Professional Documents
Culture Documents
Introduction
Change is a pervasive influence. It is an inescapable part of both social and organisational
life and we are all subject to continual change of one form or another (Mullins, 2007: 733).
Indeed, as Mullins and others suggest, change is often inescapable. At the same time, many
companies make a fortune out of their programmes selling ‘change services’ to other
companies. For instance, IBM offers services of organisational change that will supposedly
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The Nature of Organizational Change
The effects of change and transformation, corporate or societal, can be studied over different
points in time, from weeks to hundreds of years, and studied at different levels. Change can
be studied in terms of its effects and the individual, group, organisation, society, national or
international level. Nevertheless, because of its pervasive nature, change at one level is often
interrelated with changes at other levels, and it is difficult to study one area of change in
isolation. At the corporate level, however, organisational change can be initiated deliberately
by managers, it can evolve slowly within a department, it can be imposed by specific changes
in policy or procedures or it can arise through external pressures. More specifically, as we
mentioned in the previous topic the need for corporate change can be prompted by both
external and internal triggers (Huczynski and Buchanan, 2007:589) as follows:
External triggers
new technologies
new materials
changes in customers’ requirements and tastes
activities and innovations of competitors
legislation and government policies
changing domestic and global economic and trading conditions
changes in social and cultural values
Internal triggers
new product and service design innovations
low performance and morale, high stress and staff turnover
appointment of a new senior manager or top management team
inadequate skills and knowledge base, triggering training programmes
office and factory relocation closer to suppliers and markets
recognition of problems triggering reallocation of responsibilities
innovations in the manufacturing process
new ideas about how to deliver services to customers
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Moreover, change can affect all aspects of the operation and functioning of the organisation.
The structure and functioning of the organisation must reflect, therefore, the nature of the
environment in which it is operating. According to Mullins (2007:733), there are factors
which create an increasingly volatile environment, such as:
The organisation exists in the context of a competitive, complex political, economic, social,
technological, environmental and legal world. The environment changes and forces that are
listed below make the environment more complex for some organisations than for others.
How this affects the organisation could include an understanding of historical and
environmental effects, as well as expected or potential changes in environmental variables.
Many of these forces will give rise to opportunities and a company may happily engage with
change. On the other hand, some other forces may exert threats on the organisation and make
the change inescapable or even imposable. For instance, take a look to the following figure:
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EXTERNAL ENVIRONMENT
Globalised competition
Uncertain economic
conditions
Politics INTERNAL/
COMPANY
Technological
ENVIRONMENT
Change
Government
Scarcity of Natural Resources
Intervention
As indicated by the figure above, we have in the centre the internal environment of an
organisation that includes the usual company elements: employees, management, machinery,
production plants, vehicles, warehouse, equipment, departments, furniture, research
observation champers, laboratories etc (some companies may have more elements or less
depending to the nature of the organisation). At the same time, nonetheless, the company is
open to factors that exist in the external environment. These factors take the form of forces.
These forces strike the company constantly, bringing change that is often unavoidable. In
order to help ensure its survival and future success the organisation must be readily adaptable
to the external demands placed upon it.
But apart from the forces deriving from the external environment, change also originates
within the organisation itself. Much of this change is part of a natural process of ageing. For
example, as material resources such as buildings, equipment or machinery deteriorate or lose
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efficiency; or as human resources get older, or as skills and abilities become outdated. Some
of this change can be managed through careful planning. For example, ‘regular repairs and
maintenance, choice of introducing new technology or methods of work, effective human
resource planning to prevent a large number of staff retiring at the same time, and
management succession planning – training and staff development. However, the main
pressure of change is from external forces’. The organisation must be properly prepared to
face the demands of a changing environment. It must give attention to its future development
and success (Mullins, 2007:734).
In addition, we should not forget that there times necessitating change as a matter of life or
death. For instance, ‘as things get worse it is likely that the outcome will be one of three
possibilities: (i) the organisation may die (in the case of a commercial organisation it may go
into receivership, for example); (ii) it may get taken over by another organisation; or (iii) it
may go through a period of transformational change. Such change could take form in
multiple changes related to the organisation’s strategy. For example, a change in products,
markets or market focus, changes of capabilities on which the strategy is based, changes in
the top management of the organisation and perhaps the way the organisation is structured
(Johnson et al, 2009: 127). Transformational change does not take place frequently in
organisations and is usually the result of a major downturn in performance. Often it is
transformational changes that are heralded as the success stories of top executives; this is
where they most visibly make a difference. The problem is that, from the point of view of
market position, shareholder wealth and jobs, it may be rather too late. Competitive position
may have been lost, shareholder value has probably already been destroyed and, very likely
many jobs will have been lost too.
