Resistance to Organizational Change

Introduction

            Change is the single most important element of successful business management today. To remain competitive in increasing aggressive markets, organizations have to adapt constantly. Smooth change management enables businesses to be one step ahead of rivals, set trends and lead in order to survive. Successful companies, as Harvard Business School professor Rosabeth Moss Kanter once said, develop “a culture that just keeps moving all the time (Jones et al., 2004).”

             Organizational changes must take place when companies change strategies. However, even the best strategic plans encounter resistance. Any significant transformation creates “people issues”. To succeed, management must have an intimate understanding of the human side — the alignment of the company’s culture, values, people, and behaviours — to encourage the desired results. Plans themselves do not capture value; value is realized only through the sustained, collective actions of all employees who are responsible for designing, executing, and living with the changing environment.

This paper analyzes causes of resistance to change in people’s thinking processes and recommends solutions to deal with it.

Analysis

Resistance to change is an on-going problem at both the individual and group level. It can be as subtle as the reduction of the individual or group coordinated productive inputs or as harsh as encountering key personnel quit. All these effects harm productivity and hence create very real costs for businesses. Individual resistance to change can give rise to group resistance. A self-reinforcing loop of increasing resistance can develop as individuals create an environment in which resistance to change is the norm. Such an environment in turn encourages increased resistance to change among individual employees. The self-reinforcing nature of this loop can be tremendously powerful, defeating repeated attempts to break out of it. In addition, coaching people to adopt a positive attitude towards change is easier than actually altering their habitual thinking process and behaviour as hidden and unconscious resistance to change is the most difficult to conquer.

Understanding the root causes of resistance to change is an essential advantage in management. Theories of mental models and mind traps help explain why individuals are more likely to maintain previous positions. As individuals, we all build our own mental maps that we use to perceive, contextualize, simplify, and make sense of things happening in front of us. Those formulated mental maps can trick us into mental traps from thinking objectively, logically or rationally.

They also hinder us from accepting differences. Changing mental maps causes discomfort or pain. The greater the pain, the greater the resistance will be. Resistance to change is an inherent part of the brain system’s attempt to maintain a certain level of stability. Humans experience dissonance when our mental maps are not synchronized with the external environment. When no change occurs, the “preferred” state of the system is to come to a fixed state. There is a tendency for people within organizations to attempt to halt external change so that their “internal” state does not need to be changed.

1. Anchoring

Humans tend to give disproportionate weight to the first information we receive. People base decisions or estimates on events or values known to them, even though these facts may have no bearing on the actual event or value. The unknowns create uncertainties which lead to anxiety.

2. Status Quo

Humans favour alternatives that perpetuate the existing situation. People who have been in the same place for a long time are usually in this state. They do not need to change and will view any suggestion of change with distaste.

3. Sunk Costs And Commitment of Escalation

Humans make choices in a way that justifies past flawed choices. Imagine when we have invested a lot of time and energy in building up our positions, both socially and organizationally, and then any change may mean bad news. Social investment creates a person’s sense of identity. That kind of power can be simply smashed by organizational changes. People lose power, resources, autonomy or they perceive they might lose control, thereby negative attitudes towards new ideas and new directions are brewed.

Sunk costs and commitment of escalation are very common mind traps in business practices. Managers conduct irrational behavior by repeating an apparently bad decision or allocating more resources to a failing course of action. I’ve recently experienced something similar at work. We had a web site integration project going on for over 2 years with costs climbing from $1 million to $2.5 million dollars. The majority of eBusiness people think it a bad idea to construct the integrated site on the chosen platforms which wouldn’t achieve the operational efficiency goals and there are certainly better alternatives, however, we keep committing to the original plan and were afraid of the implications of starting a new plan from scratch.

4. Confirmation Bias and Selective Perception

Humans seek information that supports our existing points of views. This is also called “selective perception”…perception bias the use of information. The perceptions that people have of the change is based on their internal systems and the inferences they make. Perception is reality for the person, even it if is not really true. It therefore makes sense to understand how they perceive the change knowing that people tend to seek evidence that confirms their own predictions rather than seeking disconfirming evidence.

4. Mental Models

The mental models framework further proves the difficulty for human beings to change or to accept changes. Mindsets, schema, and scripts provide useful shortcuts to reduce our cognitive loads and our need for decision making in frequently encountered situations.

Mindsets are a collection of assumptions, attitudes, and methods that are utilized in approaching decisions such as the international versus the domestic mindset and coaching versus controlling mindset among many others. When these mindsets become commonly held by the people, corporate cultures arise. These corporate cultures then become an integral part of the people’s decision on what makes sense and what is really important. With these collective mindsets set in place, people advance choices that are construed according to how things can be limiting (or enabling) to the generation of alternatives in forming decisions.

When an established mental model is disrupted, the natural tendency is to question the mental models instead of fully abandoning them. The inquiry into these disruptions leads toward the reinforcement of the established mental model largely affected by confirmation bias as well as selective perception. Hence, difficulties in consenting to changes and disruptions remain.

