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Changing Organizations
(5006)

Submitted by

Hareem Fatima Zaidi

BY-544752

MSC. ADMINISTRATIVE SCIENCES

Semester: Spring, 2020

______________________________________________________________________

DEPARTMENT OF BUSINESS ADMINISTRATION

ALLAMA IQBAL OPEN UNIVERSITY ISLAMABAD

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Introduction
Change management is the systematic approach and application of knowledge, tools and
resources to deal with change. It involves defining and adopting corporate strategies,
structures, procedures and technologies to handle changes in external conditions and the
business environment. Effective change management goes beyond project management and
technical tasks undertaken to enact organizational changes and involves leading the "people
side" of major change within an organization. The primary goal of change management is to
successfully implement new processes, products and business strategies while minimizing
negative outcomes.
This article discusses the management of large organizational changes that may have far-
reaching impacts on the organization and its workforce, including the following topics:
 The nature and extent of organizational change.
 The business case for a systematic approach to change management.
 The roles of management and HR during major change initiatives.
 Steps to take in managing organizational change.
 How to overcome common obstacles encountered during organizational change.
 Legal and global considerations in managing change.
This article also highlights some of the special issues and challenges in implementing certain
types of major organizational change, including mergers and acquisitions, downsizing,
bankruptcy, business closure, outsourcing, and changes within the HR function.
Organizational change management refers to an event or program that a business or
enterprise wishes to initiate, which causes significant disruption to their daily operations.
There can be a variety of factors that lead to change within an organization.
A major challenge is reducing the potential for friction and resistance to change by ensuring
all employees understand why change is important to the company’s future. Yet, ignoring the
need for change can be far more threatening to your business than the change itself.
In today’s dynamic world, change is not just a fact of life, but essential for survival. New
organizational developments and priorities happen so quickly that if you’re not up-to-date,
you’re slipping behind. Trends and technology evolve, which means that customers’ needs
will constantly be changing. Information is transmitted faster and companies that can’t
deliver on speed will lose out to those that can. Whether it is installing a new software
platform, reorganizing your business to make it more streamlined and efficient, or adapting to
customer needs, it is essential as a business to ask yourself why as a leader change is
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imperative to your organization. While it can be disruptive at first, organizational change will
ultimately improve productivity among your employees and therefore boost sales success.
The goal of any business is to delight its customers. If customers are changing, a company
must learn to adapt. With every change comes the opportunity to learn. To prepare your staff
adequately for new developments, employers must assess the skills and tools their employees
already have and look for gaps. Down the line it will be easier to identify which areas should
be a top priority for training.
Types of Organizational Change
With organizational change strategies, companies can avoid stagnation while minimizing
disruption. Preparation is integral for success, especially during a change effort. However,
one can’t prepare without knowing what type of change is occurring. The first step is to
understand what change management models exist and then figuring out what best suits your
company or team.
1. Organization-Wide Change
Organization-wide change is a large-scale transformation that affects the whole company.
This could include restructuring leadership, adding a new policy, or introducing a new
enterprise technology.
Such large-scale change will be felt by every single employee. However, as the dust settles,
you can begin to see improvements. Organizational change can be a sharp indicator in
understanding how long-held policies have become outdated or reflect a company’s
transforming identity.
Achieving a successful organization-wide change demands comprehensive planning and
communication throughout the organization. Whether the results are positive or negative are
dependent on your organizational change strategies and their execution. For software
specifically, a digital adoption solution is an essential tool for implementing company-wide
changes.
2. Transformational Change
Transformational change specifically targets a company’s organizational strategy. Companies
that are best suited to withstand rapid change in their industry are nimble, adaptable, and
prepared to transform their game plans when the need arises.
Strategies to guide transformational change must account for the current situation and the
direction a company plans on taking. Cultural trends, social climate, and technological
progress are some of the many factors leaders must consider.
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According to a study from MIT Sloan Management Review and Deloitte, maturing digital
businesses are focused on integrating digital technologies, such as social, mobile, analytics
and cloud, into their transformation strategies. Meanwhile, less-mature digital businesses are
focused on solving discrete business problems with individual technologies.
However, given the rapid pace at which digital technology evolves, companies will be better
positioned to succeed if they incorporate digital adoption platforms into their transformation
strategies.
3. Personnel Change
Personnel change happens when a company experiences hyper-growth or layoffs. Each of
these types of organizational change can cause a significant shift in employee engagement
and retention.
The threat of layoffs evokes fear and anxiety among staff members, and leaders should
expect that employee morale will suffer. Nevertheless, the company must move forward. It is
important to display genuine compassion and motivate employees to continue to work hard
through difficult times.
While mass hiring has better implications for a company, it is not without its challenges.
Hiring en masse is a sign of growth, which makes companies susceptible to cultural changes
and disorganization.
Employing new staff means training them and providing ongoing support. Welcoming an
influx of employees is great, but the work is cut out for those in management. If the transition
is not handled correctly, it can cause chaos, inefficiency, and ultimately deter further growth.
4. Unplanned Change
Unplanned change is typically defined as necessary action following unexpected events.
While unplanned change cannot be predicted — it can be dealt with in an organized manner.
For example, the hurricanes that battered the U.S. early in the fall of 2017 caused thousands
of residents to evacuate and seek temporary shelter far away from home. Following this
emergency, those affected began the long process of restoring normalcy to their lives.
Companies also experience unplanned changes. When a CEO suddenly leaves the company
or a security breach occurs, chaos and disruption ensue. By setting basic organizational
change strategies in place for these situations, organizations can minimize these unplanned
risks and emerge as more adaptable and resilient.
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5. Remedial Change
Leaders implement remedial changes when they identify a need to address deficiencies or
poor company performance.
For example, financial distress is usually due to lackluster performance and requires remedial
change. Other common examples include introducing an employee training program, rolling
out new software, or creating a position to fix a pain point.
Other types of corrective action could include reviewing strategies that may have been in
place for years but are no longer profitable. Issues stemming from leadership, such as a newly
appointed CEO who turns out to be a poor fit for the company, might also call for remedial
change. Although remedial change efforts must be tailored to the specific problem on hand,
they still require effective organizational change strategies to be effective.
Ensure Successful Organizational Change
Organizational change has many clear benefits but can lead to misalignment and company-
wide confusion without proper implementation. In order to execute organizational change
with glowing results, take note of these five ways to ensure its success.
1. Set clear goals and develop a strategy
Organizational change often transcends multiple departments and job functions. A variety of
stakeholders are involved to guarantee their interests are heard and met.
According to the Katzenbach Center, only 54% of change initiatives succeed. To achieve
successful organizational change, clearly defined goals need to be set along with a digital
strategy for how they’ll be reached. After all, how can you measure success if you don’t
know what you’re aiming for?
A strategy helps determine the vision for what the company should look like after the change.
It is the role of management to develop that vision by listening to the feelings and opinions of
those who will be affected. This will encourage buy-in across the company and make sure the
strategy is carried out as intended.
2. Overcoming resistance and staff engagement
Organizational change can often be difficult, especially if your employees don’t see anything
wrong with the status quo. To them, the change may appear disruptive at best. There will be
new technologies to learn and platforms to navigate. Worse still, if the initiated change
automates many of their existing tasks, some employees may feel threatened.
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Communication will be vital to getting your team on board. Survey their opinions on the
status quo and the proposed changes in the planning stages; they will feel included in the
process, fostering a feeling of buy-in.
Explaining to your employees why these changes are necessary and will improve their day-
to-day may also allay fears and reduce resistance.
3. Offering management support
For organizational change to be successful, it needs to be adopted across the business, from
C-level down to managers. The CEO may have a vision for the change, but it will be up to
the rest of the business to execute it. That’s why it’s important to share that vision so that
others know what their role will be in bringing it to fruition, and what will be required of
them after the changes have taken place.
If management wants its employees to invest in change, they need to demonstrate
commitment from an ecosystem of leaders throughout the business. Having a consistent
message of why change is needed will help garner support across the board.
Management support can be in the form of documenting feedback throughout the process,
updating employees on progress and next steps, and encouraging open lines of
communication. All of these things will help your employees navigate their way through
organizational change and even perform better.
4. Contextual learning for new technologies
It is inevitable that with any organizational change, there will be new tools to learn and
understand. Learning is an ongoing journey and requires employers to provide contextual
learning techniques.
Using outdated training methods such as classroom lectures is a single-use solution that
doesn’t scale. Employees may watch or attend a lecture one time, and if the information isn’t
clear or continuously refreshed, it won’t be retained. Contextual learning like a digital
adoption platform helps employees by personalizing their training experience.
Using sophisticated algorithms and correlating data on factors such as their level of seniority,
job function, and previous actions, these programs tailor training to the individuals’ needs.
This comes in the form of pop-ups prompting the user with actions leading them to complete
each step in the process while also providing deep insights. Time that would have been
wasted in the classroom can be spent learning on the job.
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5. Invest in agility training

