Unit 1&2 (LCM521)

MANAGEMENT OF CHANGE AND INNOVATION
Course Code : LCM521

Credit Hours: 3 Hrs.
Instructor: Mesay Gerbi (Assis. Prof.) PhD Fellow

E-mail: mesayg2018@gmail.com
Mob: +251911519443
Dec. 2021
December 29, 2023 1

UNIT ONE
UNDERSTANDING
CHANGE
December 29, 2023 2
BRAINSTORMING QUESTIONS?
1.What is change ?
2.What is the objective of change?
3.Is change important for organization?
Why?
4.Why organization is changing from time to
time ?
5.What are the major drivers of change?
6.What is change management ?
7.Why managing change is so important to
organizations?
December 29, 2023 3
CHANGE
 Change: Making things different.
 Change: alteration of the state/condition
 Organizational change is an enduring
alteration of the present state.
 Change is a process rather than an event.
 Change involves the crystallization of new
possibilities (new policies, new behaviors, new
methodologies, new products or new market
ideas) based on the reconceptualised patterns
in the institution (Kanter, 1992) .
 Change also means dissatisfaction with the old
and belief in the new.
December 29, 2023 4
UNDERSTANDING CHANGE
 Change underlines a qualitatively different
way of perceiving, thinking, and behaving
to improve over the past and the present.
 Successful change must involve factors as፡
 clear vision,
 mission,
 communication,
 strong leadership,
 participation of all stakeholders &
 organizational culture.
December 29, 2023 5
UNDERSTANDING CHANGE
 Change can be seen as a continuous and
intrinsic to an organization or as extrinsic and
discontinuous.
 Whether they like it or not all organizations
must change to remain relevant/competent
or to get competitive advantage.
 Continuity without change leads to stagnation,
frustration and boredom in individuals and
change without continuity leads to ambiguity,
conflict and degenerative pathology in
individuals & org’ns.
December 29, 2023 6
UNDESTANDING CHANGE
Pugh’s four principles of understanding change:
1. Organizations as organisms- organization is not a
machine so must approach change
2. Org’ns are occupational and political systems
3. Members of an org’n operate in occupational,
political & rational systems at the same time.
4. Change occurs most effectively where success and
tension combine.
Two factors needed are confidence and motivation
to change.
Any change process involves not only learning
something new but unlearning (Edgar Schein)
Most change involves attitudes, values, and self
December 29, 2023 7
image and the unlearning

CHANGE AND LEARNING
 The rate of change is faster than ability to
comprehend and cope with it. It is very
challenging in this era.
 According to Reg Revans, L > C means you
are ahead in the game i.e.. You are learning
faster than things change.
 If C > L can spell disaster, because things

are changing faster than your learning
capacity, so that you are behind the race.
December 29, 2023 8
David Kolb’s Learning cycle
A
Work and Life
Experience
D B
Testing out Principles Reflection on

in new situations Experience
C
Drawing out Principles
and Concepts
December 29, 2023 9
CATEGORIES OF BUSINESS CHANGE
1. Market changes
2. Technological changes
3. Organizational changes
 The market changes are: Customers want
more or less goods or services, tough
competition, unfavorable or favorable
government decisions, price mechanisms,
raw material shortage etc.
All these causes specific changes in
organizations
December 29, 2023 10
 Technological Changes: Introduction of
new technology, in order to re-establish
price advantage, quality preeminence or
diversification into new products.
 Organizational Changes: The responses to
the market & technology changes require
new styles of organization, new skills and
change in design or introduction of new
systems involving the total organization or its
sections.
 This may also include change in processes,
customs, norms and culture of
organization.
TRIGGERS FOR CHANGE
 The market
 The technology to meet market demand
competitively.
 Financial losses or drop in profits.
 Increased competition, loss of market share,
industry in recession/decline.
 New Chief Executive Officer.
 Proactive (Opportunities or threats foreseen)
 Technological development

