure to Change at YouTube •The prime reason for the inclusion of this vignette in the textbook is to reinforce the point that managing change is not just something that ‘old economy’ organizations have to confront. The rapidity of change in the digital landscape means that it’s not just the old forms that have to adapt, many of the new ones—YouTube, Facebook, Google, etc—dhave to move speedily to reinforce their competitive position. 76
What Worries Dropbox? •Reinforces the point made in the YouTube vignette, especially in the use of reference to Myspace etc. Many internet services and websites, for example eBay and PayPal, are disrupting traditional ways of interacting with consumers. •Students should identify that technology is changing all consumers’ actions which become and increasing pressure on organizations to change 77
Using Power and Politics to Secure the City •Provides an example of how, post 9/11, the NYPD changed some of its practices in order to establish a stronger power base that would enable it to have a more effective relationship with the FBI, CIA, and other agencies involved in fighting terrorism. 90
Exercises and Answers EXERCISE 3.1 (p.91) TopTeam Role Play Purpose This exercise is designed to help students become more familiar with the images framework. Understanding environmental pressures and internal issues propelling organizations towards change is an important part of applying “images” to managing change. Options/Techniques/Requirements Format: •Groups of three Materials: •Table 3.1 Images of Pressures for Change (p.63) •Example of organizational change Time Required: Finding the story of change may take a while for some students. It may help to explain the exercise at the end of one lecture and then run the exercise in the next lecture so students have a few days to identify a story of change. Time for the class exercise would be approximately 25 minutes to select the story, complete the team role play, and debate responses for Question 4. Approximately a further 10 minutes would be required for answering Question 5. Undergraduate: Students may need some time to find an organizational change story and then share the story with the others in the group. The instructor could facilitate this by describing a couple of examples of typical stories for students to use as a reference or by suggesting sources (e.g. Fortune, Business Week). MBA/Executive: Students with professional experience will probably be more aware of stories of change from the press that they have read, or experienced at work. Potential Problems and Helpful Hints •Some people do not want to participate in role plays, thinking that the focus is on their ability to act or speak in public. Possibly an alternative is for students to talk as a group about the role taken by the different change images in the senior management board. •Students may find it difficult to find a change story, although if they completed the previous exercises they would be more familiar with this process. •Students may find stories that do not give enough information for the adoption of the role(s), or have too much detail so that the story is too complex to be able to use as a role play in the available time. •Students may be “biased” towards the style they feel more comfortable with, or away from the ones they don’t like. Take care to notice if there is some polarisation around some of the images and use that as an opening to explore the image (and its opposite) in the lecture. Debriefing A helpful approach would be to talk through with the class the feeling of being in a new situation and to re-emphasise that the purpose of the role play was not to be a good actor, rather to familiarise oneself with the pressures for change on each of the images. Take a few minutes to talk about how individual students felt about doing the role play, if they are willing to discuss this aspect. Follow up the exercise with a revision of Table 3.1 in the class, and ask students to share some insights they gained through the exercise about the images and associated pressures. Guidelines for Answering Question 5 When you have decided how you are going to respond to the chair’s request, consider the following issues: (a) Did one of your images better explain the rationale for change than the others, and why? Answer: The answer to this question will be a judgement call by the student(s). The correct answer will depend on the organizational change presented, the scenarios developed, and often the familiarity with the style of the change image. Students need to be able to give an answer based on the information given about the images in the Text. In responding to the chair's request, you may find that one of the images—such as the Coach, Interpreter, or Navigator—offers a clearer and more compelling rationale for change, depending on the specifics of the change story. For example, if the change is driven by external market pressures, the Navigator image may better explain the rationale for change because it emphasizes strategic responses to external forces. If the change is more about aligning organizational culture or values, the Coach image may be more appropriate, as it focuses on nurturing and developing individuals and teams. Ultimately, the choice of image should be guided by the nature of the change and the specific pressures the organization is facing. The rationale provided by one image may resonate more effectively in explaining the urgency and necessity of the change to key stakeholders. (b) On reflection, what criteria did you use for making this judgement with regard to the comparative advantage of a particular image? Answer: The answer to this question will reveal if students have made rational decisions based on the information or if they are reacting against or favouring certain change management images. The ability of students to support their choice of change images will reveal their level of competence with these concepts The criteria used for judging the comparative advantage of a particular image likely included the alignment of the image with the specific drivers of change (e.g., external pressures, internal dynamics), its relevance to the organization's context and culture, and its effectiveness in communicating the need for change to stakeholders. Additionally, the image's ability to address key challenges and facilitate the desired outcomes of the change process would also have been important factors. (c) Is there an image with which you personally have a particular affinity