Unit 2: Management of Change

Introduction
Organization change may be defined as the adoption of a new idea or behaviour by an organization.
It is a way of modifying an existing organization. The purpose of under taking such modification
is to increase organizational effectiveness that is the extent to which an organization achieves its
objectives. Organizational change is largely structural in nature as it brings about modifications in
organizational structure, methods and processes. Most managers agree that if an organization
wants to be successful, it must change continually in response to significant developments such as
customer needs, technological breakthrough, economic shocks and government regulations.
Managers who under take appropriate changes at a right time achieve success and put their
organizations ahead of others in race.
Definitions of Change:
Change is a very common term and is used with every aspect of human life. When already
established pattern of life is altered, it is a change. It is not possible to define the term in an exact
way as it is a very lose term used in context with almost every aspect of the organization. However
one can define change as under:
1. Change simply means alteration or putting one thing for another. Change involves addition,
subtractions, improvement or replacement of things or people.
2. Change is concerned with making the things different.
3. Any variation in the established way of life to which people are accustomed to in the
organization is known as change.
4. Organizational change refers to creation of difference or imbalance in the existent pattern
of living or dealing with work.
Nature and Importance of Change:
We know that change offers both life to the organization and also threatens the existence of life.
Those who fail to obey demand of time have to face adverse consequences. Some people, though
willing, find it difficult to adopt certain types of changes because of lack of capabilities. Nature of
change can be better discussed with reference to following features:
1. Change is an essential phenomenon, hence it is inevitable. People have to change to take
advantage of change.
2. Change demands alteration in the established way of life. It forces people to adjust and
readjust with new things, foregoing the existing ones.
3. Change brings opportunities or troubles (threats), depending upon the capacity of people
and how it is managed.
4. It is a base for growth and development because it offers plenty of opportunities for
development.
5. Organization responds to its environment by inviting and implementing change. Therefore,
it is a form of organization’s response to its environment. Similarly, change is also
implemented because of internal needs or forces.
6. Change may be economic or non economic, direct or indirect, immediate or gradual, partial
or total and so on.
7. Resistance to change is a common problem faced by most organizations. People resist the
change due to number of reasons.
8. Successful implementation of change requires planned intervention (systematic plan)
based on study and analysis of a number of considerations.
9. Most managers work as a catalyst, whose task is to absorb change in the very interest of
the organization. Sometimes, external professional consultants also perform the same task.
10. Change is always in form of addition, replacement, improvement, or subtraction of
something.

