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Chapter 18 - Managing Change and Stress
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2. To what extent did Vineet Nayar follow the change models proposed by Lewin
and Kotter?
a. Lewin’s change model uses three steps to initiate, manage, and stabilize
the change process: unfreezing, changing, and refreezing. Vineet Nayar
engaged in unfreezing by meeting with managers at HCL’s offices around
3. Which of the target elements of change within the systems model of change were
affected by the changes at HCL?
a. As presented in Figure 18-3, target elements of change include
Chapter 18 - Managing Change and Stress
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linked to the firm’s reward system. The procedures for the planning
process were changed by having managers make video recordings
4. What did Vineet Nayar do to overcome resistance to change? Could he have
done anything differently? Explain.
a. Table 18-2 describes six strategies for overcoming resistance to change.
These strategies include (1) education + communication; (2) participation
+ involvement; (3) facilitation + support; (4) negotiation + agreement; (5)
used.
5. What did this case teach you about organizational change? Discuss.
a. Answers will vary.
To gain further insight and knowledge about HCL Technologies, visit its website:
www.hcltech.com/ and explore the content under the “About Us” section.
Chapter 18 - Managing Change and Stress
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LEGAL/ETHICAL CHALLENGE: Is There an Ethical Way to Implement Downsizing
without Hurting Your Best Employees?
Solving the Dilemma: How would you have handled the layoffs at Intel?
1. Intel’s approach sounds logical to me. Revenues are up, and the company just
unveiled a new processing chip that Time called the best invention of the year.
You can’t make everyone happy when you let go more than 10,000 people.
2. Downsizing solely by the numbers is bad. Management should have
accommodated employees’ passions and interests when restructuring even if it
resulted in less cuts than desired. In the long run, this will lead to higher
employee satisfaction and performance.
3. It sounds like the criticisms are being leveled by people who don’t like their new
assignments. They should quit complaining and be happy that they are still
employed.
4. I am not sure that there is an optimum approach. It is impossible to balance the
short-term goal of reducing costs while maintaining a positive work environment
in which people are doing the type of work they are passionate about.
5. Invent other interpretations or options. Discuss.
Discussion:
Organizations have several options when determining the criteria to be used to reduce
workforce levels during reorganization. Common criteria include seniority, performance,
and competencies. Each one of these criteria has its own advantages and
disadvantages. The advantage of using seniority is that it rewards employees for their
longevity—people who have been loyal to the organization for a long period of time are
those that keep their jobs when the company needs to reduce its workforce. This
encourages employees to have long careers with an organization. The disadvantage of
using seniority is that it does not effectively reward performance. New employees may
be making substantial contributions to the organization, but because of their short
tenure with the organization, they are the ones that are let go. When using performance
as the decision-making criterion, those employees making the most relevant
contributions to the organization are the ones that remain employed with the firm. The
disadvantage of using performance is that employee morale of the long-term employees
may suffer, and the organization might face legal scrutiny if all of the organization’s poor
performers happen to be older workers. The advantage of using competencies is that
the employer is ensured that the skills and knowledge that it will need in the future will
still be possessed by the firm’s human capital. Those employees with valued skills and
competencies are the ones that stay employed with the organization. This would allow
the firm to continue to be successful in the future. The disadvantage of relying on
Chapter 18 - Managing Change and Stress
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competencies to make layoff decisions is that the categorizing of employees may fail to
reflect the employees’ passions and interests from work. Just because someone has a
competency in a particular skill does not mean that the person wants to have a job that
revolves around that competency. An employee might be more intrinsically motivated
by the opportunity to learn new skills and competencies.
Regardless of the criteria used to make layoff decisions, any reorganization that does
not incorporate the characteristics of an effective change management program is likely
to fail. Employees need to understand why the current workforce levels are
inappropriate or inefficient. Benchmarking data can be used to show how the
company’s workforce levels compare to key competitors. Employees need to know the
rationale for the criteria that will be used to make the layoff decisions and their
participation should be sought when determining what the criteria should be.
Employees should be provided the opportunity to discuss how the layoffs might affect
them. If employees are committed to the change process, any of the decision-making
criteria can effectively be used. The criticism targeted at Intel seems to be more about
the company’s change management process rather than the specific individuals who
were let go.
Internet Exercise
http://www.mindtools.com/
For this internet exercise, we return once again to the http://www.MindTools.com
website we explored in Chapter 14. This website provides numerous articles and
assessments for a variety of critical skills sets and this time we will use the website to
further explore your change management skills.
