Chapter 18: Managing Change and Stress

Seminar 10
* Forces of Change Need for Change
- External forces: originate outside the organization and hence have
global effect cause org to question the essence of its business
and business processes.
+ Key External Forces for Change
1) Demographics characteristics: Aging workforce and also more
females critically important that organizations effectively manage
diversity if they are to receive maximum contribution and
commitment from employees. (E.g. Toyota facing increasing
competition after replacement of aging workforce in USA)
2) Technological Advancements: With organizations increasingly
using technology to improve productivity and competitiveness,
technological advances are probably one of the biggest forces for
change. (E.g. Automation of production and services)
3) Market changes, Shareholders, Customers: The emergence
of a global economy is forcing companies to create cooperative
partnerships with suppliers and unions. New opportunities emerging
from the European Union and growth of the Chinese economy;
Shareholders now have say on employers pay (E.g. Aflac);
increasing customer sophistication requires org to deliver higher
value in their products and services (McDonalds customers
feedback on menus)
4) Social and political pressuresworld politics, wars, corporate
scandals, 9/11create the need for change because so many facets
of our economy are interrelated and thus are affected. Examples
include the airline industry, limited ability for acquiring foreign
talent due to visa restrictions, and regulatory and justice
department action such as the Sarbanes Oxley act as a result of the
collapse of Enron. The Green Movement also affecting companies
-Internal Forces for Change: comes from inside org may be
subtle or can manifest in outward signs such as rampant conflict.
+ Key Internal Forces for Change
1) Human Resources Problem/Prospects:
Stems from
employees perceptions about how they are treated at work and
match between individuals and organizations need and desire.
(Republic Windows and Doors Chicago Plant fired employees
staged sit-in for severance package) Job dissatisfaction and unusual
levels of absenteeism and turnover are symptoms of underlying
problems that necessitate change. Use job design and reduce role
ambiguity and conflict. Prospects for positive change stem from
employee participation and suggestions.
2) Managerial Behavior/ Decisions: excessive interpersonal
conflict between employees and managers and decisions such as
those that create inequitable reward systems, can be a driving force
behind
high
turnover,
strikes,
absenteeism,
sabotage,
communication and decision-making breakdowns, reorganizations,
and unhealthy competitiveness within organizations. All of these

Chapter 18: Managing Change and Stress

are indicators that organizations need to make changes either use
leadership training or change reward systems.

* Types of Change (P C Nutt, 1986)

* Lewins Change Model (1951)

- Five assumptions of Lewins Change Model: (E H Schein, 1980)
The change process involves learning something new, as well
as
discontinuing
current
attitudes,
behaviors,
and
organizational practices.
Change will not occur unless there is motivation to change.
People are the hub of all organizational changes.
Resistance to change is found even when the goals are highly
desirable.
Effective change requires reinforcing new behaviors, attitudes,
and organizational practices.
- Three Stages of Change
+ Unfreezing stage is to create the motivation to change. At this
stage, individuals are encouraged to replace old behaviors and
attitudes with the new desired behaviors and attitudes. The could
be brought about, for example, by comparing your firm with a major
competitor and finding out they are more efficient, more profitable,
and
more
successful
at
retaining
talented
employees
(benchmarking). Also need to devise ways to reduce barriers to
change.
+ Changing stage involves learning new information, models, or
perspectives to help employees embrace new preferred concepts or
points of view. Strategies used are to offer employee development
seminars and other types of training or to hire different people to

Chapter 18: Managing Change and Stress

perform certain functions within the organization. In essence,
change should be targeted at some kind of end result.
+ Refreezing is to support and reinforce the change. This can be
done by helping employees integrates the changed behavior or
attitude into normal procedures. Allow employees chance to exhibit
new behaviors or attitudes positive reinforcement additional
coaching. Coupled with usage of extrinsic rewards.
* Systems Model of Change
- Takes big picture perspective of organizational change.
- Based on notion that any change, regardless of magnitude, will
have repercussion across whole organisation.
- Provides a framework for diagnosing what to change and how to
evaluate the success of a change effort
- Can be used to either used as a) an aid during the strategic
planning process to determine vision, target elements or devise
action plans b) a diagnostic framework to determine causes of org
problem and devise solution.
- A System Model of Change (D R Fuqua, 1989)

- Input: Need for Mission (overall purpose) and Vision (key

objectives) and also SWOT analysis.
- Strategic Plans: Long Term Plans derived from SWOT analysis.
- Target Element of Change: Components of Org that may be
changed. Can be used to diagnose problems and to identify changerelated solution.

