Chapter 17 Organizational Change and Stress Management Page 239
Chapter 17
Organizational Change and
Stress Management
Chapter Overview
This chapter is about change. We describe environmental forces that
require managers to implement comprehensive change programs. We also consider why
people and organizations often resist change and how this resistance can be overcome. We
review various processes for managing organizational change. We also discuss
contemporary work stress issues for today’s managers.
Chapter Objectives
After studying this chapter, the student should be able to:
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2. Describe the sources for resistance to change.
4. Demonstrate two ways of creating a culture for change.
5. Describe the causes and consequences of work stress.
Suggested Lecture Outline
I. INTRODUCTION
A. Change is an environmental constant for modern organizations. Managers must be
able to help organizations change, understand the reasons for resistance of change,
and move organizations in new relevant directions.
II. FORCES FOR CHANGE
A. No company today is in a particularly stable environment.
2. Even though Apple has been successful with its iPad, the growing number of
competitors in the field of tablet computers suggests that Apple will need to
continually update and innovate to keep ahead of the market.
B. Six Specific Forces That Act As Stimulants for Change.
1. Changing Nature of the Work Force.
2. Technology.
a. Technology is continually changing jobs and organizations.
3. Economic Shocks.
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a. Monetary crises, fuel prices, stock market and real estate fluctuations,
coupled with historically low interest rates all create a much more dynamic
environment than existed in the recent past.
4. Competition.
a. The global economy also means global competition. Speed of development
5. Social Trends.
a. Consumers who are otherwise strangers now meet and share product
6. World Politics.
a. In recent years, we’ve seen a major set of financial crises that have rocked
global markets, a dramatic rise in the power and influence of China, and
dramatic shakeups in government across the Arab world.
b. Throughout the industrialized world, businesses—particularly in the
banking and financial sectors—have come under new scrutiny.
III. RESISTANCE TO CHANGE
A. Dynamics of Resistance to Change
1. We often see change as threatening.
a. One recent study showed that even when employees are shown data that
2. Resistance to change can be positive if it leads to open discussion and debate.
a. These responses are usually preferable to apathy or silence and can indicate
that members of the organization are engaged in the process, providing
change agents an opportunity to explain the change effort.
b. Change agents can also use resistance to modify the change to fit the
preferences of other members of the organization.
3. Resistance doesn’t necessarily surface in standardized ways. It can be overt,
implicit, immediate, or deferred.
a. It’s easiest for management to deal with overt and immediate resistance,
such as complaints, a work slowdown, or a strike threat.
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e. Or a single change of little inherent impact may be the straw that breaks the
camel’s back because resistance to earlier changes has been deferred and
stockpiled.
4. Exhibit 17.1 summarizes major forces for resistance to
change, categorized by their sources. Individual sources
reside in human characteristics such as perceptions,
personalities, and needs.
1) Organizational sources reside in the structural makeup of organizations
themselves.
5. It’s worth noting that not all change is good.
a. Speed can lead to bad decisions, and sometimes those initiating change fail
to realize the full magnitude of the effects or their true costs.
B. Overcoming Resistance to Change.
1. There are eight tactics change agents can use to deal with
resistance to change.
a. Education and Communication.
1) Resistance can be reduced by communicating with employees to help
them see the logic of the change.
2) Doing so reduces misinformation and can help managers “sell” the need
for the change.
b. Participation.
2) Assuming that the participants have the expertise to make a meaningful
contribution, the result could be a higher quality solution.
c. Building Support and Commitment.
1) If the emotional commitment to change can be raised it will reduce
resistance.
d. Develop Positive Relationships.
e. Implementing Changes Fairly.
1) As noted in Chapter 7, procedural fairness becomes especially important
when employees perceive an outcome as negative (as change often is).
2) Organizations should make sure employees see the changes are being
implemented consistently and fairly.
f. Manipulation and Cooptation.
2) The organization seeks not their advice but their endorsement.
