CHANGE MANAGEMENT

INTRODUCTION AND THE

CHANGE MANAGEMENT MODEL

CHAPTER NO 1

Change Management 1
 INTRODUCTION
-Organizations are changing.
-Change has always been a part of managers job and it has become
more important in recent years.
-Change is often closely tied to an organization innovation efforts.
-Organizational change includes major changes like mergers,
acquisitions, downsizing, launch of new products & services etc.
-Lesser changes too like departmental reorganization, installation of
new technology, incentive systems, shifting particular
manufacturing lines and opening new branches in other parts of the
country.
-These changes are to improve the efficiency and operations of our
organizations.
-Organizational change is intentional and planned and change is an
organizational reality.
CHANGE MANAGEMENT 2
 THE NATURE OF CHANGE AND INNOVATION
-Change is an alteration to the status quo.

-Innovation is more specialized and innovation is a new idea used in

initiating or enhancing a process, product and service.

-All innovations imply change but not all change is innovation.

-Organizational innovations range from radical breakthroughs (Laser

technology) to a small improvements (an improved computer printer paper
tray) and both have value.

- Change management is important for organizations, where managers make

organizations more proactive in changing and innovation for competitive
advantage.

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 What Is Change?
• Organizational Change
 Any alterations in the people, structure, or technology
of an organization.
 Planned alterations of organizational components to
improve the effectiveness of organizations.

• Managing change is an integral part

of every manager’s job.

CHANGE MANAGEMENT 4
 Forces for Change
- There are some forces that bring about the need for change.
-Much change starts with shift in an organizations environment.
-The external forces that create the need for change come from various
sources.
- The internal forces also create a need for change and originate
primarily from internal operations of the organizations or from the
impact of external changes.
• External forces • Internal Forces
 Marketplace  Changes in organizational
 Governmental laws and strategy
regulations  Workforce changes
 Technology  New equipment
 Labor market  Employee attitudes
 Economic changes
CHANGE MANAGEMENT 5
 The Manager as Change Agent

• Change Agents
 People who act as catalysts and assume the responsibility
for changing process are called change agents.
 Changes are initiated and coordinated by a manager within
the organization.
• Types of Change Agents
 Managers.
 Non managers: change specialists from human resource
departments
 Outside consultants: change implementation experts/
provide advice and assistance.

CHANGE MANAGEMENT 6
 Challenges of Change
Managers face three challenges in practical:
1.First increased competition for an organizational resources.

2. Second these organizations have to compete in a world that is constantly

changing due to globalization, technological changes and unanticipated
events.

3. Third it is increasingly difficult to predict what will happen in an

organization environment i.e. both external uncertainties and internal
uncertainties.

-The only certainty in a changing world is that you cannot escape change.
- In a competitive business environment, the ability to manage change
effectively can translate into increased market share, revenue and profits.

CHANGE MANAGEMENT 7
 CONTRIBUTIONS OF KURT LEWIN
 Lewin’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
- An individual called Kurt Lewin first articulated the science of
change in human efforts.
- His seminal work is the foundation for our model of change
management.
- Lewin’s illustrated in any individual, group or organization there
are two competing forces in operation.
- 1. Force of stability that aim to maintain the human systems in
status quo.
- 2. Force of change that push the system towards change.
- In human system these forces are evenly balanced known as quasi –
stationary equilibrium by maintaining the system in status quo.
CHANGE MANAGEMENT 8
 CONTRIBUTIONS OF KURT LEWIN (Contd).
• - For change to happen either the forces of change needs to be strengthened
or forces of stability needs to be weakened.

• - The step of weakening the forces of stability is referred to as unfreezing

in his change model.

• - After the system is unfrozen, the existing forces of change will ensure that
the system moves towards a new state and change itself can be
implemented.

• -In order for a change to take hold, the new system needs to be refrozen so
that it can be sustained overtime.

• -Once the system has moved into a new state it is refrozen in that state by
the adoption of new structures and cultures.
CHANGE MANGEMENT 9
 CONTRIBUTIONS OF KURT LEWIN (Contd)
• - According to Lewin’s Change model, forces of stability and change are
both within the organizations.

• -Seeds of change are present in every organizations.

•
• -The primary task of change management is to discover these forces of
change and create a suitable condition for these forces to push the
organization towards a new state.

• - Assumption underlying our change management is that solutions to an

organizations problem cannot be found outside the organization.

• - An organization posses the potential and capability to solve its own

problem.