Chapter 18: Managing Change and Stress

+ Change ripple across organization
+ Org change more likely to succeed when managers proactively
consider impact of change.
- Outputs: desired end result change. Should be consistent with an
orgs strategic plans. Org-level of change more complicated and
difficult to manage as they impact multiple target element of
change.
* Kotters 8 Steps for Leading Org Change (1996)
- Identified ineffective leadership of change efforts as being the
main cause of failed change initiatives. Therefore, he proposed an
eight-step process for leading change.
- Subsume Lewins Model of Change: 1st 4 Steps represent
unfreezing; Step 5,6,7 represents changing, Step 8 represents
represent refreezing.
- Provide specific recommendations but not effective when steps are
skipped and must be careful of mistakes at initial steps (Yahoo ExCEO Jerry Yang miss step 7)
- E.g. MasterCards Global Talent Management and Development
Group, 2008
1. Establish Sense of Unfreeze the organization by creating a
Urgency
compelling reason for why change
needed
2. Create the guiding Create cross-functional, cross-level group
coalition
of people powerful enough to lead
change
3. Develop a vision and Create a vision and strategic plan to
strategy
guide change process
4.
Communicate Create and implement a communication
change-vision
strategy that consistently communicates
the new vision and strategic plan
5.
Empower
broad- Eliminates barriers to change, use target
based action
elements of change to transform the
organization. Encourage risk-taking and
creative problem-solving
6.Generate Short Term Plan for and create short -term wins or
Wins
improvement. Recognize and reward
people who contributes to wins
7.Consolidate gains and The guiding coalition uses credibility from
produce more change
short-term wins to create change.
Additional people are brought into the
change process as change cascades
throughout the organization. Attempts
made to reinvigorate change process
8. Anchor new approach Reinforce the change by highlighting the
in culture
connections between new behaviors and
processes and org success. Develop
methods
to
ensure
leadership
development and succession

Chapter 18: Managing Change and Stress

* Organizational Development
- Set of techniques or tools that is used to implement organizational
change
- Provides a much broader perspective of change rather than
structured sequence like Kotters or Lewins, more similar to
Systems Model of Change in its diagnostic nature.
- Put into practice by change agentsomeone who is a catalyst in
helping org to deal with old problems in new ways. Can be external
consultant or internal staff.
- Model adapted from W L French, 1978

1. Diagnosis: Could use variety of data gathering techniques

such as interviews, surveys, observation, etc. Recommended
to use target elements of change in systems model of change
as vehicle to develop diagnostic questions aimed at
identifying causes
2. Intervention: Determine the treatment that will actually
address the cause of the problem. Use contingency approach
to select intervention.
3. Evaluation: Develop measures and metrics to monitor the
impact of the change.
4. Feedback: If evaluation positive, need to think of how to
refreeze changes; if negative either initial diagnosis wrong or
intervention method not effective.
- Implications and Takeaway
1. Planned organizational change works. However, change agent
recommended to rely on multifaceted interventions.
2. Change programs more successful when they are geared
toward meeting both short-term and long-term results. Do not
change for change sake.
3. Organizational change more likely to succeed when top
management truly committed to change process and desired
goals.
4. Effectiveness of OD affected by cross-cultural considerations.

Chapter 18: Managing Change and Stress

* Causes of Resistance to Change
- Resistance to change is an emotional or behavioral response to
real or imagined work changes that are threats to established work
culture.

- Recipients Characteristics
1.Individual predisposition toward change. some people are
more prone to adapt to change than others. This characteristic of
adaptability comes from past experiences with change and an
overall optimism or cynicism that an individual may have. The
individuals frame of reference or specific situation will determine
the extent to which he or she will embrace the change. Those with a
positive self-concept and tolerance for risk more likely to be
resilience to change. Also, most of us would agree that we just
prefer things that are familiar and that its hard to break a habit
even if it would be good for us. (C R Wanberg, 2000)
2. Surprise and fear of the unknown. Individuals are not sure
the change will work to their advantage and that it will be good for
them.
3. Fear of failure. Intimidating changes on job can cause
employees to doubt their abilities. Self-doubt erodes self-confidence
and cripples emotional growth and development.
4. Loss of Status and Job Security. Addresses the basic human
desire not to lose power that an organizational change might cause.
In addition, the structure and norms of behaviors within and across
functional areas may be upset causing a new set of relationships
that need to be developed. If norms are very ingrained and the
organizational change influences these norms, people will resist the
change because predictable modes of behavior become
unpredictable. In other words, people knew how to get things done
and now that has changed.

