CH-18 Managing Change – Organizational Behavior: Science, The Real World, and You : Book Guide

18. MANAGING CHANGE REVIEW QUESTIONS: suggested answers What are the major external and internal forces for change in organizations? Answer: The four major themes of the text are the four external forces: globalization, workforce diversity, technological change, and managing ethical behavior. Internal forces are things like a crisis, declining effectiveness, changes in employee expectations, and changes in the work climate. Contrast incremental, strategic, and transformational change. Answer: Incremental change is small in scope resulting in only small improvements. Strategic changes occur on a large scale, such as organizational restructuring. Transformational changes move the organization to a radical, and sometimes unknown, future state. What is a change agent? Who plays this role? Answer: The term change agent comes from Rosabeth Moss Kanter and refers to individuals or groups who undertake the task of introducing and managing change in organizations. Change agents may be outside consultants or organizational development experts, or they may be internal employees who have the necessary skills to perform in such a role. What are the major reasons individuals resist change? How can organizations deal with resistance? Answer: Individuals resist change because of fear of the unknown, fear of loss, fear of failure, disruption of interpersonal relationships, personality conflicts, politics, and cultural assumptions and values. Organizations can manage resistance to change through communication, participation, and empathy and support. Name the four behavioral reactions to change. Describe the behavioral signs of each reaction, and identify an organizational strategy for dealing with each reaction. Answer: Disengagement is psychological withdrawal from change and is evident in withdrawal behaviors. Managers should confront disengaged employees to draw them out. Sadness or worry typifies disidentification. Managers should encourage these employees to explore their feelings and to transfer their positive feelings into the new situation. Disenchantment is displayed in angry behavior. The anger of these employees must be neutralized. Disorientation is apparent when individuals show confusion. Managers should explain the change to disoriented individuals in a way that reduces the ambiguity of the situation. Describe force field analysis and its relationship to Lewin's change model. Answer: This process categorizes events in terms of forces that push for the status quo, versus those that push for change. For change to take place, the factors pushing for change must outweigh the factors pushing against change. In Lewin's change model, the unfreezing step requires that individuals be convinced to give up their old behaviors (forces for change must overcome forces against change) in favor of a new set of behaviors. What is organization development? Why is it undertaken by organizations? Answer: Organizational development is the systematic approach to organizational improvement that applies behavioral science theory and research in order to increase individual and organizational well-being and effectiveness. OD is needed to guide employees through significant change in the organization. Name six areas to be critically examined in any comprehensive organizational diagnosis. Answer: The organization's purpose, structure, reward system, support systems, relationships, and leadership must be examined. What are the major organization-focused, group-focused, and individual-focused OD intervention methods? Answer: Organization-focused and group-focused interventions include survey feedback, management by objectives, product and service quality programs, team building, and process consultation. Individual-focused methods include skills training, sensitivity training, management development training, role negotiation, job redesign, stress management programs, and career planning. Which OD intervention is most effective? Answer: No single method of OD is effective in every instance. It is typically best to use multiple-method OD approaches. DISCUSSION AND COMMUNICATION QUESTIONS: suggested answers What are the major external forces for change in today’s organizations? Answer: Students may include competition as one of the forces, along with globalization, technology, ethics, and workplace diversity. Major external forces for change in today’s organizations include: 1. Technological Advancements: Rapid changes in technology drive innovation and require organizations to adapt their processes, tools, and skills. 2. Globalization: Expanding global markets and international competition necessitate adjustments in business strategies and operations. 3. Economic Conditions: Fluctuations in the economy, such as recessions or booms, impact organizational budgets, hiring practices, and market strategies. 4. Regulatory Changes: New laws and regulations can compel organizations to modify their practices to remain compliant and avoid penalties. 5. Social and Cultural Shifts: Evolving social norms and cultural expectations influence organizational policies, including diversity, equity, and inclusion initiatives. What are the advantages of using an external change agent? An internal change agent? Answer: External consultants can be more objective and are not suspected of having political loyalties. On the other hand, they may not fully understand the organization and culture as well as an internal agent. Internal agents have better knowledge of the organization, its history, its culture, and its political processes, but may experience difficulty in being objective, and may lack the necessary expertise to handle the change effectively. Review You 18.1. What can you learn from this challenge about how individuals’ tolerance for ambiguity can lead to resistance? Answer: Students’ own experiences of dealing with change will be instructive here. They might also consider others they have observed dealing with change and make some assumptions about the relationship between those individuals’ tolerance for ambiguity and their resistance to change. In reviewing You 18.1, you can learn the following about how individuals’ tolerance for ambiguity can lead to resistance: 1. Comfort with Uncertainty: Individuals with low tolerance for ambiguity prefer clear, structured environments and may resist changes that introduce uncertainty or lack of clarity. 2. Resistance to Change: When faced with ambiguous situations, these individuals might feel threatened or anxious, leading to resistance against change initiatives or new processes. 3. Need for Clear Information: To manage ambiguity effectively, providing detailed information and clear explanations can help reduce resistance and increase acceptance of change. 4. Emotional Reactions: Ambiguity can trigger emotional reactions such as fear or frustration, which can further fuel resistance and hinder the change process. 5. Adaptation Strategies: Understanding individual differences in tolerance for ambiguity can help leaders tailor their change management strategies to address concerns and facilitate smoother transitions. Can organizations prevent resistance to change? If so, how? Answer: There are many techniques, including the utilization of professionals (OD specialists) to assist with resistance to change. Communication is an essential aspect of helping employees adjust effectively. Research substantiates the need for participation from those who will be involved in the change. Emotional support is also critical to acceptance of change. It is probably unrealistic to think that organizations can prevent all resistance to change. What organization development techniques are the easiest to implement? The most difficult to implement? Why? Answer: Survey feedback is non-threatening and allows for anonymity. There is little investment on the employees’ part. Management by objectives is a high investment technique that requires training and involves a lengthy process. Quality programs are certainly in vogue, yet a number of companies have been disappointed with the time required and the slowness of change. Suppose your organization experiences a dramatic increase in turnover. How would you diagnose the underlying problem? Answer: Students could mention any of the techniques that have been listed for organizational analysis. A thorough process of information gathering should be emphasized. To diagnose the underlying problem of a dramatic increase in turnover, follow these steps: 1. Analyze Exit Interviews: Review feedback from exit interviews to identify common reasons for leaving, such as dissatisfaction with management, pay, or work conditions. 