Management Process & Organization Behavior Notes 14

7/28/2019 Management Process & Organization Behavior Notes 14

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Organizational Change Unit 14

Sikkim Manipal University 191

Unit 14 Organizational Change

Structure

14.1 Introduction

Objectives

14.2 Forces of changes

Self Assessment Questions 1

14.3 Resistance to change


14.4 Responses to changeSelf Assessment Questions 3

14.5 Characteristics of organizational change


14.6 Theories of change


14.7 Strategies for change management


14.8 Toolkit for managing changeSelf Assessment Questions 7

14.9 Summary

Terminal Questions

Answer to SAQs and TQs

14.1 Introduction

Organizational change may be defined as the adoption of a new idea or a behavior by anorganization (Daft 1995). It is a way of altering an existing organization to increase organizational

effectiveness for achieving its objectives. Successful organizational change must continually focus on

making organizations responsive to major developments like changing customer preferences,

regulatory norms, economic shocks and technological innovations. Only those organizations that are


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able to undertake suitable change programs, can sustain and survive in a changing and demanding

economic order in their bid to remain ahead of others in the race.

Learning objectives:

The learning objectives of this unit are as follows:

1. Forces of changes

2. Resistance to Change

3. Theories of change

14.2 Forces Of Changes

Forces for change are of two types:

Internal forces

External forces.

Internal forces

Change in the top management- Change in the top management and consequent change in the

ideas to run the organization also leads to change in the system, structure and processes.

Change in size of the organization- Change in the organizations size leads to change in the internal

structure and complexity of the operations in the organization.

Performance gaps- When a gap between set target and actual results (in terms of market share,

employee productivity and profit) is identified, organizations face the forces to change and reduce the

gap.

Employee needs and values- With changing needs and values of the employees, organizations

change their policies. For example, attractive financial incentives, challenging assignments, vertical

growth opportunities and autonomy at work may be provided in an organization to attract and retain

its effective employees.


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External forces

Technology - Technological changes are responsible for changing the nature of the job performed at

all levels in an organization.

Business scenario- Due to rapid changes in the business scenario with increasing competition and

global economy, the needs and demands are also changing among the customers, suppliers and

other stakeholders. Organizations are, therefore, forced to change their operational methods to meet

the demands of the stakeholders.

Environmental factors - Environmental factors such as economic, political and demographic factors

play a vital role in devising organizational policies and strategy. For example, organizations may

have to change their employment policies in accordance with the government policy, demand of the

non-government organizations and changing economic conditions of a country.


1 Forces for change are of _____________ types.

2. Organizations are, therefore, forced to change their operational methods to meet the demands of

the _____________.

3. Environmental factors such as ___________, ______________, and _____________ factors play

a vital role in devising organizational policies and strategy

14.3 Resistance To Change

Resistance to change may be of two types:

Individual resistance

Organizational resistance.

Individual resistance-


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Change leads to insecurity among the employees because of its unknown consequences.

Employees do not know for certain whether the change will bring in better prospects. For example,

because of technological change people may feel threatened due to the fear of obsolescence of

skills, less wages and losing the job. Change sometimes leads to new dimensions of work

relationships. Due to organizational redesign, the employees may have to work with other set of

people than their existing co-workers with whom they have direct relationship, and it is generally not

welcome by most of the employees.

Organizational resistance-

Change may bring some potential threat to the organizational power to some people. Therefore,

people try to resist change. The structural inertia in the bureaucratic organizations also hinders

change. Furthermore, resource constraints play a vital role in resistance to change.


1. Resistance to change may be of _________ types.

2. Change leads to _______________ among the employees because of its unknown

consequences.

3. Change may bring some potential _________to the organizational power to some people.

14.4 Responses To Change

The responses to change depend upon the employees perception about the change. Different

individuals differ in their attitudes and hence, the perceptions towards change. Therefore, one

important task of the management of an organization is to understand and create a positive attitude

among employees regarding change.


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Reactions to Change

Three major reactions to change are:

Anger- After employees have passed over the shock of the new situation, most people who view the

change as having a negative impact on their personal situation, many times, they will begin to blame

the management or talk ill about management. This agitation and anger, if not addressed, may lead

to some people actually trying to sabotage the change process by taking stances varying between

active non-cooperation and passive resistance.

Denial- Many people, depending on their basic values and beliefs, move from anger to acceptance.

However, there are a significant number of people who go through a denial phase. A person going

through this phase will make up excuses why he or she should not be held accountable for anything

that goes wrong with the organization as a result of the change. Such attempts to disassociate from

the new situation often cause the person to alienate oneself from the group.

Acceptance- Once the person has accepted the change as real and that it is going to happen, he or

she begins to rationalize his or her role in the new situation. It is important to understand that not only

can an individual accept the situation and begin to work towards the new vision, but one can also

accept the situation as having a negative impact and choose to leave the organization. Either way,

the individual accepts the fact that the new environment exists.

Overcoming Resistance to Change

Some approaches can be taken to reduce the resistance to change. Some of them are listed

below (Schermerhorn, Hunt, and Osborn 2000):

Education and communication -Open communication and proper education help employees to

understand the significance of change and its requirement. For that, proper initiative should be taken

to provide the information regarding the type, timing, implication, purpose and reason for change.


