UNIT 2

ORGANISATIONAL CHANGE

MEANING 1 :

Organisational change refers to the actions in which a company or business alters a major
components of its organisation such as its culture, the underlying technologies, or infrastructure it uses to
operate .

 Eg: Reshaping your roles/duties inside the organistion

 Coronavirus casues lockdowns and companies Had to change to a mobile and remote workforce

MEANING 2 :

Organisational change refers to any alteration or modification or transformation of the

organisation’s structure, processes or goods.

 Definition1 -organisational change : Prosci’s definition: “The process, tools, and techniques to
manage the people side of change to achieve a required business outcome.”

 Definition2 -organisational change ; According to ACMP, the Association of Change Management

Professionals, defines it this way: “The practice of applying a structured approach to transition an
organization from a current state to a future state to achieve expected benefits.

Importance /needs/ benefits of organisational change :

 Organisation change is necessary for companies to succeed and grow

 It is important for organisation to increase morale among workers
 Its drives positive teamwork and job enrichment
 It improved employee efficiency
 It is important for better management styles
 For employees, it creates new opportunities for new roles and promotions
 Increased opportunity for employee input and participation
 It is Important for technological growth
 Global market connection
 Highly dynamic and more complex operating environment
CAUSES /REASON FOR ORGANISATIONAL CHANGE :

 New technology
 Conditions on markets
 Growth
 The global economy
 Political
 Social changes
 Adoption of new business
models

NATURE OF ORGANISATIONAL CHANGE :

 Change disturbs old equilibrium

 Change affects whole organisations
 Change is a continuous process
 Change is perceptual & behavioural
 Change is inevitable
 Change affects individuals in multiple roles.

FORCES /FACTORS INFLUENCING - ORGANISATIONAL CHANGE: (2 FACTORS )

FACTORS/ FORCES –
ORGANISATIONAL CHANGE

Internal factors : External factors:

 CHANGE IN MANAGERIAL  Technology

PERSONNAL  Marketing conditions
 NATURE OF WORKFORCE  Social changes
 DEFICIENCIES IN EXISTING  Political changes
ORGANISATION  Globalisation
 OTHER FACTORS  economic conditions

1) Internal factors:

Change in managerial personnal:

Changes in workforce at different levels leads to different types of changes in the organisation.if
a manger changes automatically our working style will also changed why because no two
mangers/ executives have the same leadership style/philosophy.(new executive will follow his
own style and will likely to put into practice his own ideas for implementation).
Deficiencies in the existing organisation:

Sometimes changes are necessary because of some deficiencies(kuraigal ) in the existing

organisational structure.these deficiencies may be larger number of managerial levels, lack of co-
ordination among various departments, lack of uniformity in policy decisions, lack of
cooperation between line and staff.

Nature of work force:

The nature of workforce has changed over a passage of time.different work values have been
expressed by different generations.

Eg: Workers  age group of 50 plus value loyalty to their employers

Workers  mid30’s and mid40’s  loyal to themselves only
Young generation  loyal to their careers.
Rapid increase in women employees .

Other factors : demand a change in the organisation, employee’s desire to share in decision
making and higher wage rate.

2)EXTERNAL FACTORS:

 TECHNOLOGY: It is the major force that cause for change.Computer technology &
automotive have made a remarkable impact on functioning of organisation
effectively in recent times.Many jobs will be reshaped due to technology change.

 MARKETING CONDITIONS: Marketing conditions are not static in nature.According

to the customers needs, expectations,desires. There should be a rapid change
frequently in the organisation. New methods of advertising are used to influence
the customers.Eg. Tough competition between manufacturer & supplier in the
market.

 SOCIAL CHANGES :it includes our surroundings or society .spread of education,

knowledge and a lot of government efforts, equal pay for equal work,social
equality. The management has to follow certain social norms in shaping its
marketing , employement & other policies.

 POLITICAL CHANGES: Political forces within and outside the country have an
important influence on large business houses. Its related taxation, corporate
governance , new laws , court decisions

 GLOBAL FACTORS: to survive , the organisation will have to compete not only with
its parental country but also with multinational corporations.
  ECONOMIC FACTORS: these include changes in economic conditions , exchange
rates, interest rates, fiscal and monetary policies and rate of inflation.

CHANGE AGENT :

Meaning 1 : Change agent is a person who brings change or introduces change in the
organisation.he is the one who works for the accomplishment of the goals or objectives
of the organisation.

