MU0018: CHANGE MANAGEMENT Q1. (a) What is change management?

Answer:- Change management is a well structured approach that helps individuals, teams, and on the whole, the organization to change from current state to desired state in an organized way. It is a process carried out in the organization to empower the employees to accept and follow the changes in their present business environment. Change management is also applied in project management. In that, it refers to the project management process where changes are introduced and implemented formally. Change is any variation/alteration/transformation, a passing phase from one state or form to another, for example, a change of countenance; a change in habits or principles. Change implies dissatisfaction with the old one and an urge for the new one. Change can be perceived in two ways-changes as intrinsic and continuous, and extrinsic and discontinuous to the organization. Change Management is a systematic approach of dealing with change, both from organization and individual perspective. Change Management can be seen from two perspectives, one is from those implementing change and the other is the recipients perspective. Your view on change management varies if you are an executive who is demanding a change, versus an employee on whom the change is executed. In many cases, neither the executive nor the employee has the knowledge of managing change. First the project managers, consultants, or the members of the project team learn about the necessity for change management. They recognize the two dimensions of change management as the top-down managers perspective and the bottom-up employees perspective. The managers perspective of change is result-oriented. They are always aware of the business issues facing the organization and are responsible for the financial performance of the company. When a change is needed, managers need to act quickly. In many cases, executives must evaluate the return on investment of this change as compared to other strategic initiatives in the company. Front-line employees (and in some cases, include supervisors and managers) generally do not have a day-to-day view of the business issues. Serving customers, processing orders, getting the job done are the primary areas of interest. When changes are made, many employees lack the knowledge of why the change is being made. They also do not share the same responsibilities as managers. Therefore, they question as to how the change will impact them personally. Many organizations have learnt the hard way through their failed projects that the change management is not something addressed after the fact. Change management must always start at the beginning of the project and should be included in all facets. So what is change management? Change management is the successful management of a business change, wherein the executive leaders, the managers and the front line employees work in order to successfully implement the needed process, technology, or organizational changes. The goal of change management is to execute these business changes quickly to: Minimize the impact on productivity. Avoid unnecessary turnover or loss of valued employees. Eliminate any adverse impact on your customers. Achieve the desired business outcomes as soon as possible.

Q1. (b) Explain the importance of change management. Answer:- Change management plays an important role in any organization, as the task of managing change is not an easy one. When we say managing change, it means making changes in a planned and systematic fashion. With reference to the IT projects, the change means the versions of a project and managing these versions properly. Changes in the organization can be initiated within the organization or externally.

Technology has compressed the distances across organizations. Internet and web technologies have given rise to honest corporations. Automation, mechanization, manufacturing systems affects at both micro and macro levels of the organization. These technological advancements are examples of an external factor that impacts on change within the organization. How the organization responds to these changes is important. Managing these changes come under change management. Reactive and proactive responses to these changes come from the organization. Earlier, change management was an integral part of business management, but with the emergence of Information Technology (IT), it has gathered importance. Information Technology Infrastructure management is one broad term, which includes all the elements necessary to ensure smooth functioning of business processes. Good change management techniques always help businessmen to adopt new ways of doing business. Technology not only refers to machinery, equipment, and tool but is concerned with the use of information and knowledge as inputs that are transformed into final outputs. This process involves technology; hence choice of appropriate technology is a key factor for competitive edge in the new environment. Changes are brought into the system when the organization faces challenges such as customer demands and technological updates. Change management process undergoes the following steps: 1. Identifying the need for change in an organization. 2. Designing the changes as per organizations requirement. 3. Making others to understand the need for change for the proper functioning of an organization. 4. Altering some organizational processes such as technology, performance meters to incorporate changes. 5. Managing both production and changes in such a way that the customers and stakeholders are bonded with each other in a long run. Managing the changes in an organization requires certain set of skills like political skills, analytical skills, people skills, system skills, and business skills. If you have good analytical skills, you can be a good change agent. You should examine the financial and political impacts of the changes that can take place. You should have the knowledge that following of a particular process will fetch immediate financial effects and start that process so that the change process is noted by the management. You should change the workflow in such a manner that it should reflect the financial changes that are taking place. Reconfigure the operations and systems in the organization in such a manner that you get the desired financial impact. So, change management is important in the business world, where the things are assessed based on their perfection and capacity to address the needs of customers and clients.