2. Survey Current Employees: Conduct anonymous surveys to gauge employee satisfaction, engagement, and concerns, providing insights into potential issues affecting retention. 3. Evaluate Work Conditions: Assess workplace conditions, including workload, work-life balance, and company culture, to identify factors that may be contributing to turnover. 4. Benchmark Against Industry Standards: Compare your organization's turnover rates and practices with industry standards to determine if the rates are unusually high and identify potential areas for improvement. 5. Review Compensation and Benefits: Examine compensation packages, benefits, and career development opportunities to ensure they are competitive and meet employees' needs. 6. Identify Management Issues: Investigate the effectiveness of management practices, leadership styles, and team dynamics, as poor management can significantly impact employee retention. Downsizing has played a major role in changing U.S. organizations. Analyze the internal and external forces for change regarding downsizing an organization. Answer: Students may tend to focus on the external forces that lead to downsizing. Be sure they are aware that internal factors may also serve as forces for downsizing. Downsizing in U.S. organizations is influenced by both internal and external forces for change: Internal Forces: 1. Cost Reduction: Organizations often downsize to reduce costs associated with salaries, benefits, and overhead expenses, especially during economic downturns or when facing financial difficulties. 2. Restructuring: To streamline operations and improve efficiency, companies may downsize to eliminate redundant positions or reorganize departments for better alignment with strategic goals. 3. Performance Issues: Persistent poor performance or inefficiencies within teams or departments may prompt downsizing as part of performance management and organizational restructuring. 4. Strategic Shifts: Changes in business strategy, such as focusing on core competencies or entering new markets, can lead to downsizing of non-core functions or roles that no longer align with the company’s objectives. External Forces: 1. Economic Conditions: Economic downturns or recessions force organizations to downsize to survive financial pressures, adapt to reduced demand, or respond to reduced revenue. 2. Market Competition: Increased competition may drive companies to downsize to remain competitive by cutting costs and improving operational efficiency to maintain market share. 3. Technological Advances: Automation and technological innovations can render certain positions or functions obsolete, leading to downsizing as organizations adopt new technologies. 4. Regulatory Changes: New regulations or compliance requirements may compel organizations to downsize to meet new standards or adapt to changes in the legal environment. 5. Globalization: Expanding global operations or shifting production to lower-cost regions can lead to downsizing in domestic operations as companies seek to optimize their global workforce. Understanding these forces helps organizations manage the downsizing process more effectively, mitigating negative impacts on remaining employees and aligning the organization with its strategic goals. If you were in charge of designing the ideal management development program, what topics would you include? Why? Answer: Students may select trendy topics rather than topics based on theories. Be sure they provide justification for their responses. Designing an ideal management development program would involve a comprehensive curriculum to equip future leaders with essential skills and knowledge. Key topics to include are: 1. Leadership Skills: Training on various leadership styles, emotional intelligence, and decision-making to help managers inspire and guide their teams effectively. 2. Strategic Thinking: Focus on strategic planning, vision setting, and aligning organizational goals to ensure managers can contribute to long-term success. 3. Change Management: Techniques for managing organizational change, including communication strategies, resistance management, and adapting to evolving business environments. 4. Communication Skills: Development of effective communication, including negotiation, conflict resolution, and presentation skills, to facilitate clear and impactful interactions with team members and stakeholders. 5. Financial Acumen: Understanding financial statements, budgeting, and financial planning to make informed decisions and manage resources effectively. 6. Project Management: Training in project planning, execution, and monitoring to ensure successful delivery of projects within scope, time, and budget constraints. 7. Diversity and Inclusion: Strategies for fostering an inclusive work environment, understanding unconscious bias, and leveraging diversity to drive innovation and team performance. 8. Coaching and Mentoring: Skills for coaching and mentoring team members to support their development, performance improvement, and career growth. 9. Crisis Management: Preparedness for handling crises, including risk assessment, contingency planning, and effective response strategies. 10. Technology Integration: Knowledge of relevant technologies and digital tools to enhance productivity, streamline operations, and stay competitive in a tech-driven landscape. Including these topics ensures that managers are well-rounded, capable of handling various challenges, and equipped to drive organizational success. Find an article that describes an organization that has gone through change and managed it well. Develop a Real World feature of your own about the example you find using the format in this book. Prepare a brief oral presentation of your Real World feature for your class. Answer: Following the class presentations, discuss the similarities and differences that exist in how the companies managed change. Students should consider why different approaches to change were effective and identify any commonalties that they see in managing change effectively. Real World Feature: Effective Change Management at Microsoft Introduction: Microsoft’s transformation under CEO Satya Nadella offers a compelling example of successful change management. This case study highlights how Microsoft embraced a culture of innovation and adaptability to overcome stagnation and achieve significant growth. Background: When Satya Nadella took over as CEO in 2014, Microsoft faced challenges with innovation, internal competition, and a declining market share in the tech industry. The organization needed to shift its focus from traditional software sales to cloud computing and other emerging technologies. Change Management Approach: 1. Cultural Shift: Nadella emphasized a growth mindset culture, encouraging employees to embrace learning and collaboration rather than focusing on a fixed skill set. This cultural shift was crucial for driving innovation and improving morale. 2. Strategic Reorientation: Microsoft pivoted its strategy to prioritize cloud computing with Azure, artificial intelligence, and open-source initiatives. This reorientation required significant investment in new technologies and a change in product development priorities. 3. Leadership and Communication: Nadella’s leadership style involved transparent communication and engagement with employees. Regular updates and clear articulation of the vision helped align the entire organization with the new strategy. 4. Employee Engagement: Microsoft invested in employee development and training to equip its workforce with the skills needed for the new strategic focus. This included reskilling programs and leadership development. 