MANAGING CHANGE

What is change?
 Change is a phenomenon that pushes us out of our comfort zone. It is for
the better or for the worse, depending on how it is viewed.
 Change management means implementing significant change in an
organized and systematic manner.
 organizational transformation:-
- refers to such activities as reengineering, redesigning and redefining
business systems
-A radical change which takes an organization to a new and different level of
structure and functioning

Two types of changes that occur in an organization

Transactional vs. Transformational Organization

Transactional Transformational
First order change Second order change
Continuity in nature Discontinuous in nature
Not related with strategic change that related with altering the organization
takes place in an organization from its core
involve adjustments in systems, is of a bigger magnitude
processes, or structures
does not involve fundamental change entails a change in the system itself
in strategy, core values, or corporate
identity
do not amend the basic fibre of the usually the result of a strategic
organization overhaul of the system or even a
severe crisis, which may threaten the
very survival of the system
Eg. Could include creating new report Leads to a complete redefinition or
formats, new methods of collecting re-conceptualization of the
old data and refining the existing organization and the way business is
processes and procedures. to be conducted in future.

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 Three Types of Transformation
1. Improved operations: To achieve efficiency by reducing costs and
reducing development time and at the same time improving quality of
products and services.
2. Strategic transformation: To regain or attain a sustainable competitive
edge over competition by redefining business objectives, establishing
new strengths and harnessing these capabilities to meet market
opportunities.
3. Corporate self-renewal: To anticipate and adapt to change such that a
strategic and operational gap does not develop.

Types of changes can be initiated to improve operations are:

1. Strategic change- A change that changes the very mission of the

organization (It may also mean that multiple missions are integrated in
to a single mission).
2. Structural change: -Of late, organizations are steadily moving towards
more decentralized decision-making and a more participative
management style.
3. Process-oriented change: These are changes that could lead to
efficiencies and are achieved through replacing or retraining
personnel, reducing investment in heavy capital equipment, and
amending operational structure.
4. People oriented change: - focused on performance improvement, team
work and commitment to the organization.

Five essential phases of transformation

i. Dilemma
ii. Clarity
iii. Discovery
iv. Solution
v. Success

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Strategies to manage transformation

 Transformation through values

 Transformation through organization development
 Transformation through reengineering
 Transformation through McKinsey’s plan
 Transformation through competitive benchmarking
 Transformation through Six Sigma
 Transformation through Kaizen principle

Process of Organizational Transformation

Step 1: Mobilize executive leadership

Step 2: Translate strategy into tangible terms

Step 3: Align business and support unit

Step 4: Motivate teams for effective implementation: link and reward

performance

Step 5: Strive for perfection—repeat the 5-step strategic process

Nature of Organizational Change

 Organizational change takes place because of internal and external

forces. The internal forces may create instant change, whereas the
external forces may result in a gradual change.

 The effect of change in any one part of the organization creates

fundamental changes in rest of the organization, steadily and
eventually.

 The effect of change in various sections of the organization takes

place in varying degrees and rate

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Factors Leading to Organizational Change

 The external Forces- is affected by political, social,

technological, economic, legal, international and labour market
environment

 The internal environment forces- is affected by the

organization‘s management policies and styles, systems, and
procedures, as well as employee attitudes

Perspectives of Organizational Change

1. Environment –Dependent perspective

2. Contingency perspective
3. Resource-dependency perspective
4. Population-ecology perspective
5. Institutional perspective
6. Evolutionary perspective
7. Adaptive perspective

Models of Organizational Change

1. Process-based Change Models

 Important to recognize and accept the need for change and

the goals for attaining such a change.

 focus on the sequence of steps that are used to bring about

changes in the organization

 The management of an organization must implement the

change in a manner that is consistent, permanent and does
not revert to the old way of functioning

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 1.1. Kurt Lewin’s Model of Change

 described the three phases of the change process which can

enable the organization to move from the current state to
the desired state—Unfreezing, Changing, and Refreezing
1.2. Planning Model

 employed in bringing about planned change in

organizations

 It proposes seven steps of changes i.e. exploration→ entry

→ diagnosis → planning → action →stabilisation and
evaluation → termination.
2. Model of the Change Management Process