Q2. List and explain the stages in organizational Life cycle? Answer:- Organizational Life Cycle (OLC) is a model that promotes the businesses to progress overtime through a predictable series of developmental stages. This model is linked with the study of organizational growth and development. It is based on biological symbol of living organisms that have a habitual pattern of development like birth, growth, maturity, decline, and death. Similarly, the OLC of businesses are seen as generally having four or five stages of developments like, start-up, growth, maturity, and decline, with diversification sometimes considered as an additional stage that comes between maturity and decline. OLC is an important model because of its principles and its recommendations. The model's principle is that the needs, opportunities, and threats that are both inside and outside the business firm will vary depending upon the stage of development in which the firm finds it. For example, a threat in the start-up stage differs from those in the maturity stage. When the firm moves through the developmental stage, changes in the nature, requirements, opportunities, and threats apply pressure for change in the organization. 2L. Baird and I. Meshoulam pointed out in an article in Academy of Management Review that organizations move from one stage to another because they fit between the organizations. Its environment is so inadequate that either the organization's effectiveness is spoilt or the organization's survival is threatened. The OLC models advise that a company's manager must change its business goals, plans, and strategy implementation devices to fit the internal and

external characteristics of each stage. Thus, different stages of the OLC require alterations in the firm's objectives, strategies, managerial processes, technology, culture, and decision making. Stages of Organization Life Cycle Organizations also go through various phases/stages like a human life cycle. The first challenge that leaders face is to understand what phase of the organizational life cycle one is in. Different experts have argued on how many phases there are, but the smartness lies in using something that is easy to remember. Organizational life cycle is divided into the following phases: 1. Start-up (or Birth). 2. Growth: This phase is sometimes divided into an early growth phase (fast growth) and maturity phase (slow growth or no growth). However, maturity phase further leads to decline. 3. Decline: While declining, an organization will undergo either renewal or death. 4. Renewal. 5. Death. These stages show that the beginning of one phase is the end of the previous phase. Each of these phases showcases different management and leadership challenges that have to be dealt with. The Start-Up phase : In this phase, the entrepreneur thinks about the business, forms a management group, write a business plan. The company goes into the growth phase when the investor writes the check. The start-up ends for those that don't need outside funds. The growth phase : In the growth phase, we expect to see revenues increasing, new services and products developing, more employees recruiting and so on. For example: The management textbooks believe that sales grow each year but in reality it is different as a company can have both good and bad years depending on the market conditions. In organizations that have been running for a few years, dry rot sets in. Dry rot refers to decaying of timber in buildings and wooden furniture caused by fungi. So, many companies have their own types of programs relating to organizational development in place. The decline phase : Corporate insanity is seen in this phase. Corporate insanity can be defined as doing the same thing in same way but expecting different results. Management expects to be better next year, but doesn't know or is unwilling to change to get better results. The renewal phase : Once the organization starts declining, it doesnt mean that it should continue. Some of the external experts have focused on the importance of organizational development as a way for preventing decline or reducing its effects. Dry rot can be reversed through the use of training as a way of injecting new knowledge and skills. You can also have rigorous programs to change and transform the organizations culture. This assumes that though you have enough transformational leaders to change the status quo, without the right type of leadership, the organization will go down to bankruptcy. The death phase ; About 80% of business failures occur due to the factors related to leadership control. Even firms that are close to bankruptcy can overcome this adversity and nurse themselves to be financial healthy. A very good example is Lee Iacoccas turnaround of the Chrysler Corporation. These are the different stages of organizational life cycle.

