Unit – 5

Organizational Change

Q1) What is the Meaning, Definition & Nature of Organizational Change?

A1) Meaning-Organizational change refers to any alteration that occurs in total work environment. Organisational change is an important characteristic of most organizations. An organisation must develop adaptability to change otherwise it will either be left behind or be swept away by the forces of change. Organisational change is inevitable in a progressive culture.

Modern organizations are highly dynamic, versatile and adaptive to the multiplicity of changes. Organisational change refers to the alteration of structural relationships and roles of people in the organization. It is largely structural in nature. An enterprise can be changed in several ways. Its technology can be changed, its structure, its people and other elements can be changed. Organisational change calls for a change in the individual behaviour of the employees.

Organizations survive, grow or decay depending upon the changing behaviour of the employees. Most changes disturb the equilibrium of situation and environment in which the individuals or groups exist. If a change is detrimental to the interests of individuals or groups, they will resist the change.

Definition:

Change is something that should be embraced rather than feared. Only with change will businesses be able to lay the foundations for long-term success.

According to Cambridge Dictionary, organizational change is: “A process in which a large company or organization changes its working methods or aims, for example in order to develop and deal with new situations or markets.”

Nature of Organizational Change

Change is a part of life and provides opportunity for growth. It is a conscious decision by the management of organisation. In any organisation, we have people engaged in production, research, development, administration, etc. The organisation in order to change should prepare a stock of the situation and should effect change in their attitude and style of functioning.

Q2) Discuss Types Organizational changes.

A2) Types Organizational changes are of two types:

Reactive Changes:

Reactive changes occur when forces compel organization to implement change without delay. In other words, when demands made by the forces are compiled in a passive manner, such a change is called reactive change.

Proactive Changes:

Proactive changes occur when some factors make realize organization think over and finally decide that implementation of a particular change is necessary. Then, the change is introduced in a planned manner.

Q3) Elaborate on the Forces that acts as stimulants to change?

A3) The Forces that acts as stimulants to change are

 Establishing a sense of urgency: - when within company, group of employees start to think about financial performance, technology upgradation, company’s position in market, competition in market and problems. They have done healthy discussion about company’s profit, company position in market and how to tackle the problems of company.

Developing a guiding group: - when an initiative is taken by few employees. Some senior employees also join that group for the success of that group. Because the senior employees may lead and direct the group and they will form the core guiding group.

Creating a new vision: - The guiding group comes with a vision. The vision should be easy to communicate. The guiding group also develops a strategy for achieving the vision.

Communicating new vision: - Communication of vision should come both in words and deeds. It is very necessary that it is clearly understood by employee.

Removing obstacles to the new vision: - The group is only successful when employee being work according to vision and also apply the new ways to do the work, only then they can free serious from obstacles along with the work. So it is duties of senior management to remove the obstacle on work.

Creating short term successes: - When the group not gets the long-term success, then the company celebrates the short term success so that moment is not lost.

Declaring victory: - change initiator and resister both should take time to declare change programme in organization successfully until they sink deeply into organizational culture. As in the new way of working are sensitive so the process can take five to ten years. So, the company should resist temptation to declare victory after few improvements and clear performance of the new programme.

Implementing the change: - Change become successful in an organization when new behaviour becomes incorporated in social norms and shared values, that is, new behaviour has to be implemented.

Q4) Describe Implementing Organizational Change

A4) 8 Steps to Implementing Change

Management Support for Change

Employees develop a comfort level when they see management supporting the process. It is critical that management shows support for changes and demonstrates that support when communicating and interacting with staff. There is nothing worse than sending a mixed message to employees. If you can’t support the change 100%, don’t even think about making it.  Employees will know it and it will self destruct.

Case for Change

No one wants to change for change’s sake, so it is important to create a case for change. A case for change can come from different sources.  It can be a result of data collected on defect rates, customer satisfaction surveys, employee satisfaction surveys, customer comment cards, business goals as a result of a strategic planning session, or budget pressures. Using data is the best way to identify and justify areas that need to improve through change initiatives.

