Change

Management
P ROF VIJAY K HODE
 What Is
Change?
Any alterations
in the people,
structure, or
technology of an
organization
Characteristics of
Change
•Is constant yet varies
in degree and
“Managing change is an
direction integral part
•Produces uncertainty
yet is not completely
of every manager’s job.”
unpredictable
•Creates both threats
and opportunities
 Forces for Change
External Forces Internal Forces
◦ Marketplace ◦ Changes in organizational
strategy
◦ Governmental laws and
regulations ◦ Workforce changes
◦ Technology ◦ New equipment
◦ Labor market ◦ Employee attitudes
◦ Economic changes
Economic Forces
➢ The economic forces influence organization’s change management
strategy by either presenting opportunities or challenges in the form of
economic uncertainties or growing competitive pressures.
➢ Changes in the business cycle.
➢ Prevalent inflation or deflation rate in the economy.
➢ Fluctuation in the interest rates
➢ Economic recession
➢ Changes in the economic policies or tax structures
➢ Import/export duties
➢ Fluctuation in the oil prices globally
➢ Financial stability of the country.
➢ Loss/increase in the consumer confidence towards the economic
conditions of the country.
Technological Forces
➢ Technological advancements and
innovations in communication and computer
technology.

➢ Advancements in the technological field

greatly contribute to the overall economic
development in the country and also the
organization’s success or failure in the
competitive environment.
 Governmental Forces
The following governmental forces have been
described below which determine the need for
organizational change:
➢ Deregulation: Deregulation is associated with
decentralization of power or economic interventions
at the state level or lessening of the governmental
intervention in the economy. Deregulation few
sectors/industries like insurance, banking,
petroleum.
➢ Foreign Exchange: Foreign exchange rates
directly affect the international trade, as the
variations in the exchange rates influence the
currency payment structure
 Internal Forces of Organizational Change

➢Systemic Forces: An organization is made up of a system and

several subsystems which are interconnected, just like the way
in which a human system functions. The subsystems of an
organization are in direct interaction and influence the
organizational behaviour as well. A change in any subsystem,
result in a change in the existing organizational processes and
the complete alignment as well as the relationship.
Inadequate Existing Administrative Processes: Each
organization function by following a particular set of
procedures, rules, and regulations. With the changing times,
an organization needs to change it’s rules and existing
administrative processes, failing which the administrative
inadequacy might result in organizational ineffectiveness.
Individual/Group Speculations: In anthropological terms, it is understood that man is a social animal whose desires and requirements keep
changing with the changing times, which result in differences in individual as well as group expectations. Various factors on the positive front
such as how ambitious an individual is, achievement drive, career growth, personal and professional competencies and negative factors such
as one’s own fears, complexes and insecurities are some of the inter-individual as well as inter group factors which influence an organizational
functioning on a day to day basis and also its overall performance.
Structural Changes: These changes alter the existing organizational structure as well as its overall design. Structural changes can be regarded
as a strategic move on the part of the organization’s to improve profitability and for achieving a cost advantage. These chan ges may take the
form of downsizing, job redesign, decentralization, etc. For example, IBM for introducing reforms in its existing system and procedures and for
achieving cost effectiveness has enforced downsizing strategy.
Changes in the Technology: Within an organization, the technological changes may take the shape of changes in the work processes,
equipment, level/degree of automation, sequence of work

