Chapter 1: Introduction to organizational change

Organizational Change
• “Organizational change can be defined as the adoption of a new idea or a behavior by an
organization” – Daft
• “Organizational change can be defined as new ways of organizing and working” – Dawson
It is a way of altering an existing organization to increase organizational effectiveness for achieving its
objectives.

Forces of Change
External forces
• Globalization and govt. policies: With globalization and liberalization, any organization in any
part of the world can manufacture, process and sell its products/services to other parts that is
liberalized. The business implications of globalization are that a firm that had monopoly in a
particular country will now have to compete with international or global firm in terms of quality
and price.
• Political factors: International politics affects trade and business. The change agents ought to be
sensitive and flexible to protect the interest of their country/organization with the changing world
politics
• Technological change: Internet and web technologies, automation, computer based design and
manufacturing systems affect the organization at both micro and macro level.
• Changing customer needs and preferences: With the availability of a variety of products there
is perceived change in customer preferences. Greater customization demand also affects
organizational production process.
• Economic factors: In view of the increased competition along with low margins organizations
try to minimize cost by keeping the organization lean and outsource some of their functions.
Internal Forces of Change
• System Dynamics: Factors such as technology, internal politics, and dominant groups
ffect the relationship among the various subsystems. Thus demanding change in espective
field or domain.
• Technological change: In response to the technological change, organisation needs to
change their system which affects their subsystem as well
• Organisation design and structure: Organisations make structural changes to reduce
costs and increase the productivity and efficiency.
• .Individual and group expectations: To survive and grow successfully, organization
needs to change their outlook to meet the needs and expectations of its members.
• Managerial and administrative process: In the changing environment, organization
needs to change their existing procedures, rules and regulations as well as revise the goals
and objectives.
 Types of change

• Change as incremental and intrinsic: Certain changes take place continuously in a way that the
stability seen in the organisation is only apparent. The process of change is considered here to be
slow in nature.
• Change as extrinsic and revolutionary: Certain changes radically transform many elements of
a structure in an organisation. Here change is perceived as disruptive in nature.
• Patterned and predictable vs. complex and unpredictable: Some scholars assume change as
regular and predictable in nature with identifiable cause –effect relationship. On the other hand,
change is thought to be complex and unpredictable in nature.
• Duality or bipolarity of change: Change is bipolar in nature. It is continuous and
discontinuous; it may be stable and instable; it may be predicted and unpredicted

Theoretical framework of organisational change:

Theories on organisational change are numerous. In order to provide an integrated approach to the
theories on organizational change Van de Ven and Poole (1995) clustered them into FOUR broad
categories according to
the nature of change process.
 Life cycle theory: An organisation follows a single sequence of stages, which is cumulative and
conjunctive. Any organisation is like a living organism. As an organisation undergoes changes, it
passes through stages in both its structure and function somehow, maintaining its identity
throughout the process.
 Teleological theory: This theory views organisational change as a result of change in its goals
and purposes and considers this process as ongoing and iterative, with an organisation never
attaining a permanent equilibrium.
 Dialectical Theory: Organisation exist in a pluralistic world of ambiguous and contradictory
forces and values that compete with each other to get control over the others. When the status
quo is confronted by the opposite forces, change occurs
 Evolutionary Theory: Organisational change is an ongoing and evolving process. This change
proceeds according to a continuing cycle of variation, selection, and retention among
organisations competing for resources in a specific environment.
 Theory E: This theory views organisational change from the context of economic value of the
organisation. It gives prime importance to the shareholder value and considering it to be the only
legitimate measure of corporate success.
 Theory O: The goal is often to develop organizational culture and human capability through
individual and organisational learning. These include the process of change, Obtaining feedback,
reflecting, and making further changes.
 Theory E & O: Companies that can effectively combine both the hard and soft approaches to
change can reap big payoffs in profitability and productivity. These companies are likely to
achieve a sustainable competitive advantage.
 Strategies for Change Management
FOUR basic strategies –
 Empirical-Rational: Change is based on the communication of information and the offering of
incentives.

 Normative-Re-educative: Change is based on redefining and reinterpreting existing norms and

values, and developing peoples commitment to new one’s.
 Power-Coercive: Change is based on the exercise of authority and the imposition of sanctions.
 Environmental-Adaptive: Change is based on building a new organization and gradually
transferring people from the old one to the new one.
Some shifts in trend
• Industrial era • Information era
• National economy • Global economy
• Technology development • Technology sophistication
• Stability and predictability • Sudden changes
• Long term • Short term
• Centralization • Decentralization
• Hierarchies • Networking
• Emphasis on Continuity • Emphasis on change

Comparison shown by Mathew J. Klemen

20th century 21st century

Stability, predictability
Size and scale
Leadership from the top
Organizational rigidity
Control by rules and hierarchy
Information safely guarded
Quantitative analysis
Need foe certainty
Reactive
Corporate independence
Vertical integration
Focus on internal organization
Sustainable competitive advantage
Discontinuous change
Speed and responsiveness
Leadership from everybody
Permanent flexibility
Control by vision and values
Information shared
Creativity, intuition
Tolerance of ambiguity
Proactive
Corporate interdependence
Virtual integration
Focus on competitive environment
Constant invention of advantage
Competing for today’s market Creating tomorrow’s market

Chapter 2: A Historical overview of change in

management
Though management was recognized as a branch of knowledge in the mid part of 20th century, but the
practice of management is evident in the beginning of ancient civilization. The construction of Pyramids
and the Great wall of China are tangible evidences of the practices of managerial activities. Another
example of early management practices can be seen during the 1400s in the city of Venice, Italy. The
Venitians developed an early form of business enterprises and engaged in many activities common to
today’s organizations.
These examples demonstrate that organizations and managers have been around for thousands of years.
However, two pre-twentieth-century events are particularly significant to the study of management:
One is Adam Smith’s “Division of Labor” where he emphasized on breaking a job or task into its basic
component parts and giving responsibilities of each part to those who have the ability/skill on that
particular part which increased productivity of the organization. The other one is Industrial Revolution
(during 18th century): The systems of production has been changed during that period, like-
• From home to factory
• From decentralization to centralization of production
• From manual to machine based production
Some specific approaches to management developed in the 20th century also have significant
contribution to overall understanding of management. That are:
• Scientific management
• Administrative theory
• Behavioral approach
• Quantitative approach
• System approach
• Contingency approach

Scientific Management
‘Scientific management’ concept developed by F. W. Taylor has brought a significant changes in the in
the way to manage operations and to increase productivity.
Taylor’s papers were:
• ‘A Piece Rate System’ – emphasized on new system of payment to worker.
• ‘Shop Management’ – focused attention on his philosophy of management.
Taylor’s concept of management
Taylor’s major thesis was that the maximum good for all society can come only through the cooperation
of management and labor in the application of scientific methods to all common endeavors
Principles of management
• Develop a science for each element of a man’s work, which replaces old rule-of-thumb method
• Scientifically select and then train’ teach and develop the workman
 • Heartily cooperate with the workers so that all work is done in accordance with the principles of
science
• Divide work and responsibility almost equally between management and workers

