Management of Change

Mod 2.7
 Syllabus
(a) Nature of change: technical, (c) The importance of coping
economic, demographic, social with and managing change is
and legal. missing.
(b) Reasons for resistance to
change: fear of the unknown, (d) Strategies to manage
climate of mistrust, disrupted change: Lewin’s Model – Force
habits, loss of control and Field Analysis.
confidence, inadequate
training, redistribution of
workload and lack of clarity of
purpose, loss of power,
ineffective communication,
inadequate leadership support.
 DO you have True Grit?
• For items 1–4, give yourself 1 point for each False and 0
points for each True. Reverse this for items 5–8, with 1 point
for each True and 0 points for each False
• Scoring and Interpretation: The score on these questions
measures your grit, which is defined as your perseverance
and passion for long-term goals.
• Grit is a key trait for change agents who must persevere
through resistance and setbacks to succeed with
implementation of a significant innovation.
• The grit scale is composed of two parts. Questions 1–4
measure “consistency of interest” and Questions 5–8
measure “perseverance of effort,” so you can compare your
scores on those two subscales.
 Nature of Change
• Change management is
a systematic approach
to dealing with the
transition or
transformation of an
organization's goals,
processes or
technologies.
 Nature of Change
• Every organization needs to • Every organization
change from time to time. If sometimes faces the need
organizations don’t change to change swiftly and
and innovate successfully, dramatically to cope with a
they die! changing environment.
• Consider that only a small
number of large companies
reach the age of 40,
according to a recent study
of more than 6 million firms.
The ones that survive are
ruthless about innovation
and change.
 Nature of Change
• Innovation can be described as a • https://youtu.be/
new or unorthodox way of lRcJt91d1Ss
performing a task that brings
about economic value to the
process or product.
• Disruptive innovation refers to
innovations in products or
services that typically start small
and end up completely replacing
an existing product or service
technology for producers and
consumers.
 Nature of Change
• Industry leaders • A ‘change agent’ is an
‘game-changers’ are individual or group that
pioneers of change and is responsible for
take the lead in managing change from
creativity and inception to
innovation which gives implementation.
them a competitive
edge over rivals,
especially in the
technology industry.
For example APPLE.
 Internal Factors of Change
1. The development of a 2. Customer service – this
new product – this may is an area in which
require change in staff business seek to set itself
composition or general apart from its competitors
processes that are and thus place greater
necessary to introduce the focus on it.
product to the market.
 Internal Factors of Change
3. Mergers and takeovers 4. Control systems – as
– business use this option firms seek to improve the
in order to adapt to the quality of their product
competitive nature of the and service being offered
industry and this would they may change the
require major changes in systems used to do so.
culture, organisation
structure and policy.
 External Factors of Change
• External factors that
cause change in an
organisation include
– Technology
– Legal
– Demographic
– Economic
– Social
(NB covered in other
areas)
 Technology
• A technology change is • Business must adapt
a change in the and make changes to
organization’s keep up with the latest
production process technology to remain
• Technology changes are efficient by:
designed to make the – reduction in costs and
production of a product wastage.
or service more – increase sales revenue or
reduce threat of loss
efficient.
sales revenue
 Technology Example
• Hammond’s Candies saves • The introduction of
hundreds of thousands of efficiency-boosting winglets
dollars a year by on aircraft at Southwest
implementing technology Airlines,
changes suggested by • the adoption of automatic
employees. mail-sorting machines by
• One example was tweaking the U.S. Postal Service,
a machine gear that reduced • the use of biosimulation
the number of employees software to run virtual tests
needed on an assembly line on new drugs at Johnson &
from five to four. Johnson’s pharmaceutical
research and development
department.
 Technology
Adapting to change:
• Updating technology - The business will have
to update hardware and software which can
be costly
• Training workers - to operate the new
technology. This will allocate financial and
human resources
 Legal
• Adapting to changes in laws that will affect
business operations
• For example changes in tax laws or other
regulations.