or preference? Why? What would it take for you to change that preference? Answer: This question relies on honesty, and an ability of the students to analyze their own history and understand how this influences their choice of image. Some students will answer this question better than others and may respond in emotive terms of what they like (or don’t like) about an image, or explain why an image “won’t work.” This could be due to a negative experience where they observed the failure of a change situation. You might have a personal affinity for an image that aligns with your leadership style or values—such as the Coach if you prioritize team development and empowerment, or the Navigator if you favor strategic planning and problem-solving. This preference could be shaped by your experiences, beliefs about effective change management, or the context in which you've seen this image succeed. Changing this preference would likely require exposure to different scenarios where another image proves more effective, or learning about the limitations of your preferred image in certain situations. Reflecting on diverse outcomes in varied contexts might shift your perspective toward a more flexible approach to change management. EXERCISE 3.2 (p.791) Case Analysis: The Sunderland City Story Our suggested responses to the three case questions are: 1. What features of a downturn can make managing organizational change more difficult? Answer: Significant spending cuts, layoffs, and radical changes to working practices usually trigger resistance and reduce employee motivation. Motivation may be further damaged when economic conditions suggest that spending cuts are going to continue, perhaps for years. From a change management perspective, change communication is likely to be seen as negative and anxiety-inducing, and the main ‘benefits’ concern job security for those who do not lose their jobs. Getting ‘buy in’ to the changes and stimulating support and commitment look like insurmountable challenges. A downturn can make managing organizational change more difficult due to factors such as reduced financial resources, heightened employee anxiety and resistance, increased pressure to deliver quick results, and a more challenging external environment. These conditions can limit options, strain relationships, and complicate communication, making it harder to implement and sustain change initiatives effectively. 2. What features of a downturn can make managing organizational change more straightforward? Answer: An economic downturn generates uncertainty and fear. However, in these circumstances, people are often more readily convinced about the need for organizational change. Management do not necessarily have to make the case and explain: the daily news is already doing that job. This seems to have been the case at Sunderland where the challenging financial situation was the trigger for implementing innovative working practices. A downturn can make managing organizational change more straightforward by creating a sense of urgency, which can reduce resistance to change and foster a collective focus on survival. It may also streamline decision-making processes, as the need for efficiency becomes critical, and prioritize essential changes, helping to clarify objectives and eliminate non-essential activities. 3. Sunderland City Council introduced several changes to deal with the twin goals of maintaining services and reducing spending. What factors explain the success of their programme? Answer: Two factors contributed to the success of the transformation programme in this case - the ‘no layoffs’ policy, and innovative strategies to help staff to change jobs. The Council was clear that no jobs would be lost, and that staff would not be forced to accept early retirement or redeployment. The threat of layoff was thus removed. An ‘internal jobs market’ was created, so that staff in shrinking departments could apply for jobs in growing areas. This was based on a web-enabled assessment and job-matching system, linked to a retraining programme which covered personality, values, and potential as well as skill and knowledge. A new unit was set up to employ staff who could not find new roles, reducing the use of temporary staff, and providing internal problem solving and careers advisory services. Flexible working and a ‘be your own boss’ scheme gave staff additional freedoms, to reduce their working hours, or to set up their own businesses with Council support. Local employers could ‘borrow’ and pay for Council staff on secondment. With imagination and planning, therefore, managing change in a recession need not be difficult. The same basic guidelines apply: clear vision, management support, good planning, involvement. In addition, positive and negative messages have to be balanced. The creative strategies that management put in place seem to have increased employee commitment and motivation during difficult economic circumstances, and may be continued, should the economy return to normal. The success of Sunderland City Council's program can be attributed to clear leadership, effective communication, a strong focus on aligning change initiatives with the council's twin goals, and the engagement of stakeholders throughout the process. Additionally, their ability to prioritize key changes, foster collaboration across departments, and maintain a flexible approach to adapt to challenges likely contributed to achieving both service maintenance and cost reduction. EXERCISE 3.3 (p.791) Case Analysis: The Reputation Trap – Can You Escape? Our suggested responses to the three case questions are: 1. What does the case reveal about the challenges faced by successful businesses? Is it possible to be too successful? Answer: Successful businesses find it hard to change for a number of reasons. First, when a business is being successful it is hard to convince people in the organization that there is any reason to change. Not unreasonably, people are inclined to assume that there is a connection between what they do and how they do it, and their organization’s performance. It’s not just a case of “if it ain’t broke, don’t fix it,” it’s a case of, “if what we are currently doing is producing high performance, wouldn’t we be ‘shooting ourselves in the foot’ if we changed?” A business can be too successful in the sense that they might be so successful that the idea that they should change might seem preposterous. It is much more self-evident that poorly performing businesses should be the ones that need to change. If in doubt that a business can be too successful, consider the example of Kodak which was dominant in the camera and film industries and saw switching to digital imaging as a change that would put their dominance at risk. With such a huge investment in the status quo, change was seen as a huge gamble. However, after dominating their industries for half a century, by 2012 Kodak was bankrupt (see “Not a Good Kodak Moment” on p.149). The case reveals that successful businesses face challenges such as complacency, resistance to change, and the pressure to maintain their reputation. Success can create a "reputation trap," where fear of losing status or market position stifles innovation and adaptability. Yes, it is possible to be too successful if it leads to overconfidence, a reluctance to take risks, and an inability to respond effectively to new challenges or market shifts. 