The Dilemma of Change/Types of Change

1) Stability v/s Change:
Organizations desire change in order to remain competitive and in order to remain in harmony
with the ever changing environment. Organizations also want to achieve internal stability because
of the predictability and certainty it provides. As such organizations sit on the horns of a dilemma
with reference to change.
Organizations handle the stability change dilemma depending on the amount and the type of
innovations required. The organic organization is for example suitable when frequent
technological changes are required. The organic organization is always oriented towards change
rather than stability. Mechanistic organizations on the other hand are oriented towards
technological stability. Organizations thus resolve the stability change dilemma by structuring in
an organic way when the organic organization needs new ideas and frequent changes and by
structuring in mechanistic way whenever possible to obtain efficiency. The point is that to resolve
the dilemma, organizational change process must be managed. To the extant change is planned,
uncertainty and unpredictability is reduced.
2) What type of change:
Changes can be seen in a variety of ways. This poses another major dilemma.
• Evolutionary Change:
Some changes are evolutionary is nature and don’t greatly violate the tradition and status quo
expectation. They are usually piecemeal and take place one by one. Because they are adjustments
with in the status quo, they seldom promote great enthusiasm, arouse deep resistance or have
dramatic results. Since they do not constitute significant departures from the past practices, they
are unlikely to provoke resistance. One limitation of such changes is that they are very slow and
organization may fall behind the requirement.
• Revolutionary Change:
Changes sometimes may be cataclysmic. The revolutionary changes resulting in overturning the
status quo arrangements cause violations rejections or suppression of old expectations. The
revolutionary churnings generally pose strong resistance and sometimes only an exercise of power
can order the implementation of such changes. Revolutionary changes are rarely introduced except
where situation becomes highly intolerable having no other acceptable option.
• Planned Change:
A new and scientific way of viewing changes is the plan alteration in the existing organizational
system. Planned organizational changes is the intentional attempt by an organization to influence
the status quo itself. Planned changes made by the organization with the purpose of achieving
something that otherwise might be unattainable or accomplishable with great difficulty. Through
planned changes organizations reach new frontiers and progress more rapidly towards a given set
of goals and objectives.
Planned change has two important goals. First it seeks to improve the ability of an organization to
adapt to changes in its environment. Second, it seeks to change employee behaviour. To survive
in a competitive world the organization must respond to changes in an intelligent way, stimulate
innovation, empower employees, create work teams, find new product etc. It must also make
employees learn new ways of doing things by changing their behaviour.
3) Proactive Change v/s Reactive Change:
Proactive change takes place when some forces to change lead an organization to conclude that
particular change is desirable. Reactive change occurs when these forces to change make it
necessary for a change to be implemented. For instance, introduction of a new employee benefit
scheme is proactive as the management strongly believes that it enhances satisfaction and
motivation to employees. The change would be reactive if the benefit plan was introduced because
of demands made by employees. Thus, proactive change is the change initiated by an organization
because it is identified as desirable. On the other hand reactive change is the change implemented
in an organization because it is made necessary by outside forces.
There is no close agreement among the researchers about the extent to which organization change
occurs. Perrow describes change as “glacial” whereas Griener considers change as ‘revolutionary’
rather than ‘evolutionary’ but change is ‘real’ and organization must cope with it or ail to survive.

The Process of Planned Change:

According to Kurt Lewin every behaviour is the result of an equilibrium between driving and
restraining forces. Driving forces push one way; the restraining push the other. The performance
that emerges is a reconciliation of the sets of forces. An increase in drawing forces might improve
productivity but it might also increase the restraining process. For example a manager may believe
that not giving any relaxation time to employees during lunch and tea breaks might bring more
discipline and improved performance. But the employees may turn hostile, develop distrust and
offer greater resistance. Therefore the natural tendency of the manager would be to explain to go
slow in a step by step manner till he is able to secure compliance to such an order. Drawing forces
generally activate their own restraining forces. Decreasing the restraining forces as explained
above is a more effective way to encourage change. Lewin’s model reminds us to look for multiple
causes of behaviour rather than relying on a single cause. The equilibrium also reveals that
organizations have forces that keep from falling too law as well as forces that keep it from rising
too high.
To initiate planned changes managers have to remove or weaken the restraining forces and work
towards creating or strengthening the driving forces that exist in organization. Lewin also studied
the process of bringing about effective change. Usually individuals experience two obstacles to
change: (1) they are unable or unwilling to alter long established attitudes and behaviours for
various reasons (2) they may try to do things differently but return to traditional ways after a short
time. To overcome this, Lewin proposed a three step sequential model of the change process.
1. Unfreezing:
Unfreezing involves making the need for change so obvious that the individuals, group or
organization can readily see and accept it. The following elements are vitally necessary during the
unfreezing phase
• The physical removal of the individuals undergoing change, from their accustomed routines,
sources of information and social relationships
• The undermining and destruction of social support.
• Demeaning and humiliating experiences to help individual to see his/her old attitude or
beheviour as unworthy and be motivated to change.
• The consistent linking of reward with willingness to change and of punishment with
unwillingness to change.
Unfreezing is thus the breaking down of the existing mores, old taboos and traditions, the primitive
ways of doing things so that people are ready to accept new alternatives. It involves discarding the
orthodox and conventional method and introducing a new dynamic beheviour that is most
appropriate to the situation.
The essence of this unfreezing phase is that the individual is made to realise that his beliefs,
feelings and beheviour are no longer appropriate or relevant to the current situation in the
organization.
2. Changing:
It is the phase where new learning occurs. When the individuals are convinced that their beheviour
is inappropriate, they happily come forward to accept change. In order to change, it is not enough
to sense that current beheviour is inadequate. The necessary condition is that various alternatives
or beheviour must also be made available in order to fill the vacuum created by unfreezing phase.
During this phase of ‘changing’, individuals learn to behave in new ways. They are provided with
alternatives out of which to choose the best one. Kelman elaborately explain this ‘moving’ phase
in terms of complains, identification and internalisation.
• Complains or forces occur when individuals are forced to change either by rewards or by
punishment.
• Internalisation occurs when individuals are forced to encounter a situation that calls for new
beheviour.
• Identification occurs when individuals recognize one among various models provided in the
environment that is most suitable to their personality.