3) This manipulative tactic can backfire if the targets become aware they
Exhibit 17.1
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1) Organizations that have selected individuals whose personality easily
2) Personalities that accept change are those that are open, risk-taking,
flexible, and have a high self-concept.
h. Coercion.
2) This technique is has limited effectiveness and may actually increase
resistance to change.
IV. APPROACHES TO MANAGING ORGANIZATIONAL CHANGE
A. This chapter presents three approaches to managing change:
Lewin’s classic three-step model of the change process, Kotter’s
eight-step plan, and organizational development.
B. Lewin’s Three-Step Model.
1. This model treats change as a break in the organization’s
equilibrium state.
to establish a new equilibrium state.
3. Unfreezing.
a. Pressure is required to overcome the inertia of the
current status quo.
b. Unfreezing must occur in one of three ways:
1) Driving Forces.
2) Restraining Forces.
3) Combination Approaches.
4. Movement.
a. Research on organizational change has shown that, to be effective, change
5. Refreezing.
a. Without this last step, change will likely be short-lived and employees will
attempt to revert to the previous equilibrium state.
b. The objective of refreezing, then, is to stabilize the new situation by
balancing the driving and restraining forces.
C. Kotter’s Eight-Step Plan for Implementing Change.
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2. These eight sequential steps overcome historic problems.
Exhibit 17.2
Exhibit 17.3
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3. The Eight Steps:
a. Establish a sense of urgency by creating a compelling reason
for why change is needed.
b. Form a coalition with enough power to lead the change.
c. Create a new vision to direct the change and strategies for achieving the
vision.
D. Organizational Development (OD).
1. OD is a generalized concept.
a. It encompasses a collection of change methods that seek
2. OD holds to the following underlying values:
a. Respect for People. People are believed to be responsible, conscientious,
and caring and should be treated with dignity and respect.
b. Trust and Support. Effective organizations are characterized by trust,
authenticity, openness, and supportive climate.
c. Power Equalization. Effective organizations deemphasize hierarchical
authority and control.
d. Confrontation. Problem should be openly confronted.
e. Participation. Involving people in decision-making regarding a change
increases their commitment to implementing the change.
3. Five OD Interventions for Change
a. Survey feedback.
1) One tool for assessing attitudes held by
2) A questionnaire, usually completed by all members of the organization
or unit, typically asks about their perceptions and attitudes on a range of
4) Particular attention is given to encouraging discussion and ensuring it
Exhibit 17.4
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5) For instance, are people listening? Are new ideas being generated? Can
6) Answers should lead the group to commit to various remedies for the
problems identified.
b. Process consultation.
1) Managers often sense their unit’s performance can be improved but are
unable to identify what to improve and how.
2) The purpose of process consultation (PC) is for an outside consultant to
3) PC is similar to sensitivity training in assuming we can improve
4) But PC is more task directed, and consultants are there to “give the client
5) They do not solve the organization’s problems but rather guide or coach
6) The client develops the skill to analyze processes within his or her unit
and can continue to call on it long after the consultant is gone.
c. Team building.
1) We’ve noted throughout this book that organizations increasingly rely
2) Team building typically includes goal setting, development of
3) It may emphasize or exclude certain activities, depending on the purpose
of the development effort and the specific problems with which the team
is confronted.
d. Intergroup development.
2) Intergroup development seeks to change groups’ attitudes, stereotypes,
and perceptions about each other.
a) Here, training sessions closely resemble diversity training (in fact,
diversity training largely evolved from intergroup development in
OD), except rather than focusing on demographic differences, they
b) Among several approaches for improving intergroup relations, a
popular one emphasizes problem solving.
3) Each group meets independently to list its perceptions of itself and of the
other group, and how it believes the other group perceives it.
a) The groups share their lists, discuss similarities and differences, and
look for the causes of disparities.
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b) Once they have identified the causes of the difficulty, the groups
move to the integration phase—developing solutions to improve
relations between them.
c) Subgroups can be formed of members from each of the conflicting
groups to conduct further diagnosis and formulate alternative
solutions.
e. Appreciative inquiry.