Administrative Theory (Henry Fayol)

Henry Fayol’s book ‘Administration industrielle et generale’ was first published in France in 1916.
But it has become significant in the history of management after its publication as ‘General and
Industrial Management’ in English in 1949.
Fayol tried to find out the answer of a basic question – “though management is important in practice but
why do schools and universities neglect management to focus on teaching?”
The answer according to Fayol was the absence of theory on management
Fayol defined theory as “a collection of principles, rules, and procedures tried and checked by general
experiences”
He noted that a lot of managers theorized but there were many contradictions and most those were
localized
To fulfill that need, he presented his own theory which started to serve as a model for instruction and
management started to be considered as a branch of knowledge which can be taught in academic
institution.
Fayol’s Theory comprises of two parts:
Principles of management:
• Division of work
• Authority
• Discipline
• Unity of command
• Unity of direction
• Subordination of individual interest to general
• Remuneration
• Centralization
• Scalar chain
• Order
• Equity
• Stability of tenure of personnel
• Initiative
• Esprit de corps
Management process
• Planning
• Organizing
• Command
• Coordination
• Control

Behavioral approach
In the mid part of 20th century, the managers of different organizations started to realize that people is a
distinctive type of resource in organization as they have emotion and feeling what other resources don’t
have. They said that management must concentrate on workers and their interpersonal relationship. In
this way a new group of managers have developed the behavioral school of management thought. The
behaviorists concentrate on motivations, group dynamics, individual drives, group relations and so on.
The early contributors of this approach are: H. Munsterberg, Elton Mayo, C.I. Barnard, H. L. Gantt, M.
P. Follett etc.

Quantitative approach
• Quantitative approach consists of bringing knowledge of various discipline to bear on the study
and effective solution of problems.
• The application of quantitative models in managerial decision making started first in war games
by the Army organization.
• After the 2nd world war, some management consultants, specialists in quality control, time and
motion experts, marketing analysts, design engineers of business organization started to apply
different quantitative tools in business decision making

The system approach

• Systems researchers envisioned organization as being made up of interdependent factors,
including individuals, group, formal structure, interaction, status and authority.
• The system approach also implies that decisions and actions taken in one part of the organization
will affect others.
• Organization is also considered as a system open to the environment. When managers make plan,
they have no choice but to take into account the external variables.

Contingency approach
Management can be based on simplistic principles to be applied in all situations. Different and changing
situations require managers to use different approaches and techniques. The contingency approach
(sometime called situational approach) says that organizations are different, face different situations and
require different ways of managing.

A management Theory Jungle

The variety of approaches to management analysis, the welter of research, and the number of differing
views have resulted in much confusion as to what management is, what management theories and
sciences are, and how managerial events should be analyzed. Looking at the facts, some senior authors
some year ago called this situation as ‘The management theory jungle’.
 Chapter 3: Individual Change
Every individual in the world experiences change in their life which may be because of changes in the
external world or may be because of the changes that take place in the internal world. The key point for
managers of change is to understand the distinction between the changes being managed in the external
world and the concurrent psychological transition that are experienced internally by people.
The example of the statement given by Heraclitus, a great ancient Greek philosopher (You never step
into the same river twice) can help us to realize the situation better.
Moreover, to realize individual changes in organization we need to address:
• Learning and the process of change
• Approaches to change
• Personality and change

Learning and the change process

Buchanan and Huczynoski (1985) define learning as “the process of acquiring knowledge through
experience which leads to a change in behavior”
A useful way of beginning to understand what happens when we go through change is to take a look at
what happens when we first start to learn something new.
For example: driving a new car for the first time
Though you can drive but this new situation can make you tempered and nervous. Because with a new
car all the buttons and control panels might be in different positions. One can go through the process of
locating them through trial and error, or perhaps reading through the manuals first. As you go through
the process, an external assessment of your performance would no doubt confirm a reduction in your
efficiency and effectiveness for a period of time. And if one were to map your internal state your
confidence level would most likely dip as well. Obviously this anxiety falls off over time. This is based
on your capacity to assimilate new information, the frequency and regularity with which you have
changed cars, and how often you drive.

Conscious and unconscious competence and incompetence

Another way of looking at what happens when individuals learn something new is to view it from a
Gestalt perspective. The Gestalt psychologists suggested that people have a worldview that entails
something being in the foreground and other things being in the background of their consciousness.
It is said that people learn new things using the following process:

Unconscious competence Conscious competence

Conscious incompetence

Conscious competence

Unconscious competence

For example: Assuming that I am an experienced driver, many of the aspects of driving for me are
unconscious. All of these aspects I hopefully carry out competently. So perhaps I can drive for many
miles on a motorway, safe in the knowledge that a lot of the activities I am performing I am actually
doing unconsciously. We might say I am unconsciously competent. However, as soon as I am in the new
situation of an unfamiliar car I realize that many of the things I can not now do as well as before. I have
become conscious of my incompetence. Through some trail and error and some practice and some
experience I manage – quite consciously – to become competent again. All these tasks have been in the
forefront of my world and consciousness. It will only be after a further period of time that they recede to
the background and I become unconsciously competent again.
Sometime the cycle may start with unconscious incompetence (where I don’t know what I don’t know,
and the only way of realizing is by making a mistake)

Kolb’s learning cycle

David Klob (1984) developed a model of experimental learning, which shows how learning occurs, and
what stages a typical individual goes through in order to learn. He explained the cycle as:
The individual actually does something (activist), reflect upon his or her specific experience (Reflector),
make some sense of the experience by drawing some general conclusions (Theorist), and plans to do
things different in the future (Pragmatist)

For example: when a new piece of software arrives in the office or in your home, how do you go about
learning it?:
• Do you install it and start trying it out? (Activist)
• Do you watch as others show you how to use it? (Reflector)
• Do you learn about the background to it and the similarities with other programs? (Theorist)
• Do you not bother experimenting until you find a clear purpose for it? (Pragmatist)
 The approaches to individual change
There are four basic approaches to understand individual change, like:
• The behavioral approach
• The cognitive approach
• The psychodynamic approach
• Humanistic approach

The behavioral approach to change

The behavioral approach focuses on how one individual can change another individual’s behavior using
reward and punishment, to achieve intended result.
Using the notion of rewards and punishments, four possible situation arise, as demonstrated in the
following table
Actions Positive Negative
Addition Positive reinforcement: Punishment:
Pleasurable and increases Unpleasant leading to
probability of repeat decrease in repeat behavior
behavior
Subtraction Extinction: Negative reinforcement:
Avoidance of an unpleasant Removal of a pleasant
stimulus increases the stimulus decreases the
likelihood of repeat likelihood of repeat
behavior behavior