 Change effort in an organization operates at two levels—the

strategic level and the grassroots level.

 a change process passes through nine stages;

Stage 1 Establishing the Need for Change
Stage 2 developing a vision for change
Stage 3 Diagnosing/analyzing the current situation
Stage 4 Generating change process recommendations
Stage 5 Detailing recommendations
Stage 6 Pilot testing
Stage 7 Preparing recommendations for roll out
Stage 8 Rolling out changes
Stage 9 Measuring, reinforcing and refining changes

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 Communicating Change
Need for Communicating Change

 To ensure that the individuals understand what is going to happen

and what is expected from them.
 To pay adequate attention to the diverse interests
 To make people understand the inevitability of the changes and the
best ways of coping or surviving with the change
 To ensure that the people share similar values and are aware of what
actions are appropriate to these values

Factors Involved in Communicating Change

 Explain how change will unfold
 Discuss the need for change.
 Establish the business case for the change
 Determine the plan for change
 Experts find that employees trust a manager more
Most frequent communication mistakes

 Avoid communicating ‘too much

 Assume employee acceptance or try to persuade employee into
accepting
 Involvement of employees in the change process

Methods and Techniques for Communicating Change

 Spray and pray

 Tell and sell

 Underscore and explore

 Identify and reply

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  Withhold and uphold

Role of Top Management in Communicating Change

1. Communicating Change at the Local Level

2. Communicating change to the outside world

Phases of the Change Management Process

Phase 1: Clarifying roles and expectations for change

Phase 2: Identifying priorities of change

Phase 3: Planning the Organizational Development (OD) activities to address

the identified priorities

Phase 4: Change management and evaluation

Change Management Process Control

Step l: Preparation for change

Step 2: Building a vision

Step 3: Plan the change

Step 4: Implementing the change

Step 5: Monitoring and reviewing change

Resistance to Change
 Resistance to change represents an attitude or behaviour that reflects an
unwillingness to support change

Forms of Resistance

1. Explicit:-
 Show of disagreement

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  Strikes

 Not meeting deadlines

 Increased employee turnover

2. Implicit: -
 Loss of loyalty

 Lowering of morale

 Absence

 Avoidance

 Low tolerance

Four basic reasons for why people resist change

i. Parochial self interest: Some people fear the implications of change for

themselves. They feel they will lose something they value such as
power, status, money, etc.

ii. Misunderstanding and lack of trust: At times people affected do not

understand the actual reasons and benefits of the change and mistrust
the management initiating the change. This situation could arise
because of communication problems and people in the organization
getting inadequate information.

iii. Low tolerance to change: Some people are very keen on security and

stability in their work, and do not adapt to change by the very nature
of their personality, or feel that they cannot cope with the changes
that will affect them.

iv. Different assessments of the situation: This condition arises when

both the initiators of change and individuals affected by it disagree on

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 the reasons for the change and on the advantages and disadvantages
of the change process.

Four common phases’ people typically go through when

experiencing organizational change

 Disorientation
 Adapting
 Functioning and
 High performing

Major sources of organizational resistance:

 Structural inertia
 Limited focus of change
 Group inertia
 Threat to expertise
 Threat to established power relations
 Resource allocation
 Lack of clear communication
 Low-risk environment

Major sources of employees /individual resistance;

 The individual’s predisposition towards change

 Fear of the unknown
 Uncertainty
 Self-interest
 Satisfaction with the status quo
 Peer pressure

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  Disruption of cultural traditions or group relations
 Lack of understanding and trust
 Speed with which the change occur
 Insensitive manner of change introduction
 Difficult timing of change & Fear of failure
Techniques to Overcome Resistance

Education and communication

Participation and involvement
Facilitation and support
Negotiation and agreement
Manipulation and co-option
Explicit and implicit coercion
Leadership
Willingness for the sake of the group
Timing of change
Change Management Strategies

Organizations adopt four types of change strategies

 normative re-educative

 empirical-rational

 power-coercive, and

 Environmental-adaptive.