Paradigm shift and cognitive schema

            A paradigm is taken to mean as “a pattern, a model, (or) an example” which is “the ideal and standard specimen (Pelli, 1986)”. In terms of organizational structure, paradigms are the dominant collective views of reality by the constituents of the group. Hence, an organizational paradigm is a world view or a reference frame (Simsek and Louis, 1994). It serves as the basis for the information-processing function of the organization as they are well-established in the decision-making procedures. With the continued use of a certain organizational paradigm, the paradigm is further reinforced and is given more merit in situations that call for crucial decisions and alternative solutions.

            Paradigm shifts, or changes in these established views of reality in the organization, imply changes in the organization itself (Huber and McDaniel, 1986). An organization that is composed of people who have already habituated themselves with the existing paradigm with regards to the configuration of the organization and the processes involved will hardly adapt and adopt changes in the established paradigm. Paradigm shifts will result to hesitance as a well-established paradigm firmly rooted in the organization is difficult to displace.

            Human beings organize knowledge about particular concepts and categories through the use of generalizations and explanations founded on specific salient instances of experience. This “cognitive schema” includes person, event, role and self schemas. While person schema reflects the schema for each individual that we know in terms of attributes and feelings, role schema drives our expectations about what people such as nurses, artists, CEOs and derivatives traders will (should) do and our evaluations of how they do it.

            Schema-driven information processing tends to be very heuristic which makes it prone to bias. As rigid schemas are relatively fixed, these schemas become immune to feedbacks, resulting primarily from its utilization in a wide variety of situations as a ‘one size fits all’ method. On the other hand, flexible schema allow for many alternatives through questioning of available data and seeking of evidences. An example to this is the National Hurricane Center’s adjustments to the forecasted path of Hurricane Katrina in 2005 (Manuel, 2006).

            Cognitive scripts or event schemas are representations of knowledge about how to approach tasks, problems, decisions and situations in which we act. As roles, scenes and actions are predictable in this schema, script violation leads to uncertainty and anxiety. The predictable nature of this schema is another reason why biases enter our decision-making processes which pose great harm if the stakes are high. Data search and generation of alternatives also become restricted as individuals are inclined to ‘think inside the box’.

Group and Organizational Resistance

Individuals depend on social reality and the opinions of others to maintain confidence in the positions they hold. Personal beliefs depend on others for social validation. We compare ourselves to others or to previous or envisioned selves and use the comparison as a basis for a variety of judgements and sentiments: happiness, well being, self-esteem, and the sense of justice. Individuals evaluate social positions or access to resources not only from an absolute level but also from a relative positioning. A change that adversely affects a person’s relative position triggers the perception of unfairness.

Since organizations are comprised of several individuals, it is most likely that these individuals who share common positions will group together at least in terms of perceptions towards the organizational schemes. With a number of members resisting the organizational changes, their decisions become interdependent to one another.

            Interdependent decisions play a part in motivating individuals to participate in collective actions in the absence of selective incentives. As singular and self-regulating decisions leave little room for a communal action, interdependent decisions occupy a central role as well in creating a recognizable block in fostering the call for collective actions.

The pressure to conform to common information has an effect on the organization members. Groups spend the vast majority of their time discussing information that they commonly hold in order to strengthen their aggregate knowledge.  Unique information is rarely shared and not widely discussed, thus limiting alternatives. Joint resistance takes the form of social pressure toward uniformity. Such situation arises from the desire or need for the group to move toward a specific goal.

Company culture also plays a detrimental role in change management. Effective norms and rules at work places take on a life of their own when they are supported by informal social systems, i.e. culture, the functional “glue” of an organization. Once a norm has been established, various mechanisms support its longevity.

When organizations change, the various mechanisms in the organization would have to change themselves to a certain degree in order to sustain the norms brought by the organizational alterations. If the company culture is one that has been reeking with flaws, and if this culture is carried over the change in the management, the results of the organizational shifts would still embody the company culture. Thus, the organizational change would be deemed futile. And if the organization has a history of such an organizational change with essentially the same old company culture, resistance to further changes are to be met.

Solutions

In order to surmount the resistance to organizational changes especially from the members of the organization, one should be an integrative thinker. Developing an integrative thinking model in arriving at a management style that addresses the resistance and dissolves it is a dire necessity. This can be done through the TAO procedure, or that which entails thinking, followed by the course of action, and finalized by the outcome.

            One must first carefully scrutinize all the related aspects in introducing changes in the management, such as the possible refutations to the call for organizational change and the constructive (and destructive) feedbacks from the members. The thinking process enables one to precisely determine the best possible course of action that must be taken in order to pre-empt resistance and pursue the changes as the outcome.

• Strong leadership

With a strong leadership, the members in the organization will have the least tendency to resist and be a cause of delay or hindrance to the organizational change. The leadership strength of those who are atop the hierarchy of management determines the consequent perceptions and actions of the members.