Reinforcement strategies
When generating reward strategies, the following should be borne in mind:
• Financial reinforcement: It is the most explicit of the reinforcement mechanisms used in
organizations today. The use of bonus payment, prizes, and other tangible rewards are common.
• Non-financial reinforcement: It tends to take the form of feedback given to an individual about
performance of specific tasks. The more specific the feedback is, the more impactful the
reinforcement can be. For example, when a person achieve a challenging goal that can reinforce
to set more challenging goal.
• Social reinforcement: Social reinforcement takes the form of interpersonal actions, that is,
communications of either a positive or negative nature. Praise, compliments, general recognition
can all act as a positive reinforcement for particular behaviors and outcome
 Motivation and behavior
The pure behaviorist view of the world led to difficulties with motivating people to exhibit the right
behaviors. So, they developed some approaches to motivate people in organization. One of the most
popular theory based on behavior is ‘Theory X and Theory Y’ developed by Doglas Mcgregor. The
assumption regarding the behavior of people in the two opposite theories are:
Theory X Theory Y
• People dislike work • People regard work as natural as
• They need controlling and direction normal
• They avoid taking responsibilities • They seek responsibilities
• They lack ambition • They are creative and innovative
• They don’t use imagination • They commit to the organization’s
• They require security objective
• They are motivated by threats of • They respond to recognition and
punishment encouragement

Fedrick Herzberg also indicated what motivated people to give their best performance. He suggested
that workers have two sets of drives:
• Hygiene: The absence of which demotivate employees but the presence of those will not
motivate, like: pay, company policy, working relation, working conditions etc.
• Motivators: The absence of those will not demotivate people and the presence of those will
motivate people, like; achievement, recognition, advancement etc.

The cognitive approach to change

Cognitive psychologists were interested in things that happen within a person’s brain. Cognitive
approach is founded on the premise that our emotions and our problems are a result of the way we think.
Individuals react in the way that they do because of the way they appraise the situation they are in. By
changing their thought processes, individual can change the way they respond to situations.
The cognitive approach does not refer to the external stimuli and the responses to the stimuli. It is more
concerned with what individual plan to achieve and how do they go about this:
Achieving results: Key questions in achieving results in organizational context are:
• Self concept and values: What are my core values and how do they dovetail with those of my
organization?
• Belief and attitude: What are my limiting beliefs and attitudes and with what do I replace them?
• Feelings: What is my most effective state of being to accomplish my goals and how do I access
it?
• Behavior: What specifically do I need to be doing to achieve my goals and what is my first step?
• Results: What specific outcome do I want and might get in the way?
Setting goals: The cognitive approach advocates the use of goals. The assumption is that the clear the
goal, the greater the likelihood of achievement.

Making sense of the result: The cognitive approach suggests we pay attention to the way in which
we talk to ourselves about results. For example, after a particular good performance one person might
say things such as “I knew I could do it, I will be able to do that again.” Another person might say
something like, “That was lucky, I doubt whether I will be able to repeat that.”

Techniques for change:

The cognitive approach has generated numerous techniques for changing the beliefs of people and
thereby improving their performance:
• Positive listings: List all the positive qualities such as, good experience, good results, skills etc.
of you. By accepting all those you can reinforce all these positive thoughts, feelings and
perceptions, which then lead to enhanced beliefs.
• Affirmation: Try writing your own affirmation. Put it on a card and read it out 10 times a day.
As you do so, remember to imagine what you would feel, what you would see, what you would
hear if it were true.
• Visualization: It focuses on a positive, present mental image. Effective visualizations require
you to enter a relaxed state where you imagine a specific example of the way you want to be.
• Reframing: It’s a technique for reducing feelings and thoughts that impact negatively on
performance
• Pattern breaking: It’s a technique of physically and symbolically taking attention away from a
negative state and focusing it on a positive.
• Detachment: Imagine a time when you did not like who you were. Leave all the negativity
behind and become quite calm and be more rational.
• Anchoring and resource states: These are two techniques where you use a remembered
positive experience from the past which has all the component of success. For example, you gave
an excellent presentation once, before your next presentation, as you go into the room
reconnected to the positive experience by pinching yourself and saying the word. Does it work?
If does not, simply try something else.
• Rational analysis: Rational analysis suggests you to write down all the reasons that is incorrect.
You need to be specific not generalize. You need to set measurable criteria, objectively based,
and you need to use your powers of logic.
 The psychodynamic approach to change
The word ‘psychodynamic’ is based on the idea that when facing change in the external world, an
individual can experience a variety of psychological states. It became evident due to research published
by Elizabeth Kubler-Ross (1969).

The Kubler–Ross Model

Kubler-Ross published her seminal work on ‘Death and Dying’ which described her work with
terminally ill patients and the different psychological stages that they went through in coming to terms
with their condition. Kubler-Ross realized that patients – given the necessary conditions – would
typically go through five stages as they came to terms with their condition:
• Denial: people faced with such potentially catastrophic change would often not be able to accept
the communication. They would deny it to themselves. That is, they would not actually take it in,
but would become emotionally numb and have a sense of disbelief.
• Anger: When people allow themselves to acknowledge what is happeningthey enter the second
stage, typically that of anger. They begin to ask themselves questions like, ‘why me?’, ‘How
could such a thing happen to someone like me?’
• Bargaining: When they have exhausted themselves by attacking others (or themselves) people
may still want to wrest back some control of the situation or of their fate. This stage is identified
as bargaining. For those who themselves are dying, and also for those facing the death of a loved
one, this stage can be typified by a conversation with themselves. Or if they are religious, this
may be a conversation with God, which ask for an extension of time.
• Depression: When it becomes clear that no amount of bargaining is going to provide an escape
from the situation people would enter a depression at this stage. For some, this depression can
take the form of apathy or a sense of pointlessness. For others it can take the form of sadness,
and for some a mixture of intense emotions and disassociated states.
• Acceptance: At this stage people can in some ways come to terms with the reality of their
situation and inevitability of what is happening to them.

The humanistic psychological approach to change

The humanistic psychological approach to change combines some of the insights from the previous three
approaches while at the same time developing its own. Humanistic psychology has a number of key
areas of focus:
• The importance of subjective awareness as experienced by the individual
• The importance of taking responsibility for one’s situation – or at least the assumption that
whatever the situation there will be element of choice in how you think, how you feel and how
you act
 • The significance of the person as a whole entity in the sense that as humans we are not just what
we think or what we feel, we are not just our behaviors. We exist within a social and cultural
context

Maslow and the hierarchy of needs

Maslow researched what makes men and women creative, compassionate, spontaneous and able to live
their lives to the full. He therefore studied the lives of men and women who had exhibited these traits
during their lives, and in so doing came to his theory of motivation, calling it a hierarchy of needs

Self actualization needs

Self-esteem needs
Love and belonging needs
Safety needs
Physiological needs

Maslow believed that human beings have an inbuilt desire to grow and develop and move towards
something he called self actualization. However in order to develop self actualization an individual has
to overcome or satisfy a number of other needs following the hierarchy given.