Meaning 2: A person who act as a catalysts and assume the responsibility for managing
change activities.

Competencies of change agent :

 Intrapersonal skills : self awareness

 Interpersonal skills : ability to work with others and groups
 General consultation skills: ability to get skills and knowledge used
 Organisation development theory : knowledge of change processes
 Position : internal vs external
 Marginality : ability to straddle boundaries
 Emotional demands : emotional intelligence
 Use of knowledge and experience.

CHANGE PROCESS: Change process which means  how a change can be occurred in an
organisation

Meaning : management of organisational change is a complex process.organisational change

does not occur instantaneously. a major organisational change requires considerable planning.

Above points Explaination in detail below :

 Management of organization change is a complex process

1st point explaination [ When we bring a change into the organization it is not an easy one
.it has some complex process in implementing the change effectively in the organization.

 Organizational change does not occur instantaneously

2nd point explaination [ here we have to bring the change according to the situation in the
organization and according to the technology since change does not occur rapidly] –example “if
there is an new technology in the market , we have to adopt that technology to our
organization in order to meet the competition “

 A major organizational change requires considerable planning

 3rd point explaination: [ if you want you bringa change into the organization ,there must be an
effective planning
ning .without planning we can’t able to bring an change into the organization ]
i.e(what
what do change ,whether change is necessary ,how to implement that change ).

Process of change

1) IDENTIFY NEEDS FOR CHANGE :

 The first step in change process is to identify / analysis whether the needs for the change
in the organisation is necessary or not .
 It should satisfies the below questions
 When change is required?
 What needs to be changed?
 Why we have to bring a change in the organisation?
 Identification of needs for the change depends upon the gap analysis
analysis: gap between
desired state of affairs(what it should achieve) & actual state(what the organisation is
achieving).

Eg: previous days accounting were done in books while system has started for the first time
ti
,the organisation started to replace books with systems . so here the need is replacement of
books with systems
2) ELEMENTS TO BE CHANGED :

 What elements of the organisation should be changed will largely be decided by needs &
objectives of change.
 Change is requires in 3 elements :-- organizational structure, technology & people.

Eg: To replace a books with systems we need 1st ,the spacious room to fit that systems.if we
decide to place more systems in one rooms means we need AC to control heat.here
structural and technological change is implemented.

3)PLANNING FOR CHANGE :

It includes who will bring change? , when to bring change ? , how to implement change ? .

If we bringing some change into the organisation means there must be some effective planning
well in advance.

4) ASSESSING CHANGE FORCES:

 There are many forces in individuals, groups and even in the organisation which resist
such change.
 Driving forces- initiate a change & keep it going
 Restraining forces- act to restrain change or decrease driving forces.
 Management has to create an environment / take necessary actions in which change will
be accepted by all people in the organisation.

5) ACTION FOR CHANGE : ( 3 STAGES)

I. UNFREEZING (ensures that employees are ready for change)

II. CHANGING ( execute the intended change)
III. REFREEZING( ensures that the change becomes permanent)

I) UNFREEZING : unfreezing means  old behaviour to learn a new one. OR

 Employees are require to forget old skills, patterns and tools to learn new one.

ii) CHANGING : This step is preparing people for implementation of change, here change agent
( internal / external ) plays an important role.

Iii) REFREEZING : It implies monitoring the change so implemented .it is concerned with post
change actions. This is the stage of actual work practice of change which we implemented so
far.
6) FEEDBACK : management of change requires feedback and follow-up actions to ensure that
change programme is going in right direction without any dysfunctional effect.

TYPES AND FORMS OF CHANGE:

Types of changes: 4 types

 Strategic transformational change

 Structural change
 Remedial change
 People centric organisational change

Strategic transformational change : (changing the overall direction of the organisation)

Strategic transformation change management is a process of changing the overall direction of

an organisation or a group within an organisation.this change is often intiated by a senior
executive of the organisation . it is a lengthy process – requires depth planning and
preparation.it requires lot of resources & leadership .it is outcome oriented

Structural change : (complete transformation ).

It involves complete transformation of the way something works. For example : if a company
was in lot of debt , it mightr reorganize to cut expenses improve efficiency, and make it easier
to pay off the debt this type of change is often difficult to implement and rarely successful.