Organizational agility refers to being able to react quickly to changes in business operations,
strategy, and even culture. However, agility is not innate within an organization; it must be
learned.
Agility can take different forms, but there are three main steps to focus on when developing
agility training. The first is to foster change management skills. These can be individual skills
such as personal resilience and organization to more company-wide skills, like forcing
clarity, networking, and coaching.
The second step is to train your team in productive time management. Knowing how to
evaluate what is important versus urgent and how to prioritize tasks is crucial. Employees
will be readily equipped to tackle changes within the organization or their daily jobs.
Finally, as mentioned above, offer continual learning and development. When organizational
changes take place, there is a lot of information that needs to be acclimated. However, if
learning is already habitual and employees are used to training within their workflow, these
changes will seem far less daunting and more manageable.
Proper agility training enables your business to pivot when the need arises. Organizational
change will become just another task as opposed to an insurmountable challenge. This is also
important for organizational health.
The "Action Training and Research" method of organizational development, pioneered by
Neely Gardner in the 1960s, has become a classic methodology in public administration,
despite the fact that GardnerÆs work was never published in book form. Raymon R. Bruce
and Sherman M. Wyman have presented the power of GardnerÆs work in a form that speaks
to the context of modern practice and scholarly thought. GardnerÆs methodology addresses
how to change hierarchically structured public organizations whose management is rigidly
vested in the status quo. He saw participative management as the key to achieving democratic
organizations, reflecting the democratic values and norms of our society. He felt the
devolution of management power in the organization enables the people doing the work of
the organization to innovate and adapt to their "customerÆs" changing needs. It is, after all,
those who are producing the goods and delivering the services that are best able to play a
substantial and non-hypocritical role in the decisions concerning those goods and services,
with the result that the most efficient and economic outcome will occur over time. The Action
Training and Research approach focuses not so much on how to change organizations, but
how to develop organizations that constantly change themselves. In this approach, each
employee is a trainer and an agent of change. Remarkably, many of GardnerÆs principles are
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current todayùparticipative management, self-managed work groups and employees, outcome

