Managing Strategic Change

• Change is natural and inevitable phenomenon.

• Organizations are required to change their objectives,
strategies, systems, processes to adjust themselves
and sustain in the dynamic environment.
• Many actions such as a move for diversification, a
shift in core technology, a business process redesign,
a product portfolio reshuffle and many others
constitute change in the organization.
• The change process entails configuration of many
elements into two systems:
– Business system
– Organizational system
• The business system is related to ‘how a firm makes profit
taking certain resources as inputs, adding value to them in
some manner and selling a particular package of product’.
• The organizational system refers to ‘how people in an
organization relate to each other and how the firm is organized.
• Both of these systems’ elements ate integrated by
organizational structure, processes, and culture.
• Organizational structure refers to the cluster of tasks and
people.
• Organizational process refers to the arrangements, procedures
and routines used to control and coordinate these tasks and
people.
• Organizational culture refers to the shared values and belief
system held by the organizational members.
 Underlying Premises of Strategic Change
• A clear sense of strategic change is required.
• Total commitment from all levels of the
organization is required.
• Selection and application of appropriate
approach to change.
• Shift in paradigm and culture
 Process of Strategic Change
• Diagnosing the change situation
– Change process starts with the determination of
what type of change an organization seeks to
achieve.
– Change can be brought in proactive manner or in
reactive manner.
– Another dimension change that should be
determined is the extent of change which includes
incremental change or transformational change.
 Types of change

Incremental change Transformational change

Tuning Planned transformational

Extent of change

Adaptation Forced transformational

• Diagnosing strategic change needs
– Identifying forces for change
• Globalization
• Information technology
• Changing workforce
• Recognize and interpret the problem and assess the
need for strategic change
• Determine the organization’s readiness and capability
for change.
• Identify managerial and workforce resources and
motivations for change
• Determine a change strategy
– Force-coercion
– Rational persuasion
– Shared power
 Approaches and Styles of Managing
Strategic Change
• Education and communication
• Collaboration or participation
• Intervention
• Direction
 Levers for Managing Strategic Change
• Structure and control systems
• Organizational routines
• Symbolic processes
• Power and political processes
• Communicating change
• Change tactics
 Resistance to Change
• Resistance to change indicates any attitude or behavior
that hinders the strategic change process.
• Resistance to change may be covert or overt in nature.
• Covert resistance refers to the increase in tardiness and
absenteeism, request for transfers, resignations, loss of
motivation, lower morale, high rate of accidents.
• Overt resistance to change is reflected through strikes,
sabotages, deteriorating quality.
• Resistance to change emerges from two sources
– Individual resistance
– Organizational resistance
INDIVIDUAL RESISTANCE ORGANIZATIONAL RESISTANCE
• Economic insecurity • Organizational design
• Fear of the unknown • Organizational culture
• Threats to power and • Resource limitations
influence • Fixed investment
• Habit personality • Inter-organizational
• Personality agreements
 Overcoming Resistance to Change
• Education and communication
• Participation
• Facilitation and support
• Negotiation
• Manipulation and cooption
• Coercion
 Approaches to Managing Change
• Lewin’s Three-Step Model (Force Field Analysis)
– Unfreezing
– Movement (change)
– Refreezing
• Action Research
– Establish client-consultant relationship
– Diagnose the need for change
– Introduce change
– Evaluate and stabilize change
– Disengage consultant’s service