People Focused Change: In this context, the major focus is laid on people and their existing competencies, human resource planning strategies,
structural changes and employee reorientation and replacement of an employee which mean shifting an employee to a different w ork arena
where his/her skills are best suited. It may also be involving establishing new recruitment policies and procedures in line w ith the changes in
the technology.
Issues with the Profitability: This can also be one of the primary causes which compel an organization to restructure (downsize or resize) or to
reengineer themselves. The organization may have profitability issues either due to a loss in revenue, low productivity or a loss in the market
share.
Resource Constraint: Inadequacy of the resources, may result in a powerful change force for the organization.
 Types of Change
Developmental change
▪These changes enhance or
rectify existing aspects of an
organisation.
▪It is connected with
improvement in process,
methods or performance
standards of the organisation.
▪These types of changes are very transitional phase.
necessary to remain in
competition.
▪ In this type of change the
employees are trained in the
new techniques.
Transitional change
▪ This typeof change replaces
existing processes or
procedures with something
that is completely new.
▪The period during which an
old process is being changed
into a new is called as the
▪ It is more challenging to
implement transitional
change than developmental
change.
Types of Change (Cotd.)
Transformational change Incremental change
▪ It is also known as radical, ▪They are directed towards
fundamental or quantum change. any unit, subunit or part of
▪This occurs after the transition the organisation.
period it may involve both ▪They are just opposite to the
developmental and transitional
change. transformational changes and
adaptive in nature.
▪ These changes involve the whole
or larger part of the organisation. ▪ It is said that a failed
▪ The change is related with shape, incremental change causes
size, structure, processes, culture less harm to the organisation
and strategy of the organisation. as it is related with only a
▪This change takes time to occur and part of the organisation.
requires a shift in assumptions of
the organisation and its members.
 Types of Change (Cotd.)
Planned change
▪When the change is, a product of
conscious reasoning and actions
and is deliberate it is known as
planned change.
▪ It occurs when manager
recognizes the need for major
change and plans according to it.
▪ It is qualitative in nature.
▪ While thinking of planned
change the manager must
communicate the vision to each
and every one involved in the
change process and establish the
support elements that are
necessary for the success of
change.
Unplanned change
▪ They usually, occur due to
some major or sudden
surprise to the organisation.
▪ It is also known as emergent
or reactive change.
▪ They are generally imposed
by some external factors or
internal features and are
beyond the control of
management.
▪ They leads to high
disorganisation.
 Probable Individual Responses (Attitude)
STIMULUS

