OUP UNCORRECTED PROOF – REVISES-PROOF, 19/04/2011, GLYPH 1 CHAPTER 2 62 3 Emotions and Strategic Change 4 Quy Nguyen Huy 5 Abstract 6 Strategic change represents a special form of organizational change that is particularly large-scale, 7 disruptive, and elicits a wide range of strong emotions among employees. This chapter discusses how 8 organizations can develop routines that deal constructively with employees’ emotions, as well as the 9 challenges that organization leaders face in perceiving and managing employees’ collective emotions. 10 The chapter ends by suggesting a number of important research questions in this vastly underexplored 11 area. 12 Keywords: Leadership; emotions , strategic change , emotional intelligence , collective emotions , 13 emotional contagion , culture 14 One of the many important questions facing posi- We then review the role of emotions in organiza- 38 15 tive organizational scholarship (POS) is its link to tions experiencing strategic change. Th e chapter 39 16 business strategy, which focuses on organizational then elaborates the key constructs in this literature, 40 17 performance. During relatively stable times, in namely individual versus collective emotions, and 41 18 which managers have more bountiful psychological perceiving and managing emotions at work. Next, it 42 19 and organizational resources to build stable, quality highlights several psychological and contextual 43 20 relationships, many dimensions of POS, such as enablers and impediments to dealing with emo- 44 21 thriving at work (Spreitzer, Sutcliff e, Dutton, tions at work. Finally, it suggests avenues for future 45 22 Sonenshein, & Grant, 2005 ), relational quality research. 46 23 (Dutton & Heaphy, 2003 ), and experiencing posi- 24 tive energy (R. W. Quinn & Dutton, 2005 ) seem Strategic Change as a Distinct Form of 47 25 relevant to increasing business performance, Organizational Change 48 26 although more research is needed to explore the Strategic change refers to a qualitative change in the 49 27 associated boundary conditions. But when organi- fi rm’s philosophy or core perspective/identity 50 28 zations need to deal with the pressure of strategic (Bartunek, 1984 ; Johnson, 1987 ). Core identity is 51 29 change, which is often associated with low or declin- defi ned as the central, enduring, and distinctive 52 30 ing organizational resources and time pressure, how characteristics of the organization that all members 53 31 can a POS perspective help us think about what feel proud of and have personally identifi ed with 54 32 organizations can do to create an enabling and con- (Dutton & Dukerich, 1991 ). Th is deep change in 55 33 structive social-psychological context for benefi cial core identity often requires concurrent shifts in all 56 34 change in business strategy? other organizational dimensions, such as structure, 57 35 Th is chapter explores this question and is orga- systems, and personnel, to preserve alignment. Th us, 58 36 nized as follows. First, strategic change will be a strategic change is often deep and large-scale and 59 37 defi ned as a distinct form of organizational change. not only causes a major and pervasive redistribution 60 811 62-Cameron-Ch-62.indd 811 4/19/2011 4:57:01 PM OUP UNCORRECTED PROOF – REVISES-PROOF, 19/04/2011, GLYPH 1 of resources and power, which is already highly Perceiving and Managing Emotions in 54 2 upsetting in itself, but by defi nition demands a Strategic Change 55 3 paradigm shift that challenges members’ most One important dimension of positive psychology 56 4 basic assumptions about the nature of the organiza- involves how employees feel at work and how their 57 5 tion (Reger & Gustafson, 1994 ). Th ese assump- emotions infl uence personal well-being and task per- 58 6 tions defi ne the domain of socially constructed formance (Spreitzer et al., 2005 ). Emotions refer to 59 7 reality and provide a patterned way of dealing with psychobiological responses elicited by an appraisal of 60 8 ambiguous, uncontrollable events (Schein, 1992 ). a particular target or situation and often include sub- 61 9 Organization members have “emotionally invested” jective experiences and specifi c action tendencies 62 10 in these non-negotiable assumptions that shape (Frijda, 1986 ; Lazarus, 1991 ). Emotion and strategic 63 11 their cognitive structures for sense-making and change are linked insofar as emotions are not neces- 64 12 sense-giving. Challenging this source of cognitive sarily aroused by favorable or unfavorable conditions; 65 13 and emotional stability is tantamount to an attack sometimes they are aroused by actual or expected 66 14 on core identity and could trigger strong defense changes in these conditions (Frijda, 1988 ). People 67 15 mechanisms, such as anxiety and defensiveness can express emotions verbally and through nonverbal 68 16 (Schein, 1992 ). behavior. Emotional cues, such as vocal intonations, 69 17 To the extent that strategic change is perceived facial displays, and other nonverbal gestures, indicate 