Organizational Change Approaches Explained

440 Part Four Organizational Processes
are in a completely different functional area. For instance,
accounting department employ-
ees won’t easily recognize how they can adopt quality
improvement practices developed by
employees in the production department. The challenge here is
for change agents to provide
guidance that is not too specific (not too narrowly defined
around the pilot project environ-
ment), because it might not seem relevant to other areas of the
organization. At the same
time, the pilot project intervention should not be described too
broadly or abstractly to
other employees, because this makes the information and role
model too vague. Finally,
employees require supportive situational factors, including the
resources and time necessary
to adopt the practices demonstrated in the pilot project.
Four Approaches to Organizational Change
So far, this chapter has examined the dynamics of change that
occur every day in organiza-
tions. However, organizational change agents and consultants
also apply various structured
approaches to organizational change. This section introduces
four of the leading ap-
proaches: action research, appreciative inquiry, large group
interventions, and parallel
learning structures.
LO 15-5

Visit connect.mcgrawhill.com for activities and test questions to
help
you learn about the four main approaches to organizational
change.
ACTION RESEARCH APPROACH
Along with introducing the force field model, Kurt Lewin
recommended an action research
approach to the change process. The philosophy of action
research is that meaningful change
is a combination of action orientation (changing attitudes and
behavior) and research orien-
tation (testing theory).64 On the one hand, the change process
needs to be action-oriented
because the ultimate goal is to change the workplace. An action
orientation involves
diagnosing current problems and applying interventions that
resolve those problems. On
the other hand, the change process is a research study, because
change agents apply a
conceptual framework (such as team dynamics or
organizational culture) to a real situation.
As with any good research, the change process involves
collecting data to diagnose problems
more effectively and to systematically evaluate how well the
theory works in practice.65
Within this dual framework of action and research, the action
research approach adopts
an open-systems view. It recognizes that organizations have
many interdependent parts, so
change agents need to anticipate both the intended and the
unintended consequences of their
interventions. Action research is also a highly participative
process, because open-systems

change requires both the knowledge and the commitment of
members within that system.
Indeed, employees are essentially co-researchers as well as
participants in the intervention.
Overall, action research is a data-based, problem-oriented
process that diagnoses the need for
change, introduces the intervention, and then evaluates and
stabilizes the desired changes.
The main phases of action research are illustrated in Exhibit
15.4 and described here:66
1. Form client–consultant relationship. Action research usually
assumes that the change
agent originates outside the system (such as a consultant), so
the process begins by
forming the client–consultant relationship. Consultants need to
determine the
client’s readiness for change, including whether people are
motivated to participate
in the process, are open to meaningful change, and possess the
abilities to complete
the process.
action research
A problem-focused change
process that combines action
orientation (changing attitudes
and behavior) and research
orientation (testing theory
through data collection and
analysis).
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Chapter Fifteen Organizational Change 441
2. Diagnose the need for change. Action research is a problem-
oriented activity that
carefully diagnoses the problem through systematic analysis of
the situation.
Organizational diagnosis identifies the appropriate direction for
the change effort
by gathering and analyzing data about an ongoing system, such
as through inter-
views and surveys of employees and other stakeholders.
Organizational diagnosis
also includes employee involvement in agreeing on the
appropriate change
method, the schedule for the actions involved, and the expected
standards of
successful change.
3. Introduce intervention. This stage in the action research
model applies one or more
actions to correct the problem. It may include any of the
prescriptions mentioned in
this book, such as building more effective teams, managing
conflict, building a bet-
ter organizational structure, or changing the corporate culture.
An important issue is
how quickly the changes should occur.67 Some experts
recommend incremental
change, in which the organization fine-tunes the system and
takes small steps toward
a desired state. Others claim that rapid change is often required,
in which the system
is overhauled decisively and quickly.

4. Evaluate and stabilize change. Action research recommends
evaluating the effec-
tiveness of the intervention against the standards established in
the diagnostic
stage. Unfortunately, even when these standards are clearly
stated, the effective-
ness of an intervention might not be apparent for several years
or might be diffi-
cult to separate from other factors. If the activity has the
desired effect, the
change agent and participants need to stabilize the new
conditions. This refers to
the refreezing process that was described earlier. Rewards,
information systems,
team norms, and other conditions are redesigned so they support
the new values
and behaviors.
The action research approach has dominated organizational
change thinking since it was
introduced in the 1940s. However, some experts are concerned
that the problem-oriented
nature of action research—in which something is wrong that
must be fixed—focuses on the
negative dynamics of the group or system rather than its
positive opportunities and poten-
tial. This concern with action research has led to the
development of a more positive ap-
proach to organizational change, called appreciative inquiry.71
APPRECIATIVE INQUIRY APPROACH
Appreciative inquiry tries to break out of the problem-solving
mentality of traditional
change management practices by reframing relationships around
the positive and the possi-

ble. It searches for organizational (or team) strengths and
capabilities and then applies or
adapts that knowledge for further success and well-being.
Appreciative inquiry is therefore
Diagnose need
for change
Introduce
intervention
Evaluate and
stabilize change
Form
client–
consultant
relationship
Disengage
consultant’s
services
• Gather data
• Analyze data
• Decide objectives
• Implement
the desired
incremental or
quantum change