Chapter 18: Managing Change and Stress

5. Peer Pressure. Occurs when people you work with are resistant
to change, and it may be hard to behave differently w/o harming
relationship with them.
6. Past successes. Can breed complacency so people dont feel
the motivation to change. It also foster stubbornness to change as
people question the need to change what is working in the past.
- Change Agents Characteristics
1. Disruption of cultural traditions and/or group
relationships. Whenever individuals are transferred, promoted or
resigned, cultural and group dynamics are thrown into
disequilibrium. (E.g. Nobuyuki Idei, Sony CEO asking 6 corporate
officers to resign after appointment of foreign CEO, 2005)
2. Personality Conflict. Personality of the change agent conflicts
with the receiver of change, it can be an obstacle. Traits of bad
leadership more likely to breed resistance from recipents.
3. Lack of Tact/ Poor Timing. Undue resistance can occur because
change agent introduce change in an insensitive manner or
awkward time need to explain strategic importance of change to
organization success to employees.
4. Leadership Style. People less likely to resist change when
transformational leadership style is adopted. (D M Harold et al,
2008)
5. Failing to legitimize change. Recipients must internalize
change before being truly accepted. Active, honest and reinforcing
rewards system is needed.
- Change-Agent Recipient Relationship
Climate of mistrust can be caused by a lack of information. When
people dont understand the need or reason for the change, they
will be less likely to embrace it. Also, if the change seems arbitrary,
unreasonable, or for self-serving reasons, it may cause resentment
towards the person who is initiating it. The concerns of the people
whose lives are being changed are a major factor in doing it well.

* Overcoming Resistance to change (J P Kotter, 1979)

Chapter 18: Managing Change and Stress

* Stress
-Stress is defined as a behavioral, physical, or psychological
response to stressors
-Stress is not merely nervous tension; stress can be positive
(Eustress)

- Cognitive Appraisal of Stressors

+ Primary Appraisal: determining whether a stressor is irrelevant,
positive, or stressful

Chapter 18: Managing Change and Stress

+ Secondary Appraisal: assessing what might and can be done to

reduce stress
- Coping Strategies
a) Control: directly confronts or solve problems
+ Control coping positively related to overall health outcome (Metaanalysis of 34 studies of > 4000 people 2002)
+ More likely to be utilized by people who possess high self-esteem,
self-efficacy, and problem solving skills (J C Hellmuth, 2009)
b) Escape Strategy: avoiding or ignoring the stressors and problems
+ Behaviors and cognitions are used to avoid or escape the
situations
+ Either passively accept or avoid confrontation of causes of stress
c) Symptom Management Strategy: Reducing symptoms of stress
+ Methods such as relaxation, meditation, medications or exercise
- Moderators of Stress
+ Variables that cause the relationships between stressors,
perceived stress and outcomes to be weaker for some and stronger
for others
1) Social Support: Amount of helpfulness derived from social
relationship
+ Four types of social support are
a) Esteem support, showing that a person is accepted and respected
despite any problems or inadequacies.
b) Informational support, providing help in defining, understanding,
and coping with problems.
c) Social companionship, spending time with others in leisure and
recreational activities.
d) Instrumental support, providing financial aid, material resources,
or needed services.
+ Managers can either keep employees informed about external and
internal social support system or participative management and
company-sponsored activities that make employees feel that they
are an important part of an extended family can be rich sources of
social support.
2) Hardiness: Personality characteristics that neutralize stress
+
Three personality dimensions contribute to hardiness.
a) Commitment, having a sense of purpose and not giving up under
pressure.
b) Internal locus of control. When we believe that we influence the

Chapter 18: Managing Change and Stress

events that affect our lives, we tend to develop proactive coping
strategies.
c) Challenge, where change is perceived as an opportunity for
growth and development, and not as a threat
+ Recommended for organizations to provide training and
development programs that strengthen the characteristics of
commitment, personal control and challenge. They also can use job
design to provide enriched jobs.
3) Type A Behavior: Aggressively involved in a chronic,
determined struggle to accomplish more in less time. (M Friedman,
1974)
1) Hurried speech; explosive accentuation of key words
2) Tendency to walk, move, or eat rapidly
3) Constant impatience with rate at which most events take
place
4) Strong preference for thinking of or doing two or more things
at once
5) Tendency to turn conversations around to personally
meaningful subjects or themes
6) Tendency to interrupt while others are speaking to maker your
point or to complete their thought in your own words.
7) Guilt feelings during periods of relaxation or leisure time.
8) Tendency to be oblivious to surroundings during daily activities
9) Greater concern for things worth having than with things
worth being.
10)
Tendency to schedule more and more in less and less
time; a chronic sense of time urgency
11)
Feelings of competition rather than compassion when
faced with another Type A person
12)
Development of nervous tics or characteristic gestures
13)
A firm belief that success is due to the ability to get
things done faster than the other guy
14)
A tendency to view and evaluate personal activities and
the activities of other people in terms of numbers
- Stress-Reduction Techniques

Chapter 18: Managing Change and Stress