1) Most OD approaches are problem centered.
3) Appreciative inquiry (AI) instead accentuates the positive; that is, AI
focuses on an organization’s successes rather than its problems.
4) The AI process consists of four steps—discovery, dreaming, design, and
destiny—often played out in a large-group meeting over a 2- or 3-day
time period and overseen by a trained change agent.
a) Discovery sets out to identify what people think are the
organization’s strengths.
b) Employees recount times they felt the organization worked best or
when they specifically felt most satisfied with their jobs.
V. CREATING A CULTURE FOR CHANGE
A. We’ve considered how organizations can adapt to change.
2. In this section we review two such approaches: stimulating an innovative
culture and creating a learning organization.
B. Stimulating a Culture of Innovation.
1. Definition of innovation.
a. We said change refers to making things different.
b. Innovation, a more specialized kind of change, is a new idea applied to
2. Sources of Innovation.
a. There are three basic sources of innovation: structural, cultural, and human
resource variables.
1) Structural Variables. These are the most studied potential source of
innovation.
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2) Culture Variables.
3) Human Resources Variables.
a) Organizations that actively promote the
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(2) They share many of the characteristics of transformational
leaders through the use of inspiration and vision.
(4) Idea Champions tend to have a lot of autonomy and decision-
making discretion in their jobs.
(6) People in collectivist cultures prefer appeals for cross-functional
support for innovation efforts.
(7) People in high power distance cultures prefer champions to
(8) The higher the uncertainty avoidance of a society, the more
(9) These findings suggest that effective managers will alter their
organization’s championing strategies to reflect cultural values.
VI. WORK STRESS AND ITS MANAGEMENT.
A. What Is Stress?
1. Stress is a dynamic condition in which an individual is
confronted with an opportunity, demand, or resource
2. This is a complicated definition. Let’s look at its components more closely.
a. Although stress is typically discussed in a negative context, it is not
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c. Consider, for example, the superior performance an athlete or stage
performer gives in a “clutch” situation.
1) Such individuals often use stress positively to rise to the occasion and
perform at their maximum.
2) Similarly, many professionals see the pressures of heavy workloads and
3. Types of Workplace Stress:
a. Challenge Stress.
1) Stressors associated with workload, pressure to complete tasks, and
time urgency.
b. Hindrance Stress. Stressors that keep you from reaching your goals (for
example, red tape, office politics, confusion over job responsibilities).
4. Stress often results from demands and resources.
a. Demands.
1) These are the responsibilities, pressures, obligations, and even
uncertainties that individuals face in the workplace.
2) The greater the number of demands, typically the greater the stress
level.
b. Resources.
2) The scarcer the resources, the higher the stress, given the same level of
demands.
B. Consequences of Stress.
1. Stress shows itself in a number of ways, such as high blood pressure, ulcers,
2. These symptoms fit under three general categories: physiological, psychological,
and behavioral symptoms.
a. Physiological Symptoms.
1) Most early concern with stress was directed at physiological symptoms
2) Their work led to the conclusion that stress could create changes in
3) Recently, evidence suggests stress may have harmful physiological
effects.
4) One study linked stressful job demands increase susceptibility to upper
respiratory illnesses and poor immune system functioning, especially for
individuals with low self-efficacy.
b. Psychological Symptoms.
1) Job dissatisfaction is “the simplest and most obvious psychological
3) Jobs that make multiple and conflicting demands or that lack clarity
4) Similarly, the less control people have over the pace of their work, the
greater the stress and dissatisfaction.
5) Jobs that provide a low level of variety, significance, autonomy, feedback,
6) Not everyone reacts to autonomy in the same way, however. For those
who have an external locus of control, increased job control increases
the tendency to experience stress and exhaustion.
c. Behavioral Symptoms.