Employee Involvement

All change efforts should involve employees at some level. Organizational change, whether large or small, needs to be explained and communicated, specifically changes that affect how employees perform their jobs. Whether it is changing a work process, improving customer satisfaction, or finding ways to reduce costs, employees have experiences that can benefit the change planning and implementation process. Since employees are typically closest to the process, it is important that they understand the why behind a change and participate in creating the new process.

Communicating the Change

Communicating change should be structured and systematic. Employees are at the mercy of management to inform them of changes. When there is poor communication and the rumour mill starts spreading rumours about change, it can create resistance to the change. Being proactive in communications can minimize resistance and make employees feel like they are part of the process.

Implementation

Once a change is planned, it is important to have good communication about the roll-out and implementation of the change. A timeline should be made for the implementation and changes should be made in the order of its impact on the process and the employees who manage that process. For instance, if your organization is upgrading its software program, employee training should be done before the software is installed on their computers. An effective timeline will allow for all new equipment, supplies, or training to take place before it is fully implemented. Implementing without a logical order can create frustration for those responsible for the work process.

Follow-up

Whenever a change is made it is always good to follow-up after implementation and assess how the change is working and if the change delivered the results that were intended. Sometimes changes exceed target expectations but there are occasions that changes just don’t work as planned. When this is the case, management should acknowledge that it didn’t work and make adjustments until the desired result is achieved.

Removing Barriers

Sometimes e Sometimes employees encounter barriers when implementing changes. Barriers can be with other employees, other departments, inadequate training, lacking equipment, or supply needs. management also needs to deal with resistant or difficult employees. It is management’s responsibility to ensure that employees can implement change without obstacles and resistance. It is unfortunate but there are times when employees simply can’t accept a change. In these rare cases, employees simply need to move on in order to successfully implement a needed change. These are difficult but necessary decisions.

Celebrate

It is important to celebrate successes along the way as changes are made.  Celebrating the small changes and building momentum for bigger changes are what makes employees want to participate in the process. When employees understand why a change is made and are part of the process for planning and implementing the change, it allows for a better chance for successful implementation.

Q5) Write short note on Lewin’s Change Management Model.

A5) Lewin’s Change Management Model is one of the most popular and effective models that make it possible for us to understand organizational and structured change. This model was designed and created by Kurt Lewin in the 1950s, and it still holds valid today. Lewin was a physicist and social scientist who explained the structured or organizational change through the changing states of a block of ice. His model consists of three main stages which are: unfreeze, change and refreeze. Let’s look at these stages in detail:

Unfreeze: The first stage of the process of change according to Lewin’s method involves the preparation for the change. This means that at this step, the organization must get prepared for the change and also for the fact that change is crucial and needed. This phase is important because most people around the world try to resist change, and it is important to break this status quo. The key here is to explain to people why the existing way needs to be changed and how change can bring about profit. This step also involves an organization looking into its core and re-examining it.

Change: This is the stage where the real transition or change takes place. The process may take time to happen as people usually spend time to embrace new happenings, developments, and changes. At this stage, good leadership and reassurance is important because these aspects not only lead to steer forward in the right direction but also make the process easier for staff or individuals who are involved in the process. Communication and time thus are the keys for this stage to take place successfully.

Refreeze: Now that the change has been accepted, embraced and implemented by people, the company or organization begins to become stable again. This is why the stage is referred to as refreeze. This is the time when the staff and processes begin to refreeze, and things start going back to their normal pace and routine. This step requires the help of the people to make sure changes are used all the time and implemented even after the objective has been achieved. Now with a sense of stability, employees get comfortable and confident of the acquired changes.

Q6) Describe McKinsey 7 S Model.

A6) McKinsey 7-S framework or model is one of those few models that have managed to persist even when others came in and went out of trend. It was developed by consultants working for McKinsey & Company in the 1980s and features seven steps or stages for managing change.

Stages

Strategy – Strategy is the plan created to get past the competition and reach the goals. This is the first stage of change according to McKinsey’s 7-S framework and involves the development of a step-by-step procedure or future plan.

Structure – Structure is the stage or attribute of this model that relates to the way in which the organization is divided or the structure it follows.

Systems – In order to get a task done, the way in which the day-to-day activities are performed is what this stage is related to.

