Change ManagementChange Management

Prof. Steve Phelan Prof. Steve Phelan

Lecture 10Lecture 10

TodayToday

• Culture, values, and behavior Why change programs don’t produce change Psychological contracts Culture change at Seagram

• LMZ Ch 24 Building systems that learn on a large scale

(~1990)

Why change programs don’t Why change programs don’t produce changeproduce change

• Fallacy of programmatic change Formal organization structure and systems cannot lead a

corporate renewal process Successful transformations usually start at the periphery in a

few plants far from corporate Ad hoc arrangements to solve concrete business problems Change roles, responsibilities, relationships

• -> Changes behavior which then changes attitudes

• Senior managers should: Create a climate for change Provide resources and leadership development Spread the lessons of success and failure Not insist on specific solutions

Changing the deal while Changing the deal while keeping the peoplekeeping the people

• What is a psychological contract? Examples

• Achieving transformation Challenging the old contract – a reason to change Preparation for change

• Signal that we really mean it• Symbolic ending of old contract• Loss reduction – losses are more painful than gains• Transition structures

Creating a new mindset• Evoking a new contract script – interesting!

Living the new contract

Psychological contracts ctd.Psychological contracts ctd.

• Continuous change Can an organization go through so many

changes that they lose the capacity for employees to enter into voluntary commitments and good faith agreements?

• Concept of balanced contracts Both employer and employee have

performance terms to live up to and high investments in the relationship

Seagram CaseSeagram Case

• Questions are given: What should be done with recommendations

for action raised by participants in training? Are you going to punish the values violators? How will we recognize and reward the values

champions? What should be done with new employees? How do we sustain the momentum /

institutionalize the values?

Large scale systems changeLarge scale systems change• The article effectively applies OD to large

scale system change Maximum mix teams Organizational valentines Preferred futuring Celebrating diversity (MBTI)

• Do you buy the philosophy? Does it work under any circumstances? Would you ever use it?