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Experiences with consultant:
Describe your experience with a consultant, either from your place of employment (current or
previous), in the community, or as the consultant yourself. Thinking of this week’s lecture and
the components of a contract, did he/she follow that process? If not, what was missed? Describe
your experience.
If you do not have experience with a consultant, recall a situation from your experience where
you would have benefited from having an OD Consultant. What would you have done as a
consultant? Why?
Organization Change
Lorna Wilson/Taxi/Getty Images
Learning Objectives
After reading this chapter, you should be able to:
• Categorize change according to rate of occurrence, how it comes about, and scale.
• Provide examples of personal and organizational interventions that represent developmental, transitional,
and transformational change; first- and second-order change; and operational and strategic change.
• Discuss the systems approach to change.
• Describe three levels of change, including individual, group or team, and organization or system.
• Compare and contrast five models of organization change.
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Write down the names of five highly successful companies today that were just as dominant
25 years ago. Are you able to think of five? Companies, like living organisms, tend to have
a limited life span. Very few remain competitive for more than a decade or two. Instead, as
Newman (2010) pointed out, companies tend to lose their edge because they fail to innovate
and change. As he put it, they become obsessed with competing in the present and lose sight
of the future. Newman listed 10 examples: Blockbuster, Dell, Eastman Kodak, Motorola,
Microsoft, Sears, Sony, Sun Microsystems, Toys “R” Us, and Yahoo. You can probably think of
others. Let us look at a couple of these examples.
Blockbuster easily transitioned from VHS to DVD formats but failed to anticipate that content
would become available via mail, vending machine rentals, video on demand, and video
streaming. Companies such as Netflix and Redbox did anticipate and adapt to this trend, however.
Blockbuster became obsolete, closing hundreds of stores, accumulating debt, and struggling to
regain its competitive edge.
Eastman Kodak dominated the commercialized camera industry for nearly
a century, with innovations such as the
Brownie camera in 1900, Kodachrome
color film, the handheld movie camera,
and the easy-load Instamatic camera.
In spite of such innovation, Kodak
failed to anticipate the advent of
digital photography. Today most of us
use our cell phone, iPad, digital camera, and a variety of apps and websites
to take, store, alter, print, and share
photos. Like Blockbuster, Kodak struggled to innovate with forays into pharmaceuticals, memory chips, health care
Scott Anderson/The Journal Times/AP
imaging, document management, and
Blockbuster Video failed to anticipate change and
many other fields. Unfortunately, these
could not compete with Netflix and other digital
ventures did not restore the company’s
movie sources.
profitability. In January 2012 the New
York Stock Exchange (NYSE) suspended trading of Kodak stock following the company’s announcement that Kodak and its
U.S. subsidiaries had filed for Chapter 11 reorganization. In February 2012 the NYSE removed
the entire class of the company’s common stock from its listing and registration.
It is challenging to convince an organization to change, particularly when things are going well,
as things did for many years for both Blockbuster and Kodak. Even when companies recognize
the need for change, the process is complex and challenging, and most efforts do not succeed.
In fact, change often fails to meet its intended outcomes (Griffith, 2002; Kogetsidis, 2012; Self,
Armenakis, & Schraeder, 2007). Some have estimated that 50% of all change efforts fail (Quinn,
2011, and others estimate the failure rate even higher, at nearly 70% (Balogun & Hope Hailey,
2004; Burnes & Jackson, 2011; Higgs & Rowland, 2000). Simply put, organizations are not very
good at planning and implementing change.
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The Nature of Organization Change
Section 2.1
The purpose of this chapter is to explore organization change. We will identify a variety of types
of change, discuss the systems approach to change, examine levels of change, and compare and
contrast change models. Let us begin by considering the nature of change.
2.1 The Nature of Organization Change
Change is the alteration or complete transformation of people, processes, products, and
places. As you know from your own experience, change may be impermanent, transitional,
and even reversible (such as moving to a new city, then perhaps moving home again) or permanent and transformational (such as getting a college degree or experiencing the death of
a loved one). Organizations, too, experience changes that can be subtle or transformational,
temporary or permanent. Managing change effectively is considered a core competence of
successful organizations (Burnes, 2004).
Three Categories of Change
There are several ways to classify change. Cao, Clarke, and Lehaney (2004) suggested change
may be according to organizational function, process, culture, or power distribution. Senior
(2002) took a different approach, organizing types of change according to three categories:
(a) rate of occurrence, (b) how it comes about, and (c) scale.
Rate of Occurrence
Change happens at varying paces. Often it is discontinuous and episodic. There is only one
event or episode of change that makes a significant break from what has gone on before.
Examples of discontinuous or episodic change might include a natural disaster, economic
cycles of recession and expansion, or something more personal like the onset of illness or a
one-time change in work.