budgets, empowering the employee, and viewing the citizen as customer/owner. All provide a
tool for organizational development in todayÆs public and private organizations. This
volume will serve as a valuable guide to managers and consultants practicing organizational
change in private and public sectors, at home or abroad. It will serve as an excellent resource
to all students of action research methods.
A merger is generally defined as the joining of two or more organizations under one common
ownership and management structure. An acquisition is the process of one corporate entity
acquiring control of another by purchase, stock swap or some other method. Nearly two-
thirds of all mergers and acquisitions (M&As) fail to achieve their anticipated strategic and
financial objectives. This rate of failure is often attributed to HR-related factors, such as
incompatible cultures, management styles, poor motivation, loss of key talent, lack of
communication, diminished trust and uncertainty of long-term goals. HR professionals face
several challenges during M&As, including the following:
 Attempting to maintain an internal status quo or to effect change—either to facilitate
or thwart (in the case of a hostile takeover) a possible merger or acquisition, as
instructed by upper management.
 Communicating with employees at every step in the M&A process with appropriate
levels of disclosure and secrecy.
 Devising ways to meld the two organizations most effectively, efficiently and
humanely for the various stakeholders.
 Dealing with the reality that M&As usually result in layoffs of superfluous
employees. This process entails coordinating separation and severance pay issues
between the combining organizations.
 Addressing the ethical dilemmas involved, such as when an HR professional may be
required to eliminate his or her own position or that of a co-worker or an HR
counterpart in the combined organization.
Downsizing
Successfully implementing a layoff or reduction in force (RIF) is one of the more difficult
change initiatives an HR professional may face. Tasks HR professionals will need to
undertake include:
 Planning thoroughly. Each step in the process requires careful planning, considering
alternatives, selecting employees to be laid off, communicating the layoff decision,
handling layoff documentation and dealing with post-layoff considerations.
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 Applying diversity concepts. HR should form a diverse team to define layoff criteria
and make layoff selections.
 Addressing the needs of the laid-off. This step involves reviewing severance
policies, outplacement benefits, unemployment eligibility and reference policies.
 Dealing with the emotional impact. HR professionals should understand and prepare
for the emotional impact of layoffs on the downsized employees and their families, on
the managers making layoff decisions, on other HR professionals involved, and on
remaining employees and managers working with the post-layoff workforce. In some
situations, an HR professional may even be responsible for implementing his or her
own layoff, a case calling for the utmost in professional behavior.
 Managing the post-layoff workforce.
Bankruptcy
Filing for a business bankruptcy and successfully emerging from the process is generally a
complex and difficult time for all parties. HR may have to cut staff, reduce benefits, change
work rules or employ a combination of such actions. A major strategic concern during a
Chapter 11 bankruptcy is retaining key personnel.
Compassion, frequent communication and expeditious decision-making will help reduce the
stress an organization's employees are likely to experience during this difficult organizational
change. Showing genuine respect for people and treating them with honesty, dignity and
fairness—even as difficult decisions are being made about pay, benefits and job reductions—
will drive the success or failure of an organization post-bankruptcy.
Closing a business operation
Businesses make the difficult decision to close all or part of their operations for many
reasons, including economic recession, market decline, bankruptcy, sale, a realignment of
operations, downsizing, reorganization, outsourcing or loss of contracts.
HR professionals will play an integral role during such business closures, from developing
the plan for the closure through the final stages of shutdown. Some of HR's major
responsibilities during this type of organizational change are listed below:
 Following facility-closing notification laws. HR must determine whether and to
what extent the business must comply with notification requirements under federal or
state laws for mass layoff and facility closings. HR will also lead the announcement
process and participate in all aspects of employee communications, which may
include all-employee meetings, written announcements and media interviews.
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 Announcing the closure news. HR has an important role to play in anticipating and
responding to workforce reactions by having as much information and resources on
hand as possible. To avoid hostilities or other destructive behavior, HR should
consider using an employee assistance program or an outplacement firm.
 Providing employee benefits information. After the shock of the announcement
subsides, the most frequently asked questions involve benefits, including
unemployment compensation, health care continuation, pension plan issues, and
retirement plan distributions and rollovers.
 Coordinating outplacement services. Offering outplacement services for departing
employees may enable business owners and managers to provide much-needed
support and protect the organization's reputation. If financially feasible, the
organization may offer departing employees outplacement services from a private
outplacement consulting firm or, in some states, a state agency.
 Negotiating with unions. In unionized facilities, employers have a duty to bargain
about the effects of a business closure decision. These negotiations typically involve
assistance benefits, seniority issues, pension plan issues and employment
opportunities at facilities not affected by the closure.
 Costing the closure. Anticipating the costs of a business closure is critical from an
early stage of the process and will fall heavily on HR. This procedure involves
assessing the cost of winding down employee benefits, assistance benefits, payroll
and administrative costs, severance payments, union demands, unresolved employee
claims or charges, security precautions, and any closing notification penalties.
 Disposing of company property. HR should know the organization's policy for
disposal of company property and respond to employees' requests for office furniture,
equipment, machinery and other tangible business assets. If the business does not sell
or transfer assets or is not in debt to creditors, HR may help determine whether to give
items to employees, community groups, schools or other potential recipients.
 Complying with legal requirements. Numerous legal issues surround the closing of
a business. Depending on the number of employees and the employer's commitments
to employee benefits programs, legal compliance may require following closing-
notification requirements, sending out COBRA notices and termination letters, issuing
final paychecks, making any required severance payments and communicating
unemployment compensation. HR must know how to comply with the laws and avoid
litigation risks.
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Outsourcing
For several reasons, including cost savings and freeing staff to focus on more strategic
efforts, an organization may decide to outsource HR or other business functions. Outsourcing
is a contractual agreement between an employer and a third-party provider whereby the
employer transfers the management of and responsibility for certain organizational functions
to the external provider. Many types of outsourcing options are available to employers, from
outsourcing one aspect of a single function to outsourcing an entire functional department.
This change can have a similar impact on employees as downsizing or closing a department.
When deciding whether to outsource, an organization should carefully consider questions
about its needs in a particular functional area, current processes, business plan and
outsourcing options, including:
 Does the situation merit outsourcing?
 Is the department providing excellent service with existing staff and processes? Is it
meeting the organization's needs?
 Can the affected department handle outsourcing without disrupting operations?
 Will the CEO and top management team support and pay for an outside vendor?
 How might an outsourcing arrangement fall short of expectations? How can such risks
be mitigated?
During an HR outsourcing process, HR professionals may be asked to identify solutions to
guide organizations through vendor selection and management of the outsourcing
relationship.
Changes within HR
HR professionals frequently help other parts of the organization respond to change, but what
happens when the HR department becomes the epicenter of change? These kinds of
transformations, such as moving to a shared services model, integrating with another HR
function following a merger or delivering new services to new clients, can be more difficult
for HR professionals to manage than other types of organizational changes.
During major changes within the HR function, HR should do the following:
 Lead by example. Do exactly what HR asks other leaders and managers to do during
major change initiatives.
 Remember that HR professionals' responsibilities never cease. The HR
department must continue to serve employees while contending with the discomfort,
confusion and demands that department-specific change creates.
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 Keep in mind that few organizational changes occur in isolation. If senior leaders
decide to implement an HR shared services model, for instance, the information
technology, finance and procurement functions also could move to a similar model or
initiating efficiency projects.
 Measure the degree to which HR staff is prepared to change before plunging into
the change. HR leaders should assess staff readiness and engagement through
interviews and surveys. After evaluating the results, they should make necessary
adjustments in staff readiness and engagement levels before proceeding.
 Realize that most HR transformations require fresh, or refreshed, talent. HR
leaders can fire and hire, or they can retrain and develop.
Legal Issues
In addition to managing the "people side" of organizational change initiatives, HR
professionals should keep leadership informed of any applicable employment laws and the
potential legal implications of various types of change. Typically, HR will be responsible, in
consultation with legal counsel, for ensuring compliance with pertinent federal, state, local
and international employment laws and regulations.
Legal compliance requirements may vary considerably based on the nature of the change
initiative, the location(s) and size of the organization, whether the employer is unionized, and
other factors. Federal laws that may apply to particular organizational change initiatives
include:
 Title VII of the Civil Rights Act of 1964.
 Age Discrimination in Employment Act (ADEA).
 Americans with Disabilities Act (ADA).
 National Labor Relations Act (NLRA).
 Worker Adjustment and Retraining Notification Act (WARN) of 1988.
 Employee Retirement Income Security Act (ERISA).
 Health Insurance Portability and Accountability Act (HIPAA) of 1996.
 Consolidated Omnibus Budget Reconciliation Act (COBRA).
HR professionals may also be responsible for negotiating contracts with unions, service
providers or vendors. In such cases, they need to be familiar with key contract terms and
issues and be able to represent the organization's interests effectively in contract negotiations
and management. .
Global Issues
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Significant organizational changes can create ongoing conflict between two locations in the
same country. But conflict is more likely to occur, and is harder to address, when differences
in language, time zones, institutions and business practices exist. According to research
conducted by the Economist Intelligence Unit, companies will continue to become larger and
more global, handling operations in more countries than they do today.4
Culturally based assumptions about customer needs, infrastructure, competitive threats and
other factors make it more difficult to find common ground during a cross-cultural change
initiative. What differentiates an organization's products or services in one country may not
be the same elsewhere, and the strengths that it has in its home market may not be easily
replicated in other countries.
Common problems in cross-cultural change initiatives include:
 Lack of a partnership approach. It is natural for an organization to consider its
home market and its largest customers when planning change efforts. However, those
voices can easily drown out the needs of employees or clients in distant markets,
including those that could have high growth potential. By partnering with all
employees and clients from the beginning and considering future potential for
revenue, profit and growth, an organization can build an approach to change that
integrates the patterns of past successes with future directions.
 Misreading similarities and differences in markets. Multinational organizations
might project solutions suitable for one country onto another country or assume that
customers abroad want to behave "more like us." To make matters more complicated,
foreign products may have considerable appeal in some markets but often for reasons
that only make sense in the local context. Companies may expect the same
competitive landscape, yet the largest competitive threats may come from companies
that are unknown back at headquarters.
 Not enough accountability. Establishing accountability at the local level is difficult
when employees lack a sense of ownership for a new initiative. This situation can be
exacerbated by the typical matrix organizational structure at many global companies.
Employees who report into both a global business unit and a local management
structure frequently pay the closest attention to the managers they encounter every
day who are most likely to affect their futures.
Leaders of global change initiatives should consider these potential problems and plan to
address them in advance. They will be far more likely to avoid change-related pitfalls;
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achieve their objectives; and build business partnerships characterized by mutual learning and
superior business results.

