Prospect theory as an explanation for resistance to organizational change: some management implications

Abstract

The problem in organizational change projects is that people often resist organizational change. Many change projects in organizations do not reach their goals. The question is why? This paper investigates how prospect theory can be used to explain people’s resistance to organizational change. Prospect theory is based on research from Kahneman and Tversky. If we know why people resist organizational change, we as leaders can do something to promote the change project. The objective of this article is to advise managers and leaders on ways of reducing resistance to organizational change. The authors identify seven propositions that explain how managerial strategies reduce organizational change. They recommend seven measures that may be employed by management to obtain support for projects implementing organizational change

Prospect theory: an analysis of corporate actions and priorities in pandemic crisis

“…Businesses were severely affected and had to adopt alternative actions for combating the crisis. Conceptual generalization methodology has been used for the study (Adriaenssen and Johannessen, 2016). The research evaluates the corporate actions in the light of prospect theory during pandemic.…”

The impact of economic factors on the relationships between psychological contract breach and work outcomes: a meta-analysis

“…In all, psychological contract theory would benefit from taking a wider perspective on the coping processes of people following a breach and incorporate their decision based on the wider economic environment. Prospect theory (Adriaenssen and Johannessen, 2016;Kahneman, 2011;Kahneman and Tversky, 1979) offers a useful theoretical angle to study not only how psychological contracts are processed emotionally, but also how the resulting behavior of employees is also influenced by assessments of risk and therefore subject to wider contextual macroeconomic factors. In other words, while SET perspectives (Blau, 1964) predict that employees actively restore a balance when PCB occurs, prospect theory would predict that this balance may be absent when employees perceive the potential losses of withholding their efforts to be too great.…”

“…In all, psychological contract theory would benefit from taking a wider perspective on the coping processes of people following a breach and incorporate their decision based on the wider economic environment. Prospect theory(Adriaenssen and Johannessen, 2016;Kahneman,…”

Regulatory decisions in the context of risk and uncertainty

“…One of the key achievements of behavioural economics in the context of making decisions under uncertainty and risk is the prospect theory (Adriaenssen and Johannessen, 2016;Kahneman and Tversky, 1979;Pasquariello, 2014). By dividing the decision-making stage into the phases of editing and evaluation, the first one indicates that by making a preliminary analysis of the decision-making situation, people tend to simplify it by using heuristics and orderliness regarding the reference point.…”