Q3. Explain briefly the recent approaches to organizational development and change. Answer:- In recent years, serious questioning has emerged about the relevance of OD to managing change in modern organizations. The need for "reinventing" the field has become a topic that even some of its "founding fathers" are discussing critically. With this call for reinvention and change, scholars have begun to examine organization development from an emotion-based standpoint. For example, deKlerk (2007) writes about how emotional trauma can negatively affect performance. Due to downsizing, outsourcing, mergers, restructuring, continual changes, invasions of privacy, harassment, and abuses of power, many employees experience the emotions of aggression, anxiety,

apprehension, cynicism, and fear, which can lead to performance decreases. deKlerk suggests that in order to heal the trauma and increase performance, O.D. practitioners must acknowledge the existence of the trauma, provide a safe place for employees to discuss their feelings, symbolize the trauma and put it into perspective, and then allow for and deal with the emotional responses. One method of achieving this is by having employees draw pictures of what they feel about the situation, and then having them explain their drawings with each other. Drawing pictures is beneficial because it allows employees to express emotions they normally would not be able to put into words. Also, drawings often prompt active participation in the activity, as everyone is required to draw a picture and then discuss its meaning. The use of new technologies combined with globalization has also shifted the field of organization development. Roland Sullivan (2005) defined Organization Development with participants at the 1st Organization Development Conference for Asia in Dubai-2005 as "Organization Development is a transformative leap to a desired vision where strategies and systems align, in the light of local culture with an innovative and authentic leadership style using the support of high tech tools. Action research: Concerned with social change and, more particularly, with effective, permanent social change, Lewin believed that the motivation to change was strongly related to action: If people are active in decisions affecting them, they are more likely to adopt new ways. "Rational social management", he said, "proceeds in a spiral of steps, each of which is composed of a circle of planning, action, and fact-finding about the result of action".

Figure 1: Systems Model of Action-Research Process Lewin's description of the process of change involves three steps: "Unfreezing": Faced with a dilemma or disconfirmation, the individual or group becomes aware of a need to change. "Changing": The situation is diagnosed and new models of behavior are explored and tested. "Refreezing": Application of new behavior is evaluated, and if reinforcing, adopted. Figure 1 summarizes the steps and processes involved in planned change through action research. Action research is depicted as a cyclical process of change. The cycle begins with a series of planning actions initiated by the client and the change agent working together. The principal elements of this stage include a preliminary diagnosis, data gathering, feedback of results, and joint action planning. In the language of systems theory, this is the input phase, in which the client system becomes aware of problems as yet unidentified, realizes it may need outside help to effect changes, and shares with the consultant the process of problem diagnosis. The second stage of action research is the action, or transformation, phase. This stage includes actions relating to learning processes (perhaps in the form of role analysis) and to planning and executing behavioral changes in

the client organization. As shown in Figure 1, feedback at this stage would move via Feedback Loop A and would have the effect of altering previous planning to bring the learning activities of the client system into better alignment with change objectives. Included in this stage is action-planning activity carried out jointly by the consultant and members of the client system. Following the workshop or learning sessions, these action steps are carried out on the job as part of the transformation stage. The third stage of action research is the output, or results, phase. This stage includes actual changes in behavior (if any) resulting from corrective action steps taken following the second stage. Data are again gathered from the client system so that progress can be determined and necessary adjustments in learning activities can be made. Minor adjustments of this nature can be made in learning activities via Feedback Loop B (see Figure 1). Major adjustments and reevaluations would return the OD project to the first, or planning, stage for basic changes in the program. The action-research model shown in Figure 1 closely follows Lewin's repetitive cycle of planning, action, and measuring results. It also illustrates other aspects of Lewin's general model of change. As indicated in the diagram, the planning stage is a period of unfreezing, or problem awareness.The action stage is a period of changing, that is, trying out new forms of behavior in an effort to understand and cope with the system's problems. (There is inevitable overlap between the stages, since the boundaries are not clear-cut and cannot be in a continuous process). The results stage is a period of refreezing, in which new behaviors are tried out on the job and, if successful and reinforcing, become a part of the system's repertoire of problem-solving behavior. Action research is problem centered, client centered, and action oriented. It involves the client system in a diagnostic, active-learning, problem-finding, and problem-solving process. Data are not simply returned in the form of a written report but instead are fed back in open joint sessions, and the client and the change agent collaborate in identifying and ranking specific problems, in devising methods for finding their real causes, and in developing plans for coping with them realistically and practically. Scientific method in the form of data gathering, forming hypotheses, testing hypotheses, and measuring results, although not pursued as rigorously as in the laboratory, is nevertheless an integral part of the process. Action research also sets in motion a longrange, cyclical, self-correcting mechanism for maintaining and enhancing the effectiveness of the client's system by leaving the system with practical and useful tools for self-analysis and self-renewal.