• The business has no choice to adapt to
changes otherwise face fines or penalities.
• Eg Change in minimum wage law 2023
 Demographic
• The demographics are • Changes in
the characteristics and demographics such as
composition of the an aging population,
population in terms of : family structure will
– Age lead to business
– Gender adapting the offering of
– Income bracket their products or
– Religion service to their target
– Household size market.
– Ethnicity/race
 Economic
• Changes in macroeconomic factors such as:
– Inflation
– Unemployment levels
– Changes in fiscal or monetary policies
 Social
• Societal factors look at changes in:
– Morals and values of the population
– Level of crime
– The culture and traditions of the country
• How do societal factors cause changes to the
business operations?
• How have business operations been affected
by rising crime levels in the country?
 Resistance to Change
• Resistance to change • Change management
is unwillingness to adapt to project failures are in 70%
new circumstances or ways accredited to the neglecting
of doing things. of human needs (Born,
• Regardless of the need or 2001).
benefits that change would
bring, it is always met with
some degree of resistance
by the workforce.
• To reduce this from
happening managers must
be aware of the main
reasons why workers may
resist change.
 Resistance to Change
Reasons for resistance to change:
1. fear of the unknown,
2. climate of mistrust,
3. disrupted habits,
4. loss of control and
confidence,
5. inadequate training,
6. redistribution of workload
and lack of clarity of purpose,
7. loss of power,
8. ineffective communication,
9. inadequate leadership
support.
 Uncertainty
• Uncertainty or ‘fear of the
unknown’ is caused by a lack of
information about future events.
• It is especially threatening for
employees who have a low
tolerance for change and fear
anything out of the ordinary.
• They do not know how a change
will affect them and worry about
whether they will be able to meet
the demands of a new procedure
or technology.
 Uncertainty - Example
• Hospitals that have spent • Consider that utility
millions of dollars companies installing
adopting electronic wireless smart meters in
medical records are states from Maine to
having a hard time getting California have faced a
some doctors to use strong backlash from
them. One reason is the customers who say the
uncertainty about how meters invade their
electronic records will privacy, increase costs,
change how doctors go and threaten their health.
about their daily work.1
 Mistrust
• Employees often distrust • People also resist change
the intentions behind a when they do not
change or do not understand its
understand the intended implications and perceive
purpose of a change. that it might cost them
• If previous working much more than they will
relationships with a gain. Such situations often
manager or promoter of occur when trust is
an idea have been lacking between the
negative, resistance may person initiating the
occur. change and the
employees.
(Addison-Wesley, 1970).
 Mistrust
Example:
• When the president of a small midwestern company announced to his
managers that the company would implement a flexible working schedule
for all employees to make working conditions at his company more
attractive, , it never occurred to him that he might run into resistance. He
had been introduced to the concept at a management seminar and
decided to use it particularly to clerical and plant personnel.
• Shortly after the announcement, numerous rumors begin to circulate
among plant employees—none of whom really knew what flexible working
hours meant and many of whom were distrustful of the manufacturing
vice president. One rumor, for instance, suggested that flexible hours
meant that most people would have to work whenever their supervisors
asked them to—including evenings and weekends. The employee
association, a local union, held a quick meeting and then presented the
management with a nonnegotiable demand that the flexible hours
concept be dropped. The president, caught completely by surprise,
complied.
 Disrupted habits
• Humans are naturally
creatures of habit.
• Anything which breaks
the routine or the norm
of what we have grown
accustomed to doing, may
cause insecurity in the
minds of employees.
• Employees may feel they
have to be retrained and
disrupt their current
pattern of life.
 Inadequate training
• Employees lacking the • Some workers may feel
knowledge, skills and they do not have the
ability needed to ‘intelligence’ to learn new
effectively perform their skills especially related to
duties is necessary for technology.
changes will lead to
resistance.
• Feelings of inadequacy
and the possibility of
being replaced by
someone who has the
skills needed may worry
workers.
