UNIT 05: Management of Change

CCSU BBA Semester 01

Management of Change: Change and Organizational development

Change management is the process of guiding organizational change from start to finish, including planning, implementing, and solidifying changes in an organization. It refers to how companies handle modifications, such as the implementation of new technology, adjustments to existing processes, and shifting organizational hierarchy.

Organization Change and Development

Change and Organizational Development (OD) are interrelated concepts focused on improving an organization’s effectiveness, adaptability, and health. While change management addresses specific changes within an organization, organizational development takes a broader, long-term approach to foster continuous improvement and growth.

Organizational Change Management is about an organization achieving a desired future state from its current state with minimal disruption or negative impact to the organization.

Organizational Development is about how an organization achieves its purpose through its design, function, structure, and processes.

Organizational development (OD) is a field of study that addresses change and how it affects organizations and the individuals within those organizations. Effective organizational development can assist organizations and individuals to cope with change. Strategies can be developed to introduce planned change, such as team-building efforts, to improve organizational functioning. While change is a “given,” there are a number of ways to deal with change — some useful, some not. Organizational development assists organizations in coping with the turbulent environment, both internally and externally, frequently doing so by introducing planned change efforts.

The different levels of change management include the following:

Benefits of addressing change management

Organizational change and development are essential to make an organization grow and adapt to its given market. When organizations fall behind they need to adapt their plan to make the company more efficient. Companies that are open to change will also be more effective in reaching the goals they have set.

Addressing change management at an organizational level improves the success rates of initiatives by ensuring a structured and systematic approach.
It enhances employee engagement and morale by fostering clear communication, reducing uncertainty, and involving employees in the process.
Organizational agility is increased as the organization becomes better equipped to adapt to market changes, technological advancements, and competitive pressures.
It minimizes resistance to change by addressing employee concerns and aligning everyone with the organization’s goals.
Overall, this approach ensures smoother transitions and long-term sustainability of changes.

Resistance to Change

Resistance to change is unwillingness to adapt to new circumstances or ways of doing things. It can happen with individuals, relationships, or within organizations.

Causes of Resistance to Change

Fear of the Unknown: People may feel uncertain about how the change will affect their roles, responsibilities, or job security.

Loss of Control: Changes can make individuals feel they are losing influence over their work environment or decision-making processes.

Poor Communication: A lack of clear information about the reasons, benefits, or processes of change can breed mistrust and skepticism.

Lack of Trust in Leadership: If employees distrust the leadership or past changes have failed, they may resist new initiatives.

Perceived Threats: Changes that impact job roles, workloads, or career progression can create anxiety and opposition.

Cultural Inertia: An organizational culture that values tradition and stability may resist any attempts at disruption or innovation.

Strategies to Overcome Resistance to Change

Effective Communication: Clearly explain the need for change, its benefits, and how it will be implemented. Transparent communication reduces fear and builds trust. Letting employees know about changes to the status quo as soon as possible helps to build a bridge between employees and management.

Employee Involvement: Actively involve employees in the planning and decision-making process to give them a sense of ownership. Run surveys with your team on how they feel about the change and how they would make the process easier.

Provide Support and Training: Support your team members with skills, change management tools, knowledge bases, and training on the new process or tool you’re implementing. This will help your employees find value in a new system quickly, causing them to build trust with you when it.

Address Concerns: Listen to feedback, understand the root causes of resistance, and take steps to address legitimate concerns. To avoid change resistance, provide proof that a new process, tool, or change will greatly benefit your employees.

Reinforce Positive Outcomes: Celebrate small wins and showcase the benefits of the change to motivate employees and reinforce acceptance.

Approaches to Managing Organizational Change

Lewin’s Three-Step Change Model

Change involves a sequence of organizational processes that occurs over time. Lewin (1951) suggests this process typically requires three steps: unfreezing, moving, and refreezing.

Unfreezing: Prepare the organization for change by breaking down existing norms and behaviours. It might be accomplished by introducing new information that points out inadequacies in the current state or by decreasing the strength of current values, attitudes, and behaviours.

Moving: Once the organization is unfrozen, it can be changed by moving. This step usually involves the development of new values, attitudes, and behaviours through internalization, identification, or change in structure.

Refreezing: The final step in the change process involves stabilizing the change at a new quasi-stationary equilibrium, which is called refreezing. Changes in organizational culture, changes in staff norms, changes in organization policy, or modifications in organizational structure often accomplish this.

Kotter’s Eight-Step Plan

Building on Lewin’s three-step change model, John Kotter (1996) of Harvard University developed a more detailed approach for managing change. Kotter began by listing common errors that leaders make when attempting to initiate change.

