Managing Organizational

Change
 INTRODUCTION

•All organizations continuously introduce small, adaptive

changes.
•But sometimes management has to initiate broad, painful,
and sometimes comprehensive system wide change.
•Strategies that entitled a great deal of change had different
implications on the structure than did those that were
stable.
 
•Non-routine technologies entail more change than do
routine ones, and to ensure effectiveness, the non-routine
type requires a more flexible structure.
•Similarly, the organizations facing rapidly changing
environments will look for the flexibility, innovation and
rapid responsiveness.
•Organizations facing a high degree of change, will be
most effective with the Adhocratic structure or at least a
structure with a number of Adhocracy’s Primary
characteristics.
 Planned
Change
•Some organizations treat change as an accidental occurrence.
However, addressing change activities that are planned or
purposeful.
•The objective of planned change is to keep the organization
current and viable.

 
As long as organizations confront change---
current products and services reach maturity in the life cycles
and become obsolete;
competitors introduce new products or services;
government regulations and tax policies affecting the
organization are changed;
important sources of supply go out of business;
a previously non unionized labor force votes for union
presentation—
--the organization either responds or accepts the inevitable
decline in effectiveness.
 Structural
•The type of change that management seeks to create are
Change
varied. The type of change depends on the target.
• At the individual level managers attempt to affect an
employee’s behavior.
• Training, socialization, and counseling represent examples
of change strategies that organizations use when the target of
change is the individual.
•Similarly, management may use interventions such as
sensitivity training, survey feedback, and process consultation
when the goal is to change group behavior.
•Techniques that have an impact on the organization’s
structural system are changing authority patterns, access to
information, allocation of rewards and technology.
•Managers should use behavioral techniques to bring about
change along with the structural techniques
Model for --

“Managing Organizational Change”

Determinants
Feedback Forces initiating change

Organizational
Change Agent
initiator

What is to be changed?
Intervention
strategies
Structure?
Technology?
Organizational Processes?

Implementation
Change Process Implementation Tactics
Intervention
Unfreeze Move Refreeze Participation
Persuasion
Edict
 Change

Results

Organizational
effectiveness
 A model for managing organizational change: -
•Certain forces initiate change by certain forces
•This change agent chooses the intervention action, i.e. he or
she chooses what is to be done
•Implementation of the intervention contains 2 parts: What is
done and how it is done.
•The implementation change requires unfreezing the status quo,
moving to a new state, and refreezing the change to be
permanent.
•Implementation also requires a decision as to the specific
tactics to be used.
 DETERMINANTS:
Some of the Determinants of the structural change:-
•Change in objectives: - If an organization chooses to move
from being an innovator to being follower, its structure is likely
need to become more mechanistic.
•Purchase of new equipment:- The new equipment that
increases capital intensity and standardizes internal processes
will tend to require the organization to become more mechanistic.
•Scarcity of the labor: - Labor shortages can result in changes in
the technology. The shortage has forced managers to make their
organization more organic. Because these professionals are short
in supply, they have been able to negotiate a greater voice in
decision making, less direct supervision, and fewer rules and
regulations.
•Implementation of a sophisticated information-processing system: - When the organization’s
introduce sophisticated information processing, the centralization dimension is typically altered.
•Government regulations:- The passage of new laws creates the need to establish new
departments and changes the power of current departments.
•The economy: - When interest rates went from around 7 percent into the high teens during the
late 1970’s, a number of organizations responded by expanding the discretion of purchasing the
personnel and decentralizing authority to allow them to respond more quickly to changes to
inventory needs.
•Unionization: - Large, geographically dispersed organizations that suddenly become unionized
will tend to centralize labor relations activity to facilitate co-coordinating negotiation of company
wide collective bargaining agreements.
•Mergers or acquisition: - Duplicate functions will be eliminated, and new coordinating
positions are typically created.
• Actions of the competitors: - Aggressive action by competitors can lead to the expansion of
boundary spanning and an increase in decentralization.
• Decline in employee-morale: - Overly structured jobs can be a source of the low job
satisfaction.
•Increase in turnover: - Organizations that are loosing the employees that are the good
performers and who are difficult to replace often modify their reward system and redesign their
jobs to make them more challenging.
•Sudden internal or external hostility:- Temporary crises are typically met by
management centralizing decision making.
•Decline in profits: -When a corporation’s profits drops off, management
frequently resorts to a structural shakeup. Personnel will be shuffled, departments
will be added or deleted, new authority relationships will be defined, and decision-
making patterns significantly altered
 The Organizational Initiator:
        Those who initiate the structural change are the change agents.
        Change agents are those in power and those who wish either to
replace or constraint those in power.
        This typically includes senior executives, managers of major units
within the organization; internal staff-development specialists are
powerful lower-level employees.
        It includes consultants brought in from outside.
        Change agents are important for who they are and interest they
represent.
        Every change agent will bring along his or her own self-interest.
      The outside consultant, who takes on the change agent role, can be
looked at from two perspectives, from the rational point of view; the
outside consultant brings to the objectivity to analyze the organization’s
problems and the expertise to offer valuable suggestions for change
        From the power-control perspective, however the
outside consultant becomes nothing other than the hired – gun
brought in to confirm and legitimate changes that might
otherwise be perceived as serving as self-servicing.
Intervention strategies:
 Theterm intervention strategy is used to describe the choice of means by
which the change process takes place.
•The strategies tend to fall in 4 categories: People, structure, technology,
and organizational processes.
1.Structure: - The structure classification includes changes affecting the
distribution of the authority, allocation of rewards, alterations in chain of
command, degree of formalization, and addition or the deletion of positions,
departments, and divisions.
2.The technology;- The technology classification encompasses modifications
in the equipment that the employees use, interdependencies of work activities
among the employees, and the changes that affect the interrelationships between
employees and the technical demands of their jobs.
3.Organizational processes:- The final strategy considers changing
organizational processes such as decision making and communication patterns .
 implementation:

Implementation involves steps in the Change process.

