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Managing
Organizational
Change

A Multiple Perspectives Approach Third Edition

Ian Palmer

Richard Dunford

David A. Buchanan

MANAGING ORGANIZATIONAL CHANGE: A MULTIPLE PERSPECTIVES APPROACH, THIRD EDITION

Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2017 by McGraw-Hill Education. All rights reserved. Printed

in the United States of America. Previous editions © 2009 and 2006. No part of this publication may be reproduced or distributed in any form or by any

means, or stored in a database or retrieval system, without the prior written consent of McGraw-Hill Education, including, but not limited to, in any network

or other electronic storage or transmission, or broadcast for distance learning.

Some ancillaries, including electronic and print components, may not be available to customers outside the United States.

This book is printed on acid-free paper.

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ISBN 978-0-07-353053-6

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Library of Congress Cataloging-in-Publication Data

Palmer, Ian, 1957-

Managing organizational change : a multiple perspectives approach / Ian Palmer, Richard Dunford,

David A. Buchanan. — Third Edition.

p. cm.

Revised edition of Managing organizational change, 2009.

Includes bibliographical references and index.

ISBN 978-0-07-353053-6 (alk. paper)

1. Organizational change. 2. Organizational change–Management. I. Dunford, Richard.

II. Buchanan, David A. III. Title.

HD58.8.P347 2016

658.4’06–dc23

2015033668

The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does not indicate an endorsement by the

authors or McGraw-Hill Education, and McGraw-Hill Education does not guarantee the accuracy of the information presented at these sites.

mheducation.com/highered

DEDICATIONS

From Ian To Dianne, Matthew, and Michelle

From Richard To Jill, Nick, and Ally

From David To Lesley with love—and thanks

This book is also dedicated to the memory of Gib Akin, our

co-author from 2005 to 2014.

iv

A number of people have contributed to this edition, and we owe them all a debt of grat-

itude, including Jonathan Bamber, Lesley Buchanan, Daloni Carlile, Mimi Clarke, and

Alastair McLellan. In addition, we would like to thank our McGraw-Hill Education team,

including Michael Ablassmeir, Director, Laura Hurst Spell, Senior Product Developer; Jeni

McAtee, Evan Roberts, Karen Jozefowicz, Content Project Managers; Gunjan Chandola

(Lumina), Full-Service Content Project Manager; and DeAnna Dausener, Content Licens-

ing Specialist. We would also like to thank the second edition reviewers for their helpful

feedback: Diane Bandow, Troy University; Cynthia Bean, University of South Florida–

St. Petersburg; Bradford R. Frazier, Pfeiffer University; Dominie Garcia, San Jose State

University; Selina Griswold, University of Toledo; Mark Hannan, George Washington

University; Christopher S. Howard, Pfeiffer University; Jim Kerner, Athens State Uni-

versity; Catherine Marsh, North Park University; Patricia A. Matuszek, Troy University;

Ranjna Patel, Bethune Cookman University; Mary Sass, Western Washington University;

Dennis Self, Troy University; Patricia Scescke, National Louis University.

Acknowledgements

v

Preface ix

PART 1 Groundwork: Understanding and Diagnosing Change 1

1 Managing Change: Stories and Paradoxes 3

2 Images of Change Management 31

3 Why Change? Contemporary Pressures and Drivers 61

4 What to Change? A Diagnostic Approach 101

PART 2 Implementation: The Substance and Process of Change 137

5 What Changes—and What Doesn’t? 139

6 Vision and the Direction of Change 171

7 Change Communication Strategies 205

8 Resistance to Change 249

9 Organization Development and Sense-Making Approaches 279

10 Change Management, Processual, and Contingency Approaches 315

PART 3 Running Threads: Sustainability, and the
Effective Change Manager 353

11 Sustaining Change versus Initiative Decay 355

12 The Effective Change Manager: What Does It Take? 385

Name Index 423

Subject Index 433

Brief contents

vi

Preface ix

Part 1

Groundwork: Understanding and
Diagnosing Change 1

1 Managing Change: Stories and
Paradoxes 3

Learning objectives 3

Stories About Change: What Can We

Learn? 4

The Story of Beth Israel Deaconess

Medical Center 5

The Story of Sears Holdings 8

The Story of J. C. Penney 10

Tension and Paradox: The State of the Art 14

Assessing Depth of Change 18

What’s Coming Up: A Road Map 19

Change Diagnostic: The Beth Israel Story 21

Change Diagnostic: The Sears Holdings

Story 23

Change Diagnostic: The J. C. Penney Story 24

Exercise 1.1: Writing Your Own Story of

Change 26

Additional Reading 27

Roundup 27

References 28

2 Images of Change Management 31

Learning objectives 31

What’s in a Name: Change Agents, Managers,

or Leaders? 32

Images, Mental Models, Frames,

Perspectives 33

The Six-Images Framework 34

Six Images of Change Management 37

Using the Six-Images Framework 46

Self-Assessment: What Is Your Image of

Managing Change? 49

Self-Assessment: Scoring 51

Exercise 2.1: Assessing Change Managers’