Literature Review
To keep pace in a constantly evolving business world, organizations often need to implement
enterprise wide changes affecting their processes, products and people. Change is a fact of
life in businesses today. It can be difficult, and people often resist it. But to develop an agile
workplace culture, organizations should follow a systematic approach to managing major
change. Organizational development experts have established approaches for successfully
navigating through change.
Organizational leaders must identify and respond quickly to market changes and unexpected
challenges, but most are not in a position to create an agile culture. Yet agile leadership—
from CEOs down to line-level managers—separates high-performing from lower-performing
organizations. Companies that consistently outperform competitors in profitability, market
share, revenue growth and customer satisfaction reported much greater agility than lower
performers.
The rate of major organizational change has accelerated dramatically in this decade. Global
research and advisory company Gartner reports that the average organization has undergone
five enterprise changes in the past three years and 73% of organizations expect more change
initiatives in the next few years.1
As change initiatives have become more frequent and widespread, the importance of
managing individuals through change has gained credence. Major changes can affect
organizations across all levels. Many corporate leaders have concluded that failing to manage
employees through change can be costly: Employees who are dissatisfied with or upset by
change are generally less productive [1].
An employer that is serious about change management should develop a communication
plan, a road map for change sponsors, integrated training programs and a plan for dealing
with resistance.
HR should be involved in major organizational changes from the beginning and can assist by
influencing the following:
 Improving employees' understanding of change.
 Increasing communication between management and employees.
 Identifying and mitigating risks.
 Enhancing employee satisfaction.
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 Boosting trust between management and employees.