• Determine
the change
effectiveness
• Refreeze new
conditions
EXHIBIT 15.4 The Action Research Process
appreciative inquiry
An organizational change
strategy that directs the group’s
attention away from its own
problems and focuses
participants on the group’s
potential and positive elements.
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deeply grounded in the emerging philosophy of positive
organizational behavior, which
suggests that focusing on the positive rather than the negative
aspects of life will improve
organizational success and individual well-being. In other
words, this approach emphasizes
building on strengths rather than trying to directly correct
problems.72
Appreciative inquiry typically examines successful events,

organizations, and work units.
This focus becomes a form of behavioral modeling, but it also
increases open dialogue by
redirecting the group’s attention away from its own problems.
Appreciative inquiry is espe-
cially useful when participants are aware of their problems or
already suffer from negativity
in their relationships. The positive orientation of appreciative
inquiry enables groups to
overcome these negative tensions and build a more hopeful
perspective on their future by
focusing on what is possible.73
Appreciative inquiry’s positive focus is illustrated by the
intervention conducted a few
years ago at Mittal Steel USA.74 Although the mill was one of
the most productive in the
global organization, its safety record was poor. A team of
employees was formed to spear-
head an appreciative inquiry approach to improved safety.
Almost all of the Steel USA’s
debating point
WHAT’S THE BEST SPEED FOR ORGANIZATIONAL
CHANGE?
One of the great debates among organizational change experts is
how quickly the change should occur. One view is that slow, in-
cremental change is better because it gives employees more
time
to adjust to the new realities, keep up with what needs to be
learned, and manage their stress in this process. Incremental
change is also preferred because it gives change champions
more time to change course if the current direction isn’t
working
as hoped.

The value of incremental change was recently illustrated at
Ergon Energy. Government legislation required companies to
upgrade their record keeping system, but the Australian energy
provider decided to make the changes incrementally, because
employees had already experienced constant change over the
previous couple of years. “Even resilient staff such as those em-
ployed at Ergon Energy have a change tolerance level,” explains
Petá Sweeney, a consultant who worked with Ergon staff during
this transition. “Consequently this led deliberately to
discounting
a revolutionary ’big bang’ approach to record-keeping improve-
ments.” Sweeney reports that changing incrementally signifi-
cantly improved employee engagement in the process. “Staff are
more willing to participate in the change journey as well as
offer-
ing suggestions for improvements. They do so knowing that
changes will take place gradually and allow for time to fully
bed
down new practices and that effective enterprise-wide changes
require their help.”68
In spite of these apparent virtues of incremental change, some
experts claim that rapid change is usually much better. They do
not say that change needs to be radical or evenly rapid all of the
time. Rather, they suggest that most change initiatives need to
be,
on average, much quicker than incremental. One argument is
that
companies operate in such a fast-paced environment that any
speed less than “rapid” is risky; an incremental change initiative
will put them further behind to the point that any change seems
futile.
A second argument is that rapid change creates a collective
sense of momentum, whereas inertia eventually catches up with
incremental change.69 In other words, employees feel the sense

of progress when change occurs quickly. This forward
movement
generates its own energy that helps motivate employees toward
the vision. Incremental change, by comparison, is sluggish and
lethargic. A related argument is that any organizational change
requires plenty of energy, particularly from the leaders who
must
continually communicate, role model, coach, and otherwise sup-
port and influence employees toward the new state of affairs.70
This energy is finite, and it is more likely to run out when the
change is spread over a long rather than a short period of time.
Third, incremental change doesn’t necessarily give employees
more time to adjust; instead, it typically gives them more time
to
dig in their heels! Rapid change, on the other hand, happens at
such speed that employees don’t have the opportunity to find
ways to hold back, retrench, or even think about strategies to
op-
pose the change effort. Finally, proponents of incremental
change
point to its benefits for minimizing stress, yet there is reason to
believe that it often has the opposite effect. Changing slowly
can
feel like a slow train wreck—the more you see it coming, the
more painful it feels. Quicker change, particularly when there
are
support systems to help employees through the process, may be
less painful than changing incrementally.
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1,400 employees were personally interviewed over several
months, to hear their vision and
aspirations for safety at the company. Interviewers asked
questions such as, “Tell me about a
time when you felt most safe and secure working in this mill.
What in particular helped
make you feel safe?” and “Imagine we are truly injury-free! We
are the safest mill in the
entire global system. . . . What does the mill look like?” The
interview information was
collated and became the foundation of an appreciative inquiry
summit attended by almost
200 employees and other stakeholders (customers, suppliers,
community leaders, and global
parent leadership). Out of the summit emerged a dozen specific
change initiatives to
improve safety at Mittal Steel USA. Within a year, the company
experienced a dramatic
improvement in safety behaviors and statistics.
Appreciative Inquiry Principles Appreciative inquiry embraces
five key princi-
ples (see Exhibit 15.5).75 One of these is the positive principle,
which we describe above.
A second principle, called the constructionist principle, takes
the position that conversa-
tions don’t describe reality; they shape that reality. In other
words, how we come to under-
stand something depends on the questions we ask and the
language we use. Thus,
appreciative inquiry requires sensitivity to and proactive
management of the words and
language used, as well as the thoughts and feelings behind that
communication. This re-