70 18 as being in opposition to esteemed core values, how others construe their role in changing events and 71 19 the negative emotions can be more intense than social structures (Rafaeli & Sutton, 1987 ). Emotions 72 20 the aff ect aroused by lack of cognitive understand- help direct attention, prompt and inhibit particular 73 21 ing of the proposed change (Festinger, 1957 ). behavioral tendencies, and allow employees to coor- 74 22 Opposing concepts are likely to trigger anger, dinate their eff orts (Keltner & Haidt, 1999 ). Paying 75 23 threat, or fear (Reger et al., 1994 ). Disagreement attention to emotional cues therefore provides useful 76 24 on important issues provokes intense emotions information about opinions, preferences, and poten- 77 25 (Jehn, 1997 ), and negative emotions tend to spread tial behaviors — even when people are unaware of 78 26 more rapidly than positive ones (Staw, Sutton, & their emotions or consciously try to control their 79 27 Pelled, 1994 ). expression (Ashkanasy, Härtel, & Zerbe, 2000 ). 80 28 Change leaders’ tasks include recognizing cues Emotions in organizations, however, have impli- 81 29 that signal the need for strategic change and helping cations that extend beyond those related to specifi c 82 30 employees implement a new strategic direction individuals. Personal emotions can play a signifi cant 83 31 (Huff , Huff , & Th omas, 1992 ). As this process role in the eff ectiveness of collective eff orts (George, 84 32 unfolds, top and mid-level managers can face many 1990 ; George & Brief, 1992 ). Collective reactions 85 33 challenges in their attempts to facilitate learning and informal coalitions can form in response to 86 34 among their employees (Chakravarthy, 1982 ), and change proposals and their perceived implications for 87 35 as they strive to empower, motivate, and inspire various groups that have diff erent roles and interests 88 36 them (J. B. Quinn, 1980 ). To accomplish strategic in an organization (Cyert & March, 1992 ). Collective 89 37 change, leaders often have to manage the tension emotions can infl uence the ways in which various 90 38 between deploying existing competencies and fos- groups think and behave in relation to both the orga- 91 39 tering the development and implementation of new nization and other groups within it (Mackie, Devos, 92 40 ones (Crossan, Lane, & White, 1999 ). Th ese con- & Smith, 2000 ). Th ese emotional responses arise and 93 41 fl icting goals can generate role confl ict and emo- evolve throughout the process of strategic change, 94 42 tional discord among employees who are already and they highlight the need for leaders to accurately 95 43 worried about time pressure and resources to carry perceive collective emotions then to manage them. 96 44 out their tasks eff ectively (Floyd & Lane, 2000 ). 45 Th e emotional reactions of individual employees, as Perceiving Emotions in Strategic Change 97 46 well as of upper and middle managers, to alternative Perceiving emotions accurately, both at an individ- 98 47 strategic direction can be particularly intense ual and collective level, has been theorized to be 99 48 (Kanter, 1983 ) as these are amplifi ed in a context of important in the context of strategic change (Jeff rey 100 49 new, contested, and shifting ideas. To facilitate stra- Sanchez-Burks & Huy, 2009). 101 50 tegic change, organization leaders need to perceive 51 employees’ emotions accurately, then manage them perceiving emotions in individuals 102 52 in a constructive manner. We explore each dimen- Th e ability to recognize emotions in other people is 103 53 sion in turn. a key component of social emotional intelligence 104 812 strategic change 62-Cameron-Ch-62.indd 812 4/19/2011 4:57:01 PM OUP UNCORRECTED PROOF – REVISES-PROOF, 19/04/2011, GLYPH 1 (Salovey & Grewal, 2005 ). Scholars have shown with regard to the ensuing costs and benefi ts for 53 2 empirically that accuracy in respect to individuals’ their work units (Gump & Kulik, 1997 ). For exam- 54 3 emotional displays is related to eff ectiveness in man- ple, employees who strongly identify themselves 55 4 aging interpersonal relationships in many occupa- with their companies are likely to experience emo- 56 5 tions and organizational roles (Côté & Miners, tions similar to one another when faced with events 57 6 2006 ; H. Elfenbein, Beaupré, Lévesque, & Hess, that enhance or threaten the organization’s identity 58 7 2007 ; H. A. Elfenbein, 2007 ); For example, studies through a major shift in strategic focus (Dutton & 59 8 have shown that high emotion recognition ability Dukerich, 1991 ). Organizational culture represents 60 9 among managers correlates positively with percep- another subtle yet powerful form of control that 61 10 tions of transformational leadership among their informs and guides the emotions of employees and 62 11 subordinates (Bass, 1999 ; Rubin, Munz, & Bommer, contributes to shared emotional experiences (Van 63 12 2005 ), and in negotiation, accuracy correlates with Maanen & Kunda, 1989 ).