 Improving employee skills and proficiency through change-related training initiatives.
The Roles of Management and HR
Business managers who want to undertake major transformation to stay competitive must
work with HR staff to gain employee acceptance and support.
Management's role
Having the right leadership and buy-in from the executive team is critical to unifying the
organization behind a common strategic direction.
Another key is making sure all managers are equipped to coach their direct reports toward
commitment. One-on-one conversations help individual team members analyze how the
change will affect them, determine their level of commitment and choose how they will act.
Questions managers should address with employees include:
 What is changing?
 Why is it changing?
 How will it affect your area?
 How will it affect you directly?
Unfortunately, many managers are not adept at change management. The lack of change
management skills among managers can make change initiatives difficult to achieve. A
Towers Watson Change and Communication ROI Survey found that 87 percent of employers
train managers on effective change management; however, only one-quarter of those
employers found the training to be effective [2]. To increase managers' skills, HR should
provide training that is tailored to the specific change initiative and the competencies
necessary to lead successful change.
HR's role
HR can play a dual role in change management by initiating and leading the change and by
serving as a facilitator for changes that other leaders and departments initiated.
The HR department performs a variety of functions associated with the communication,
implementation and tracking of major changes. Most commonly, HR professionals assist
employees by serving as a point of contact for questions and concerns and by explaining any
impact on staffing. In addition, HR often coordinates meetings and communications about the
change and related initiatives. Other common HR roles and responsibilities include:
 Providing initial employee communications about changes.
 Developing training programs.
 Preparing informational documents.
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 Assessing readiness before the change.

 Analyzing potential impact.
HR can also play a strategic role in change management by calculating the post-
implementation return on investment by identifying key performance indicators (KPIs) to be
measured and by tracking and communicating these results [3].
By championing change, HR can help the organization increase buy-in, comfort and support
for change across departments, thereby increasing the success of change initiatives.
Steps in the Change Management Process
Organizations should systematically prepare for and implement major organizational change.
John Kotter, a Harvard Business School professor, developed a well-known and widely
adopted approach for managing organizational change. This approach, updated in Kotter's
book Accelerate, involves the following eight stages:3
1. "Create a sense of urgency." Successful transformation efforts usually begin when
leaders examine the market for changes that may lead to new competitive realities for the
organization. These changes can stem from demographic shifts, social trends, new
technology, market or competitor changes, or new government regulations. The leaders
should explain that a potential crisis or major opportunity is imminent, and they should
encourage frank discussion throughout the organization. Creating a sense of urgency that the
status quo is no longer acceptable is essential to gain the workforce's energetic cooperation.
2. "Build a guiding coalition." Once employees feel a sense of urgency, leaders should
establish a group with enough power to lead the change. Members need substantial authority
based on position, expertise, credibility and leadership, as well as effective management
skills and proven leadership abilities. This coalition must learn to work together based on
trust and set a common goal. Many guiding coalitions build trust through offsite meetings,
joint activities and conversation [4].
3. "Form a strategic vision and initiatives." The guiding coalition should craft a clear
vision for the future, motivate people to take appropriate actions and coordinate their actions.
An effective vision is imaginable, desirable, feasible, focused, flexible and communicable,
according to Kotter. Creating an effective vision takes time and can be a challenging process,
but the end product provides a clear direction for the future.
4. "Enlist a volunteer army." Once the guiding coalition has developed the vision, its
members should provide extensive communications about how the change will improve the
business and how those improvements will benefit employees. Key elements in effective
communications include simplicity, use of examples, multiple forums, repetition, explanation
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of apparent inconsistencies and two-way communication. The group should model the
behavior expected of employees.
5. "Enable action by removing barriers." To empower workers to support change and
act on the vision, change leaders should identify and remove obstacles. Four categories of
important obstacles are:
1. Formal structures that make it difficult for employees to act.
2. A lack of needed skills.
3. Personnel or information systems.
4. Supervisors who discourage actions toward implementing the new vision.
6. "Generate short-term wins." Successful and enduring change takes time, which can be
discouraging to employees at all levels of the organization. To maintain urgency, leaders
should create conditions that support early successes and visible improvements. The key is to
actively search for opportunities to score early achievements and to recognize and reward
those who made these accomplishments possible. Good short-term wins have unambiguous
results, are visible to many people and are clearly related to the change effort [5].
7. "Sustain acceleration." Until major changes are embedded in an organization's culture
(which could take up to a decade), they remain vulnerable to resistance and regression. It is
important to use the early successes as a foundation for larger challenges and to revise all
systems, structures and policies that do not fit the change vision. HR can consolidate gains by
hiring, promoting and developing employees who can implement the transformation vision.
Additionally, the change process can be reinvigorated with new project themes and change
agents.
8. "Institute change." The final stage in Kotter's model for successful change is linking
the changes to two key components of corporate culture—norms of group behavior and
shared values [6].
Another model for organizational change includes a four-phase change management process:
1. Define—Align expectations regarding the scope of the change as well as timing and
business impact.
2. Plan—Understand how the change will impact stakeholders and design a strategy to
help them navigate it.
3. Implement—Engage with leaders and associates to execute the change.
4. Sustain—Work with leaders and employees to track adoption and drive lasting
change.
Employee resistance
 18