lates to a third principle, called the simultaneity principle,
which states that inquiry and
change are simultaneous, not sequential. The moment we ask
questions of others, we are
changing those people. Furthermore, the questions we ask
determine the information we
receive, which in turn affects which change intervention we
choose. The key learning
point from this principle is to be mindful of the effects that the
inquiry has on the direc-
tion of the change process.
A fourth principle, called the poetic principle, states that
organizations are open books,
so we have choices in how they may be perceived, framed, and
described. The poetic
principle is reflected in the notion that a glass of water can be
viewed as half full or half
empty. Thus, appreciative inquiry actively frames reality in a
way that provides construc-
tive value for future development. The anticipatory principle,
the fifth principle of appre-
ciative inquiry, emphasizes the importance of a positive
collective vision of the future
state. People are motivated and guided by the vision they see
and believe in for the fu-
ture. Images that are mundane or disempowering will affect
current effort and behavior
differently than will images that are inspiring and engaging. We
noted the importance of
visions earlier in this chapter (change agents) and in our
discussion of transformational
leadership (Chapter 12).
APPRECIATIVE INQUIRY PRINCIPLE DESCRIPTION

Positive principle Focusing on positive events and potential
produces more positive, effective, and
enduring change.
Constructionist principle How we perceive and understand the
change process depends on the questions we ask and
language we use throughout that process.
Simultaneity principle Inquiry and change are simultaneous, not
sequential.
Poetic principle Organizations are open books, so we have
choices in how they may be perceived, framed,
and described.
Anticipatory principle People are motivated and guided by the
vision they see and believe in for the future.
EXHIBIT 15.5 Five Principles of Appreciative Inquiry
Source: Based on D. L. Cooperrider and D. K. Whitney,
Appreciative Inquiry: A Positive Revolution in Change (San
Francisco: Berrett-Koehler, 2005), Ch. 7; D. K.
Whitney and A. Trosten-Bloom. The Power of Appreciative
Inquiry: A Practical Guide to Positive Change, 2d ed. (San
Francisco: Berrett-Koehler, 2010), Ch. 3.
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The Four-D Model of Appreciative Inquiry Built on these five
principles is
appreciative inquiry’s “Four-D” process (named after its four
stages) shown in Exhibit 15.6.
Appreciative inquiry begins with discovery—identifying the
positive elements of the ob-
served events or organization.76 This might involve
documenting positive customer experi-
ences elsewhere in the organization. Or it might include
interviewing members of another
organization to discover its fundamental strengths. As
participants discuss their findings,
they shift into the dreaming stage by envisioning what might be
possible in an ideal organi-
zation. By pointing out a hypothetical ideal organization or
situation, participants feel safer
revealing their hopes and aspirations than they would if they
were discussing their own or-
ganization or predicament.
As participants make their private thoughts public to the group,
the process shifts into
the third stage, called designing. Designing involves dialogue in
which participants listen
with selfless receptivity to each other’s models and assumptions
and eventually form a collec-
tive model for thinking within the team. In effect, they create a
common image of what
should be. As this model takes shape, group members shift the
focus back to their own situ-
ation. In the final stage of appreciative inquiry, called
delivering (also known as destiny),
participants establish specific objectives and directions for their
own organization, on the
basis of their model of what will be.

Appreciative inquiry was introduced more than two decades
ago, but it really gained
popularity only within the past few years. Several success
stories of organizational change
from appreciative inquiry have emerged in a variety of
organizational settings, including
the British Broadcasting Corporation, Heidelberg USA, Castrol
Marine, Canadian Tire,
AVON Mexico, American Express, Green Mountain Coffee
Roasters, and Hunter
Douglas.77
Although appreciative inquiry has much to offer, it is not
always the best approach to
changing teams or organizations, and it has not always been
successful. This approach de-
pends on participants’ ability to let go of the problem-oriented
approach, including the
“blame game” of determining who may have been responsible
for past failures. It also
requires leaders who are willing to accept appreciative inquiry’s
less structured process.79
Another concern is that research has not yet examined the
contingencies of this approach.80
In other words, we don’t yet know under what conditions
appreciative inquiry is a useful
approach to organizational change and under what conditions it
is less effective. Overall,
appreciative inquiry can be an effective approach to
organizational change, but we are just
beginning to understand its potential and limitations.
1.
Discovery
Identifying the