Images 52

Exercise 2.2: The Turnaround Story at

Leonard Cheshire 53

Additional Reading 55

Roundup 56

References 57

3 Why Change? Contemporary Pressures
and Drivers 61

Learning objectives 61

Environmental Pressures for Change 62

Why Do Organizations Not Change in

Response to Environmental Pressures? 79

Why Do Organizations Not Change after

Crises? 82

Internal Organizational Change Drivers 85

Exercise 3.1: Top Team Role Play 91

Exercise 3.2: Case Analysis: The Sunderland

City Story 91

Exercise 3.3: The Reputation Trap: Can You

Escape? 92

Additional Reading 93

Roundup 94

References 96

4 What to Change? A Diagnostic
Approach 101

Learning objectives 101

Organizational Models 102

Organization Strategy and Change 108

Diagnosing Readiness for Change 117

Built-to-Change 124

Exercise 4.1: The Capital One Financial

Story 125

Contents

Contents vii

Exercise 4.2: Scenario Planning 127

Exercise 4.3: Readiness for Change

Analysis 128

Additional Reading 130

Roundup 131

References 134

Part 2

Implementation: The Substance and
Process of Change 137

5 What Changes—and What
Doesn’t? 139

Learning objectives 139

What Changes? 140

Innovation 146

Organizational Culture 150

Technology 155

Exercise 5.1: The Nampak Story 161

Exercise 5.2: Organizational Culture

Assessment 162

Exercise 5.3: How Will the Digital Revolution

Affect Your Organization? 163

Additional Reading 163

Roundup 164

References 166

6 Vision and the Direction
of Change 171

Learning objectives 171

Vision: Fundamental or Fad? 172

The Characteristics of Effective Visions 174

How Context Affects Vision 180

How Visions Are Developed 181

Why Visions Fail 187

Linking Vision to Change: Three

Debates 189

Exercise 6.1: Interviewing Change

Recipients 197

Exercise 6.2: Analyze Your Own

Organization’s Vision 197

Exercise 6.3: The Role of Vision at Mentor

Graphics 197

Additional Reading 198

Roundup 199

References 201

7 Change Communication
Strategies 205

Learning objectives 205

The Change Communication Process 206

Gender, Power, and Emotion 211

Language Matters: The Power

of Conversation 215

Change Communication Strategies 222

Contingency Approaches to Change

Communication 228

Communication Channels and the Role

of Social Media 232

Exercise 7.1: Listen to Who’s Talking 238

Exercise 7.2: How Defensive Are You? 239

Exercise 7.3: Social Media at the

Museum 240

Additional Reading 241

Roundup 242

References 244

8 Resistance to Change 249

Learning objectives 249

WIIFM, WAMI, and the Dimensions

of Resistance 250

Benefits 251

Causes 253

Symptoms 260

Managers as Resisters 261

Managing Resistance 263

Exercise 8.1: Diagnosing and Acting 270

Exercise 8.2: Jack’s Dilemma 270

Exercise 8.3: Moneyball 271

Additional Reading 272

Roundup 272

References 274

viii Contents

9 Organization Development and
Sense-Making Approaches 279

Learning objectives 279

Alternative Approaches to Managing

Change 280

Organization Development (OD) 280

Appreciative Inquiry (AI) 291

Positive Organizational Scholarship (POS) 293

Dialogic Organizational Development 295

Sense-Making 298

Exercise 9.1: Reports from the Front Line 304

Exercise 9.2: Designing a Large-Scale Change

Intervention 304

Exercise 9.3: Making Sense of

Sense-Making 304

Exercise 9.4: Interpreting the Interpreter:

Change at Target 305

Exercise 9.5: Change at DuPont 306

Additional Reading 308

Roundup 308

References 310

10 Change Management, Processual, and
Contingency Approaches 315

Learning objectives 315

Alternative Approaches to Managing

Change 316

Why Change Fails 317

Change by Checklist 319

Stage Models of Change Management 325

Process Perspectives on Change 331

Contingency Approaches to Change

Management 335

Exercise 10.1: Develop Your Own Change

Model 341

Exercise 10.2: The British Airways Swipe

Card Debacle 342

Exercise 10.3: The Italian Job 344

Additional Reading 346

Roundup 346

References 349

Part 3

Running Threads: Sustainability, and
the Effective Change Manager 353

11 Sustaining Change versus
Initiative Decay 355

Learning objectives 355

Initiative Decay and Improvement

Evaporation 356

Praiseworthy and Blameworthy Failures 359

Actions to Sustain Change 362

Words of Warning 369

Exercise 11.1: A Balanced Set of

Measures 373

Exercise 11.2: Treating Initiative Decay 373

Exercise 11.3: The Challenger and Columbia

Shuttle Disasters 374

Additional Reading 379

Roundup 380

References 382

12 The Effective Change Manager:
What Does It Take? 385

Learning objectives 385

Change Managers: Who Are They? 386

Change Managers: What Kind of Role

Is This? 394

Change Management Competencies 397

Political Skill and the Change Manager 403

Developing Change Management

Expertise 410

Exercise 12.1: Networking—How Good

Are You? 412

Exercise 12.2: How Resilient Are You? 413

Exercise 12.3: How Political Is Your

Organization? 415

Additional Reading 416

Roundup 417

References 419

Name Index 423

Subject Index 433

ix

Since the previous edition of this book published in 2009, the organizational world has

changed dramatically—the global financial crisis, fresh geopolitical tensions, environ-

mental concerns, greater focus on corporate social responsibility, economic uncertainties,

emerging new markets, dramatic technological developments, demographic shifts, chang-

ing consumer tastes and expectations. Add to that mix the growing significance of social

media, where positive and critical views of organizations and their products and services

can be shared instantly and globally with large numbers of people.

From a management perspective, it feels as though the drivers for organizational change

are now more numerous, and that the pace of change has also increased; more pressure,

more change, faster change. While the pace of change may only appear to have quickened,

failure to respond to those pressures, and in some cases failure to respond quickly enough,

can have significant individual and corporate consequences. The personal and organiza-

tional stakes appear to have increased.

The management of organizational change thus remains a topic of strategic impor-

tance for most sectors, public and private. Current conditions have, if anything, increased

the importance of this area of management responsibility. This new edition, therefore,

is timely with regard to updating previous content, while introducing new and emerging

trends, developments, themes, debates, and practices.

In the light of this assessment, we believe that the multiple perspectives approach is

particularly valuable, recognizing the variety of ways in which change can be progressed,

and reinforcing the need for a tailored and creative approach to fit different contexts. Our

images of how organizational change should be managed affect the approaches that we

take to understanding and managing change. Adopting different images and perspectives

helps to open up new and more innovative ways of approaching the change management

process. We hope that this approach will help to guide and to inspire others in pursuit of

their own responsibilities for managing organizational change.

This text is aimed at two main readers. The first is an experienced practicing manager

enrolled in an MBA or a similar master’s degree program, or taking part in a management

development course that includes a module on organizational change management. The

second is a senior undergraduate, who may have less practical experience, but who will

probably have encountered organizational change through temporary work assignments,

or indirectly through family and friends. Our senior undergraduate is also likely to be

planning a management career, or to be heading for a professional role that will inevi-

tably involve management—and change management—responsibilities. Given the needs

and interests of both types of readers, we have sought to present an appropriate blend of

research and theory on the one hand, and practical management application on the other.

Instructors who have used our previous edition will find many familiar features in this

update. The chapter structure and sequence of the book remain much the same, with some

minor adjustments to accommodate new material. The overall argument is again underpinned

by the observation that the management of organizational change is in part a rational or tech-

nical task, and is also a creative activity, with the need to design novel strategies and processes

Preface

that are consistent with the needs of unique local conditions. We hope that readers will find

the writing style and presentation clear and engaging. We have also maintained the breadth of

coverage of the different traditions and perspectives that contribute to the theory and practice

of managing organizational change, with international examples where appropriate.

The development of this new edition has introduced new content and new pedagogical

features. The new content for this edition includes the following:

Depth of change: Change can be categorized and understood with regard to how deeply

it penetrates an organization. A “depth of change” model is explained, using a “shal-

low to transformational” scale, forming the basis for discussion and analysis at various

points in the text (chapters 1, 4, and 12).