Successful change starts with individuals, and failure often occurs because of human nature
and reluctance to change. Employees may also lack the specific behavioral traits needed to
adapt easily to changing circumstances, which could decrease employee engagement and
effectiveness and put organizational productivity at risk. How organizations treat workers
during a change initiative determines how successful the change—and the organization—will
be. There are six states of change readiness: indifference, rejection, doubt, neutrality,
experimentation and commitment. Organizations about to embark on a transformation should
evaluate workforce readiness with assessment instruments and leader self-evaluations to
identify the areas in which the most work is needed [7].
Leaders should have a solid strategy for dealing with change resistance. Some actions to
build employee change readiness include:
 Developing and cascading strong senior sponsorship for people-focused work. In the
absence of visible sponsorship, leaders should build alliances, meet business needs
and promote wins.
 Developing tools and information for front-line supervisors and managers.
Organizations should involve them early—train them, prepare them and communicate
regularly.
 Coaching employees to help them adapt and thrive during change.
 Rewarding desired behaviors and outcomes with both tangible and intangible rewards.
 Relying on insights from both those in the field and subject-matter experts.
Communication breakdown
Sometimes decisions about major organizational changes are made at the top management
level and then trickle down to employees. As a result, why and how the company is changing
may be unclear. According to a Robert Half Management Resources survey, poor
communication commonly hinders organizational change-management efforts, with 65
percent of managers surveyed indicating that clear and frequent communication is the most
important aspect when leading through change.
To avoid this problem, HR should be involved in change planning early to help motivate
employees to participate. Effective communication promotes awareness and understanding of
why the changes are necessary. Employers should communicate change-related information
to employees in multiple forms (e.g., e-mails, meetings, training sessions and press releases)
and from multiple sources (e.g., executive management, HR and other departments).
 19

To avoid communication breakdowns, change leaders and HR professionals should be aware

of five change communication methodologies—from those that provide the greatest amount
of information to those that provide the least:
 "Spray and pray." Managers shower employees with information, hoping they can
sort significant from insignificant. The theory is that more information equates to
better communication and decision-making.
 "Tell and sell." Managers communicate a more limited set of messages, starting with
key issues, and then sell employees on the wisdom of their approach. Employees are
passive receivers, and feedback is not necessary.
 "Underscore and explore." Managers develop a few core messages clearly linked to
organizational success, and employees explore implications in a disciplined way.
Managers listen for potential misunderstandings and obstacles. This strategy is
generally the most effective.
 "Identify and reply." Executives identify and reply to key employee concerns. This
strategy emphasizes listening to employees; they set the agenda, while executives
respond to rumors and innuendoes.
 "Withhold and uphold." Executives withhold information until necessary; when
confronted by rumors, they uphold the party line. Secrecy and control are implicit.
The assumption is that employees are not sophisticated enough to grasp the big
picture.
Experts estimate that effective communication strategies can double employees' acceptance
of change. However, often companies focus solely on tactics such as channels, messages and
timing while failing to do a contextual analysis and consider the audience. Some of the
specific communication pitfalls and possible remedies for them are the following:
 The wrong messengers are used. Studies have found that employees tend to trust
information from managers. Understanding the organization's culture will dictate who
is the best messenger for change—the manager, the senior executive team or HR.
 The change is too sudden. Leaders and managers need to prepare employees for
change, allow time for the message to sink in and give them an opportunity to provide
feedback before a change is initiated.
 Communication is not aligned with business realities. Messages should be honest
and include the reasons behind the change and the projected outcomes.
 20

 Communication is too narrow. If the communication focuses too much on detail and
technicalities and does not link change to the organization's goals, it will not resonate
with employees.
Executive leaders and HR professionals must be great communicators during change. They
should roll out a clear, universal, consistent message to everyone in the organization at the
same time, even across multiple sites and locations. Managers should then meet both with
their teams and one on one with each team member.
Leaders should explain the change and why it is needed, be truthful about its benefits and
challenges, listen and respond to employees' reactions and implications, and then ask for and
work to achieve individuals' commitment [8].
Other obstacles
Employee resistance and communication breakdowns are not the only barriers that stand in
the way of successful change efforts. Other common obstacles include:
 Insufficient time devoted to training about the change.
 Staff turnover during the transition.
 Excessive change costs.
 An unrealistic change implementation timeline.
 Insufficient employee participation in voluntary training.
 Software/hardware malfunctions.
 Downturn in the market or the economy.
Change management experts have suggested that unsuccessful change initiatives are often
characterized by the following:
 Being too top-down. Executives relate their vision of what the end result of the
change initiative should be, but do not give direction or communication on how the
managers should make the change happen.
 Being too "big picture." The organization's leaders have a vision of the change but
no idea of how that change will affect the individuals who work there.
 Being too linear. Managers work the project plan from start to finish without making
even necessary adjustments.
 Being too insular. Most organizations do not seek outside help with change
initiatives, but businesses may need objective external input or assistance to
accomplish major changes.
Successful change management must be well-planned, well-timed and well-integrated. Other
critical success factors include a structured, proactive approach that encompasses
 21

communication, a road map for the sponsors of the change, training programs that go along
with the overall project and a plan for dealing with resistance. Change leaders need to be
active and visible in sponsoring the change, not only at the beginning but also throughout the
process. Turning their attention to something else can send employees the wrong message—
that leaders are no longer interested.
Managing Varied Types of Major Organizational Change
Organizational change comes in many forms. It may focus on creating new systems and
procedures; introducing new technologies; or adding, eliminating or rebranding products and
services. Other transformations stem from the appointment of a new leader or major staffing
changes. Still other changes, such as downsizing or layoffs, bankruptcy, mergers and
acquisitions, or closing a business operation, affect business units or the entire organization.
Some changes are internal to the HR function [9].
In addition to the general framework for managing change, change leaders and HR
professionals should also be aware of considerations relating to the particular type of change
being made. The subsections below highlight some of the special issues and HR challenges.

