Managing Change

Chapter#4
 Change Management
Change management (CM) is a collective term for all approaches to
preparing and supporting individuals, teams, and organizations in
making organizational change. Change is either planned or unplanned.
Planned change (or proactive change) is deliberate and intended. The
entity makes the change to move from an existing situation (or way of
doing things) to a new situation.
Unplanned change (or reactive change) happens in response to
developments, events and new circumstances that have arisen. The
change is not intended in advance.
 Incremental vs. Transformational Change
With planned change, the entity might see an opportunity to develop.
Unplanned change is often seen as a reaction to a threat or an adverse
event. Change is either incremental or transformational.
Incremental change is a fairly small change. This type of change happens
without the need for a major re-organisation or restructuring of the
organisation and its systems and procedures. The entity should be able to
adapt easily to the change.
Transformational change is a big change. A transformational change
requires a major re-organisation or a restructuring of the organisation
and its systems and procedures. The change has a big impact on the
entity, and also on the people working in it.
Nature of Transformational Change
Transformational change requires
change management skills from the managers who are responsible
for introducing the change (the ‘change managers’). Change is also
either:
 a ‘one-off’ event, so that the entity moves quickly from the old
state of affairs to a new state of affairs, or
a continuing process of development and change over a long period
of time.
 Triggers for change
A trigger for change might come from either outside or inside the entity.
External triggers for change
Political reasons for change
Unexpected political crisis – such as a civil war or major civil unrest
Economic reasons for change
Foreign sales or expansion into foreign markets, inflation, GDP Growth.
Social, Demographic and cultural reasons for change
Changing public attitudes about food, food market need to develop new
products.
Change in fashion, designs and arts
Change in age of population compel to change the retirement age.
Technological reasons for change
IT & Communication revolution,
LED technology,
Aerodynamics and aeronautics,
Containerization and huge ships development
 Triggers for Change-External Triggers for Change

Ecological/environmental reasons for change

Diminishing supplies of fresh water,
Diminishing supplies of energy or factors related to climate change.
Legal reasons for change
New laws on health and safety at work,
Laws against pollution and laws to protect the environment
Consequences of change
Care is needed as it is difficult to introduce major changes without
disruption. There are many difficulties to successfully implement a
change.
 Triggers for Change-Internal Triggers for Change

Internal triggers for change

Change might be motivated or caused by developments within the
organisation.
Change of senior management.
new senior manager/s
new chief executive officer or managing director
Acquisitions and mergers.
two separate firms into a single entity.
Demergers and divestments
entity is split up into two separate entities
changes in organisation, management and systems
Reorganisation,
downsizing and rationalisation.
current organization
 Change Management Requires:
oIdentification of the strategic changes. ( a new market, a new product
or new features of existing product)
oChange systems and organisation structures to make the changes
successfully (for new product or feature of existing product we need to
change system or procedure)
oRecognizing the effect of change on employees: (assembly line work
need to add more effort to add new features, sales staff need to give
extra briefings to customers)
oCareful planning and implementation of the change (think as strategy,
then process, equipment training of personal)
oMaking sure that the changes ‘stick’ and remain in place, after they
have been made. (strict not compromise for ease with individuals ;
People attitude should be changed rather need to compromise on
change).
 Attitudes to Change
Some employees might welcome change and support the changes.
More often, however, employees fear change and resist change. Two
factors act as blockages to change.
i. Attitudes
ii. Culture
Reasons related to job:
Employees think about their job and themselves
Job at risk, and make them redundant.
Technological change- their skills may not required
Working condition becomes worse.
 Attitudes to Change

Personal reasons and fears:

Employees think
Less important to their employer
Bear criticism the way they have been working.
Their work will be less interesting.
Reluctant to learn new ways of working.
Fear to be unknown
Social reasons
Employees might resist change
It will break up their workgroup,
Separate them from the people they enjoy working with.
They will be forced to work more,
There will be less interaction with colleagues.
Expect bad relationship with manager implementing change
Dislike the way in which change is implemented
There will no industrial democracy, they don’t have any say
Change and Organization Culture
Some entities are more capable of adapting to change than others. The
management writer Elizabeth Ross Kanter suggested that there are
cultural reasons why an organisation might be more change-adept
than others.
Imagination to innovate. This comes from a leadership that seeks
new ideas for positive change.
Professionalism to perform. The workforce has been suitably trained
and developed, and has the ability to support its management in
introducing change.
Openness to collaborate. Change-adept entities share ideas with
other entities, such as suppliers and joint venture partners to make the
change successful.
 Reaction to Change
Entrenchment where employees refuse to change. Leads to
disciplinary proceedings and potentially dismissal.
Willing and enthusiastic acceptance. This positive approach is more
likely to end in win-win whereby the organisation achieves its change
employee may embrace the opportunity to learn new skills and
experience different working practices.
Begrudging acceptance where employees do not support the change
but not resisted against. this lack of support during the change may play
against them in the future, may not be promoted.
Strike action: Strikes bring negative publicity to an organisation and can
harm the levels of service provided to customers..
 Guidelines for change management:
Understanding where we are to where we want to be, and
recognising the changes that are necessary to get there.
The change process consists of planning the changes, implementing
them and then maintaining the change
Levers of change.
Levers of change
Understanding of the need for change and desired result
of the change.
High Level of commitment in leaders to change leaders
Effective communication how he/she effected by change
Qualities for managing change
Organization structure required for change
Reward system associated with performance target
consisted with change
Critical success factors and key performance indicators
should be revised
Employees should be given training for change
Q.1 In the rapidly changing business environment, dynamic
organizations have to continuously anticipate the impact of these
changes on their business and introduce modifications in their
organizational structures to enable them to improve and further
consolidate their competitive advantages.
(a) Identify and describe the factors which make it necessary for
businesses to introduce changes in their organizational structures.
(06)
(b) Briefly explain the strategies which are usually adopted to
overcome the resistance to change in an organization. (06) [S10]

Q.11 Any major change in internal business environment is bound

to face stiff resistance. What types of organizational strategies are
required to introduce changes successfully and reduce the level of
resistance from the employees? (05)[A06]
6 (b) Zen Courier Co (ZCC) is a mid-sized courier company and in the past
was reconciled with its market-follower status as three companies
dominated the business. Recently, ZCC has negotiated an agreement
with Global Couriers, a leading international courier company. Global
Couriers would make equity investment in ZCC and also provide technical
expertise to ZCC to enable it to be an important player in the courier
business in the country. This significant expansion in the scale and scope
of ZCC’s business would require major changes in the organizational
structure and involve redundancy of several employees, besides
induction of new employees with relevant skills.
Required: Explain briefly the factors which ZCC would need to
consider for successful change implementation. (06)
 ZCC should keep the following factors in perspective for successful
change implementation:
(i) The management of ZCC should have a clear understanding of the
precise need for change and the objectives to be achieved by the
change.
(ii) The need for change should be communicated to all those
individuals who would be affected by the change. This should entail
candid two-way communication between management of ZCC and
the affected employees.
(iii) Reward systems may need revision so that rewards to managers and
other employees are based on the new set of performance targets.
(iv) Critical success factors and key performance indicators may be
revised to make them compatible with the changes in ZCC’s business
objectives.
(v) Those employees who would be retained in the organisation may
need training to meet the operational requirements due to change
in the scope and objectives of the business.
Examiner Comments
More focus on points not implementation.
Confuse not understand what to right
Most students written down irrelevant answers
 Skills for Managing Change
Rosabeth Moss Kanter suggested that a manager in a change-adept
entity should have the following skills.
Tuning in to the environment.
They should use to monitor environmental change. E.g.
‘Pay special attention to customer complaints,
Choose best source of information
Identify an operational weakness or unmet need
Search out broader signs of change –
A competitor doing something differently
A customer using your product
Service in unexpected ways.
Challenging the prevailing organisational wisdom.
Challenge the ’conventional wisdom’ ,
New and innovational ways of thing the things
 Skills for Managing Change

Communicating a Compelling Aspiration.

A change manager should have a clear idea of what he wants to
achieve
Communicate this ‘vision’ to everyone he deals with.
Not sell the importance of need but involve the others
Building Coalitions.
Managers effort is not enough
Need to win the support and co-operation of all the individuals
Motivate them to use knowledge, influence or resources to make
change happen.
Making Everyone a Hero.
Give full credit to everyone who helps to introduce change
successfully,
Make them feel that their efforts are fully appreciated
Should be rewarded
Models of Change Management: Force Field Analysis by Kurt Lewin
The theory describe the forces that came into conflict over planned
changes. There are two opposing forces:
The driving forces that support the need for change, and
The restraining forces that oppose and resist the change. Any of the
following factors might be a driving force or a restraining force:
 Models of Change Management: Force Field Analysis by Kurt Lewin