Absenteeism
Personal
Histories

Strike

Demands Collective
CHANGE (Social)
Demands
Indifference

Harder Work
Work
Environment

Sabotage

Social Responses to Change

Sources for Resistance to Change

oHabit oGroup Inertia

oSecurity oThreat to expertise
oEconomic Factor oThreat to established power
relationship
oFear of Unknown
oThreat to established
oSelective Information resource allocation
Processing
 1. Increase urgency – Creating a sense
of urgency among employees may
be the best way to motivate and
engage them during the process.
Models Of 2. Build the team – Determine the
Change 1. right set of skills and personalities
for the team that will be responsible
Kotter’s for driving change within the
Change organization.
Management 3. Get the vision correct – Take into
Model account not just the strategy, but
This model has also employees' creativity, emotions
eight stages and project's objectives.
and each of 4. Communicate – Be transparent and
them focuses frequently communicate with
on employees’ people about the changes being
response to implemented.
change.
 5. Get things moving – Get support,
remove the roadblocks and collect
feedback in a constructive way.
6. Focus on short term goals – Don’t just
Models Of focus on the end result. Set small goals
and recognize small achievements
Change 1 during the process to boost employee
morale.
Kotter’s Change
Management 7. Incorporate change – Reinforce and
Model make change a part of the workplace
This model has culture. Help employees adjust, and
eight stages and reward them for the new behaviors.
each of
them focuses on 8. Don’t give up – Changes don’t
employees’ happen overnight, and obstacles are
response to unavoidable. Be persistent while the
change.
process of change management is going
on, no matter how tough things may
seem.
McKinsey 1. Strategy – Strategy is the change
7-S Change management plan that should
consist of a step-by-step procedure
Manageme or future plan.
nt Model
2. Structure – This factor is related to
2. the structure in which the
organization is divided or the
structure it follows.
This model
consists of 7 3. Systems – This stage focuses on the
crucial systems that will be used to
categories that complete day-to-day tasks and
companies activities.
should be 4. Shared values – Shared values refer
aware of when to the core or main values of an
implementing organization according to which it
change: runs or works.
 5. Style – The manner in which
McKinsey change is adopted or implemented is
7-S Change known as ‘style’.
Manageme 6. Staff – The staff refers to the
workforce or employees and their
nt Model 2. working capabilities.
7. Skills – The competencies as well as
This model other skills possessed by the employees
working in the organization.
consists of 7
crucial This model focuses on all the
categories that important factors that change may
companies impact.
should be McKinsey’s model focuses on all the
aware of when business aspects that should be defined
implementing before the change strategy is
change: implemented.
 Awareness – of the need and
ADKAR requirement for change
Change Desire – to bring and be part of change
Manageme Knowledge – of how to drive change
nt Model 3 Ability – to incorporate the change on a
regular basis
ADKAR model Reinforcement – to keep it
focuses on the implemented and reinforced later on as
business- well.
oriented goals, This model is a solution for companies
it can be very
that are trying to look at both the
useful business and people dimensions of
to support
change. Model focuses on the
employees to
identification and evaluation of the
more easily go
reasons why change is working or
through the
not, and why desired results are not
process of being obtained.
change.
 Denial – In this stage, employees are
Kübler-Ross not willing to or unable to accept
Five Stage change. This happens because most
Change people show resistance towards change
Management and may not want to believe what is
Model 3. happening.
Anger – This model assumes that when
This model helps the news first get absorbed, anger
employers underst follows. Denial converts into anger
and better their when employees realize that the
employees and change is actually happenning.
empathize with
them. Bargaining – During the bargaining
Model consists of stage, employees try to get to the best
five stages through possible solution out of the situation or
which employees circumstance. Bargaining is a way for
may be going people to avoid ending up with the
during worst case scenario.
organizational
changes.
Kübler- Depression – When employees realize
that bargaining is not working, they may
Ross Five end up getting depressed and may lose
Stage faith. Some of the symptoms include low
Change energy, non-commitment, low
Manageme motivation and lack of any kind of
excitement or happiness.
nt Model 4
Acceptance – When employees realize
This model helps
employers underst
that there is no point in fighting change
and better their any more, they may finally accept what
employees and is happening and may begin to resign to
empathize with it.
them.
This change management model focus on
Model consists of employees, their feelings, concerns and needs.
five stages through
which employees Organizations that manage to understand their
may be going employees are much more likely to eliminate
during some of the biggest barriers towards successful
organizational change management.
changes.
 Unfreeze: This is the preparation stage
Lewin’s where employers must get prepared
Change for change. The crucial step here is to
enhance open employee
Management communication explaining why
Model 5. change is necessary. The goal is to
overcome employees’ resistance to
change as much as possible.
Lewin’s Change
Management Change: This is the stage in which
Model is one of the change gets implemented. Continuing
most popular on the first stage, good leadership and
accepted, and
effective change effective employee
management communications are crucial here.
models.
Refreeze: This is the stage in which
It helps companies change is accepted and employees go
better understand back to their routine. This stage should
organizational and
structured change. be considered as almost ever-going.
Change Process
◦ Levin's description of the change process as a break in the
organization’s equilibrium state
◦ Unfreezing the status quo
◦ Changing to a new state
◦ Refreezing to make the change permanent

◦ The lack of environmental stability and predictability requires that managers

and organizations continually adapt (manage change actively) to survive.
The Change Process
Stages in Change Process
1. Becoming aware of the pressure for change.
2. Recognizing the need for change.
3. Diagnosing the problem.
4. Planning the change.
5. Implementing the change.
6. Following up on the change.
Change Agents
Change Agents
◦ Persons who act as catalysts and assume the responsibility
for managing the change process.
Types of Change Agents
◦ Managers: internal entrepreneurs
◦ Outside consultants: change implementation experts
Three Categories of Change
Types of Change
Structural People
◦ Changing an organization’s ◦ Changing attitudes,
structural components or its expectations, perceptions, and
structural design behaviors of the workforce
Technological
◦ Adopting new equipment, tools,
or operating methods that
displace old skills and require
new ones
◦ Automation: replacing certain
tasks done by people with
machines
◦ Computerization
Managing Resistance to
Change
Why People Resist Change?
◦ The ambiguity and uncertainty that change introduces
◦ The comfort of old habits
◦ A concern over personal loss of status, money, authority,
friendships, and personal convenience
◦ The perception that change is incompatible with the goals
and interest of the organization
 Managerial Actions to Reduce Resistance to Change

• Education and communication

• Participation
• Facilitation and support
• Negotiation
• Manipulation and co-optation
• Selecting people who accept change
• Coercion