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18 Source: The Bigs Project/Ben Carpenter Organizational Change and Stress Management LEARNING OBJECTIVES After studying this chapter, you should be able to: 622 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. 18-5 Identify the potential environmental, organizational, and personal sources of stress at work and the role of individual and cultural differences. 18-6 Identify the physiological, psychological, and behavioral symptoms of stress at work. 18-7 Describe individual and organizational approaches to managing stress at work. Organizational Change and Stress Management 623 CHAPTER 18 Employability Skills Matrix (ESM) Myth or Science? Career OBjectives Critical Thinking ✓ ✓ Communication Collaboration Knowledge Application and Analysis Social Responsibility An Ethical Choice Point/ Counterpoint Experiential Exercise Ethical Dilemma Case Incident 1 Case Incident 2 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ MyLab Management Chapter Warm Up If your professor has assigned this activity, go to www.pearson.com/ mylab/management to complete the chapter warm up. THE BIGS: NAVIGATING THE JOB MARKET AND BUILDING A CAREER B en Carpenter, co-CEO of Greenwich Capital, was ecstatic when he and his wife found out that his daughter, Avery, received a job offer to become an assistant to the producer of Katie Couric’s talk show. This happiness quickly turned into panic, however, when he received an e-mail from Avery with the subject, “Is this okay to send?” asking her new boss if she could start a week from Monday so that she could go apartment hunting in Manhattan (a request that would not make a great first impression when starting a new job). Ben immediately messaged his daughter, “DO NOT SEND—MORE TO FOLLOW” and began to type out on his phone twenty-two points that Avery needed to understand in order to succeed in the work world. These points were soon to become the basis for Ben’s best-selling book, The Bigs Project. Ben’s book draws from myriad experiences throughout his career where he has had to deal with “twists and turns” on his career path and how he handled them. Change was a constant when Ben was younger: When he was in fourth grade, his father lost his job at Harris Trust. From then on, a pattern began in which every year, his father would lose his job and the family would have to move. Ben and his family moved from Illinois to New 624 PART 4 The Organization System Hampshire, from New Hampshire to Missouri, and so on, before arriving in Massachusetts during high school. The stress and strain from these multiple moves was difficult, but Ben’s family stuck together and stayed resilient through the moves. Notably, Ben’s father was a very hard worker—it’s just that the career path he chose was not well suited for his strengths. From these experiences, Ben recognized the importance of developing a passion for something you are good at, and doing the right things to build a career. Throughout his experiences and with hard work, being resilient during times of tumultuous change was imperative. Another “twist” happened in Ben’s 30s when he was a bond salesman at Greenwich Capital. Ted Knetzger, the founder of the firm, invited Ben to dinner and asked him if he wanted to try trading (something that Ben always wanted to do). Unfortunately, during two years of trading, Ben realized he was not cut out for that role and the loss of money for the organization was emotionally exhausting to him. Thankfully, Ted was supportive during these years and even toward the end of these experiences offered Ben a job as CFO of the firm. Here is where Ben made the best decision of his career: He stepped back, considered what he was good at doing, and instead decided to go back to selling bonds (instead of a job that he knew little about). But while Ben was making his decision, he had something unexpected happen: At work, Ben started experiencing excruciating chest pains and had to be rushed to the hospital for a rare condition in which a main artery in his body suddenly tore: an aortic dissection. Thanks to his wife, Leigh, who frantically flagged down the doctors and nurses in the hospital when Ben needed medical attention and, after several surgeries, Ben was able to recover. Although he was initially distraught when the surgeon told him that he would not be able to run or lift anything heavy for the rest of his life, he felt a surge of optimism and well-being and realized, “everything will be okay.” After this experience, Ben made the decision to go back to selling bonds instead of taking on the CFO position. From there, he rose the ladder to become sales manager, COO, and then eventually CEO. Sources: Based on B. Carpenter, The Bigs: The Secrets Nobody Tells Students and Young Professionals About How to: Choose a Career, Find a Great Job, Do a Great Job, Be a Leader, Start a Business, Manage Your Money, Stay out of Trouble, and Live a Happy Life (Hoboken, NJ: Wiley, 2014); B. Carpenter, “Is Your Student Prepared for Life?,” The New York Times, August 31, 2014, https://www.nytimes.com/2014/09/01/opinion/is-your-student-prepared-for-life .html?_r=0; M. Gordon, “Q&A With Greenwich’s Ben Carpenter,” Greenwich Time, November 6, 2014, http://www.greenwichtime.com/business/article/Q-A-with-Greenwich-s-BenCarpenter-5876838.php; The Bigs Project, https://www.thebigsproject.net/, accessed April 23, 2017. Organizational Change and Stress Management CHAPTER 18 625 M any changes bring about a great deal of stress. As Ben’s experiences highlight, it is extremely important to critically think about building your career: Think strategically about choosing a career, seek out learning and development opportunities that can hone your career skills, work hard, and be resilient and adaptive in handling the many stressors that are sent your way. In this chapter, we describe environmental forces that require firms and people 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. Change 18-1 Contrast the forces for change and planned change. No company today is in a particularly stable environment. Even those with a dominant market share must change, sometimes radically. For example, the market for smartphones has been especially volatile.1 During the fourth quarter of 2016, 77 million iPhones were sold, compared with 76.8 million Samsung sales.2 Contrast this with the fourth quarter of 2015, in which considerably fewer (71.5 million) iPhones were sold, versus considerably more (83.4 million) Samsung phones.3 At the same time, the Chinese mobile phone company Oppo, and its parent company, BBK Electronics, have been moving rapidly into the market: Collectively they hold only 6 percent less market share than either Samsung or Apple.4 A look just a few years further back shows formerly dominant players like Nokia, Xiaomi, or Research in Motion (makers of the Blackberry) shrinking dramatically in size. In this and many markets, competitors are constantly entering and exiting the field, gaining and losing ground quickly. Forces for Change “Change or die!” is the rallying cry among today’s managers worldwide.5 Exhibit 18-1 summarizes six specific forces that stimulate change. Throughout the text, we’ve discussed the changing nature of the workforce. Almost every organization must adjust to a multicultural environment, demographic changes, immigration, and outsourcing. Technology is continually changing jobs and organizations. It is not difficult to imagine the idea of an office becoming an antiquated concept in the near future. Economic shocks also have a significant impact on organizations. During the great recession of 2007 to 2009, millions of jobs were lost worldwide; home values dropped dramatically; and many large, well-known corporations like Merrill Lynch, Countrywide Financial, and Ameriquest disappeared or were acquired.6 Recovery has occurred in many countries, and with it has come new job prospects and investments. Other countries, like Greece, struggle to regain their economic footing, limiting the economic viability of many Greek organizations.7 Competition is changing. Competitors are as likely to be across the ocean as across town. Successful organizations are fast on their feet, capable of developing new products rapidly and getting them to market quickly. In other words, they are flexible and require an equally flexible and responsive workforce.8 Social trends don’t remain static either. Organizations must therefore adjust product and marketing strategies continually to be sensitive to changing social trends, as Instagram did when it debuted “Instagram Stories,” media (e.g., pictures, videos, text) that disappears some time after sending, essentially re-creating “Snapchat Stories.”9 Consumers, employees, and organizational leaders are also 626 PART 4 The Organization System Exhibit 18-1 Forces for Change Force Examples Nature of the workforce More cultural diversity Aging population Increased immigration and outsourcing Faster, cheaper, and more mobile computers and handheld devices Technology Emergence and growth of social-networking sites Economic shocks Deciphering of the human genetic code Rise and fall of global housing market Financial sector collapse Global recession Competition Social trends World politics Global competitors Mergers and consolidations Increased government regulation of commerce Increased environmental awareness Liberalization of attitudes toward gay, lesbian, and transgender employees More multitasking and connectivity Rising health care costs Negative social attitudes toward business and executives Opening of new markets worldwide increasingly sensitive to environmental concerns. Green practices are quickly becoming expected rather than optional.10 Not even globalization’s strongest proponents could have imagined the change in world politics 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, populism and nationalist movements gaining headway in Europe and the United States, and intense shakeups in governments across the Arab world. Throughout the industrialized world, businesses—particularly in the banking and financial sectors—have come under new scrutiny. Planned Change change Making things different. planned change Change activities that are intentional and goal-oriented. A group of housekeeping employees who work for a small hotel confronted the owner: “It’s very hard for most of us to maintain 7-to-4 work hours,” said their spokeswoman. “Each of us has significant family and personal responsibilities. Rigid hours don’t work for us. We’re going to begin looking for someplace else to work if you don’t set up flexible work hours.” The owner listened thoughtfully to the group’s ultimatum and agreed to make changes. The next day, a flextime plan for these employees was introduced. A major automobile manufacturer spent several billion dollars to install stateof-the-art robotics. One area that received the new equipment was quality control, where sophisticated computers significantly improved the company’s ability to find and correct defects. Because the new equipment dramatically changed the jobs in the quality-control area, and because management anticipated considerable employee resistance to it, executives developed a program to help people become familiar with the change and deal with any anxieties they might be feeling. Both of these scenarios are examples of change, or making things different. However, only the second scenario describes planned change.11 Many changes are like the one that occurred at the hotel: They just happen. Some Organizational Change and Stress Management change agents Persons who act as catalysts and assume the responsibility for managing change activities. CHAPTER 18 627 organizations treat all change as an accidental occurrence. In this chapter, we address change as an intentional, goal-oriented activity. What are the goals of planned change? First, it seeks to improve the ability of the organization to adapt to changes in its environment. Second, it seeks to change employee behavior. Who in organizations is responsible for managing change activities? The answer is change agents.12 They see