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 Things that need to be understood while selecting a strategy are:

 Degree of resistance
 Target population
 Time frame
 Expertise
 Stakes

Components of a Strategy

a. Objectives
b. Resources
c. Environment
d. Time orientation
e. Competitors

Four Types of Change Management Strategies

1. Normative Re-educative Strategy

 change in the norms, attitudes, and values of individuals will
lead to changes in behaviour
 based upon the core beliefs, values, and attitudes, and
assumes that with the change in the attitudes of the
individuals
 people are social beings who stick to cultural norms and
values
2. Rational-Empirical Strategy
 Deals with the rationality of people to embrace change for
their self-interest.
3. Power-Coercive Strategy
 people are basically compliant and will generally do what they
are told or can be made to do

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  The basic purpose is to restrict people‘s options, not to
enhance them
 The timing of the threat and the degree of its seriousness are
the two major factors that influence the choice of power-
coercive strategy.

4. Action-Centred Strategy
 focus on problem solving
 not only help to resolve the problem, but also effectively
manage the change implications, particularly in the post-
MANAGING CHANGE Page 61 change phase

Valuable guidelines for selection of appropriate strategies:

 Degree of change
 Degree of resistance
 Population
 Stakes
 Time frame
 Expertise
 Dependency

Factors Affecting the Choice of a Change Strategy

 Urgency of the need for change

 Degree of resentment to change
 Power of the individual/group initiating the change
 Necessity for information and commitment
 Available expertise
 Target population
 Dependency factors
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Stages that the implementer pass change implementation process
are:

 Celebratory period

 Reconsideration stage

 Persuasion

 Commitment

Specific tasks to facilitate changes are;

 Timings

 Dismissals, job losses and de-layering

 Visible short-term wins

 Promoting winners and heroes

Implementing Change

Three sets of ‗basic commodities‘or ‗power tools‘that can be acquired by

members of an organization to gain power:

Information (data, technical knowledge, political intelligence,

expertise)
Resources (funds, materials, staff, time)
Support (endorsement, backing, approval, legitimacy)

Different levers that can be employed to manage strategic change:

Structure and control systems

Routines
Symbolic processes
Political processes

Three basic ingredients of leadership

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  A guiding vision
 Passion
 Integrity

The four key leadership capabilities identified in the framework are;

1. Sense-making: making sense of the world around us

2. Relating: developing key relationships within and across organizations
3. Visioning: creating a compelling vision of the future
4. Inventing: creating new ways of working together

For successful and continuous change efforts in organizations,

there are four specific leadership roles;

1. Sponsor
2. implementer
3. advocate and
4. change agent

Manager leader
administrates innovates
Is a copy Is an original
maintains develops
Focus is on system and structure Focus on people
Has a short range perspective Has a long range perspective
Has his eyes on the bottom line Has his eyes on the front line
imitates creates
Accepts the status quo Confronts the status quo
Classic good solider fighter
Does things right Does the right thing
Transformational leader ship Transactional leader ship
Leaders involved with raising the Leaders only hand out rewards to
sense of purpose of the followers followers to meet their targets.
and motivating them

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 Intellectual simulation Management by exception
Aims of leaders and followers Work is contingent on the rewards
combine in to one given

Characteristics of Change Leaders

 They incorporate change in such a manner that the results turn out to
be fruitful for both the organization and its employees
 They confront others to associate themselves with the new changes in
the organization and provide the essential resources.
 They direct change with their words and actions.
 A constant dedication to be displayed for realizing the change. Focus
is on results and on success.
 Interact with individuals and groups in the organization to explain the
who, what, when, where, why and how of the change
 Or change leaders have the ff characteristics on level- accepts need for
change→ defines/initiates change→ manages change→ - manages complex
change→ champions change.

