Session 2

Change
“Why it’s not as easy as
it looks”

Dr Arvind Bhatt 2
 ▪ It may seem Positive if you’re leading the change.

▪ It may seem Negative if you’re on the receiving end of it.

The Types of Change

▪ Anticipated Changes
Changes that are planned ahead of time and occur as intended according to a
plan.

▪ Emergent Changes
Changes that arise spontaneously from local innovation and that are not
originally anticipated or intended.

▪ Opportunity-Based Changes
Changes that are not anticipated ahead of time, but are introduced during the
change process in response to an unexpected opportunity, event, or breakdown.
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 The Goal of organizational change is to find new or improved
ways of using resources and capabilities in order to increase an
organization’s ability to create value and improve returns to its
stakeholders.

 In the last decade, over half of Fortune 500 companies have

undergone major organizational changes to allow them to
increase their ability to create value.

 One of the most well-documented findings from studies have

revealed that organizations and their members often resist
change.

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The basic question is what the causes of such resistance are.

For analytical purposes let us categorize the causes into the following :-

 Individual Resistance

 Group Resistance

 Organizational Resistance
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These reasons are:

1. Habits: All human beings are creatures of habit. whenever a person is

confronted with a change, his basic tendency will be to resist the change.

For Example: Whenever a person is transferred, his first reaction, most of the
time, is to resist the change because it will lead to a lot more complexities like
shifting the house, change of schools of the children, making adjustments in
the new place, finding new friends, joining new group etc. Thus, every
person will try to take the easy way out by resisting this change.

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2. Economic Factors: The economic reasons for
the resistance to change may be the following:

 Workers may fear that the change will lead to technological

unemployment. Generally, new technology is associated with the
education of labour intake and therefore, people will resist a change
that will affect their employment.

 Workers fear that they will be idle most of the time due to the
increased efficiency of the new technology, which in turn may lead
to retrenchment of labour force.

 Workers may fear that they will be demoted if they don’t acquire the
skills required for the new jobs.

 Workers resist the change which leads to setting high job standards,
which in turn may reduce opportunities for bonus or incentive pay.

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3.Insecurity: One of the major reasons for resistance to change is uncertainty
about the impact of change, specially on job security. The fear of the
unknown always has a major impact on the decision of the individuals. Not
knowing what the change would bring about makes the employees fearful
about the change.

4.Lack of Communication: If the workers are given an opportunity to

participate in the process of change, the resistance is likely to be less. But if
the change is not properly communicated that to in an acceptable manner to
the employees, it is likely to cause resistance.

5.Extent of Change: If there is a minor change and the change involves only
the routine operations, the resistance, if any, will be minimum. But the major
changes like reshuffling of staff will lead to major visible resistance. Similarly,
the process of change is slow, the resistance will be less as compared to rapid
or sudden changes.

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6.Psychological Factors: The psychological reasons for resistance to change
are:
❑ Workers may not like criticism implied in a change that the
present method is inadequate and unsuitable.
❑ New changes may lead to reduction of the personal pride of the
workers because they fear that new work changes will do away with
the need for much manual work.
❑ Workers may have the fear that the new jobs will bring boredom
and monotony as a result of specialization brought by the new
technology.
7.Social Factors: Individuals have social needs like friendship, belongingness
etc. for the fulfillment of which they develop social relations in the
organization. They become members of certain informal groups. The change
will bring a fear in the mind of people because there is generally dislike for
new adjustments, breaking present social relationships, reduced social
satisfaction, feeling of outside interference.

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 Group Resistance

• Most organizational changes have impact on formal groups in the

organization.

• Breaking up a close knit work group or changing social relationship

can provoke a great deal of resistance.

• The main reason why the groups resist change is that they fear that
their cohesiveness or existence is threatened by it.

• This is particularly true in case of groups which are very cohesive,

where people have a very strong sense of belongingness to the group
and where the group members consider their group as superior to the
other groups.

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 Organizational Resistance

Organizational resistance means that the change is resisted

at the level of the organization itself.
Some organizations are so designed that they resist new
ideas, this is specifically true in case of organizations which
are conservative in nature.

Government agencies want to continue doing what they

have been doing for a number of years even though there is
a need for the change in their services.

Most of the educational institutions are using essentially the

same teaching technologies which they were using fifty
years ago. Majority of the business firms are also resistant to
changes.
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 Major Reasons for Organizational Resistance are:
1. Threat to Power: Top management generally consider change is a threat to
their power and influence in the organization due to which the change will
be resisted by them. The introduction of participative decision making or self
managed work teams is the kind of change which is often seen as threatening
by the middle and top level management. In addition they will never like to
take the steps which will strengthen the position of trade unions.

