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Organization Development

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Lesson 07
The Nature of Planned Change
The pace of global, economic, and technological development makes change an inevitable feature of
organizational life. However, change that happens to an organization can be distinguished from change that
is planned by its members. Here, the term change will refer to planned change. Organization development
is directed at bringing about planned change to increase an organization's effectiveness. It is generally
initiated and implemented by managers, often with the help of an OD practitioner either from inside or
outside of the organization. Organizations can use planned change to solve problems, to learn from
experience, to reframe shared perceptions, to adapt to external environmental changes, to improve per-
formance, and to influence future changes.
All approaches to OD rely on some theory about planned change. The theories describe the different
stages through which planned change may be effected in organizations and explain the process of applying
OD methods to help organization members manage change.
Theories of Planned change:
The three major theories of organization change that have received considerable attention in the field are:
Lewin's change model, the action research model, and contemporary adaptations of action research.
Lewin's Change Model:
According to the open-systems view, organizations-- like living creatures--tend to be homeostatic, or
continuously working to maintain a steady state. This helps us understand why organizations require
external impetus to initiate change and, indeed, why that change will be resisted even when it is necessary.
Organizational change can occur at three levels-- and, since the patterns of resistance to change are
different for each, the patterns in each level require different change strategies and techniques. These levels
involve:
1.
Changing the individuals who work in the organization--that is, their skills, values, attitudes, and
eventually behavior--but making sure that such individual--ehaviora4 change is always regarded as
instrumental to organizational change.
2.
Changing various organizational structures and systems--reward systems, reporting elationships,
work design, and so on.
3.
Directly changing the organizational climate or interpersonal style--how open people are with
each other, how conflict is managed, how decisions are made, and so on.
According to Lewin, a pioneer in the field of social psychology of organizations, the first step of any
change process it to unfreeze the present pattern of behavior as a way of managing resistance to change.
Depending on the organizational level of change intended, such unfreezing might involve, on the individual
level, selectively promoting or terminating employees; on the structural level, developing highly experiential
training programs in such new organization designs as matrix management; or, on the climate level,
providing data-based feedback on how employees feel about certain management practices. Whatever the
level involved, each of these interventions is intended to make organizational members address that level's
need for change, heighten their awareness of their own behavioral patterns, and make them more open to
the change process.
The second step, movement, involves making the actual changes that will move the organization to
another level of response. On the individual level, we would expect to see people behaving differently,
perhaps demonstrating new skills or new supervisory practices. On the individual level, we would expect to
see changes in actual organizational structures, reporting relationships, and reward systems that affect the
way people do their work. Finally, on the climate or interpersonal- style level, we would expect to see
behavior patterns that indicate greater interpersonal trust and openness and fewer dysfunctional
interactions.
The final stage of the change process, refreezing, involves stabilizing or institutionalizing these changes by
establishing systems that make these behavioral patterns "relatively secure against change," as Lewin put it.
The refreezing stage may involve, for example, redesigning the organization's recruitment process to
increase the likelihood of hiring applicants who share the organizations new management style and value
system. During the refreezing stage, the organization may also ensure that the new behaviors have become
the operating norms at work, that the reward system actually reinforces those behaviors, or that a new,
more participative management style predominates.
According to Lewin, the first step to achieving lasting organizational change is to deal with resistance to
change by unblocking the present system. This unblocking usually requires some kind of confrontation and
a retraining process based on planned behavioral changes in the desired direction. Finally, deliberate steps
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need to be taken to cement these changes in place--this "institutionalization of change" is designed to
make the changes semi-permanent until the next cycle of change occurs.
Figure: 07
Whatever the level involved, each of the three interventions is needed to make organizational members
address the level's need for change, heighten their awareness of their own behavioral patterns, and make
them more open to the change process.
Stage 1: Unfreezing
Three ways of unfreezing an organization are:
i.
Disconfirmation
ii.
Induction of guilt or anxiety
iii.