Remedial change: (repairing some work which goes wrong)

Remedial change is the process of repairing something that has already gone wrong. Why waiting
for the mistake to happen and then repairing /fixing it ? if it’s not broken don’t try to fix it. Allow
the organisation to work perfectly with the existing process, procedure,
& systems.the best way to avoid mistakes is by maintaing a well organised environment.

People centric organizational change : (it focuses on employees, customers, stakeholders –

mindset and behaviour.)

The most successful organizational changes are the ones that are implemented in a people –
centric manner.The orgnaisation focuses on the emotions & intrinsic motivation of these
stakeholders. It mainly focuses on employees, customers and stakeholders mindset & behaviour .

Eg: if employees and customers are happy then they will buy your company’s products or
service
Other two types :

 Planned changes
 Unplanned changes

PLANNED CHANGES : Planned change is a change that occurs when managers or employees
make a conscious effort to change in response to a specific problem.

Obviously, when change is planned, like a new information management system or a different
accounts payable procedure, change management can also be planned to minimize employee
resistance

UNPLANNED CHANGES : An unplanned change occurs randomly and spontaneously without any
specific intention on the part of managers or employees of addressing a problem.

When an unplanned change occurs, like a sudden economic downturn or a shortage of resources,
managers are taken by surprise and adaptation may not be as organized.

EVOLUTIONARY CHANGES & REVOLUTIONARY CHANGES :

EEE EVOLUTIONARY CHANGES REVOLUTIONARY CHANGES

Change is gradual, incremental Change that is sudden , drastic and

and specifically focused organisational wide
Not a sudden altering of the Quick discovery of new ways to be effective
basic nature
Constant attempt to improve Likely to result in a radical shift in ways of
stratergy to accommodate to doing things
changes in the environment
People bring only small changes Changes are made only when it is
to the consistent unavoidable
Cost efficiency and improving An increase in the company’s economic
humanity (social efficiency) efficiency
Refer to the change in the Refer to the forcible overthrow of a
heritable characteristics of government or social order in favour of a
biological populations over new one
successive generations
Instruments : Instruments :
Sociotechnical systems theory Reengineering
Total quality management e-engineering
Flexible work groups restructuring
innovation
MODELS OF CHANGE :
1..Kurt Lewin,model or 3stage model

Kurt lewin a researcher and psychologist explained organizational change using the analogy of changing the
shape of a block of ice.his model is known as unfreeze- change- refreeze refers to the three-stage
three process
of change the describes.

 Unfreezing: “ready to change”

 Change/movement: “implementation:
 Unfreeze/refreeze: “making it stick “

I) UNFREEZING: Unfreezing is the process which involves finding a method of making it possi
possible
for people to let go of an old pattern that was counterproductive in someway

Unfreezing can be achieved by the use of these 3 methods

 Increasing the driving forces that direct behaviour away from the existing situation or
state quo.
 Decrease the restraining forces that negatively affect the movement from the existing
equilibrium
 managers can put a combination of the two to use.

2) MOVEMENT /CHANGE :The second part of the process, “movement,” is the actual
implementation of change. New practices and policies are implemented.
3) REFREEZING :InIn the third step, “refreezing,” the newly adopted behaviors and processes are
encouraged and supported to become a part of the employees’ routine activities.
activities Coaching,
training and an appropriate awards
awa system help to reinforce.

Lewin’s model of change has four characteristics:

 It emphasizes the importance of recognizing the need for change and being motivated to
implement it.
 It acknowledges that resistance to change is inevitable.
 It focuses on people as the source of change and learning.
 It highlights the need to support new behaviors.

Kotter’s Eight Step Plan for Implementing Change

Kotter studied all of the places where failures could occur in Lewin’s model. Kotter recognized
that several things needed to be added in:

 a sense of urgency around change

 a coalition for managing the change
 a communicated vision for the change
 the removal of obstacles to accomplishing change
 the continued pursuit of change in spite of apparent victory
 an anchoring
ng of the changes into the organization’s culture

His revised eight steps of change are as follows:

Kotter expanded Lewin’s “unfreezing” step with his first four recommendations. His steps five,
six, and seven correspond with Lewin’s “movement” stage and step eight is parallel with the
“refreezing” process.