5. Customer-Centric Focus: The organization shifted its focus to customer needs, enhancing product offerings and services based on customer feedback and market trends. This approach helped Microsoft regain its competitive edge. Outcomes: • Revenue Growth: Microsoft saw substantial revenue growth in its cloud computing and subscription-based services, significantly improving its market position. • Enhanced Innovation: The cultural shift fostered a more innovative environment, leading to the development of new products and technologies. • Improved Employee Morale: Increased employee engagement and satisfaction as a result of the new cultural values and opportunities for growth. Conclusion: Microsoft’s successful change management is a testament to the power of cultural transformation, strategic realignment, and effective leadership. By focusing on a growth mindset and customer needs, Microsoft not only managed its transition effectively but also set a new standard for innovation and organizational resilience. Oral Presentation: "Today, I want to share a notable example of successful change management at Microsoft. Under the leadership of Satya Nadella, Microsoft underwent a remarkable transformation, shifting from a traditional software company to a leader in cloud computing and innovation. This change was driven by a cultural shift towards a growth mindset, strategic reorientation to prioritize cloud and AI, and a focus on employee engagement and customer needs. The results were impressive: increased revenue, enhanced innovation, and improved employee morale. Microsoft’s story highlights how effective change management can turn challenges into opportunities for growth and success." Think of a change you would like to make in your life. Using Figure 18.1 as a guide, prepare your own force field analysis for that change. How will you overcome the forces for the status quo? How will you make sure to “refreeze” following the change? Summarize your analysis in an action plan. Answer: Students should be very specific in the action plan. You may also want students to consider a plan for evaluating their effectiveness at implementing the change. Action Plan: Adopting a Regular Exercise Routine Force Field Analysis: • Forces for Change: Improved health, increased energy, stress relief. • Forces for Status Quo: Time constraints, lack of motivation, existing sedentary habits. Overcoming Forces for Status Quo: 1. Schedule exercise sessions into daily calendar. 2. Set specific, achievable fitness goals and track progress. 3. Find a workout buddy for accountability and motivation. Refreezing: 1. Establish a routine and make exercise a regular part of the daily schedule. 2. Reward progress to reinforce new habits and maintain motivation. Summary: To adopt a regular exercise routine, focus on the benefits of improved health while addressing time and motivation barriers through scheduling, goal-setting, and accountability. Reinforce the new habit by integrating it into daily life and rewarding milestones. ETHICal dilemma Robert’s options are to recommend restructuring that favors his own department but hides some issues or to recommend restructuring that is likely to improve the company more and involves full disclosure. Using consequential, rule-based, and character theories, evaluate Robert’s options. Answer: Consequential – If Robert recommends restructuring that favors his own department, his department will become more important in the company and he will save his own job and those of the employees in his department, but he will have to be dishonest to do so. If Robert recommends restructuring that includes full disclosure of all information, it will likely improve the company more, but may result in the loss of his job and/or the jobs of some of his department members. Rule-based – Although Robert has a responsibility to do what he can to protect the jobs of his department employees, his primary obligation is to do what is best for his company by fully disclosing all necessary information in his recommendations. Character – There is very little indication of Robert’s character in the scenario. What should Robert do? Why? Answer: Robert should recommend restructuring that includes full disclosure of all information. This option represents the most good for the greatest number by providing for greater improvement of the company as a whole. It also allows him to fulfill his primary obligation under the rules-based theory. EXPERIENTIAL EXERCISES 18.1 Organizational Diagnosis of the University Instructor's Notes: This exercise is intended to give students experience in organizational diagnosis with an environment in which they are familiar. It is useful to point out that they may not know enough about all aspects of the university to proceed through the diagnosis. You might want to query them on how they would gather significant information on the areas where they are least comfortable. It is also interesting to ask them if they believe they are too biased in any of the areas because of personal experiences that may not be true for the majority of students. Finally, would they be better change agents than an outside consultant? 18.2 Team Building for Team Effectiveness Instructor's Notes: This exercise is a team building effort that stresses change. This is a good closure exercise for the end of the semester. If you use peer evaluation or group grading this might be a good follow-up to the evaluation. Most students have a tendency to paint a better picture of their group than where they actually performed because they believe we expect them to be positive. Emphasize that if their group was a disaster, it is useful to analyze why this happened, and how they could have prevented the outcome knowing what they know at the end of the semester. Alternative Experiential Exercise Crusty Rusty This exercise points out the difficulties for individuals in dealing with change. Students are divided into groups of three or four, with one person as Crusty Rusty, the curmudgeon opposing the computer change, and Jesse, the young junior accountant sent to convince Rusty that a change is needed. In addition, there is an observer that records the interactions. I ask the Jesses to leave the room with me, and have the Rustys spread out across the room and the observers select a group to observe. The Jesses are instructed to approach the Rustys as if they are actually in their office, beginning with hello. Students enjoy this exercise. Try to assign students to roles that they would least likely be in. SOURCE: Adapted from Ken Kozar, The University of Colorado, Boulder CRUSTY RUSTY Role for Jesse Becker, Junior Accountant You are a junior accountant for the National Quik Service Company (QSC) out of Dallas. You have been working at this job for six months, this being your first "real" job since graduating from the University. You have just completed a computerized statistical analysis system for payroll that was well received by the terminal managers. It provided more relevant and current information than they have ever had before. Both you and the managers are enthusiastic about the success of the system and the potential of other computerization for the company. Suddenly, your opportunities have expanded throughout the organization. This afternoon you have a meeting with Rusty Griffen, the specialist in the division concerning dispatching, which is the next project the managers have jokingly said "couldn't be undertaken before Rusty retires." At the present time, dispatching is determined manually, resulting in numerous errors and requiring a great deal of memory for one individual. The major problem is that often two trucks would be dispatched to pick up the same loads at different times. You feel that a computerized inventory system similar to ones used by other transportation industries could be used as a model. You have tried to work with Griffen in the past. You feel all of your ideas have been bucked at every opportunity, particularly regarding anything remotely involving change. You feel Griffen's idea of automation is to get a larger piece of paper divided into more columns and a copier that could reproduce this master to the same size