Creation of psychological safety
i. Disconfirmation or lack of confirmation. Organizational members are not likely to embrace change
unless they experience some need for it. Embracing change typically means that people are dissatisfied with
the way things are ­ quality is below standard, costs are too high, morale is too low, or direction is unclear,
for example.
Unfreezing involves reducing those forces maintaining the organization's behavior at its present level.
Unfreezing is sometimes accomplished through a process of "psychological disconfirmation." By
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introducing information that shows discrepancies between behaviors desired by organization members and
those behaviors currently exhibited, members can be motivated to engage in change activities.
ii. Induction of guilt or anxiety. This is a matter of establishing a gap between what is current but not
working well and some future goal that would make things work better. When people recognize a gap
between what is and what would be better and more desirable, they will be motivated via guilt or anxiety to
reduce the gap. But disconfirmation and induction are not enough to accomplish the unfreezing stage. One
more process is necessary.
iii. Creation of psychological safety. To face disconfirmation, experience guilt or anxiety, and be able to
act or move, people must believe that moving will not bring them humiliation or loss of self-esteem. People
must still feel worthy, psychologically safe. The consultant must be concerned with people not losing face
and must take care that when people admit that something is wrong they will not be punished or
humiliated.
Stage 2: Moving (Changing)
The second step, movement, involves making the actual changes that will move the organization to
another level of response.
On the individual level, we would expect to see people behaving differently, perhaps demonstrating new
skills or new supervisory practices.
On the structural level, we would expect to see changes in actual organizational structures, reporting
relationships, and reward systems that affect the way people do their work.
On the climate or interpersonal level, we would expect to see behavior patterns that indicate greater
interpersonal trust and openness and fewer dysfunctional interactions.
There are two main processes for accomplishing this stage:
i. Identification with a new role model
ii. Scanning the environment for new information
i. Identification with a new role model, mentor, boss, or consultant to "begin to see things from that
other person's point of view. If we see another point of view operating in a person to whom we pay
attention and respect, we can begin to imagine that point of view as something to consider for ourselves".
ii. Scanning the environment for new, relevant information. In working with the chairman of a
company and the president or CEO, the consultant explored many reasons for their conflict with one
another. To help with reducing some of this conflict, the consultant worked on clarifying roles and
responsibilities. He quotes other chairman-president/CEO models from other client organizations, some
that worked very well and some that did not. This process was an activity of bringing to the two of them
new, relevant information that might help them move forward with the changes needed in the relationship.
Stage 3: Refreezing
This final stage is one of helping the client integrate the changes. This stage involves stabilizing or
institutionalizing these changes by establishing systems (such as norms, policies, and structures) that make
these behavioral patterns "relatively secure against change".
The refreezing stage may involve
·  Redesigning the organization's recruitment process to increase the likelihood of hiring applicants
who share the organization's new management style and value system.
·  During the refreezing stage, the organization may also ensure that the new behaviors have become
the operating norms at work, that the reward system actually reinforces those behaviors, or that a
new, more participative management style predominates.
This stage can be seen in two parts ­ self and relations with others:
i.
Personal refreezing
ii.
Relational refreezing
i. Personal refreezing is the process of taking the new, changed way of doing things and making it fit
comfortably into one's total self-concept. This process involves a lot of practice ­ trying out new roles and
behaviors, getting feedback, and making adjustments until the new way of doing things feels reasonably
comfortable.
ii. Relational refreezing is the process of assuring that the client's new behavior will fit with significant
others. In a system, when one begins to do things differently, will this difference quickly affect others with
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whom the person interacts? If you and I interact frequently and I change to maintain the relationship you
will have to change as well, at least to some extent to maintain the relationship. This process involves
openly engaging with others about the new way of doing things, to help them see why the change is better
than the old way.
Case Example: British Airways
In 1982 Margaret Thatcher's government in Great Britain decided to convert British Airways (BA) from
government ownership to private ownership. BA had regularly required large subsidies from the
government (almost $900 million in 1982), subsidies that the government felt it could not provide. Even
more important, the Conservative government was ideologically opposed to the government's ownership
of businesses--a matter they regarded as the appropriate province of private enterprise.