The opposite of discontinuous or episodic change is continuous change—an ongoing process of shifts that can lead to significant alterations over time. People experience continuous change with technological innovations. Just a few years ago, the idea of a smartphone
seemed far-fetched, yet today they are widely owned. Continuous change is also prevalent
in health care, where new drugs and treatments have prolonged life—at least in industrialized countries.
How Change Comes About
Another way of describing change is the way in which it occurs. Planning is one way that
change comes about, particularly in OD. Change can also be unexpected, without planning.
This might also be considered evolutionary change, which happens gradually and amounts
to substantial shifts over time. Organizations may be involved in continuous improvement
projects that gradually result in the adoption of new technologies and improved management
practices such as participative management or organization learning.
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The Nature of Organization Change
Section 2.1
Change may also come about due to contingency—when organizations are forced to respond
to unique, unanticipated variables that require special action and changes. For example, lacking a necessary raw material might require emergency alterations to product design. Another
way change comes about is via choice. Organizations can choose what changes to make, such
as deliberately deciding to change their leadership style.
Change According to Scale
The scale of change ranges from moderate ongoing changes at a department level to wholesale
transformation of the organization culture. Revolutionary change, although much less common than evolutionary change, represents a shock to the system that alters it permanently.
The terrorist attacks of September 11, 2001, created revolutionary change in Americans’
national identity and sense of safety, as well as significant changes in air travel. Another revolutionary change was the economic downturn of 2008 and its consequences. These changes
forced both individuals and organizations to adapt.
Developmental, Transitional, and Transformational Change
Change is one of those words that serves as a melting pot for scores of concepts and methods. Like the Inuit expression for snow (of which there are
20 or more shades of meaning), change means many different things to us.
(Ackerman, 1997, p. 45)
Ackerman (1986) characterized change as developmental, transitional, or transformational.
Developmental change is the growth and learning people experience as they acquire new
skills, manage relationships, and take on new challenges. This type of change might involve
problem solving, work assignments, conflict resolution, group dynamics, team building, meeting management, role negotiation, survey feedback, or training.
When people make incremental steps toward a preferred status over a specified period, they
are making a transitional change. Transitional change includes increasingly using a device
like a smartphone or gradually reducing calorie intake in order to lose weight. On an organization level, transitional change might occur through reorganization, technology integration,
new product development, mergers or acquisitions, or globalization.
Transitional change seeks to accommodate the new state while maintaining functionality during the conversion. Employees usually view this change as a disruption in standard operating
procedures. For example, a large public university recently switched the platform for its online
courses. The change began with an informational campaign. Then, over two semesters, faculty
could volunteer to be early adopters of the technology. During this phase the early adopters provided feedback to the information technology department to help the entire organization fully
transition to this new technology. This strategy enabled the university to continue to deliver
online learning in both the old and new formats while the technology was still in development.
The entire university was then able to change to the new platform the following year.
A change that revolutionizes the organization and the ways its members think and act is
known as transformational change. Transformational change is generally not reversible,
because processes, behaviors, or beliefs become fundamentally different from those that
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The Nature of Organization Change
Section 2.1
characterized the previous state. Transformational change may be due to crisis, leadership
transitions, culture or strategy alterations, dramatic shifts in markets, or executive coaching.
Some companies have managed to
transform themselves and stand the
test of time. IBM transformed from a
mainframe computer company into one
that makes software, personal computers, and storage solutions. Apple
started as a transformational company: In a market dominated by large,
unsightly computers with complex
software and awkward user interfaces, it introduced small, user-friendly
Macintosh computers with aesthetically pleasing designs. Apple gained
an ardent fan base, but as its competition caught on, it almost faded into
©John Harper/Corbis
obscurity. Then, under the leadership Apple was able to transform itself into one of the
of Steve Jobs, the company underwent most important technology innovators of our time.
a series of transformational changes
that transformed our relationship with
personal digital assistants via the iPad, iPhone, and iPod. Transformational change usually
requires a charismatic leader who inspires others with a vision to achieve the desired change
and willingness to take risk.
First- and Second-Order Change
Change in OD has been historically classified as first order and second order. When individuals
simply alter the intensity, frequency, or duration of a behavior but otherwise continue doing more
or less what they have already been doing, they are making a first-order change. For instance,
Jordan might decide to increase his exercise sessions from once to twice a week. Or a management team might decide to communicate monthly instead of quarterly about organization issues.
First-order change is considered easy to implement and readily reversible. It does not require
new learning, so it is usually impermanent. Jordan might decide to go back to once-weekly
exercise sessions or to slack off on his regimen all together. Or management may later decide
to communicate less frequently and implement that change easily.
