Organizational Change

Module 4
 Contents
1. Concept
2. Forces of change
3. Managing planned change
4. a. Changing Structure
4. b. Changing Technology
4. c. Changing the physical setting
4. d. Changing people
Contents
5. Resistance to change :
5.a. Individual resistance
5.b. Organizational resistance
5.c. Overcoming resistance to change
5.d. The politics of change
 Contents

6. Approaches to managing organizational change :

6. a. Lewin’s three step model

7. Organizational development :
7.a. OD values
7. b. OD Interventions

8. Key issues of management change:

8.a. Innovation
8. b. Creating a learning organization
 1. Concept
• Change has been defined as any alteration to the status quo in an organization initiated
by internal or external factors that impact both the organization and the individual.
• How management act to change the status quo will determine the organization’s long-
term ability to survive.
• No company today is in – stable environment
• Company's need to manage both short and long term changes
• Dynamic and changing environment – org faces – require total adaptation (deep and rapid
response)
• “ Change or die” – rallying cry among todays mangers world wide.
• Change : Making things different
• Org is having to adjust to a multicultural environment – demographic changes, immigration,
outsourcing - has transformed the nature of the workforce
❖Three different types of skills may be required on
the part of manager to effectively implement the change process.
They are:

1.Skills in identifying the problems that demand solutions.

2.Skills in formulating strategies and techniques to solve these problems.

3.Skills in implementing processes to gain acceptance from the people

affected by change.
2. Six forces that are acting as stimulants for
change
 3. Managing Planned Change
• Change : Making things different
• Planned change : Change activities that are intentional and goal oriented

• Goals of planned change:

1. Seeks to improve the ability of the organization to adapt to changes in its

environment
2. It seeks to change employee behaviour
• For org to survive – must respond to changes in its environment

• Efforts to stimulate innovation, empower employees and introduce work

teams – e.g., of planned change – directed to responding to changes in
environment

• Planned change – also concerned with changing the behaviour of individual

& groups within org
• Planned change can described in terms of order of magnitude:

• First-order change is linear and continuous. It implies no fundamental shifts in

the assumptions that organizational members hold about the world or how the
organization could improve its functioning.
• Second-order change is a multidimensional, multi-level, discontinuous, radical
change involving reframing of assumptions about the organization and the
world in which it operates.

Responsible for change:

• Change agents : Persons who act as catalysts and assume the responsibility
for managing change activities

• Can be managers or non managers , current / hired employees

4. What can change agents do?
A change agent is a person from inside or outside the organization who helps
an organization transform itself by focusing on matters as organizational
effectiveness, improvement, and development.

A change agent, also known as an advocate of change, is a person who acts as

a catalyst for the change management process.

The change agents can bring about changes which fall under four categories:
4. a. Structure
4. b. Technology
4. c. Physical setting
4. d. People
4.a. Changing Structure

• As the conditions change, the org needs to undergo structural changes to

suit the changed conditions.

• Focus on work specialisation, span of control, departmentalisation,

centralisation versus decentralisation, formalisation, job design etc.

• Determines how tasks are formally divided, grouped and co-ordinated.

• For eg., departmental responsibilities can be combined, spans of control
widened, vertical layers reduced etc., to make the organisation less
bureaucratic. Decision making process can be speeded up by increasing
decentralisation.
• Also changing the simple structure to a team-based structure or a matrix
design.

• Jobs and work schedules may be redesigned.

• Job descriptions can be redefined, jobs enriched or flexible working hours
introduced, organisation’s compensation system may be modified,
incentives to increase motivation etc.
 4.b.Changing Technology

• Today, major technological changes involve introduction of new equipment,

tools, or methods, automation and computerisation.

• Automation is a technological change that replaces people with machines

which work automatically, without intervention from human beings.

• Computerisation has enabled introduction of management information

systems which has totally changed the way in which business organisations
operate.
 4.c. Changing the Physical Setting

• The layout of the workplace is done taking into consideration, work

demands, formal interaction requirements, and social needs.

• It includes decisions regarding space configurations, interior design,

equipment's installation and the like.

• The layout of work place needs changes as products produced by the

organisation changes, technology is changed etc.
 4.d.Changing People

• This involves changing the attitudes and behaviours of organisational

members through processes of communication, decision- making and
problem solving.

