Chapter 18 Organizational Change and Stress Management Page
Chapter 18
Organizational Change
and Stress Management
LEARNING OBJECTIVES
After studying this chapter, students should be able to:
18-1. Contrast the forces for change and planned change.
18-2. Describe ways to overcome resistance to change.
18-3. Compare the four main approaches to managing organizational change.
18-4. Demonstrate three ways of creating a culture for change.
stress at work.
18-7. Describe individual and organizational approaches to managing stress at
work.
INSTRUCTOR’S RESOURCES
Instructors may wish to use the following resources when presenting this chapter.
Text Exercises
Career OBjectives: How Can I Bring My Team’s Overall Stress Level Down?
Myth or Science?: “When You’re Working Hard, Sleep Is Optional”
An Ethical Choice: Manager and Employee Stress During Organizational Change
MyLab Management
oPersonal Inventory Assessments: Tolerance of Ambiguity Scale
oWatch It!: East Haven Fire Department: Managing Stress
oTry It!: Multichapter Simulation: Change
Point/Counterpoint: Companies Should Encourage Stress Reduction
Questions for Review
Experiential Exercise: Learning From Work
Ethical Dilemma: All Present and Accounted For
680
Chapter 18 Organizational Change and Stress Management Page
Text Cases
Case Incident 1: Sprucing Up Walmart
Case Incident 2: Lonely Employees
Instructor’s Choice
This section presents an exercise that is NOT found in the student’s textbook. Instructor’s
Choice reinforces the text’s emphasis through various activities. Some Instructor’s
Choice activities are centered on debates, group exercises, Internet research, and student
experiences. Some can be used in class in their entirety, while others require some
additional work on the student’s part. The course instructor may choose to use these at
any time throughout the class—some may be more effective as icebreakers, while some
may be used to pull together various concepts covered in the chapter.
Web Exercises
and ideas for researching OB topics on the Internet. The exercises “Exploring OB Topics
on the Web” are set up so that you can simply photocopy the pages, distribute them to
your class, and make assignments accordingly. You may want to assign the exercises as
an out-of-class activity or as lab activities with your class.
Summary and Implications for Managers
The need for change has been implied throughout this text. For instance, think about
attitudes, motivation, work teams, communication, leadership, organizational structures,
human resource practices, and organizational cultures. Change was an integral part in our
discussion of each. If environments were perfectly static, if employees’ skills and abilities
were always up to date and incapable of deteriorating, and if tomorrow were always
exactly the same as today, organizational change would have little or no relevance to
managers. But the real world is turbulent, requiring organizations and their members to
undergo dynamic change if they are to perform at competitive levels. Coping with all
these changes can be a source of stress, but with effective management, challenge can
enhance engagement and fulfillment, leading to the high performance that, as you’ve
discovered in this text, is one major goal of the study of organizational behavior (OB).
Specific implications for managers are below:
Consider that, as a manager, you are a change agent in your organization. The
decisions you make and your role-modeling behaviors will help shape the
organization’s change culture.
Your management policies and practices will determine the degree to which
the organization learns and adapts to changing environmental factors.
Some stress is good. Low to moderate amounts of stress enable many people
to perform their jobs better by increasing their work intensity, alertness, and
ability to react. This is especially true if stress arises due to challenges on the
job rather than hindrances that prevent employees from doing their jobs
681
Chapter 18 Organizational Change and Stress Management Page
effectively.
You can help alleviate harmful workplace stress for your employees by
accurately matching work-loads to employees, providing employees with
stress-coping resources, and responding to their concerns.
You can identify extreme stress in your employees when performance
declines, turnover increases, health-related absenteeism increases, and
engagement declines. However, by the time these symptoms are visible, it
may be too late to be helpful, so stay alert for early indicators and be
proactive.