Rogers and the path to personal growth

Carl Roger is one of the founders of the humanistic movement. He has written extensively on the stages
through which people travel on their journey towards ‘becoming a person’.
Rogers’ ‘client-centred approach’ to growth and development provide clues and cues as to how we as
change agents might bring about growth and development with individuals within organizations. Rogers
highlighted three crucial conditions for this to occur:
• Genuineness and congruence: To be aware of your own feelings, to be real, to be authentic.
The more genuine and congruent the change agent in the relationship, the greater the probability
of change in the personality of the client.
• Unconditional positive regard: acceptance of whatever feelings are going on inside the clients.
Whatever feeling the client is experiencing, be it anger, fear, then that is all right.
• Empathic understanding: Understand the feelings and thoughts of the clients which may seem
to be horrible, weak, or sentimental and explore all the hidden roots.

Gestalt approach to individual and organizational change

Gestalt therapy was originated from Fritz Perls. Gestalt use a cycle of experience to map how
individuals and groups enact their desire:

Sensation Awareness Mobilization of energy action contact resolution

withdrawal of attention
 • Sensation: A favorite saying to Fritz Perls was to ‘get out of your mind and come to your sense’.
Gestalt always begins with what one is experiencing. Experiencing has as its basis what one is
sensing which determines the nature of awareness.
• Awareness: What we sense outside of ourselves or within leads to awareness. Awareness comes
when we alight or focus upon what we are experiencing. (data generation, sharing information
etc.)
• Mobilization of energy: It occurs as awareness is focused on a specific facet (Interest in an idea
or proposal)
• Action: The energy then need to be released typically by doing something, by taking action, by
making contact in and with outside world
• Contact: Joining in a common objective, common recognition of problem definition etc.
• Resolution: Making contact will then experience a reduction in energy, and will complete the
cycle by having come to a resolution (testing, checking for common understanding etc.)
• Withdrawal: After resolution the object of attention would fad in to the background. (tuning to
the other tasks or problems0

Personality and change

We have looked at different approaches to change, and suggested that individuals do not always
experience these changes in a consistent or uniform way. However, it has not been asked whether people
are different, and if so, whether their differences affect the way they experience change. We have found
in working with individuals and teams through change that it is useful to identify and openly discuss
people’s personality types. The most effective tool for identifying personality type is the Myers Briggs
Type Indicator (MBTI). The MBTI identifies eight different personality preferences that we all use at
different times – but each individual will have a preference for one particular combination over others.
The eight preferences can be paired as set out below:

Where individual draw their energy

Extraversion is the preference for drawing energy from the external world, tasks and things, whereas
Introversion is a preference for drawing energy from the internal world of one’s thought and feeling.

What individuals pay attention to and how they receive data and information
Sensing is concerned with the five senses and what is and has been, whereas Intuition is concerned with
possibilities and patterns and what might be.

How an individual makes decision

Thinking is about making decisions in an objective, logical way based on concept of right and wrong,
whereas Feeling is about making decisions in a more personal values-driven and empathic way.

What sort of life style an individual enjoys

Judging is a preference for living in a more structured and organized world which is more orderly and
predictable, whereas Perceiving is a preference for living in a more flexible or spontaneous world where
options are kept open and decisions not made until absolutely necessary.

The MBTI research validated that if you are a particular type you have particular preferences and are
different from other people of different types. This means that when it comes to change, people with
different preferences react differently to change, both when they initiate it and when they are on the
receiving end of it.

Chapter 4: Resistance to organizational change

Resistance: The concept

A review of the literature on resistance to change suggests that there is no commonly held definition for
resistance to change as different approaches have been used by academicians and practitioners to
conceptualize resistance to change. Some of the definitions given by researchers over the past decades
fall within a wide spectrum and describe resistance to change as:
“Resistance is any conduct that serves to maintain the status quo in the face of pressure to alter status
quo.” – Zaltman & Duncan (1977)

“Resistance is an incomplete transition in response to change” – Bridges (1986)

Resistance to change is a multifaceted phenomenon, which introduces unanticipated delays, costs, and
instabilities into the process of strategic change – Ansoff (1988)

“Resistance is the obstacle in the organization’s structure” – Kotter ((1995)

Nature of resistance: Positive or negative?

Organizational change literature in the past has explored the notion of resistance to change as an
annoying barrier which is needed to be overcome and also considered as a deviant behavior that needed
to be cured. Ansoff’s definition of resistance also reflects the negativity in resistance to change.
Recently an alternative to such a perspective has been observed as researchers are analyzing resistance
as positive force. Waddell and Sohal (1988) point out that resistance could show change managers
certain aspects that are not properly considered in the change process. Parren and Megginson (1996)
said “ Resistance may be viewed as a ‘natural’ survival mechanism within organizations that tests,
adapts and sometime stops decision by fallible and often ill informed senior management”.

Factors causing resistance to change

• Fear of the unknown: Such fear is due to uncertainty about the nature of change, feelings that
one does not know what is going on and what the future holds
• Loss of control: feeling that when the change is brought by another person an individual can loss
his/her control over the situation.
• Loss of face: Feeling of embarrassment as a result of change and discerning it in such a way that
the things that one has done in the past were wrong.
• Loss of competency: Feeling that the existing skills and competencies that the person has will
no longer be of any use after the change has been taken place.
 • Need for security: Worry about one’s potential role after the change has taken place.
• Poor timing: Feeling surprised on how the change has been sprung on the person being asked to
change at a time when one already feels overworked.
• Force of habit: Feeling of comfort in the existing routines and habits and not liking to change
existing ways of doing things.
• Lack of support: Lacking the support of direct supervisor and/or organizations, not having the
correct resources to properly implement the change.
• Lack of confidence: Lack of confidence that once change has taken place, things will be better
than before.
• Lingering resentment: feeling angry due to a lack of respect for the people involved and/or
over the way one has been treated during past change efforts.