Following the analysis on forces from the external and internal environments that make
change necessary, we can now present the particular types of organizational changes as
follows:
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changes will have impact on the group which in turn will influence the whole organization.
Therefore, a manager should never treat the employees in isolation but he must understand
that the individual level change will have repercussions beyond the individual.
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retraining personnel, heavy capital equipment investment and operational changes.
All this will affect the organizational culture and as a result the behaviour pattern of
the individuals.
People oriented change. People oriented changes are directed towards performance
improvement, group cohesion, dedication, and loyalty to the organizations as well as
developing a sense of self-actualisation among members. This can be made possible
by closer interaction with employees and by special behavioural training and
modification sessions.
To conclude, as it was mentioned earlier, changes at any level may affect the other levels.
Because of its pervasive nature, change at one level is often interrelated with changes at other
levels, and it is difficult to study one area of change in isolation. The strength of the effect
will highly depend on the level or source of change.
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Major Types of Organizational Change
Typically, the phrase “organizational change” is about a significant change in the
organization, such as reorganization or adding a major new product or service. This is in
contrast to smaller changes, such as adopting a new computer procedure. Organizational
change can seem like such a vague phenomena that it is helpful if you can think of change in
terms of various dimensions as described below.
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organization to become much more proactive and less reactive, or address large budget
deficits. Remedial projects often seem more focused and urgent because they are addressing a
current, major problem. It is often easier to determine the success of these projects because
the problem is solved or not. Change can also be developmental – to make a successful
situation even more successful, for example, expand the amount of customers served, or
duplicate successful products or services. Developmental projects can seem more general and
vague than remedial, depending on how specific goals are and how important it is for
members of the organization to achieve those goals. Some people might have different
perceptions of what is a remedial change versus a developmental change. They might see that
if developmental changes are not made soon, there will be need for remedial changes. Also,
organizations may recognize current remedial issues and then establish a developmental
vision to address the issues. In those situations, projects are still remedial because they were
conducted primarily to address current issues.
Adapted from “Field Guide to Consulting and Organizational Development” – online at:
http://managementhelp.org/misc/types-of-orgl-change.pdf
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Managing Change
As we discussed in Topic 1, the persons responsible for change are also titles as ‘Change
Agents’. This role is often directly linked to the role of a strategic leader. According to
Johnson et al (2009: 276), leaders are often categorised in two ways:
1. Charismatic leaders, who are mainly concerned with building a vision for the
organisation and energising people to achieve it. The evidence suggests that these
leaders have particularly beneficial impact on performance when the people who
work for them see the organisation facing uncertainty.
2. Instrumental or transactional leaders, who focus more on designing systems and
controlling the organisation’s activities.
But often change agents are not necessarily senior managers and do not need formal job titles.
There is an increased involvement of all levels of organizational membership on change
teams. Also, most managers these days combine change roles with their regular duties. In
addition, a change agent is not necessarily an individual but a group that helps effect change
in an organisation. For example, the creator of new marketing programme may, or may not,
be the change agent. He or she may need to rely on others to take a lead in effecting changes.
It could be that a middle manager is a change agent in a particular context; or perhaps
consultants, working together with managers from within the organisation.
What is likely, however, is that those at the top of an organisation will be seen by others, not
least those who work for them, but also other stakeholders and outside observers, as
intimately associated with strategic change programmes when they occur. In this sense they
are symbolically highly significant in the change process. Let us see, for example, how some
outsiders to the organisation can also be important. For example these could include:
A new chief executive from outside the organisation may be introduced into a business
to enhance the capability for change. This is especially so in turnaround situations. He
or she changes the context for change by bringing a fresh perspective on the
organisation, not bound by the constraints of the past, or the embedded routines that
can prevent strategic change.
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New management from outside the organisation can also increase the diversity of
ideas, help break down cultural barriers to change and increase the experience of and
capability for change. However, their successful influence is likely to depend on how
much explicit visible backing they have from the chief executive. Without such
backing they may be seen as lacking authority and influence.
Consultants are often used to help formulate strategy or to plan the change process.
They are also increasingly used as facilitators of change processes: for example, in a
coordinating capacity, as project planners for change programmes, as facilitators of
project teams working on change, or of strategy workshops used to develop strategy
and plan means of strategic change. The value of consultants is threefold. First, they
too do not inherit the cultural baggage of the organisation and can therefore bring a
dispassionate view to the process. Second, as a result, they may ask questions and
undertake analyses which challenge taken for granted ways of seeing or doing things.
Third, they signal symbolically the importance of a change process, not least because
their fees may be of a very high order.
Other stakeholders may be key influencers of change. For example government,
investors, customers, suppliers and business analysts all have the potential to act as
change agents on organisations.
