CHANGE MANAGEMENT

UNIT-1
AN OVERVIEW:
 Change is a reality with which individuals, groups and organizations
must constantly cope in order to survive.

 Change is the coping process of moving from the present state to a

desired state that individuals, groups and organizations undertake
in response to dynamic internal and external factors that alter the
current realities.

WHY IS CHANGE IMPORTANT TO MANAGERS AND ORGANIZATIONS?

 Organizations that do not bring about change in timely ways are

unlikely to survive.

 Managers who serve in service (or) manufacturing will continuously

be judged upon their ability to effectively and efficiently manage
change. For example: FORD, ICICI.

 The pace of change has increased dramatically due to technology

and innovations.

DEFINITION:

Organization change may be defined as the adoption of a new idea (or)

a behavior by an organization (Daft 1995). It is a way of altering an
existing organization to increase organizational effectiveness for
achieving its objectives.

FORCES FOR CHANGE

Forces for changes are of two types: internal & external

INTERNAL FORCES:

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  CHANGE IN SIZE OF THE ORGANIZATION: Change in
Organizations size leads to change in the internal structure and
complexity of the operations.

 PERFORMANCE GAPS: When a gap between set target and actual

result is identified, Organization face the forces to change and
reduce the gap.

 EMPLOYEE NEEDS AND VALUES: With changing needs and

values of the employees, Organizations change their policies. For
example: attractive financial incentives, challenging, assignments,
vertical growth opportunities and autonomy at work provided in
Organization to attract and retain its effective employees.

 CHANGE IN THE TOP MANAGEMENT: Change in the top

management and consequent change in the ideas to run the
organization also leads to change in the system, structure and
processes.

EXTERNAL FORCES:

 TECHNOLOGY: The rate of technological change is greater today

than any time in the past. Technology is responsible for changing
the nature of the job performed at all levels in an organization.

 BUSINESS SCENARIO: Due to rapid changes in the business

scenario with increasing competition. The needs and demands are
also changing among the customers. Organizations are forced to
change their operational methods to meet the demands of the
stakeholders.

 ENVIRONMENTAL FACTORS: Environmental factors such as

economic, political factors plays a vital role in devising
Organizational policies and strategy. For example: Organizations
may have to change their employment policies in accordance with
the government policy.

TYPES OF CHANGE

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 HAPPENED CHANGE: This is a change that is rather unpredictable
and that takes places naturally due to external factors. For
example: currency devaluation, over which it has no control
adversely, affects the business of a computer that has to import its
basic raw material.

 REACTIVE CHANGE: Change that clearly in response to an event

(or) a series of events are termed reactive. For example:
technological changes force the organization to invest in modern
technologies.

 ANTICIPATORY CHANGE: Change carried out in expectation of an

event (or) a series of events is caused anticipatory change. For
example: Pepsi’s announcement about investment of $750 over the
next five years for its operation in Mexico.

 PLANNED CHANGE: Planned change (or) developmental change is

undertaken to improve upon the current ways of operating.

1. It is a calculated change initiated to achieve a certain desirable

output performance

2. This type of change where the future state is being consciously

chosen, is not as threatening.

 INCREMENTAL CHANGE: changes directed at micro level and

focused on units/subunits/components within an Organization are
termed as incremental changes.

 OPERATIONAL CHANGE: This is necessitated when an

Organization needs to improve the quality of its products (or)
services due to external competition.

 STRATEGIC CHANGE: Change that is addressed to the

Organization as a whole (or) to most of the Organizations
component including strategy may be called strategic change. An
example could be a change in the Organization management style.
Toyota has recently taken steps to change its overall corporate
management philosophy, which is less hierarchies, flexible and
which allows itself a considerable degree of autonomy.

 FUNDAMENTAL CHANGE: This entails a redefinition of the current

purpose (or) mission of the Organization.

 TRANSFORMATIONAL CHANGE: Transformational change

involves the entire or a greater part of the Organization. It could be
a change in the shape(size and complexity), structure(systems,
ownership& the like), or nature(basic assumptions, culture,
technology, etc.,) of the Organization.

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  REVOLUTIONARY CHANGE: Abrupt changes in Organizational
strategy and design represent revolutionary change.

1) Envisioning

2) Energizing

3) Enabling

 RECREATION: It is tantamount to tearing down the old structure

and rebuilding a new one, it involves the whole Organization.

MODELS AND CHANGE

 Organizations and their managers must recognize that change, in

itself, is not necessarily a problem. The problem often lies in an
inability to effectively manage change.

 Not only the adopted process be wrong, but also the conceptual
framework may lack vision and understanding.

Some of the approaches (Models of Change)

 Systems Model of Change

 Force Field Analysis

 Continuous Change process model

 Change and Transition Management

 Organizations Growth Model.

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1. SYSTEMS MODEL OF CHANGE:

People Culture

Technolog
Task y

Design Strategy

 A change in the organization strategic plan might dictate a change in

organization design to an adoptive form. This in turn, could result in
the reassignment of people. At the same time, the redesign may also
lead to a change in the technology in the organization, which affects
the attitudes and behaviour’s of the employees involved, all these
changes would affect the culture of the org (shared values, beliefs,
norms etc.).

Instinct: Management cannot be a part of the organization.

Therefore it also helps managers to understand and think through such

relationships.

2. LEWIN’S FORCE FIELD ANALYSIS MODEL:

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  Psychologist Kurt Lewin, developed the Force Field Analysis model to
help us understand how the change process works.

It has two dimensions,

(change will have two reception acceptance and restrictions)

1. Represents the driving forces that push organization towards a new

state of affair

2. Restraining forces that maintain the status quo.

Instinct: The reaction of change of employees will depend on the

source of change and their positions relative to it.