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Employee participation and involvement- People generally get more committed towards the change,

if they are directly involved in the change process. This way, they have the opportunity to clarify their

doubts and understand the perspective and requirement of change for the organization. The

management also gets the chance to identify the potential problems that may occur in the workplace

and the chance to prevent it.

Facilitation and support- Change agent can offer a range of supportive measures to reduce

resistance. Empathetic and considerate listening can reduce employees fear and anxiety towards

change. Counselling sessions to reduce stress, trauma, etc., can be an effective measure.

Negotiation and agreement- Organizations which have a fair chance to face potential resistance from

the union representatives, can defuse the resistance by involving them directly in the change

process. They should be properly briefed about the need and value of change. However, this can be

a costly proposition when there is more than one dominant union in the organization, as all the

contending parties would fight for power and recognition.


1. Many people, depending on their basic values and beliefs, move from anger to ___________.

2. ___________ and considerate listening can reduce employees fear and anxiety towards change

3. This can be a costly proposition when there is more than one _____________ union in the

organization, as all the contending parties would fight for power and recognition.

14.5 Characteristics Of Organizational Change -

Characteristics:

It is deliberate, systematic and well thought of.

Velocity of change depends on the degree or level of significance.

Status quo is challenged.

Reaction can be both positive and negative.


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Focuses on long-term change.

The forces for change:

Organization-environment relationship (merger, strategic alliances, etc.) where organizations attempt

to redefine their relationships with changing social and political environment.

Organizational life cycle (changes in culture and structure of organizations evolution from birth

through growth towards maturity).

Political nature of organization (changes in internal control structures, etc.) to deal with shifting

political current.


1. Organizational change focuses on ________ change.

2. In Organization-environment relationship, organizations attempt to redefine their relationships with

changing _________ and ____________ environment.

14.6 Theories Of Change

Force field analysis theory

Lewin (1951) proposed a three step sequential model of change process:

Unfreezing

At this stage, the forces, which maintain the status quo in the organizational behavior, are reduced by

refuting the present attitude and behavior to create a perceived need for something new. It is

facilitated by environmental pressure such as increased competition, declining productivity and

performance, felt need to improve the style of work, etc.


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Moving/changing

This stage involves a shift in behavior of organizations by modifying system, process, technology and

people. This phase can be explained in terms of compliance, identification and internalization (Rao

and Hari Krishna 2002). Compliance or force occurs when individuals are forced to change whether

by reward or by punishment. Internalization occurs when individuals are forced to encounter a

situation that calls for new behavior. Identification occurs when individuals recognize one among

various models provided in the environment that is most suitable to their personality.

Refreezing

At this stage, actions are taken to sustain the drive for change and to facilitate the institutionalization

process of the change even in a day-to-day routine of the organizations. Here, the desired outcomes

are positively reinforced and extra support is provided to overcome the difficulties.

Action research model

Action research model is another model of planned change. According to this model, planned change

is a cyclical process in which initial research about organizations provides the data to guide the

subsequent action to bring the required changes. It emphasizes on the significance of data collection

and diagnosis prior to action planning and implementation and careful evaluation of the actions. This

model describes change in eight steps:

Problem identification It starts with the identification of one or a combination of problems in the

organization and consequent requirement of bringing change in organizational practices.

Consultation with the expert It is the phase where the organization consults with the experts in the

same field to generate the ideas for improvement of the situation. At this stage an open and

collaborative atmosphere is intended to be set up.

Data gathering and preliminary diagnosis This stage is usually completed by the expert often with the

organizational members help. The four basic modes of data gathering are interview, process

observation, questionnaires and organizational performance data.


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Feedback to key client or group Because action research is a collaborative activity, the diagnostic

data is fed back to the client usually with a group or work team meeting. The consultant provides the

client with all the necessary data.

Joint diagnosis of the problem At this point, the clients and the expert jointly decide whether they

want to work on the identified problems.

Joint action planningThe consultant and the client then jointly decide on the further action. This is the

beginning of the movement process (refer to Lewins model). At this stage, specific actions are taken

depending on the culture, technology and the environment of the organization.

Action This stage involves actual change from one organizational state to another. It may

include new methods and procedures, reorganizing structures and work designs, and new

behaviors.

Data gathering after action Since action research is a cyclical process, data must also be gathered

after the action has taken place.

Dimensions of Planned Change

Though the models of change describe how to implement change, steps of planned change may be

implemented in a variety of ways, depending on the clients needs and goals, the change agents

skills and values, and the organizational context. Planned change can be contrasted across

situations on two key dimensions: the magnitude of organizational change and the degree to which

the client system is organized (Cummings and Worley 1997).

Magnitude of change

Planned change can range from incremental change, which involves minute alterations in the

operations, to quantum change i.e. fundamental change in organizational operations including

structure, culture, reward system, information processes, etc.