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‘Education involves the explanation of the reasons for and means of strategic change.
This might be appropriate when the problem in managing change is because of
misinformation or lack of information and if there is adequate time to persuade people
of the need for change. However, there are problems here. Assuming that reasoned
argument in a top-down fashion will overcome perhaps years of embedded
assumptions about what ‘really matters’ could be naïve. Change may be more
effective if those affected by it are involved in its development and planning.
Participation in the change process is the involvement of those affected by strategic
change in the change agenda; for example, in the identification of strategic issues, the
strategic decision-making process, the setting of priorities, the planning of strategic
change or the drawing up of action plans. Such involvement can foster a more
positive attitude to change; people see the constraints the organisation faces as less
significant and feel increased ownership of, and commitment to, a decision or change
process. It may therefore be a way of building readiness and capability for change.
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However, there is the inevitable risk that solutions will be found from within the
existing culture so anyone who takes this approach may need to retain the ability to
intervene in the process.
Intervention is the coordination of and authority over processes of change by a
change agent who delegates elements of the change process. For example, particular
stages of change, such as ideas generation, data collection, detailed planning, the
development of rationales for change or the identification of critical success factors,
may be delegated to project teams or taskforces. Such teams may not take full
responsibility for the change process, but become involved in it and see their work
building towards it. The change agent retains responsibility for the change, ensures
the monitoring of progress and that change is seen to occur. An advantage is that it
involves members of the organisation, not only in originating ideas, but also in the
partial implementation of solutions, giving rise to commitment to the change.
Direction involves the use of personal managerial authority to establish a clear
strategy and how change will occur. It is top-down management of strategic change
associated with a clear vision or strategic intent and may also be accompanied by
similar clarity about critical success factors and priorities.
Coercion is direction in its most extreme form. It is the imposition of change or the
issuing of edicts about change. This is the explicit use of power and may be necessary
if the organisation is facing a crisis, for example. There are some overall observations
that can be made about the appropriateness of these different styles in different
contexts:
● Different styles for different stages. Styles of managing change may need to differ
according to stages in a change process. Clear direction may be vital to motivate a desire or
create a readiness to change; participation or intervention can help in gaining wider
commitment across the organisation and developing capabilities to identify blockages to
change, plan and implement specific action programmes.
● Time and scope. Participative styles are most appropriate for incremental change within
organisations, but where transformational change is required, directive approaches may be
more appropriate. (It is worth noting that even where top management see themselves
adopting participative styles, their subordinates may perceive this as directive and, indeed,
may welcome such direction.)
● Power. In organisations with hierarchical power structures a directive style may be
common and it may be difficult to break away from it, not least because people expect it. On
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the other hand, in ‘flatter’ power structures (or an adhocracy, a more networked or learning
organisation), it is likely that collaboration and participation will be common and desirable.
● Personality types. Different styles suit different managers’ personality types. However,
those with the greatest capability to manage change may have the ability to adopt different
styles in different circumstances.
● Styles of managing change are not mutually exclusive. For example, clear direction on
overall vision might aid a more collaborative approach to more detailed strategy
development. Education and communication may be appropriate for some stakeholders, such
as financial institutions; participation may be appropriate for groups in parts of the
organisation where it is necessary to build capability and readiness; whereas if there are parts
of the organisation where change has to happen fast, timing may demand a more directive
style’ (Johnson, 2007: 278-281).
One of the earliest models of planned change was put forward by Kurt Lewin in 1975. Lewin
explained that organizations like human beings prefer to stay in a state of equilibrium or a
steady state called as homeostasis. He observed that the stability of human behavior was
based on “quasi- stationary equilibrium” supported by a large force field of driving and
restraining forces. This observation gave rise to the theory of Force Field Analysis. This
social scientist views behaviour as a dynamic balance of forces working in opposing
directions. Driving forces facilitate change because they push employees in the desired
direction. Restraining forces hinder change because they push employees in the opposite
direction. Therefore, these forces must be analyzed and Lewin’s three-step model can help
shift the balance in the direction of the planned change. This is a three-phased process of
behavioural modification that includes the following three steps:
1. Unfreezing: Reducing those forces which maintain behaviour in its present form,
recognition of the need for change and improvement to occur. According to Lewin,
the first step in the process of changing behavior is to unfreeze the existing situation
or status quo. The status quo is considered the equilibrium state. Unfreezing is
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necessary to overcome the strains of individual resistance and group conformity.
Unfreezing can be achieved by the use of three methods.
First, increase the driving forces that direct behavior away from the existing situation
or status quo.
Second, decrease the restraining forces that negatively affect the movement from the
existing equilibrium.
Third, find a combination of the two methods listed above.