Organizational effectiveness -has been defined as the degree of goal

achievement. The determination of an organization‘s goal(s) is crucial in
evaluating effectiveness of an organization

Effectiveness
an achievement of group purposes
accomplishes goals in continuation
over an indefinite time period
an attribute of being adequate in
accomplishing a set goal i.e.,
generating intended or expected
result
Measured by the extent to which its
goal actualization occurs
Efficiency
extent to which a group provides
satisfaction to its members
denotes an organization‘s
competency in performance
attempts to improve the task
performance underway
Measured by the amount of
resources utilized in the production
of a unit of output.

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Five specific Approaches to Organizational Effectiveness;

1. Goal attainment approach

2. System resource approach
3. Internal process approach
4. Competing values approach
5. Strategic constituencies approach

The four perspectives of organizational effectiveness;

1. Open-Systems Perspective
2. Organizational Learning Perspective
3. High-Performance Work Practices Perspective
4. Stakeholder Perspective

Factors in achieving organizational effectiveness are;

 Sensitivity training
 Survey feedback
 Process consultation
 Team building
 Inter group development
 Innovation
 Creating a learning organization
 Sustained top management commitment

Evaluating Organizational Change

Monitoring involves: Evaluation involves:

Establishing indicators of efficiency, Finding out what is to be achieved? What
effectiveness and impact difference will it make? What impact it is

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Setting up of systems to collect
information relating to the above
mentioned indicators
Collecting information and its
subsequent recording
Analysing information
Availability of this information to
different verticals and team members
Measurement and Methods of Evaluation;
 Self-evaluation
 Participatory evaluation
 Rapid participatory appraisal
 External evaluation
 Interactive evaluation
going to have?
Finding out what is to be achieved? What
difference will it make? What impact it is
going to have?
Does the organization have any strategy;
is it effective in terms of facilitating the
envisioned changes? Is the strategy
functioning, if not, why?
Finding out how it had worked initially.
Was the use of resources efficient? What
is the opportunity cost of using this
approach?
To what extent is the chosen project method enduring?
How does it impact the different stakeholders?

The characteristics of a feedback process:

 Motivation to work upon feedback data

 Agenda for the meeting
 Proper representation
 Power position
 Support during process

Key features of continuous improvement or Kaizen approach;

 Rather than big, cross-origination changes, many small changes

become the bases for improvement.
 Ideas are less likely to be radically different from present practices, as
they come from the workers making the implementation easier.
 Requirement of a major capital investment is less as compared to
major process changes when small improvements take place.

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  It is less expensive as the ideas come from the talents of the existing
workforce, and not specialists or consultants.
 To improve their own performance all employees continually seek
better ways.
 Kaizen helps in reinforcing team work, improves motivation and
encourages workers to take onus for their work

Change Agents
Change agents-
 Are people who usually have specialized training in
organizational behaviour and can help guide and advice the
change process.
 They strive to alter human capability or organizational systems
to achieve a higher degree of output or self actualization.

A typology of change agents has been developed based on the following

four categories:

 A change agent could be an individual, a group, or an organizational

unit.
 Their organizational position could be either internal or external.

 Their cultural background could be indigenous or non-indigenous,

governmental or private, or a combination of both.

 Their organization system could be economic, services,

commonwealth, mutual benefit, or related to community system.

Internal change agents External change agents

an insider who possesses profound is not a member of the organization
knowledge about the organization
Requirement for a long-term solution Requirement of large-scale

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and hiring a consultant is not feasible organization-wide changes
Requirement to rely on internal
capability
Requirement for comprehensive
knowledge in organization‘s working
Requirement for change agents who
would be trusted and known to
employees
Requirement for internal ownership
Requirement to involve senior
management
Requirement to implement
complicated changes
Requirement for an objective
perspective
Requirement that there be no conflict
of interest or loyalty

Role of change agent

 Consulting
 Training
 Research
 Catalyst
 Resource connector
Competencies of Change Agents

 Cognitive competencies
 Functional/technical competencies
 Personal (effectiveness)/self management competencies
 Vision . Inter-personal skills