best of “what is”
2.
Dreaming
Envisioning
“what might be”
3.
Designing
Engaging in
dialogue about
“what should be”
4.
Delivering
Developing
objectives about
“what will be”
EXHIBIT 15.6 The Four-D Model of Appreciative Inquiry
Sources: Based on F. J. Barrett and D. L. Cooperrider,
“Generative Metaphor Intervention: A New Approach for
Working with
Systems Divided by Conflict and Caught in Defensive
Perception,” Journal of Applied Behavioral Science 26 (1990),
p. 229;
D. Whitney and C. Schau, “Appreciative Inquiry: An Innovative
Process for Organization Change,” Employment Relations
Today 25 (Spring 1998), pp. 11–21; D. L. Cooperrider and D.
K. Whitney, Appreciative Inquiry: A Positive Revolution in

Change
(San Francisco: Berrett-Koehler, 2005), Ch. 3.
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LARGE GROUP INTERVENTION APPROACH
Appreciative inquiry can occur in small teams, but it is often
designed to involve a large
number of people, such as the hundreds of employees who
participated in the process at
Heidelberg USA. As such, appreciative inquiry is often
identified as one of several large
group organizational change interventions. Large group
interventions adopt a “whole sys-
tems” perspective of the change process.81 This means that they
view organizations as open
systems (see Chapter 1) and assume that change will be more
successful when as many em-
ployees and other stakeholders as possible associated with the
organizational system are in-
cluded in the process.82 Large group interventions are highly
participative events, because
participants discuss their experiences, expectations, and ideas
with others, typically in small
groups within the large collective setting.
Similar to appreciative inquiry, large group interventions adopt
a future-oriented positive
focus rather than a past-oriented problem focus. Future search

conferences, for instance, are
large group interventions typically held over a few days in
which participants identify
emerging trends and develop strategies for the organization to
realize potential under those
future conditions. In addition to this strategy development,
large group interventions
generate a collective vision or sense-making about the
organization and its future. This
“meaning-making” process is important for the organization’s
evolving identity and how
participants relate to that identity.
Large group interventions have occurred in a variety of
companies and industries.
Emerson & Cuming’s chemical manufacturing facility in
Canton, Massachusetts, held a
large group summit in which managers, supervisors, and
production employees were
organized into five stakeholder teams to identify initiatives that
would improve the plant’s
safety, efficiency, and cooperation. Lawrence Public Schools in
Kansas conducted a large
group session involving parents, teachers, students, community
partners, and other stake-
holders to help the board allocate resources more effectively.
“The goals that were developed
at the future search conference reflect what the community
envisioned for its school dis-
trict,” says superintendent Randy Weseman. Those goals have
since become the foundation
of the board’s strategic decision making.83
Future search meetings and similar large group change events
potentially minimize
resistance to change and assist the quality of the change

process, but they also have limita-
tions.84 One problem is that involving so many people
invariably limits the opportunity to
A few years ago, Heidelberg USA, the American arm of the
world’s largest printing press manufacturer (Heidelberger
Druckmaschinen AG), experienced morale-busting product
setbacks as well as downsizing due to the economic
recession. To rebuild employee morale and engagement,
Heidelberg held a two-day appreciative inquiry summit
involving one-third of its staff. Organized into diverse
groups from across the organization, participants
envisioned what Heidelberg would ideally look like in the
future. From these sessions emerged a new vision and
greater autonomy for employees to serve customers.
“Appreciative inquiry can energize an organization even
in tough times because it begins the conversation with
possibilities instead of problems,” says a senior executive
at Heidelberg USA.78
large group interventions
Highly participative events that
view organizations as open
systems (i.e., involve as many
employees and other
stakeholders as possible) and
adopt a future and positive focus
of change.
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contribute and increases the risk that a few people will
dominate the process. Another con-
cern is that these events focus on finding common ground,
which may prevent the partici-
pants from discovering substantive differences that interfere
with future progress. A third
issue is that these events generate high expectations about an
ideal future state that are diffi-
cult to satisfy in practice. Employees become even more cynical
and resistant to change if
they do not see meaningful decisions and actions resulting from
these meetings.
PARALLEL LEARNING STRUCTURE APPROACH
Parallel learning structures are highly participative
arrangements composed of people from
most levels of the organization who follow the action research
model to produce meaningful
organizational change. They are social structures developed
alongside the formal hierarchy
with the purpose of increasing the organization’s learning.85
Ideally, participants in parallel
learning structures are sufficiently free from the constraints of
the larger organization that
they can effectively solve organizational issues.
Royal Dutch/Shell relied on a parallel learning structure to
introduce a more customer-
focused organization.86 Rather than try to change the entire
organization at once, executives
held weeklong “retail boot camps” with teams from six
countries, consisting of frontline people
(such as gas station managers, truck drivers, and marketing
professionals). Participants learned