Early OD focused on first-order change that involved moderate adjustments to the organization, people, and processes. These interventions were largely individualistic; that is, practitioners modified aspects of individuals’ behavior, believing that these individual changes would
translate into organization effectiveness. This mindset caused OD consultants to overlook the
big-picture, systemic issues affecting the organization. As a result, early OD often was ineffective.
Radical change that alters thinking, behaviors, or processes in irreversible ways is known as
second-order change. This level of change requires a fundamentally different approach to
issues, as well as new learning. It is generally not reversible and tends to be revolutionary or
transformational. For example, rather than simply increasing his number of weekly exercise
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Section 2.1
The Nature of Organization Change
sessions, Jordan might meet with his doctor to assess his overall health, get up earlier each day
to exercise, hire a personal trainer to work with him, consult a registered dietitian, take a
healthy cooking class, or otherwise alter his mindset about exercise and health. Or, management might restructure or fundamentally change how it communicates, altering not only the
frequency but also the content and delivery mode. The rise of online social networking offers
an example of how organizations have new platforms for communicating. Platforms such as
instant messaging, Twitter, wikis, social networking, teleconferencing, e-mail, and collaboration apps (e.g., Basecamp) have radically changed the way employers, employees, and customers communicate, and have also made information more timely and comprehensive.
Cathy Keifer/iStock/Thinkstock
Just as a caterpillar transforms into a butterfly, so
too is second-order change an irreversible process
that alters ways of being.
Contemporary OD, in its quest to
change systems and cultures, focuses
on second-order change. Examples
include executive coaching that transforms a leader’s behavior, performance
feedback that improves individual
and group performance, leadership
development that shifts how leaders
think and act, group and team facilitation that revolutionizes interpersonal
dynamics, diversity and multiculturalism initiatives that make the organization more inclusive, total quality
management that improves products
and services, life–work balance programs that reduce stress, or organization restructuring that changes work
What first- and second-order changes
have you made in your life? How successful were you at maintaining them? What changes
have you noticed in your workplace? How effective are you at helping others change? Take the
change leader style assessment to evaluate yourself.
Assessment: What Is Your Own Change Leader Style?
Take this self-assessment to gain insight into your change style. The survey covers
60 attitudes and behaviors of leaders related to change management. It should take
about 20 minutes to work through the assessment. Management/Session 3/Change Style
Assessment/Managing Change- Your Style Assessment.pdf
Operational and Strategic Change
When organizations make shifts that affect day-to-day functioning or operations, they are making an operational change. Examples include shifting the production schedule to accommodate
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The Nature of Organization Change
Section 2.1
supply of raw materials, hiring temporary workers to help cover a short-term increase in product
demand, adding overtime to meet production numbers, problem solving around a quality issue,
or creating a newsletter to better communicate with employees.
Tips and Wisdom
Notice the signs of approaching change: Pay attention to your organization and the
environment. What do you notice, hear, and suspect?
Ask yourself: “What is the worst thing that could happen if change X occurs?”
Acknowledge that the only thing you control is yourself. How do you want to show
up during the change?
Look for opportunities within the change to think differently, take on new
responsibilities, and learn new things.
Help others cope. It will help take your mind off the uncertainty and position you as
a leader.
When the organization shifts its tactics to better achieve its mission and vision, it is making
a strategic change. Strategic changes might include shifting the culture, management, and
rewards systems to be more inclusive as a means of recruiting and retaining a diverse workforce; firing an executive and bringing in a person with a track record for business turnarounds;
hiring workers to pursue a new market, product, or service; realigning people and resources
to focus on a goal of becoming number one in sales or quality; or conducting a new marketing
campaign to reach new customers.
Whether operational or strategic, change can be stressful, but strategies exist for coping
with change.
Take Away 2.1: The Nature of Organization Change
There are several ways of describing the nature of change in OD, which is the
alteration of the complete transformation of people, processes, products and places.
Change can be classified according to (a) its rate of occurrence, (b) how it comes
about, and (c) its scale.
OD can focus on first- or second-order change. First-order change is a gradual
or incremental change that usually involves making moderate adjustments
to existing procedures and practices. Second-order change significantly and
irreversibly alters thinking, behaviors, or processes.
Developmental change is associated with the growth and learning people acquire
through experiences and formal education or training. Transitional change
involves making incremental steps toward a desired state over a specified period.
Transformational change revolutionizes the organization and the ways its
members think and act.
Change can be operational or strategic. Operational change involves shifts that affect
day-to-day functioning or operations of the organization. Strategic change involves
more revolutionary shifts in tactics to better achieve organization mission and vision.
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General Systems Theory and Organization Change
Section 2.2
2.2 General Systems Theory and Organizatio …
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