Resistance: The behavioral elements

The behavioral elements that the resistance posses, if analyzed, provide information regarding the
motivation of the resistors and help leaders decide their response towards them and the issues that may
raise. O’ Connor (1993) while discussing the behavioral aspects of resistance gave forward a matrix that
categories resistance on two dimensions:
• Overt vs. Covert: Resistance in covert form occurs as the concealed and undefined and such
resistance can completely avoid detection. In its overt forms, resistance appears in the form of
open expression which may be accompanied by the reasons for such disagreement.
Consequently, it is easier to manage overt resistance than covert.
• Conscious vs. Unconscious: When resistance is unconsciously motivated, individuals are
unaware that their behavior undermines change. Such kind of resistance is resulted due to
previously set work routines based on wrong information. Unconscious resistance is difficult to
detect by the management. Resistance with a conscious motive follows a consideration of the
change, and may be based on misinformation or self serving motives. Such resistance may be
tackled by debating as ignoring it may lead to increased resistance.
Based on these dimensions, O’ Connor (1993) proposed the matrix that categorizes four extremes of
behavior corresponding to the four readily identifiable kinds of resistance:
• Covert and conscious - The Saboteur : Such resistors undermine change but at the same time
pretend to support it. They may verbally support the change while doing nothing about it wishing
that the change initiative goes away so that there is little or minimal disruption and discomfort.
This group also includes people who intend to sabotage the company or individual’s plan for
change in order to attain their personal gain.
• Covert and unconscious - The Survivor: The people under this category fail to meet targets or
fail to understand the implications of their behavior. They don’t realize that they are undermining
the change initiative. Such resistance is often undetected and the resistors themselves think they
are doing a good job. Since most of the time their efforts are wasted.
• Overt and Unconscious – The Zombie: This is the extreme case of survivor and is unable to
change most of the time as a result of high degree of getting accustomed to acting in a particular
way. In spite of verbally agreeing to a prescribed change role, they neither have the will or the
ability to create the change and gradually revert back to their former behavioral patterns.
• Overt and Conscious – The Protester: The protesters in their refusal to change believe
themselves to making positive contribution to the organization and criticize every failure brought
 about by the change. Such resistors are easy to detect and are easy to manage as their resistance
is open and they discuss their position clearly and rationally.

Resistance: The cognitive and affective processes

Organizational change causes individuals to experience a reaction process. In the study on resistance to
organizational change and the role of cognitive and affective processes, Bovey and Hede (2001)
developed a Behavioral Intentions Matrix based on the overt-covert and active-passive dimensions
that helped in measuring the individual’s intention of engaging in supportive and resistant behavior
towards organizational change:

Active Overt active reactionCovert active reactionResistance Covert

oppose
argue
obstruct

Support
Initiate
EmbraceResistance
Stall
Dismantle

Support
Support
Co- operateOvert passive ReactionCovert active reaction Resistance
Observe
Refrain
Wait

Support
Agree
AcceptResistance
Ignore
Withdraw
Avoid

Support
Give-in
Comply
While empirically testing the role of cognition and affect in change processes, these researchers
surveyed individuals during the resistance phase of the change process in order to measure the
associations between an individual’s irrational ideas and their behavioral intentions toward resistance.
They found that irrational ideas, especially blaming, being inert and passive, not controlling one’s
destiny, and avoiding life difficulties, are associated with resistance to change and individuals who
posses higher levels of irrational ideas are more likely to resist organizational change. These
associations strengthen as a result of the emotions involved in the process.

Recognizing resistance: The management’s challenge

It is essential for management to discover precisely ‘who’ and the ‘why’ of resistance. In many cases,
resistors themselves are unaware of their resistance. Such situations arise especially when there is poor
and insufficient communication about the staffs’ expected role in the change process and change is
mismanaged from the top. On the other hand, the manager responsible for implementing change may not
have understood the requirements or has chosen to resist the change while verbally agreeing to it. O’
Connor (1993) has provided five diagnostic questions, each of which act as a tool for recognizing
resistance:
• Do those who are responsible for change implementation realize that it is based on a serious
need?
• Do those involved describe the need for change in the same way?
• Is there a common end goal for change to which everyone agrees?
• Does everyone believe the goal is attainable and helps the organization?
• Is there a unanimous confidence in the person selected to manage the change?

Managing resistance to change

One of the most challenging and baffling problems faced by managers in handling change is employees’
resistance to change. The resistance may be in the form of two kinds of reactions:
a) Explicit in the form of:
• Voicing disagreement
• Strike
• Go slow
• Employee turnover etc.
b) Implicit in the form of:
• Loss of loyalty
• Lowering of morale
• Absence
• Low tolerance etc.
It is mostly assumed that resistance is only negative and bad. But the fact is that the bad and good of
resistance to change depend on whether it is based on sound principles or not. Managers responsible for
managing change need to look into that aspect and also the following sources when implementing
change:
Sources of individual resistance
• Limited knowledge/lack of knowledge: In situations when people do not have sufficient
knowledge about the causes and effects of changes they feel anxious and stressed and
consequently resist change,
• Myopia perception: When change is introduced employees are more concerned about how it
affects them personally rather than how it would affect the entire organization.
• Fear of the unknown: Uncertainty about the effects of change personally and professionally is
another reason for individual resistance. A number of fear like loss of status, power, income, and
uncertainty about their ability to cope with work pressure come in the way of accepting the
change.
• Aversion to risk: Change threatens those who like comfort of the familiar. Change often
requires personal transition wherein the familiar is destabilized and some do not like to take that
risk.

Sources of organizational resistance

• Inertia of a structure: A number of built-in mechanisms provide stability to organizations.
Every organization has got its own systems, processes, policies and procedures, which ought to
be followed for uniformity and formalization of the process. Consequently any change in the
structural aspects has cascading effect on other related systems and processes.
• Challenge to power dynamics: Structural change with ensuing changes in decision-making
pattern can destabilize power relationships over a period of time.
• Pressure for observing group norms: It is common observation that a single member of a
group accepts change suggested by the management willingly, but his group affiliation with a
union does not allow him to do so. Therefore, to conform with group norms he is likely to resist
change.
• Lopsided/blinkered view of change: An organization consists of four basic
elements/subsystems namely task, structure, technology and people. Focus on any one of the
subsystems will bring about corresponding change in other subsystems which may make the
change difficult.

Types of resistance
• Emotional resistance: It occurs due to employee attitude and feelings about change. Feeling of
insecurity, loss of self e, fear of the unknown, desire for status quo and/or mistrust in
management can make people emotional to resistance.
• Rational resistance: It is based on reasoning, logic and disagreement with the fact. It may result
from the actual time and effort required in adjusting to change and the time given to adjust.
• Social resistance: Resistance occurs due to social values, labor values, community values or
political coalition. It can put a lot of moral pressure to resist when the change will go against
values.
Implications of resistance
• For any change to be accepted by the employees cooperatively, it is important for a manager to
anticipate and handle the employees
• Recognizing the effect on social factors is extremely important for the success of any change
efforts
 • It also should be considered that as people are different; their response to change would also be
different and may range from moderate support to weak support or even opposition to change.
• The managers responsible for change need to develop a climate of trust with positive feelings
toward most changes.
• It is observed that when its management is not able to win the support of employees they use
authority but if it is not used carefully it will defeat the purpose.