about competitive trends in their regions and were taught
powerful marketing tools to identify
new opportunities. The teams then returned home to study their
markets and develop propos-
als for improvement. Four months later, boot camp teams
returned for a second workshop, at
which each proposal was critiqued by Royal/Dutch Shell
executives. Each team had 60 days to
put its ideas into action; then the teams returned for a third
workshop to analyze what worked
and what didn’t. This parallel learning process did much more
than introduce new marketing
ideas. It created enthusiasm in participants that spread
contagiously to their coworkers, includ-
ing managers above them, when they returned to their home
countries.
Cross-Cultural and Ethical Issues in Organizational Change
Throughout this chapter, we have emphasized that change is an
inevitable and often contin-
uous phenomenon, because organizations need to remain aligned
with the dynamic external
environment. Yet we also need to be aware of cross-cultural and
ethical issues with any
change process. Many organizational change practices are built
around Western cultural
assumptions and values, which may differ from and sometimes
conflict with assumptions
and values in other cultures.87 One possible cross-cultural
limitation is that Western organi-
zational change models, such as Lewin’s force field analysis,
assume that change has a
beginning and an ending in a logical linear sequence (that is, a
straight line from point A to
point B). Yet change is viewed more as a cyclical phenomenon
in some cultures, such as the

Earth’s revolution around the sun or a pendulum swinging back
and forth. Other cultures
have more of an interconnected view of change, whereby one
change leads to another (often
unplanned) change, which leads to another change, and so on,
until the change objective is
ultimately achieved in a more circuitous way.
Another cross-cultural issue with some organizational change
interventions is their
assumption that effective organizational change is necessarily
punctuated by tension and
overt conflict. Indeed, some change interventions encourage
such conflict. But this direct
confrontation view is incompatible with cultures that emphasize
harmony and equilibrium.
These cross-cultural differences suggest that a more
contingency-oriented perspective is re-
quired for organizational change to work effectively in this era
of globalization.
Some organizational change practices also face ethical issues.88
One ethical concern is the
risk of violating individual privacy rights. The action research
model is built on the idea of
collecting information from organizational members, which
requires that employees provide
personal information and reveal emotions that they may not
want to divulge.89 A second
LO 15-6
parallel learning structure
A highly participative
arrangement composed of
people from most levels of the

organization who follow the
action research model to
produce meaningful
organizational change.
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ethical concern is that some change activities potentially
increase manage-
ment’s power by inducing compliance and conformity in
organizational
members. For instance, action research is a system-wide activity
that requires
employee participation rather than allowing individuals to get
involved vol-
untarily. A third concern is that some organizational change
interventions
undermine the individual’s self-esteem. The unfreezing process
requires that
participants disconfirm their existing beliefs, sometimes
including their own
competence at certain tasks or interpersonal relations.
Organizational change is usually more difficult than it initially
seems. Yet
the dilemma is that most organizations operate in hyperfast
environments
that demand continuous and rapid adaptation. Organizations
survive and

gain competitive advantage by mastering the complex dynamics
of moving
people through the continuous process of change as quickly as
the external
environment is changing.
Organizational Behavior:
The Journey Continues
Nearly 100 years ago, the industrialist Andrew Carnegie said:
“Take away my
people, but leave my factories, and soon grass will grow on the
factory floors.
Take away my factories, but leave my people, and soon we will
have a new
and better factory.”90 Carnegie’s statement reflects the message
woven
throughout this textbook: Organizations are not buildings or
machinery or
financial assets; rather, they are the people in them.
Organizations are human
entities—full of life, sometimes fragile, and always exciting.
“Take away my people, but leave my factories, and
soon grass will grow on the factory floors. Take
away my factories, but leave my people, and soon
we will have a new and better factory.”
—Attributed to Andrew Carnegie
15-1 Describe the elements of Lewin’s force field analysis
model.
Lewin’s force field analysis model states that all systems have
driving and restraining forces. Change occurs through the pro-
cess of unfreezing, changing, and refreezing. Unfreezing pro-
duces disequilibrium between the driving and restraining forces.