TRIGGERS …….
EXOGENOUS AND ENDOGENOUS FORCES
 Change in organization can occur as a result
of either external or internal forces or a
combination of both (Nadler 1988).
 Change can originate from external sources
through technological advances, social,
political or economic parameter shifts
 It can come from inside the organization as
a management response to a range of
issues such as changing client needs,
costs or a human resource or a
performance issues.
TRIGGERS ……
EXOGENOUS PARAMETER SHIFTS
 Exogenous parameter shifts are external changes
that can be a source of new systems or alterations
in existing systems (Caballero & Kingston, 2009).
 Major exogenous parameter shifts which org’ns
are facing are globalization, technological
advancement, politics and legal issues,
society, competitors, customers & the markets.
 Harris (1997) argued that external forces may still
be influenced by political factors existent in the
past and present at the current time.
 For example, the government in power might adopt
new policies that will impact change.

TRIGGERS …….
 Government legislation
 Advances in process or product
technology.
 Changing consumer requirements,
expectations or taste.
 Competitor or supply chain activities.
 General economic or social pressures.
 Unpredictable environmental catastrophes.
 Acquisition or merger

Change Management
 is broadly defined as
“the process of helping people
understand the need for change and to
motivate them to take actions, which
result in sustained changes in behavior”.
 Change management, is the term commonly
used to refer to a set of basic tools or
structures intended to keep any change
effort under control.
MANAGING CHANGE PROCESS
The basic rules for managing change process:
1.Establish that there is a need.
2.Think it thoroughly/systematically
3.Discuss about it formally/informally with those
likely to be affected
4.Encourage the expression of all
objections.
5.Make sure you are willing to undertake
change yourself.
6.Monitor the changes and reinforce them at
all points.
STRATEGIES FOR MANAGING CHANGE
 “General Strategies for affecting Changes in
Human Systems” by R. Chin & Kenneth (1996)
suggest four basic strategies for managing
change in organizations which include:
1. Empirical-Rational
2. Normative-Re-educative
3. Power-Coercive
4. Environmental-Adaptive
 As a general rule, most successful change
mgt require some mix of the four strategies;
and rarely will a single strategy suffice.
Empirical-rational Strategy
assumes that People are rational beings
and will follow their self-interest
Therefore, successful change is based on the
communication of information and the offering
of incentives.
It works under the balance of incentives and
risk management and is difficult to deploy
when the incentives available are modest.

Cont’d
The Normative-re-educative Strategy
assumes that People are social beings
and will adhere to cultural norms and
values.
Therefore, successful change is based on
redefining and reinterpreting existing norms
and values, & developing commitments to new
ones.
In this context, the central issue is
charismatic and dynamic leadership so as to
be consistent with these beliefs.
The Power-coercive Strategy
assumes People are basically compliant & will
generally do what they are told or can be made
to do.
Successful change is based on the exercise
of authority and the imposition of sanctions.
The basic aim is to decrease people’s options.
In many situations, people actually want and will
readily accept a Power-Coercive strategy,
particularly when all feel threatened and few
know what to do.
Two major factors influencing the choice of the
Power- Coercive strategy are
A.Time (if the time for action is limited) and
B.The
December 29, 2023 seriousness of the threat faced. 22
Cont’d
The Environmental - adaptive Strategy
assumes people oppose loss and
disruption but they adapt readily to new
circumstances.
Change is based on building a new org’n &
gradually transferring people from the old one
to the new one.
It holds that although people are often quick
to oppose change (they view as undesirable),
they are even quicker to adapt to new
environments.
APPROACHES TO CHANGE IMPLEMENTATION
 There are ﬁve broad optional approaches.
1. Expert strategy:
usually applied when a “technical” problem requires solving,
such as the introduction of a new IT system, and as such is
better suited to smaller technical or operational change.
2. Directive strategy:
is driven from the top of the organization and relies on
authority, persuasion & compliance/ obedience/
agreement.
3. Negotiating strategy:
involves a willingness to negotiate with individuals
and teams affected by the change and to accept
adjustments
4. Educative strategy:
 involves changing people’s values and beliefs
so that they support the change and are committed
to a shared set of organizational values.
 It is Winning “hearts and minds” is a complex
process that involves a mixture of activities such
as:
communication,
persuasion,
education,
training & selection participation

