HR 405 : Strategies for

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UNIT 1
 Introduction & levels of change.

 Importance/ Imperatives of change.

 Forces of change.

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 Causes-social, economic, technological and organizational.

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 Organizational Culture & change.

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 Kurt Lewin’s model of change.

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Change Management
INTRODUCTION
Change has always been a norm of life but over the past few decades
widespread organisational change has assumed gigantic proportions.
The developments in technology, increasing needs of society, and the
emergence and growth of global organisations are some of the factors

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that have contributed to the need for, and frequency for change.

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Planning, implementing and managing change in a fast changing

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environment is increasingly the situation in which most organisations now
work.
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People are normally resistant to change as change affects structures

etc.
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and procedures, job security and terms and conditions, social structures

Identification of the need for change and leading organisations through

that change, therefore, needs effective change management.

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Change Management
Concept :
 "Change is the only constant" is a well known premise. Over the past
few decades large-scale change has become a norm in
organisational life. The organisations no longer have a choice, they
must change to survive.
 The need for change is increasing, the capability to change is

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becoming essential for organisations to survive and succeed in
future. Rapid advancements in technology and globalisation of trade

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have given momentum to change. This momentum of change is not
going to decelerate.
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 However, a look at the intimidating rate of change into a technology-
driven world, that has affected all spheres of life in the past decades,

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is more than enough to give a picture of the ever accelerating drive

 As the speed of change continues to increase and affect all the

sectors of life, change management is a fundamental competence
needed to manage the change in organisations.

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 Thus in the present scenario managing change has assumed lot of
significance. As change must be aimed at ensuring organisational
survival, whether the economy is strengthening or weakening, the
consequences of change being uncertain, proper management of
change becomes even more vital.

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 The term management can be defined in simplest words as the task

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of managing change. Thus change management is about change to

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realise business results and managing change involves the process
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of making changes in a well planned, systematic manner.

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 In the words of Lisa Kudray and Brain Kleuiet in the article "Global
trends in Managing Change": "Change Management is defined as
the continuous process aligning an organisation with its market place
... and doing it more responsively and effectively than its
competitors.“

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 Change management can also be defined as the effective

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management of a business change such that organisational leaders,

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managers and employees work in concert to successfully implement
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the needed technology or organisational changes. Change

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management could be organisational or individual.

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 LEVELS OF CHANGE
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 ORGANIZATIONAL LEVEL CHANGE

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LEVELS
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CHANGE
INDIVIDUAL LEVEL CHANGE

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 Organisational change management is the management of change
from the perspective of the top leadership looking down into the
organisation. It focuses on the broad change management practices
and skills to help the organisation comprehend, accept and support
the required changes: It provides the knowledge and skill to

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implement proper methodology for managing a change throughout
an organisation. Organisational change management involves top

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level and middle level managers and the human resource managers

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who sponsor the change in the organisation.
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 Individual change management is the management of change from
the perspective of the employees who are at the bottom level. These
are the people who actually implement the change. In this the focus
is on empowering them by providing them the tools and required
training to help them in navigating their way through the change

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process. For an effective individual change management, various
tools and techniques are employed to help an employee transition
through the change process.
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 Group level change : Most organizational changes have their major
effects at the group level. This is because most activities in
organizations are organized on a group basis. The group could be
departments or informal work groups or even teams. Changes at the

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group level can affect work flows ,job design, social organization,
influence and status systems and communication patterns.

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Example :

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IMPORTANCE/IMPERATIVES OF
CHANGE
 1. Crisis: Change becomes a necessity when an organization finds
itself in a crisis. It helps it rectify some of its processes or activities
that may have become ineffective. Initiating changes to discard these
processes assists the organization to withstand the turbulent times.

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 2. Performance Gaps: In some situations, the organization's goals

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and objectives are not being met or other organizational needs are

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not being satisfied. Thus during such unpleasant times, change

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becomes imperative to close these gaps.

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 3. Technological Advancements: Transforming the business in line
with new technologies helps it to edge out its competitors, thanks to
increased productivity. The introduction of CDs in the 1980s is a
prime example of the significance of change in technological
developments. Record firms that adopted this technology realized

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profits because producing CDs was cheaper than LPs. Incorporating
change in line with technology helps the development of new

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procedures for carrying out various needed tasks.

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 4. Organizational Culture: Many companies initiate change to
improve their organizational culture. Changing the organizational

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culture, which could include basic beliefs, values, feelings, and
internal and external relationships, can improve its efficiency and
productivity. Effective organizational culture also attracts new
customers, increases customer satisfaction, reduces costs of
operations and increases worker retention.

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 5. Identification of Opportunities: Change becomes imperative when
opportunities are identified in the market place that the organization
needs to pursue in order to increase its competitiveness.