 When an individual or a group has initiated certain actions, then they

are more likely to display positive attitudes and externally generated
change produce the greatest degree of negative feedback.

3. THE CONTINUOUS CHANGE PROCESS MODEL:

 This approach indicates that change is continuous.

1. Forces 2. Recognize & 3. Problem

for Change define problem Solving

Change Transition
Agent Management

5. Measure 4. Implement
Evaluate & the Change
Control

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 In this approach, top management perceives that certain forces call for
change, and the issue is change are generated and evaluated and an
acceptable one is selected. Early in the process, the organization may seek
the assistance of a change agent. Under the direction and management of
change agent, the organization implements the change. The final step is
measurement, evaluation and control. The change agent and the top
management group assess the degree to which the changes having the
desired effect and make appropriate changes if necessary.

Instinct: change is continuous since environment is demanding.

3. CHANGE AND TRANSITION MANAGEMENT:

“Transition management is the process of systematically, planning,
organizing and implementing change from the disassembly of the current
state to the realization of a fully functional future state within a
organization.”

Transition management suggest that organizations,

 To plan

 To divert

 To implement

 To sustain

 To build on change, can implement four sets of interlocking processes.

Theory Practices

TO PLAN:

Trigger layer opportunity, threat, crisis, clarify

why

Vision layer define the future where the

organization intends to go

TO IMPLEMENT: Persuade, recruit disciplines

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Conversion layer

Sustain & enhance belief.

Reinforce and justify

TO SUSTAIN:

Maintenance & renewal layer

Instinct: Factors for implementation of change needs to be focused

separately.

5. ORGANIZATIONAL GROWTH MODEL:

A development theory developed by Larry E. Greiner is helpful in

examining growth of organizations.

Stage 1:

The first stage of organizational growth is called creativity. The

founders of the organization dominates this stage. The emphasis is on
creating a product and a market.

 Once the organization grows, the founders found themselves

burdened with unwanted management responsibilities.

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  It is at this point that the crisis of leadership occurs.

“who is going to lead the organization out of confusion and save

the management problems?” The solution is to locate and install
a strong manager.
“This lead to the next evolutionary period.”

Stage 2:

 During this phase, the new manager and the key staff take most of the
responsibility for instituting direction.

 While lower level managers are treated more as functional specialists

than autonomous decision making managers.

 As low level managers demand more autonomy, this eventually leads

to the next revolutionary period – the crisis of autonomy.

Stage 3:

 Organization gets to the growth stage of delegation. It usually begins

to develop a decentralized organization structure, which heightens
motivation at the lower level. Crisis of control occurs at this stage

Solution to this crisis is co-ordination. Management becomes the watch

dog.

Stage 4:

 Co-ordination will result in Red Tape Crisis

“This occurs when the organization has become too large and complex to
be changed”, through formal programs and rigid systems.

Stage 5:

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  The organization should move to the next Evolutionary level
“Collaboration Level”. Greiner is not certain what the next revolution
will be.

RESISTANCE TO CHANGE
Why do people resist change?

This is for three reasons

• Uncertainty (substitute ambiguity and uncertainty for the

known)

• Concern over personal loss (Fear of losing something

already possessed)

• The belief that the change in not in the organizations best

interest (Incompatible with the goals)

APPROCHES TO MANAGE RESISTANCE:

The following are the approaches for reducing resistance to
change:
 Provide information in advance.
 Encourage participation.
 Guarantee against loss.
 Make only necessary changes.
 Attempt to maintain useful customs and informal
relationships.
 Build trust.
 Provide counseling.
 Allow for negotiation.
IMPLEMENTATION OF ORGANIZATIONAL CHANGE:
 Organizational changed may be planned well in advance.

LEWIN’S CHANGE MODEL:

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 Kurt Lewin(1952) developed a three stage process to be followed when
introducing planned change.

Lewins three stages in the change process are

1. Unfreezing

2. Changing

3. Refreezing

1. Unfreezing:

The first step in the change process is Unfreezing or Preparing

the situation for change by creating a fert-need for it.

In order to do this , the manager must establish good

relationships with all the people who will be involved with the change .It is
important that everyone must understand that present behavior is simply
not effective.

Minimizes expressed resistance to the change.

2. Changing:

During the changing phase, the actual change is implemented.

In the process, it is critical for management to carefully identify

the more effective behavior to be followed & changes in tasks, people,
culture, technology.

3. Refreezing:

Refreezing is the final stage of the change process by which the

change is

stabilized.

Management’s task is to create an acceptance and continuity for

the new

behavior.

It is also necessary the management provide the required

resources support for the

change.

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 ORGANIZATIONAL TRANSFORMATIONS
DEFINITION:

Organizational Transformation is a multilevel discontinuous

radical organizational change involving a paradigmatic shift - Amir Lens & Uri
Merry.

Organizational Transformation is a term referring collectively to such

activities as reengineering, redesigning &redefining business systems.

TYPES OF TRANSFORMATIONS:

1. Operational Transformation:

To achieve a improvement in the firm’s efficiency, often by reducing

costs, improving quality, services & reducing development time.

2. Strategic Transformation:

The process of changing strategy to regain a Sustainable Competitive by

redefining Business Objectives, Creating New Competencies & harnessing
these capabilities to meet Market Opportunities.

3. Corporate Self Renewal:

Self-Renewal creates the ability for a firm to anticipate & cope with
change, so than strategic & operational gap does not develop.

PHASES OF TRANSFORMATION:

Phase 1:

Automation (It begins with automation of existing activities to

reduce cost and raise capacities to expand).

Phase 2:

Enhancement (It focuses on adding features, function, value

added services to customers).

Phase 3:

Redefinition (It may become principal vehicle for become, the

existing business can be redefined).

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