Cont’d
5. Participative strategy:
it is about
A.Changes are more likely to be widely
acceptable over
B.It promotes an active involvement of
people and is likely increase their
commitment to, and enthusiasm for, the
change process.
C.Provide opportunities for both
managers and employees to learn from the
experiences and skills of others
UNIT TWO
THEORIES, MODELS AND
TYPES OF CHANGE

THEORIES AND MODELS OF
ORGANIZATIONAL CHANGE
The most comprehensive typologies offered
by Van De Ven and Poole (1995) employs
the following categories:
1.Evolutionary (Adaptive change)
2.The Teleological (scientific & planned
change)
3. Life cycle theories
4. Dialectical theories
5. Social cognition models
6. Cultural models
EVOLUTIONARY CHANGE THEORY
 There are two types of evolutionary
change models: biological and social
evolutionary models.
 Major Assumptions: The earliest ideas,
based on biological investigations,
focused on change as slow stream of
mutations gradually influenced by
environment (Morgan, 1986).

TELEOLOGICAL THEORY OF CHANGE
 Teleology-the theory that events and
development are meant to fulfill a purpose
This categories has several different
names including:
 Planned change,
 scientific management and
 rational models,
 strategic planning,
 adaptive learning approaches comes
under the teleological umbrella.
LIFE- CYCLE THEORY OF CHANGE
The life cycle model emphasis the
importance of human being in the
change process and viewing changes
that occur within the life cycle of
people as well as those of the
organizations they create.
Life cycle or developmental models
emphasize systematic individual
changes.
DIALECTICAL THEORY OF CHANGE
 Dialectical refers to differences between two
areas- Idealism and Materialism
 Dialectical: refers to the Marxian perspective
in which a pattern, value, ideal, or norms in
an organization is always present with its
polar opposite (Morgan 1986).
 Eg. in higher education institutions is the
pattern of communitarian/collectivisim, with
opposing values of individualism. These two
forces are always influencing each other, and
overtime change is created through
interactions of opposing forces.
SOCIAL COGNITION THEORY
Cognition-the action or process of acquiring
knowledge and understanding through thought,
experience or the senses.
The social cognition models tends to come
from a social constructivist view of orgn’s.
 Culture and Change Management:
Dilemmas Theory
Long term change achieved through
socialization of human being which is
unpredictable social movement.
TYPES OF THEORIES OF CHANGE
MANAGEMENT
1. LEWIN’S THREE-STEP CHANGE THEORY

 Lewin’s model of organizational change can
be accomplished in three ways (Branch,2002)
1.Changing the individuals who work in the
organization (their skills, values, attitudes and
eventually behavior) - with an eye to
instrumental organizational change;
2.Changing various organizational structures
and systems - reward systems, reporting
relationships, work designs; and
3.Directly changing the organizational climate
or interpersonal relations – how often people
are with each other, how conflict is managed,
how decisions are made.
2. THE CONTINGENCY MODEL OF CHANGE
Expanding upon change from an
organizational transformation perspective.
Assumption: organizations needed a model of
change that was essentially a ‘situational’ or
‘contingency model’.
It is change strategy to achieve ‘optimum fit’
with the changing environment (Dunphy and
Stace, 1993).
 It uses situational variables such as time,
leadership styles, change drivers etc.
3. EMERGENT APPROACH TO
ORGANIZATIONAL CHANGE
 It is against the planned model of change.
 The model views ‘change as driven from the
bottom up rather than from the top down
 It stresses that change is an open-ended and
continuous process of adaptation to changing
conditions and circumstances’ (Burnes 1996b,).
 The approach suggests change to be so rapid
that, it is impossible for senior change initiators
to effectively identify, plan and implement the
necessary organizational changes (Kanter,
Stein and Jick 1992).
4. ANDERSON AND ANDERSON’S MODEL
OF CHANGE (Anderson, 2001).
 It is totally comprehensive model designed to
address all kinds of organizational change and
captures the cyclical nature of org’nal change
 This model consists of three areas:
A. content (organizational and technical areas that
need change);
B. people (the mindset, behavioral and cultural
changes required to deliver the proposed change);
C. Process (actions required to plan, design and
implement the proposed change).
 All three processes must be carried out in an
integrated and unified manner. See Figure:

SPECIFIC MODELS OF CHANGE
 Trickle down model: Organizational change
occurs because the top management takes a
decision and adopts some new ways (technology,
systems, structure )and others follow it. i.e.
following the examples of elite.
 Identity search model: The urge to develop
one’s own uniqueness and identity will make the
group or individuals accept change.
 The adaptation model: This model emphasizes
the role of external factors (new government
policy, competitive environment etc.) in
producing change in organizations.
SPECIFIC FORMS ……..
 The Pro-action model: According to this
model the urge to change comes from
within the organization.
 Structure Model: According to this model
successful change require preparing the
necessary structural details (technology,
design of the organization, systems) and
introduce them systematically.
 Process Model: This model states that
successful change can be planned by
helping people to develop competencies
(planning, decision making, problem
solving, collaborating, communicating etc.)
FOCUS ON THE INDIVIDUAL
 The individual is the prime force in
organizational change.
 There are 8 stages in the process of
change in an individual:
1. initiation, 2. motivation,
3. diagnosis, 4. information
collection,
5. action proposal, 6. deliberation,
7. implementation, and 8. stabilization.
FOCUS ON THE INDIVIDUAL
 Change through feedback: Individuals
change if they get feedback on their
behavior.
The feedback need to be objective and non
threatening.
 Motivation change model: David
McClelland’s model is widely used in
entrepreneurship.

FOCUS ON THE ROLE
 Organizational change can be brought about by
changing the organizational role.
 Organizational roles are analyzed for role efficacy
(potential effectiveness).
 If organizational roles can be modified, these will on
the one hand increases individuals’ involvement,
and on the other increase organizational
effectiveness.
1. Centrality Vs Peripherally: The dimension
of centrality measures the role occupant’s
perception of the significance of his or her
role. The more the people feel their roles are
central in the organization, the higher will be
their role efficacy.
FOCUS ON THE ROLE
2. Integration Vs. Distance: Integration between
self and the role contributes to the role efficacy,
and self-role distance diminishes efficacy.
3. Proactivity Vs. Reactivity : When a role
occupant takes initiative and does something
independently, that person is exhibiting proactive
behavior. When he merely responds, the behavior
is reactive.
4. Creativity Vs. Routinism: When role occupants
perceive that they do something new or unique in
their roles , their efficacy is high