 Passion . Communication skills

 Self-motivation . Self Control

 Self confidence . Flexibility

 Organizational commitment . Initiative

 Influence and impact . Understanding and using

power dynamics

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  Negotiation

Characteristics of Successful Change Agents

 Homophile . Reward
 Empathy . Energy
 Linkage . Synergy
 Proximity . Openness
 Structuring

Change Agent Styles

 Low influence/involvement of client and of change agents

 Low influence/involvement of client and high influence/involvement of change agent
 High influence/involvement of client and low influence/ involvement of change agent
 High influence and involvement of the client of the change agent

Areas that Change Agents can Change;

 Human resources
 Functional resources
 Technological capabilities
 Organizational abilities
Organizational culture is said to be a blend of innovation and the ability to
take risks, attention to detail, outcome orientation, people orientation, team
orientation, aggressiveness and stability.

Dimensions of Culture:

 Values
 Symbols
 Legends
 Heroes

Types of Culture:-

 clan culture, is represented as a place where a lot of sharing takes

place and people are way too friendly with each other

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  Adhocracy culture- It focuses on dynamism, entrepreneurship, and
creativity at the workplace. People strive to take risks

 A market culture in the lower right quadrant is one which is

prevalent in a results-oriented workplace. Leaders are
demanding and tough as their concern is winning every time and
this is what provides bonding in the organization.

 Organizational culture- People are governed by procedures and

well-defined processes. Leaders are efficient enough so they are
good coordinators and better organizers. Emphasis is on running
and maintaining an organization on smooth lines

Types of organizational cultures are:

 Normative Culture- the norms and procedures of the organization are

predefined and the existing guidelines set the rules and regulations

 Pragmatic Culture- lays more emphasis on the clients and the external
parties

 Academic Culture- the organizations hire skilled individuals

 Baseball Team Culture- employees are considered to be the most
treasured possession of the organization in a baseball team culture

 Club Culture: the stress is upon the specialization, educational

qualification and interests of the employees.

 Fortress Culture- prevalent in organizations whose long term

existence itself is uncertain, and hence its employees are not confident
of their careers.

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  Tough Guy Culture- The work of the employees is thoroughly
monitored and the employees; performances are reviewed regularly.

 Bet Your Company Culture- Organizations that take heavy risks, the
consequences of which are unforeseen in decision making, follow bet
your company culture

 Process Culture- process driven organizations and not people driven

so the feedbacks and performance reviews do not matter much .

Six key features of the culture of the organization need to be assessed:

 Dominant characteristics
 Organizational leadership
 Management of employees
 Organization glue
 Strategic emphases
 Criteria of success

Steps help in establishing and implementing the change:

i. Observable artefacts

ii. Rites and rituals

iii. Shared values

iv. Common assumptions

v. Management philosophy

Approaches to Individual Change

a) Behavioural Approach
 Positive Reinforcement- Positive reinforcement means providing
rewards for good behaviour

 Negative Reinforcement- the withholding of punishment

 Punishment- an undesirable consequence an employee receives

for bad behaviour.

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  Extinction- the elimination of particular behaviour.

In any project of planned behaviour change, a number of steps will be required that
will help individuals going through change;

Step 1: The identification of the behaviours that impact performance.

Step 2: The measurement of those behaviours. How much are these
behaviours currently in use?
Step 3: A functional analysis of the behaviours, that is, the
identification of the component parts that make up each behaviour.
Step 4: The generation of a strategy of intervention. What rewards and
punishments should be linked to the behaviours that impact
performance.
Step 5: An evaluation of the effectiveness of the intervention strategy.