a future for the organization others have not identified, and they are able to motivate, invent, and implement this vision. Change agents can be managers or nonmanagers, current or new employees, or outside consultants. Some change agents look to transform old industries to meet new capabilities and demands. For instance, Sandy Jen, Cameron Ring, Monica Lo, and Seth Sternberg are working together to apply social marketplace concepts to online business—a concept exemplified by rideshare company Uber and crowdfunding firm Kickstarter. The group has created an innovative service for senior care called Honor.13 In contrast to older methods of matching seniors and their families with services through nursing facilities, Honor uses an online marketplace. Caregivers list qualifications and desired job attributes, and seniors specify the type of services they need. Then Honor facilitates meeting the needs. This new model could alter the entire field of care, based on the vision of a core group of dedicated leaders. Finding true change agents in long-established organizations can pose unique challenges. General Motors (GM) expects its human resources (HR) managers to be change agents and its top HR executive to set the tone. Experts attributed some of the failed changes at GM to Kathleen Barclay’s stint as global HR vice president. GM next hired Mary Barra, a manufacturing executive they thought could bring about better changes. Barra seemed like a change agent, but even then-CEO Dan Akerson said, “It was the worst application of talent I’ve ever seen.” Barra was later named as GM’s new CEO, displacing Akerson.14 For the top HR spot, GM next selected Cynthia Brinkley, who supposedly had the right combination of skills to be a change agent. Yet she had no HR background15 and was replaced shortly afterward by John Quattrone. Quattrone has over 25 years of experience in HR (and over 40 years of tenure with GM).16 Time will tell. Many change agents fail because organizational members resist change. In the next section, we discuss resistance to change and what managers can do about it. Resistance to Change 18-2 Describe ways to overcome resistance to change. Our egos are fragile, and we often see change as threatening. Even when employees are shown data that suggest they need to change, they latch onto whatever data they can find that suggest they are okay and don’t need to change.17 Employees who feel negatively toward a change cope by not thinking about it, increasing their use of sick time, or quitting. All these reactions can sap the organization of vital energy when it is most needed.18 Resistance to change doesn’t come only from lower levels of the organization. In many cases, higher-level managers resist changes proposed by subordinates, especially if these leaders are focused on immediate performance. Conversely, when leaders are more focused on mastery and exploration, they are more willing to hear and adopt subordinates’ suggestions for change.19 Resistance to change can be positive if it leads to open discussion and debate.20 These responses are usually preferable to apathy or silence and can indicate that members of the organization are engaged in the process, 628 PART 4 The Organization System providing change agents an opportunity to explain the change effort. Change agents can also monitor the resistance to modify the change to fit the preferences of members of the organization. Resistance doesn’t necessarily surface in standardized ways. It can be overt, implicit, immediate, or deferred.21 It’s easiest for management to deal with overt and immediate resistance such as complaints, a work slowdown, or a strike threat. The greater challenge is managing resistance that is implicit or deferred because these responses—loss of loyalty or motivation, increased errors or absenteeism—are more subtle and more difficult to recognize for what they are. Deferred actions also cloud the link between the change and the reaction to it, sometimes surfacing weeks, months, or even years later. 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. Exhibit 18-2 summarizes major forces for resistance to change, categorized by their sources. Individual sources reside in human characteristics such as perceptions, personalities, and needs. Organizational sources reside in the structural makeup of organizations themselves. It’s worth noting that not all change is good. Rapid, transformational change is risky, so change agents need to think through the full implications carefully. Speed can lead to bad decisions, and sometimes those initiating change fail to realize the full magnitude of the effects or their true costs. Exhibit 18-2 Sources of Resistance to Change Individual Sources Habit—To cope with life’s complexities, we rely on habits or programmed responses. But when confronted with change, this tendency to respond in our accustomed ways becomes a source of resistance. Security—People with a high need for security are likely to resist change because it threatens their feelings of safety. Economic factors—Changes in job tasks or established work routines can arouse economic fears if people are concerned that they won’t be able to perform the new tasks or routines to their previous standards, especially when pay is closely tied to productivity. Fear of the unknown—Change substitutes ambiguity and uncertainty for the unknown. Selective information processing—Individuals are guilty of selectively processing information in order to keep their perceptions intact. They hear what they want to hear, and they ignore information that challenges the world they’ve created. Organizational Sources Structural inertia—Organizations have built-in mechanisms—such as their selection processes and formalized regulations—to produce stability. When an organization is confronted with change, this structural inertia acts as a counterbalance to sustain stability. Limited focus of change—Organizations consist of a number of interdependent subsystems. One can’t be changed without affecting the others. So limited changes in subsystems tend to be nullified by the larger system. Group inertia—Even if individuals want to change their behavior, group norms may act as a constraint. Threat to expertise—Changes in organizational patterns may threaten the expertise of specialized groups. Threat to established power relationships—Any redistribution of decision-making authority can threaten long-established power relationships within the organization. Organizational Change and Stress Management CHAPTER 18 629 Overcoming Resistance to Change Eight tactics can help change agents deal with resistance to change.22 Let’s review them briefly. Communication Communication is more important than ever in times of change. One study of German companies revealed changes are most effective when a company communicates a rationale that balances the interests of various stakeholders (shareholders, employees, community, customers) rather than those of shareholders only.23 Other research on a changing organization in the Philippines found that formal information sessions decreased employees’ anxiety about the change, while providing high-quality information about the change increased their commitment to it.24 Participation It’s difficult to resist a change decision in which we’ve participated. Assuming participants have the expertise to make a meaningful contribution, their involvement can reduce resistance, obtain commitment, and increase the quality of the change decision.25 However, these advantages sometimes come with potential negatives: the potential for a poor solution and a great consumption of time. Building Support and Commitment When managers or employees have low emotional commitment to change, they resist it and favor the status quo.26 Employees are also more accepting of changes when they are committed to the organization as a whole.27 Motivating employees and emphasizing their commitment to the organization overall can help them commit emotionally to the change rather than embrace the status quo. When employees’ fear and anxiety are high, counseling and therapy, new-skills training, or a short paid leave of absence may facilitate adjustment to change. Develop Positive Relationships People are more willing to accept changes if they trust the managers implementing them and see them as legitimate.28 One study surveyed 235 employees from a large housing corporation in the Netherlands that was experiencing a merger. Those who had a more positive relationship with their supervisor, and who felt that the work environment supported development, were much more positive about the change process.29 Underscoring the importance of social context, other work shows that even individuals The Ohio Department of Natural Resources used participation, shown here, as an effective tactic for overcoming resistance to change. Faced with the tough task of reducing the use of time and resources, the cashstrapped department involved employees in a continuous improvement process to find better ways to work more efficiently. Source: Kilchiro Sato/AP Images 630 PART 4 The Organization System who are generally resistant to change will be more willing to accept new and different ideas (and can even experience less stress) when they feel supported by their coworkers and believe the environment is safe for taking risks.30 Another set of studies found that individuals who usually resisted change felt more positive about it if they trusted the change agent.31 This research suggests that if managers are able to facilitate positive relationships, they may be able to overcome resistance to change even among those who ordinarily don’t like changes. Implementing Changes Fairly One way organizations can minimize negative impact is to make sure change is implemented fairly. As we saw in Chapter 7, procedural fairness is especially important when employees perceive an outcome as negative, so it’s crucial that employees see the reason for the change, are kept informed about its progress, and perceive its implementation as consistent and fair.32 However, research on 26 large-scale planned change projects in the Netherlands reveals that change recipients are not always self-interested: They focus on the impact that change has on their coworkers, the organization, and other parties.33 Some resistance might be inevitable, particularly when the change affects the employees’ freedoms, although fairness perceptions still help alleviate this resistance.34 Manipulation and Cooptation Manipulation refers to covert influence attempts.35 Twisting facts to make them more attractive, withholding information, and creating false rumors to get employees to accept change are all examples of manipulation. If management threatens to close a manufacturing plant whose employees are resisting an across-the-board pay cut, and if the threat is actually unfounded, management is using manipulation. Cooptation, on the other hand, combines manipulation and participation.36 It seeks to buy off the leaders of a resistance group by giving them a key role, seeking their advice not to find a better solution but to get their endorsement. Both manipulation and cooptation are relatively inexpensive ways to gain the support of adversaries, but they can backfire if the targets become aware that they are being tricked or used. Once that’s discovered, the change agent’s credibility may drop to zero. Selecting People Who Accept Change Research suggests the ability to accept and adapt easily to change is related to personality—some people are simply more receptive to change.37 Individuals who are emotionally stable, have high core self-evaluations, are willing to take risks, and are flexible in their behavior are prime candidates.38 This seems to be universal. One study of managers in the United States, Europe, and Asia found those with a positive self-concept and high risk tolerance coped better with organizational change.39 Individuals higher in general mental ability are also better able to learn and to adapt to changes in the workplace.40 In sum, an impressive body of evidence shows organizations can facilitate change by selecting people predisposed to accept it. Besides selecting individuals who are willing to accept changes, it is also possible to select teams that are more adaptable. In general, teams that are strongly motivated by learning about and mastering tasks, are high in cognitive ability, and have collectivistic values are better able to adapt to changing environments.41 It may thus be necessary to consider not just individual motivation but also group motivation when trying to implement changes. A meta-analytic review of hundreds of teams suggests that teams whose members are high in cognitive ability and motivated to master their tasks tend to be the most adaptable.42 Coercion Last on the list of tactics is coercion, the application of direct threats or force on the resisters.43 If management is determined to close a manufacturing plant whose employees don’t acquiesce to a pay cut, the company is using coercion. Other examples include threatening employees with transfers, blocked promotions, negative performance evaluations, and poor letters Organizational Change and Stress Management CHAPTER 18 631 of recommendation. Coercion is most effective when some force or pressure is enacted on at least some resisters—for instance, if an employee is publicly refused a promotion request, the threat of blocked promotions will become a real possibility in the minds of other employees. The advantages and drawbacks of coercion are approximately the same as for manipulation and cooptation. The Politics of Change No discussion of resistance would be complete without a brief mention of the politics of change.44 Because change invariably threatens the status quo, it inherently implies political activity. 