 Inadequate training
• If management does not provide sufficient
training or if the training is ‘rushed down’ then
employees will not be very supportive of the
change especially with new technology.
 Redistribution of workload
• Changes in the amount of • Excessive workload can lead
work or the roles and to overstretched resources
responsibilities of workers and compromise either the
(as contracted in their job change program or normal
specification) can lead to operations.
resistance. • Employee morale will fall,
• Increase workload can be and conflict may arise
seen as unfair treatment if it between teams and line
is more than others at the staff (HBR 2005)
same position.
• Ideally, no one’s workload
should increase more than
10%. (bcg.com)
 Redistribution of workload
• Decrease workload or a reduction in the roles
and responsibilities of the employee may be
perceived as an indication of the possibility of
redundancy of a job. it may also not be in
alignment with the employees career goals for
advancement.
Loss of power
• Changes in the positions of
authority would reduce the
control and authority that some
persons may have previously held.
Eg demotion.
• For example a merger may cause
duality of positions and lead to
redundancy. Therefore some
positions which have authority
such as middle level managers
may no longer be available for
someone in that position before
and there is a loss of power and
authority by that individual.
 Ineffective communication
• People are unwilling to • Where formal
accept change when communication is
they do not have ineffective employee
sufficient information. rely on the informal
• Ineffective communication which
communication on an may be
upcoming change may counterproductive to
result in serious the implementation of
resistance. change.
 Inadequate leadership support
• If the leadership or top When CareFusion Corporation
management does not show was spun off as a subsidiary of
support for changes at lower Cardinal Health, CEO David L.
levels, the organisation may Schlotterbeck and other top
not fully endorse the changes. executives wanted to implement
new values of collaboration and
teamwork, but lower-level
managers were initially suspicious
of their intentions.
Only when they saw that top
leaders were fully committed to
the values and honored them in
their own behavior did others
begin to support the changes.
 Strategies to Manage Change
1. Top management support
2. Communication and education
3. Coercion
4. Participation
5. Negotiation
6. Force Field Analysis
Strategies to Manage Change
 Communication and Education
• Communication and education are used when
solid information about the change is needed
by users and others who may resist
implementation.
• Education is especially important when the
change involves new technology or users
unfamiliar with the idea.
 Communication and Education
• As part of an effort to make changes in a division’s structure and in
measurement and reward systems, a division manager put
together a one-hour audiovisual presentation that explained the
changes and the reasons for them. Over a four-month period, he
made this presentation no fewer than a dozen times to groups of
20 or 30 corporate and division managers.
• An education and communication program can be ideal when
resistance is based on inadequate or inaccurate information and
analysis, especially if the initiators need the resisters’ help in
implementing the change. But some managers overlook the fact
that a program of this sort requires a good relationship between
initiators and resisters or that the latter may not believe what they
hear. It also requires time and effort, particularly if a lot of people
are involved.
 Communication and Education
• Within organizations, education can be especially
important when the change involves new
technical knowledge or users are unfamiliar with
the idea.
• Managers should appeal to people’s feelings and
emotion.
• People are much more likely to change their
behavior when they both understand the rational
reasons for doing so and see a picture of change
that influences their feelings
 Participation
• Participation is getting
employees involved in the
change process.
• Change management
should target human
needs of organisational
members and include the
employees as much as
possible into the project
happening in the terms of
organisational goals
(Schwarz, 2006)
 Participation
• Participation of employee • When employees take
in change means when part in change
change leaders and management, it means
managers consciously that they’re more than
provide opportunities to just passively accepting of
all of employees to have a the changes happening in
greater voice and their their workplace. Instead,
input in organizational they’re actively involved
change process. in the process, providing
input and feedback at
every stage
 Participation - Benefits
1. Buy-in of change idea 2. Sense of ownership
• Employee participation can help to • Employee participation fosters a
get buy-in of proposed change sense of ownership over the
idea. change process.
