APPROACHES TO MANAGING ORGANIZATIONAL CHANGE
Lewinâ€™s Threeâ€“Step Model:
Kurt Lewin argued that successful change in organizations should follow three steps:
The 3 steps are unfreezing the status quo, movement to a new state, and refreezing new change to make it permanent. The value of this model can be seen in the following example when the management of a large oil company decided to reorganize its marketing function in the western United States.
The oil company had three-divisional offices in the West, located in Seattle, San Francisco, and Los Angeles. The decision was made to consolidate the divisions into a single regional office to be located in San Francisco. The reorganization meant transferring over 150 employees, eliminating some duplicate managerial positions, and instituting a new hierarchy of command. As you might guess, a move of this magnitude was difficult to keep secret. The rumor of its occurrence preceded the announcement by several months. The decision itself was made unilaterally. It came from the executive offices in New York. The people affected had no say, whatsoever in the choice. For those in Seattle or Los Angeles, who may have disliked the decision and its consequences the problems inherent in transferring to another city, pulling youngsters out of school, making new friends, having new coworkers, undergoing the reassignment of responsibilities and their only recourse was to quit. In actuality, less than 10%did.
The status quo can be considered to be an equilibrium state. To move from this equilibrium to overcome the pressures of both individual resistance and group conformity unfreezing is necessary. It can be achieved in one of three ways. The driving forces, which direct behavior away from the status quo, can be increased. The restraining forces, which hinder movement from the existing equilibrium, can be decreased. A third alternative is to combine the first two approaches.
The oil companyâ€™s management could expect employee resistance to the consolidation. To deal with that resistance, management
could use positive incentives to encourage employees to accept the change. For instance, increases in pay can be offered to those who accept the transfer. Very liberal moving expenses can be paid by the company. Management might offer low-cost mortgage funds to allow employees to buy new homes in San Francisco. Of course, management might also consider unfreezing acceptance of the status quo by removing restraining forces. Employees could be counseled individually. Each employeeâ€™s concerns and apprehensions could be heard and specifically addressed. Assuming that most of the fears are unjustified, the counselor could assure the employees that there was nothing to fear and then demonstrate, through tangible evidence, that restraining forces are unwarranted. If resistance is extremely high, management may have to resort to both reducing resistance and increasing the attractiveness of the alternative if the unfreezing is to be successful.
Once the consolidation change has been implemented, if it is to be successful, the new situation needs to be refrozen so that it can be sustained over time. Unless this last step is taken, there is a very high chance that the change will be short-lived and that employees will attempt to revert to the pervious equilibrium state. The objective of refreezing, then, is to stabilize the new situation by balancing the driving and restraining forces.
The oil companyâ€™s management can refreeze its consolidation change by systematically replacing temporary forces with permanent ones. For instance, management might impose a permanent upward adjustment of salaries. The formal rules and regulations governing behavior of those affected by the change should also be revised to reinforce the new situation. Over time, of course, the work groupâ€™s own norms will evolve to sustain the new equilibrium. But until that point is reached, management will have to rely on more formal mechanisms.