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. Managers who have spent a long time with an organization and who have achieved a senior position in the hierarchy are often major impediments to change. For them, change can be a very real threat to their status and position. Yet they may be expected to implement changes to demonstrate they’re not merely caretakers. 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. Of course, as you might guess, when forced to introduce change, these longtime power holders tend to implement incremental changes. Radical change is often considered too threatening. This explains why boards of directors that recognize the imperative for rapid and radical change frequently turn to outside candidates for new leadership.45 Approaches to Managing Organizational Change 18-3 Compare the four main approaches to managing organizational change. We now turn to several approaches to managing change: Lewin’s classic threestep model of the change process, Kotter’s eight-step plan, action research, and organizational development. Lewin’s Three-Step Model of the Change Process driving forces Forces that direct behavior away from the status quo. restraining forces Forces that hinder movement from the existing equilibrium. Kurt Lewin argued that successful change in organizations should follow three steps: unfreezing the status quo, movement to a desired end state, and refreezing the new change to make it permanent46 (see Exhibit 18-3). By definition, status quo is an equilibrium state. To move from equilibrium—to overcome the pressures of both individual resistance and group conformity— unfreezing must happen in one of three ways (see Exhibit 18-4). For one, the driving forces, which direct behavior away from the status quo, can be increased. For another, the restraining forces, which hinder movement away from equilibrium, can be decreased. A third alternative is to combine the first two approaches. Companies that have been successful in the past are likely to encounter restraining forces because people question the need for change.47 Exhibit 18-3 Lewin’s Three-Step Change Model Unfreezing Movement Refreezing 632 PART 4 The Organization System Exhibit 18-4 Unfreezing the Status Quo Desired state Restraining forces Status quo Driving forces Time Once the movement stage begins, it’s important to keep the momentum going. Organizations that build up to change do less well than those that get to and through the movement stage quickly. When change has been implemented, the new situation must be refrozen so it can be sustained over time. Without this last step, change will likely be short-lived and employees will attempt to revert to the previous equilibrium state. The objective of refreezing, then, is to stabilize the new situation by balancing the driving and restraining forces. Kotter’s Eight-Step Plan John Kotter of Harvard Business School built on Lewin’s three-step model to create a more detailed approach for implementing change.48 Kotter began by listing common mistakes managers make when trying to initiate change. They may fail to create a sense of urgency about the need for change, a coalition for managing the change process, and a vision for change, and they may fail to communicate effectively about it and/or to anchor the changes into the organization’s culture. They also may fail to remove obstacles that could impede the vision’s achievement and/or provide short-term and achievable goals. Finally, they may declare victory too soon. Kotter established eight sequential steps to overcome these problems. They are listed in Exhibit 18-5. Exhibit 18-5 Kotter’s Eight-Step Plan for Implementing Change 1. Establish a sense of urgency by creating a compelling reason for why change is needed. 2. Form a coalition with enough power to lead the change. 3. Create a new vision to direct the change and strategies for achieving the vision. 4. Communicate the vision throughout the organization. 5. Empower others to act on the vision by removing barriers to change and encouraging risk taking and creative problem solving. 6. Plan for, create, and reward short-term “wins” that move the organization toward the new vision. 7. Consolidate improvements, reassess changes, and make necessary adjustments in the new programs. 8. Reinforce the changes by demonstrating the relationship between new behaviors and organizational success. Source: Based on J. Kotter, Leading Change (Boston, MA: Harvard Business School, 1996). Organizational Change and Stress Management CHAPTER 18 633 Notice how Kotter’s first four steps essentially extrapolate Lewin’s unfreezing stage. Steps 5, 6, and 7 represent movement, and the final step works on refreezing. So Kotter’s contribution lies in providing managers and change agents with a more detailed guide for successfully implementing change. Action Research action research A change process based on systematic collection of data and then selection of a change action based on what the analyzed data indicate. Action research is a change process based on the systematic collection of data and selection of a change action based on what the analyzed data indicate.49 Its value is in providing a scientific methodology for managing planned change. Action research consists of five steps (note how they closely parallel the scientific method): diagnosis, analysis, feedback, action, and evaluation. The change agent, often an outside consultant in action research, begins by gathering information about problems, concerns, and needed changes from members of the organization. This diagnosis is analogous to the physician’s search to find specifically what ails a patient. In action research, the change agent asks questions, reviews records, and interviews employees by actively listening to their concerns. Diagnosis is followed by analysis. What problems do people focus on? What patterns do these problems seem to take? The change agent synthesizes this information into primary concerns, problem areas, and possible actions. Action research requires the people who will participate in a change program to help identify the problem and determine the solution. So the third step—feedback—requires sharing with employees what has been found from the first and second steps. The employees, with the help of the change agent, develop action plans for bringing about needed change. Now the action part of action research is set in motion. The employees and the change agent carry out the specific actions they have identified to correct the problem. The final step, consistent with the scientific underpinnings of action research, is evaluation of the action plan’s effectiveness, using the initial data gathered as a benchmark. Action research provides at least two specific benefits. First, it’s problemfocused. The change agent objectively looks for problems, and the type of problem determines the type of change action. This is a process that makes intuitive sense. Unfortunately, in reality, change activities can become solution-centered and therefore erroneously predetermined. The change agent has a favorite solution—for example, implementing flextime, teams, or a process reengineering program—and then seeks out problems that the solution fits. A second benefit of action research is the lowering of resistance. Because action research engages employees so thoroughly in the process, it reduces resistance to change. Once employees have actively participated in the feedback stage, the change process typically takes on a momentum of its own. Organizational Development organizational development (OD) A collection of planned change interventions, built on humanistic–democratic values, that seeks to improve organizational effectiveness and employee well-being. Organizational development (OD) is a collection of change methods that try to improve organizational effectiveness and employee well-being.50 OD methods value human and organizational growth, collaborative and participative processes, and a spirit of inquiry.51 Contemporary OD borrows heavily from postmodern philosophy in placing heavy emphasis on the subjective ways people see and make sense of their work environment. The change agent may take the lead in OD, but there is a strong emphasis on collaboration. What are some OD techniques or interventions for bringing about change? Here are six. 634 PART 4 The Organization System sensitivity training Training that seeks to change behavior through unstructured group interaction. survey feedback The use of questionnaires to identify discrepancies among member perceptions; discussion follows, and remedies are suggested. process consultation (PC) A meeting in which a consultant assists a client in understanding process events with which he or she must deal and identifying processes that need improvement. Sensitivity Training A variety of names—for example, sensitivity training, laboratory training, encounter groups, and training groups (T-groups)—all refer to an early method of changing behavior through unstructured group interaction.52 Current organizational interventions such as diversity training, executive coaching, and team-building exercises are descendants of this early OD intervention technique. In classic sensitivity training, members were brought together in a free and open environment in which participants discussed themselves and their interactive processes; they were loosely directed by a professional behavioral scientist who created the opportunity to express ideas, beliefs, and attitudes without taking any leadership role. The group was process-oriented, which means that individuals learned through observing and participating rather than being told. With all forms of OD, caution must be taken so the unstructured groups are not intimidating, chaotic, and damaging to work relationships. Survey Feedback One tool for assessing the attitudes of organizational members, identifying discrepancies among member perceptions, and solving differences is the survey feedback approach.53 Everyone in an organization can participate in survey feedback, but of key importance is the organizational “family”—the manager of any given unit and the employees who report directly to him or her. All usually complete a questionnaire about their perceptions and attitudes on a range of topics, including decision-making practices; communication effectiveness; coordination among units; and satisfaction with the organization, job, peers, and