CHAPTER 3

CHANGE MANAGEMENT
Meaning of Change in an organization:
Change in an organization refers to the process of introducing and implementing
alterations to its structure, culture, policies, procedures, or strategies.
Organisational change occurs when an organisation transforms its structure,
strategies , methods, culture and other elements to reorganize and restructure the
organization.
These changes can be initiated for various reasons, such as adapting to market
conditions, improving efficiency, responding to external factors, or achieving
specific goals. Managing change effectively is crucial for organizational growth and
success.

Characteristics or nature of Change:

Change is characterized by the following features:
1. Movement from one state of balance to another: Change involves moving from
the existing state of balance to a new level of equilibrium. It disturbs the old
equilibrium and develops a new equilibrium where new ways of working become
part of the system.
2. In whole or parts: It may involve change in some parts of the organization
(technology, structure or people) or the organization as a whole. Even if change is
introduced in art of the organization, it affects the entire organization.
3. Pervasive: The process of change is not restricted to one organization or one
country. It is a worldwide phenomenon. The whole world, all countries, every
organization, its members and all individuals change their pattern of working.
4. Responsive to environmental factors: Change is affected by factors external and
internal to the organizations.
5. Continuous process: Change is not a one-time process. Organizations keep
changing their policies to survive and grow in the competitive markets. While some
changes are minor and get absorbed in the system through internal adjustments,
major changes are introduced through change agents.
6. Essential activity: Change is not a force that organizations may or may not
respond to. If organizations want to survive, change has to be accepted by them
They can, however, plan the change or react to change. The former approach to
change is conducive to organizational development and growth.
7. Change agents: Change is initiated by change agents. Change agents can be
internal or external to the organization. Internal change agents can be top
executives of the organization. External agents are outside experts or advisors
appointed by executives to initiate the change process.

Factors influencing Change :

Broadly we can classify the factors influencing change into two categories. They
are:
I. External Reasons
II. Internal Reasons

I. External Reasons
1. Government Rules and Regulations: Changes in laws and regulations imposed by
governmental bodies can necessitate organizational adjustments to remain
compliant. For example, new labor laws may require companies to revise their HR
policies.
2. Competition: The competitive landscape can be a powerful driver of change. To
gain a competitive edge, organizations often need to innovate, improve products or
services, or explore new markets. For instance, a surge in competitors entering the
market may force a company to enhance its product offerings.
3. Technological Advances: Rapid technological advancements can force
organizations to adapt or risk becoming obsolete. Integrating new technologies can
boost efficiency and enhance customer experiences. An example is the adoption of
online ordering systems in response to customer demands for convenience.
4. Changes in People Requirements: As societal preferences and demographics
evolve, organizations must adjust their strategies and offerings. For example, the
rise of eco-conscious consumers may lead companies to develop sustainable
product lines.

II. Internal Factors

1. Change in Leadership: New leadership often introduces a fresh vision and
strategy for the organization. Leadership changes can lead to shifts in
organizational culture, values, and goals, driving change throughout the
company.
2. Introducing New Technology: The implementation of new technology can
revolutionize internal processes and procedures. For instance, transitioning to
cloud-based collaboration tools can streamline operations and improve
communication.
3. The Domino Effect: Change in one area of the organization can trigger a cascade
of adjustments. For example, restructuring a department's responsibilities may
lead to changes in adjacent departments to ensure alignment.
4. For Meeting Crises: Unexpected events, such as economic downturns, natural
disasters, or security breaches, may require swift organizational changes to
adapt and recover. Crises often demand agile responses, which can necessitate
significant changes in strategy and operation
5. Organizational Life Cycle: Organizations go through different stages in their life
cycle, from inception to maturity and, sometimes, decline. Each stage requires
distinct strategies and adaptations. For example, a start-up might need to shift
its focus from innovation to scaling as it moves from the growth phase to
maturity.

PLANNED CHANGE
Meaning of Planned change:
Planned change means making intentional and organized improvements in an
organization or process. It's like having a clear plan to make things better, whether
it's in how a company works or how a system operates. It involves setting goals,
making a detailed plan, and getting everyone involved to make sure the changes
happen smoothly.

Importance of Planned Change:

1. Adaptation to Environmental Change: Planned change helps organizations adapt
to the ever-changing business environment by improving their ability to respond to
new concepts, ideas, knowledge, and systems.
2. Employee Behavior Change: Planning is crucial for changing employees'
attitudes and behaviors in order to make them more responsive to changes in the
organization.
3. Meeting Competition: Planned change enables organizations to modify their
working procedures and systems to effectively compete with other businesses in
the market.
4. Fulfilling Consumer Expectations: Planned change helps organizations identify
and fulfill the changing needs, demands, and expectations of consumers.
5. Innovation of New Knowledge: Planned change supports the innovation of new
ideas, concepts, and technology to enhance organizational performance and meet
evolving customer demands.
6. Development of Teamwork: Planned change emphasizes participative
management and the division of work among teams, fostering collaboration and
facilitating the achievement of planned objectives.
7. Improved Organizational Efficiency: Planned change allows organizations to
identify and eliminate inefficient practices or processes, resulting in improved
overall efficiency and productivity.
8. Enhanced Employee Morale and Satisfaction: Planning for change and involving
employees in the process can boost morale and job satisfaction, as they feel valued
and part of the decision-making process.
9. Increased Organizational Flexibility: Planned change enables organizations to be
more flexible and adaptable to emerging trends, market shifts, and changing
customer preferences.
10. Better Decision-Making: Planning for change involves thorough analysis and
evaluation, leading to better decision-making and more informed choices for the
organization.
11. Organizational Growth and Expansion: Implementing planned change
initiatives can help organizations identify new opportunities, expand their
operations, and enter new markets.
12. Improved Organizational Resilience: Planned change equips organizations with
the necessary tools and strategies to withstand disruptions and navigate through
challenging times.
13. Enhanced Innovation and Creativity: Planned change encourages a culture of
innovation and creativity, empowering employees to generate and implement new
ideas and solutions.
14. Effective Change Management: Planning for change provides a structured
approach to managing and implementing change, minimizing resistance and
ensuring successful outcomes.
15. Stakeholder Engagement: Planned change involves engaging stakeholders, such
as employees, customers, suppliers, and shareholders, fostering collaboration and
obtaining valuable input and support.

Nature of planned Change :

1.Planned change is qualitative in nature: A Change in the frequency or in the
technique points out only a quantitative change. Qualitative change takes place
only when the individuals in organization developed the desire to change. They go
through their personal self-examination and modify their behaviour in meaningful
ways.
2. Every planned change has direction: The change has direction. The change has a
basic purpose and rationale. The means used for bringing about change is been
guided by some principles.
3. Enact the change at various levels: It is used in order to enact the change at the
unit level and even at the organizational level to implement promote innovation as
well as social change
4. Emphasized on gathering data: emphasis or focus on the gathering or collection
of data and diagnosis before the action as well as planning. For example, big data to
solve the big problems.
5. Planned Change includes various steps: It includes recognizing the need for the
change, developing change goals, appointing a change agent, assessing the current
climate, developing and implementing the change plane, evaluating the plan's
success.

RESISTANCE TO CHANGE
Meaning to Resistance to change:
Resistance to change refers to the natural human tendency to resist or oppose
significant alterations, transitions, or innovations in an organization, process, or
personal life. When people are confronted with change, they may feel
uncomfortable, anxious, or uncertain about the unknown aspects of the change.
This resistance can manifest in various forms, such as reluctance to adopt new
processes, skepticism about the benefits of the change, or even active opposition
to the proposed changes. Understanding and managing resistance to change is
crucial for successfully implementing new ideas or strategies. It often involves
effective communication, addressing concerns, and providing support to help
individuals and organizations adapt to the changes more smoothly.

Meaning of organizational resistance:

Organizational resistance refers to the collective opposition or reluctance
within an organization to adopt and embrace changes, whether they are related to
new policies, procedures, technology, or any other significant alterations in the way
the organization operates. This resistance can be manifested at various levels,
including among employees, management, and different departments or units
within the organization.

Reasons for resistance to change:

I. Individual Resistance
Individuals resist change for a variety of reasons, Here are the four reasons why
individuals may resist change
1. Fear of the Unknown: Changes often bring with it ambiguity and uncertainty. If,
for example, the introduction of a new computer system requires that the
employees learn some specific statistical techniques, some may fear they will be
unable to do so. They may, therefore, develop a negative attitude toward the
introduction of new computer system.
2. New Learning: For doing new task, one requires to learn a new language,
develop a new technology, or adjust to a totally new culture. No doubt, learning
new ideas can be exciting, most people report that excitement comes only after the
learning is occurred, not before.
3. Disruption of Stable Friendship: Almost all organisational changes disrupt the
previous stable friendship. This, in turn, results in uncomfortable feelings of social
isolation and loneliness. This may serve as a source of indirect resistance to change.
4. Distrust of Management: There are well-documented findings available from the
history of labour relations that managers exploited labourers. That's why
employees often suspect the reason for change and try to oppose the same.
II. Organisational Resistance
The organisational structure itself also resists change. The four reasons of
organizational resistance to change have been summarized as follows:
1. Threats to the Power Structure: Most changes have the capacity to disrupt the
organisations's power structure. Introduction of decentralised decision making is
example of change that is often seen as threats to the power of supervisors and
middle level managers but a welcome by lower-level employees.
2. Structural Inertia(rigidity) : Organisational structures have several mechanisms
designed to produce stability. Accordingly, job assignments, selection and training
of new employees, and performance reward systems are designed to maintain
stability, thereby resist to change. Whenever an organisation is confronted with
change, this structural inertia acts as a counterbalance to sustain stability.
3. System Relationships: As mentioned earlier, any change has domino effect.
Change in one subsystem affects changes in other subsystems also. For example, a
change in the accounting department may influence the methods of reporting and
recordkeeping of every other department. Hence, the other departments may
resist to such change.
4. Sunk Costs and Vested Interest: Sunk costs are investments in fixed assets, such
as land and building and machinery. Vested interests are the personal
commitments of individuals to programmes, policies, or other people. As
individuals find it difficult to abandon, so the organisations tọ recoup the sunk cost.
The same becomes a source of organisational resistance to change.
III. Group resistance
1. Peer Pressure: Employees within a group may exert pressure on each other to
resist change to maintain solidarity.
2. Norms and Conformity: Group norms often influence individual behavior, and
individuals may conform to group norms that oppose change.
3. Communication Gaps: If change is not communicated effectively within a group,
misunderstandings and resistance can arise.
4. Power Dynamics: Groups or teams with vested interests in the current state of
affairs may resist change that threatens their power or status
Types of resistance to change in the Organisations
Resistance to change within an organization can take various forms. Here are
some common types of resistance:
1. Individual Resistance: This is when employees resist change due to fear of the
unknown, concerns about their job security, or apprehension about their ability to
adapt to the new situation.
2. Structural Resistance: Existing organizational structures and processes can resist
change, especially if the change requires modifying or replacing these structures.
3. Cultural Resistance: An organization's culture can be resistant to change,
particularly when new initiatives conflict with established norms, values, or
traditions.
4. Political Resistance: Power struggles and internal politics can lead to resistance
when change threatens the established power dynamics within the organization.
5. Group Resistance: Teams or departments may resist change if they perceive it as
a threat to their roles, responsibilities, or ways of working.
6. Technological Resistance: Resistance may occur when new technology is
introduced, often due to a lack of skills or concerns about automation replacing
jobs.
7. Psychological Resistance: Individuals may resist change due to the emotional
and psychological challenges it poses, such as anxiety, stress, or fear of loss.
8. Procedural Resistance: Resistance can stem from perceptions that the change
process is poorly planned, lacks transparency, or is not communicated effectively.
9. Economic Resistance: Changes affecting compensation, benefits, or financial
stability can lead to resistance among employees.
10. External Resistance: External stakeholders, such as customers, suppliers, or
regulatory bodies, may resist changes that impact their interactions with the
organization.

Strategies to overcome resistance at organisations:

1. Education and Communication: This involves providing clear information about
the reasons for change, its benefits, and potential drawbacks. By educating
employees and communicating openly, you can reduce fear and uncertainty.
2. Participation and Involvement: Involve employees in the change process. This
can include seeking their input, feedback, and active participation in decision-
making. When employees feel their opinions matter, they are more likely to
support the change.
3. Facilitation and Support: Provide support and resources to help employees
adapt to the change. This could include training programs, mentorship, or access to
tools and resources needed for the transition.
4. Negotiation and Agreement: Sometimes, it's necessary to negotiate with
individuals or groups who strongly resist the change. Finding common ground and
making agreements can help mitigate resistance.
5. Manipulation and Co-optation: While not the most ethical approach, it involves
tactfully influencing or co-opting key individuals or groups to support the change.
This should be used cautiously and ethically.
6. Explicit and Implicit Coercion: In extreme cases, when all other methods fail,
coercion may be used. Explicit coercion involves clear consequences for resistance,
while implicit coercion relies on subtle pressure tactics. Coercion should be used
sparingly and transparently, as it can damage morale and trust.

CHANGE MANAGEMENT
Meaning of change management:
Change management refers to the structured approach an organization
uses to prepare and support individuals, teams, and the entire organization in
transitioning from the current state to a desired future state. It is a multidisciplinary
practice that draws on concepts from psychology, sociology, business, and other
fields to facilitate and manage the process of organizational change effectively.
Change management in OB involves a series of planned activities and
strategies to minimize resistance and facilitate a smooth transition when an
organization undergoes significant changes.

Meaning of Negotiation:
Negotiation refers to the process of discussion and communication between
two or more parties with the goal of reaching an agreement or resolving a conflict.
Negotiation is a fundamental aspect of human interaction within organizations and
plays a crucial role in decision-making, conflict resolution, and collaboration.
Module No. 3: CHANGE MANAGEMENT

Section A (2 Marks each)

1.What do you mean by change in an organization?
2.What is organizational resistance?
3.What is negotiation?
4.Write the meaning of change management

Section B (5 Marks each)

1.What is the importance of planned change?
2.What is the nature of Planned change?
3.What are the factors influencing Change?
4.How to overcome the resistance to change?
5.What are the different types of organizational resistance?

Section C (10 Marks each)

1.Analyse the factors influencing change.
2.Identify the nature of change.
3.Explain various types of resistance to change.
4.Evaluate the importance of planned change?