Introduction to Business Management and Organizational Behaviour Organizational Behaviour - Change

Organizational Behaviour – Change

Introduction
Change affects us all in different ways. The reality today is that managing change and coping
with change is a never-ending process that can be complex and stressful. Constant change is
commonplace in the modern workplace. Specific factors driving change include changes in the
work itself, structural and organizational design alterations, shift to the global economy, and
increased diversity.

There is often resistance to change in organizations. This is usually traced to some combination
of individual, group, or organizational characteristics, including the design structure of the
organization, changing systems and programs, changing organizational policies, and the
organizational culture.

Organizations need to remain compatible with their external environments. However, the
environments in which organizations operate are constantly changing, so they must recognize
the shifts and respond accordingly in order to survive and remain effective.

Successful organizations monitor their environment and take appropriate steps to maintain a
compatibility with the new external conditions. Given the increasing amount of change that
organizations experience, it is critical that all employees learn strategies to manage change and
cope with change.

Rather than resisting change, employees and successful organizations embrace change as an
integral part of organizational life.

Learning Outcomes
• Explain factors influencing the need for change
• Describe reasons why people resist organizational change
• Describe strategies to minimize resistance to change
• Describe Lewin's model of force field analysis
• Define group norms and highlight their importance for a group
• Explain different approaches to managing organizational change.

Lewin’s Force Field Analysis Model

During the 1940's, social psychologist Kurt Lewin developed a way of looking at change that
has helped many organizational leaders manage resistance to change. When the two opposing
forces are equal, the current behaviour is sustained, creating an equilibrium.

According to Lewin's force field analysis, a person's behaviour is the result of two
opposing forces: the force that maintains the status quo (staying the same) called "restraining
forces", and the force that pushes for change, called "driving forces".
Introduction to Business Management and Organizational Behaviour Organizational Behaviour - Change

Restraining Forces
Organizational leaders will be more effective in implementing change if they can weaken the
restraining forces and/or strengthen the driving forces.

During a change implementation, managers must first analyze the current situation and correctly
diagnose the restraining forces in the driving forces impacting the change.

Next they need to assess their ability to impact the various forces identifying which ones they
have significant control over in which ones they have little control over.

According to Lewin, the most effective way to make changes is to pinpoint existing resistances
and focus efforts on eliminating as many of the ones that you can control as possible.

Driving Forces
Change will occur more easily when the driving forces are stronger than the restraining forces.

The force field analysis model provides a framework that helps change agents diagnose the
forces that drive and restrain organizational change.

The diagnosis can then be used to understand how people will respond to the things that are
being changes as the change process is implemented.

The Three Phases of the Planned Change Process (Lewin)

An important dimension of Lewin's model is to carefully manage change by means of a three-
step process.

Phase I
Unfreezing: Creating a felt need for change; minimizing resistance

Unfreezing involves encouraging employees to cast aside old behaviours by "shaking things
up" so that the existing equilibrium is destroyed. The goal is to bring about an acceptance
among employees that change is needed. Organizations can encourage the adoption of this
attitude by signaling that the current behaviour is no longer valued.

Phase II
Moving: Changing people, tasks, structure and technology

In the moving stage, employees are encouraged to develop new behaviours, values, and
attitudes. Organizational leaders can facilitate this process by demonstrating desirable
behaviour and providing training so that employees acquire the new skills and attitudes. The
organization should communicate the overall vision of the change to employees so that they can
establish roles within the new structure.

Phase III
Refreezing: Reinforcing outcomes; evaluating results and modifying
Introduction to Business Management and Organizational Behaviour Organizational Behaviour - Change

Finally, in refreezing, the new behaviours and attitudes are reinforced. This is accomplished by
establishing a new equilibrium through the implementation of a new organizational culture,
norms, and other policies.

Forces for Change

There are several types of change that have had an impact on organizations. The result of
these forces is that organizations must adapt, alter their practices, and be creative in how they
deal with these forces for change in order to survive.

List of Changes:
• Population Change
• Change as a result of Legislation
• Increasing Competition
• Technological Change
• Mergers and Acquisitions

Population Change
At the beginning of the 20th century, one third of the population was under 15 years of age and
only 5% were age 65 years or older. The average life expectancy at that time was about 50
years old.

At the end of the 20th century, 12% of the population was 60 or older with an expectation that
this percentage would rise to a level of between 25 and 30% by the year 2040.

Average life expectancy at the turn of the millennium was more than 75 years of age.

Change as a Result of Legislation

Over the past half decade, there have been significant changes in employment laws, particularly
in the areas of employment standards, human rights, labour relations and health and safety. A
specific example is the 2006 change to Human Rights Code legislation in Ontario that had the
effect of prohibiting employers from forcing employees to retire at age 65 simply because of
their age.