immediate supervisor. Data from questionnaires are tabulated along with data pertaining to an individual’s specific organizational “family” and the entire organization, and then distributed to employees. These data become the springboard for identifying problems and clarifying issues that may be creating difficulties for people. Particular attention is given to encouraging discussion and ensuring it focuses on issues and ideas, not on attacking individuals. For instance, are people listening? Are new ideas being generated? Can decision making, interpersonal relations, or job assignments be improved? Answers should lead the group to commit to various remedies for the problems. The survey feedback approach can be helpful to keep decision makers informed about the attitudes of employees toward the organization. However, individuals are influenced by many factors when they respond to surveys, which may make some findings unreliable. Managers who use the survey feedback approach should therefore monitor their organization’s current events and employee response rates. Process Consultation Managers often sense that their unit’s performance can be improved but are unable to identify what to improve and how. The purpose of process consultation (PC) is for an outside consultant to assist a client, usually a manager, through crafting “a relationship through a continuous effort of ‘jointly deciphering what is going on’ . . . to make coauthored choices about how to go on.”54 These events might include workflow, informal relationships among unit members, and formal communication channels. PC is similar to sensitivity training in assuming we can improve organizational effectiveness by dealing with interpersonal problems and in emphasizing involvement. But PC is more task-directed, and consultants do not solve the organization’s problems but rather guide or coach the client to solve his or her own problems after jointly diagnosing what needs improvement. The client Organizational Change and Stress Management CHAPTER 18 635 develops the skill to analyze processes within his or her unit and can therefore use the skill long after the consultant is gone. Because the client actively participates in both the diagnosis and the development of alternatives, he or she arrives at a greater understanding of the process and the remedy, and becomes less resistant to the action plan chosen. team building High interaction among team members to increase trust and openness. intergroup development Organizational development (OD) efforts to change the attitudes, stereotypes, and perceptions that groups have of each other. A team of U.S. marines with Company C, 6th Engineer Support battalion, participate in a team-building activity with British commandos from the 131 Commando Squadron Royal Engineers during a simulation of a raid of an urban compound at Fort Indiantown Gap. These types of training exercises give the marines and commandos an opportunity to exchange tactics and build working relationships across group lines. Source: PJF Military Collection/Alamy Stock Photo Team Building We’ve noted throughout this text that organizations increasingly rely on teams to accomplish work tasks. Team building uses high-interaction group activities to increase trust and openness among team members, improve coordination efforts, and increase team performance.55 Here, we emphasize the intragroup level, meaning within organizational families (command groups) as well as committees, project teams, self-managed teams, and task groups. Team building typically includes goal setting, development of interpersonal relations among team members, role analysis to clarify each member’s role and responsibilities, and team process analysis. It may emphasize or exclude certain activities, depending on the purpose of the development effort and the specific problems the team is confronting. Basically, however, team building uses high interaction among members to increase trust and openness. In these times when organizations increasingly rely on teams, team building is an important topic. Intergroup Development A major area of concern in OD is dysfunctional conflict among groups. Intergroup development seeks to change groups’ attitudes, stereotypes, and perceptions about each other.56 Here, training sessions closely resemble diversity training, except rather than focusing on demographic differences, they focus on differences among occupations, departments, or divisions within an organization. In one organization, for example, the engineers saw the accounting department as composed of shy and conservative types, and the HR department as having a bunch of “ultra-liberals more concerned that some protected group of employees might get their feelings hurt than with the company making a profit.” Such stereotypes can have an obvious negative impact on coordination efforts among departments. 636 PART 4 The Organization System Among several approaches for improving intergroup relations, a popular one emphasizes problem solving.57 Each group meets independently to list its perceptions of itself and another group and how it believes the other group perceives it. The groups then share their lists, discuss similarities and differences, and look for causes of disparities. Are the groups’ goals at odds? Are the perceptions distorted? On what basis were stereotypes formulated? Have some differences been caused by a misunderstanding of intentions? Have words and concepts been defined differently by each group? Answers to questions like these clarify the exact nature of the conflict. Once they have identified the causes of discrepancies, the groups move to the integration phase—developing solutions to improve relations between them. Subgroups of members from each of the conflicting groups can conduct further diagnoses and formulate alternative solutions. appreciative inquiry (AI) An approach that seeks to identify the unique qualities and special strengths of an organization, which can then be built on to improve performance. Appreciative Inquiry Most OD approaches are problem-centered. They identify a problem or set of problems, then look for a solution. Appreciative inquiry (AI) instead accentuates the positive. Rather than looking for problems to fix, it seeks to identify the unique qualities and special strengths of an organization, which members can build on to improve performance.58 That is, AI focuses on an organization’s successes rather than its problems. The AI process consists of four steps—discovery, dreaming, design, and destiny—often played out in a large-group meeting over 2 to 3 days and overseen by a trained change agent. Discovery sets out to identify what people think are the organization’s strengths. Employees recount times they felt the organization worked best or when they specifically felt most satisfied with their jobs. In dreaming, employees use information from the discovery phase to speculate on possible futures, such as what the organization will be like in 5 years. In design, participants find a common vision of how the organization will look in the future and agree on its unique qualities. For the fourth step, participants seek to define the organization’s destiny or how to fulfill their dream, and they typically write action plans and develop implementation strategies. AI has proven to be an effective change strategy in organizations such as GTE, Roadway Express, American Express, and the U.S. Navy.59 American Express used AI to revitalize its culture during a lean economy. In workshops, employees described how they already felt proud of working at American Express and were encouraged to create a change vision by describing how the company could be better in the future. The efforts led to some concrete improvements. Senior managers were able to use employees’ information to better their methods of making financial forecasts, improve information technology (IT) investments, and create new performance-management tools for managers. The end result was a renewed culture focused on winning attitudes and behaviors.60 MyLab Management Try It If your professor has assigned this activity, go to www.pearson.com/ mylab/management to complete the Mini Sim. Creating a Culture for Change 18-4 Demonstrate three ways of creating a culture for change. We’ve considered how organizations can adapt to change. But recently, some OB scholars have focused on a more proactive approach—how organizations can embrace change by transforming their cultures. In this section, we review Organizational Change and Stress Management CHAPTER 18 637 three approaches: managing paradox, stimulating an innovative culture, and creating a learning organization. We also address the issue of organizational change and stress. Managing Paradox paradox theory The theory that the key paradox in management is that there is no final optimal status for an organization. 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.61 Think of riding a bicycle: You must maintain forward momentum or you’ll fall over. From this perspective, there is no such thing as a separate discipline of “change management” because all management is dealing with constant change and adaptation. The idea of paradox sounds abstract, but more specific concepts have begun to emerge from a growing body of research.62 Several key paradoxes have been identified. Learning is a paradox because it requires building on the past while rejecting it at the same time. Organizing is a paradox because it calls for setting direction and leading while requiring empowerment and flexibility. Performing is a paradox between creating organization-wide goals to concentrate effort and recognizing the diverse goals of stakeholders inside and outside the organization. And finally, belonging is a paradox between establishing a sense of collective identity and acknowledging our desire to be recognized and accepted as unique individuals. Managers can learn a few lessons from paradox theory,63 which states that the key paradox in management is that there is no final optimal status for an organization.64 The first lesson is that, as the environment and members of the organization change, different elements take on more or less importance. For example, sometimes a company needs to acknowledge past success and learn how it worked, while at other times looking backward only hinders progress. There is some evidence that managers who think holistically and recognize the importance of balancing paradoxical factors are more effective, especially in generating adaptive and creative behavior in those they are managing.65 Stimulating a Culture of Innovation How can an organization become more innovative? An excellent model is W. L. Gore & Associates, the $2.9-billion-per-year company best known as the maker of Gore-Tex fabric.66 Gore has developed a reputation as one of the most innovative U.S. companies by developing a stream of diverse products—including guitar strings, vacuum cleaner filters, industrial sealants, and fuel cell components. What’s the secret of Gore’s success? What can other organizations do to duplicate its track record for innovation? Gore pioneered a flat, unique, lattice-type organizational structure (now termed an open allocation structure)67 run by employees (associates) working in self-organized project groups.68 Gore also allocates 10 percent of each emlpoyee’s day to creative tasks and idea generation.69 Although there is no guaranteed formula, certain characteristics surface repeatedly when researchers study innovative organizations. They are structural, cultural, and human resources characteristics. Change agents should consider introducing these characteristics into their organizations to create cultures and climate for innovation and creativity. Let’s start by clarifying what we mean by innovation. innovation A new idea applied to initiating or improving a product, process, or service. Definition of Innovation We said change refers to making things different. Innovation, a specialized kind of change, is applied to initiating or improving a product, process, or service, in other words, a better solution.70 So all innovations