3. Refreezing:
During this phase individuals internalise the new beliefs, feelings and beheviour learnt in the
‘changing’ phase. That is to say a person accepts the new beheviour as a permanent part of his
beheviour repertoire. He has to practise and experiment with the new methods of beheviour and
see that it effectively blends with his other behavioural attitude. It is very important for the manager
concerned with the introducing change to visualise the new beheviour is not extinguished soon.

Resistance to Change:
Resistance to change may be individual or organizational. People resist change for a variety of
reasons fear of losing job obsolescence of skills disturbs the status qua and social relationship etc.
Organization too resist changes because of resource constraints difficulty in bringing about
structural technological changes etc. Lets examine this in greater detail.
Economic reasons:
1) Fear of economic loss:
Employees often feel insecure about loss of employment and economic benefits such as:
(i) Fear of technological unemployment
(ii) Fear of reduce work hours and consequently less pay
(iii) Fear of demotion and thus reduce wages
(iv) Fear of speed up and reduce incentive wages
Machines, computers and robots have destroyed thousands of jobs in recent past. Employee fears
in this regard their for seem genuine and well founded
2) Obsolescence of skills:
Change may render existing employee skills and knowledge obsolete. What they have been doing
for ages together might be under threat. If employees fell that do not possess requisite skills that
are currently in demand they resist change quite seriously.
Personal reasons:
1) Fear of unknown:
Change is resisted often because of its unknown consequences. Whenever people do not know
exactly what will be in change happen they are likely to resist it will all with their might. For
example a bank employee may resist posting to ruler branch because of the anxiety on unknown
area. Female clerks in Indian banks often refuse promotions because promotion requires
relocketing.in all such cases employees don’t know how change will affect them and worry about
whether they will be able to meet to demands of a new procedure technological and location.
2) Status:
People like status quo because they have adjust to the demands of the job over a period of time.
Change would render all such experience knowledge and learning somewhat useless. When
introduced, change would require people to learn new or even difficult way of doing things. This
means loss of expected rewards, convenience and comforts. This kind of emotional turmoil forces
them to embrace status quo arrangements passionately. Why to rock the boat and invite trouble?
3) Self Interest and Ego defensiveness:
Employees typically resist a change as they believe it will take away something of value. A
proposed change in job design structure or technology may lead to a perceived loss of power
prestige or company benefits. Many impending changes threaten the self-interests of some
managers in the organization. A change may diminish their power and influence within the
company so they fight it. Again a seals persons suggestion to expand seals by offering seasonal
discounts may be turned down by the branch manager who things the seals executive might steal
the credit.
Social reasons:
1) Social displacement:
Change often causes social displacement of people buying breaking informal groups and friendly
relationships. Employees get emotionally upset when friendship breakdown. They dislike new
adjustments, new grouping and new relationships brought forward by change efforts and thus resist
it vehemently.
2) Peer pressure:
People may resist change because peer pressure.as individual they may like computerization but
refuse to accept it for the sake of the group. Any change that upsets group norms is likely to be
opposed even if is known to have a positive impact.
Organizational issues:
1) Threat to Power and Influence:
Some people consider change as a potential threat to their position and influence in the
organization. Novel ideas and the new use of resources can disrupt the power of relationships and
therefore are often resisted at organizational level. Especially people who are occupying the top
place in the organization resist some changes because any change might threaten their existing
power. That is to say people resist change on the ground that it might affect their position power.
2) Organization Structure:
Some organization structures have inherent forces acting again change.in a bureaucratic structure
for example jobs are narrowly defined lines of authority are clearly spelt out the information flows
from top to the boutam.in such an organization novel innovative ideas don’t find favour are screen
out. The structure inertia favours stability and status quo rather than change and innovation.
3) Resource Constraints:
Organization many a time operate under some resource constraints if the resources with which to
operate are available in abundance there will be no problem of introducing change. But the
necessary financially material and human resources may not be available to the organization to
make the needed changes.
4) Sunk Cost:
The plight of some companies is such that heavy capital is blocked in the fixed assets. If an
organization wishes to introduce change then difficulty arises because of this sunk cost. Sunk cost
are not restricted to physical things alone further they can be expressed in terms of people also.
For instance some member in the organization retain their jobs by virtue of enough seniority
though they do not significantly contributed to the organization unless they are motivated properly
to higher performance the payment for their services for example fringe benefits salaries and other
payment represents the sunk cost for the organization.

