Study Guide
Unit 3: Change Management and Decision-Making
3a. Use Lewin's three-step model of change in relating types of change to the decision-making process
- What are the environmental sources of organizational change?
- What are the three steps in Lewin's model for organizational change, and how would you describe them?
- How can the eight stages in John Kotter's change model be mapped onto Lewin's model?
The necessity for change can stem from anywhere in an organization's internal environment, such as the people who work for the organization, management, the shareholders, and the board of directors. Other inside forces are the organization's culture, structure, or intrapreneurship. It may also be stimulated by forces in the organization's external environment, such as legislation, society, economics, technology, nature, politics, globalization, and competition.
Kurt Lewin's change model consists of:
- unfreezing: preparing employee mindset for change;
- change implementation: executing the change plan; and
- refreezing: reinforcing the change in organizational culture.
John Kotter's change model encourages unfreezing by:
- establishing a sense of urgency;
- forming a powerful guiding coalition; and
- creating a vision of change.
Then, he suggests implementing change by:
- communicating the vision;
- removing any obstacles to it; and
- creating small wins along the way.
Finally, as in Lewin's model, change is reinforced by:
- consolidating improvements; and
- anchoring the change in culture.
To review, see:
- Planning and Executing Change Effectively
- Managing Change
- Managing Change for Organizations
- Communicating Change
3b. Assess various methods of communicating change within an organization
- According to the influence change model, what are the four ways management can introduce change?
- Why is it so important to communicate the change plan in the unfreezing stage and publicize success in the refreezing stage, according to Lewin?
- Kotter's model is most useful when change is reasonably predictable, and leaders can drive change downward. What are the communication challenges with this model?
The influence change model says that people first need to understand what you want them to do differently. Next, leaders need to change the processes to support the desired change. Then, they must give employees the capabilities to effect the changes required of them. Finally, employees need to see their leaders modeling the new, desired behaviors. Combined, these four influences will offer a positive mindset toward the desired change.
Lewin says that communicating the change plan up front is the most important way to prepare people's mindset for accepting change. People fear what they don't know. And when they fear change, they will resist it. Being absolutely transparent about why change needs to happen, your expectations for change, and the benefits of change to employees will allay fears and make it easier to accept change. Once the change is in place, make your success public knowledge. It's hard to argue with something that works, so it will be harder to return to your old ways. Plus, it shows your employees that their efforts and sacrifices were worth the trouble and gives them confidence in continuing with new behavior patterns.
Because Kotter's model takes a top-down approach, employees may resist change if they cannot participate in the planning process. Participation creates buy-in and commitment, thus reducing resistance, especially if the urgency of the situation is not fully understood at first. Therefore, leaving communication of the vision to step four may also be challenging. While the vision may be clear to leaders, it takes followers longer to get a clear and accurate picture. Envisioning change simultaneously with its implementation may be overwhelming.
To review, see:
3c. Compare and contrast decision-making based on individualized and team processes
- What are some ways to make individual decision-making less biased?
- What are the pros and cons of individual and group decision-making?
- Why is groupthink simultaneously rare yet devastating?
- What are the tenets of brainstorming?
Individual decision-making is often discouraged because it is biased in favor of the decision-maker's preferences. One way of avoiding this is through habitual or mundane decisions that do not require much thought, or programmed decisions. Another way is by using decision rules, or decisions that occur frequently enough that we develop an automated response to them. Finally, organizations may develop standard operating procedures or policies, which are written decision rules for employees to follow in recurring situations.
Individual decision-making is faster, best for simple decisions, and easiest for determining accountability. However, fewer ideas are generated, results are biased, and it's easy to procrastinate. Group decision-making will generate less biased, more varied, and more creative ideas than individual decision-making. Decision-makers will also be more committed socially to the final decision and the process. However, it takes a lot longer, and dynamics such as groupthink, social loafing, and lack of accountability may occur. Groupthink is rare yet devastating because eight extremely specific and difficult conditions need to be met, but when they are, the results are disastrous.
Brainstorming is a unique group decision-making process that is often misrepresented in the vernacular. It consists of generating concepts and ideas quickly and without criticism. Ideas should build on (piggyback) previous ideas, and no idea should be considered too outlandish. Setting idea quotas, where the group must reach a set number of ideas before finishing, is recommended to prevent cognitive process losses.
To review, see:
3d. Evaluate the strengths and weaknesses of rational and "satisficing" approaches to decision-making
- What are the steps to rational decision-making?
- What are the three main critiques of the rational model of decision-making?
- What does it mean to "satisfice" in boundedly rational decision-making?
Rational decision-making involves:
- identifying the problem;
- establishing decision criteria;
- weighing each criterion;
- generating alternatives;
- evaluating each alternative;
- choosing the optimal alternative (mathematically);
- implementing that decision; and
- evaluating the effectiveness of that decision.
The main critique of this model is that it assumes full information, which is usually not available. Even if it were, we would not have the cognitive capacity to process it all, and even if we could, we would not always want the optimal outcome. Boundedly-rational decision-making accounts for these critiques with the concept of satisficing, which is the idea that people often engage in a limited search to find a solution that is close enough to optimal.
To review, see:
3e. Analyze the impact of biases on the decision-making process
- How do personal biases such as stereotyping and selective perception bias decision-making?
- How do outcome bias and shared information bias (the common knowledge effect) reduce decision quality?
- How do production blocking and group polarization negate the benefits of group decision-making processes?
Stereotyping is a widely held generalization about a group of people, while selective perception is when we screen out information we wish to ignore and instead focus only on information we find salient. Stereotyping starts with inaccurate mental models at the beginning of the decision process. Selective perception may screen out information valuable to optimal decision-making. Both biases lead to decisions based on personal preferences rather than rational data. Decision quality is also reduced due to outcome bias, when we naturally focus on the outcome rather than what was known at the time when evaluating decision-making, and shared information bias, when group members spend too much time discussing information they all know while ignoring equally important information that only a few know.
Assuming there is time, group decision-making is normally preferred because of its many benefits over individual decision-making. However, these benefits may be negated by group process failures such as production blocking, when people forget their ideas because they are listening to others or miss what others are saying because they are thinking of their own ideas, and group polarization, when, after discussion, the attitudes held by the individual group members become more extreme than they were before the group began discussing the topic.
To review, see:
Unit 3 Vocabulary
This vocabulary list includes terms you will need to know to successfully complete the final exam.
- boundedly-rational decision-making
- brainstorming
- change implementation
- decision rules
- external environment
- group decision-making
- group polarization
- idea quotas
- individual decision-making
- influence change model
- internal environment
- John Kotter's change model
- Kurt Lewin's change model
- outcome bias
- policies
- production blocking
- programmed decisions
- rational decision-making
- refreezing
- satisficing
- selective perception
- shared information bias
- standard operating procedures
- stereotyping
- unfreezing