Refreezing realigns the organization’s systems and structures
with the desired behaviors.
15-2 Discuss the reasons people resist organizational change
and how change agents should view this resistance.
Restraining forces are manifested as employee resistance to
change. The main reasons people resist change are the negative
valence of change, fear of the unknown, not-invented-here syn-
drome, breaking routines, incongruent team dynamics, and in-
congruent organizational systems. Resistance to change should
be viewed as a resource, not an inherent obstacle to change.
Change agents need to view resistance as task conflict rather
than relationship conflict. Resistance is a signal that the change
agent has not sufficiently strengthened employee readiness for
change. It is also a form of voice, so discussion potentially im-
proves procedural justice.
15-3 Outline six strategies for minimizing resistance to
change and debate ways to effectively create an urgency
to change.
Organizational change requires employees to have an urgency
for change. This typically occurs by informing them about driv-
ing forces in the external environment. Urgency to change also
develops by putting employees in direct contact with customers.
Leaders often need to create an urgency to change before the
external pressures are felt, and this can occur through a vision
of
a more appealing future.
Resistance to change may be minimized by keeping employ-
ees informed about what to expect from the change effort (com-
municating); teaching employees valuable skills for the desired
future (learning); involving them in the change process; helping
employees cope with the stress of change; negotiating trade-offs
with those who will clearly lose from the change effort; and us-

ing coercion (sparingly and as a last resort).
15-4 Discuss how leadership, coalitions, social networks,
and pilot projects assist organizational change.
Every successful change also requires transformational leaders
with a clear, well-articulated vision of the desired future state.
chapter summary
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critical thinking questions
1. Chances are that the school you are attending is currently
undergoing some sort of change to adapt more closely with
its environment. Discuss the external forces that are driving
the change. What internal drivers for change also exist?
2. Use Lewin’s force field analysis to describe the dynamics of
organizational change at Ford Motor Company. The Global
Connections 15.2 feature about Ford’s transformation provides
some information, but think about other forces for and against
change beyond the information provided in this vignette.
3. Employee resistance is a symptom, not a problem, in the
change process. What are some of the real problems that
may underlie employee resistance?
4. Senior management of a large multinational corporation is
planning to restructure the organization. Currently, the or-

ganization is decentralized around geographic areas so that
the executive responsible for each area has considerable au-
tonomy over manufacturing and sales. The new structure
will transfer power to the executives responsible for different
product groups; the executives responsible for each geo-
graphic area will no longer be responsible for manufacturing
in their area but will retain control over sales activities.
Describe two types of resistance senior management might
encounter from this organizational change.
5. Discuss the role of reward systems in organizational change.
Specifically, identify where reward systems relate to Lewin’s
force field model and where they undermine the organiza-
tional change process.
6. Web Circuits is a Malaysian-based custom manufacturer for
high-technology companies. Senior management wants to
introduce lean management practices to reduce production
costs and remain competitive. A consultant has recom-
mended that the company start with a pilot project in one
department and, when successful, diffuse these practices to
other areas of the organization. Discuss the advantages of
this recommendation, and identify three ways (other than
the pilot project’s success) to make diffusion of the change
effort more successful.
7. What is the role of formal and informal networks in organi-
zations interested in undergoing change?
8. Suppose that you are vice president of branch services at the
Bank of East Lansing. You notice that several branches have
consistently low customer service ratings, even though there
are no apparent differences in resources or staff characteris-
tics. Describe an appreciative inquiry process in one of these
branches that might help overcome this problem.

action research, p. 440
appreciative inquiry, p. 441
force field analysis, p. 426
large group interventions, p. 445
parallel learning structure, p. 446
refreezing, p. 427
unfreezing, p. 427
key terms
They also need the assistance of several people (a guiding coali-
tion) who are located throughout the organization. Change also
occurs more informally through social networks. Viral change
operates through social networks using influencers.
Many organizational change initiatives begin with a pilot proj-
ect. The success of the pilot project is then diffused to other
parts
of the organization. This occurs by applying the MARS model,
including motivating employees to adopt the pilot project’s
meth-
ods, training people to know how to adopt these practices,
helping
clarify how the pilot can be applied to different areas, and
provid-
ing time and resources to support this diffusion.
15-5 Describe and compare action research, appreciative
inquiry, large group interventions, and parallel learn-
ing structures as formal approaches to organizational
change.
Action research is a highly participative, open-systems
approach
to change management that combines an action orientation

(changing attitudes and behavior) with research orientation
(testing theory). It is a data-based, problem-oriented process
that
diagnoses the need for change, introduces the intervention, and
then evaluates and stabilizes the desired changes.
Appreciative inquiry embraces the positive organizational be-
havior philosophy by focusing participants on the positive and
possible. Along with this positive principle, this approach to
change applies the constructionist, simultaneity, poetic, and
anticipatory principles. The four stages of appreciative inquiry
include discovery, dreaming, designing, and delivering.
Large group interventions are highly participative events
that view organizations as open systems (i.e., involve as many
employees and other stakeholders as possible) and adopt a
future and positive focus of change. Parallel learning struc-
tures rely on social structures developed alongside the formal
hierarchy with the purpose of increasing the organization’s
learning. They are highly participative arrangements, com-
posed of people from most levels of the organization who
follow the action research model to produce meaningful orga-
nizational change.
15-6 Discuss two cross-cultural and three ethical issues in
organizational change.
One significant concern is that organizational change theories
developed with a Western cultural orientation potentially con-
flict with cultural values in some other countries. Also,
organiza-
tional change practices can raise one or more ethical concerns,
including increasing management’s power over employees,
threatening individual privacy rights, and undermining individ-
ual self-esteem.
448