Overcoming Resistance to Change/Remedies:

Some of approaches at the individual as well as group level design to reduce resistance to change
may be listed thus:
1) Education & Communication:
One of the easy ways to overcome resistance to change is to help employees understand the true
need for a change as well as the logic behind it. Tell them clearly as to what is going to occur why
to dispel their fear.to this and manager should specifically explain:
• What the change is about;
• When it to be introduces;
• How it will be implemented;
• Why the change is required;
• What is the basic purpose of change;
• How the change is going to help them etc.
When employees realize the need for change and understand the logic behind it, they tend to accept
easily. However, it is very time consuming approach. Managers have to explain everything
patiently in order to gain acceptance from employees.
2) Participation and involvement:
Participation is another key concept in gaining acceptance if people participate in what is happing
they will be more likely to go along. They get a chance to express their opinions freely, get their
doubts clarified and understand the perspective of others. As a result, uncertainty is reduced; self-
interests and social relationships are less threatened. Involving users and potential resisters in the
change process has other benefits also.it helps managers identify potential and understand the
differences in perceptions of change among employees. After the series of discussions any change
effort that is likely to be made is going to be accepted wholeheartedly. People generally support
what they help create. People who participate will be committed to implementing change.
However, it is a time consuming and costly exercise.
3) Facilitation & Support:
Change agents can offer a range of supportive efforts to reduce resistance. Compassionate and
sympathetic listening may be used to reduce employee’s fears and anxieties. Managerial support
can also come in the form of special new skills training job stress counselling and compensating
time off. The approach obviously rests on the belief that people have the ability to solve their own
problems with the help of a sympathetic listener. The role of manager as a facilitator is one of
understanding and perhaps advising rather than passing judgement. This requires a somewhat
permissive and friendly atmosphere.
4) Negotiation and Agreement:
Sometimes management can neutralize potential or actual resistance by exchanging something of
value for cooperation.it can offer rewards to those who go along with the change it can also agree
to protect those who will potentially be damaged by the change. Every attempt can be made to see
that people don’t loss their face in the change process. Unions and their representatives who
bargain for their members should be allowed to air their opinions freely so as to have a clear picture
of what they stand for. When management is able to strike a deal by offering something of value
an agreement is reach. Negotiation as a tactic works when resistance come from powerful sources
.its cost can be quite high when the field is wide open to several contending groups. As commented
by Robbins, .there is the risk that once a change agent negotiates with one party to avoid resistance
he/she is open to the possibility of being blackmailed by other individuals in positions of the power.
5) Manipulation & Cooptation:
Manipulation occurs when managers selectively withhold undesirable information create false
rumours distort facts to get potential resisters accept the change. In co-optation, the change agent
seeks to buy off the leaders of a resistance group by giving them a key role in the change process.
This method, however is not a form of participation because the change agent does not really want
advices from those coopted. In this sense, cooptation would prove to be a known productive self-
defeating exercise. People who fell that they have been tricked, are not being treated fairly or are
being lied to are likely to respond negatively to a change. Once the coopeted members discovered
the tactics the change agents credibility may nose dive.
6) Coercion:
In coercion managers use formal power to force employees to change. Resisters are told to accept
the change or loss rewards or even their jobs. This approach may not pay in the long run because
employees fell like victims are abbey at change agent and may even sabotage the changes. In
critical situations where urgent response is required, coercion works.
7) Group Dynamics:
Forces operating with in groups can be used to overcome resistance to change. A group can be
very effective in changing members attitudes values and behaviour specially in those areas as are
related to the proposed of the group. In a group where members are share perception that change
is required change can be easily implemented. The source of pressure for change lies within the
group. Likewise open communication with group members help in resolving knotty issues
amicably an implement change smoothly