Nadler’s System Model

Nadler’s suggests that any change within an organization has a ripple effect on all the other areas
of the organization. He suggests that, to implement change successfully, a man
manager must
consider four elements:

 Informal organizational elements: communication patterns, leadership, power

 Formal organizational elements: formal organizational structures and work processes
 Individuals: employees and managers, and their abilities, weaknesses,
weaknesses, characteristics, etc.
 Tasks: assignments given to employees and managers

Action Research
Action research is a change process based on systematic collection of data and then selection of a
change action based on what the analyzed data indicate. The process of action research consists of five
steps, very similar to the scientific method:

 In the diagnosis stage, information is gathered about the problem

 .Analysis, the change agent identifies what information is of primary important &
develops a plan of action.
 Feedback  sharing with employees what has been discovered during diagnosis and
analysis, inorder to getting their thoughts and developing action plans.
 Finally action.--> Employees and the change agent carry out the actions required to
solve the problem.
 evaluation,  action plan’s effectiveness is reviewed

Organizational Development
Organizational development is a ccollection of planned-change
change interventions, built on
humanistic-democratic values,, that seeks to improve organizational effectiveness and
employee well-being.

Organizational development requires the organization to invest a good deal of time and research
Some of the techniques and interventions:

 Sensitivity training. This is training that seeks to change behavior through unstructured
group interaction. The objective is to provide subjects with increased awareness of their
own behavior and how others perceive them, to facilitate better integration between
individuals and organization.

 Survey feedback. The use of questionnaires to identify discrepancies among member

perceptions,
 Team building. High interaction among team members to increase trust and openness.
 Intergroup development. These are efforts to change the attitudes, stereotypes and
perceptions that groups have of each other.
 Appreciative inquiry. It identify the qualities and strengths of an organization, on which
performance improvement can be built.

RESISTANCE TO CHANGE :

Meaning:

It is the act of opposing change / struggling with change or transformations that alter the
existing state of affairs.

People will resist(i.e stop) change in the organisation , when they think or assumes it as a
threat .

They may resign, they amy show tardliness, loss of motivation to work, increases
absenteeism,request for transfer, reduction in productivity etc...

EXAMPLE: Bank employees protest against decision of merger – public sector banks merge to
privatization.the protest because due to fear of loosing jobs they resist this change.

CLASSIFICATION/TYPES OF RESISTANCE AND CAUSES OF RESISTANCE TO CHANGE

2 TYPES :

 INDIVIDUAL RESISTANCE
 ORGANISATIONAL RESISTANCE

1. INDIVIDUAL RESISTANCE TO CHANGE: Individual resistance to change reside in basic human

characteristics such as perceptions, personalities & needs
REASON FOR INDIVIDUAL RESISTANCE TO CHANGE:
i.Fear of losing their jobs
ii. Security-because it threatens their feeling of safety
iii. Status quo- it may pose disturbance to the existing comforts
iv. Peer Pressure- individual employees may be prepared to accept change but refuse to accept
it for the sake of the group
v.Disruption of Interpersonal Relation
vi. Social Displacement- Change may also result in breaking up of work groups
vii.economic factors: change may threaten employees pay checks
viii. social factors: people may resist change fro fear of what others will think

ORGANISATIONAL RESISTANCE TO CHANGE :

Organizational resistance means the change is resisted at the level of the organization itself
. Some organization are so designed that they resist new ideas, this is specifically true in case of
organization which are conservative in nature.

REASON FOR ORGANISATION RESISTANCE TO CHANGE :

Majority of the business firm are also resistance to changes. The major reason for
organizational resistance are:-
• Threat to power and influence
• Group inertia

.Organizational structure
.Structural inertia
• Resource constants

. Sunk cost
TECHNIQUES TO OVERCOME CHANGE :

EDUCATION & COMMUNICATION:

The starting point for successful change is to communicate effectively the reasons why change
is needed!. Effective education helps address misconceptions about the change, including
misinformation or inaccuracies.

PARTICIPATION & INVOLVEMENT:

Involvement in a change programme can be an effective way of bringing "on-board" people

who would otherwise resist.Participation often leads to commitment, not just compliance.
Delays and obstacles need to be avoided

FACILITATION & SUPPORT:

facilitation and support might include additional training, counselling and mentoring as well as
simply listening to the concerns of people affected .

CO-OPTION & MANIPULATION:

 Co-option involves bringing specific individuals into roles that are part of change
management.Manipulation involves the selective use of information to encourage people to
behave in a particular way .