imply change, but not all changes introduce new ideas or lead to significant improvements. Innovations can range from incremental improvements, such as tablets, to radical breakthroughs, such as Nissan’s electric Leaf car. 638 PART 4 The Organization System Based on its motto “Think Different,” Apple has built a culture of innovation where employees share a passion for creating consumer-friendly products like the Apple Watch, shown here displayed by a customer at an Apple store in Toronto, Canada. Apple’s supportive culture embraces crossfertilization of ideas, collaboration, experimentation, and risk taking. Source: Ryan Emberley/Invision/AP Images Sources of Innovation Structural variables are one potential source of innovation.71 A comprehensive review of the structure–innovation relationship leads to the following conclusions: 1. Organic structures positively influence innovation. Because they’re lower in vertical differentiation, formalization, and centralization, organic organizations facilitate the flexibility, adaptation, and cross-fertilization that make the adoption of innovations easier.72 2. Innovation-contingent rewards positively influence innovation. When creativity is rewarded, firms tend to become more innovative—especially when employees are given feedback on their performance in addition to autonomy in doing their jobs.73 3. Innovation is nurtured when there are slack resources. Having an abundance of resources, including an equal distribution of wealth, allows an organization to afford to purchase or develop innovations, bear the cost of instituting them, and absorb failures.74 4. Interunit communication is high in innovative organizations. These organizations are heavy users of committees, task forces, cross-functional teams, and other mechanisms that facilitate interaction across departmental lines.75 Context and Innovation Innovative organizations tend to have similar cultures. They encourage experimentation and reward both successes and failures. They celebrate mistakes.76 Unfortunately, in too many organizations, people are rewarded for the absence of failures rather than for the presence of successes. Such cultures extinguish risk taking and innovation.77 Innovative organizations tend to share a common vision as well as underlying goals. They have a shared sense of purpose.78 Innovative organizations also tend to be cohesive, mutually supportive, and encouraging of innovation.79 Within the human resources category, innovative organizations actively promote the training and development of their members so they keep current, offer high job security so employees don’t fear getting fired for making mistakes, and encourage individuals to become champions of change.80 These practices should be mirrored for work groups as well. One study of 1,059 individuals on over 200 different teams in a Chinese high-tech company found that Organizational Change and Stress Management CHAPTER 18 639 work systems emphasizing commitment to employees increased creativity in teams.81 These effects were even greater in teams where there was cohesion among coworkers. idea champions Individuals who take an innovation and actively and enthusiastically promote the idea, build support, overcome resistance, and ensure that the idea is implemented. Idea Champions and Innovation Once a new idea has been developed, idea champions actively and enthusiastically promote it, build support, overcome resistance, and ensure it is implemented.82 Champions often have similar personality characteristics:83 extremely high self-confidence, persistence, energy, and a tendency to take risks. They usually display traits associated with transformational leadership—they inspire and energize others with their vision of an innovation’s potential and their strong personal conviction about their mission. Situations can also influence the extent to which idea champions are forces for change. For example, passion for change among entrepreneurs is greatest when work roles and the social environment encourage them to put their creative identities forward. On the flip side, work roles that push creative individuals to do routine management and administration tasks diminish both the passion for and implementation of change.84 Idea champions are good at gaining the commitment of others, and their jobs should provide considerable decision-making discretion. This autonomy helps them introduce and implement innovations85 when the context is supportive. Do successful idea champions do things differently in varied cultures? Yes, they do.86 Generally, people in collectivist cultures prefer appeals for crossfunctional support for innovation efforts; people in high power-distance cultures prefer champions to work closely with those in authority to approve innovative activities before work is begun; and the higher the uncertainty avoidance of a society, the more champions should work within the organization’s rules and procedures to develop the innovation. These findings suggest that effective managers alter their organization’s innovation strategies to reflect cultural values. For instance, although idea champions in Russia might succeed by ignoring budgetary limitations and working around confining procedures, idea champions in Austria, Denmark, Germany, or other cultures high in uncertainty avoidance will be more effective by closely following budgets and procedures. Sergio Marcchione, CEO of Fiat-Chrysler, originally acted as an idea champion for the single objective of updating the company’s product pipeline. To facilitate the change, he radically dismantled the bureaucracy, tearing up Chrysler’s organization chart and introducing a flatter structure with himself at the head. As a result, the company introduced a more innovative line of vehicles and planned to redesign or substantially refresh 75 percent of its lineup in 2010 alone.87 In 2014, Marchionne announced an ambitious plan to significantly increase the company’s U.S. auto sales through innovations in the product line. The organization is struggling to make his dreams a reality by 2018, but they remain committed to his goals. “We’ve always had something that came out of left field and made us very, very uncomfortable,” Marcchione said—the rallying cry for any idea champion.88 Creating a Learning Organization Another way an organization can proactively manage change is to make continuous growth part of its culture—to become a learning organization.89 learning organization An organization that has developed the continuous capacity to adapt and change. What Is a Learning Organization? Just as individuals learn, so too do organizations. A learning organization has developed the continuous capacity to adapt and change. The Dimensions of the Learning Organization Questionnaire (DLOQ) has been adopted and adapted internationally to assess the degree of commitment to learning organization principles.90 640 PART 4 The Organization System Exhibit 18-6 Characteristics of a Learning Organization 1. There exists a shared vision that everyone agrees on. 2. People discard their old ways of thinking and the standard routines they use for solving problems or doing their jobs. 3. Members think of all organizational processes, activities, functions, and interactions with the environment as part of a system of interrelationships. 4. People openly communicate with each other (across vertical and horizontal boundaries) without fear of criticism or punishment. 5. People sublimate their personal self-interest and fragmented departmental interests to work together to achieve the organization’s shared vision. Source: Based on P. M. Senge, The Fifth Discipline: The Art and Practice of the Learning Organization, 2nd ed. (New York: Random House, 2006). Exhibit 18-6 summarizes the five basic characteristics of a learning organization—one in which people put aside their old ways of thinking, learn to be open with each other, understand how their organization really works, form a plan or vision everyone can agree on, and work together to achieve that vision.91 Proponents of the learning organization envision it as a remedy for three fundamental problems of traditional organizations: fragmentation, competition, and reactiveness.92 First, fragmentation based on specialization creates “walls” and “chimneys” that separate different functions into independent and often warring fiefdoms. Second, an overemphasis on competition often undermines collaboration. Managers compete over who is right, who knows more, or who is more persuasive. Divisions compete when they ought to cooperate and share knowledge. Team leaders compete to show who the best manager is. And third, reactiveness misdirects management’s attention to solving problems rather than creating. The problem solver tries to make something go away, while a creator tries to bring something new into being. An emphasis on reactiveness to problems pushes out innovation and continuous improvement and, in its place, encourages people to concentrate on quick fixes as problems emerge. Managing Learning What can managers do to make their firms learning organizations? Here are some suggestions: • Establish a strategy. Management needs to make explicit its commitment to change, innovation, and continuous improvement. • Redesign the organization’s structure. The formal structure can be a serious impediment to learning. Flattening the structure, eliminating or combining departments, and increasing the use of cross-functional teams reinforce interdependence and reduce boundaries. • Reshape the organization’s culture. Managers must demonstrate by their actions that taking risks and admitting failures are desirable. This means rewarding people who take chances and make mistakes. They also need to encourage functional conflict. Organizational Change and Stress Think about the times you have felt stressed during your work life. Look past the everyday stress factors that can spill over to the workplace, like a traffic jam that makes you late for work or a broken coffee machine that keeps you from your morning java. What were your more memorable and lasting stressful times at work? For many people, these were caused by organizational change. Organizational Change and Stress Management CHAPTER 18 641 Researchers are increasingly studying the effects of organizational change on employees. We are interested in determining the specific causes and mitigating factors of stress to learn how to manage organizational change effectively.93 The overall findings are that organizational changes that incorporate OB knowledge of how people react to stressors may yield more effective results than organizational changes that are managed only objectively through goal-setting plans.94 Not surprisingly, we also find that the role of leadership is critical. One study indicated that transformational leaders can help shape employee affect so employees stay committed to the change and do not perceive it as stressful.95 Other research indicated that a positive orientation toward change before new initiatives are planned decreases employees’ stress when they go through organizational changes and increases their positive attitudes.96 Managers can be continually working to increase employees’ self-efficacy, change-related attitudes, and perceived control over the situation to create this positive change orientation. For instance, they can use role clarification and continual rewards to increase self-efficacy, and they can enhance employees’ perceived control and positive attitudes toward change by including them from the planning stages to the application of new processes. Another study added the need for increasing the amount of communication to employees during change, assessing and enhancing employees’ psychological resilience through offering social support, and training employees in emotional self-regulation techniques.97 Through these methods, managers can help employees keep their stress levels low and their commitment high. Often, organizational changes are stressful because some employees perceive aspects of the changes as threatening. These employees are more likely to quit, partially