There has also been significant change in other forms of legislation governing organizations.
These changes include significant deregulation of industries such as telecommunications and
other utilities and increased access to foreign labour and foreign markets as a result of free-
trade agreements. All of these changes have impacted the environment in which organizations
operate.

Increasing Competition
Deregulation and improved access to global markets has resulted in increasing competition in
most industries. The availability of foreign markets provides Canadian businesses with an
opportunity to do more business abroad.
Introduction to Business Management and Organizational Behaviour Organizational Behaviour - Change

However, it also provides foreign businesses with an opportunity to do more business in

Canada. The higher level of competition causes businesses to reflect on current practices and
initiate change to respond to the increased competition.

Technological Change
New technologies are emerging at a dizzying pace. These innovations can have a profound
impact on the way organizations operate.

For example, smart phones have changed the way that people communicate with each other.
Communication happens far more frequently outside of the boundaries of the workspace and
the traditional workday timing. Combine this with the fact that organizations can operate around
the world and the result may be that employees are expected to be accessible 24/7.

New technologies have also changed the nature of the skill requirements that employees must
obtain to keep job roles that are evolving. This increases the need for training. The introduction
of new technology into an organization can also result in job loss. As a result, employees may
act cautiously before embracing new technology until they understand its implications for them
personally.

Mergers and Acquisitions

As competition increases, organizations often seek out merger and acquisition opportunities as
a strategy to become more efficient and protect their presence in the market. Any merger or
acquisition by its very nature produces dramatic change.

There will be changes to organizational policies, practices and philosophies because no two
organizations are exactly the same when they merge. Some job roles will change, which
increases the threat of job loss or change in job status. As well, organizational culture will likely
undergo change.

All of these changes impact employees and must be managed effectively if an organization is to
realize the benefits of a merger or acquisition.

Resistance to Change
Resistance to change should be seen as a normal human response. There is a level of comfort
in the status quo. If we examine some of the reasons that people resist change, it will enable us
to be more effective in implementing change that needs to happen.
There are several reasons why people resist change. Below is a list of some of the most
common reasons:

Habit
Individuals continue to respond to stimuli in their usual ways; resistance to change depends on
whether they perceive advantages from changing some of their habitual behaviour.

Fear of the Unknown

Individuals may become anxious simply because of uncertainty.

Direct Costs
Introduction to Business Management and Organizational Behaviour Organizational Behaviour - Change

Changes may threaten a person's economic security or result in some other cost that is
undesirable.

Threats to Status of Influence and Power

When change within an organization reduces an individual's ability to exert influence and power,
they resist the change and work towards maintaining the status quo in order to preserve their
level of influence and power.

Selective Perception
People may filter communications regarding the need for change and selectively keep
information that fits with their desired view of their environment.

Misaligned Structures
Organizational structures such as reward systems, new reporting lines, and new duties may not
align with the perceived vision of change that will cause individuals to resist the change because
of confusion.
Resource Limitations
People may resist change because they do not feel that there is the required support available
from the organization (i.e. training).

Altered Relationships
Change can alter relationships within an organization that may result in different team dynamics
and different interdepartmental dynamics. Individuals may resist these changes because they
prefer the existing relationships.

As we can see, there are many reasons why individuals resist change. In the next section, we
will review strategies to minimize resistance to change.

Strategies to Minimize Resistance to Change

Although managers can never eliminate all resistance to change, there are strategies that can
overcome much of the resistance so that the change process occurs more smoothly and
effectively.

Successful methods for managing resistance to change usually include the following features:
• Participation and Involvement
• Communication
• Empathy and Support
• Negotiation and Coercion

Participation and Involvement

The most effective method for overcoming resistance to change is to include employees in the
planning and implementation of the change process. This makes it more likely that their
interests will be taken into consideration, making them more accepting.

When determining how to involve employees, it is important to clearly identify what level of
control you wish to give to employees with respect to the various components of change. For
example, in some circumstances, you will not be asking employees for their input on whether a
Introduction to Business Management and Organizational Behaviour Organizational Behaviour - Change

certain change should happen. Rather, you will be asking their input on how they can implement
a change that must occur.

You should involve them in a communication process to explain why a change must occur and
to answer their questions. However, if the decision to change has been made and the direction
of the change is clear, it is important to ensure that you do not signal to employees that they can
persuade you to alter that decision. What they can influence is how the decision gets
implemented.