2. Group Inertia: Sometimes, the individuals resist change because the group
to which they belong resists it. The degree and force of resistance will
depend upon how loyal one is to the group and how effectively group resists
the change, Generally, the members of a group are influenced by the codes,
patterns and attitudes of the group.

3. Organizational Structure: Change is often resisted by the bureaucratic

structures, where jobs are narrowly defined, lines of authority clearly
spelled and flow of information is stressed from top to bottom. Moreover,
organizations are made up of a number of interdependent subsystems, one
system cannot be changed without affecting the others.

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4.Threat to Specializations: Changes in organization may threaten the
expertise of specialized groups. For example, giving computer training to all
the employees in the organization and giving personal computers was
perceived as a threat by the experts in computer department of the
organization.

5.Resource Constraints: Organizations need adequate financial resources for

training and for offering rewards to those who support change. An
organization who does not have resources for implementing the change often
resists it.

6.Sunk Costs: The change is generally resisted by the top management,

because it often leads to the problem of sunk costs. The heavy capital which
is already invested in the fixed assets or the amount which has already been
spent on the training of the employees will go waste if the change is
introduced.

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Consequences if the change is perceived to be a threat

The resistance to change can have some very unfavorable

consequences if the change is considered or perceived to be a
threat to the individual or the group it can result in:
• Implicit defensive behavior such as
➢ Loss of loyalty to the company
➢ Loss of motivation to work
➢ Persistent reduction in output
➢ Excessive absenteeism
➢ Sullen hostility
➢ Increase in errors and so on.
• Evident defensive behaviour such as
➢ Civil disobedience
➢ Strikes
➢ Slowdown of work or
➢ Aggressive unionism.
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Overcoming Resistance to Change

Kotter and Schelsinger has identified general strategies for

overcoming resistance to change.
▪ Education and Communication:
Resistance can be reduced through communicating with
employees to help them see the logic of a change.
➢ This tactic basically assumes that the source of
resistance lies in misinformation or poor
communication.

➢ If employees receive the full facts and get any

misunderstanding cleared up, resistance will
subside.

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▪ Participation and Involvement:
It is difficult for individuals to resist a change
decision in which they would have participated.

o Prior to making a change, those opposed can be

brought into the decision process.

o Participation increases understanding, enhance

feelings of control, reduces uncertainty and
promotes a feeling of ownership when change
directly affects people.

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▪ Facilitation and Support:
If employees are provided with encouragement, support,
training,
counseling and resources adapt to new requirements easily.
o By accepting people’s anxiety as legitimate and helping them
cope with change, managers have a better chance of gaining
respect and the commitment to make it work.

▪ Negotiation and Agreement:

Management can bargain to offer incentives in return for agreement
to change. This tactic is often necessary while dealing with powerful
resistance, like bargaining units. Sometimes specific things can be
exchanged in return for help in bringing about a change. Other times,
general perks can be widely distributed and facilitate to implement
the change

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Manipulation and Cooptation:
▪ Manipulation is framing and selectively using information
and implied incentives to maximize the likelihood of
acceptance.
An example would be if the management tells employees
that accepting a pay cut is necessary to avoid a plant shut
down, when plant closure would not really have to occur.

▪ Cooptation is influencing resistant parties to endorse the

change effort by providing them with benefits they desire
and non-influential role in the process.

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▪ Explicit and Implicit Coercion (Compulsion): Sometimes
management might use authority and the threat of negative
incentives to force acceptance of the proposed change.
Management might decide that if employees do
not accept proposed changes, then it has to shut the plant
down, decrease salaries or suspend people.

▪ Examples of coercion can be:

✓ Transfer
✓ Loss of promotion
✓ Negative performance evaluations and
✓ Poor letter of recommendation.
The advantages and drawbacks of coercion are approximately
the same as that of manipulation and cooptation.

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▪ Leadership:
Leadership plays a very important role in overcoming
resistance to change.

o A capable leader can reinforce a climate of physical

support for change.

o The Greater the prestige and credibility of the person ,

the greater will be the influence upon the employees
who are involved in the change process.

o A strong and effective leader can exert emotional

pressure on his subordinates to bring about the desired
change.

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Dr Arvind Bhatt 21
Dr Arvind Bhatt 22
 A Framework for Successfully-Leading Change
Understanding the
Developing nature of change
resilience and
commitment

Identifying the
SUCCESSFULLY
LEADING forces of change
Understanding the CHANGE
effects of change
on stakeholders

Clarifying the
change vision
Managing the
phases of change
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 Leadership

❖ Leaders establish unity of purpose, direction, and the

internal environment of the organization.