• Professional Orientation
 5. Resistance to change
• Org and members – resist to change
• Egos fragile – see change as threatening

• Resistance to change good for 2 reasons :

1. Provides a degree of stability & predictability to behaviour
- if no resistance , org beh can take characteristics of chaotic randomness
2. Resistance can also be a source of functional conflict
- Evoke healthy debate , result in better decision
• Downside – hinders adaptation and progress

• Resistance can be – overt, implicit, immediate or deferred

• Easy for management – when resistance overt and immediate

• Greater challenge – managing resistance that is implicit or deferred

Implicit resistance – more subtle

- loss of loyalty to the org, loss of motivation to work , increased
errors, increased absenteeism due to “sickness”
• Deferred resistance
– deferred actions closely link between the source of
resistance and the reaction to it

- minimal reaction at the time it was initiated , but then

resistance surface over weeks , months or even a year later

- resistance builds up and then explodes in some response

that seems out of proportion to the change action
5.a. Individual Sources
5.b. Organizational Sources
 5.c. Overcoming Resistance to
Change

7 tactics suggested for use by change agents in dealing with resistance :

1. Education and communication

• This tactic assumes that the source of resistance lies in misinformation or poor
communication.
• Communication can reduce resistance in 2 levels :
• 1. It fights the effects of miscommunication – if full facts received resistance could be
subsided.
• 2. It could help in ‘selling’ the need for change – necessity is communicated.

• Best used: Lack of information, or inaccurate information

2. Participation and Involvement:

• Prior to making a change, those opposed can be brought into the decision process.
• Assumptions that participants have the expertise to make meaningful contribution –
involvement increase commitment and reduce resistance
• Best used: Where initiators lack information, and others have power to resist
• Problem : Potential for a poor solution and time consuming

3. Building Support and Commitment:

• Offer a supportive efforts to reduce resistance

• Fear and Anxiety high – Counselling, therapy, new skills training
• Develop emotional commitment
• Best used: Where people resist because of adjustment problems
4. Implementing changes fairly - Negotiation and agreement

• Procedural fairness – imp when employees perceive an outcomes as negative

• Assure that employees understand the reason for change and perceive the
changes are implemented fairly and consistently
• Exchange something of value for a lessening of resistance.
• Best used: Where one group will lose, and has considerable power to resist
5. Manipulation and Cooptation
• Manipulation – covert influence attempts
• Twisting and distorting facts to make them appear more attractive,
withholding undesirable information, creating false rumors
• Cooptation - form of both manipulation and participation
• Buy off the leaders of the resistance group – giving them key role in
decision making
• Both methods – inexpensive and easy way to get support but can backfire
ones discovered.
• Best used: Where other tactics won’t work or are too expensive
6. Selecting people who accept change
• Ability to easily accept and adapt to change - related to personality
• They are open to experiences , have positive attitude towards change , flexible
• Org could facilitate change – selecting people who score high on self concept,
high risk tolerance (as researches proved)
• Avoid people who tend to react emotionally to change or are rigid.

7. Coercion (Explicit and Implicit )

• Application of direct threats or force on the resisters
• Coercion – threats of transfer, loss of promotions, negative performance evaluations,
poor letter of recommendation
• Inexpensive and easy way to get support but can backfire ones discovered.
 5.d. Politics of Change

• Change threatens the status quo – inherently implies political activity

• Politics suggests that the impetus / force for change is more likely to come
from :
a. Outside change agents
b. Employees who are new to organization who have less invested in the status
quo
c. Managers who have spend entire career in an organization and eventually
achieve a senior position in the hierarchy
• When forced to introduce change - long time power holders implement
incremental changes
• Radical changes are threatening

• Power struggle within the org will determine to a large degree the
speed and quality of change

• Long time career executives – sources of resistance – Explains why board

of directors recognize the imperative for rapid introduction of radical
change turn to outside leadership.
 6. Approaches to Managing Org
Change
6.a. Lewin’s classic step model of the change process
6.b. Kotter’s 8 – step plan
6.c. Action Research
6.d. Organizational Development

John Kotter
6.a. Lewin’s Three-Step Model For
Implementing Change
1. Unfreezing

• Change efforts to overcome the pressures of both individual resistance and

group conformity.
• Due to an external or internal driver (or drivers), the org needs to
restructure, reorganise, reengineer its processes, change or develop new
technology solutions.
• Response to a change in the business, financial, management, operational,
people or technology environment
(for eg., increased competition or a commercial threat, or an acquisition or
merger).