Methods of handling resistance

Kotter and Schlesinger have suggested six major methods to deal with the resistance to change realizing
the causes, sources, types and implications of resistance to change:

Education and Where people lack information or have

communication inaccurate information and analysis of the
situation

Participation and Where all the information needed to design

Involvement the change is not available, and where others
have considerable power to resist

In situations where people are resisting

Facilitation and Support
because they have adjustment problems

There are chances of someone or some group

Negotiation and losing out in a change, and where that group
Agreement has considerable power to resist

Manipulation and Co- Situations where other tactics will not

optation work, or are too expensive

Explicit and Implicit Where sped is essential and the change

coercion initiators possess considerable power
 Chapter 5: Models of change
Several models of organizational change have been developed by researchers. Two contrasting models
of change are the ‘trickle down’ model vs. ‘identity search’ model. According to trickle down model,
organizational change occurs because top management takes a decision and adopts new ways
(technology, systems, structure etc.) and others follow it. On the other hand, the identity search model
urge to develop one’s own uniqueness and identity which will make the group or individual accept
change. These two models correspond to the approaches that organizations adopt like, the top down
(classical) approach and the bottom up (living systems) approach.
Thus the approach to organizational change may broadly be classified into two categories:
The top down approach
An organization comprises of functional areas. Directives from the top management drive these areas
through defined paths of command and control. The underlying assumption here is that, management
needs to push hard to sustain change. This approach broadly adopts the following steps (Binney and
Williams, 1997):
• Developing a vision
• Communicating the vision
• Top management determination
• Planning and programming
• Adopting the best practice
The bottom up approach
It views organizations as systems that get affected by environmental change. Organization is considered
to be a “learning” organization, with multiple feed back systems. Here change is considered as an on
going process that occurs naturally. The characteristics of the system approach are:
• Organizations need to be studied in relation to the contextual environmental factors such as
structure, size, technology and leadership patterns
• Organizations are composed of several interdependent subsystems
• Organizations are purposeful and comprise individuals, groups, structure, system, policies
• Organizations are adaptive, dynamic, flexible and interdependent
• Leader is democratic
• Recognition of the need for both change and stability
• Focus on the current reality in addition to future orientation
• Understanding and respect for the distinctiveness of each organization and its own specialized
need for change
Such system allow for individual learning as well as greater social interactions. Here, the leader is more
than the provider of clear vision and aids in the change process by facilitating, identifying and directing
the emerging pattern of behavior and thinking.

For greater understanding about the change, some of the models that have hold relevance and existed
over a span of time can be categorized into three groups on the basis of their nature, analysis and
treatment:
a) Process based models
b) Content based model
c) Integrated models
 Process based models

Lewin’s model of change

This model is one of the early models of planned change. According to Lewin change underlies the
modification of those forces that keep a system’s behavior stable. The level of behavior at any point of
time is the result of two vectors – one aiming towards maintaining the status quo, and the others striving
for change. When these two forces balance each other equally, the current behavior is maintained.
According to Lewin, change in a system can be induced by either increasing the forces for change or
deceasing the forces maintaining the current state or by applying a combination of both.
In this model organizational change affects three levels:
• Individual level (change affecting individual’s attitude, beliefs, values, skills and behavior)
• Structure and systems level (change affecting incentive system, information systems etc.)
• Organizational climate (change affecting leadership style, interpersonal relationship, decision
making etc.)
In order to provide a basis for change at all these levels, Lewin model consists of the following three
critical steps:
• Unfreezing: This involves reducing forces that maintain the organization’s present behavior.
This may be accomplished at the individual level by disconfirming individual’s present behavior.
The individual here may be given information that reveals incongruity between the behaviors
desired by organizational members and his/her current behavior. At the system level, new and
more effective design like matrix may be demonstrated to initiate change. At the climate level,
survey feed back methods may be used to understand and feel about certain management
practices.
• Changing/moving: This refers to the shift in behavior to a new level resulting in the
development of new behavior, values, attitudes in individual through change in the
organizational structure and processes. The change initiated must be perceived as solutions to
problems identified during the unfreezing stage.
• Refreezing: This is the stage where the organization stabilizes and achieves a new state of
equilibrium and a preferred behavior. It is often accomplished through the use of various support
mechanism like, awards, recognition, demonstration of benefits etc. The new state is made
relatively secure against change until the next cycle of change is planned

Model of the Change Management Process

Galpin (1996) proposed the model of the change management process which provides guidance for
successfully implementing change. In his view a successful organizational change effort must target two
levels – the strategic level and the grassroots level.
Strategic change refers to the up-front, initial effort involving executives, senior managers, a small cadre
of employees and often consultant, who provide an outside view. This kind of change has two goals – a
technical or analytical goal (involving generation of recommendations for change) and a soft-side goal
(involving creation of momentum for change)
Grassroots change is the effort to drives change deep into an organization by stressing implementation at
the local level. The primary goal here is to implement and sustain desired change
 Top Management 1. Leadership Local Management
A select few 2. Infrastructure Management, employees
and the masses
The entire organization 3. Diagnostics Specific sites
Comparison of external 4. Comparison points Implementation of the best
benchmarking and best practices
practices to internal
Introduction and application 5. Tools Application of
of data collection tools and implementation tools to the
technique to a select few masses
Assessment of needs, some 6. Training Assessment of needs &
design and delivery extensive design and
delivery
Recommendations for 7. Outcome goals Implementation of change
change and momentum
building

Change does not usually occur in one leap but often entails several key stages along the way. In this
model nine stages are shown to create and implement change. The nine stages require management
within an organization to understand and apply the characteristics of both strategic and grassroots
changes:

Stage 1: Establishing the need for change

This stage involves identifying and articulating the need to change so as to help people understand why
changes are required. The rationale for change is thus included along with the consequences of not
changing.

Stage 2: Developing and disseminating the vision of the change

People at this stage require a clear vision of where the organization seeks to go and hence the vision
needs to be expressed in a way that allows for all organizational members to understand and relate to it
and see their roles in achieving it.

Stage 3: Diagnosing/analyzing the current situation

The current process of the organization are analyzed and diagnosed and the observations are compared
with the desired change as per vision. The implication of change can be diagnosed by using some
analytical tools or techniques (such as cost benefit analysis, break-even analysis etc.).

Stage 4: Generating change process recommendation

At this stage, ideas are raised to improve, eliminate, combine and develop new process. Foraying into
creativity, best practice comparisons and benchmarking are often sources for operating in new ways.

Stage 5: Detailing recommendations

This stage includes consideration of details such as costs, hardware and software availability, and
training needs. The merits of the ideas are evaluated on the basis of their cost effectiveness,
implementation time and technology availability.
Stage 6: Pilot testing
At this stage, grassroots changes become essential since improvements are tried out within the
organization. Pilot testing might not encompass the entire process but is often useful in fine tuning
improvements before making organization-wide change.

Stage 7: Preparing recommendations for roll out

Here the feed back obtained during the previous stage is used to finalize recommendations for roll out.