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Degree of organization

In highly mechanistic and bureaucratic organizational dimensions, structure, job design, leadership

styles, policies are too rigid and inflexible. In this type of organizations, communication is

suppressed, conflicts are avoided and employees are apathetic. In contrast, flexible organizations

have loose task definition, communication is fragmented and job responsibilities are ambiguous. In

bureaucratic organizations, change through loosening the control on behaviour is attempted.


1. Lewin (1951) proposed a ___________ step sequential model of change process.

2. Action research model is another model of __________ change.

3. Planned change can range from ____________ change to _________ change.

14.7 Strategies For Change Management

According to Bennis, Benne and Chin (1969), four basic strategies can be adopted to manage

change:

Empirical-Rational

People are rational and will follow their self-interest once a change is revealed to them. Change is

based on the communication of information and the proffering of incentives.

Normative-Re-educative

People are social beings and adhere to cultural norms and values. Change is based on redefining

and reinterpreting existing norms and values, and developing peoples commitments to new ones.

Power-Coercive

People are basically compliant and will generally do what they are told or can be made to do.

Change is based on the exercise of authority and the imposition of sanctions. According to Nicklos

(2004), there can be a fourth strategy in adapting to changes, i.e. environmental-adaptive.


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Environmental-Adaptive

People oppose loss and disruption, but they adapt readily to new circumstances. Change is based on

building a new organization and gradually transferring people from the old one to the new one.


1. According to Bennis, Benne and Chin, _______ basic strategies can be adopted to manage

change:

2.According to Nicklos (2004), there can be a ________ strategy in adapting to changes, i.e.

environmental-adaptive.

14.8 Toolkit For Managing Change

According to Nicklos (2004), some of the factors to select an effective change strategy and some tips

to manage change are described as follows.

Generally, there is no single change strategy. One can adopt a general or what is called a grand

strategy but for any given initiative some mix of strategies serves best. Which of the preceding

strategies to use in your mix of strategies is a decision affected by a number of factors. Some of the

more important ones are:

Degree of resistance - Strong resistance argues for a coupling of power-coercive and environmental-

adaptive strategies. Weak resistance or concurrence argues for a combination of empirical-rational

and normative-re-educative strategies.

Target population -Large populations argue for a mix of all four strategies.

The stakes - High stakes also argue for a mix of all four strategies because when the stakes are

high, nothing can be left to chance.

The time frame- Short time frames argue for a power-coercive strategy. Longer time frames argue for

a mix of empirical-rational, normative-re-educative and environmental-adaptive strategy.


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Expertise- Having adequate expertise at making change argues for some mix of the strategies

outlined above. Not having the expertise argues for reliance on the power-coercive strategy.

Dependency - This is a classic double-edged sword. If the organization is dependent on its people,

managements ability to command or demand is limited. Conversely, if people are dependent upon

the organization, their ability to oppose or resist is limited. (Mutual dependency almost always signals

a requirement for some level of negotiation).


1. ______________resistance argues for a coupling of power-coercive and environmental-adaptive

strategies.

2. _________________ populations argue for a mix of all four strategies.

3. Short time frames argue for a _____________strategy.

14.9 Summary

Organizational change may be defined as the adoption of a new idea or a behavior by an

organization. It is a way of altering an existing organization to increase organizational effectiveness

for achieving its objectives. Forces for change are of two types: Internal forces and external forces.

Internal forces are: change in the top management, change in size of the organization, performance

gaps and employee needs and values. External forces are technology, business scenario, and

environmental factors. Resistance to change may be of two types: Individual resistance and

Organizational resistance. Change leads to insecurity among the employees because of its unknown

consequences. Employees do not know for certain whether the change will bring in better prospects.

This results into individual resistance. Change may bring some potential threat to the organizational

power to some people. This leads to organizational resistance. The responses to change depend

upon the employees perception about the change. Different individuals differ in their attitudes and

hence, the perceptions towards change. Three major reactions to change are: Anger, Denial and

Acceptance. Some approaches can be taken to reduce the resistance to change, such as, Education

and communication, Employee participation and involvement, Facilitation and support, and

Negotiation and agreement. Organizational change is deliberate, systematic and well thought of.

Velocity of change depends on the degree or level of significance and the status quo in the


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organization is challenged with a long-term focus. Two major theories of change are (i) Force field

analysis theory and (ii) Action Research Model. Lewin proposed a three steps sequence of

unfreezing, moving and refreezing as the change process in Force Field Analysis Theory.

According to Action Research Model, planned change is a cyclical process in which initial research

about organizations provides the data to guide the subsequent action to bring the required changes

in eight steps.

Terminal questions

1. What are the forces of change? Explain.

2. Explain the different types of resistance to change.

3. Describe the force field analysis model and action research model.

4. Based on the toolkit forwarded by Nicklos stated in this chapter, explain how one can manage

change.

Answer to Self Assessment Questions


1 Two

2. Stakeholders

3. Economic, political and demographic


1. Two

2. Insecurity

3. Threat


1. Acceptance.

2.Empathetic3. Dominant


1. Long-term

2. Social and political


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1. Three

2. Planned

3. Incremental, quantum


1. Four

2. Fourth


1.Strong

2.Large

3. Power-coercive

Answer to Terminal Questions

1. Refer to section 14.2




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Management Process & Organization Behavior Notes 14

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