The Change Process requires Unfreezing and moving to a new
state and refreezing the change to make a permanent change.
3 step Change process does not ensure that the change will
prove to be enduring.
Refreezing is necessary to overcome the pressures of both
individual resistance and group conformity. It can also be done
in one of three ways.
1. The Driving forces
2. Restraining forces
3. Combination of both the forces
Once Unfreezing has been accomplished the change itself can
be implemented.This is where the Change agents introduce one
or more intervention strategies.
The objective of Refreezing is to stabilizing the new situation
by balancing the driving and restraining forces.
 How is refreezing Done?

It requires systematic replacement of the temporary forces

with permanent ones.

The factors that determine the degree to which change will

be permanent are :
1. Reward Allocation system
2. Support of a sponsor
3. Failure to transmit information
4. Group forces
5. Commitment to change
6. Diffusion in change
 Implementation Tactics:-

1. Intervention Tactic:- in this the change agents introduce new

standards . The change agents justify the need for change and
suggests measures to improve the current practices.So
change agents sells their change rationale to those who will
be affected.
2. Participation Tactic:- the change agents assign the tasks to
members and delegate authority with full responsibility to
them for the implementation decision.
3. Persuasion Tactic:- Change agents identify the opportunity
for change. They allow interested internal staff or outside
experts to present their ideas for bringing about change.
4. Edict Tactics:- change agents use memos, presentation etc. to
announce the changes introduced to those who will be
affected by the change.
results:

The need for change is continuous and the need for

feedback is always required. The result of change can be
positive, negative , temporary or permanent which
depends upon the each of the earlier steps.
The innovating organization
Innovation is the adoption of the ideas that are new to
the adopting organization.
All innovations represent change but all changes need
not represent innovation.
Innovation takes the form of
Technological innovation- it involves the use of new
tools, techniques, devices or systems to produce changes
in products or services or in the way those products are
produced or services rendered.
 Administrative innovation
It is the implementation of changes in an organization structure or
its administrative processes.
This would include changes like the introduction of flexible work
schedules or matrix organization design.
The organization`s strategy sets the overall framework for the
importance of innovation. Prospectors, for example tend to foster
more innovation. Reactors tend to be low innovators. But clearly
certain structures are better than others for stimulating innovation.
 A descriptive view of organizational
change
Change is often resisted. Managers are motivated to initiate
change because they are concerned with effectiveness and
that change is a dynamic and continuous process driven by
the organization`s need to adjust and match itself with the
constant changes in its environment.
This descriptive view proposes that stability, not change,
characterizes most organizations. Moreover, organizations
don`t make continual adjustments in response to changes in
their environment. When change comes it comes fast and
dramatically.
So organizations are extremely stable overtime; and when
change is initiated, it`s more revolutionary than evolutionary.
Stability leads to inertia

Organizations by their nature are conservative. They

actively resist change. Eg. Educational institutions are
extremely resistant to change.
Why do organizations resist change?
Because
1. Members fear losing what they already have
2. Most organizations are bureaucracies
3. Many organizations can manage their environment
4. Organization cultures resist pressure towards change
So every organization needs stability to function. If an
organization reacted to every change stimulus it
would lose the consistent, goal directed behavior that
makes a group of people into an organization
 Intercompatibility requires
revolutionary
Organizations change
allow for a limited set of common configurations.
But we know all organizations are not unique. They tend to
develop internal consistencies between their technology; authority
patters, span of control, degree of specialization, standardization
and formalization; and other key structural elements.
Management would prefer to avoid change. If the organization
faces a dynamic environment then we should expect that the
management will first try to reduce its dependence on that
environment. Even the largest and the most powerful
organizations cannot completely manage their environment. So
management options are two –
1. It can keep up with the changes in the environment by changing
itself incrementally to match changes in the environment.
This will create environmental fit but create internal
inconsistencies.
2. Second alternative is to delay change until it is absolutely
necessary and then make it comprehensive. This maintains
internal consistency but at the price of having a poor
environment structure fit for a period.
 A power control footnote
They recognize that those in power have little reason to change
the current structure. The status quo maintains control and
furthers the interests of the power holders.
Change is most likely a response to pressing demands created by
internal and external parties interested in the organization.
That is it is reactive rather than anticipatory.
Planned change is a process of
1. Change followed by planned interventions
2. The planning that legitimates and ratifies this change
Pressures to change come from anywhere outside the dominant
coalition. If those in power are not able to keep those
pressures in check, changes will be implemented.
When these changes are implemented, in response to
outside pressures they will tend to be conveyed as
planned and consistent with the organization`s goals of
improved performance
Application Questions
How do planned internal forces of change differ from
unplanned internal forces of change? Discuss in
relation to some real life situations.
What are the types of changes you have experienced
in your organization? give examples. Identify further
illustrations for each type of change using a national
or international perspective.
“ Change does not occur in vacuum. There are
number of factors both within and outside the
organization which cause change to take place”
Discuss the relevance of this statement in the light of
the forces impacting the organization