Stage 8: Rolling out changes

At this stage, a roll out schedule must be developed, materials and equipments lined up as it would
facilitate conducting training as grassroots change gains paramount importance.

Stage 9: Measuring, reinforcing and refining changes

This stage involves consolidating the grassroots changes through measurement, reinforcement and
refinement in order to achieve the intended results. Refinements are based on obtained feed back and are
essential for enhancing the effectiveness of implemented changes and achieving the desired results.
 Content Based Models
The Dissipative Equilibrium Model of the Organization
This model was proposed by Hunt, who viewed organization as rational action system which is
characterized by system variables and effectiveness variables. Thus according to this model each
organizational system is designed to achieve certain objectives, whose attainment is measured in terms
of effectiveness on certain parameters. It is also said in this model that the organization always seeks to
attain equilibrium and these variables (the system and effectiveness) are two sets of parameters that are
involved in determining such an equilibrium. Consequently any change process or resultant change
involves these two sets:
System variables
These include the following variables:
• Formal structure: It refers to the arrangement of resources in such a way that there is a
coordination between the organizational member’s activities and their interpersonal relationships
in order to pursue organizational objectives.
• Informal structure: The formal structure usually imbues organizational members’ values,
beliefs and attitudes collectively. In addition to such collective cognition, there are other values,
beliefs and attitudes that give rise to an organization’s informal structure that is much loose and
unstructured and define the relationship among members.
• Technical system: In any organization there exists a relationship between the organizational
members’ work and the organizational goals. Such a link is provided by a technical system
which includes the tool and machine system and the physical work constraints and relate to the
procurement, disposal and adaptation of resources.
• External pressure: As organizations are open systems, these are often subjected to pressures
generated from outside. Such pressures are experienced in the form of communications between
the members and nonmembers. Examples include complaints, and customer services.
• Individual variables: Though an organization is basically a collective of its members’ role
performances but each member joins an organization to fulfill certain needs. These needs define
the individual variable and its strength is manifested in the individual’s motivation in satisfying
his needs

Effectiveness variables
These include the followings:
• Achievement: Achievement can be understood at two levels – organizational and individual
levels, though these two levels are not mutually exclusive. At the organizational level,
achievement may be understood in terms of its relationships with technical systems and
cooperation. Organizational goal achievement also requires cooperation among the
organizational members. At the individual level, need satisfaction drives individual’s level of
motivation that in turn, fuels more effective performance thereby resulting in greater possibility
of organizational goal fulfillment.
• Cooperation: Achievement of goals often is a result of organizational members’ shared values
and belief systems. Such kind of shared systems pave the way for cooperation between members.
In other words, perceived goals’ interdependencies lead to cooperation.
• Destructive conflict: Conflict arises as a result of perception of conflicting goals among the
organizational members. Organizations are structured into departments. Departments may
 experience conflict between their respective goals and dissection of goals provides a focus for
conflict development.
• Need satisfaction: It is in order to satisfy certain needs that an individual works in an
organization. The effort the individual expends results the enhances of his/her role performance
and thereby results in greater satisfaction of the needs that lead him to become a member of the
organization.
• Need dissatisfaction: Formal structural hierarchy in the organization causes its members to
become aware of the disparities that exist within the organization with respect to their salary
structure, status and the like.

Hunt carried out empirical studies to test the validity and utility of his model, to further identify the
interactions between the specific variables and to assess the strength of such interactions. Such efforts
aid selection of the intervention chosen by the change agent in a way that these most closely appropriate
and precipitate the desired outcome in the organization.

Bruke-Litwin Model of Organizational Performance and Change

The Bruke-Litwin (1992) model adopts the open system approach towards an organization. In this
model the external environment serves as the input dimension and the individual and the organizational
performance serves as the output dimension. The other remaining components in the model refer to the
primary throughput dimensions. The feedback loop links the input with the output; and the arrows are
bi-directional (organizational outputs – products and services affect the external environment and the
forces in the external environment affect performance directly). For example change in the government
policies or market conditions will affect organizational outcome and vice versa.
The model’s underlying assumption is that a company is an organic entity and is made up of many
individual components, each of which potentially plays a role in change efforts. Factors such as
leadership, organizational mission, strategy and culture shape and drive an organization’s life in broad
ways thereby playing transformational roles in the life of an organization. At the same time there are
variables like a company’s structure, management practices, systems that help people conduct their jobs
and factors like employee motivation, needs, job fit and work unit climate- that influence how work gets
done on an actual every day basis. These factors influence organizational and individual performance at
a transactional level. Successful change requires keeping both transformational and transactional
variables in mind, and using one (or a combination) of them to shape and sustain change.
 External Environment
(1)

Leadership
(3) Organizational
Mission and Strategy
(2) Culture
(4)

Management Practices
(6)
Structure Systems (Policies &
(5) Procedure) (7)

Work Unit Climate

(8)

Task Requirements & Motivation Individual Need and

Individual (10) Values (11)
Skills/Abilities
(9)

Individual and Organisation

Performance (A)
In figure, boxes of the top half (1-4) represent the transformational factors. The changes occurring here
are caused by direct interaction with external environmental forces and as a consequence require
significantly new behavior from the organizational members. Changes in any of these boxes bring about
discontinuous and revolutionary changes in the organization and affect the entire organization – the deep
structure of the system and require a visionary leadership.
According to the Bruke-Litwin model of change, planned change flows from top (External environment)
to bottom (performance). The arrows that point downwards are given more causal weight. Thus, with
respect to organizational change, external environment has the greatest impact. Inside the organization,
the transformational factors have the greatest impact. According to the model, the external environment
first affects the leadership. These are the senior executives and key decision makers who determine the
mission and strategy, or bring about change in these; and in part shape the organization’s culture.

Integrated Models
The Nadler-Tushman Congruence Model
Nadler and Thushman gave this model based on the following assumptions:
• Existence of organizations as open systems
• Being open system organizations are influenced by the environment around and influence the
environment by their outputs
Hence, the model can be understood as having three parts: inputs, throughput or the transformational
process, and outputs.

THROUGHPUTS

Informal
INPUTS Organisatio
n
Environment;
Available Organisatio
resources; Formal al
Strategy
Organizational Task Organisation functioning;
history arrangements Group
behaviour,
Inter-group
relations;
People
Individual
behaviour
Inputs
Assuming that inputs to an organizational system are relatively stable, Nadler and Thushman described
four inputs to the organization:
• Environment
• Resources within the reach of the organization
• Organization’s past (history)
• Strategies that were initially developed and have got refined over time
These inputs to the organization explain the behavior of members of the organization and also act as
constraints as well as opportunities for action.
Outputs
Nadler and Thushman have classified outputs into four categories – system functioning, group
behavior, inter group relationships and individual behavior and effects. Systems functioning may be
assessed through the organization’s attainment of its desired goal, utilization of its resources and coping
with environment over time. The other outputs are behavioral in nature and are related to:
• Performance of groups/units within the organization
• Extent of communication, differences/conflict resolution and collaboration among these units
• Behavior of the individuals in terms of turnover, absenteeism and good performance.