The growing deregulation of international air traffic was another important environmental change. Air fares
were no longer fixed, and the resulting price wars placed BA at even greater risk of financial losses.
In order to be able to "privatize"--that is, sell BA shares on the London and New York Stock
Exchanges--it was necessary to make BA profitable. The pressures to change thus exerted on BA by the
external environment were broad and intense. And the internal organizational changes, driven by these
external pressures, have been massive and widespread. They have transformed the BA culture from what
BA managers described as "bureaucratic and militaristic" to one that is now described as "service-oriented
and market- driven." The success of these efforts over a five- year period (1982--1987) is clearly depicted
in the data.
This figure 8 reflects BA's new mission in its new advertising slogan--"The World's Favorite Airline." Five
years after the change effort began, BA had successfully moved from government ownership to private
ownership, and both passenger and cargo revenues had dramatically increased, leading to a substantial
increase in share price over the offering price, despite the market crash of October 1987. Indeed, in late
1987 BA acquired British Caledonian Airways, its chief domestic competitor. The steps through which this
transformation was accomplished clearly fit Lewin's model of the change process.
Table: 01
The British Airways Success Story: Creating the "World's Favorite Airline"
1982
1987
Ownership
Government
Private
Profit/loss
$900 million
$435 million
Culture
Bureaucratic and
Service-oriented and market-driven
militaristic
Passenger load factor
Decreasing
Increasing-up 16% in Ist quarter
1988
Cargo load
Stable
Increasing-up 41% in Ist quarter
1988
Share price
N/A
Increased 67% (2/11/87-8/11/87)
Acquisitions
N/A
British Caledonian
Unfreezing: In BA's change effort, the first step in unfreezing involved a massive reduction in the
worldwide BA workforce (from 59,000 to 37,000). It is interesting to note that, within a year after this staff
reduction, virtually all BA performance indices had improved--more on-time departures and arrivals, fewer
out-of-service aircraft, less time "on hold" for telephone reservations, fewer lost bags, and so on. The
consensus view at all levels within BA was that the downsizing had reduced hierarchical levels, thus giving
more autonomy to operating people and allowing work to get done more easily.
The downsizing was accomplished with compassion; no one was actually laid off. Early retirement, with
substantial financial settlements, was the preferred solution throughout the system. Although there is no
question that the process was painful, considerable attention was paid to minimizing the pain in every
possible way.
A second major change occurred in BA's top management. In 1981, Lord John King of Wartinbee, a senior
British industrialist, was appointed chairman of the board, and Cohn Marshall, now Sir Colin, was
appointed CEO. The appointment of Marshall represented a significant departure from BA culture. An
outsider to BA, Marshall had a marketing background that was quite different from that of his
predecessors, many of whom were retired senior Royal Air Force officers. It was Marshall who decided,
shortly after his arrival, that BA's strategy should be to become "the World's Favorite Airline." Without
question, critical ingredients in the success of the overall change effort were Marshall's vision, the clarity of
his understanding that BA's culture needed to be changed in order to carry out the vision, and his strong
leadership of that change effort.
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To support the unfreezing process, the first of many training programs was introduced. "Putting People
First"--the program in which all BA personnel with direct customer contact participated - was another
important part of the unfreezing process. Aimed at helping line workers and managers understand the
service nature of the airline industry, it was intended to challenge the prevailing wisdom about how things
were to be done at BA.
Movement: Early on, Marshall hired Nicholas Georgiades, a psychologist and former professor and
consultant, as director (vice president) of human resources. It was Georgiades who developed the specific
tactics and programs required to bring Marshall's vision into reality. Thus Georgiades, along with Marshall,
must be regarded as a leader of BAS successful change effort. One of the interventions that Georgiades
initiated--a significant activity during the movement phase--was to establish training programs for senior
and middle managers. Among these were "Managing People First" and "Leading the Service Business"--
experiential programs that involved heavy doses of individual feedback to each participant about his or her
behavior regarding management practices on the job.
