management process & organization behavior notes 14
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Unit 14 Organizational Change
Structure
14.1 Introduction
Objectives
14.2 Forces of changes
Self Assessment Questions 1
14.3 Resistance to change
Self Assessment Questions 2
14.4 Responses to changeSelf Assessment Questions 3
14.5 Characteristics of organizational change
Self Assessment Questions 4
14.6 Theories of change
Self Assessment Questions 5
14.7 Strategies for change management
Self Assessment Questions 6
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.
Self Assessment Questions 1
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.
Self Assessment Questions 2
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.
Self Assessment Questions 3
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.
Self Assessment Questions 4
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.
Self Assessment Questions 5
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.
Self Assessment Questions 6
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).
Self Assessment Questions 8
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
Self Assessment Questions 1
1 Two
2. Stakeholders
3. Economic, political and demographic
Self Assessment Questions 2
1. Two
2. Insecurity
3. Threat
Self Assessment Questions 3
1. Acceptance.
2.Empathetic3. Dominant
Self Assessment Questions 4
1. Long-term
2. Social and political
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Self Assessment Questions 5
1. Three
2. Planned
3. Incremental, quantum
Self Assessment Questions 6
1. Four
2. Fourth
Self Assessment Questions 7
1.Strong
2.Large
3. Power-coercive
Answer to Terminal Questions
1. Refer to section 14.2
2. Refer to section 14.3
3. Refer to section 14.6
4. Refer to section 14.8
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