1) Behavior-related stress symptoms include changes in productivity,
absence, and turnover, as well as changes in eating habits, increased
C. Managing Stress.
functional and lead to higher performance, management
may not be concerned when employees experience
them.
a. Employees, however, are likely to perceive even low levels of stress as
undesirable.
b. It’s not unlikely, therefore, for employees and management to have different
notions of what constitutes an acceptable level of stress on the job.
2. Individual Approaches.
a. An employee can take personal responsibility for reducing stress levels.
1) Many people manage their time poorly.
3) So an understanding and utilization of basic time-management
4) A few of the best-known time-management principles are
a) making daily lists of activities to be accomplished,
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d) Knowing your daily cycle and handling the most demanding parts of
your job when you are most alert and productive.
b. Physicians have recommended noncompetitive physical exercise, such as
aerobics, walking, jogging, swimming, and riding a bicycle, as a way to deal
with excessive stress levels.
1) These forms of physical exercise increase heart capacity, lower the at-
c. Individuals can teach themselves to reduce tension through relaxation
techniques such as meditation, hypnosis, and biofeedback.
1) The objective is to reach a state of deep physical relaxation, in which you
2) Deep relaxation for 15 or 20 minutes a day releases tension and
3) A growing body of research shows that simply taking breaks from work
at routine intervals can facilitate psychological recovery and reduce
stress significantly and may improve job performance, and these effects
are even greater if relation techniques are employed.
d. As we have noted, friends, family, or work colleagues talk to provide an
outlet when stress levels become excessive.
1) Expanding your social support network provides someone to hear your
3. Organizational Approaches.
a. Several factors that cause stress—particularly task and role demands—are
controlled by management and thus can be modified or changed.
b. Strategies to consider include improved personnel selection and job
placement, training, realistic goal setting, redesign of jobs, increased
employee involvement, improved organizational communication, employee
sabbaticals, and corporate wellness programs.
c. Certain jobs are more stressful than others but, as already noted, individuals
differ in their response to stressful situations.
1) We know individuals with little experience or an external locus of
control tend to be more prone to stress.
3) Obviously, management shouldn’t restrict hiring to only experienced
4) Similarly, training can increase an individual’s self-efficacy and thus
lessen job strain.
d. We discussed goal setting in Chapter 7.
1) Individuals perform better when they have specific and challenging
2) Employees who are highly committed to their goals and see purpose in
3) Specific goals perceived as attainable clarify performance expectations.
4) The result is less employee frustration, role ambiguity, and stress.
e. Redesigning jobs to give employees more responsibility, more meaningful
work, more autonomy, and increased feedback can reduce stress because
these factors give employees greater control over work activities and lessen
dependence on others.
1) But as we noted in our discussion of work design, not all employees
want enriched jobs.
3) If individuals prefer structure and routine, reducing skill variety should
also reduce uncertainties and stress levels.
4) Role stress is detrimental to a large extent because employees feel
5) By giving these employees a voice in the decisions that directly affect
7) Increasing formal organizational communication with employees
reduces uncertainty by lessening role ambiguity and role conflict.
f. Given the importance that perceptions play in moderating the stress–
response relationship, management can also use effective communications
as a means to shape employee perceptions.
1) Remember that what employees categorize as demands, threats, or
g. Our final suggestion is organizationally supported wellness programs.
1) These typically provide workshops to help people quit smoking, control
2) Some help employees improve their psychological health as well.
3) A meta-analysis of 36 programs designed to reduce stress (including
4) Most wellness programs assume employees need to take personal
responsibility for their physical and mental health and that the
organization is merely a means to an end.
VII. Implications for Managers
A. The need for change has been implied throughout this text.
B. Think about attitudes, motivation, work teams,
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2. Describe the sources of resistance to change.
Answer: People tend to resist change, even in the face of evidence of its benefits.
There are two main sources of resistance to change: individual and organizational.
3. Summarize Lewin’s three-step change model.
Answer: This model treats change as a break in the organization’s equilibrium state.
The status quo has been disturbed and change is necessary to establish a new
equilibrium state. The first step is unfreezing. Pressure is required to overcome the
4. Explain the relationship between Lewin’s change model and Kotter’s plan for
implementing change.