• Be Prepared

Only the well prepared decision maker will be a winner. “The fatal flaw in decision making is to ignore the thinking of others.”

• Awareness

In cases where a decision has whole-life consequences (such as the lifetime mortgage or the lifetime critical injury insurance), it is an imperative that the agents should have a critical perception of their ‘environment’. The agents should be aware that there are implications beyond their current horizon of foresight, even if they do not yet care about or fully understand matters beyond that point. In contrast, a naïve agent who is unaware of his short-sightedness will make mistakes. Management should be aware of the existence of mental traps and people’s tendencies and find ways to counter the negative effects imposed on change management.

• Prospect theory (Levy and Levy, 2002)

Many small gains feel better than one large gain. Take a thousand small tactical steps – hiring people with a commitment to the new model or design, firing a few key people who are standing in the way, repeating over and over again why and how things are now different.

Set priorities and decide up front what it is you want to change. Every plan should have an action agenda, with steps laid out for accountability and follow-up.

Robert Cialdini offers several important principles in order to persuade people to follow the lead of organizational change. In essence, one should manifest a positive treatment towards the members in order to obtain a positive response (Cialdini, 2007). This ensures that the organizational change will be met with the least physical resistance or with no resistance at all.

Subconscious resistance is more difficult to tackle. Over the long run, it costs the company more in trying to change people than by simply letting them go and hiring new people that are more aligned with the company’s transformation goals.

The endowment effect theory states that when people are endowed with a product, they value it more. This technique can also be utilized in introducing changes within the organization by giving the members tangible products that are to be received from the organizational change so that they will value the change in the management all the more. For example, the intent of H-P’s Fiorina to announce the Compag acquisition several months ago before the deal was to facilitate a shakeup of the H-P culture so that the kind of reorganization that was required could go forward, whether the merger went through or not.

In harnessing the art of persuasion, one should be integrative rather than remaining positional or being stringent in defending one’s stance. This is to allow the influx of opposing ideas and manipulate these oppositions to the favour of one’s claim for the changes. It is also equally important to know one’s self and to inquire as well about other’s models. With these things, one can be able to seek-out a creative array of alternative solutions to the resistance of the members with the organizational change.

Several principles are also to be observed in persuading the members to remove themselves of their resistance claims. These include reciprocity which emphasizes the social obligation to give back return the same form of behavior that one gives to another. Scarcity highlights the idea that people want more of what they cannot obtain inasmuch as they are more pushed by their losses instead of the gains that they have acquired. Authority, on the other hand, refers to the power of position especially in the organization. It also includes the authority in terms of expertise and, to a certain extent, charisma. Meanwhile, consistency (with commitments) entails the perception that people have the tendency to agree to perform actions which they have previously taken sometime in the past. This is anchored on the observation that little changes in performing actions and operations within the organization can yield large benefits and rewards.

Further, consensus (as a social proof) entails that the individual should view and consider others in order to specifically pinpoint what is appropriate or is desirable in the context of the changes to be proposed. Last but not the least, the concept of liking emphasizes the idea that people tend to choose to agree to the persons they know and like inasmuch as these people also elevate the status of those they like and give them rewards as these same people tend to champion the ideas of those they like. Having a likeable image and perception from the members would yield to a smooth and positive appraisal of one’s proposal for a change in the management.

Positive aspects of change may be less obvious at first than negative ones. New ventures, expansion, promotions, and booms often bring challenges before delivering gains. Cases such as departmental or factory closings, dismissals, bankruptcies, or deterioration in markets bring difficulties and very few immediate benefits. But however it appears, approaches change positively as potential opportunity. Use it as a stimulus to encourage new ideas and harness enthusiasm for further progress.

• Changes in the external environment increase the dissonance.
• Increasing dissonance reduces resistance to changing the mental map.
• Changing a mental map decreases dissonance as the internal and external realities are brought into closer synchronization.

Another reaction to a constantly changing environment is to engage in constant change (Cohen, 1960). When this approach was modeled, resistance to change decreased and mental map changes increased as change occurred at a constant rate. From the organizational point of view, this approach is probably the most conducive to long-term organizational health.

Conclusion

Integrative thinking can be a two-edged sword: it can work against organizational change or it can work for it. The art lies on how the management is able to use integrative thinking to its advantage. With an able management adept at utilizing integrative thinking into the process of inducing systematic changes in the management, members will be unable to resist a tempting offer that will broaden their field in the organization.

References

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JONES, J., AGUIRRE, D. & CALDERONE, M. (2004) 10 Principles of Change Management. Strategy+Business.

LEVY, M. & LEVY, H. (2002) Prospect Theory: Much Ado about Nothing? Management Science, 48, 1334-1349.

MANUEL, J. (2006) In Katrina’s Wake. Environmental Health Perspectives, 114, A33.

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