• In the ‘unfreeze’ state, you should seek to ‘unlock’ the present way of doing
things or ‘status quo’, establish a new vision for the business, establish the
change requirements and approach for implementing the changes.
• Status quo considered as – equilibrium state
• Move from equilibrium – to overcome pressure of both indi resistance and
group conformity

• Achieved in one of three ways :

1. Driving forces : which direct beh away from the status quo can be increased
2. Restraining forces : Hinder movement from the existing equilibrium can be
decreased
3. Combining first 2 approaches
Unfreezing the Status Quo
2. Moving
• A change process that transforms the org from the status quo to a desired end state
.
• In this state, you are planning and executing the required changes, managing
implementation of all change products and ensuring delivery of the required
benefits.

3. Refreezing
• Stabilizing a change intervention by balancing driving and restraining forces.
• In this state, the changes are fully implemented and consolidated and become
the ‘steady state’ management and operation of the business or organisation – at
least until the next big ‘unfreeze’ takes place!
• Org change effective :
1. Change has to happen quickly
2. New situation needs to be refrozen – to stabilize the new situation by
balancing driving and restraining forces
Two views of change process
6.b. Kotter’s 8 – step plan for
implementing change
6.c. Action Research
6.d./ 7 Organizational development
7.b. OD Techniques / Interventions
• Six interventions that change agents might consider using :
1. Sensitivity Training
2. Survey Feedback
3. Process Consultation
4. Team Building
5. Intergroup Development
6. Appreciative Inquiry
 Organizational Development
Techniques
1. Sensitivity Training
• Training groups (T-groups) that seek to change behaviour through
unstructured group interaction.
• Members bought in free and open environment– participants discuss –
interactive process
• Indi learn through – observing & participating rather than being told
• Professionals create – opportunities for expressing
• Objective – provide subjects increased awareness of their own beh and how
others perceive them , greater sensitivity to others and better understanding
of group process
2. Survey Feedback Approach

• The use of questionnaires to identify discrepancies among member

perceptions; discussion follows and remedies are suggested
• Questionnaire completed by members in the org / unit
• It asks about members perceptions and attitudes
• Data – tabulated - identify problems and clarifying issues
• Encourage discussions and ideas and not to attack individuals
3. Process Consultation (PC)
• Manager often sense that their unit’s performance can be improved but unable to
identify what and how to improve.
• Purpose of PC is for an outside consultant to assist a client , usually
manager “ to perceive, understand and act upon process events” with
which the manager must deal.
• A consultant gives a client insights into what is going on around the client,
within the client, and between the client and other people; identifies
processes that need improvement.
• Includes work flow, informal relationships, formal communication channel.
• More task oriented than sensitivity training
• Client actively and jointly participates – in both diagnosis and development of
alternatives – greater understanding of process and less resistance to action plan
chosen
4. Team Building
• Uses high interaction group activities to increase trust and openness
among team members
• Objective – to improve coordinate efforts of members which will result in
increasing team’s performance
• Applied within and intergroup levels – applicable where activities are
interdependent
• Clarifying each members role on the team, free interchange of views
Team Building Activities include:
• Goal and priority setting
• Developing interpersonal relations
• Role analysis to each member’s role and responsibilities
• Team process analysis
5. Intergroup Development
• OD efforts to change the attitudes, stereotypes, and perceptions that groups
have of each other.
• One popular method : Emphasize problem solving

Intergroup Problem Solving:

• Groups independently develop lists of perceptions (of itself, the other
group and how it believes that other group perceives it)
• Share and discuss lists.
• Differences articulated & look for causes of misperceptions

• Integration phase – work to develop situations that will improve the

relationship between groups
6. Appreciative Inquiry (AI)

• Seeks to identify the unique qualities and special strengths of an

organization, which can then be built on to improve performance

• Focus on org success than on problems.