CHANGE MANAGEMENT 10
 MANAGING CHANGE: Types of Change
• -Initiating change involves identifying what organizational areas might
need to be changed and putting the change process in motion.
• - Managers option fall into three categories to change: 1. Structure
2.Technology and 3. People.
• Structural
 Changing the organization’s structure or its structural components.
• Technological
 Adopting new equipment or operating methods that displace old skills
and require new ones.
• Automation
 Replacing certain tasks done by people with machines.
• Workforce
 Changing attitudes, expectations, perceptions, and behaviors of the
workforce.
CHANGE MANAGEMENT 11
 ORGANIZATIONAL ROUTINES AND MENTAL MODELS
• -Organizational routines is the second assumption in our change
management model, which states that organizational change involves
changing routines in an organization.

• -These rules, codes or routines they are embedded in people’s head as

mindsets or mental models.

• -These mindsets or mental models are made up of assumptions, values and

beliefs.

• -Organizational routines are like formulae or code to guide behavior in

specific situations.

• -Since routines create and sustain stability in an organization, change

management is largely about changing people’s mindsets.
CHANGE MANAGEMENT 12
 CHANGING MENTAL MODELS OR MINDSETS
• -As routines drive organizations towards stability and are embedded in
mental models or mindsets that people carry, then change involves altering
these mental models.
• -Following Lewin, we only want to change those mental models or routines
that sustain or maintain organization in the status quo.
• - Reducing the existing forces of stability and the existing force of change
will move the organization forward.
• -Changing an individual mental models involve including the individual to
give up some of his or her beliefs, assumptions and values.
• -Edgar Schein (MIT) in United States building on Kurt Lewin ideas, he
argues that change in individuals involves two opposing forces.
• - These are learning anxiety and survival anxiety.
• -Learning Anxiety: the prospects of learning something new itself produces
anxiety. Learning anxiety causes resistance to change. It is a force against
change in an organization so it is a force of stability.

CHANGE MANAGEMENT 13
 • -Survival Anxiety: the feeling – unless we learn something new – we are going
to be out of business or fail to achieve some important goals.
• -It is a force of change and survival anxiety has to be greater than learning
anxiety.
• -Following Lewin, Schein argues that reducing learning anxiety – rather than
increasing survival anxiety – can more effectively bring about change.
• -This involves a climate of Psychological safety so that individuals feel
comfortable in changing their mental models and ways of thinking.
• -Schein warns against coercive persuasion, which occurs when individuals are
forced to change.
• -So our model of change management is premised on the assumption of free
choice.
• - It is proposed that change is most effective when it is based on free choice
and it is brought about without coercing individuals.
• -Change management requires engagement and connections with those whose
mental models needs to be changed.
• - Dialogue and conversation constitutes a medium of change.
CHANGE MANAGEMENT 14
 THE CHANGE MANAGEMENT MODEL
• - Managing change involves managing four complex tasks.
• - Each of these complex tasks needs to be completed effectively in order to
achieve a successful outcome.
• - Failure in any one of these four tasks will lead to a failure in the overall
change.
• - These four tasks are:
• (1) Appreciating change
• (2) Mobilizing support
• (3) Executing change
• (4) Building change capability

• - The figure shows the model.

• -Leadership lies at the core of change management.
• -Each of the four complex tasks require a specific type of leadership.

CHANGE MANAGEMENT 15
 FIGURE:THE CHANGE MANAGEMENT MODEL

APPRECIATING MOBILIZING
CHANGE SUPPORT

LEADERSHIP

BUILDING EXECUTING
CHANGE CHANGE
CAPABILITY

CHANGE MANAGEMENT 16
 APPRECIATING CHANGE

-Appreciating change involves understanding the forces of stability and

change in an organization.
-Two ways in which an organization can change.
-One is unplanned change (changes due to new ideas, conflict between
individuals, departments or teams, political and power struggle inside the
organization).
-Second is planned change and change management is mostly about planned
change.
-The appreciation phase makes us aware of:

(1)The need for change

(2) Consequences of changing and not changing
(3) Options for undertaking change in the organization.

CHANGE MANAGEMENT 17
 APPRECIATING CHANGE

- The need for Change:

- - Experiential learning model by Herbert Simon, Richard Cyert and James
March explains why individuals and organizations change has two aspects.
- - Organizations are purposive, goal oriented systems, which represents
organizations expectations about its performance.
- - Performance exceeds expectations they are successful or vice versa.
- - Perception of failure leads to change.
- - This model proposes organizational change is triggered by performance
falling below expectations level.
- - Change is initiated by disconfirmation.
- Content of Change:
- - For all organizations in competitive and dynamic environment there are
four content levers of change.
- -Technology, Quality, Costs, Marketing four areas that are targeted for
change.
CHANGE MANAGEMENT 18
 APPRECIATING CHANGE
-The critical task of appreciating change is intended to make key people in the
organization mentally ready for change in light of analysis of operating
environment.
-A common mistake most managers make in assuming that just because they are
ready for change, everyone else in the organization is ready.
-This is a flawed assumption.
-Rest of the employee in organizations don’t see the way managers see a big
picture.
-Convince others about the need for change.
-This is the next critical task of change management.