FOCUS ON THE ROLE
5. Linkage Vs. Isolation: Inter-role linkage
contributes to role efficacy. If role occupant’s
perceive interdependence with others, their
efficacy will be high
6. Helping Vs. Hostility: One important
aspect of efficacy is the individual perception
that he or she gives and receives help. A
perception of hostility decreases efficacy.
7. Super ordination Vs. Deprivation: One
dimension of role efficacy is the perception
that role occupant contributes to some larger
equity.
FOCUS ON THE ROLE
8. Influence Vs. Powerlessness: The role
occupant feeling that they are able to
exercise influence in their roles increases
their role efficacy.
9. Growth Vs. Stagnation: When a role
occupant has opportunities- and perceives
them as such- to develop in his role trough
learning new things ,role efficacy is high.
10. Confrontation Vs. Avoidance: When
problems arise, either they can be confronted
and attempts made to find solutions for them,
or they can be avoided.
FOCUS ON TEAMS
 Some models of organizational change are
based on teams, they are:
1. Organizational development (OD)
2. Work Redesign
3. Process Consultation
 Organizational development (OD):
OD model of change based on the
assumption that effective organizational
change would require change in basic
values or ethos of organization, strong
teams and involvement of members in the
different stages of planning of change .
FOCUS ON TEAMS
 Work Redesign: This focuses on distribution
of power of decision making in work related
matters to the group which is responsible for
results.
 This model emphasis on integration of intellectual &
physical work.
 Process Consultation: Schein suggests three
main characteristics-
a. Joint diagnosis of the process with the client
b. Helping client in learning the diagnostic skills.
c. The active involvement of the client in
searching a solution.
TYPES OF CHANGE
 In general, scholars identified two broad
types of change in organizations. These are:
1. Incremental Change
2. Fundamental change
1. Incremental change: involves the kind of
‘constant tinkering’ that all effective and
efficient organizations continually engage in
to ‘improve the fit among the components
of the organization’ (Nadler & Tushman
1995).
Incremental …..
 Considered as a normal and ongoing
process occurring in organizations.
 Fosters more effective ways of getting
employees to work in collaboration and
harmony, eventually resulting in the
organization performing more efficiently and
effectively (Nadler & Tushman 1995).
Critiques of Incremental change
 This type of change ‘is usually limited in scope
and does not disrupt our past patterns
rather it is an extension of the past’ (Quinn,
1996).
2. Fundamental Types of change
 Organizations choosing not to engage totally in
incremental change sometimes implement the
following types of change:
1. Fundamental-the implementation of a standards-
based approach which necessitates dramatic
changes in the organization;
2. Transitional-this involves the slow evolution of
the organization through the introduction of
mergers, new processes or technologies; and
3.Transformational- the organization rethinks its
mission, culture, activities and critical elements of
success.
REFORMATION VS. TRANSFORMATION
“Reformations” seek performance improvements
through org’l behavior change without changing
structure or function; while “transformations” require
changes in structure or function.

TYPES OF CHANGE
 Ramnarayan discusses four different
types of change:
1. Continuous or incremental change
2. Discontinuous or radical change
3. Participative change
4. Directive change

TYPES OF CHANGE
K.Harigopal (2001) has defined the various
types of changes as follows:
 ‘Directional’ change occurs because of
intense competition among the companies,
changes in government policies and when
there is a failure in business strategy.
 ‘Fundamental change’ occurs because
there is a change in organization's purpose
or in its goals.
 ‘Operational change’ is as a result of
improvement in quality, quantity as per
given schedule, unit cost of operations.
TYPES OF CHANGE
 ‘Total change’ occurs when the entire
existing system needs a revamping/make
over or restoring.
 ‘Planned change’ occurs because of certain
internal and external demands. Eg Golden
hand shake.
 ‘Happened change’ is unpredictable. It is
not in one’s control and is a result of external
causes.
 ‘Transformational change’ occurs because
of basic shift in goals.
TYPES OF CHANGE
 ‘Revolutionary changes’ are sudden
changes. Eg: Automation.
 ‘Recreation change’ occurs when an
organization wants to be entirely different
from the one which it is at present.
 ‘Strategic change’ takes place when there is
change in most of the components of the org.
 ‘Anticipatory change’ occurs when there is a
change as a result of an event.
 ‘Relative change’ occurs because of an event
or series of events.
OSU
STAY BLESSED!!!

Thank You!

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MANAGEMENT OF CHANGE AND INNOVATION

Course Code : LCM521

Instructor: Mesay Gerbi (Assis. Prof.) PhD Fellow

December 29, 2023 1

image and the unlearning

 If C > L can spell disaster, because things

Testing out Principles Reflection on

December 29, 2023 12

new policies that will impact change.

December 29, 2023 15

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December 29, 2023 30

December 29, 2023 36

integrated and unified manner. See Figure:

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