These training programs all had more or less the same general purpose: to identify the organization's
dysfunctional management style and begin the process of developing a new management style that would
fit BA's new, competitive environment. If the organization was to be market- driven, service-based, and
profit-making, it would require an open, participative management style-- one that would produce
employee commitment.
On the structures and systems level during the unfreezing stage, extensive made of diagonal task forces
composed of individuals from different functions and at different levels of responsibility to deal with
various aspects of the change process--the need for MIS (management information systems) support, new
staffing patterns, new uniforms, and so on. A bottom-up, less centralized budgeting process--one sharply
different from its predecessor--was introduced.
Redefining BA's business as service, rather than as transportation, represented a critical shift on the level of
climate/interpersonal style. A service business needs an open climate and good interpersonal skills, coupled
with outstanding teamwork. Off-site, team-building meetings--the process chosen to deal with these issues
during the movement stage--has now been institutionalized.
None of these changes would have occurred without the commitment and involvement of top
management. Marshall himself played a central role in both initiating and supporting the change process,
even when problems arose. As one index of this commitment, Marshall shared information at question-
and-answer sessions at most of the training programs--both "to show the flag" and to provide his own
unique perspective on what needed to be done.
An important element of the movement phase was acceptance of the concept of "emotional labor" that
Georgiades championed--that is, the high energy levels required providing the quality of service needed in
a somewhat uncertain environment, such as the airline business. Recognition that such service is
emotionally draining and often can lead to burnout and permanent psychological damage is critical to
developing systems of emotional support for the service workers involved.
Another important support mechanism was the retraining of traditional personnel staff to become internal
change agents charged with helping and supporting line and staff managers. So, too, was the development
of peer support groups for managers completing the "Managing People First" training program?
To support this movement, a number of internal BA structures and systems were changed. By introducing
a new bonus system, for example, Georgiades demonstrated management's commitment to sharing the
financial gains of BA's success. The opening of Terminal 4 at Heathrow Airport provided a more
functional work environment for staff. The purchase of Chartridge House as a permanent BA training
center permitted an increase in and integration of staff training, and the new, "user-friendly" MIS enabled
managers to get the information they needed to do their jobs in a timely fashion.
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Table: 02
Applying Lewin's Model to the British Airways (BA) Change Effort
Levels
Unfreezing
Movement
Refreezing
Individual
Downsizing  of  workforce Acceptance of concept Continued
($9,000 to 37,000); middle of "emotional labor".
commitment  of  top
management especially hard Personnel
staff
as management.
hit.
internal consultants.
Promotion  of  staff
New top management team.
"managing people first" with new BA values.
"putting people first"
peer support groups.
"Top
Flight
Academies".
"Open
Learning" programs
Structures
and Use of diagonal task forces to Profit sharing (3weeks New
performance
systems
plan change.
pay in 1987).
appraisal system based
Reduction  in  levels  of Opening of Terminal 4.  on both behavior and
hierarchy.
Purchase of Chartridge performance.
Modification  of  budgeting as training center.
Performance-based
process
New,  "User-friendly" compensation system.
MIS
Continued use of task
forces
Climate/interpersonal Redefinition of the business: Greater emphasis on New uniforms.
style
service, not transportation.
open communications.  New coat of arms.
Top-management
Data  feedback  on Development and use
and work-unit climate.
of cabin-crew teams.
commitment
Off-site, team-building Continued use of data-
involvement.
meeting.
based  feedback  on
climate
and
management practices.
Refreezing: During the refreezing phase, the continued involvement and commitment of BA's top
management ensured that the changes became "fixed" in the system. People who clearly exemplified the
new BA values were much more likely to be promoted, especially at higher management levels. Georgiades
introduced additional pro-grams for educating the workforce, especially managers. "Open Learning"
programs, including orientation programs for new staff, supervisory training for new supervisors, and so
on, were augmented by "Top Flight Academies" that included training at the executive, senior
management, and management levels. One of the academies now leads to an MBA degree.