500
efiles
449
CASE STUDY: TRANSACT INSURANCE CORPORATION
TransAct Insurance Corporation (TIC) provides automobile
insurance throughout the Southeastern United States. Last
year, a new president was hired by TIC’s Board of Directors
to improve the company’s competitiveness and customer ser-
vice. After spending several months assessing the situation,
the new president introduced a strategic plan to strengthen
TIC’s competitive position. He also replaced three vice-
presidents. Jim Leon was hired as vice-president of Claims,
TIC’s largest division with 1,500 employees, 50 claims center
managers, and 5 regional directors.
Jim immediately met with all claims managers and directors
and visited employees at TIC’s 50 claims centers. As an out-
sider, this was a formidable task, but his strong interpersonal
skills and uncanny ability to remember names and ideas helped
him through the process. Through these visits and discussions,
Jim discovered that the claims division had been managed in a
relatively authoritarian, top-down manner. He could also see
that morale was very low and employee–management relations
were guarded. High workloads and isolation (adjusters work in
tiny cubicles) were two other common complaints. Several
managers acknowledged that the high turnover among claims
adjusters was partly due to these conditions.
Following discussions with TIC’s president, Jim decided to
make morale and supervisory leadership his top priority. He
initiated a divisional newsletter with a tear-off feedback form

for employees to register their comments. He announced an
open-door policy in which any claims division employee
could speak to him directly and confidentially without going
first to the immediate supervisor. Jim also fought organiza-
tional barriers to initiate a flex-time program so that employ-
ees could design work schedules around their needs. This
program later became a model for other areas of TIC.
One of Jim’s most pronounced symbols of change was the
“Claims Management Credo” outlining the philosophy that
every claims manager would follow. At his first meeting with
the complete claims management team, Jim presented a list
of what he thought were important philosophies and actions
of effective managers. The management group was asked to
select and prioritize items from this list. They were told that
the resulting list would be the division’s management philos-
ophy and all managers would be held accountable for abiding
by its principles. Most claims managers were uneasy about
this process, but they also understood that the organization
was under competitive pressure and that Jim was using this
exercise to demonstrate his leadership.
The claims managers developed a list of 10 items, such as
encouraging teamwork, fostering a trusting work environment,
setting clear and reasonable goals, and so on. The list was circu-
lated to senior management in the organization for their com-
ment and approval, and sent back to all claims managers for
their endorsement. Once this was done, a copy of the final
document was sent to every claims division employee. Jim also
announced plans to follow up with an annual survey to evalu-
ate each claims manager’s performance. This concerned the
managers, but most of them believed that the credo exercise
was a result of Jim’s initial enthusiasm and that he would be
too busy to introduce a survey after settling into the job.
One year after the credo had been distributed, Jim an-
nounced that the first annual survey would be conducted. All
claims employees would complete the survey and return it

confidentially to the human resources department, where the
survey results would be compiled for each claims center man-
ager. The survey asked about the extent to which the man-
ager had lived up to each of the 10 items in the credo. Each
form also provided space for comments.
Claims center managers were surprised that a survey
would be conducted, but they were even more worried about
Jim’s statement that the results would be shared with employ-
ees. What “results” would employees see? Who would distrib-
ute these results? What happens if a manager gets poor ratings
from his or her subordinates? “We’ll work out the details
later,” said Jim in response to these questions. “Even if the
survey results aren’t great, the information will give us a good
baseline for next year’s survey.”
The claims division survey had a high response rate. In some
centers, every employee completed and returned a form. Each
report showed the claim center manager’s average score for
each
of the 10 items as well as how many employees rated the man-
ager at each level of the five-point scale. The reports also in-
cluded every comment made by employees at that center.
No one was prepared for the results of the first survey.
Most managers received moderate or poor ratings on the
10 items. Very few managers averaged above 3.0 (out of a
5-point scale) on more than a couple of items. This suggested
that, at best, employees were ambivalent about whether their
claims center manager had abided by the 10 management
philosophy items. The comments were even more devastating
than the ratings. Comments ranged from mildly disap-
pointed to extremely critical of their claims manager. Em-
ployees also described their long-standing frustration with
TIC, high workloads, and isolated working conditions. Sev-
eral people bluntly stated that they were skeptical about the
changes that Jim had promised. “We’ve heard the promises
before, but now we’ve lost faith,” wrote one claims adjuster.
The survey results were sent to each claims manager, the