From the website’s homepage at http://www.mindtools.com, click on the “Project
Management” link under the “Explore the Toolkit” content area. Then click on the link
for the “Change Management” category. Then click on the link for the “How Good Are
Your Change Management Skills?” to complete the quiz. The quiz has 16 questions
and should take you less than 5 minutes to complete. After you have answered the quiz
questions, click on “Calculate My Total” to see your score and to review feedback based
on your score. Return to the “Change Management” content area and review the
material in the “Change Management,” “Lewin’s Change Management Model” and
“Kotter's 8-Step Change Model” sections, as well as any other sections that appear
interesting to you.
Questions:
1. What feedback did you find most helpful from the results of the “How Good Are
Your Change Management Skills” assessment? Discuss practical steps you
could take to improve your change management skills.
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2. Explain Lewin’s ice cube metaphor for organizational change. How important is
the unfreezing stage in organizational change?
3. Assume you want to introduce change to the company where you work or at a
student organization in which you participate. How could you use the change
model proposed by Kotter to more effectively manage the change process?
4. Why is it difficult to enact change in organizations?
5. Based on what you have learned in this course, how will you be able to more
effectively manage the “people” component during a change management
initiative at your organization?
INSTRUCTIONAL RESOURCES
1. Classroom discussion can be facilitated with the book “Toolkit for Organizational
Change” by T. F. Cawsey and G. Deszca (Sage Publications, Inc., 2007).
2. See “Topic 14: Change” in “An Instructor’s Guide to an Active Classroom” by A.
Johnson and A. Kinicki (McGraw-Hill/Irwin, 2006).
3. See “The Bikestuff Simulation: Experiencing the Challenge of Organizational
Change” by K. Rollag and S. Parise in Journal of Management Education, 2005,
Vol. 29(5), pp. 769-787.
TOPICAL RESOURCES
1. See “Rapid Transformation: A 90-day Plan for Fast and Effective Change” by B.
Tabrizi (Harvard Business School Press Books, 2007).
2. See “Reflective Decisions: The Use of Socratic Dialogue in Managing
Organizational Change” by R. Skordoulis and P. Dawson in Management
Decision, 2007, Vol. 45, pp. 991-1007.
3. See “A Positive Approach to Workplace Stress” by J. Robison in Gallup
Management Journal Online, 6/14/2007.
4. See “Organizational Justice and Stress: The Mediating Role of Work-Family
Conflict” by T. Judge and J. Colquitt in Journal of Applied Psychology, 2004, Vol.
89(3), pp. 395-404.
5. See “Challenge and Hindrance Stress: Relationships With Exhaustion, Motivation
to Learn, and Learning Performance” by J. LePine, M. LePine, and C. Jackson in
Journal of Applied Psychology, 2004, Vol. 89(5), pp. 883-891.
Chapter 18 - Managing Change and Stress
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VIDEO RESOURCES
1. Individual differences in the reaction to change are explored in the film
"Managing at the Speed of Change" (CRM Films).
2. A view of change from a non-traditional paradigm is the subject of the film
"Leadership and the New Science" (CRM Films).
3. Technological change and market fragmentation as forces of change are covered
in the film "Power of Change Series: The Management Revolution" (CRM Films).
4. Participation in the change process is explored in the film "Power of Change
Series: Reinventing the Organization" (CRM Films).
5. The changing relationships between employer and employee are the topic of the
film "New Workplace" (CRM Films).
6. Coping with change is the topic of the film "Taking Charge of Change" (CRM
Films).
7. Techniques for managing change are the subject of the film "All Change (The
Management of Change)" (Films Incorporated).
DISCUSSION QUESTIONS
1. How can managers effectively monitor the external and internal forces for change
impacting their organizations?
2. Discuss the importance of the unfreezing and the refreezing stages in Lewin’s
change model.
3. Assume a company wanted to introduce telecommuting (see Chapter 14) to its
workforce. Discuss how the systems model of change could be used to guide
the change process.
4. Once again assume a company wanted to introduce telecommuting. Why is this
change likely to trigger resistance to change? How could a manager effectively
address this resistance?
5. Based on what you have learned in this chapter, how might you more effectively
manage your stress?
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SUPPLEMENTAL EXERCISE 1: ROBERTA AND THE NEW DIRECTION1
APPLICATION
This is the final installment of the continuing case, which started in Chapter 1 with
"Introduction to Roberta." In order to make this case as effective as possible, it is a good
idea to have students at least read the case from the introductory case. It provides the
background information needed to understand the situation more fully. The other
continuing cases may prove helpful to you and your students to provide more detailed
background information on the downsizing, the retirement of Sam Moore, and the
characters of Roberta, Bob Hiberley, and members of the Customer Service Department
staff.