Q4. Discuss in brief about the role of leaders in the change process. Answer:- Role of Leaders in Change : The leaders play an important role in the change management. The leaders at different levels in the organization will have different roles to play. The leaders work towards achieving the goals in the organization. Whenever the leaders are planning to manage change, it is necessary to follow few principles. They are: Different people react in different way for the changes. Everyone has fundamental needs that have to be met. Change often involves a loss, and people go through the "loss curve". Expectations need to be managed realistically. Fears have to be dealt with. Main roles of a leader in change : According to Senge3, Leadership occur at different locations in an organization. Some leaders have the traditional hierarchical leadership they are more formal. Some local leaders have to transfer the vision into an action. Network leaders have the job of connecting different parts of an organization that are involved in the change. Bate has given the list of roles of leaders according to his idea of five dimensions of cultural leadership. The five dimensions are: The aesthetic culture deals with the ideas about the change. This is the sensate, ideational and idealistic culture. This is the species culture.

The political culture deals with the meaning of change and involves putting ideas into the words. This gives the ownership to that political idea of the community. The ethical culture deals with the standards in the change and involves the guiding of learning process. This involves some ethics that have to be followed in the organization. The action culture involves the translations from cultural meanings into the cultural practices. This involves the practices that are followed around in the environment. The formative culture deals with the structures those are in change. This involves the architecture of culture. This involves the structures around the change.

The role model leader provides the confidence to manage the change process and demonstrates some of the characters which play an important role in the change process. They are: Wider context: The leader has the ability to deal the changes in wider way since it is not only limited to the organization strategy but it is spread to the team, division and the organization. Empathy: The leader has the ability to see others and understand and acknowledge others for managing the change process. Communication or being straight: The leader communicates directly to the people about the present and future changes and keeps the people well informed. Leader communicates both the good and the bad news with the people. Leader will be honest in terms of the change and the consequences of the change on the individual as well as the team. Counseling: The leader counsels the individuals who are undergoing change and respects the individuals change by understanding their emotions. Challenging: The leader identifies the unacceptable attitudes and behaviors and suggests for the acceptable attitudes and behaviors and maintains the comfort among the individuals and groups. Involving: The leader encourages the individual and team to involve fully in the change process and make sure that the change is successful. Reframing: The leader has the ability to see the situation from different perspectives and encourages others to do in the same way. This helps to create solutions in order to put the situations in a coherent framework. Enable learning: The leader enables the people to learn new skills, gain knowledge and the behaviors. Reviewing: The leader ensure that the certain reviews are done on regular basis for the proper management process. Recognitions set a positive environment so it is necessary to give positive feedback for the individuals as well as the group when they achieve their objectives.

Q5. Explain the strategies for competitive advantage. Answer:- Strategies for Competitive Advantage : In the previous sections, we have studied about the implementation of the strategies and the factors that affect the implementation. In this section, we will study about the strategies for competitive advantage which is necessary for the products in this kind of competitive business world. A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices. Michael Porter has given four generic business strategies that are analysed by him on his work in the competitive industry. He has given four strategies taking consideration of the scope of a business versus the degree of product differentiation. Strategy: Differentiation These are the strategies which include the selection of one or more criteria that can be used by the customers for taking the product in the market. According to the criterias, the organization can develop the special strategy to meet the needs of the customers. This often involves the product with the premium price to demonstrate the production costs and the value added features that are present for the customer needs. This strategy gives the clear idea about the product and what is the advantage of using this product compared to the other product in the market for the benefit of the consumer.