regional director, and employees at the claims center. Jim in-
structed managers to discuss the survey data and comments
with their regional manager and directly with employees. The
claims center managers, who thought employees only received
average scores, went into shock when they realized that the re-
ports included individual comments. Some managers went to
their regional director, complaining that revealing the personal
comments would ruin their careers. Many directors sympa-
thized, but the results were already available to employees.
When Jim heard about these concerns, he agreed that the
results were lower than expected and that the comments
should not have been shown to employees. After discussing
the situation with his directors, he decided that the discus-
sion meetings between claims managers and their employees
should proceed as planned. To delay or withdraw the reports
500
efiles
SELF-ASSESSMENT
ARE YOU TOLERANT OF CHANGE?
PURPOSE This exercise is designed to help you under-
stand how people differ in their tolerance for change.
INSTRUCTIONS Read each of the statements following
and circle the response that best fits your personal belief.
Then, use the scoring key in the Appendix at the end of this
book to calculate your results. This self-assessment should
be completed alone so that you can rate yourself honestly
without concerns of social comparison. Class discussion

will focus on the meaning of the concept measured by this
scale and its implications for managing change in organiza-
tional settings.
TEAM EXERCISE: STRATEGIC CHANGE INCIDENTS
PURPOSE This exercise is designed to help you identify
strategies for facilitating organizational change in various
situations.
INSTRUCTIONS
1. The instructor will place students into teams, and each
team will be assigned one or both of the scenarios pre-
sented next.
2. Each team will diagnose the scenario to determine the
most appropriate set of change management practices.
Where appropriate, these practices should (a) create an
urgency to change, (b) minimize resistance to change,
and (c) refreeze the situation to support the change ini-
tiative. Each of these scenarios is based on real events.
3. Each team will present and defend its change manage-
ment strategy. Class discussion regarding the appropriate-
ness and feasibility of each strategy will occur after all
teams assigned the same scenario have presented. The in-
structor will then describe what the organizations actually
did in these situations.
SCENARIO 1: GREENER TELCO The board of
directors at a large telephone company wants its executives to
make the organization more environmentally friendly by
encouraging employees to reduce waste in the workplace.
Government and other stakeholders expect the company to
take this action and be publicly successful. Consequently, the

chief executive officer wants to significantly reduce paper us-
age, trash, and other waste throughout the company’s many
widespread offices. Unfortunately, a survey indicates that em-
ployees do not value environmental objectives and do not
know how to “reduce, reuse, recycle.” As the executive re-
sponsible for this change, you have been asked to develop a
strategy that might bring about meaningful behavioral
change toward this environmental goal. What would you do?
SCENARIO 2: GO FORWARD AIRLINE A major
airline had experienced a decade of rough turbulence, includ-
ing two bouts of bankruptcy protection, 10 managing direc-
tors, and morale so low that employees had removed the
company’s logo from their uniforms out of embarrassment.
Service was terrible, and the airplanes rarely arrived or left the
terminal on time. This was costing the airline significant
amounts of money in passenger layovers. Managers were par-
alyzed by anxiety, and many had been with the firm so long
that they didn’t know how to set strategic goals that worked.
One-fifth of all flights were losing money, and the company
overall was near financial collapse (just three months to de-
faulting on payroll obligations). You and the newly hired
CEO must get employees to quickly improve operational ef-
ficiency and customer service. What actions would you take
to bring about these changes?
450
would undermine the credibility and trust that Jim was try-
ing to develop with employees. However, the regional direc-
tor attended the meeting in each claims center to minimize
direct conflict between the claims center manager and
employees.
Although many of these meetings went smoothly, a few
created harsh feelings between managers and their employ-
ees. The source of some comments were easily identified by

their content, and this created a few delicate moments in
several sessions. A few months after these meetings, two
claims center managers quit and three others asked for
transfers back to nonmanagement positions in TIC. Mean-
while, Jim wondered how to manage this process more
effectively, particularly since employees expected another
survey the following year.
Discussion Questions
1. What symptom(s) exist in this case to suggest that
something has gone wrong?
2. What are the main causes of these symptoms?
3. What actions should the company take to correct these
problems?
© 2000, Steven L. McShane and Terrance J. Bogyo. This case is
based on
actual events, but names, industry, and some characteristics
have been
changed to maintain anonymity.
500
efiles
Week 8 Written Assignment – Org Behavior
Read the TRANSACT INSURANCE CORPORATION case
study at the end of Chapter 15 of our text.
Answer the following questions in a 3-4 page (not counting
cover page and references), APA formatted document and place
in the drop box by the end of the week. Please insure you apply

critical thinking and draw from your personal and professional
experiences when answering the questions.
1. What symptom(s) exist in this case to suggest that something
has gone wrong?
2. What are the main causes of these symptoms?
3. What actions should the company take to correct these
problems?
Readings
· McShane, S.L., & Von Glinow, M.A. (2015). Organizational
Behavior: Emerging Knowledge, Global Reality (7th eds.).
New York: McGraw-Hill. Chapter 15 - Organizational Change
(pp. 424-451)

Organizational Change Approaches Explained

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