A new performance appraisal system, based on both behavior and results, was created to emphasize
customer service and subordinate development. A performance-based compensation system is being
installed, and task forces continue to be used to solve emerging problems, such as those resulting from the
acquisition of British Caledonian Airlines.
Attention was paid to BA's symbols as well-- new, upscale uniforms; refurbished aircraft; and a new
corporate coat of arms with the motto "We fly to serve." A unique development has been the creation of
teams for consistent cabin-crew staffing, rather than the ad hoc process typically used. Finally, there is
continued use of data feedback on management practices throughout the system.
Table of Contents:
  1. The Challenge for Organizations:The Growth and Relevance of OD
  2. OD: A Unique Change Strategy:OD consultants utilize a behavioral science base
  3. What an “ideal” effective, healthy organization would look like?:
  4. The Evolution of OD:Laboratory Training, Likert Scale, Scoring and analysis,
  5. The Evolution of OD:Participative Management, Quality of Work Life, Strategic Change
  6. The Organization Culture:Adjustment to Cultural Norms, Psychological Contracts
  7. The Nature of Planned Change:Lewin’s Change Model, Case Example: British Airways
  8. Action Research Model:Termination of the OD Effort, Phases not Steps
  9. General Model of Planned Change:Entering and Contracting, Magnitude of Change
  10. The Organization Development Practitioner:External and Internal Practitioners
  11. Creating a Climate for Change:The Stabilizer Style, The Analyzer Style
  12. OD Practitioner Skills and Activities:Consultant’s Abilities, Marginality
  13. Professional Values:Professional Ethics, Ethical Dilemmas, Technical Ineptness
  14. Entering and Contracting:Clarifying the Organizational Issue, Selecting an OD Practitioner
  15. Diagnosing Organizations:The Process, The Performance Gap, The Interview Data
  16. Organization as Open Systems:Equifinality, Diagnosing Organizational Systems
  17. Diagnosing Organizations:Outputs, Alignment, Analysis
  18. Diagnosing Groups and Jobs:Design Components, Outputs
  19. Diagnosing Groups and Jobs:Design Components, Fits
  20. Collecting and Analyzing Diagnostic information:Methods for Collecting Data, Observations
  21. Collecting and Analyzing Diagnostic information:Sampling, The Analysis of Data
  22. Designing Interventions:Readiness for Change, Techno-structural Interventions
  23. Leading and Managing Change:Motivating Change, The Life Cycle of Resistance to Change
  24. Leading and managing change:Describing the Core Ideology, Commitment Planning
  25. Evaluating and Institutionalizing Organization Development Interventions:Measurement
  26. Evaluating and Institutionalizing Organization Development Interventions:Research Design
  27. Evaluating and Institutionalizing Organization Development Interventions
  28. Interpersonal and Group Process Approaches:Group Process
  29. Interpersonal and Group Process Approaches:Leadership and Authority, Group Interventions
  30. Interpersonal and Group Process Approaches:Third-Party Interventions
  31. Interpersonal and Group Process Approaches:Team Building, Team Building Process
  32. Interpersonal and Group Process Approaches:Team Management Styles
  33. Organization Process Approaches:Application Stages, Microcosm Groups
  34. Restructuring Organizations:Structural Design, Process-Based Structures
  35. Restructuring Organizations:Downsizing, Application Stages, Reengineering
  36. Employee Involvement:Parallel Structures, Multiple-level committees
  37. Employee Involvement:Quality Circles, Total Quality Management
  38. Work Design:The Engineering Approach, Individual Differences, Vertical Loading
  39. Performance Management:Goal Setting, Management by Objectives, Criticism of MBO
  40. Developing and Assisting Members:Career Stages, Career Planning, Job Pathing
  41. Developing and Assisting Members:Culture and Values, Employee Assistance Programs
  42. Organization and Environment Relationships:Environmental Dimensions, Administrative Responses
  43. Organization Transformation:Sharing the Vision, Three kinds of Interventions
  44. The Behavioral Approach:The Deep Assumptions Approach
  45. Seven Practices of Successful Organizations:Training, Sharing Information