Advantages / Disadvantages
Advantages of Organizational Change
Change can assist a business to keep up with industry trends, making it more appealing to
promising consumers as well as maintaining present consumers. For instance, one way to
make sure that a business does not fall behind when an opponent established and markets a
successful new product is by establishing and advertising a related product of its own.
In the process of organization change, employees will be able to acquire new skills, seek new
opportunities and exercise their creativity in ways that eventually favors the organization
through extra ideas and increased commitment. Knowledge transfer takes place during the
process when people have idiosyncratic information that is valuable to other people, and thus
learning takes place during the change.
In addition, the capability to clasp change can assist employees in a business by developing
new opportunities. For instance, a worker who actively applies himself/ herself to learning
the new office technology can also train others who are more uncertain. This leadership role
has caused the employee to position himself/ herself as a person who has the ability to guide
others and is capable of assuming extra responsibilities, making her a credible candidate for
approaching promotion.
 22

Furthermore, businesses that are capable at handling or even embracing change can promote
an environment that stimulates innovation. Employees will be more willing to think in a more
creative manner if their ideas are acknowledge by a manager or the business owner. By
stimulating employees to think in a more creative manner will enable a business grow in long
run. Either a good product or a marketing idea will enables a small business to achieve it
success.
Finally, an erudite or personnel change in an organization can result in employee attitudes
and morale being positive. When there is a change in human resources philosophy, it enables
a much relaxed work ambiance, for instance, dress down day on Friday; this kind of idea will
definitely make the employees overjoyed. When an inflexible manager is substitute with one
who always listens to employees’ ideas and feedback’s, employees will feel that their efforts
are acknowledged and that they will give in their best regarding their job functions.
Disadvantages of Organizational Change
When major change takes place, the impact of transformation of an organisation can be
effective and may frequently create complicated challenges. Change can present a risk and
certain level of danger. The end results can be very costly and sometimes beyond recovery in
terms of time, money, human resources, or equipment’s. It is known that human nature
oppose change, especially if it is perceived to influence one’s lives adversely.
When an organization is undergoing organisational change, such as: re-structuring, or
merging, it will result in employees going through the feelings of tension, stress, and
uncertainty, which results in the impact on employees’ productivity output, achievement, and
engagements toward the organisation. In other words, the aftermath can be out of discipline.
The norm prefers foreseeable future but change disrupts it, which cause confusion and
potentially an erosion of assurance. An employee lose confident and their ideas are not
supported and acknowledge by the higher management may increase the stress of the
employees and this might lead to staff not performing well in their daily work routine.
Secondly, during organisational change, staff members might experience loss of attachment.
Most of the time, change requires working with new members, such as a new leader, or a new
team. Gradually, employees will feel attached and develop a sense of faithfulness to their
colleagues. Having to break up this faithfulness, can often be pressurised and make people
anxious. Employees feel that the environment is doubtful, low tolerance of ambiguity, less
freedom and ideal time for work, thus they will are unwilling to take risk, and therefore
becoming less motivated and committed to making contributions.
 23

Thirdly, organisational changes might lead to staffs having low morale. When the staffs
opposed a change that is taking place in the workplace, they become less confident and felt
hopeless about their professional future with the organisation. This is specifically so when
there is a deficiency of communication within the organisation regarding the change.
Lowered morale can disperse throughout the whole company, which will result in issues with
both recruiting and retention of the workers.
Lastly, organisation change may result in less efficiency in employees. This is due to the
employees spending much time focusing on withstanding the changes taking place in the
organisation, which will results them becoming less attentive in their daily work routine
which is affiliate with their jobs. Being less attentive in their work will reduce the level of
adeptness and achievement among staff; this can influence the organisation’s fundamental. In
reality, a decreased level of adeptness is the main reason why there is an organisation change,
as changes are frequently build to reform a more cogent and productive company.

Conclusion & Recommendations

For instance, even though the project charter may be provided based on its relationship to a
program, it is still necessary to further formulate the change, and so the planning to
accommodate the inherent change in the project is further elaborated beginning with the
change formulation and carrying through all five sections of the change life cycle framework.
To ensure the adoption, integration, and use that lead to benefits realization, the project plan
contains those activities that initiate the ability of the organization to sustain the change.
Successful projects are not built and tossed over the wall with hopes that the output is used.
Rather the successful project includes considerations throughout the project that move
towards benefits realization and the value intended.
The starting point is the defined business objectives of the organization. Executive
management and/or the board of directors as part of their ongoing strategic planning set these
objectives. Major steps in the movement from the current state to the future state include:
 Formulate Change: Translates the organization's strategic plan into tangible objectives
that are aligned with stakeholders’ needs and expectations.
 Plan Change: Planning for change includes both the “what” and “how” of change so that
people, process, technology, structure, and cultural issues are all integrated into the
overall program or project plan.
 Implement Change: Planning, implementation, and transition processes are overlapping,
as shown, which reinforces the concept that change implementation is an iterative
 24

process. Implementation focuses on the process of developing the programs and projects
in alignment with the strategic intent and with a view to the intended outcomes.
 Manage Transition: The transition process links the change initiative with the
operations side of the business and business-as-usual. It incorporates the measures to
enable the organization to sustain long-term changes. It is concerned with successfully
delivering project outputs to the business rather than just throwing them over the fence. It
also incorporates the measures to enable the organization to sustain long-term changes.
 Sustain Change: The success of any change initiative lies in the benefit value for the
organization and its stakeholders; therefore, it is important to sustain the change through
a number of ongoing activities that exceed the traditional scope of projects and programs.
 Identify/clarify need for change: Establish the need for change and the contribution
needed for continued growth and sustainable competitive advantage.
 Assess readiness for change: Assess the change readiness of organizational systems,
structures, culture, and people that are impacted by or needed for the change.
 Delineate scope of change: Clarify expected outcomes of the change and define the
extent and activities necessary for successful change.
During the plan change cycle:
 Define the change approach. Align the change approach with the culture of the
organization. Many models exist (i.e., Bridges, Lewin, Kotter, etc.) and the approach may
follow one particular model or, more commonly, a blend of models. The point is there is
not a single one-size-fits-all model that works for every change.
 Plan stakeholder engagement. Identify and engage all stakeholders, internal and
external, affected by or interested in the outcomes and plan for their ongoing
involvement. Prepare stakeholders to work with them and not against them. One of the
biggest points of pain and potential failure is trying to force change from the top
downward. It can work and sometimes is the appropriate approach for the change. But
more often, involving stakeholders early in the change process increases buy-in to the
change and produces a better change. Resistance to change is a natural human response,
but it is not always negative.
 Plan transition and integration. Design a plan that includes all of the activities
necessary to achieve objectives and integrate with business operations. The output is not
just a product or service. That on its own does not add value to the business. Only when
the output is adopted and used does the organization begin to realize value from the
change.
 25