Step	Description
1. Establish a sense of urgency	Unfreeze the organization by creating a compelling reason for why change is needed.
2. Create the guiding coalition	Create a cross-functional, cross-level group of people with enough power to lead the change.
3. Develop a vision and strategy	Create a vision and strategic plan to guide the change process.
4. Communicate the change vision	Create and implement a communication strategy that consistently communicates the new vision and strategic plan.
5. Empower broad-based action	Eliminate barriers to change, and use target elements of change to transform the organization. Encourage risk taking and creative problem solving.
6. Generate short-term wins.	Plan for and create short-term “wins” or improvements. Recognize and reward people who contribute to the wins.
7. Consolidate gains and produce more change	The guiding coalition uses credibility from short-term wins to create more change. Additional people are brought into the change process as change cascades throughout the organization. Attempts are made to reinvigorate the change process.
8. Anchor new approaches in the culture	Reinforce the changes by highlighting connections between new behaviours and processes and organizational success. Develop methods to ensure leadership development and succession.

Harris’s Five-Phase Model

Ben Harris (1975), formerly of The University of Texas, created a five-stage model for managing change. He stated that these phases come in a sequential order, but they often overlap one another. Each phase will be discussed briefly.

Fullan’s Change Themes Set

Michael Fullan (2011) provides still another model of the successful change process. According to Fullan, seven basic themes derived from current knowledge of successful change form a set and must be contemplated together when attempting change. They are presented here.

Change is Learning: All change involves learning and all learning involves coming to understand and be good at something new. Thus, conditions that support learning must be part of any change effort. Such conditions are also necessary for the valid rejection of changes, because many people reject innovations before they fully understand them.

Change is a Journey, Not a Blueprint: There can be no blueprints for change, because rational planning models for complex social change do not work. The message is not the traditional “Plan, then do,” but “Do, then plan, and do and plan again.” This perspective rests on the assumption that the environment both inside and outside the organization is often chaotic.

Problems Are Our Friends: We cannot develop effective responses to complex situations unless we actively seek and confront real problems that are difficult to solve. Only through immersing ourselves in problems can we come up with creative solutions. Problems are the route to deeper change and deeper satisfaction.

Change Is Resource-Hungry: Change demands additional resources for training, for new materials, for new space, and, above all, for time. Change represents developing solutions to complex problems, learning new skills, arriving at new insights, which are carried out in a social setting already overloaded with demands.

Change Requires the Power to Manage: It Change initiatives do not run themselves. They require substantial effort devoted to such tasks as monitoring implementation, keeping everyone informed of what’s happening, linking multiple change projects, locating unsolved problems, and taking clear coping action.

Change is Systematic: What does it mean to work systematically? There are two aspects: (1) reform must focus on the development and interrelationships of all the main components of the system simultaneously—organization design, professional development, community, members’ support systems, and the like, and (2) reform must focus not just on structure, policy, and regulations but on deeper issues of the culture of the system

All Large-Scale Change Is Implemented Locally: The ideas that change is learning, change is a journey, problems are our friends, change is resource-hungry, change requires the power to manage, and change is systematic all embody the fact that local implementation by organization stakeholders is the only way that change happens.

McKinsey’s 7-S Framework

The McKinsey 7S Model is a framework for organizational effectiveness that suggests that there are seven internal factors of an organization that need to be aligned and reinforced in order for it to be successful.

Organizational Effectiveness

Organizational effectiveness refers to the ability of an organization to achieve its goals and objectives efficiently while adapting to changes in its environment and meeting the needs of stakeholders. It encompasses several dimensions, including productivity, profitability, employee satisfaction, customer satisfaction, and innovation.

Key Factors Affecting Organizational Effectiveness

Leadership: Leadership plays a pivotal role in shaping organizational effectiveness by setting a clear vision and guiding the organization toward its goals. Effective leaders inspire trust and foster collaboration across teams.
Strategy: Strategy is the blueprint that aligns an organization’s activities with its overarching mission and goals. A well-formulated strategy ensures that resources are allocated efficiently, priorities are clear, and efforts are cohesive.
Structure: Structure defines how work is organized within the organization, including the roles and responsibilities of individuals and teams. An effective structure promotes smooth communication, efficient decision-making, and collaboration across departments.
Culture: Culture is the shared set of values, beliefs, and norms that shape how employees behave and interact. A positive organizational culture fosters collaboration, inclusivity, and a commitment to excellence
Processes and Systems: Processes and Systems are the operational backbone of an organization. Efficient processes ensure that tasks are completed effectively, while robust systems support decision-making and streamline workflows.
People: People are the organization’s greatest asset. A skilled and engaged workforce drives innovation and operational success. Investing in employee development, fostering a positive work environment, and maintaining open lines of communication contribute to higher job satisfaction, lower turnover, and better overall performance.
Resources: Resources, including financial, physical, and human assets, must be managed effectively to support the organization’s goals. Effective resource management ensures sustainability, minimizes waste, and provides the organization with the tools it needs to thrive in a competitive environment.
Performance Measurement: Performance Measurement involves tracking progress toward goals and using data to make informed decisions. By evaluating key performance indicators (KPIs), organizations can identify areas of success and opportunities for improvement.