 6. Reaction to Internal & External Pressure: Management and

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employees, particularly those in organized unions often exert

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pressure for change. External pressures come from many areas,

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including customers, competition, changing government regulations,

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shareholders, financial markets, and other factors in the
organization's external environment.

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 7. Mergers & Acquisitions: Mergers and acquisitions create change
in a number of areas often negatively impacting employees when two
organizations are merged and employees in duel functions are made
redundant.

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 8. Planned Abandonment: Changes becomes imperative as a result

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of abandoning declining products, markets, or subsidiaries and

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allocating resources to innovation and new opportunities.

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Forces of change.

FORCES OF CHANGE

EXTERNAL INTERNAL
FORCES
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FORCES

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• Government Rules.
Regulations & Policies
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Human Resources
• Competition

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• Conflict
• Technological Advances • Leadership
• Market Changes • Structural Re-
• Social & Political organization
Pressures • Reward Systems
• Demographic Features

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External Factors of Organizational
Changes :
I. Government Rules, Regulations and Policies: Every new government
introduces some or the other rule, regulation or law or frame certain policies
that brings about considerable changes in the organization which are affected
by these governmental rules. The recent decision of the Government of
Maharashtra to ban dance bars, Slum Rehabilitation Program of the

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Government of Maharashtra or the introduction of Value Added Tax (VAT) as
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well as other changes such as disinvestments, deregulation as well as

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liberalization policies have brought about for reaching changes in different
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organizations, Some organizations are affected more strongly and positively

is only limited.
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by these changes, whereas the impact of these changes on other organizations

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 2. Competition: Organizations in a global competitive economy of today
functions on the principle of "survival of the fittest". The forces of
globalization coupled with deregulation and liberalization policy of our
economy has introduced stiff competition, which has necessitated changes
in the organization. In order to meet the challenges from the competitors in

market economy.
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the market, organizations need to change at a fast rate so as to adjust in the

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 3. Technological Advances: Technology is changing at an unimagined
speed. The Introduction of new technology and recent development in the
area of information technology, process technology, etc., has created a
lasting impact on many organizations. Both manufacturing as well as
service organizations are increasingly using technology as means to

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improve productivity and market competitiveness. Some important
technologies used in manufacturing industry are as follows:

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► Automatized operations with Robotics.

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► 0.0 Computerized Numerical Control (CNC), which is used for metal
cutting operations.

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 4. Market Changes: Last decade has seen considerable market changes as a
result of globalization of economy and services. The emergence of global
economy has forced companies to change the way they do business. Some
important market changes are as follows:
► South African Banks found that they need to establish banking

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locations in remote areas of the country if they wish to grow and
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remain as National Banks.

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► Indian Nationalized Banks have changed their timings, structure and

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services operations to compete with private national and international
banks. Most of these banks are offering personalized and door-step

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service to win and retain customers.

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 5. Social and Political Pressures: Changing social and political pressures is
also impacting organizations. For example. Tobacco companies are
experiencing considerable pressure to alter the ways they market their
products within a given nation. The marketing of baby foods, private items,
private clothes, etc., have to take into consideration socio-cultural factors as

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well as religious fundamentalism that exists in a given nation. Political
events often create substantial changes affecting business as well as ways in

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which organization's function. The fall of Berlin wall, the collapse of

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Communism, the problems in Iraq. etc., have created opportunities for some

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to progress, whereas it has led to downfall of others.

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 6. Demographic Characteristics: Demographic characteristic of the work
force such as their age, sex, personal characteristics, knowledge, etc.,
considerably influence the changes that occur in the organization.
Demographic changes may occur as a result of new recruitment or as a
result of changes in company policies or as a result of mergers and joint

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ventures, etc. Today, the demographic features of different organizations are
very much different. Business Process Organizations (BPO) employees are

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generally young individuals with less experience but considerably higher

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risk taking ability as compared to traditional organization which employ

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individuals on a 9.00 a.m. to 5.00 p.m. jobs.

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Internal Factors of Organizational
Change
 1. Factors Associated with Human Resources: Any factor dealing with
human resource can bring about changes in the organization. Employee
dissatisfaction, employee conflicts, employees' perception of how they are
treated at work can bring about lasting' changes in the organization, often
detrimental to organizational functioning. Similarly, employee turnover,

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high levels of absenteeism, newly recruited employees, large number of
employees opting for Voluntary Retirement Scheme. etc., can also bring

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about Organizations respond to problems of human resources at work by

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using approaches of job design, which lead to considerable changes in

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organizational structure and functioning.

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 2. Conflict: Employee conflict especially one associated with organized
employees as well as conflict between employer and employee as well as
employer and trade union leads to considerable changes in an organizational
functioning and structure.

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 3. Leadership: Leaders are also responsible for bringing about considerable
changes in an organization. When a new leader takes over an organization
he introduces many changes in an organization. Inappropriate leader
behaviours such as inadequate direction or support may result in problems
requiring change.