Implementation of the project or program output may be all at once or may be delivered in
segments. Regardless of which one is utilized, there are three important functions that must
be included in the plan.
 Prepare organization for change. Identify areas where specific support is required and
implement support activities.
 Mobilize stakeholders. Inform stakeholders of the ultimate objectives for the change and
enable them to actively participate in decisions impacting the change.
 Deliver project outputs. Products, services, and results are considered to be outputs
from the change initiative.
Manage transition is where the project or program timeline may be extended. The planning
for the change resulting from the delivery of outputs occurred in the earlier phase. Here the
focus is on achieving the planned results and ensuring that those results are successfully
transitioned into ongoing business operations.
 Transition outputs into business. During the change process, as results are being
delivered, continue the ongoing transition process by integrating the new capabilities into
business as usual. Make sure the outputs are transitioned into the business.
 Measure adoption rate and outcomes/benefits. Measure results at the business level,
not just in terms of product results, but in terms of performance results. It is not that the
change was launched. It is about whether or not there is a change in the way business is
done. The goal of the project was a business benefit, not the output itself. You can only
determine success if you have a way to measure and verify the realization of intended
results.
 Adjust plan to address discrepancies. All change initiatives have a degree of
uncertainty and ambiguity; therefore, the team needs to adjust the plan on a regular basis
to account for changing or evolving circumstances.
The project or program plan should include measures for ensuring that the outcomes are
sustainable for the organization. It is all too easy for the organization to slip back into old
habits or ways of doing things so the sustain change step is conducted to minimize the risk
and to maximize the realization of benefits from the project or program. This means that three
areas need to be planned and executed during this step, but note that this activity begins to
ramp up prior to project completion.
 Ongoing communication, consultation, and representation of stakeholders. Success
of the change is reinforced by two-way communication and consultation with
 26

stakeholders. From the beginning you communicate, you consult and you ask your
stakeholders to participate.
 Conduct sensemaking activities. Ongoing conversation and social practices enable
people to make sense of what is happening during the change. You also conduct
sensemaking activities. Sensemaking activities include helping people:
- understand what is happening,
- make sense of the change,
- realize the impact of the change,
- know what it is going to do for them,
- understand where you want them to go,
- see the vision, and
- understand what the ultimate purpose of the change is and how it is going to affect
them.
 Measure benefits realization. Measure success of the change through its impact on the
organization.
Notice that the five steps in the framework are not discrete in that the movement to the next
step does not wait until the completion of the earlier step. As noted earlier, the framework is
not intended to be a recipe where you combine each of the ingredients in sequence and out
comes success. This is most noticeable in this step where the process begins as early as the
Formulate Change step and continues on the end. But there is even more than the just the
overlap between steps. Change is cyclic and adaptation to results on the ground must be made
as the plan moves forward. The difficult part of change is the adaptive element represented by
the arrows at the top three stages. You take two steps forward and one step back because an
action often does not fully produce the intended outcome for that stage. For instance, the
technology being leveraged did not work as planned or a portion of the staff did not
understand the deliverable. Cyclical movement to adapt to observed results needs time, that
may require a move back to earlier stages to adjust before moving forward again.
When trying new things, the outcomes do not always work as planned and so require
adjustments to the plan. However, you must remain focused on the end goal or overall
strategy otherwise you will become distracted by these temporary results. But you also cannot
overlook the interim results as you advance the plan forward. The reason any project or
program is undertaken is to drive business value. This value may be in the form of reduced
costs, improved efficiency, or additional products or services just to name a few. Simply
delivering a project output is not enough. The output must be implemented and utilized as
 27

discussed earlier. The final step in the change life cycle framework is measuring the actual
benefit realized and comparing that realized benefit to the original intent.
Metrics for gauging the benefit would have been determined earlier in the process; and here
the benefits are compared to the original intent to show to what extent the business has indeed
realized the full intended value.
Organizations today must become more innovative and agile to succeed. By its very nature,
innovation and agility result in constant, ongoing organizational change and managing that
change well is part and parcel of realizing business results. Managing Change in
Organizations: A Practice Guide provides guidance that further informs the standard practice
of portfolio, program and project management. PMI has collected and continues to develop
resources to assist organizations and practitioners to execute change well.

References
 Bridges, W. (1991). Managing Transitions: Making the most of Change. Reading,
MA:Addison-Wesley.
 Economist Intelligence Unit. (2013). Why good strategies fail: Lessons for the C-
suite. Retrieved
from http://www.pmi.org/~/media/PDF/Publications/WhyGoodStrategiesFail_Report
_EIU_PMI.ashx
 Franklin Covey/Pricewaterhousecoopers. (2008). Execution-focused leadership:
Balancing short-term survival with long-term sustainability. Retrieved
from http://www.pwc.com/en_us/us/people-management/assets/execution-focused-
leadership.pdf
 IBM. (2010). IBM Global CEO Study
 Kotter, J. (1996). Leading Change. Boston, MA:Harvard Business School Press.
 Kübler-Ross, E. (1969). On Death and Dying. New York: Macmillan.
 Lewin, Kurt. (1947). Frontiers in Group Dynamics: Concept, Method and Reality in
Social Science; Social Equilibria and Social Change. Retrieved
from http://hum.sagepub.com/content/1/1/5
 Project Management Institute. (2012). Pulse of the Profession™ In-Depth Report:
Organizational Agility. Retrieved
from http://www.pmi.org/~/media/PDF/Research/Organizational-Agility-In-Depth-
Report.ashx
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 Project Management Institute. (2013). Managing Change in Organizations: A Practice

Guide. Newtown Square, PA: PMI.