CHANGE MANAGEMENT 19
 MOBILISING SUPPORT
-Why is support necessary?
-Two ways of planned change in organizations.
-One way is to impose change – (non – participative process).
-Second way participative approach – (convincing process).
-It does not impose change but expose people to the possibility of change.
-In change management model engagement, involvement and participation
are essential to bring about meaningful change.
-Three categories of people play a role in change process:
1.Change strategists decide that organization needs change and set a
direction for change effort, they design the change process like top
management.
2. Change implementers those implement the change by creating new
structures, rules, procedures and processes like middle management.
3. Change Recipients people whose jobs change as a result of changes
launched in the organization usually lower levels in the organization.
CHANGE MANAGEMENT 20
 MOBILISING SUPPORT
-Getting consent for change:
-People need to be convinced about change.
-It requires persistence and patience and willingness to engage with people
opposed to your ideas and opinions.
-Politics of change:
-Change refers to a political process because it involves influencing and
negotiating with people in order to bring about change in their mental
models.
-Executing change:
-This involves creating and putting in place new structures, processes or
procedures.
-It involves creating coordinating mechanisms such as cross functional teams
for improvements and innovations.
-Most change management efforts fail at the implementation phase because
of problems like it takes more time then originally allocated.
-Lack of coordination, competitors activities, crisis, capabilities and skills of
CHANGE MANAGEMENT 21
 EXECUTING CHANGE
-employees falls short of requirements.
-Change execution always require more resources than what has been
allocated by an organization like people, time and money.
-Types of Change:
-Change type depends on four crucial decisions made by key managers:
1.Deciding the goal and purpose of change. What do we want to achieve?
2.Deciding the scope of change. Do we want change throughout organization
or in a few selected units?
3.Deciding the intensity of change. Do we change few things or do we
change many things?
4.Deciding the timeframe for change. How quickly and slowly do we want to
execute change?
-Styles of Change:
1.Deciding whether the change execution should be directive or participative.
2.Deciding whether the changes should focus on structures or processes.

CHANGE MANAGEMENT 22
 EXECUTING CHANGE
-Directive changes are typically top down changes where as participative
changes may be initiated at the top but will involve extensive consultations
with people in the organizations.
-Structures refers to organizational components where as process refers to
norms and culture of the organization.
-Changing structure is relatively easier.
-Programmatic Change:
-Variety of change programs have emerged each promising effective and
successful change.
-Referred to as change packages “ a ready made approach that can be
customized for each organization.
-These packages are less risky to use as a change approach that has proven
itself in other organizational setting.
-It is not true to say that as change approach has worked in another
organization it will also work in your organization.
-Organizational change is very context dependent.
CHANGE MANAGEMENT 23
 EXECUTING CHANGE
-Research indicates that organizational change success does not depend on
package, techniques and tools employed.
-Critical success factors include: clearly focused strategy, quality of
operational execution, performance of employee and flexible structures.
-Challenge is to manage people response to change.
-Employees are seen as resisting to change because of hostility, negativity
and lack of enthusiasm for change.
-People undergo psychological transitions because they have to let go of their
old mental models.
- This transition takes time and manager has to deal with these emotions with
sensitivity and tacts.