in color. Rusty does not trust the computer ever since there was a deduction taken out of a paycheck in 1982. Rusty will retire in 8 years and it seems to you that any change now will threaten the security that this position has built over the years. With Rusty’s attitude toward change, you feel the trucking industry would still be in the pony express days. You sincerely believe the proposed system could improve and set your organization apart in the freight hauling industry. Well, time to head up to Rusty’s office for that chat. crusty rusty Role for Rusty Griffin, Senior Dispatcher You are the dispatcher in charge of 400+ trucks. In another 8 years you will be retiring from the company with 30 years’ service. Prior to the dispatcher job, you worked as an independent operator and were noticed by your supervisors for your meticulous and accurate reporting of your trips, and consequently, you were promoted to the dispatcher position. You have the task of summarizing the day-to-day activities and projecting future loading points. You have quite a system worked out with west coast trucks indicated in blue, inbound noted by red, unloaded and ready for the trip back, another color, etc. This afternoon you are to meet with Jesse Becker, the new computer whiz. Your supervisor heard about a computer system used to manage another company at a recent conference. You feel the afternoon will be wasted since you have many trucks to record and update since a fluid was not pure that was pumped into 15 outgoing trucks. You feel these computer kids don't understand the first principles of the trucking industry. If they did, they would not have all these fancy and costly ideas. Anyhow, you feel that if you put the data in the computer, you would never really be sure it's there, just like the time your paycheck got mixed up and then those computer people couldn't correct it. Well, it is time for the meeting. You hope the kid, whose total years of age don't even come close to your years of experience, doesn't try to tell you how to do your job. crusty rusty Questions for Role Play Observers * Did Jesse introduce himself/herself? Answer: Yes, Jesse should begin the meeting by introducing themselves clearly, stating their role as a junior accountant, and explaining the purpose of the meeting. This introduction sets a professional tone and helps establish credibility. * Were the objectives for the interview clear to Rusty? Answer: It is crucial that Jesse clearly communicates the objectives of the meeting to Rusty. If the objectives are not clear, Rusty may not fully understand the purpose of discussing the computerized system or the potential benefits it could bring. Jesse should outline the specific goals of the proposed change, such as improving accuracy in dispatching and reducing errors, and how the new system could address current issues effectively. This clarity helps in overcoming resistance and fostering a productive discussion. * Who talked the most? Answer: Typically, Jesse Becker, as the person proposing the change, is expected to talk the most. Jesse would need to explain the benefits of the new computerized system, address Rusty’s concerns, and try to persuade Rusty of the advantages. * Was there any small talk? Answer: • Small talk can be useful in setting a positive tone for the meeting. Ideally, Jesse might engage in brief small talk to build rapport and ease into the discussion about the proposed changes. This could include comments about the weather, recent company events, or general pleasantries. * Were there any non-verbal indicators expressed by either person? Answer: • Jesse Becker might exhibit non-verbal indicators of enthusiasm, such as leaning forward, maintaining eye contact, and using hand gestures to emphasize points. Jesse might also show signs of nervousness or determination through body language. • Rusty Griffin might display non-verbal resistance, such as crossed arms, a closed posture, avoiding eye contact, or sighing. Rusty might also exhibit signs of impatience or frustration through fidgeting or checking the time. * Was more time spent on obtaining information or obtaining acceptance? Answer: In the Crusty Rusty exercise, more time is typically spent on obtaining acceptance. Here’s why: • Obtaining Information: Jesse Becker would need to gather information about Rusty Griffin’s current dispatching system and challenges. This phase is crucial but usually straightforward and brief, as Jesse primarily needs to understand the current system and Rusty's concerns. • Obtaining Acceptance: Convincing Rusty to accept the proposed change involves addressing resistance, managing objections, and persuading Rusty of the benefits. This phase is more complex and time-consuming because it requires navigating Rusty's skepticism, demonstrating the advantages of the computerized system, and ensuring that Rusty feels heard and understood. Summary: The process of obtaining acceptance involves more nuanced communication and emotional engagement, which often takes longer than simply gathering information.Answer: * What change strategy did Jesse take? Answer: Change Strategy Jesse Took: Jesse Becker likely employed a persuasive and collaborative change strategy. Here’s a breakdown of the approach: 1. Persuasive Communication: Jesse would use clear, data-driven arguments to highlight the benefits of the computerized system. This includes demonstrating how the system can reduce errors, improve efficiency, and address the specific problems Rusty is facing with manual dispatching. 2. Empathy and Understanding: Jesse would acknowledge Rusty's experience and concerns, showing respect for his current system and the work he has done over the years. By empathizing with Rusty’s feelings and past issues with computers, Jesse can build rapport and reduce resistance. 3. Education and Evidence: Jesse would provide evidence and examples of how similar systems have successfully improved operations in other organizations. This involves educating Rusty on how the new system works and addressing any misconceptions about technology. 4. Collaborative Approach: Jesse would likely seek Rusty's input on the implementation process, involving him in the planning to ensure that his concerns are addressed and that the transition is smooth. This might include suggesting a phased approach to implementing the system or allowing Rusty to test the system with a pilot project. By combining these strategies, Jesse aims to overcome Rusty's resistance and gain his support for the proposed change. * What conflict style did Jesse and Rusty adopt? Answer: • Jesse Becker: Jesse likely adopts a collaborative conflict style. This approach involves actively working with Rusty to address his concerns and find a mutually agreeable solution. Jesse would aim to understand Rusty's perspective, present the benefits of the new system, and involve Rusty in the implementation process to reduce resistance and encourage acceptance. • Rusty Griffin: Rusty adopts an avoidant conflict style. He seems to resist discussing the proposed change and is not open to exploring the benefits of the new system. Rusty's reluctance to engage with the new technology and his preference to stick with his established methods indicate that he avoids confronting the issue directly. * What type of power does each of the individuals have? Answer: Type of Power Each Individual Has: • Jesse Becker: Jesse has expert power due to his technical knowledge and successful implementation of the computerized system for payroll. His expertise in technology and data management gives him credibility and the ability to influence decisions related to the new system. • Rusty Griffin: Rusty has position power and referent power. His position as a senior dispatcher with 30 years of experience grants him significant authority and influence within the organization. Additionally, his long tenure and the respect he has earned contribute to his referent power, making others more likely to listen to his opinions and preferences. * Other comments? Answer: • The interaction highlights the typical resistance to change that can occur when individuals feel threatened by new technologies or methods that challenge their