Strategy: Cost leadership The main aim of this strategy is to provide the product with the less cost in the market. The lowest cost producer is its main aim. Even the market segments suggest the same thing. The lowest cost producer will be benefited when the product rate is at minimum equal to the average price in the market. Usually this type of strategy is associated with the large scale industries which aim at offering the standard products with a minimum differentiation and perfect product. Majority of the customers prefers the perfect product with the minimum differentiation. The low cost leader always tries to put the discount on the products with the goal of maximizing the sales. This will work out particularly when there is much of competition on the market. Strategy: Differentiation focus This strategy aims at differentiating the product with a minimum number of target market segments. This strategy is applicable to the special needs of the customer. The customer well in advance informs the industry for the production of the special with the needs that will be differentiated with the already existing product in the market. There is a valid factor for the differentiation and the existing competitor products are not meeting those needs. Strategy: Cost focus This strategy focuses on the cost of the product which is the base for the business of the organization. There are some products, which have features that are not needed for the customers. That time the sale will also be less since the cost is more, which is not worth according to their needs. During that time, it will be very helpful if the organization provides the product with the, less cost and the specific needs that are required for the customers.

Q6. (a) Define learning organization. Answer:- We can define learning organization as the organization which has embedded the philosophies like anticipating, reacting and responding to change, complexity and uncertainty. The competitive advantage mainly depends on the rate at which the organization can learn. The learning organization is the group of people enhancing their capacity to create what they want. There are many tools and techniques developed for the implementation of the learning organization and the situations to start the learning organization process. The collective learning is required when you are working in a team. The key skills such as communication, listening, observing, supporting colleagues and coping with challenges, help to bring a success to collective learning process. Many of the companies in the world focus on improving the existing products and services, and innovating things to excel in the business strategy. This resulted in the starting of many activities like TQM (Total Quality Management) and BPR (Business Process Reengineering). These programs can be successful or a failure, depending on some factors likes individual skills, attitudes and organization culture. There are few factors that are needed for learning organization to deal with. They are to: Face sudden and unexpected changes where there are no responses for the existing programs. Expect the changing situations. Allow the staff to respond to the customer needs in a proper way. The learning organization helps in developing skills. The four level models help in learning and developing skills in an organization. The different levels can be explained as follows: Level 1: This involves learning facts, knowledge, processes and procedures. This is applicable when there are minor changes.

Level 2: This involves learning new job skills that can be transferred to other situations. This can be applied to the situations when there is a need for changing the existing responses. The introduction of outside knowledge is the useful tool in this case. Level 3: This involves developing the solutions. This is applicable in the ever changing situations. This level focuses on experimentation and learning from the success and failure. Level 4: This level is called as the learning to learn. This involves mainly the innovation and creativity in developing the future rather than adjusting with the old. In this level, only the assumptions are more challenged and the knowledge is formed again.

Q6. (b) Explain the need for learning organization. Answer:- Need for learning organizations : Many of the companies in the world focus on improving the existing products and services, and innovating things to excel in the business strategy. This resulted in the starting of many activities like TQM (Total Quality Management) and BPR (Business Process Reengineering). These programs can be successful or a failure, depending on some factors likes individual skills, attitudes and organization culture. There are few factors that are needed for learning organization to deal with. They are to: Face sudden and unexpected changes where there are no responses for the existing programs. Expect the changing situations. Allow the staff to respond to the customer needs in a proper way. Now we have come to know that in an organization, groups of people come together to accomplish a purpose, which holds answers to many questions faced in that organization. 1The field of organizational learning explores ways to design organizations so that they fulfill their function effectively, encourage people to reach their full potential, and, at the same time, help the world to be a better place. We can define learning organization as the organization which has embedded the philosophies like anticipating, reacting and responding to change, complexity and uncertainty. The competitive advantage mainly depends on the rate at which the organization can learn. The learning organization is the group of people enhancing their capacity to create what they want. There are many tools and techniques developed for the implementation of the learning organization and the situations to start the learning organization process. The collective learning is required when you are working in a team. The key skills such as communication, listening, observing, supporting colleagues and coping with challenges, help to bring a success to collective learning process.