New tensions and debates: A new section explores contemporary dilemmas in orga-

nizational change management. One of these concerns striking the balance between

large-scale transformational change (which can be disruptive) and “sweating the small

stuff” (which can create a platform for further changes). A second concerns pace, with

some commentators advising how to speed up change, while others warn of the dangers

of “the acceleration trap” (chapter 1).

Change managers or change leaders: Some commentators claim this is an important

distinction, while others argue that this is a words game. Can we resolve this debate

(chapter 2)?

Post-crisis change: Recommendations for change from investigations into accidents,

misconduct, and catastrophes are often not implemented. We explore why this should

be the case—in conditions where it might be presumed that change would be welcome

and straightforward (chapter 3). We also consider briefly the problems and practice of

communication during and after crises (chapter 7).

Change in a recession: Is change more challenging when economic conditions are dif-

ficult? A new section argues that change may be more straightforward during a reces-

sion (chapter 3).

Innovation: We explore how change is driven by the proactive development, adop-

tion, and diffusion of product and operational innovations, along with the distinction

between sustaining and disruptive innovations, and the nature and development of

innovative organization cultures (chapter 4).

Built to change: We explore the organizational capabilities that contribute to change,

adaptation, responsiveness, and agility, considering mechanistic and organic manage-

ment systems, segmentalist and integrative cultures, and the concept of the “built-to-

change” organization (chapter 4).

Change communication strategies: This chapter has been thoroughly updated, with the

emphasis on change communication, exploring the characteristics of effective change

communication strategies, the potential impact and applications of social media as cor-

porate communications tools, and the “communication escalator” (chapter 7).

Middle management blockers: The traditional stereotype has middle managers sub-

verting top team initiatives. Recent research suggests that this image is wrong, and

that middle management are often the source of creative strategic ideas as well as the

“engine room” for delivery (chapters 8 and 12).

x Preface

Organization development and sense-making approaches: As in the previous edition,

recent developments in organization development, appreciative inquiry, positive orga-

nizational scholarship, and dialogic organization development are explored (chapter 9).

Contingency and processual approaches: Covered in the last edition, recent develop-

ments have been incorporated to update these sections, reflecting their influence on

theory and practice (chapter 10).

Praiseworthy and blameworthy failures: The section on “recognizing productive fail-

ures” has been updated with recent commentary suggesting that some failures should

be rewarded (chapter 11).

The effective change manager: What does it take? This new chapter explores the capa-

bilities of change managers, considering competency frameworks, interpersonal com-

munication processes and skills, issue-selling tactics, and the need for the change

manager to be politically skilled (chapter 12).

The pedagogical features in the text include:

• learning outcomes identified at the beginning of each chapter;

• fewer, and shorter, “high-impact” case studies of organizational change and other diag-
nostic and self-assessment exercises for classroom use;

• movie recommendations, identifying clips that illustrate theoretical and practical
dimensions of organizational change management;

• a short “roundup” section at the end of each chapter, with reflections for the practic-
ing change manager, and summarizing the key learning points (linked to the learning

outcomes);

• a small number of suggestions for further reading at the end of each chapter.

Since this book was first published, we have continued our conversations with man-

agers who have been using it as part of their teaching, consulting, and other organiza-

tional change activities. In so many of these conversations, it was reassuring to hear how

the multiple perspectives framework that underpins this book struck the right chord with

them, opening up new, innovative, and different ways of seeing, thinking, conceptualizing,

and practicing organizational change. We hope that this new and updated third edition will

continue to inspire various change journeys, and we look forward to more conversations

along the way.

Online Resources

Instructors: If you are looking for teaching materials in this subject area, such as case stud-

ies, discussion guides, organizational diagnostics, self-assessments, company websites, or

audio-visual materials (feature films, YouTube clips) to use in lectures and tutorials, then

go to McGraw-Hill Connect: connect.mheducation.com

Continually evolving, McGraw-Hill Connect has been redesigned to provide the only

true adaptive learning experience delivered within a simple and easy-to-navigate environ-

ment, placing students at the very center.

Preface xi

• Performance Analytics – Now available for both instructors and students, easy-to-decipher
data illuminates course performance. Students always know how they are doing in class,

while instructors can view student and section performance at a glance.

• Personalized Learning – Squeezing the most out of study time, the adaptive engine
within Connect creates a highly personalized learning path for each student by identify-

ing areas of weakness and providing learning resources to assist in the moment of need.

This seamless integration of reading, practice, and assessment ensures that the focus is

on the most important content for that individual.

The Connect Management Instructor Library is your repository for additional resources

to improve student engagement in and out of class. You can select and use any asset that

enhances your lecture.