in reaction to their stress. To reduce the perception of threat, employees need to perceive the organizational changes as fair. Research indicates that those who have a positive change orientation before changes are planned are less likely to perceive changes as unfair or threatening. MyLab Management Watch It If your professor has assigned this activity, go to www.pearson.com/ mylab/management to complete the video exercise. Stress at Work 18-5 Identify the potential environmental, organizational, and personal sources of stress at work and the role of individual and cultural differences. Friends say that they’re stressed from greater workloads and longer hours because of downsizing at their organizations. Parents worry about the lack of job stability and reminisce about a time when a job with a large corporation implied lifetime security. Employees complain about the stress of trying to balance work and family responsibilities. Harris, Rothenberg International, a leading provider of employee assistance programs (EAPs), finds that employees are having mental breakdowns and needing professional help at higher rates than ever.98 Indeed, as Exhibit 18-7 shows, work is a major source of stress in most people’s lives. What are the causes and consequences of stress, and how can individuals and organizations reduce it? What Is Stress? stress An unpleasant psychological process that occurs in response to environmental pressures. Do you feel stressed? If so, join the crowd (see OB Poll). Stress is a dynamic condition in which an individual is confronted with an opportunity, demand, or resource related to what the individual desires and for which the outcome is 642 PART 4 The Organization System Exhibit 18-7 Work Is One of the Top Sources of Stress What area of your life causes you the most stress? Area Causes Most Stress Financial worries Work 64% 60% Family responsibilities Health concerns 47% 46% Source: Based on “Stress in America: Paying with Our Health,” American Psychological Association, February 4, 2015, http://www.apa .org/news/press/releases/stress/2014/stress-report.pdf. perceived to be both uncertain and important.99 This is a complicated definition. Let’s look at its components more closely. Although stress is typically discussed in a negative context, it also has a positive purpose.100 In response to stress, your nervous system, hypothalamus, pituitary, and adrenal glands supply you with stress hormones to cope. Your heartbeat and breathing accelerate to increase oxygen, while your muscles tense for action.101 This is a time when stress offers potential gain. Consider, for example, the superior performance that an athlete or stage performer gives in a clutch situation. Such individuals often use stress positively to rise to the occasion and perform at their maximum. Similarly, many professionals see the pressures of heavy workloads and deadlines as positive challenges that enhance the quality of their work and the satisfaction they get from their job. However, when the situation is negative, stress is harmful and may hinder your progress by elevating your blood pressure uncomfortably and creating an erratic heart rhythm as you struggle to speak and think logically.102 challenge stressors Stressors associated with workload, pressure to complete tasks, and time urgency. OB POLL Stressors Researchers have argued that challenge stressors—or stressors associated with workload, pressure to complete tasks, and time urgency—operate Many Employees Feel Extreme Stress What is your stress level? Low 5% 31% 64% Extreme, with accompanying symptoms Manageable Source: Based on J. Hudson, “High Stress Has Employees Seeking Both Wellness and Employee Assistance Help,” ComPsych Corporation press release, November 12, 2014, http://www.compsych.com/press-room/press-releases-2014/818-nov-12-2014. Organizational Change and Stress Management hindrance stressors Stressors that keep you from reaching your goals, for example, red tape, office politics, and confusion over job responsibilities. demands Responsibilities, pressures, obligations, and even uncertainties that individuals face in the workplace. resources Factors within an individual’s control that can be used to resolve demands. allostasis Working to change behavior and attitudes to find stability. CHAPTER 18 643 quite differently from hindrance stressors—or stressors that keep you from reaching your goals (for example, red tape, office politics, confusion over job responsibilities).103 Evidence suggests that both challenge and hindrance stressors lead to strain, although hindrance stressors lead to increased levels of strain.104 Challenge stressors lead to more motivation, engagement, and performance than hindrance stressors.105 Hindrance stressors, on the other hand, appear to have more of a negative effect on safety compliance and participation, employee engagement, job satisfaction, organizational commitment, performance, and withdrawal than do challenge stressors.106 Researchers have sought to clarify the conditions under which each type of stress exists. It appears that time pressure and learning demands both act as challenge stressors that can help employees learn and thrive in organizations.107 Hindrances (e.g., a lack of resources to complete your job) serve to block goal attainment and should be distinguished from threats, which can result in personal harm (e.g., corrections officers fearing harm from inmates).108 Demands and Resources More typically, stress is associated with demands and resources. Demands are responsibilities, pressures, obligations, and uncertainties that individuals face in the workplace. Resources are factors within an individual’s control that he or she can use to resolve the demands. Let’s discuss what this demands–resources model means.109 When you take a test at school or undergo your annual performance review at work, you feel stress because you confront opportunities and performance pressures. A good performance review may lead to a promotion, greater responsibilities, and a higher salary. A poor review may prevent you from getting a promotion. An extremely poor review might even result in your being fired. To the extent you can apply resources to the demands on you—such as preparing for the review, putting the review in perspective (it’s not the end of the world), or obtaining social support—you will feel less stress. In fact, this last resource— social support—may be more important on an ongoing basis than anything else. According to recent research on Dutch elementary school teachers, when school principals exhibit transformational leadership behaviors (see Chapter 12), their teachers’ engagement is sustained in the presence of challenge stressors and buffered from negative effects when hindrance demands are present.110 Overall, under the demands–resources perspective, having resources to cope with stress is just as important in offsetting stress as demands are in increasing it.111 Allostasis The discussion so far may give you the impression that individuals are seeking a steady state in which demands match resources perfectly. While early research tended to emphasize such a homeostatic, or balanced, equilibrium perspective, it has now become clear that no single ideal state exists. Instead, it’s more accurate to talk about allostatic models in which demands shift, resources shift, and systems of addressing imbalances shift.112 By allostasis, we work to find stability by changing our behaviors and attitudes. It all depends on the allostatic load, or the cumulative effect of stressors on us given the resources we draw upon.113 For example, if you’re feeling especially confident in your abilities and have lots of support from others, you may increase your willingness to experience strain and be better able to mobilize coping resources. This would be a situation where the allostatic load was not too great; in other cases where the allostatic load is too great and too prolonged, we may experience psychological or physiological stress symptoms. Stress preferences change in cycles. You’ve experienced this when you sometimes just feel like relaxing and recovering, while at other times you welcome more stimulation and challenge. Much like organizations are in a constant state of change and flux, we respond to stress processes by continually adapting to both internal and external sources, and our stability is constantly redefined. 644 PART 4 The Organization System Exhibit 18-8 A Model of Stress Potential sources Consequences Environmental factors • Economic uncertainty • Political uncertainty • Technological change Organizational factors • Task demands • Role demands • Interpersonal demands Personal factors • Family problems • Economic problems Individual differences • Perception • Job experience • Social support • Personality traits Physiological symptoms • Immediate effects • Illness • Chronic health conditions Experienced stress Psychological symptoms • Anxiety • Lower emotional well-being • Lower job satisfaction Cultural differences Behavioral symptoms • Lower job performance • Higher absenteeism • Higher turnover Potential Sources of Stress at Work What causes stress? Let’s examine the model in Exhibit 18-8. Environmental Factors Just as environmental uncertainty influences the design of an organization’s structure, it also influences stress levels among employees in that organization. Indeed, uncertainty is the biggest reason people have trouble coping with organizational changes.114 There are three main types of environmental uncertainty: economic, political, and technological. Changes in the business cycle create economic uncertainties. When the economy is contracting, for example, people become increasingly anxious about their job security. Political uncertainties don’t tend to create stress among U.S citizens and Canadians as much as they do for employees in countries such as Haiti or Venezuela. The obvious reason is that the United States and Canada have more stable political systems, in which change is typically implemented in an orderly manner. Yet political threats and changes in all countries can induce stress. Because innovations can make an employee’s skills and experience obsolete in a very short time, keeping up with new computer programs, robotics, automation, and similar forms of technological change is an additional challenge for many people at work that causes them stress. Organizational Factors There is no shortage of factors within an organization that can cause stress. Pressures to avoid errors or complete tasks in a limited time, work overload, a demanding and insensitive boss, and unpleasant coworkers are a few examples. We’ve categorized these factors around task, role, and interpersonal demands. Task demands relate to a person’s job. They include the design of the job (including its degree of autonomy, task variety, and automation), working conditions, and the physical work layout. One factor consistently related to stress in the workplace is the amount of work that needs to be done, followed closely by the presence of looming deadlines.115 Working in an overcrowded room or a visible location where noise and interruptions are constant can also increase anxiety and stress.116 Organizational Change and Stress Management CHAPTER 18 645 Role demands relate to pressures placed on a person as a function of the particular role he or she plays in the organization.117 Role conflicts create expectations that may be hard to reconcile or satisfy. Role overload occurs when the employee is expected to take on too much. Role ambiguity means role expectations are not clearly understood and the employee is not sure what to do. Unfortunately, individuals who face high situational constraints by their roles (such as fixed work hours or demanding job responsibilities) are less able to engage in the proactive coping behaviors, like taking a break, that reduce stress levels.118 When faced with problems at work, they not only have higher levels of distress at the time, but they are also less likely to take steps to eliminate stressors in the future. Interpersonal demands are pressures created by other