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 4. Structural Reorganization: Structural re-organization in a given

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organization due to changes in management, operations, introduction of new

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technology or due to mergers, takeovers, etc. can bring about considerable
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changes in the organization.

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 5. Reward Systems: The type of reward system that an organization offers
to its employees can also lead to considerable changes in the organization as
the reward system influence employee satisfaction level and lead to
considerable job turnover.

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ORGANIZATIONAL CHANGE AND
CULTURE
 The culture of an organization consists of its values, beliefs and
attitudes and these are the driving force behind its behavior.
Organization is deeply impacted by changes in Organizational
Culture.
 When a given behaviour or conduct of an organization no longer

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serves to attain its larger objectives, an organization has to behave
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differently and hence changes in organizational culture begins to take
place.
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 However, it is not so easy to change organization's culture because

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changing organizational culture involves changes in values, beliefs
etc. An individual holds this more strongly that they resist any attempt
to change these.
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 Though organizational culture cannot be easily changed many
authors have identified the following factors which may play an
important role in the change process:
• I. A strong leader.
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• 2. A clear vision of what needs to be done.
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• 3. Development of new work procedures.
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• 4. Openness of an organization to learn.
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 1. A strong leader: A strong leader can help to bring about a cultural change.
A strong leader initiates and sustains a cultural change. A good leader has to
recognize that organization's members are 1 reluctant to change and would
exert significant energy to maintain the status quo. Generally, a strong
leader at the helm of the organization with a missionary zeal introduces
cultural change. In the process of cultural change other influential leaders
also emerge.

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 2. A clear vision needs to be done: Besides intense energy to initiate cultural
change, a leader also must have sense of vision or direction as to where the
organization is heading. The leader should have strong belief and must share
with others as to what the new culture will be like. The clarity of vision may
occur due to following two factors viz.:
►(a)
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From the values that the leader may have and
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►(b) The crisis that must be handled to save the business.

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 The process of vision includes not only determining the destination but also
generating commitment from all organizational members to contribute to

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their fullest extent to achieve organizational goals .The employees should
also clearly known as to what would happen if change does not take place.

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 3. Development of new work procedures: Organization in order to
bring about a cultural change must also adapt new procedures that
reinforce the cultural values which are being espoused (advocated).
Now work procedures help to break one's association with old values
from which organizations seek to depart. New work procedures

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include the excessive use of teams as well as changes in job
redesign. The new work procedures would include all or some of the
following:
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►
(b) Co-operation n
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(a) Changes in communication
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patterns.

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(c) Decision making.
(d) Changes in organizational policies pertaining to
selection, training and compensation.

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 The new procedures for performing the work provides a venue for
organizational members to reframe their values, attitudes and beliefs about the
organization and what it is trying to accomplish. A failure to change the work
performed even though new values and beliefs have been expressed often
results in backsliding: By Backsliding we mean return to the old ways of
thinking and feeling and ultimately behaving in ways from which organization
is attempting to evolve.

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 4. Openness of an organization to Learn: An organization as a whole, along

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with its leaders and workers must be open to learn, grasp and adapt to changing

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environment. The organizational members should have patience and

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perseverance, instead of viewing the mistakes as punishable offences or signs of

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weakness, they should be regarded ,a part of normal and healthy change

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process. According to Seng organization becomes "learning organization"
when they are not only comfortable with the growth process but also treat their
members in a nurturing, as opposed to sanctioning manner. Organization which
is open to learn also accepts the fact that good ideas and opportunities for
growth can and do originate at all levels of the organization, and not just from
top management.

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Kurt Lewin’s model of change.

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Three Stages in the Model :

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Kurt Lewin’s model of change :

Stage 1 : Unfreezing
This starts by challenging many of the beliefs, attitudes, and
behaviour of people within the organization.
Motivation for change should be generated before change
can occur.
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 During this everyone feels that things are becoming off

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balance as new system will make their job difficult.
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We need to sell the benefits of the change to everyone

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involved i. e. benefits of replacing type-writers with computers
Also address any doubts or concerns.

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Kurt Lewin’s model of change :

Stage 2 : Changing
Once the organization has gone through the unfreeze stage,
effective change can begin within the organization.
Time and frequent communication are two key factors for the
change to occur.

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People need to understand the changes as they occur and

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feel that they are part of the change.

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Some take a long time to learn the computers. This can lead
to fear and rumours that need to be handled quickly which
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should be taken care of.
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Kurt Lewin’s model of change :

Stage 3 : Refreezing
It is the process to integrate the new behavior into the
person’s thinking and attitude.
Once the changes have taken effect, we need to make

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them believe that their productivity and knowledge will go up

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as the start learning computer.