The Connect Instructor Library includes:

• Instructor Manual

• PowerPoint files

• Test Bank

Students: If you are looking for additional materials to improve your understanding of

this subject and improve your grades, go to McGraw-Hill Connect: connect.mheduca-

tion.com

Manager’s Hot Seat: Now instructors can put students in the hot seat with access to an

interactive program. Students watch real managers apply their years of experience when

confronting unscripted issues. As the scenario unfolds, questions about how the manager

is handling the situation pop up, forcing the student to make decisions along with the

manager. At the end of the scenario, students watch a post-interview with the manager and

view how their responses matched up to the manager’s decisions. The Manager’s Hot Seat

videos are now available as assignments in Connect.

LearnSmart: LearnSmart, the most widely used adaptive learning resource, is proven

to improve grades. By focusing students on the most important information each stu-

dent needs to learn, LearnSmart personalizes the learning experience so they can study

as efficiently as possible.

SmartBook: An extension of LearnSmart, SmartBook is an adaptive ebook that helps

students focus their study time more effectively. As students read, SmartBook assesses

comprehension and dynamically highlights where they need to study more.

xii Preface

1

1
Groundwork:
Understanding and
Diagnosing Change

CHAPTER 1 Managing Change: Stories and Paradoxes

CHAPTER 2 Images of Change Management

CHAPTER 3 Why Change? Contemporary Drivers and Pressures

CHAPTER 4 What to Change? A Diagnostic Approach

The central theme of the four chapters in Part 1 is groundwork. How are we to approach

an understanding of organizational change? With what approaches, perspectives, or

images of change management should we be working? What drivers and pressures

produce organizational change? What diagnostic tools can we use in order to decide

what aspects of the organization and its operations will need to change or will benefit

from change?

PART

3

Managing Change:
Stories and Paradoxes

Learning objectives

By the end of this chapter you should be able to:

LO 1.1 Understand how stories of change can contribute to our knowledge of theory

and practice.

LO 1.2 Explain why managing organizational change is both a creative and a rational

process.

LO 1.3 Identify the main tensions and paradoxes in managing organizational change.

LO 1.4 Evaluate the strengths and limitations of our current understanding of this field.

1Chapter

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.C
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.c
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4 Chapter 1 Managing Change: Stories and Paradoxes

LO 1.1 LO 1.2 Stories About Change: What Can We Learn?

Changing organizations is as messy as it is exhilarating, as frustrating as it is satis-

fying, as muddling-through and creative a process as it is a rational one. This book

recognizes these tensions and how they affect those who are involved in managing

organizational change. Rather than pretend that these tensions do not exist, or that they

are unimportant, we confront them head on, considering how they can be addressed and

managed, recognizing the constraints that they can impose. We also want to demon-

strate how the images that we hold about the way in which change should be managed,

and of the role of change agents, affect how we approach change and the outcomes we

think are  possible.

To begin this exploration, we present three stories of recent changes. The first con-

cerns the turnaround of the Beth Israel Deaconess Medical Center in Boston. The sec-

ond concerns the new organizational model introduced at Sears Holdings in an attempt

to restore falling sales and profits. The third concerns innovative efforts to restore fall-

ing sales and a fading brand at J. C. Penney, a retailer. These stories address differ-

ent problems, but they display many common issues concerning the management of

change. Each of these accounts comes with a set of assessment questions. We would

like to ask you to think through the answers to those questions for yourself, or in a class

discussion.

Our aim is to demonstrate that stories about change can be one valuable source of

practical lessons, as well as helping to contribute to our general understanding of change.

These stories are of course distinctive, one-off. How can they contribute to knowledge

and practice in general, in other sectors and organizations? Stories are one of the main

ways of knowing, communicating, and making sense of the world (Czarniawska, 1998;

Pentland, 1999; Dawson and Andriopoulos, 2014). Our stories have actors: change lead-

ers, other managers, staff, customers. They take decisions that lead to actions that trig-

ger responses: acceptance, resistance, departure. There is a plot: a serious problem that

could be solved by organizational change. There are consequences: to what extent did the

change solve the problem, and were other problems created along the way? The sequence

of events unfolds in a typical manner: … and then … and then. This tells us why the out-

comes were reached.

Our narratives are not just descriptions of a change process, of what happened. They

also provide us with explanations. These are process narratives. Process narratives have

several advantages over more traditional (quantitative, statistical) research methods (Mohr,

1982; Poole et al., 2000; Van de Ven and Poole, 2005):

they tell us about the context, give us a sense of the whole, a broader frame of reference;

complexity can be expressed within