• Argues that problem solving approaches always ask people to look

backward at yesterdays failures, shortcoming and doesn’t result in new
visions

• AI functions to enhance on what org is already good at

Appreciative Inquiry (AI) – 4 steps:

1. Discovery: recalling the strengths of the organisation– focus on success

rather than problems

2. Dreaming: speculation on the possible future of the org based on the info
in discovery phase – envision the org in 5 years

3. Design: Based on dream articulation - finding a common vision and agree

on its unique qualities

4. Destiny: deciding on how to fulfill the dream

 8. Key issues of management change –
Creating a culture for change
• Two approaches to change (transforming cultures):

8.a. Stimulating an innovative culture

8.b. Creating a learning org

 8.a. Stimulating an Innovative Culture
Innovation :

• More specialized kind of change

• A new idea applied to initiating or improving a product , process or service

• Innovations involve change but all change need not be innovations

• Range from small to big changes

• Sources of Innovations :

8.a.1.Structural

8.a.2. Cultural

8.a.3. Human resource categories

 8.a.1. Structural Variables :
The most studied potential source of innovation.
1. Organic structures +vely influence innovation. ‘coz lower in vertical
differentiation, centralization, organic org facilitate the flexibility, adaptation,
and cross-fertilization that make the adaptation of innovations easier.

2. Long tenure in management is associated with innovation. Managerial tenure

provides legitimacy and knowledge of how to accomplish tasks and obtain desired
outcomes.

3. Innovation is nurtured when there are slack resources. Having an abundance of

resources allows an org to afford to purchase innovations.

4. Inter-unit communication is high in innovative org.

 8.a.2.Cultures
Innovative organizations tend to have similar cultures.
• They encourage experimentation.
• They reward both successes and failures, they celebrate mistakes.
• Unfortunately people are rewarded for the absence of failures rather than for
the presence of successes.
• Such cultures extinguish risk taking and innovation.
• People will suggest and try new ideas only when they feel such behaviors
exact no penalties.
• Managers in innovative organizations recognize that failures are a natural
byproduct of venturing into the unknown.
 8.a.3.Human Resource Category
• Promote the training and development of their members so that they keep
current, offer high job security - no fear of getting fired for making mistakes, and
encourage individuals to become champions of change.
• Idea champions – Individuals who take an innovation and actively &
enthusiastically promote the idea, build support, overcome resistance , & ensure
that the idea is implemented.
• Champions - common personality characteristics - extremely high self-confidence,
persistence, energy, and a tendency to take risks , transformational leadership.
• They inspire and energize others with their vision & good at gaining the
commitment
• Their jobs that provide considerable decision-making discretion - helps them to
implement innovations
 8.b. Creating a Learning Organization
• Learning Org – An org that has developed the continuous capacity to
adapt and change
• All org learn – whether they choose or not - fundamental requirement for
their sustained existence
Single loop learning
Double loop learning
Developed by Chris Argyris and Donald Schön.
These theories are based upon “a theory of action” perspective designed by
Argyris.
 Single Loop Learning
• A process of correcting errors using past routines and present policies
 Double Loop Learning
• A process of correcting errors by modifying the org’s objectives, policies
and standard routines
• Challenges deeply routed assumptions and norms within an org
 Characteristics of learning org
1. There exist a shared vision
2. People discard old ways of thinking & standard ways of solving
problems
3. Members think of all org processes , activities & functions and
interactions with the envt as part of a system of inter relationship
4. People openly communicate with each other (vertical & horizontal)
without fear of criticism/ punishment
5. People submit their personal self interest and fragmented
departmental interest to work together to achieve the org shared
vision
• Learning Org as a remedy for 3 fundamental problems inherent in
traditional org:

1. Fragmentation – based on specialization creates “walls” – that separate

diff functions into independent territory

2. Competition – overemphasis undermines collaboration. Need to

cooperate and share knowledge .Compete just to show who is best

3. Reactiveness – misdirects managements attention to problem solving than

creation – pushes out continuous improvement and innovation
 Managing Learning
• To change an org to make into a continual learner – some suggestions :

1. Establish a strategy – make explicit commitment to innovation &

continuous improvement
2. Redesign the org structure – flattening serious structures , use cross
functional teams , interdependence reinforced
3. Reshape the org culture – managers demonstrate by their actions that
taking risks & admitting failures are acceptable .

Encourage – Functional Conflict - ‘Key to unlock real openness at work’

Thank You
A.R.