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One should make sure that people get comfortable in using

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the computers.

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Also to provide clear communications, support and training.

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Celebrate the successful completion of changes.

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Practical Steps for Using the KURT
LEWIN Framework :
 Unfreeze
1. Determine what needs to change: ❖ Survey the organization to
understand the current state. ❖ Understand why change has to take
place.
2. Ensure there is strong support from upper management: Use

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Stakeholder Analysis and Stakeholder Management to identify and

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win the support of key people within the organization. Frame the

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issue as one of organization-wide importance.

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3. Create the need for change: Create a compelling message as to
why change has to occur. Use your vision and strategy as supporting

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evidence. Communicate the vision in terms of the change required.
Emphasize the "why“.
4. Manage and understand the doubts and concerns: Remain open
to employee concerns and address in terms of the need to change.

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 Change :
1. Communicate often: Do so thmughout the planning and
implementation of the changes. • Describe the benefits. Explain
exactly how the changes will affect everyone. Prepare everyone for
what is coming.
2. Dispel rumours: Answer questions openly and honestly. • Deal with

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problems immediately. Relate the need for change back to
operational necessities.

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3. Empower action: Provide lots of opportunity for employee
involvement. Have line managers provide day-to-day direction.

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4. Involve people in the process: Generate short-term wins to

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reinforce the change. Negotiate with external stakeholders as
necessary (such as employee organizations).

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 Refreeze
1. Anchor the changes into the culture: Identity what supports the
change. Identify barriers to sustaining change.
2. Develop ways to sustain the change: Ensure leadership support.
Create a reward system. Establish feedback systems. Adapt the

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organizational structure as necessary.

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3. Provide support and training: Keep everyone informed and
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supported.

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4. Celebrate success.

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 CASE STUDY FOR
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CASE STUDY FOR DISCUSSION

 Tata Motors, division of one of the largest business houses in India has
grown significantly over the last 72 years since its establishment in 1945.
Tata Motors Ltd is India's largest automobile company with revenue of about
14 billion dollars. It is the first company from India's engineering sector to
be listed in the New York stock exchange. Tata motors presence indeed cuts

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across the length and breadth of India. Over 4 million Tata vehicles ply on
the Indian roads since the first rolled out in 1954. The company is going

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strong with its 23000 employees guided by the vision to be "the best in the

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manner in which we operate, best in the products we deliver and best in our

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value systems and ethics." The Tata are known and are always sought to be a
value driven organization. The 5 core Tata values being Integrity,

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understanding, responsibility, excellence and unity.
 The TELCO saga started off with Tata's acquiring an Eastern railway
workshop to build boilers and steam locomotives for railways. Then they
ventured into commercial vehicles in 1954 having entered into a partnership
with Daimler-Benz in Germany.

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 In global context it caters to three main market segments: Passenger cars,
utility vehicles and commercial vehicles.
 They followed the strategy of acquisition and joint ventures in its mid-stage
and launched new products at a rapid pace in different market segments.
Through subsidiaries and associate companies, Tata Motors has operations

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in the UK, South Korea, Thailand and Spain.
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 Among them is Jaguar Land Rover, a business comprising the two iconic

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British brands that was acquired in 2008. In 2004, it acquired the Daewoo

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Commercial Vehicles Company, South Korea's second largest truck maker.
 Tata Motors is also expanding its international footprint, established through

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exports since 1961. The company's commercial and passenger vehicles are
already being marketed in several countries in Europe, Africa, the Middle
East, South East Asia, South Asia and South America. It has franchisee/joint
venture assembly operations in Kenya, Bangladesh, Ukraine, Russia and
Senegal.

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 A significant breakthrough for the company was the development and
commercialization of the truly Indian cars — Tata Indica and Tata Indigo.
Within 2 years of the launch, Indica became the India's largest selling car in
its segment. Ratan Tata had always been keen on entering the lower-end of
the market as he believed the big market lay there. He initiated steps to
develop the Indica. Billed as India's first indigenous car and kept as a secret

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for a long period of time, the Indica promised much.

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 Unfortunately for the Tatas, the development of the Indica coincided with one

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of the worst phases in the company's history. During the period 1995-1998,
the commercial vehicle business had been doing well and Tata Motors grew

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at 30-40 per cent. Then came the downturn in the economy and the market for

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commercial vehicles suddenly shrank by 40%. The lost sales compounded by

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the heavy investment for its entry into passenger car business, the cost of
complying with new emission standards and increasing threat from overseas
competitors caused Tata motors to shock the market by 5 billion rupees loss
for the year 2001. Realizing the urgent need to cut costs, the Tatas embarked
on a major restructuring exercise.

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 For any doubts you can ask me in the lecture or email me at
- purvajaiswal@indsearch.org
(WRITE A FORMAL EMAIL)

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THANK YOU !

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