2. How does a successful organization determine whether an environmental change is a brief fad or fashion to be ignored or a development that requires a fundamental rethinking of the way in which it does business? Answer: There is no process that will guarantee the future of any organization. Strategic decision-making involves becoming as informed as possible and making decisions on that basis. A key part of the process is to make sure that a diverse range of views are sought. In particular, just relying on the views of those inside an organization can be very risky because these views may reflect an orthodoxy that prevails within the organization. This orthodoxy may provide a very good explanation of why the organization has been successful in the past but it may be a very poor guide to the basis for future success. Even if a new development is not a fad, existing players have to consider such factors as: •Is the change going to wipe out existing ways of competing? If this is not the case, there can still be a role for those competing in the traditional way (for example, some retail banking remains ‘shopfront’ rather than on line). The counter-example is video-streaming, eg, Netflix which has meant the demise of video stores, e.g., Blockbuster. •Should we develop a mix of approaches so that we offer both a traditional product and the new way (for example, retail banks retaining some shopfronts while adding on-line banking). •Do we have the capabilities to succeed even if we wanted to switch to competing in the ‘new way.’ If we don’t have such capabilities, should develop them internally or would we have to acquire them (e.g., by taking-over a business with the necessary expertise. A successful organization can determine whether an environmental change is a brief fad or a significant development by conducting thorough market analysis, monitoring trends over time, and assessing the impact of the change on its core business model and customer needs. Engaging in strategic foresight, seeking input from diverse stakeholders, and evaluating the long-term implications of the change are also crucial in deciding whether to adapt or stay the course. 3. What change issues does this case raise with regard to the significance of reputation? Answer: There is a clue in the vignette title. The notion of a ‘trap’ is a reference to the way in which becoming known for – indeed being seen as the exemplar of – a particular type of product is both a blessing and a curse. It’s a blessing when the market demand for the product with which you are associated is high, and a ‘chain around the neck’ when customer tastes change. This case/vignette provides an excellent example of how volatile the competitive environment can be. In late 2015, Chipotle was struck by a health crisis due to contamination of some of its fresh food. Both sales and share price dropped significantly as discussed in the following articles. http://www.wired.com/2016/01/chipotles-health-crisis-shows-fresh-food-comes-at-a-price/ http://fortune.com/2016/01/13/chipotle-ceo-ecoli-crisis-recovery/?iid=leftrail Chipotle has, in turn, been caught in a reputation trap because it is associated with fresh food and fresh food now raises questions in consumers’ minds about hygiene standards in food outlets promoting themselves as providing fresh food. This case highlights that a strong reputation can be both an asset and a liability. While it can protect an organization during challenging times, it can also create pressure to maintain the status quo, leading to resistance to necessary change. The case raises issues such as the risk of becoming too risk-averse, the difficulty of balancing reputation with innovation, and the challenge of evolving while preserving the organization's established identity. 4. What actions would you recommend be taken by Big Food and the fast food companies that have been caught in the reputation trap? Answer: The Chipotle crisis of late 2015 presented fast food outlets with a ‘free hit’ in regard to being able to promote the hygiene standards associated with fast food (as long as none of their outlets experience similar problems. However, it would be wise for fast food companies to not assume that the Chipotle crisis is the same thing as the demise of the fresh food movement. That is, a crisis is unlikely to be sufficient grounds for determining that something is a fad. Multiple crises would be needed before Chipotle-like dining could be consigned to the fad category. Even then, a radically different business model might emerge that was still using a version of ‘we’re fresh food, you’re not’ to attack the fast food industry. It seems that Big Food is facing a growing concern – at least within some of its markets – with processed food, food additives, sugar content, etc. Responses that Big Food might choose to take include (i) challenging the growing perception of the shortcomings of processed food and/or (ii) making changes to their products/product range to minimise the bases for criticism. I recommend that Big Food and fast food companies caught in the reputation trap take actions such as embracing transparency, prioritizing health and sustainability in their offerings, and actively engaging with consumer concerns. They should also invest in innovation to adapt to changing market demands, rebrand if necessary to align with current values, and diversify their product lines to stay relevant while maintaining their core identity. Solution Manual for Managing Organizational Change: A Multiple Perspectives Approach Ian Palmer, Richard Dunford, David A. Buchanan 9780073530536, 9780073404998