In this case a demoralized department is being asked to face yet another change. They
just experienced a very badly-handled downsizing a month ago, and the rumor mill says
that more cuts are part of the company's future. While the employees trust Roberta, Bob
Hiberley has shown little interest or support in their department, and they are aware of
this. The company has also made poorly-handled changes in policy, and other "running
scared" decisions as a result of an inopportune acquisition and falling sales. Many
employees feel that they are paying the price for bad decisions at the top.
The primary reasons for resistance to change in this group (from the leading reasons for
resistance to change listed in the text) are a climate of mistrust and loss of status and/or
job security. These resistance factors are due to the problems HRI has created through
its handling of layoffs and policy changes. Employees no longer feel they can trust HRI to
operate fairly, and, based on the evidence in the other case installments, this is
reasonable.
As she tries to overcome resistance to change, Roberta can use two approaches outlined
in Table 18-2 of the text. First: Education and Communication. She has given her staff
incomplete information. While it is reasonable not to share the possible department move
before it has been approved, it places her employees in a situation where they are being
asked to evaluate a situation without all the pieces. As soon as possible, Roberta needs
to share the entire plan with her subordinates. Second: Participation and Involvement.
Much of what has happened at HRI occurred without any participation in the decisions by
anyone who was not a part of top management. As a result, the decisions have met
resistance and anger. Roberta can move in the direction of making people feel better
about the change, and encouraging their buy-in, by involving them in the decision. This is
very consistent with Roberta's management style.
The most important things Roberta can do to make this change process more positive
and productive are to provide as much information to her staff as possible, and give them
as much control over the change process and their role in it as possible. She also may
1 Co-written by Edwin C. Leonard, Indiana-Purdue University at Fort Wayne and Maria Muto, Arizona State
University.
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want to involve Francie in the process, so that her staff can get to know her. Roberta
feels good about the move, and she has to make sure that the staff sees the advantages
also.
* * *
ROBERTA AND THE NEW DIRECTION
Roberta was concerned about the way Bob Hiberley, her new boss since the forced
retirement of Sam Moore, felt about her department. When she talked to him about the
increase in customer retention rates over the past year, he didn't seem to understand the
value of this. In addition, his handling of the recent bout of layoffs, coupled with his
treatment of subordinates, told Roberta that his style of management was at odds with
her own.
Over the past several months, Roberta had met twice for lunch with Francie Hill, the vice
president of marketing. As they talked, Roberta became excited about the possibility of
moving her department under the marketing umbrella. There, her staff could interact
more directly with sales on customer-service issues. In addition, they would move from a
division that was characterized as overhead to the revenue-producing arm of the
company. This would give them more credibility in HRI, and would put both Roberta and
her department in a stronger position.
Francie and Roberta got along well, and found they had similar management styles.
Francie was ready to broach the subject of the move informally to Bob Hiberley, Roberta's
current boss, and Mr. Martin, the president of HRI. There was only one concern.
"Roberta, for us to accomplish what marketing will need from your department, there will
have to be a much more extensive and accessible tracking system," Francie told Roberta.
"Your department will have to become a true in-coming telemarketing resource, including
responsibility for tracking complaints by salesperson, geographical area, and client type.
In addition, I would like your staff to eventually take on the after-sale order responsibilities.
That would free my salespeople to be out generating more new customers with that
saved time."
"I am not sure that we can accomplish all that with our current phone and computer
systems," Roberta responded. "However, there are several systems currently on the
market that we could buy that would meet your needs."
"That sounds promising," Francie answered. "Why don't you do a little research to find
out what we are looking at in terms of cost and time to change systems? I've got money
left in my capital budget that we could spend on this, and if we play our cards right, we
may be able to demonstrate a noticeable return on the investment in the long run to the
company as a result."
As Roberta headed back toward her office, she felt good about her job for the first time in
Chapter 18 - Managing Change and Stress
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months. Under Francie's division, the customer-service department would be recognized
as an important contributor to the bottom line, both indirectly through customer retention,
and directly through after-sale order responsibilities. With the changes, Roberta realized
that she might even be able to bring back one or more of the staff people that had been
laid off the month before.
While Roberta knew that it was still too soon to let her staff know about the possible
move, she decided to broach the subject of looking at new telecommunication/customer
records systems. She knew that a number of staff members, particularly Kent and
Andrea, had often discussed what the department could do with the right equipment.
