12/07/2022

RMIT Classification: Trusted

Week 1
Organizational Change: Setting the
Scene

Dr Hardik Bhimani

RMIT Classification: Trusted

What is Change?

Is the transition or transformation of something or phase to

another state or condition

RMIT Classification: Trusted

Nature of Organization Change

Organizational change:
• Occurs daily and all the time
• Largely unplanned and gradual
• Revolutionary organizational
change is rare, change tends to
be more evolutionary
• Increasingly unpredictable
business environments call for
planned and revolutionary change

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RMIT Classification: Trusted

Understanding Organizational Change

– The Context

• Organizations are created and

developed on an assumption of
continuity
• External business environments:
– Are not continuous
– Does not neatly fit in a pattern
– Are not interdependent,
homeostatic, linear or
predicable
– Can cause destruction and/or
creativity

RMIT Classification: Trusted

Understanding Organizational Change

– Trade Literature

• There is limited research in this field and the focus is on continuity

and stabilization.

• A good way to understand organizational change is through models

to link theory with practice.

• Another source is trade literature written by consultants and

experienced professionals who focus on lessons learned:
– Looks at how organizations should be led and managed
– Limitation: organizations in focus no longer illustrate principles
because conditions have changed

RMIT Classification: Trusted

Understanding Organizational Change

– Stories

Use metaphors and allegories

to tell a story and teach a
simple maxim, and address:
• Resistance to change
• Outline heroic actions in the
face of confusion
• Tactics taken to deal with
these obstacles
• Limitation: they oversimplify
themes they are addressing

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Understanding Organizational Change

– Change Leaders

Change leaders:
• Must respond to questions as
factually as possible
• Be clear as possible about what
the future will look like and what it
will take to get there
• Acknowledge in the short-term
there will be challenges, leading to
frustration, and even anger and
resentment. However, it is
important to emphasize the long-
term productivity gains of change.
• Be patient and not act defensively

RMIT Classification: Trusted

Understanding Organizational Change

– PEST
The business environment is changing more rapidly than ever before,
increasing uncertainty and competition. This requires organizations to:
• Recognize change is non-linear, can be messy and chaotic
• Create a sense of urgency
• Provide a vision for the future
• Anticipate and address resistance to change
• Recognize the role of the change leaders play in change

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Understanding Organizational Change

– Innovation

Sources of innovation can be internal or external. Organizations can

proactively engage in:
• Creative innovation
• Sustaining innovation
• Efficiency Innovation

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Understanding Organizational Change

– Disruptive Innovation

• Are innovations that disrupt

incumbent businesses within an
existing industry
• Change competitive patterns
and value networks, creating
new market footholds
• Often occur in markets that
have been overlooked by
incumbents

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Understanding Organizational Change

– The Digital Innovation

Digital technology may be disruptive

or sustain innovations by:
• Providing access to resources
that were previously impossible
or expensive to access
• Reaching new untapped markets
• Reducing costs to customers
• Creating new and/or innovative
supply chains that are cheaper
and have shorter delivery times

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RMIT Classification: Trusted

Understanding Organizational Change

– The Digital Innovation
Disruptive business models:
• On demand businesses
• Freemium
• Completely free
• The marketplace
• Access over ownership
• The eco-system

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RMIT Classification: Trusted

Understanding Organizational Change

– Big Bang Disruption

These are unplanned and often unintentional disruptions that come

from no where but are instantly everywhere. These source of these
disruptions are rarely from the industry they disrupt. Include:
• Bounded big-bang disruption
• Pervasive big-bang disruption

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RMIT Classification: Trusted

Understanding Organizational Change

– Misalignment

Problems organizations face today can be attributed to poor decisions

of the past rather than present decisions or external environmental
factors.

Organizations go through five stages, each brings with it alignment

issues that have to be managed to be effective.

Each stage brings about prolonged periods of evolutionary growth that

is small and incremental. These these phases can create turmoil and
revolution. Their management will determine the survival of an
organization and its ability to move to the next phase of evolutionary
growth.

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Five Phases of Evolutionary Growth

1. Growth through creativity leading to a crisis of leadership

2. Growth through direct leading to a crisis of autonomy
3. Growth through delegation leading to a crisis of control
4. Growth through cooperation leading to a crisis of red tape
5. Growth through collaboration

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RMIT Classification: Trusted

Understanding Organizational Change

– Interplay of Internal vs. External Environment

Change can be triggered by a constant stream of internal and external

problems and opportunities that have to be addressed. This can
create internal and external misalignment, requiring the need to hire
new staff, formalize processes and practices.

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Change & Lifelong Learning

Personal history:
• May be inborn, developed
throughout life or from life
experiences
• A competitive drive where one
has a desire to succeed, sets
standards, and builds self-
confidence
• Lifelong learning, seeking new
challenges and knowledge,
reflecting on past actions, in-
order to develop new skills and
ability
• Leadership capacity
• Competitive capacity to deal
with competition and changing
economic environment

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Beliefs About Change Agency

Change agency is the belief a

change agent has of their ability to
respond to opportunities and
threats. There are two school of
thoughts:
1. Deterministic View
2. Voluntaristic View

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Factors in Change Agency

Effective change agents can be

be supported to develop the
following skills:
1. Confidence in their own
ability to make change
2. The motivation to change
3. Conceptual skills & action
tools/interventions
4. Change management skills

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1. Confidence in their Own Ability to Make

Change

Some managers have the conceptual skills and ability to effect

change, however, they do not have confidence in their ability to affect
outcomes. This may be due to:
• Locus of control
• Learned helplessness
• Motivational deficits
• Cognitive deficits

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Starting the Change Process

A change agent can either be an insider who is a member of the

system or someone who is an outsider.

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2. The Motivation to Change

People who are motivated to change are those who are successful but
may be experiencing failure or tensions in some part of their work.
They have the confidence and motivation to change.

Thus, change readiness is important, as this is the extent to hold

positive views about the need for change and the belief that change
will yield positive outcomes for themselves and others.

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3. Conceptual Skills & Action

Tools/Interventions

Change leaders and managers can use a range of concepts and

theories to help them:
• Identify the kind of change that confronts them
• Understand the change process
• Identify what needs to be attended to if they are to achieve a
desired outcomes

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4. Change Management Skills

Change agents and leaders need to have the communication skills to:
• Offer leadership
• Work with teams
• Confront disappointment and challenges
• Negotiate, motivate and manage relationships

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Qualitative Techniques: When & Why?

This technique is used when the change agent wants to collect and
analyze non-numerical data to better understand how change is
viewed by people affected by it.

It can also help the change agent to better understand from the
participant’s perspective how the change affects them and their
experiences during the change process.

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