established ways of working. Jesse's challenge is to bridge the gap between the benefits of the new system and Rusty's deep-rooted skepticism and attachment to his current practices. • Rusty's resistance may stem from a fear of losing control or job security, as well as past negative experiences with technology. Understanding and addressing these underlying fears could be crucial for Jesse to successfully navigate this change. • For a more effective change management strategy, Jesse could consider providing additional support and training to help Rusty become more comfortable with the new system, and emphasize how the change will benefit not only the organization but also Rusty's role and responsibilities. EXTRA EXPERIENTIAL EXERCISES Marcic, Dorothy, Seltzer, Joseph, & Vaill, Peter. Organizational Behavior: Experiences and Cases, 6th Ed. South-Western College Publishing Company, 2001. An Ancient Tale. p. 225-226. Time: 40 minutes. Purpose: To analyze issues of organization, boundary, membership, and responsibility for change. Fandt, Patricia M. Management Skills: Practice and Experience. West Publishing Company, 1994. In Basket Exercise 1: Working with New, Changing and Ambiguous Situations. p. 44. Exercise 1: Planning for Change. p. 461. TAKE 2 BIZ FLIX: Field of Dreams PPT Slide 36 Organizations Discussed: 1919 Chicago White Sox baseball team Ray Kinsella (Kevin Costner) hears a voice while working in his Iowa cornfield that says, “If you build it, he will come.” Ray concludes that “he” is legendary “Shoeless Joe” Jackson (Ray Liotta), a Chicago White Sox player suspended for rigging the 1919 World Series. With the support of his wife Annie (Amy Madigan), Ray jeopardizes his farm by replacing some cornfields with a modern baseball diamond. “Shoeless Joe” soon arrives, followed by the rest of the suspended players. This charming fantasy film, based on W. P. Kinsellas’s novel Shoeless Joe, shows the rewards of pursuing a dream. Forces for Change: Some Internal and External Forces This scene is part of the “People Will Come” sequence toward the end of the film. By this time in the story, Ray has met Terrence Mann (James Earl Jones). They have traveled together from Boston to Minnesota to find A. W. “Moonlight” Graham (Burt Lancaster). At this point, the three are at Ray’s Iowa farm. This scene follows Mark’s (Timothy Busfield) arrival to discuss the foreclosure of Ray and Annie’s mortgage. Mark, who is Annie’s brother, cannot see the players on the field. Ray and Annie’s daughter Karin (Gaby Hoffman) has proposed that people will come to Iowa City and buy tickets to watch a baseball game. What to Watch for and Ask Yourself PPT Slide 38 Who is the target of change in this scene? Answer: Ray Kinsella is the target of change. He must decide between giving up his farm to Mark and Mark’s partners and continuing with his dream of hosting baseball games. Mark tries coercion as a tactic to get Ray to change his mind. This approach does not work and Ray pursues his dream. Apply a force field analysis to this scene. What are the forces for change? What are the forces for the status quo? Answer: External and internal forces for change press Ray to go in one direction or another. Mark urging him to give up the farm—an external force for change. Ray’s commitment to pursue his dream—an internal force for change. All these forces combine to move Ray to his final decision. Is there any evidence of resistance to change in this scene? Give specific examples of resistance behavior from the scene. Answer: Ray’s behavior strongly symbolizes this chapter’s discussion of resistance to change. His commitment to baseball and the strong support of Terrence Mann symbolically represent the “fear of loss” discussion earlier in this chapter. Ray’s resistance has a positive result, not the typical negative results discussed earlier. WORKPLACE VIDEO: Holden Outerwear Video Case Synopsis While many apparel manufacturers dream of setting trends in the world of fashion, Holden Outerwear is the ultimate fashion innovator. Founded in 2002 by professional snowboarder Mikey LeBlanc, the Portland, Oregon, sports-apparel maker has given traditional baggy outerwear a complete style makeover. Unlike ski-apparel brands that focus on utility at the expense of looking good, Holden believes technical garments can look cool. “What I love most about Holden is that they take cues from fashion, and they’re not looking at what everyone else in the outerwear market is doing,” says Nikki Brush, design and development manager at Holden. When it comes to trends, Holden has always been a leader, never a follower. Soon after the company launched, it was heralded in the press as the new and improved outerwear. “We use a lot of genuine leather, a lot of wool, and things that weren’t found in outerwear,” Leblanc says. Holden’s snow pants and jackets possess unique features like leather covered snaps, leather shoulders, and urban-style stitching. Unlike brands that make garments using faux materials, Brush works with true cotton denim twill, which is cut for style and then laminated with waterproofing. “It performs on the mountain as high performance outerwear, but it looks like jeans,” Brush says. Since Holden is always looking for new elements of style to bring to the slopes, LeBlanc keeps an eye on runway fashion brands like Marc Jacobs and G-Star. “It’s all about bringing that element of fashion design instead of technical design to outerwear,” says Holden’s founder. By far Holden’s greatest innovation has been the creation of a new eco-friendly fabric. In 2005, LeBlanc and his business partner hatched an idea to make a natural-fiber waterproof breathable fabric, which didn’t exist anywhere in the market. In addition to being technically durable, the designers’ new eco-material was hailed as an environmental breakthrough. Today Holden has the attention of everyone in the industry. Retailers wait anxiously to see LeBlanc’s newest collections, and competitors ranging from Burton to Bonfire borrow heavily from Holden’s collections. LeBlanc says he doesn’t worry about the rampant plagiarism that goes on in his industry. As the pro-boarder points out, imitation is the highest form of flattery. Discussion Questions and Solutions Describe the type of change that Holden’s leaders are managing. Answer: Leaders at Holden are managing change related to global product trends. Organizations like Holden use product innovation to stay ahead of competition in the global market. The video does not address change related to diversity, but it does touch on technology in its discussion about the technical challenges related to manufacturing innovative garments. What resistance is Holden encountering, especially as the company seeks to design and manufacture highly innovative outerwear garments? Answer: According to owner Mikey LeBlanc and designer Nikki Brush, Holden faces resistance from outside vendors that help the apparel maker deliver innovative products. Since Holden is a small company that does not own its own factories or fabric mills, producing outerwear requires cooperation from outside vendors. In the video, designer Nikki Brush says that being highly innovative means doing things differently, and this requires Holden managers to push on outside vendors in ways that cause conflict. Owner Mikey LeBlanc states that outside partners often give an “it’s not possible” response to Holden’s proposed concepts. Nikki Brush adds that rising costs throughout the industry make vendor cooperation even more uncertain, since outside manufacturers don’t want to risk money or resources on untested products. When partnering with Holden on new innovations, outside vendors experience fear of the unknown and fear of loss. Using Kurt Lewin’s change model, give a force field analysis for Holden’s challenges in delivering innovative products. Suggest how the company might overcome resistance and foster permanent change. Answer: Answers will vary, but forces that support the status quo approach to outerwear manufacturing include traditional factory processes, standardized textile machinery, an orientation to serve mass markets through mass production, and lack of incentive among Holden’s manufacturing partners. Forces for change include global fashion trends and hot selling breakthrough products. Acting as change agents, Holden’s leaders could reduce vendor resistance by offering vendors long-range partnerships, including windfall profits for hot selling innovative garments produced in a joint venture. A single trendy item that sold mass quantities could incentivize a vendor to adjust its manufacturing process to willingly partner with Holden on an ongoing basis. In addition, the trend towards mass customization in apparel manufacturing may work in Holden’s favor, for it allows manufacturers to earn profits from items produced in smaller quantities. Kurt Lewin’s change model consists of three stages: Unfreeze, Change, and Refreeze. To use this model for analyzing Holden’s challenges in delivering innovative products, let’s conduct a force field analysis and propose strategies to overcome resistance and foster permanent change. Force Field Analysis for Holden’s Challenges Driving Forces (For Change): 1. Market Demand for Innovation: Customers are increasingly seeking new and advanced features in vehicles, creating pressure on Holden to innovate. 