This chapter begins with a discussion of change at Hyatt Hotels. While changes can be good, such as
finishing school or responding to considerable organizational growth like Hyatt has, many changes bring
stress to everyone involved. This chapter is about change and stress. We describe environmental forces that
require firms to change, the reasons people and organizations often resist change, and the way this
resistance can be overcome. We review processes for managing organizational change. Then we move to
the topic of stress and its sources and consequences. In closing, we discuss what individuals and
organizations can do to better manage stress levels and realize positive outcomes for organizational
behavior (OB), which after all is the purpose of this text in its entirety.
BRIEF CHAPTER OUTLINE
I. Change
A. Forces for Change
1. Organizations face a dynamic and changing environment. This requires
stimulants for change.
2. Nature of The Workforce
demographic changes, immigration, and outsourcing.
3. Technology is changing jobs and organizations.
concept in the near future.
4. Economic Shocks
Financial, and Ameriquest.
b. Millions of jobs were lost worldwide.
5. Competition is Changing
town.
b. Successful organizations will be fast on their feet, capable of developing
6. Social trends don’t remain static either.
a. Organizations must therefore continually adjust product and marketing
Stories.”
682
Chapter 18 Organizational Change and Stress Management Page
rather than optional.
7. World Politics
a dramatic rise in the power and influence of China, populism and
B. Planned Change
2. There are two goals of planned change:
environment.
b. Change employee behavior.
consultants.
4. Many change agents fail because of organizational resistance to change.
II. Resistance to Change
A. Introduction
1. Our egos are fragile, and we often see change as threatening.
needed.
3. Resistance to change can be positive if it leads to open discussion and debate.
4. Resistance to change does not necessarily surface in standardized ways.
5. Resistance can be overt, implicit, immediate, or deferred.
by their sources.
7. It’s worth noting that not all change is good.
B. Overcoming Resistance to Change
1. Communication
a. Resistance can be reduced on two levels through communicating to help
employees see the logic of a change.
2. Participation
participated.
b. Prior to making a change, those opposed can be brought into the decision
process, assuming they have the expertise to make a meaningful
contribution.
c. The negatives—potential for a poor solution and great time consumption.
3. Building support and commitment
adjustment.
683
Chapter 18 Organizational Change and Stress Management Page
b. When managers or employees have low emotional commitment to change,
4. Develop positive relationships
a. People are more willing to accept changes if they trust the managers
implementing them and see them as legitimate.
5. Implementing changes fairly
a. One way organizations can minimize negative impact is to make sure
change is implemented fairly.
6. Manipulation and cooptation
a. Manipulation refers to covert influence attempts.
key role in the change decision.
c. Both manipulation and cooptation are relatively inexpensive and easy
ways to gain support.
i. The tactics can backfire if the targets become aware that they are
being tricked or used.
7. Selecting people who accept change
d. Studies have shown that teams that are strongly motivated by learning
about and mastering tasks are better able to adapt to changing
environments.
8. Coercion
a. Coercion is the application of direct threats or force upon the resisters.
b. Examples of coercion are threats of transfer, loss of promotions, negative
performance evaluations, and a poor letter of recommendation.
C. The Politics of Change
1. Change threatens the status quo, making it an inherently political activity.
2. Politics suggests the impetus for change is more likely to come from outside
change agents, employees new to the organization (who have less invested in
the status quo), or managers slightly removed from the main power structure.
3. Managers who have spent their entire careers with a single organization and
eventually achieve a senior position in the hierarchy are often major
impediments to change.
a. It is a very real threat to their status and position, yet, they may be
expected to implement changes.
4. By acting as change agents, they can convey to stockholders, suppliers,
employees, and customers that they are addressing problems and adapting to a
dynamic environment.
684
Chapter 18 Organizational Change and Stress Management Page
III. Approaches to Managing Organizational Change
A. Lewin’s Three-Step Model (Exhibit 18-3)
1. Kurt Lewin argued that successful change in organizations should follow three
steps:
a. Unfreezing the status quo.
b. Movement to a new state.
c. Refreezing the new change to make it permanent.
2. The status quo can be considered to be an equilibrium state.
a. To move from this equilibrium—to overcome the pressures of both
individual resistance and group conformity—unfreezing is necessary.