NEGOTIATION & BARGAINING

• The idea here is to give people who resist an incentive to change or leave .The negotiation
and bargaining might involve offering better financial rewards for those who accept the
requirements of the change programme .Alternatively, enhanced rewards for leaving might
also be offered

• This approach is commonly used when a business needsto restructure the organisation(e.g.
by delayering)

EXPLICIT & IMPLICIT COERCION:

• Explicit coercion involves people been told exactly what the implications of resisting change
will be

• Implicit coercion involves suggesting the likely negative consequences for the business of
failing to change,without making explicit threats.The big issue with using coercion is that it
almost inevitably damages trust between people in a business and can lead to damaged
morale (in the short-term)

CHANGE PROGRAM :

Change Management Programs enable companies to control the installation of new

processes to improve the realization of business benefits. These programs involve
devising change initiatives, generating organizational buy-in, implementing the initiatives
as seamlessly as possible and generating a repeatable model for ensuring continued
success in future change efforts. A Change Management Program allows leaders
to help people succeed, showing where and when trouble is likely to occur,
and laying out a strategy for mitigating risks and monitoring progress.

Companies use Change Management Programs to:

 Implement major strategic initiatives to adapt to changes in markets, customer preferences,

technologies or the competition’s strategic plans
 Align and focus an organization when going through a major turnaround
 Implement new process initiatives

LEVELS OF ORGANISATIONAL CHANGE PROGRAM:

The various levels of organizational change programs may be classified into individual level
changes, group level changes and organisational level changes.
Individual Level Change Programs

Individual level changes may take place due to changes in job assignment, transfer of an
employee to a different location or the changes in the maturity level of a person which occurs
over a passage of time. individual level changes will have impact on the group which in turn will
influence the whole organisation. Therefore, a manager should never treat the employees in
isolation.

Group Level Change Programs

The groups in the organisation can be formal groups or informal groups. Formal groups can
always resist change for example, the trade unions can very strongly resist the changes proposed
by the management. Informal groups can pose a major barrier to change because of the
inherent strength they contain. Changes at the group level can affect the work flows, job
design, social organisation, influence and status systems and communication patterns.

Organization Level Change Programs

The organisational level change involves major programs which affect both the individuals and
the groups. Decisions regarding such changes are made by the senior management. These
changes occur over long periods of time and require considerable planning for implementation.
A few different types of organisation level changes are:

Strategic Change: Strategic change is the change in the very basic objectives or missions of the
organization

structural Change: Structural change involves changing the internal structure of the
organisation.

Process Oriented Change: These changes relate to the recent technological developments,
information processing and automation. This will involve replacing personnel, heavy capital
equipment investment and operational changes.

people Oriented Change: People oriented changes are directed towards performance
improvement, group cohesion, dedication and loyalty to the organisation as well as developing
a sense of self actualization among members.

JOB REDESIGN :

Job redesign is the process to review & recreate an existing job role and its related activities &
responsibilities to make it more attractive and skillful fro employees.
Job redesign is done to make the job role more exciting , encouraging for employees and keep
them motivated to perform the role effectively.

JOB REDESIGNIG PROCESS:

Some of the key steps in job redesign are:

1. Job Elements Review & Analysis

A manager has to review the current job elements and what is it that is motivating or
demotivating an employee.
2. Redesigning Job Elements
Once these factors are identified, tasks and duties are either removed or added to ensure that
the employee will be motivated to perform these. Some duties might also require an employee
to upskill, which will keep the employee motivated and satisfied as well.
3. Job Description Update
Once the enhanced elements are finalized, the exact roles, responsibilities, duties and tasks are
explained to the employee as a part of job redesign process.
4. Job Allocation
Once the final role is redesigned, the job role can either be given to the same employee or can be
rotated amongst other employees to keep everyone engaged and motivated.

ADVANTAGES OF JOB REDESIGN

Job Redesigning is usually done keeping in mind some/all of these advantages:
1. Improving employee satisfaction:
The biggest factor why companies do a job redesign is to keep an employee satisfied and
motivated with better roles and tasks to perform.
2. Making the job contemporary:
Job redesign ensures that some redundant activities are removed and some critical tasks as
added to the job role keeping in mind the industry requirements.
3. Increasing Company Output
Improvement in job roles which lead to employee motivation will indirectly lead to a higher
productivity from employees
4. Increasing employee accountability
Since job redesign involves improving a current job role which keeps an employee satisfied, it
required higher responsibility and accountability from the employee.