Communication
Employees are more likely to resist change when they are uncertain of its nature and
consequences. Thus, it is a good idea to thoroughly discuss the change and its implications with
those who will be affected. Effective communication concerning the change reduces the
inaccurate information circulated through gossip and will help employees prepare for the
change.

A good communication strategy during change will ensure that employees have the opportunity
to ask questions of senior management and the people driving the change. It is very important
to know what the employees are thinking. Change can cause anxiety and fear, so organizations
must be proactive in creating forums where employees can ask questions without fear of
reprisal.

The communication strategy should also take into consideration that employees will be at
different stages of acceptance of the change. This means that while some communications can
be broad brush communications to all employees, much of the communication during change
should be individually focused and be based on whether a person is on side with the change, on
the fence, or highly resistant.

Empathy and Support

Managers should demonstrate empathy and support for employees who are affected by
organizational change. Leaders should listen to employee's concerns and offer assistance and
reassurance. By lending an empathetic ear and support, managers can diminish frustration and
fears.

Organizations can also offer support to employees as they experience change by providing
training and coaching on the new skills and new knowledge that the employees require as a
result of the change.

Support can also be offered in the area of stress management. Organizations may choose to
run seminars or programs that help employees understand how to cope with stress. As well, the
organization may have an employee assistance program (EAP) whose services could be
emphasized during the process of change.

Negotiation and Coercion

If employees do not respond to strategies for minimizing resistance such as participation and
involvement, the organization may have to consider harder tactics such as negotiation and
coercion. Negotiation is difficult because it may lead the organization to compromise its position
on a change that is less effective if compromised. This could lead to reducing the short run pain
and also reducing the long-term gain which may result in further need for change in the not-too-
distant future.
Introduction to Business Management and Organizational Behaviour Organizational Behaviour - Change

Coercion generally relies on positional power or the power to punish people and therefore will
likely result only in compliance when what is needed is commitment. It is usually a last-ditch
effort to gain some cooperation from an employee. If coercion is required on a limited basis, the
organization should give consideration to whether the individuals they need to coerce to change
should really be a part of the organization going forward. If coercion is required on a widespread
basis, the organization has a much more serious problem because their ability to implement the
change is seriously threatened. They may need to consider an alternative course of action for
the change they are trying to implement.

Implementing New Technology

Most people find change to be uncomfortable at first, and technological change can be
frustrating and threatening.

There are six strategies that managers can use to diminish employee resistance to new
technology:

1. Hold Information Sessions

Hold information sessions in which the advantages, disadvantages, and reasons for the
change are explained. Be sensitive to the concerns of the employees, and be open to
receive and answer questions concerning the change.

2. Include Employees in All Decisions

Include employees in all decisions regarding the change from the moment that the
change is contemplated, proposed, or announced. Participation helps employees feel
that they are involved in and have "ownership" of the change. If this is not possible, alert
employees to the change and its consequences at the first opportunity so they can
prepare themselves psychologically, ask questions, and voice concerns.

3. Offer Effective Training

Offer effective training for the change. Training encourages employees to realize that
they control the technology, not vice versa. The training should be designed to meet the
employees' needs, so analyze the training needs before developing a training program.

4. Form Support Groups

Form support groups within the organization to help employees adjust to the changes.
Since technological change is often stressful for employees, support groups may provide
emotional outlets and help employees feel less alone with the problem through the
knowledge that others share their concerns. Support groups can also be a forum for
exchanging information on using the technology.

5. Provide Incentives
Provide incentives for mastering the new technology. They may include an increased
likelihood of promotion, increased autonomy, increased employee responsibilities, and
increased pay.
Introduction to Business Management and Organizational Behaviour Organizational Behaviour - Change

6. Encourage Employees to Participate

Encourage employees to participate in reinvention, which means to invent new uses for
technology already in place. Through reinvention, employees can personalize the
technology to their own needs and share this information with others so that they will find
better ways of using it. Organizations can encourage this type of creativity by offering
incentives form employee efforts. Providing bonuses or formal recognition of the
employee who has reinvented are examples of such rewards.

Summary
Change is a pervasive aspect of modern organizational life. There are numerous pressures
that drive organizational change. Using Lewin's model, change can be viewed as a process of
unfreezing the status quo or the current situation, causing change or transformation and then
refreezing the operating framework to make the change permanent.

Change often meets with resistance. There are a variety of reasons for this resistance.
Effective managers and leaders will meet the resistance "head-on" and manage it by minimizing
the negative impact of resistance. Any effective change management process will involve close
consideration and analysis of barriers to change that exist within the organizational setting at all
levels, and will assess the impact of organizational strategies, structure,
leadership/management competence and organizational culture.

You have now completed this module. You can continue to the next module.