At the next full staff meeting, Roberta brought up the idea as a possibility, stressing the
advantages in terms of better customer service, more productivity, and more useful
information for the rest of HRI. "In the long run, a new system could be to the advantage
of both HRI and this department," Roberta concluded.
"We'll probably become so productive that even more of us will be out of a job,"
exclaimed Jennifer. "It's interesting that there wasn't enough money to keep Amanda,
Eugene, and Mary Jo on staff, but suddenly there's money for an expensive new
computer system," Kent commented bitterly.
"The way things are going around here, we'll probably all be replaced by a machine,"
Bill said. "Hiberley would certainly prefer that."
"Look group," Roberta responded, "This system should make us more valuable to HRI,
not less. If we can demonstrate a bottom-line effect from our department, we will have
more credibility, and your jobs will be safer, not in more danger. In addition, we will be
able to serve customers better, which is why we're here, after all."
DISCUSSION QUESTIONS
1. Looking at the leading reasons for resistance to change listed in your text, what
is the primary reason why this group is resistant, and why?
2. Which of the six strategies for overcoming resistance to change (Table 18-2)
should Roberta try to reduce resistance to the new system?
3. Roberta was only able to give her staff part of the total change picture. Do you
think her decision to share the possibility of buying a new system with her staff
was wise?
4. How do you think Roberta's staff will respond to the move to a new division?
What can Roberta do to make this entire change process more positive and
productive?
Chapter 18 - Managing Change and Stress
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SUPPLEMENTAL EXERCISE 2: HOW TO C.O.P.E. WITH STRESS2
APPLICATION
This exercise provides some basic techniques to reduce everyday stress. They provide
a simple stress reduction format that covers all aspects of a person's life. This
information is presented in a handout format on the next page. A variation of this
exercise is also given as the last part of the handout, so students can practice it later on
their own.
* * *
1. Have the class take their own pulses. Give them a 15 second time check, and then
have them multiply by four to find out their resting pulse rate.
2. Each student should take a five to ten minute relaxation period. During this period,
breathe in through the nose and out through the mouth. Follow the steps outlined in
the handout. Read the directions (also given below) aloud.
• Sit upright but comfortably and quietly with arms in lap and eyes closed. (Feet flat
on the floor.)
• Slowly repeat a peaceful word or phrase over and over to yourself in your mind, or
create a mental picture of a peaceful scene.
• Avoid distracting thoughts by keeping a passive mental attitude.
3. At the completion of a three to five minute relaxation period, (before students open
their eyes), do another 15 second pulse check. Chances are that a number of
students will find that their pulse rates have dropped.
HOW TO C.O.P.E. WITH STRESS
CONTROL THE SITUATION:
• Avoid unrealistic deadlines.
• Do your best, but know your limits. You cannot be everything to everyone.
• Learn to identify and limit your exposure to stressful and people.
2 Source: Robert Kreitner, Management, 1992 (Boston: Houghton Mifflin) Appendix B.
Chapter 18 - Managing Change and Stress
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OPEN UP TO OTHERS:
• Freely discuss your problems, frustrations, and sources of uptightness with those
who care about you.
• When in doubt, smile! A sincere smile often can defuse emotion and build a bridge
of goodwill.
PACE YOURSELF:
• Plan your day on a flexible basis.
• Don't try to do two or more things at the same time.
• Counter unproductive haste by slowing down to concentrate on the activity at hand
("stop to smell the roses along the way").
• Think before reacting.
• Live on a day-to-day basis rather than on a minute-to-minute basis.
EXERCISE AND RELAX:
• Engage in regular noncompetitive physical activity (e.g., take a ten-to-twenty minute
walk each day). Those who are in good physical condition can stay in shape by
jogging, swimming, riding a bike, or playing tennis, handball, or racquetball on a
regular basis (three or four times a week). (See your doctor when in doubt about
your physical condition.)
• When feeling uptight, relax for a few minutes by following these simple steps:
1. Sit comfortably with eyes closed in a quiet location.
2. Slowly repeat peaceful word or phrase over and over to yourself in your mind.
(A mental picture of a peaceful scene also works.)
3. Avoid distracting thoughts by keeping a passive mental attitude.
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SUPPLEMENTAL LECTURETTE 1: THE TRUSTING HEART3
APPLICATION
This lecturette may be used to supplement the chapter’s coverage of stress reduction
techniques.
* * *
Many people are choosing to change their lifestyle, including eating, sleeping, and
exercise behaviors, to improve their health and decrease the chances of problems later
in life.