CHANGE MANAGEMENT 24
 BUILDING CHANGE CAPABILITY
-Organizations require a frame braking change by:
1.new definition of company’s mission and core values.
2.an alteration of the distribution of power.
3.a modification in structure, systems and procedures.
4.a change in the way people work together in organizations.
5.new executives brought in from outside the organization in key managerial
position.
-Organizations must have the in build capacity for adapting to change.
-How can managers create such capability?
-Knowledge creation and diffusion is one way of creating such capabilities in
organizations.
-These are correctly embedded, the knowledge that they create in their
systems, structures, habits and processes.
-Finally capability can be build by attending to a number of areas; such as
building system for identifying improvement opportunities, rewarding
knowledge sharing, building greater discretion and flexibility, creating
CHANGE MANAGEMENT 25
 BUILDING CHANGE CAPABILITY
-Culture of free and frank conversation, risk taking and keeping to be the
best.
-Three elements contributing to capability are self efficacy, focus and energy.
-Self – efficacy: refers to the confidence an individual has in his or her ability
to achieve challenging goals/ belief that one has capability to master
difficult tasks.
-A high level of self efficacy makes it easier for an individual to learn new
things because he or she experiences less learning anxiety compared to
another individual with lower level of self efficacy.
-Critical role of change managers and leaders is to devise ways of enhancing
the self efficacy of people in organizations.
-Focus implies that individuals and groups have the clear understanding of
the goals to attain and specific steps to be taken for this purpose.
-Learning is valuable only when focused and well defined agenda.
-Energy signifies that actors are determined to do what is required to achieve
the goals; their actions are fuelled by intense personal commitment.
CHANGE MANAGEMENT 26
 LEADERSHIP OF CHANGE
-Research has shown that many change programs fail because they lack
commitment and support from top management.
-Effective change management requires credible and visible leadership in all
phases.
-Organizational change requires different leadership roles for four different
tasks.
-These leadership roles are:
1.Cognitive Tuner
2.People Catalyser
3.System Architect
4.Efficacy Builder
1.Cognitive Tuner: The task of appreciating change requires the leader to
understand the mental models inside the organization and forces of
change impacting on the organization.
- The leader must tune into both the prevailing mindsets inside the
organization and the forces of change in the environment.
CHANGE MANAGEMENT 27
 -It is largely a process of reflection, analysis and thinking and occurs through
a medium of dialogue and conversation.
-Leader must be skilled in initiating dialogue in the organization to both
understand people mindset and make people aware of their mindsets.
-The very act of cognitive tuning is it initiates change in an organization.
2. People Catalyser: The role of a leader is to act as a catalyst to speed up
the process of letting go of old mental models and adoption of newer ones.
-In an organizational settings this involves mobilizing support and resources,
building networks and relentlessly communicating the message of change.
-It involves helping people to cognitively redefine their mental models, need
to influence and persuade others, frame the change to permit the people to
let go off their old mental models and build support through negotiation.
3. System Architect: Executing change involves creating the right structures
and processes in an organization.
-It is establishing effective coordination mechanisms such as cross functional
teams.
- Change leader play a important role in executing change because they can
CHANGE MANAGEMENT 28
 -Facilitate change by the kind of architecture that they put in place for the
change process.
-Success of change efforts depends on the important role of leader in
designing, building and sustaining a social architecture that can facilitate
others to change.
4. Efficacy Builder:
-The essence of capability building is making people believe in their own
ability to face challenges and master new tasks.
-Change leaders play a central role in creating and sustaining a positive
climate that enhances peoples self efficacy in an organization.
-They perform this role by enhancing the expectation of people inside the
organization to face challenging tasks.
-Effective change leaders make change happen by engendering a feeling of
optimism and hope in the organization.
-This fosters a positive belief in people that they can face the challenges of
change and overcome them.
-This helps people view change as an opportunity rather than a threat.
CHANGE MANAGMENT 29
 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

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 Issues in Managing Change (cont’d)
• Changing Organizational Cultures
 Cultures are naturally resistant to change
 Conditions that facilitate cultural change:
 The occurrence of a dramatic crisis
 Leadership changing hands
 A young, flexible, and small organization
 A weak organizational culture

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 Issues in Managing Change
• Handling Employee Stress due to Change
 Stress
 The physical and psychological tension an individual
feels when confronted with extraordinary demands,
constraints, or opportunities and their associated
importance and uncertainties.
 Functional Stress
– Stress that has a positive effect on performance.
 How Potential Stress Becomes Actual Stress
 Thereis uncertainty over the outcome
 When the outcome is important

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 Issues in Managing Change
• Reducing Stress
 Engage in proper employee selection
 Match employees’ KSA’s to jobs’ TDR’s
 Use realistic job interviews for reduce ambiguity
 Improve organizational communications
 Develop a performance planning program
 Use job redesign
 Provide a counseling program
 Offer time planning management assistance
 Sponsor wellness programs

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 Issues in Managing Change
• Making Change Happen Successfully
 Embrace change—become a change-capable
organization.
 Create a simple, compelling message explaining why
change is necessary.
 Communicate constantly and honestly.
 Foster as much employee participation as possible—
get all employees committed
 Encourage employees to be flexible
 Remove those who resist and cannot be changed.

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 Stimulating Innovation
• Creativity
 The ability to combine ideas in a unique way or to
make an unusual association.
• Innovation
 Turning the outcomes of the creative process into
useful products, services, or work methods

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 Creating the “Right” Environment for
Innovation
• Structural Variables
 Adopt an organic structure
 Make available plentiful resources
 Engage in frequent interunit communication
 Minimize extreme time pressures on creative
activities
 Provide explicit support for creativity

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 Creating the “Right” Environment for
Innovation (cont’d)
• Cultural Variables
 Accept ambiguity
 Tolerate the impractical
 Have low external controls
 Tolerate risk taking
 Tolerate conflict
 Focus on ends rather than means
 Develop an open-system focus
 Provide positive feedback

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 Creating the “Right” Environment for
Innovation (cont’d)
• Human Resource Variables
 Actively promote training and development to keep
employees’ skills current
 Offer high job security to encourage risk taking
 Encourage individual to be “champions” of change

Copyright © 2005 Prentice Hall, Inc. All rights reserved. 13–38