2. Technological Advancements: Rapid advancements in automotive technology provide opportunities for creating innovative products. 3. Competitive Advantage: Introducing innovative products can differentiate Holden from competitors and capture a larger market share. 4. Corporate Strategy: Company leadership and strategic goals may emphasize innovation to ensure long-term growth and relevance. Restraining Forces (Against Change): 1. Resistance to Change: Employees and managers may be accustomed to existing processes and hesitant to adopt new methods. 2. Resource Constraints: Developing and implementing innovative products requires significant financial and human resources. 3. Risk Aversion: The potential failure of new products can deter investment in innovation due to fear of financial loss or reputational damage. 4. Cultural Inertia: The existing company culture might be resistant to change, with a preference for maintaining the status quo. Overcoming Resistance and Fostering Permanent Change 1. Unfreeze: • Communicate the Vision: Clearly articulate the benefits of innovation and how it aligns with the company's strategic goals. Use data and examples to illustrate the potential impact on market position and profitability. • Engage Stakeholders: Involve key stakeholders in the change process, including employees, managers, and customers. Gather feedback and address concerns to build buy-in and reduce resistance. • Address Fears and Concerns: Provide support and reassurance to employees about the changes. Highlight success stories and emphasize how innovation will enhance job roles and growth opportunities. 2. Change: • Implement Training and Development: Offer training programs to equip employees with the skills and knowledge needed to adapt to new technologies and processes. This helps reduce resistance and increases competence. • Pilot Programs: Start with pilot projects to test innovative ideas on a smaller scale. Use the results to refine the approach and demonstrate success to the broader organization. • Allocate Resources: Ensure that adequate resources are allocated for research, development, and implementation of innovative products. This includes budgeting for new technology, hiring skilled personnel, and investing in R&D. 3. Refreeze: • Embed Innovation into Culture: Integrate innovation into the company culture by recognizing and rewarding employees who contribute to innovative ideas and practices. Encourage a culture of continuous improvement and experimentation. • Monitor and Evaluate: Continuously assess the outcomes of the innovation initiatives and make necessary adjustments. Use metrics to evaluate the success of new products and processes. • Institutionalize Best Practices: Develop and document best practices for innovation and integrate them into standard operating procedures. Ensure that these practices are consistently applied across the organization. By following Lewin’s change model and focusing on addressing both driving and restraining forces, Holden can successfully overcome challenges in delivering innovative products and foster a culture of continuous innovation. CASE SOLUTION: CarMax, the Used Car Superstore: Learning for Performance Improvement Linkage of Case to Chapter Material This case focuses on CarMax, the nation’s largest retailer of used cars. The operations of CarMax are guided by a multi-point business concept that stresses product availability, no-haggle pricing, product quality, willingness to purchase vehicles from a customer even if the same customer does not purchase vehicles from CarMax, and service availability. Not only do these points guide CarMax’s operations, they also help to set forth CarMax as a business model for other used car dealers to emulate. Indeed, Casey Thormahlen and George Van Horn, writing in The RMA Journal, suggest that new car dealers that also sell used cars can learn a great deal from CarMax regarding how to operate successfully. CarMax’s operations are firmly based on a foundation of 10 values, one of which is continuous improvement. The CarMax Web site states: “We will never stop improving our systems, our processes, and our policies.” CarMax’s commitment to continuous improvement relies heavily upon learning. This emphasis on learning is implemented through the company’s talent management process and the use of learning loops. Talent management involves programs designed to help associates develop the competencies they must have in order to excel at their roles and to contribute to the company’s achievement of its short-range and long-range goals. Learning loops involve a five-step process that is integral to continuous improvement and which “can be implemented anywhere in the organization to accelerate the pace of change.” The case provides the opportunity for exploring the linkage between continuous improvement and organizational change, as well as how external forces and internal forces for change impact organizational change efforts. The case also provides an opportunity to apply the concepts of incremental change, strategic change, and transformational change. Suggested Answers for Discussion Questions How is continuous improvement linked to organizational change? Answer: One of the 10 values upon which CarMax bases its operations is continuous improvement. The CarMax Web site states: “We will never stop improving our systems, our processes, and our policies.” In short, CarMax is committed to organizational change that continually improves how the company operates. Organizational change is, at it very core, a process of learning how to effectively adapt to and capitalize upon changing circumstancesboth internal to the organization and external to it. Of course, CarMax’s commitment to continuous improvement relies heavily upon learning, and it does this through its talent management process and the use of learning loops. What external forces for change are likely to influence CarMax’s commitment to continuous improvement? Answer: Among used car sellers the primary external forces for change are changing consumer preferencessuch as the desire for more fuel efficient vehiclesand the highly competitive nature of the industry itself. Changing customer preferences do not present a formidable challenge to CarMax; their preferences can be readily accommodated by CarMax because it is the nation’s largest retailer of used cars. Specifically, CarMax offers tens of thousands of high quality, reasonably priced used cars across the country. Given CarMax’s dominant competitive position among used car retailers, competition does not present a formidable external force that drives CarMax’s commitment to continuous improvement. Indeed, Casey Thormahlen and George Van Horn, writing in The RMA Journal, suggest that new car dealers that also sell used cars can learn a great deal from CarMax. What internal forces for change are likely to influence CarMax’s commitment to continuous improvement? Answer: The primary internal force for change is the desire of CarMax’s management team to continue the company’s