(Exhibit 18-4)
b. Companies that have been successful in the past are likely to encounter
restraining forces because people question the need for change.
c. Once the change has been implemented, the new situation needs to be
refrozen so that it can be sustained over time.
B. Kotter’s Eight-Step Plan for Implementing Change (Exhibit 18-5)
1. John Kotter of the Harvard Business School built on Lewin’s three-step model
to create a more detailed approach for implementing change.
2. Kotter began by listing common mistakes managers make when trying to
initiate change.
a. They may fail:
into the organization’s culture.
vi. They may also declare victory too soon.
b. Kotter then established eight sequential steps to overcome these problems.
i. They’re listed in Exhibit 18-5. Notice how Kotter’s first four steps
essentially extrapolate Lewin’s “unfreezing” stage.
“refreezing.”
iii. So Kotter’s contribution lies in providing managers and change agents
with a more detailed guide for successfully implementing change.
C. Action Research
1. Action research is a change process based on the systematic collection of
indicate.
2. The process consists of five steps: diagnosis, analysis, feedback, action, and
evaluation. These steps closely parallel the scientific method.
a. Diagnosis begins by gathering information about problems, concerns, and
needed changes from members of the organization.
areas, and possible actions.
685
Chapter 18 Organizational Change and Stress Management Page
c. Action research includes extensive involvement of the people who will be
involved in the change program.
compared and evaluated.
3. Action research provides at least two specific benefits for an organization.
a. First, it is problem-focused. The change agent objectively looks for
problems and the type of problem determines the type of change of action.
b. Second, resistance to change is reduced. Once employees have actively
momentum of its own.
D. Organizational Development
1. Introduction
a. Organizational development (OD) is a collection of change methods that
try to improve organizational effectiveness and employee well-being.
environment.
2. There are six interventions that change agents might consider using. They are:
sensitivity training, survey feedback, process consultation, team building,
intergroup development, and appreciative inquiry.
a. Sensitivity Training
group interaction.
b. Survey Feedback
i. Everyone can participate in survey feedback.
c. Process Consultation
i. An outside consultant works with clients through crafting “a
d. Team Building
i. Team building uses high-interaction group activities to increase trust
and openness among team members, improve coordinative efforts, and
increase team performance.
e. Intergroup Development
and perceptions about each other.
f. Appreciative Inquiry
i. This type of OD brings to light the positive, rather than the conflict.
686
Chapter 18 Organizational Change and Stress Management Page
iii. AI is done in 4 steps
(a) Discovery
(i) Discovery sets out to identify what people think are the
organization’s strengths.
(b) Dreaming
will be like in 5 years.
(c) Design
(i) Participants find a common vision of how the organization will
look in the future and agree on its unique qualities.
(d) Destiny
develop implementation strategies.
(e) AI has proven to be an effective change strategy in organizations
such as GTE, Roadway Express, American Express, and the U.S.
Navy.
(f) The end result of AI was a renewed culture focused on winning
attitudes and behaviors.
IV. Creating a Culture for Change
A. Introduction
creating a learning organization.
B. Managing a Paradox
1. In a paradox situation, we are required to balance tensions across various
courses of action. There is a constant process of finding a balancing point, a
dynamic equilibrium, among shifting priorities over time.
change and adaptation.
C. The idea of paradox sounds abstract, but more specific concepts have begun to
emerge from a growing body of research.
D. Several key paradoxes have been identified.
1. Learning is a paradox because it requires building on the past while rejecting
it at the same time.
requiring empowerment and flexibility.
3. Performing is a paradox between creating organization-wide goals to
concentrate effort and recognizing the diverse goals of stakeholders inside and
outside the organization.
687
Chapter 18 Organizational Change and Stress Management Page
unique individuals.
E. Managers can learn a few lessons from paradox theory, which states the key
paradox in management is that there is no final optimal status for an organization.
1. The first lesson is that as the environment and members of the organization
change, different elements take on more or less importance.
688