However, one behavior change that can have a profound effect on health is more
intangible and more difficult to accomplish--changing your emotional response to the
world. According to research by heart specialist Dean Ornish and internist Redford
Williams, hostility and cynicism can foster biological patterns that may lead to heart
disease.
The solution? Work toward developing a "trusting heart." There are three elements to
this:
• Reduce your mistrust of others' motives.
• Reduce your levels and frequencies of emotions such as anger, frustration, and
irritation.
• Treat others with consideration, and be assertive when others are not treating you
appropriately.
Redford Williams developed a 12-step process to change a hostile and cynical
perspective, and develop a trusting heart.
1. Recognize and record your hostile and cynical thoughts. This will help you
recognize those situations where you are likely to respond negatively, and help you
develop strategies for coping with them to stop the hostility before it starts.
2. Acknowledge the problem to another. Confessing your concern to another person
and asking for his or her help and support in correcting your behavioral and cognitive
patterns is in itself an act of trust. It can also make or break the success of the
process.
3 Adapted from Redford Williams, “The Trusting Heart,” Psychology Today, January/February 1989, pp. 36-42.
Chapter 18 - Managing Change and Stress
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3. Stop cynical or hostile thoughts. Simply saying "STOP" loudly in your mind when
you recognize a hostile thought can be a powerful tool in dissipating it. Often,
hostility or cynicism is an unconscious habit, and a conscious break in the pattern
will have a positive impact over time.
4. Use reason to dissipate hostility. Often hostility has no real base, and can be
eliminated with a simple analysis of the situation.
5. Empathize with others. Working to understand others can help dissipate the
hostility you may be feeling toward them. Often, people are not actively out to get
you, and considering their motives can give you a useful perspective.
6. Use humor. Be willing to laugh at yourself, particularly when you realize that you are
being irrationally hostile. Laughter is an excellent way to dissipate anger.
7. Relax. Using meditation and other relaxation techniques can help you eliminate
frustrations as they arise. Once you get used to the feeling of relaxing and
consciously reducing stress, it will be easier to pull that same skill into everyday life.
8. Trust people. If this is difficult for you, begin with small trust activities, where being
wrong will cause very little harm. Letting go of suspicions is hard, but will get easier
as you practice it.
9. Listen to others. This can build trust from others because it indicates your interest
in them. This can foster stronger, more trusting relationships.
10. Be assertive. Do not stay silent when people are behaving in a hostile or cynical
way toward you. This will increase your likelihood of feeling frustrated and hostile
yourself. Instead, assertively let them know that their behavior is inappropriate and,
if possible, suggest a reasonable solution. Try to avoid those people who are
consistently hostile or cynical.
11. Live each day as if it was your last. This is a common suggestion, but it has value.
Pulling yourself out of a daily perspective into a life perspective can help make
frustrations and irritations unimportant. Understanding the fragility of life can help
you appreciate the good and ignore the bad.
12. Forgive rather than blame. This is for your sake, not theirs. When you blame
someone, you carry the anger that creates with you. When you forgive them, you
free yourself from them and the problems they caused.
These techniques may be hard to accomplish, but applying even some of these ideas
can help lead to a more trusting heart, and a more heart-healthy life.
Chapter 18 - Managing Change and Stress
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SUPPLEMENTAL LECTURETTE 2: OVERCOMING RESISTANCE TO CHANGE4
APPLICATION
This lecturette may be used to supplement the chapter’s coverage of organizational
change.
* * *
Change, even positive change, is difficult for most people. After years of experience
with downsizing, reengineering, and restructuring, employees are understandably wary
of organizational change efforts. So how does a manager minimize employee
resistance to change? Here are some suggestions:
Monitor events. Managers should monitor events within the organization in order to be
prepared for changes to come. Employees who have faith in their managers to
successfully monitor events have confidence in their leader’s ability to make sound
judgments and protect them from unreasonable demands.
Seek it out. If change is inevitable, seek it out in order to influence the decisions to be
made.
Be a positive role model. Modeling a positive attitude can help staff adjust to
upcoming changes.
Confront feelings. Share information whenever possible to alleviate fears and
suppress inaccurate grapevine information.
Sell the need for change. Explain the benefits of change in terms relevant and
understandable to those affected.
Set small goals. Successful accomplishment of small goals along the way help
employees remain motivated and provide a sense of achievement. Subgoals also
facilitate the monitoring and measurement of the change efforts.
Involve staff. Involving those affected in the decision-making process helps workers
buy into the new program or process.
4 Adapted from F. Stone, “Overcoming Opposition to Organizational Change,” Supervisory Management, October
1995, Vol. 40 No. 10, p. 9-10.