Driving Forces Factors Restraining Forces

Prefer organization the people involved in the What they want for
objective, there is link change, themselves, own interest
between organizational is preferred over
objective and individual organizational interest.
objective
Involve in new activities the habits and customs of Fallow tradition,
the individuals
Creative and Innovative their attitudes Idle, avoiding and rigid
Friendship the relationships between Conflicts
the people involved
Can flexible and organisation structures Unchangeable and cannot
accommodative within the entity cope up with change.
Available the resources to make the Shortfall
change
Happening Event No Significant Event
Lewin also argued that:
Change will not occur if the forces resisting the change are stronger
than the driving forces for change.
Change is only possible when the driving forces for change are
stronger than the restraining forces against change.
Strengthen the driving forces for change It might seem that the best
answer is to strengthen the driving forces for change.
Reduce Restraining Forces
The best approach is therefore to try to reduce the restraining forces
against change. Management should therefore: consider ways of
reducing their strength, for example by discussing the issues and
difficulties with the individuals concerned, or by trying to win the
support of key individuals who currently oppose the change.
Q: Model Central Hospital (MCH) is currently experiencing
serious problems resulting in overall poor performance of the hospital.
These problems are attributable to the indifferent attitude and lack of
commitment of a group of doctors and ancillary (secondary) staff in the
hospital.
The board of trustees of MCH is concerned with the gravity of the
problems and has appointed Dr Mushtaq, a hospital management
specialist, with far-reaching powers to implement change measures for
improvement in the affairs of the hospital.

(a) Analyse the above situation in the context of Lewin’s force field
analysis model of change. (03)
(b) Discuss the measures that Dr Mushtaq should take in terms of
Lewin’s force field analysis model of change stating the actions to be
taken at different stages of the change process. (06) [S17][10 March
2017 ]
 Lewin: unfreeze, change, re-freeze
The change process then needs to go through three stages:
•unfreeze
•movement (change)
•re-freeze
Unfreeze
Individuals will not want to change anything if they think that the
current situation is acceptable. Recognize what is wrong with the
current system or current situation
Encourage employees to feel dissatisfaction with mention activity.
Clear vision about what changes they want to make,
They should encourage employees to want these changes to
happen.
 Lewin: unfreeze, change, re-freeze

.
Movement (change)
The changes should then be made.
The support for change must be strong enough to overcome the
opposition.
Management should be given sufficient resources to implement
the changes
Get employees to participate in making the changes
Their participation can reduce resistance.
Re-freeze
The process of getting employees to carry on with the new system is
called refreezing.
There is risk that employees again use old ways
Employees should be encouraged to carry on with the new way of
doing things.
Reward employees for performance based on the desired
behaviour and results.
 McKinsey 7S Model
The 7S Framework was first published in 1981 and was subsequently
adopted by the consultancy firm McKinsey.
McKinsey 7S Model

Hard Factors Soft Factors

Strategy
Goals and objectives of the entity,
Plan for optimal use of resource
Structure
Allocate task & authority
Ensure coordination and Communication.
Systems
System that can best use of resources
Generate outstanding value
 McKinsey 7S Model

Staff: Attribute associated with people work in organisation-

numbers,
motivation,
loyalty,
pay rates,
working conditions,
career advancement
Skills: These are the
Skills of key personnel.
What can they do well
What do they do badly
Style: Culture aspects
Style
Norms
Shared values:
Customer Support
Generating Profit
Deliver to Community
 McKinsey 7S Model

In USA managers are more focused on – structure, strategy and

systems, i.e. the hard variables.
However they tended to ignore the other four factors (skills, style,
staff and shared values) – i.e. the soft variables.
According to McKinsey, this is why attempts at strategic change often
fail
Ignoring even one factor could have adverse implications for the other
six factors, and the change will not be successful.
All seven factors must therefore be given consideration when change
is planned and implemented.
 Gemini 4Rs Model
Introduced by Gemini Consultants.

Re-structure Examine the

Re-frame Create the desire and
organisation structure, and create
vision for change. Create a
an economic model shows use of
measurement system to measure
resources and how much value is
performance.
created (Cost & Benefits)

Revitalise Commitment for future.

Re-design the processes which Find new products and new markets
create more value. and invent new businesses. Change
the rule of game.
 The ‘change agent’
When a transformational change is implemented, there has to be a
‘change agent’ who drives the change and is responsible for its
successful implementation. Often the change agent is an outside
consultant. This individual must have certain skills.
He must explain the reasons for the change, and provide employees
with reliable information. This will help to reduce the risk of false
rumours spreading.
As far as possible, he should involve the individuals affected, and get
them to participate in making the changes. As a result they will not
resist.
He should maintain communications with employees at all time,
monitoring the progress of the change and providing information to
others about the progress.
Where appropriate, he should provide training to the employees
affected.
He should emphasise the benefits of the change to the individuals
affected. Not on the drawback
 The ‘change agent’

A consultant is often used because:

An outside consultant is perceived to be independent and fair.
The consultant will have experience in managing the change
process. Can give better suggestion.
Large-scale changes are cost and disastrous if go wrong. Get advice
if available.