employees. Some pressures are expected, but a rapidly growing body of research has shown that negative coworker and supervisor behaviors, including fights, bullying, incivility, abusive supervision, and racial/sexual harassment, are very strongly related to stress at work.119 Interpersonal mistreatment can have effects at a physiological level, with one study finding that unfair treatment in a controlled setting triggered the release of cortisol, a hormone involved in the stress-reaction process.120 How can I bring my team’s overall stress level down? My coworkers and I are under a lot of pressure because we have a huge deadline coming up. We’re working a lot of extra hours, and tensions are starting to ramp up to arguments. Is there any way I can get my team to chill out? — Hakim Dear Hakim: It sounds like you’re facing some of the core issues that produce stress at work: high demands, critical outcomes, and time pressure. There’s no question tempers can start to flare under these conditions. While it may not even be desirable to get your team to relax, or chill out as you say, lowering your team’s aggregate stress level will increase your group’s effectiveness. Fortunately, there are some wellestablished ways to help lower stress in groups. Some of the most effective are directly related to getting people to recommit to the team: • To help minimize infighting, get the group to focus on a common goal. • • Shared objectives are one of the most effective ways to reduce conflict in times of stress, and they remind everyone that cooperation is key. Review what the team has done and what steps toward the goal remain. When the team can see how much work they have accomplished, they will naturally feel better. When the team feels most tense, take a collective temporary break. It can be difficult to step away from a project with heavy time demands, but working at a point of maximum tension and conflict is often counterproductive. A chance to stop and gain perspective helps everyone recharge and focus. Remember that minimizing team stress shouldn’t happen through lowering standards and accepting lower-quality work but through reducing counterproductive organizational behavior. A positive work environment with high member engagement will do a lot to move the group forward. Career OBjectives A combination of focus, progress, and perspective will ultimately be the best approach to limiting your stress. Sources: Based on P. M. Poortvliet, F. Anseel, and F. Theuwis, “Mastery-Approach and Mastery-Avoidance Goals and Their Relation with Exhaustion and Engagement at Work: The Roles of Emotional and Instrumental Support,” Work & Stress 29 (April 2015): 150–70; J. P. Trougakos, D. J. Beal, B. H. Cheng, I. Hideg, and D. Zweig, “Too Drained to Help: A Resource Depletion Perspective on Daily Interpersonal Citizenship Behaviors,” Journal of Applied Psychology 100 (2015): 227–36; and J. P. Trougakos, I. Hideg, B. H. Cheng, and D. J. Beal, “Lunch Breaks Unpacked: The Role of Autonomy as a Moderator of Recovery during Lunch,” Academy of Management Journal 57 (2014): 405–21. The opinions provided here are of the managers and authors only and do not necessarily reflect those of their organizations. The authors or managers are not responsible for any errors or omissions, or for the results obtained from the use of this information. In no event will the authors or managers, or their related partnerships or corporations thereof, be liable to you or anyone else for any decision made or action taken in reliance on the opinions provided here. 646 PART 4 The Organization System Individuals who believe they are experiencing a social climate of discrimination from multiple sources over time have higher levels of psychological strain, even after accounting for differing baseline levels of well-being.121 Social exclusion, perhaps as a form of interpersonal mistreatment, can also be a significant source of psychological strain. One study found that experiences of ostracism may have even more negative effects than experiences of interpersonal conflict.122 Personal Factors The typical individual may work between 40 and 50 hours a week. But the experiences and problems people encounter in the other 120plus hours can spill over to the job. The final category of sources of stress at work includes factors of an employee’s personal life: family issues and personal economic problems. National surveys consistently show that people hold family and personal relationships dear.123 Family issues, even good ones, can cause stress that has a significant impact on individuals.124 Family issues are often closely related to work–life conflict. The relationship becomes a vicious cycle: Work–life conflict affects stress levels, which in turn affect work–life conflict.125 Regardless of income level, some people are poor money managers or have wants that exceed their earning capacity. People who make $100,000 per year seem to have as much trouble handling their finances as those who earn $20,000, although recent research indicates that those who make under $50,000 per year do experience more stress.126 The personal economic problems of overextended financial resources create stress and siphon attention away from work. Stressors Are Additive When we review stressors individually, it’s easy to overlook that stress is an additive phenomenon—it builds up.127 Each new and persistent stressor adds to an individual’s stress level. So a single stressor may be relatively unimportant in and of itself, but if added to an already high level of stress, it can be too much. To appraise the total amount of stress an individual is under, we have to add all of the sources and severity levels of that person’s stress. Because this cannot be easily quantified or observed, managers should remain aware of the potential stress loads from organizational factors in particular. Many employees are willing to express their perceived stress load at work to a caring manager. Individual Differences Some people thrive on stressful situations, while others are overwhelmed by them. What differentiates people in terms of their ability to handle stress? What individual variables moderate the relationship between potential stressors and experienced stress? At least four are relevant—perception, job experience, social support, and personality traits. Perception In Chapter 6, we demonstrated that employees react in response to their perception of reality rather than to reality itself. Perception moderates the relationship between a potential stress condition and an employee’s reaction to it. Layoffs may cause one person to fear losing his job, while another sees an opportunity to get a large severance allowance and start her own business. Those who perceive a stressful event as a small blip in an otherwise long timeline (and who take to heart phrases such as “this, too, shall pass” and “time heals all wounds”) tend to cope better than those who focus on immediate circumstances.128 So stress potential doesn’t lie in objective conditions; rather, it lies in an employee’s interpretation of those conditions. Job Experience Experience on the job tends to be negatively related to work stress. Why? Two explanations have been offered.129 First is selective withdrawal. Voluntary turnover is more probable among people who experience more stress. Therefore, people who remain with an organization longer are those with more stress-resistant traits or those more resistant to the stress characteristics Organizational Change and Stress Management CHAPTER 18 647 DentalPlans.com employee Kristen Reineke celebrates after scoring a point while playing foosball in the employee lounge. In giving its employees the opportunity to form collegial relationships by playing games like foosball and Wii, DentalPlans.com provides them with the social support that can lessen the impact of on-thejob stress. Source: Charles Trainor Jr./MCT/Newscom of the organization. Second, people eventually develop coping mechanisms to deal with stress. Because this takes time, senior members of the organization are more likely to be fully adapted and should experience less stress. Social Support Social support—collegial relationships with coworkers or supervisors—can buffer the impact of stress.130 This is among the best-documented relationships in the stress literature. Social support acts as a palliative, mitigating the negative effects of even high-strain jobs. Personality Traits Stress symptoms expressed on the job may originate in the person’s personality.131 Perhaps the most widely studied personality trait in research on stress is neuroticism, which we discussed in Chapter 5. As you might expect, neurotic individuals are more prone to experience psychological strain.132 Evidence suggests that neurotic individuals are more likely to find stressors in their work environments, so they believe their environments are more threatening. They also tend to select less adaptive coping mechanisms, relying on avoidance as a way of dealing with problems rather than attempting to resolve them.133 Workaholism is another personal characteristic related to stress levels.134 Workaholics are people obsessed with their work; they put in an enormous number of hours, think about work even when not working, and create additional work responsibilities to satisfy an inner compulsion to work more. In some ways, they might seem like ideal employees. That’s probably why, when most people are asked in interviews what their greatest weakness is, they reflexively say, “I just work too hard.” However, there is a difference between working hard and working compulsively. Workaholics are not necessarily more productive than other employees, despite their extreme efforts. The strain of putting in such a high level of work effort eventually begins to wear on the person, leading to higher levels of work–life conflict and psychological burnout.135 Cultural Differences Research suggests that the job conditions that cause stress show some differences across cultures. One study revealed that, whereas U.S. employees were stressed by a lack of control, Chinese employees were stressed by job evaluations and lack of training.136 It doesn’t appear that personality effects on stress are 648 PART 4 The Organization System different across cultures, however. One study of employees in Hungary, Italy, the United Kingdom, Israel, and the United States found Type A personality traits (see Chapter 5) predicted stress equally well across countries.137 A study of over 5,000 managers from 20 countries found individuals from individualistic countries such as the United States, Canada, and the United Kingdom experienced higher levels of stress due to work interfering with family than did individuals from collectivist countries in Asia and Latin America.138 The authors proposed that this may occur because, in collectivist cultures, working extra hours is seen as a sacrifice to help the family, whereas in individualistic cultures, work is seen as a means of personal achievement that takes away from the family. Consequences of Stress at Work 18-6 Identify the physiological, psychological, and behavioral symptoms of stress at work. Stress shows itself in a number of ways, such as high blood pressure, ulcers, irritability, difficulty making routine decisions, changes in appetite, accident proneness, and the like. Refer back to Exhibit 8-8. These symptoms fit under three general categories: physiological, psychological, and behavioral symptoms. Physiological Symptoms Most early concern with stress was directed at physiological symptoms because most researchers were specialists in the health and medical sciences. Their work led to the conclusion that stress could create changes in metabolism, increase heart and breathing rates and blood pressure, bring on headaches, and induce heart attacks.139 Evidence now clearly suggests stress may have other harmful physiological effects, including backaches, headaches, eye strain, sleep disturbances, dizziness, fatigue, loss of appetite, and gastrointestinal problems.140 A study of hourly care workers showed that negative interactions with their