❖ They create the environment in which people can

become fully involved in achieving the organization’s
objectives.

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 Management Vs. Leadership

➢ Management: Efficiency in climbing the

ladder of success for the organization*
➢ Leadership: Making sure the ladder is
leaning against the right wall!

* Steven Covey’s 7 Habits of Highly Effective People

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 Management Vs.Leadership
Management Leadership
• Planning and Organizing
• Defining/Communicating the
• Defining Roles and
Mission
Responsibilities
• Defining/Communicating the
• Defining Policies Vision
• Problem Solving
• Aligning Resources
• Budgeting
• Creating Teams/Coalitions
• Hiring and Firing
• Driving Radical Changes
• Controlling Operations
• Establishing New Rewards
• Meeting Short-term Results
• Promoting Values and Beliefs
• Maintaining Stability and Order • Inspiring and Motivating
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 What are Your Tasks…as a Change Leader?
Stability

Learning,
Comfort Acceptance, and
and Control Commitment
Create a
4
Felt N e e d Stabilize and
for Change Sustain the Change
1
L o o k in g Leader Actions Looking
Back 3 Forw ard
Introduce Revise and
the Change Finalize the
Change
2 Plan

Fear, Anger, Inquiry,

and Resistance Experimentation,
and Discovery

C h a oBhatt
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 Leader’s Actions for Phase 1:
Comfort andControl

Create a Felt
Need for Change
• It is leadership’s job to define and articulate a
vision for the organization and the need for
change.......

“Implementing organizational change requires a compelling

reason for change. Unless people see the need for change, it will
just not happen.”
-John Pepper (Former CEO) Proctor and Gamble

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 Leader’s Actions for Phase 1:
Comfort and Control
• Acknowledge people’s past efforts and success.

• Get people’s attention!

• Immerse people in information about the change . . .
customer complaints, budget data, increasing costs,
competitive pressures.

• Let people know it will happen — one way or another!

• Give people time to let the ideas sink in.

• Don’t sell the solutions . . . sell the problem!

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 Leader’s Actions for Phase 1:
Comfort and Control

• Create and communicate a sense of urgency, and

risks of not changing.

• Create the fear of not changing, and sell that the

change is necessary, achievable, and beneficial.

• Communicate what will not change, and always be

honest and consistent.

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 Leader’s Actions for Phase 2:
Fear, Anger, and Resistance
• Communicate the vision.
• Listen carefully to what people are saying.
• Acknowledge people’s feelings (pain, perceived losses, anger,
excitement, etc.)
• Strive to address their perceived losses.
• Tell people what you know — and what you don’t know.
• Don’t try to talk people out of their feelings.
• Discuss ways to solve the problems that people see with the change.
• Encourage discussion, disagreement, debate. . . keep people talking.

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 Leader’s Actions for Phase 2:
Fear, Anger, and Resistance
• Create a coalition of influential upper level managers and
stakeholders to guide and support the efforts promoted by the
change leader.
• Select the right coalition members with credibility, proven
leadership abilities, expertise in needed areas, and the power
and prestige necessary to make things happen ➔ avoid people
who lack in enthusiasm, integrity, and trust worthiness.

• Recognize that large scale change needs to be led from the top
and supported/accomplished from the bottom.

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 Leader’s Actions for Phase 3:
Inquiry, Experimentation, and Discovery

• Affirm Why change is necessary and How it will

work….
• Involve influential and resilient people in creating
the solution (strategies and tactics) to accomplish
the vision.
• Emphasize the Win-Win aspects of the change to
address the threats.
• Create detailed change implementation plan.

◼ A change plan gives time for reflection and re-

thinking of the options.

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 Leader’s Actions for Phase 4:
Learning Acceptance, and Commitment
• Acknowledge people’s hard work.
• Celebrate successes and accomplishments.
• Endorse the vision.
• Bring people together toward the vision.
• Acknowledge what people have left behind.
• Develop long-term goals and plans.
• Provide tools and training to reinforce new behaviors.
• Reinforce and reward the new behaviors.
• Create systems and structures that reinforce new behaviors.
• Prepare people for the next change.
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 Stabilizing and Sustaining the Change *

• Establish staff commitment to the new

direction by reinforcing new behaviors and
beliefs.
• Invest in the change through new skills
training, new equipment and facilities, and new
performance/reward measures and
management systems that are consistent with
the change.
• Prepare people for future changes and assure
them that they have the capacity to address and
solve future threats.
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