• When employees are involved in • When employees feel like they’re
change management, they’re a part of the decision-making
more likely to understand and process, they’re more likely to be
accept the changes. committed to making the changes
• They become more familiar with successful.
new roles and responsibilities. • Ownership of change means being
• They feel like they’ve had a say in proactive towards taking up new
the decisions being made, and roles, responsibilities and
they understand the rationale changing old ways of doing work.
behind the changes.
 Participation
• Eg At Learning Point Associates, which needed
to change dramatically to meet new
challenges, the change team drew up a
comprehensive road map for transformation
but had trouble getting the support of most
managers. The managers argued that they
hadn’t been consulted about the plans and
didn’t feel compelled to participate in
implementing them.
 Negotiation
• Negotiation is a more formal means of
achieving cooperation. It uses formal
bargaining to win acceptance and approval of
a desired change.
• Companies that have strong unions must
formally negotiate change with the unions.
 Coercion
• Coercion means that managers
use formal power to force
employees to change.
• Resisters are told to accept the
change or lose rewards or even
their jobs.
• In most cases, this approach
should not be used because
employees feel like victims, are
angry at change managers, and
may even sabotage changes.
 Coercion
• However, coercion may • For example, a number
be necessary in crisis of top managers at
situation when a rapid Coca-Cola had to be
response is needed. reassigned or let go
• It should be used as a after they refused to go
last resort along with a new CEO’s
changes for revitalizing
the sluggish corporation
 Top Management Support
• The visible support of top
management also helps
overcome resistance to
change.
• Top management support
symbolizes to staff that the
change is important for the
organisation.
• This is also important when
the change involves several
departments to avoid
conflict for resources among
departments.
 Top Management Support
• Without top management • If employees don’t see that
support, changes can get the company’s leadership is
bogged down in squabbling backing a project, they’re
among departments. unlikely to change. No
• One survey found that 80 amount of top-level support
percent of companies that is too much
are successful innovators
have top executives who
frequently reinforce the
importance of innovation
both verbally and
symbolically
 Top Management Support

• In 1999, when we were working with the CEO of a

consumer products company, he told us that he
was doing much more than necessary to display
his support for a nettlesome project. When we
talked to line managers, they said that the CEO
had extended very little backing for the project.
They felt that if he wanted the project to succeed,
he would have to support it more visibly! (Harvard
Business Review 2005)
 Lewin’s Force Field Analysis
Force-field analysis grew from the
work of Kurt Lewin, who identified
two opposing forces in
implementing change:
• Driving forces - can be thought
of as problems or
opportunities that provide
motivation for change within
the organization.
• Restraining forces - are the
various barriers to change,
such as a lack of resources,
resistance from middle
managers, or inadequate
employee skills.
 Force Field Analysis (Lewin)
Lewin’s model has 3 steps:
1. Unfreezing – reducing strength of forces
which maintain current equilibrium
2. Moving – developing new organisational
values, attitudes and behaviours to help move
the organisation on
3. Refreezing – stablilizing after the changes
have been made so that there’s a new
equilibrium.
 Force Field Analysis (Lewin)
• Increasing the driving forces is not enough for
change, as the restraining forces remain in
place, and as long as they remain in place it
becomes harder to use the driving forces.
Force Field Analysis (Lewin)
 Force Field Analysis (Lewin)
Exhit 11.6
• The driving forces were not sufficient to overcome the restraining
forces.
• To shift the behavior to JIT, managers attacked the barriers. An
analysis of the freight system showed that delivery by truck
provided the flexibility and quickness needed to schedule
inventory arrival at a specific time each day.
• The problem with facility layout was met by adding four new
loading docks. Inappropriate worker skills were improved with a
training program to instruct workers in JIT methods and in
assembling products with uninspected parts.
• Union resistance was overcome by agreeing to reassign workers no
longer needed for maintaining inventory to jobs in another plant.
With the restraining forces reduced, the driving forces were
sufficient to allow the JIT system to be implemented.