supervisors led to heightened blood pressure and poor recovery from work (in other words, an inability to “re-charge” after work).141 Still another study conducted with Canadian day-shift workers found that higher levels of psychological demands and overcommitment were related to significantly increased variation in cortisol levels.142 Many other studies have shown similar results linking work stress to a variety of indicators of poor health. The effects of stress and strain on sleep (see also Myth or Science?) have piqued the interests of researchers in particular, with the majority of studies suggesting that strain has a moderate impact on job attitudes (especially when it comes to sleep quality over quantity).143 A variety of different types of work-related stressors have been shown to impair sleep quality; such stressors include unfinished work tasks. Social stressors and conflict between part-time work demands and school demands can have a great impact on sleep for college students.144 Additional research suggests that, beyond the obvious solution of getting more, good-quality sleep, physical activity and recovery experiences with social support groups can help.145 Psychological Symptoms Job dissatisfaction is an obvious cause of stress. But stress shows itself in other psychological states—for instance, tension, anxiety, irritability, boredom, and procrastination. One study that tracked physiological responses of employees over time found that stress due to high workloads was related to lower emotional well-being.146 Jobs that make multiple and conflicting demands or that lack clarity about the employee’s duties, authority, and responsibilities increase both stress and dissatisfaction.147 Similarly, the less control people have over the pace of their work, the greater their stress and dissatisfaction, a finding that has been replicated across 63 countries.148 Jobs that provide a low level of variety, significance, autonomy, feedback, and identity appear to create stress and reduce Organizational Change and Stress Management When You’re Working Hard, Sleep Is Optional T his statement is false. Individuals who do not get enough sleep are unable to perform well on the job. One study found that sleeplessness costs U.S. employers $63.2 billion per year, almost $2,300 per employee, partially due to decreased productivity and increased safety issues. Sleep deprivation has been cited as a contributing factor in heart disease, obesity, stroke, and cancer. It can also lead to disastrous accidents. For example, U.S. military researchers report that sleep deprivation is one of the top causes of friendly fire (when soldiers mistakenly fire on their own troops), and 20 percent of auto accidents are due to drowsy drivers. More than 160 people on Air India Flight 812 from Dubai to Mangalore were killed when pilot Zlatko Glusica awoke from a nap and, suffering from sleep inertia, overshot the runway in one of India’s deadliest air crashes. Sleeplessness affects the performance of millions of workers. According to research, one-third of U.S. employees in most industries, and more than one-quarter of workers in the finance and insurance industry, are sleep deprived, getting fewer than 6 hours of sleep per night (7 to 9 are recommended). More than 50 percent of U.S. adults age 19 to 29, 43 percent age 30 to 45, and 38 percent age 46 to 64 report that they rarely or never get a good night’s sleep on weekdays. Research has shown that lack of sleep impairs our ability to learn skills and find solutions, which may be part of the reason law enforcement organizations, Super Bowl–winning football teams, and half the Fortune 500 companies employ so-called fatigue management specialists as performance consultants. Along with sleeplessness, insomnia has been a growing problem. Recent research in Norway indicated that up to 34 percent of motor vehicle deaths during the 14-year study period might have been prevented if the people involved in the crashes hadn’t displayed insomnia symptoms. Managers and employees increasingly take prescription sleep aids, attend sleep labs, and consume caffeine in efforts to either sleep better or reduce the effects of sleeplessness on their performance. These methods often backfire. Studies indicate that prescription sleep aids increase sleep time by only 11 minutes and cause short-term memory loss. The effects of sleep labs may not be helpful after the sessions are over. And the diminishing returns of caffeine, perhaps the most popular method of fighting sleep deprivation (74 percent CHAPTER 18 649 Myth or Science? of U.S. adults consume caffeine every day), require the ingestion of increasing amounts to achieve alertness, which can make users jittery before the effect wears off and leave them exhausted. When you’re working hard, it’s easy to consider using sleep hours to get the job done and to think that the stress and adrenaline from working will keep you alert. It’s also easy to consider artificial methods in attempts to counteract the negative impact of sleep deprivation. However, research indicates that when it comes to maximizing performance and reducing accidents, we are not good at assessing our impaired capabilities when we are sleep deprived. In the end, there is no substitute for a solid night’s sleep. Sources: Based on M. J. Breus, “Insomnia Could Kill You—By Accident,” The Huffington Post, May 9, 2015, http://www.huffingtonpost.com/dr-michael-j-breus/insomnia-couldkill-you-by-accident_b_7235264.html; D. K. Randall, “Decoding the Science of Sleep,” The Wall Street Journal, August 4–5, 2012, C1–C2; M. Sallinen, J. Onninen, K. Tirkkonen, M.-L. Haavisto, M. Harma, T. Kubo, et al., “Effects of Cumulative Sleep Restriction on Self-Perceptions While Multitasking,” Journal of Sleep Research (June 2012): 273–81; and P. Walker, “Pilot Was Snoring before Air India Crash,” The Guardian, November 17, 2010, www.guardian.co.uk/world/2010/nov/17/ sleepy-pilot-blamed-air-india-crash. satisfaction and involvement in the job.149 Not everyone reacts to autonomy in the same way, however. For those with an external locus of control, increased job control increases the tendency to experience stress and exhaustion.150 Behavioral Symptoms Research on behavior and stress has been conducted across several countries and over time, and the relationships appear relatively consistent. Behavior-related stress symptoms include reductions in productivity; increases in absences, safety incidents, and turnover; changes in eating habits; increased smoking or consumption of alcohol; rapid speech; fidgeting; and sleep disorders.151 A significant amount of research has investigated the stress–performance relationship. One proposed pattern of this relationship is the inverted U shown in Exhibit 18-9.152 The logic underlying the figure is that low to moderate levels of 650 PART 4 The Organization System Exhibit 18-9 The Proposed Inverted-U Relationship between Stress and Job Performance Performance High Low Low Stress High stress stimulate the body and increase its ability to react. Individuals may perform tasks better, more intensely, or more rapidly. But too much stress places unattainable demands on a person, which result in lower performance. In spite of its popularity and intuitive appeal, the inverted-U model hasn’t earned a lot of empirical support.153 Maybe the model misses links between stressors and felt stress and job performance, meaning that sometimes there are reasons we could be stressed but we feel fine because of positive moderating factors. We may be able to avoid letting stress affect our job performance.154 For example, one study indicated that individuals with high emotional intelligence (EI; discussed in Chapter 4) may be able to mitigate the effects of job stress on performance.155 Therefore, this model may be a good, neutral starting point from which to study differences. As we mentioned earlier, researchers have begun to differentiate challenge and hindrance stressors, showing that these two forms of stress have opposite effects on job behaviors, especially job performance. A meta-analysis of responses from more than 35,000 individuals showed role ambiguity, role conflict, role overload, job insecurity, environmental uncertainty, and situational constraints were all consistently and negatively related to job performance.156 There is also evidence that challenge stress improves job performance in a supportive work environment, whereas hindrance stress reduces job performance in all work environments.157 Managing Stress 18-7 Describe individual and organizational approaches to managing stress at work. What should we do about stress? Should we do anything? Because low to moderate levels of stress can be functional and lead to higher performance, management may not be concerned when employees experience them; however, employees are likely to perceive even low levels of stress as undesirable. It’s not unlikely, therefore, that employees and management have different notions of what constitutes an acceptable level of stress on the job. What management may consider to be “a positive stimulus that keeps the adrenaline running” is very likely to be seen as “excessive pressure” by the employee. Regardless, stress can lead to poor outcomes that even managers should be aware of; for example, research on over 4,000 caregivers across 35 different hospitals suggested that during a typical 12-hour shift without breaks, hand-washing and safety compliance reduced by 8.7 percent.158 Keep this example in mind as we discuss individual and organizational approaches toward managing stress.159 Organizational Change and Stress Management CHAPTER 18 651 Individual Approaches An employee can and should take personal responsibility for reducing stress levels. Individual strategies that have proven effective include time management techniques, physical exercise, relaxation techniques, and social support networks.160 Many people manage their time poorly. The well-organized employee, like the well-organized student, may very well accomplish twice as much as the person who is poorly organized. A few of the best-known time management techniques are: (1) maintaining to-do lists; (2) scheduling activities based on priorities, not what you can accomplish; (3) doing the hard tasks first; and (4) scheduling distraction-free time to accomplish tasks. These time management skills can help minimize procrastination by focusing efforts on immediate goals and boosting motivation even in the face of tasks that are less enjoyable.161 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. These activities decrease the detrimental physiological responses to stress and allow us to recover from stress more quickly.162 Individuals can teach themselves to reduce tension through relaxation techniques such as meditation, mindfulness, and deep breathing.163 The objective is to reach a state of deep physical relaxation in which you focus all your energy on the release of muscle tension.164 Deep relaxation for 20 minutes a day, twice a day, releases strain; provides a pronounced sense of peacefulness; and produces significant changes in heart rate, blood pressure, and other physiological factors.165 A growing body of research shows that simply taking breaks from work at routine intervals (e.g., lunch breaks, walks in the park) can facilitate psychological recovery, can reduce stress significantly, and may improve job performance, and these effects are even greater if relaxation techniques are employed.166 Even very short microbreaks have been demonstrated to have an effect on employee stress relief and energy.167 You might be tempted to think that complete detachment from work, or stiff boundaries between your work and leisure life, is good; however, research suggests that those who are recovering ponderers, or who do not completely detach and ponder over problems they need to resolve at work (but still engage in relaxation activities), tend to be both engaged and experience a substantial decrease in stress.168 As we have noted, friends, family, or work colleagues can provide…



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