McGregor‘s Management Assumption Theories

Assumptions of theory of X Assumptions of theory of Y

People have an aversion to People consider work to be

work
They need to be controlled
and directed
The primary need is security
They can be driven by treats
of reprimand
They are averse to additional
responsibility
natural and normal
They responded better to
recognition and encouragement
They perform as per the
organisation objectives
according to the reward
promise
They look for some private
accomplishment from work
If allowed the right
encouragement people readily
accept responsibility and
accountability

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 They don’t have ambitions They have creative and
innovative ideas.
They don’t use their
imaginations

Herzberg‘s Motivating Factors

Hygiene factor Motivators

Pay achievement
Company polices recognition
Quality of supervision /management responsibility
Working relations advancement
Working conditions learning
status The type and nature of the work
security

b) Cognitive Approach

 Positive Listings

 Affirmations

 Visualizations

 Reframing

Implications of Change in Individuals; Applying change model ensures that:

 Employees have a solid understanding of why change is happening

 Employees engage in both the solution and the change.
 Training is used to build knowledge after employees have made the
personal decision to support the change.
 Resistance is identified and dealt with early in the process.
 Senior leaders demonstrate their own and the organization‘s
commitment to the change.

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  Communications are segmented and customized for different
audiences, answering the questions that they care about.
 Momentum is built throughout different areas and levels within the
organization.
 Changes are less painful to the organization and to the employees.
 A coalition of support among senior leaders and managers creates
momentum throughout the organization.

 Probability of meeting project objectives is increased.

 The organization begins to build a history of successful change,

creating a better backdrop for the next change initiative.

Organizational learning

Is a social process as it involves interactions among many

individuals. It requires a culture that promotes learning and
adaptation as part of everyday working practices .
The process by which an organization acquires, retains, and uses
inputs for development, resulting in an enhanced capacity for
continued self-learning and self-renewal‘.

Process of Organizational Learning; Organizational learning has been

defined in terms of seven orientations;

(i) Knowledge source (internal-external)

(ii) Focus (product-process)
(iii) Documentation (personal-collective)/ Knowledge reserve
(individual-public)
(iv) Dissemination (formal-informal)

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 (v) Learning (adaptive-innovative)/ Knowledge focus
(improvement of existing-development of new services)
(vi) Value chain (design/make-market/deliver)/ ) Learning time
(immediate needs-long-term use)
(vii) Self-development (individual-group)/ Learning focus
(individual performance-group performance)
(viii) Learning mode (practice-reflective activities)

Five key characteristics of such organizations are fast learning organisations

(FLO) are:

i) Openness to exploration (learning)

ii) Competitive challenge (stimulating leadership; supporting challenge

and change)
iii) Clear and compelling vision (commitment of resources to the vision)

iv) Entrepreneurialism/ adventure (dedicated fast learners)

v) ) Opportunities to spin off innovations

Four steps to organizational learning:

Step 1 Capturing individual learning;

 Publications Activity reports

 Lessons and exercises
 Interviews
 Presentations

Step 2 Storage of captured knowledge:

Step 3 Organizing knowledge content

Step 4 Transferring knowledge

Three types of organizational learning

1. Adaptive learning- focuses on improvement in the status quo, which is

the most prevalent form of learning in organizations. It helps members

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 to reduce errors or gaps between actual and desired situations.
Adaptive learning can produce incremental change based on the
organization‘s functioning
2. Generative learning: focus on changing the current situation. It can
lead to transformational change which sometimes radically alters the
existing scenario.
3. Deutero learning: focuses on knowing how to learn to manage
between the internal and external environment. It involves learning
about and being able to ensure a fit and alignment between its
mission and improving upon the organization‘s internal environment
of its structure, systems, processes, staff and skills.

Concept of Learning Organizations

Single-loop learning: This involves improving the organization‘s capacity

to achieve known objectives. It is associated with routine and behavioural
learning. Under single-loop, the organization learns without a significant
change in the basic assumptions.
Double-loop learning: This form of learning re-evaluates the nature of
the organizational objectives and the values surrounding them. This type
of learning involves changing the organization‘s culture.

Five Pre-conditions for Creating a Learning Organization;

(i) Accepting that organizations are complex, adaptive human systems

(ii) Understanding that organizations are driven more by process than
structure

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(iii) Understanding the difference between first and second order change
processes
(iv) Accepting the need to integrate the cycles of operational and policy/
foresight learning into a forum of strategic organizational debate
(v) Accepting the professionalism of ‘direction-givers

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