Organizational Culture

Organizational culture refers to the shared values, beliefs, norms, and practices that shape the behaviours, attitudes, and decisions of employees within an organization. It represents the collective personality of the organization, influencing how work gets done, how people interact, and how the organization is perceived both internally and externally.

Importance of Organizational Culture

A strong organizational culture creates a unique identity that differentiates the organization from its competitors. It helps employees understand what the organization stands for and its broader purpose.
Employees who align with the organizational culture feel more engaged, motivated, and committed. A positive culture fosters a sense of belonging and purpose, boosting morale and productivity.
A well-aligned culture supports strategic objectives, promotes teamwork, and streamlines decision-making, leading to enhanced organizational performance.
A strong culture enables organizations to navigate change effectively by fostering resilience, innovation, and a willingness to embrace new ideas.
Organizations with positive, inclusive cultures are more appealing to job seekers and better equipped to retain top talent, reducing turnover and recruitment costs.
Culture influences how employees interact with customers, directly impacting customer satisfaction, loyalty, and brand reputation.
A culture grounded in ethical principles ensures that employees and leaders act with integrity, fostering trust and accountability.

Power and Politics in Organizational Quality of Work Life

Power and politics are pervasive aspects of organizational life, impacting decision-making, resource allocation, and interpersonal relationships. Power refers to the ability to influence others, while politics refers to the use of power to achieve personal or organizational goals. Both power and politics can have positive and negative effects on organizational outcomes.

One way in which power manifests in organizations is through hierarchical structures. Those in higher positions have more power to influence decision-making and allocate resources. However, power can also be acquired through expertise, relationships, and social influence. For example, an employee with specialized knowledge or strong connections may have more power than someone in a higher position.

Politics can be seen as a tool for gaining and maintaining power in organizations. It often involves coalitions, alliances, and negotiations between individuals and groups seeking to further their own interests. Politics can be used to achieve positive outcomes, such as promoting innovation or challenging the status quo, but it can also lead to negative outcomes, such as unethical behaviour or the suppression of dissent.

Impact of Power on Quality of Work Life

Positive Impact

Negative Impact

Empowerment: When leaders share power and delegate authority, employees feel more in control of their work, boosting morale and engagement.

Resource Allocation: Managers with legitimate power can secure resources, training, and tools that improve work conditions.

Conflict Resolution: Power used constructively by leaders helps mediate disputes and maintain a harmonious workplace.

Authoritarian Control: Excessive use of coercive power can lead to fear, resentment, and stress among employees.

Unequal Distribution: When power is concentrated among a few, it can create feelings of exclusion and inequality, negatively affecting QWL (Quality of Work Life).

Impact of Politics on Quality of Work Life

Positive Impact

Negative Impact

Networking and Alliances: Organizational politics can foster relationships and collaborations that benefit both individuals and the organization.

Career Advancement: Employees who navigate politics effectively may secure better opportunities, leading to personal and professional growth.

Conflict and Tension: Political maneuvering often leads to interpersonal conflicts, mistrust, and stress.

Unfair Practices: Favoritism and biased decision-making can demoralize employees and undermine fairness.

Reduced Productivity: Excessive politicking diverts attention from organizational goals and impacts overall performance.

Recent advances in organizational behaviour

Fairness and equity

One of the most pressing challenges for organizations today is how to ensure fairness and equity for all their stakeholders, especially their employees. Fairness and equity refer to the perception that people are treated fairly and equally according to their needs, contributions, and expectations. Fairness and equity can affect employee engagement, performance, satisfaction, retention, and well-being.

Technology and innovation

Technology is transforming the way people work and communicate in organizations. Technology can enable new forms of collaboration, creativity, learning, and problem-solving. Technology can also create new challenges and opportunities for organizational behaviour. For example, technology can facilitate remote work, which can offer more flexibility and autonomy for employees but also pose difficulties in coordination, communication, trust, and work-life balance.

Sustainability and ethics

Another major trend that affects organizational behaviour is the growing concern for sustainability and ethics in the business world. Sustainability refers to the ability of organizations to meet their current needs without compromising the ability of future generations to meet theirs. Ethics refers to the moral principles that guide the decisions and actions of organizations and their members.

Change and resilience

The final trend that impacts organizational behaviour is the constant change and uncertainty that characterize the modern workplace. Change can be driven by various factors such as technology, competition, regulation, customer demand, or crisis. Change can bring about opportunities for growth and improvement but also challenges for adaptation and survival. Resilience refers to the ability of individuals or organizations to cope with change or adversity by bouncing back or even thriving from them.