Change Agents:
A change agent is a person from inside or outside the organization who helps an
organization transform itself by focusing on such matters as organizational effectiveness,
improvement, and development. Change agent is the one who is given a responsibility to introduce
change in the organization successfully. The person can be one from inside the organization or an
expert can be called for from outside the organization to do the needful. Thus we can have internal
or external change agents. Both have their own advantages and disadvantages. They can be
summarized as under:
Advantages of internal change agents are:
1. As they are from the organization, they would possess better knowledge of the organization
– its objectives, policies and practices. This knowledge facilitates the implementation of
change.
2. As they are from inside the organization, they are quickly available as and when required.
3. As the payment to internal change agents is not to be done explicitly, it reduces out-of-
pocket costs.
4. Being an internal part of the organization, they would have better control and authority to
use whenever needed in the process of implementing a change.
Disadvantages of internal change agents are listed as under:
1. The people who are very close to the problem may not be able to come to an optimum
solution of the problem.
2. As they are internal to the organization, they may hold biased view about different aspects
of the organization. This may hinder the process of successful implementation of change.
3. As internal change agents are very much a part of the problem which is to be solved by
implementing a change, they may create an additional resistance to change.
4. As internal employees are already entrusted with some work, they may not be directly
available for the task of implementation of change. So their work needs to re-assigned.
On the other hand, the second option is to avail the services of external change agents. There are
certain benefits and drawbacks of having external change agents. These are as follows:
The advantages are:
1. As they are not a part of the organization where change is to be introduced, they would
hold an objective view of the organization.
2. As external agents have expertise in the field, they would even have more experience in
dealing with diverse problems.
3. If required, external change agents can call more individuals with diverse expertise to be a
part of the team.
4. As they are professionals, they would have more technical knowledge, competence and
skills.
The disadvantages of external change agents are:
1. They would possess less knowledge about the organization where change is to be
introduced.
2. They are to be paid immediately on the completion of the task, so it leads to high out-of-
pocket costs.
3. Being external agents to introduce change in the organization, it needs longer start up time.
4. As they become known to the internal issues that emerge during the process, it may reflect
unfavourably on the image of the organization.

➢ Role of a Change Agent:

Though role of a change agent varies with the nature of organisation, problem and management,
change agent usually performs the following tasks:

1. He announces the need for change in the organisation. Members usually want to maintain
status quo which is resistant to change. Change agents help to overcome this resistance.
2. He diagnoses the present situation in the organisation, foresees changes in the
environment and helps the client company in adapting to the changing environment.
3. He helps in smoothly carrying out the change process. People accept change naturally
without feeling that they are forced to accept it.
4. He formulates strategies for change. These are known as change interventions or OD
(organisation Development) interventions.
5. He trains the internal change agents to implement the change process and introduce it
further in the organisation. Change, thus, becomes an on-going process in the light of
ever-changing dynamic external environment.
6. He uses behavioural skills to deal with emotional and social problems of employees in
accepting and implementing change.

A change agent, thus, acts as a:

1. Facilitator:
He facilitates change by developing awareness about the importance of change.
2. Consultant:
He draws major plan for change based on his diagnostic skills.
3. Counselor:
He studies the attitudes, personality, perception, beliefs and expectations of
organisational members to the change process and motivates them to accept change and
continue in the changed environment till a change is introduced again.