Some activities that can assist in the unfreezing step include: motivate participants by
preparing them for change, build trust and recognition for the need to change, and actively
participate in recognizing problems and brainstorming solutions within a group.
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Therefore, Lewin’s model illustrates the effects of forces that either promote or inhibit
change. Specifically, driving forces promote change while restraining forces oppose change.
Hence, change will occur when the combined strength of one force is greater than the
combined strength of the opposing set of forces.
The work of Kurt Lewin dominated the theory and practice of change management for over
40 years. However, in the past 20 years, Lewin’s approach to change, particularly the 3-Step
model, has attracted major criticisms. The key ones are that his work: assumed organizations
operate in a stable state; was only suitable for small-scale change projects; ignored
organizational power and politics; and was top-down and management-driven.
Think Theory....
Take a pen and list the sequence and actions that were promoted by the
management for each stage (unfreezing, movement, refreezing).
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But the three-phase of Kurt Lewin is not the only one. In the analysis below we got hrough a
comprehensive model of change that has seven steps and can lead to effective organizational
change. This model is useful for both planned and reactive organizational change. The seven
steps of comprehensive model of organizational change are as follows:
1. Recognize need for change: The first step in this model is recognizing need for change. For
marketing managers who anticipate needed change, recognition is likely to come much
earlier, as a result of marketing forecasts indicating new market potential, expert indications
about impending socio-economic change or a perceived opportunity to capitalize on a key
technological breakthrough. These managers tend to ‘initiate change because they expect it to
be necessary in the near future in any case’.
2. Establish goals for change: The manager must then set goals for the proposed change. It is
important for the manager to specify goals that the change is supposed to accomplish. The
goals can be set to maintain or increase the market standing, to enter new markets, to restore
employee morale, to reduce turnover, to settle a strike and to identify good investment
opportunities.
3. Diagnose relevant variables: An important next step is diagnosing organizational variables
that have brought about the need for change. Turnover, for example, may be caused by a
variety of factors such as low pay, poor working conditions, poor supervision, better
alternatives in the job market or employee job dissatisfaction etc. Thus, if turnover is the
recognized stimulus for change, the manager must understand what has caused it in a
particular situation in order to make the right changes. To carry out this diagnosis, the
manager may discuss the situation with employees and other managers.
4. Select change intervention: After the manager has developed an understanding of the
problem and its causes then he must select a change intervention that will accomplish the
intended goal. An intervention is a specific change induced in an organization with the
intention of solving a particular problem or accomplishing a specific objective. For example,
if turnover is caused by low pay, then a new reward system is required and if the cause is
poor supervision then interpersonal skills and training for supervisors is required.
5. Plan implementation of change: The manager must then carefully plan the implementation
of change. Planning the implementation of change involves consideration of the cost of the
change, how the change will affect other areas of the organization and the degree to which
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employees should participate in bringing about the change. Hastily implemented change can
result in more harm than benefit. For example, if the change involves the use of new
equipment, the manager should not make any changes that rely on the use of new equipment
until it has arrived and been installed and workers know how to use it. Moreover, if change is
thrust upon them too quickly, their resistance may stiffen.
6. Implement change: A systematically implemented change is more likely to proceed
smoothly and to encounter fewer obstacles than is a change that is implemented too quickly
and without adequate preparation.
7. Evaluate implementation: Finally, after the change has been implemented, the manager
should verify that it has accomplished its intended goals. A change may fail to bring about
the intended results. This may be due to inappropriate goals or inaccurate diagnosis of the
situation or wrong selection of intervention.
1. Exploration Phase: In this phase key persons from within the organization who are aware of
the need for change act as the initiators. This stage is crucial since the organization examiners
the requirement of change and what kind of investment in terms of resources can be made for
the change programme. It is in this phase that the OD expert is identified .The consultant tries
to examine the organizations inclination and commitment to change. The client on the other
hand tries to judge if the consultant can understand the situation from the organizations
perspective.
2. Planning Phase: This phase follows the commitment of resources of the organization to
change as well as the consultants’ exploration of the situation. The change process is
undertaken after the diagnosis of the situation. The consultant as well as the client jointly
participates in the diagnosis process, goals are set and an appropriate action plan is decided.
3. Action Phase: The changes as decided in the action plan are implemented in this phase. The
action plan includes basic actions and processes which take the organization from the present
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state to the desired state. Careful monitoring of the implementation couples with periodical
assessment ensures that the organization is well set to achieve the desired action.
4. Integration Phase: This phase involves making the changes part of the regular
organizational functioning. Change in behavior and processes are reinforced gradually
through feedback, reward systems, motivational techniques like incentives, participation in
implementation etc. The consultant slowly moves away from the organization in order to
ensure the organization can support itself in the future.
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Appendix A
Leadership Styles for Managing Change
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