Shared values – Shared values refer to the core or main values of an organization according to which it runs or works.

Style – The manner in which the changes and leadership are adopted or implemented is known as ‘style’.

Staff – The staff refers to the workforce or employees and their working capabilities.

Skills – The competencies as well as other skills possessed by the employees working in the organization.

Q7) What is Kotter’s change management theory?

A7) Kotter’s change management theory is one of the most popular and adopted ones in the world. This theory has been devised by John P. Kotter, who is a Harvard Business School Professor and author of several books based on change management. This change management theory of his is divided into eight stages where each one of them focuses on a key principle that is associated with the response of people to change.

Stages

Increase urgency – This step involves creating a sense of urgency among the people so as to motivate them to move forward towards objectives.

Build the team – This step of Kotter’s change management theory is associated with getting the right people on the team by selecting a mix of skills, knowledge and commitment.

Get the vision correct – This stage is related to creating the correct vision by taking into account, not the just strategy but also creativity, emotional connect and objectives.

Communicate – Communication with people regarding change and its need is also an important part of the change management theory by Kotter.

Get things moving – In order to get things moving or empower action, one needs to get support, remove the roadblocks and implement feedback in a constructive way.

Focus on short term goals – Focusing on short term goals and dividing the ultimate goal into small and achievable parts is a good way to achieve success without too much pressure.

Don’t give up – Persistence is the key to success, and it is important not to give up while the process of change management is going on, no matter how tough things may seem.

Incorporate change – Besides managing change effectively, it is also important to reinforce it and make it a part of the workplace culture.

Q8) How to DEVELOP: A LEARNING ORGANISATION?

A8) Some of the major steps for developing a learning organization are as follows:

I. Awareness:

To start with, organizations must appreciate that learning is necessary at all levels and not just limited to the managerial levels. This apart, need for change must also be accepted as the only way to survive. Such awareness at organization levels can only be created once organizations believe in emulating the examples of success stories of those who have leapfrogged their growth truly developing the learning organization culture.

II. Environment:

Creating a learning environment requires sharing with all members of the organization, a comprehensive picture of the whole organization and its goals. This requires creating a more flexible, organic structure. Organic structure. The flatter structure also promotes transparency of information between members of the organization and thereby develops a more informed work force. The desired environment for learning organization encourages openness and reflectivity, and accepts error and uncertainty. Members of the organization should be able to question decisions without fear.

III. Leadership:

Leaders should activate learning. Learning is an enabler for an organization to gain competitive advantage. But to get the results, it is the leader who sells the concept and encourages learning to help both the individual and the organization in learning. It is the leader’s responsibility to help mould the individual views of team members. It requires the management to provide commitment for long-term learning with resource support.

IV. Empowerment:

The real testing tool for learning is the degree of empowerment. Empowerment requires involving workers in decision making. Empowerment makes workers more responsible for their actions, without letting loose the managerial involvement. Managers still need to encourage, enthuse, and co-ordinate the workers. Empowerment must be allowed at all levels so that members can learn from one another simultaneously.

V. Learning:

Learning systems also need to replicate real-life situations through a series of simulation games. This facilitates learning from mistakes to make the future learning more effective. The learning environment needs to be open, flexible, and motivating. To facilitate continuous learning, some organizations also make extensive use of the electronic media such as e-learning, duly providing a track to measure the learning progresses. But its acceptance largely depends on the workers’ urge to learn. This can be ensured by linking learning with various incentive packages and HR decisions.

Q9) What are the Methods of Implementing Organizational Change.

A9) Several methods of implementing change in organizations are discussed below:

Today’s business environment is very dynamic and changes are the order of the day. Some changes originate within the organization, but many come from the external environment.

For instance, new laws are legislated by the government which the organizations must comply, new developments in technology arise, competitors introduce new products / services, customer’s likes and dislikes change, life styles change. There are pressures from customers, labour unions, communities and competitors which force change on organizations.

(i) By transformational leaderships:

Transformational leaders are managers who initiate bold strategic changes to position the organisation for its future. They articulate a vision and sell it vigorously. They stimulate employees to action and charismatically model the desired behaviours. They attempt to create learning individuals and learning organizations that will be better prepared for the unknown future challenges. Three important elements of transformational leadership are:

(a) Creating a vision,

(b) Figuring charisma and

(c) Stimulating learning.