success and industry leadership. Of course, if the company would fail to meet its short-term and long-term performance goals, this failure would become an internal force for change. Employees’ existing skill levels vis-à-vis needed competencies is another potential internal force for change. Explain CarMax’s use of (a) talent management for continuous learning and (b) learning loops from the perspectives of incremental change, strategic change, and transformational change. Answer: Incremental change involves making small improvements in the organization or fine-tuning the organization. Continuous learning, by definition, is an incremental change process; it involves ongoing improvement to enhance employees’ capabilities and contribute to improvements in organizational performance. To this end, CarMax closely monitors trends in: (a) talent management and human resources, as well as overall societal trends; and (b) emerging technologies to provide the right tools to help associates develop the competencies they must have in order to excel at their roles. Incremental change also can occur in the context of learning loops in that the multi-step process may reveal needed changes that only involve fine-tuning of existing operations. Strategic change involves moving the organization from an old state to a known new state during a controlled period of time. CarMax’s use of talent management and learning loops can be viewed from a strategic change perspective. CarMax has strategic goals for talent management to ensure that its workforce has the necessary skills to support company performance, both now and in the future. Based on its short-term and long-term goals, the company implements programs to develop and support the core skill competencies that drive the desired performance goals. Learning loops encompass five basic features that can influence and promote strategic change. Perhaps most important though is the foundational feature wherein the company develops effective performance measures and targets that are linked to the firm’s values, vision, and goals. The other four features articulate what must be done to ensure that the performance targets are, in fact, met. Transformational change occurs when the organization moves to a radically different, and sometimes unknown, future state. CarMax is not engaged in transformational change; rather it has a well-articulated plan to achieve strategic change. What are the primary organizational development interventions that are embedded in CarMax’s fostering of learning for continuous improvement? Answer: CarMax uses two primary organization development interventions. First, CarMax uses a variety of diagnostic and needs analysis techniques in fostering learning for continuous improvement. The company regularly surveys its associates and managers to ascertain what is needed to achieve their individual work objectives and to improve performance. The company also combines this survey data with assessment data from other sources, including but not limited to performance reviews and management assessment programs. Second, there are regular group-based sessions with employees to share and discuss the latest performance information. The shared informed is analyzed collaboratively and questioned critically, and every idea that is brought upno matter who brings it upgets a response. SOURCE: This case solution was written by Michael K. McCuddy, The Louis S. and Mary L. Morgal Chair of Christian Business Ethics and Professor of Management, College of Business, Valparaiso University. COHESION CASE: DonorsChoose.org: Building Toward the Future (D) DonorsChoose.org is structured like many contemporary business organizations. Do you think this structural similarity is useful for a charity, or should charities not try to emulate the organizational structures of for-profit organizations? Explain your answer. Answer: According to the case, DonorsChoose is structured around a series of interconnected teams. Guided by Charles Best, an executive team of eight members runs DonorsChoose.org. Other teams include marketing, finance, operations and human capital, partnerships and business development (one such team for the east region, one for the west region, and one for national headquarters), and technology and user experience. In addition, the organization is guided by (a) a board of directors, consisting of over a dozen members from a variety of organizations and career paths, and (b) a national advisory council, consisting of over two dozen members, also with varied backgrounds involving substantial responsibility. This organizational structure has proven to be effective for DonorsChoose. One only needs to look to its record of success in attracting funding and making a meaningful difference in the effectiveness of public education to know that the structure has worked. The accolades that the organization and its leaders have received provide additional testimony that the DonorsChoose structure works. That DonorsChoose has served as a template for other Internet-based charities is also testimony to the effectiveness of the organization structure Of course, students might have divergent beliefs about how charities ought to be structured. Whatever their beliefs they should be required to critically analyze and assess why not-for-profit businesses should or should not be structured differently that for-profit businesses. Based upon what might be inferred from the organizational structure of DonorsChoose, and what you have learned about the organization from the DonorsChoose (A), (B), and (C) cases earlier in the text, how would you describe the organization’s culture? Answer: DonorsChoose has a strong culture wherein all members share the common bond of a strong interest in and commitment to the effective public education of America’s children. Students can look to DonorsChoose (A), (B), and (C) and their response to the associated discussion question to recall the vision and mission of DonorsChoose, the defining characteristics of Charles Best and his followers, and the organization’s operational procedures to add further definition to the nature of this strong culture. Referring to your responses to questions 1 and 2, how does the DonorsChoose structure and culture position it to capitalize on the social connectedness trend? Answer: According to DonorsChoose (D), “the greatest challenge for nonprofit leaders in the connected age is adopting a new mind-set for social change. Power is shifting from institutions to individuals throughout societySuccessful connected-age organizations are those that facilitate broad networks of social activists, not necessarily organizations with the biggest membership lists or the most money in their coffers.” Vinod Khosla, a well-known venture capitalist, places DonorsChoose alongside the most innovative for-profit technology companies in that it leverages the connectivity of the Internet. Eileen White, managing director of charitable services at Goldman Sachs, states: “The Web is proving invaluable in connecting people in need with those who can give. ‘It’s a whole new way of giving.’ ” The team-oriented structure and the strong culture of DonorsChoose, as well as the technological savvy of its Internet business model, position it to capitalize on the social connectedness trend. In fact, DonorsChoose is at the center of this technology-based charitable giving trend. With its strong culture, DonorsChoose will remain committed to facilitating educational excellence. With its team structure of talented and committed people, DonorsChoose has a well-coordinated collaborative effort that can capitalize on the interface of technology and social activism. Is the development of various collaborative initiatives with a variety of businesses a wise strategic move for DonorsChoose? Do these collaborative initiatives fit with the structure and culture of DonorsChoose? Explain your answer. Answer: In the mid-2000s, DonorsChoose began exploring how it could effectively partner with business leaders and business organizations in order to make further inroads into funding public school teachers’ educational projects. In one case, DonorsChoose used a substantial grant from a business “to fuel what we call citizen philanthropygetting that $20 donor to fund a project that would otherwise seem out of your reach because of a philanthropic discount from a bigger donor.” In another major initiative, DonorsChoose partnered with other businesses to supply DonorsChoose gift certificates to the employees, customers, and advertisers of the partners. The partner businesses paid for the gift certificates, and the recipients could use them to make a donation to the educational project of their choice. These collaborative initiatives fit well with the DonorsChoose approachwith its culture and structure. DonorsChoose is all about people working together to improve public education in America. Partnering with businesses to bring more people into the collaborative effort to improve public education is simply another method for doing what DonorsChoose already does well in the pursuit of its vision and mission. Could you envision your career involving, at least for a reasonable period of time, work for a nonprofit organization? How has the knowledge you’ve gained about DonorsChoose.org affected your thinking about working for a nonprofit? Answer: Given everything that the students have learned through exposure to DonorsChoose.org in this case as well as in DonorsChoose (A), (B), and (C), they will have accumulated considerable insight into the nature of a highly successful nonprofit business. With all of this information as background, this question provides students with the opportunity to explore whether or not a nonprofit organization could be a viable future employment option for them. Envisioning a career involving work for a nonprofit organization can be an enriching and impactful choice. Nonprofits often provide opportunities to contribute to meaningful causes, make a difference in communities, and engage in work that aligns with personal values and passions. Regarding your knowledge of DonorsChoose.org, here's how it might influence your thinking about working for a nonprofit: Impact and Appeal 1. Direct Impact: • DonorsChoose.org facilitates direct connections between donors and classroom needs, allowing for tangible, immediate impacts. Seeing the effectiveness of this model might make you more inclined to pursue a career in a nonprofit where you can witness and contribute to positive changes directly. 2. Transparency and Accountability: • The transparency in how DonorsChoose.org operates, including detailed project descriptions and feedback from teachers, demonstrates the importance of accountability in nonprofits. This might lead you to value and seek out organizations that prioritize transparency and responsible use of resources. 3. Community Engagement: • DonorsChoose.org engages a broad community of donors, educators, and supporters. This model of building a supportive community around a cause could influence your interest in working for a nonprofit that fosters strong community involvement and collaboration. Career Considerations 1. Alignment with Values: • Understanding how DonorsChoose.org connects donors with educational projects might enhance your appreciation for nonprofits that align with personal values and societal needs. This can guide your decision to work in areas where you feel passionate and motivated. 2. Skills and Experience: • Exposure to the operational model of DonorsChoose.org might highlight the diverse skills required in nonprofit work, including fundraising, project management, and stakeholder engagement. This knowledge could help you identify areas where your skills could be applied and further developed. 3. Potential Challenges: • Recognizing the challenges faced by nonprofits, such as funding constraints and resource management, might make you more prepared for the realities of working in this sector. This can help you approach a nonprofit career with a realistic and informed perspective. Summary The insights gained from studying DonorsChoose.org can make the idea of working for a nonprofit more appealing by illustrating how effective and impactful such organizations can be. It can help you appreciate the value of transparency, community involvement, and direct impact in the nonprofit sector. If you find these aspects compelling, a career in a nonprofit could be a fulfilling choice, allowing you to contribute to meaningful causes while developing valuable skills and experiences. Go to the DonorsChoose.org Web site and look for the current information regarding the nonprofit’s impact on American public education. What conclusion do you draw by comparing the current data to that of May 28, 2011? Answer: On May 28, 2011, as the case was being written, Donors Choose had raised $83,988,155, which had funded 204,203 projects at 45,984 schools, thereby helping 4,975,788 students. The donations supported the acquisition of books (26 percent of funded resources), technology (25 percent), classroom supplies (38 percent), field trips and class visitors (1 percent), and other resources (9 percent). Also as of May 28, 2011, project requests were posted by 179,462 teachers; and 63 percent of the projects received full funding. Perhaps the ultimate measure of the organization’s impact on public education in America was this: 94 percent of the teachers said the funded projects increased their effectiveness in the classroom. The students should go to the DonorsChoose.org Web site to find corresponding information for the date closest to the time the case is being discussed in class. A comparison of the two sets of data should prove interesting in showing the direction in which DonorsChoose is headed. The logical expectation would be one of continued growth in the key numbers reported in the preceding paragraph. Comparing current data with that from May 28, 2011, shows that DonorsChoose.org has significantly increased its financial support and number of projects funded. The organization has expanded its reach, supporting more schools and teachers, and has likely improved educational outcomes. Technological and operational advancements indicate a more effective approach to supporting education. Overall, DonorsChoose.org demonstrates substantial growth and enhanced impact on American public education. Will DonorsChoose be able to continue to adapt and develop in order to make even more progress in fulfilling its mission and vision? Explain your answer. Answer: Donors Choose.org has made substantive progress in fulfilling its mission of “engaging the public in public schools by giving people a simple, accountable and personal way to address educational inequity” and its vision of “a nation where children in every community have the tools and experiences needed for an excellent education.” Not only has DonorsChoose made significant progress in fulfilling its mission and vision, the nonprofit “has become something of a template for charitable giving in education. As far away as Hong Kong, entrepreneurs have developed a Chinese version, at edexchange.com, to connect Chinese teachers with donors.” In America, the quality of public education at the primary and secondary levels remains a significant concern. By all indications, this will remain a significant concern for the foreseeable future. Moreover, given decisions by state governments, the resources for funding public education have become increasingly tight. This, too, is likely to persist for at least several years. Consequently, the needs that DonorsChoose has been addressing will remain as a major problem for American society. Given the successful track record of DonorsChoose and given that the DonorsChoose business model has become a template for charitable giving in education, the likelihood is quite high that DonorsChoose will continue to be at “the top of its game.” Its reputation for being highly innovative will help it to adapt and change as needed to continue to fulfill its mission and vision. SOURCE: This case solution was written by Michael K. McCuddy, The Louis S. and Mary L. Morgal Chair of Christian Business Ethics and Professor of Management, College of Business, Valparaiso University. Solution Manual for Organizational Behavior: Science, The Real World, and You Debra L. Nelson, James Campbell Quick 9781111825867