FoxMeyer’s Workplace Change Resistance Explained
Organizational change is inevitably driven by the emergence of new products and technologies, evolving workforce environment, and new government regulations. However, all efforts at organizational change are associated with numerous problems that cost managerial time and damage morale. It is recognized that organizational changes are always met with varying levels of resistance. Unfortunately, not all managers are capable of recognizing “who might resist the change initiative and for what reasons.”
Moreover, even those who do take time to assess the impact of change initiatives before their implementation are often driven by simplistic sets of beliefs and assumptions about potential resistance. Given that individual and group dynamics during organizational change are not always intuitively obvious, such a limited approach to change implementation might lead to undesirable outcomes. Therefore, managers considering the introduction of new policies and procedures have to be aware of different reasons that people have for resisting workplace change. According to Kotter and Schlesinger, these reasons include:
“A desire not to lose something of value, a misunderstanding of the change and its complications, a belief that the change does not make sense for the organization, and a low tolerance for change in general.”
A desire not to lose something valuable or parochial self-interest is a form of resistance that prevents employees from focusing on the best interest of their organization. People disfavor new organizational arrangements because they recognize that new policies and regulations might alter their conditions; therefore, they often engage in “political behavior” in order to resist changes. Such power struggles do not always take the form of two opposing groups and might occur “under the surface of public dialogue.” Employees also resist new policies and procedures when they perceive that the balance between cost and gain might not be in their favor. A lack of trust contributes to misunderstandings about impending changes and often gives rise to the circulation of rumors. Effective managers know that all misunderstandings have to be rapidly clarified in order to avoid resistance.
Another reason for change resistance is a discrepancy between the assessment of new organizational arrangements made by management and employees. If people perceive change differently from their managers, they might not recognize the benefits associated with it and instead concentrate on costs. A lack of information about impending changes might produce negative sentiments among employees, thereby leading to the spread of incorrect assumptions and beliefs. Lack of tolerance for change is associated with resistance to the initiatives proposed by management. Change initiators have to recognize that in order for people to make emotional transitions, they have to be sure that they will be able to quickly develop new skills required by alteration of organizational conditions.
The implementation of the SAP technology debacle experienced by FoxMeyer cannot be attributed to a single reason for change resistance. It can be argued that even though parochial self-interest was the main driver behind employees’ decision to leave the company, misunderstanding and trust issues substantially contributed to the development of negative attitudes towards the change. It is clear that FoxMeyer’s management did not take the necessary steps to properly address a “debilitating morale problem” that resulted in merchandise damage and a loss of $34 million worth of inventories. The management of the company should have taken extra steps to diagnose resistance and do everything possible to minimize negative attitudes toward organizational change efforts. The harmful form of resistance demonstrated by the warehouse employees was the result of distrust and poor management decisions in equal measure. If change initiators had properly explained to workers all implications of the future change, they would have avoided the retaliation, which resulted in catastrophic inventory shrinkage.