(a) Creating Vision:

A vision is a crystallized long-range image or idea of what can be and should be accomplished. A vision may also integrate the shared beliefs and values that serve as a basis for changing an organization’s culture.

(b) Communicating Charisma:

Managers as leaders need to persuade employees that the vision is urgent and to motivate them to achieve it. Charisma is a leadership characteristic that can help influence employees to take early and sustained action. Charismatic leaders are dynamic risk takers, who show their depth of expertise and well-deserved self-confidence, express high performance expectations, and use provocative language to inspire the followers. Charismatic leaders are respected and trusted by employees as they introduce change and tend to be emotionally committed to the vision of such leaders.

(c) Stimulating Learning:

Transformational leaders develop people’s capacity to learn from the experience of change. This process is called double-loop learning. The employees, who are double-loop learners, develop the ability to anticipate problems, prevent many situations and to be more ready for the next change to be introduced in the future.

(ii) By use of group forces:

The group is an instrument for bringing strong pressures on its members to change. Since behaviour is firmly grounded in the groups to which a person belongs, any changes in group forces will encourage changes in the individual behaviour. The idea is to help the group join with management to encourage desired change.

(iii) By providing a rationale for change:

Capable leaderships reinforce a climate of psychological support for change. The effective leader presents change on the basis of the impersonal requirements of the situation, rather than on personal grounds. Change is more likely to be successful if the leaders introducing it have high expectations of success. Managerial and employee expectations of change may be as important as the technology of change.

(iv) By participation:

Participation encourages employees to discuss, to communicate, to make suggestions and to become interested in change. Participation encourages commitment rather than mere compliance with change. Commitment implies motivation to support a change and to work to ensure that the change is effective.

Employees need to participate in a change before it occurs, not after. When they are involved in the planned change, right from the beginning, they feel committed to the implementation of such change.

(v) By sharing rewards:

By ensuring that there are enough rewards for employees in the changed situation, managers can build employee support for change. Rewards also give employees a sense that progress accompanies a change. Both economic and psychic rewards are useful.

(vi) By ensuring employee security:

Along with shared rewards, existing employee benefits need to be protected. Security during a change is essential in the form of protection from reduced earnings when new technology and methods are introduced. Seniority rights, opportunities for advancement etc., are to be safeguarded when a change is made.

(vii) By communication and education: on

Support for change can be gained by communication and education. All individuals or groups that will be affected by change must be informed about the change in order to make them feel secure and to maintain group cooperation.

(viii) By stimulating employee readiness:

Employers should be helped to become aware of the need for a change. Change is more likely to be accepted if the people affected by it recognize a need for it before it occurs. It is also essential for managers to take a broader, systems-oriented perspective on change to identify the complex relationships involved. Organisational development can be a useful method for achieving this objective.

Q10) What do you mean by Dealing with Individual & Group Resistance?

A10) Individual Resistance

People resist change because they fear the consequences. Change means learning new habits and facing new situations. Learning new skills comes with the uncertainty of being able to master those skills. It’s easy to see why change can seem threatening. Furthermore, if individuals’ sense that there will be economic insecurity or risk regarding the change, or if they don’t trust management, this could further add to the resistance.

Sometimes, individual traits can make one change resistant. Culture, personality and prior experiences can contribute to one’s level of acceptance where change is concerned.

Group Resistance.

When groups start to work well together, it’s because they’ve established norms and cohesion. Central norms in a group can be difficult to change, because they involve the group’s identity. Any change to them is likely to be resisted, as group members will work to protect each other and preserve the group. If a group is used to practicing centralized decision making and suddenly, they’ve been told to use a decentralized style of decision making, they’re likely to resist, because it goes against their norm.

Group cohesion can affect the acceptance of change. If a cohesive group has been disbanded in favor of a different kind of team structure, the group’s desire to stick together may make them resistant to change. But just as group cohesion can work against change, it can also work for change. A cohesive group looking to implement change can typically overcome any one individual member’s resistance to it.