5. Explain the values underlying most organizational development (OD) efforts.
6. Describe potential sources of, and ways of managing, work stress.
Answer: Stress may result from demands and resources. Demands are the
responsibilities, pressures, obligations, and even uncertainties individuals face in
Exercises
1. Self-analysis. How open to change are you? Select three activities you do frequently
on a daily basis: brushing your teeth, combing your hair, making a sandwich or
pouring a glass of milk. For 24 hours, consciously try to do these activities using the
hand opposite from the one you typically use. How did you feel during this 24-hour
period? Were you more anxious? Did you find yourself slipping into the habitual
use of your dominant hand? How strong were your habits? Write a one-page paper
summarizing your feelings and experiences during this 24-hour period.
2. Web Crawling. Using your favorite search engine, search the term “making change
happen” and review the listed websites. Your task is to find five techniques for
3. Teamwork. Divide the class into teams. Ask them to access the website
http://tomlaforce.com/stress-wrecks-teamwork/. After reviewing the site, ask
students to relate to assignments they have had in other classes where they were
required to work in groups. Can the students assess these groups as effective or not
(relate to production of the desired outcome)? Can patterns be identified such as
more effective group activity occurred when the group had less stress (maybe due
dates, complexity of the assignment, concern for grade or others)? Ask the students
to discuss their finding in the class.
4. Analyzing Your Organization (Cumulative Project). Discuss with your manager the
times in which he or she has met resistance to a proposed organizational change.
What types of resistance was encountered? How did the manager overcome the
resistance? What types of change seem to be “hot buttons” with this organization?
Have employees resisted when upper management implemented the change?
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Related to this, discuss the methods by which your organization tries to improve.
Do they have specific quality programs in place? How about OD initiatives? Find
5. Analyzing Your Organization (Summation). Review the answers you submitted for
your Analyzing Your Organization questions throughout this course. Write a three-
page summary of what you’ve learned through this course. How have your views
and beliefs regarding your organization changed since the beginning of the course?
Suggested Assignment
Divide the class into relatively large teams of six to eight people each. Students will
learn that necessary change may be undesired and resisted. Yet the resistance must
be overcome if the organization is to change, grow, and succeed. You can use this as
a double exercise. Either have the students simply strategize means to overcome
resistance, or (and this is a more complex option) have students think through the
whole change process and create alternative courses of action—other change efforts
that might help the college/university solve its problem in another way.
Introduce the following scenario (or one of your own that is more relevant to your
situation) to the class:
1. All freshmen and sophomores must live on campus in dorms (to increase
occupancy).
3. All faculty members will have their teaching loads increased by one class per
semester (to reduce the need for additional faculty).
4. All classes must have a minimum of fifteen enrollments or they will be
5. Students must pay a $250 per semester parking fee to have a car on campus
6. All majors with less than 100 students will either be consolidated or
eliminated (to focus resources on larger majors).
Have the teams brainstorm what type of resistance is likely to arise from these
changes and from whom. Have the teams share their findings with the whole class
and consolidate the specific examples of resistance into five or six categories.
Reform the teams and have them discuss what strategies might be effective in
overcoming each category of resistance. In addition, discuss what other ways the
college or university might address the problem. When complete, have each team
report their suggestions to the class for critique.
Instructor Notes: Students will often begin by arguing about the specific changes.
Students will want to argue that the changes shouldn’t be made or make judgmental
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agree. Next, students often start talking about the kind of resistance and focus on
specific acts—protests, demonstrations, angry letters, and so on. Help them think
about the constituencies: those who have a stake in the changes besides just
students and faculty members.
If you chose the more complex option, then your students should begin by going
back to the basic problem and assumptions. The basic problem is insufficient
money (capital) and the assumption is that the university can solve the problem by
spending less (reducing costs). Students should be encouraged to think about the
particular needs represented by the various stakeholders. What does the
administration need? What does the faculty need? What do students need? What
do the alumni need?