Throughputs
The four major interactive components that constitute throughput or transformational process, wherein
inputs are change into outputs include people, jobs or tasks, managerial structure and all relations of
individuals, groups and subsystems.
The concept of congruence
Nadler and Thushman have gone beyond the description of the model’s components and relationship to
give the concept of ‘fit’. As defined by Bruke “fit is the measure of the congruence between pairs of
inputs and especially between the components of the transformational process”. Further Nadler and
Thushman went on to contend that inconsistent fits between any pair would lead to less than optimal
performance with respect to both the organization and the individual. They hypothesized that the better
the fit, the more effective the organization will be. They also tried to diagnose:
• The state of fit: It involves two related activities – determining fits between components, and the
links between the fits and organizational outputs. To determine the fits between components,
sufficient gathering of data and analysis is imperative. In order to diagnose the latter, change
agents must concentrate on the outcome of diagnosis of the fits between different components
and their behavioral consequences on the set of behaviors associated with outputs. This helps in
identifying certain critical organizational problems and the addressing of these problems induces
change in the system, following which the system is monitored and evaluated using the feedback
loop.

The Managing Change Model

The managing change model (Burke and Spencer-1990) offers an integrated perspective. This
framework combines the strengths of various theoretical perspectives and incorporates important issues
involved in evaluating the overall effectiveness of the change process. The model consists of the
following dimensions:
• Individual response to change: Concerning the nature, prevalence, and utility of resistance to
change.
• The general nature of change: concerning whether effective large system change is
evolutionary or revolutionary in nature.
• Planning change: concerning the causes of change in organizations, articulation of the vision,
how to get from the present to the future, and barriers to effective transitions.
• Managing the people side of change: concerning how, when, and how much to communicate
about change within the organization, and psychological issues related to transitions.
• Managing the organizational side of change: Concerning the design and structural issues of
systemic and long term change efforts.
• Evaluating the change efforts: concerning indicators of change effort’s effectiveness.

Knowledge of the change Process

Evaluating
change

Managing Managing
“people” “Organizational
side of ” side of
change” change

Planning change

Individual response General nature of

to change change

Knowledge of fundamental aspects of change

 Chapter 6: Organization structure and change
The term organizational structure refers to the formal configuration between individuals and groups
with respect to the allocation of tasks, responsibilities and authority within the organization. In an era
of globalization, rapid technological changes, and intense competition, new forms of organizational
designs and networks have replaced traditional forms of organizational structure. Structure has been
considered as the most important and powerful influence within the organization. If we do not deal with
structure, we would not be able to change the organization fundamentally. With an understanding of
structural principles we can redesign our organization so that change will finally succeed. To do so we
need to realize the perspective and forms of existing organizational structures.

Perspectives of organizational structure

Two major perspectives are:
Classical universal approach to structure: This is a universal set of principles, which can be
used in the design of the structure of any organization. A number of structural principles were advanced
which were believed to be applicable in all organizations. The publication of these principles in the
1980s led to the advancement of this theory. Organizations that performed well, both in terms of growth
and profitability, were declared as excellent. The attributes for measuring their success were also
chosen. The inference was that if other organizations applied the principles derived from such
organizations, they would also benefit (Thornhill 2000). Out of the eight attributes, three are related to
structure:
• Adopting leanness in relation to the design of the organization and its staffing.
• Model of accountability based on developing responsibility through decentralization while
ensuring centralized control over core values and through financial targets.
• Creation of small empowered teams on a flexible basis, whose sole task would be to find a
relatively rapid solution to a significant business problem, rather than working through a
bureaucratic or formal route to solve the issue.
Contingency approach to organizational structure: It suggests that an organization’s
strategy and structure are contingent on the circumstances confronting the organization. Contingent
theorists believe that if an organization’s structure has not been designed to take account of the demands
created by the environment and the characteristics of the organization, this will adversely affect its
effectiveness and performance.

Forms of organization structure

Positions in the organization can be figured and explained in terms of their authority and responsibility
which make the design of an organization. There are three common organizational designs found in use:
The simple structure: A structure characterized by:
• low degree of departmentalization
• wide span of control
• authority centralized in a single person
• little formalization.
The bureaucracy: A structure with:
• Highly routine operating tasks achieved through specialization
• Very formalized rules and regulations
• Tasks that are grouped into functional departments
 • Centralized authority
• Narrow span of control
• Decision making follows the chain of command.
The matrix structure: The matrix structure combines a functional, and market or project centred
arrangement. This type of structure is designed to combine the efficiency of a functional approach with
the responsiveness implied by a product or market centred approach. A person has to report to
essentially two heads: one is project leader and the other is functional leader. Organizations which are
operating with a functional structure, might form a matrix structure for a part of the company for special
projects.

New design options

The team structure: The primary characteristics of the team structure are that it breaks down
departmental barriers and decentralizes decision making to the level of work team. This type of structure
somewhere treated as SMT (Self Managed Team).
The virtual organization: It is also called as Network or Modular organization. It’s typically a small,
core organization that outsources major business functions. This structural form allows each project to
be staffed with the talent most suited to its demand.

Futuristic organizational model

Abacus organization: The Abacus structure can be a sort of a matrix organization where there are
product (product) areas and geography (countries). Networks transfer knowledge, provide support and
open communications. There is a lot of possibility here to escalate globally through information sharing.
EcoNet organization: The EcoNet structure looks like concentric circle (small circle represent
businesses). Here the emphasis is not only on the concept of ‘small is beautiful’, but also on speed and
boldness in decision making, culture and remuneration, therefore, access to talent.
Spaghetti organization: This is a kind of boundary-less organization. There are no titles, no
department, and no personal office space. This structure is physically and organizationally informal.
Small management teams sponsor and lead projects and the key is the information system and
knowledge base.

Purposes of organizational design

• To support the organization’s strategy and vice versa
• To reorganize resources in the most efficient and effective way
• To provide the effective division of task and accountabilities among individuals and groups
• To ensure effective coordination of the organization’s activities
• To enhance and clarify the lines of communication
• To allow for the effective monitoring and review of the organization’s activities
• To provide mechanisms for coping with change

Restructuring
We trained hard. But it is seemed that every time we were beginning to form into teams, we would be
reorganized. I was to learn later in the life that we tend to meet any new situation by reorganizing. And
what a wonderful method it can be for creating the illusion of progress while producing confusion,
inefficiency, and demoralization – Gaius Petronius Arbiter.
Restructuring as a theme for change might seem a little strange because it might not be meaningful
unless the reasons behind the change are justified.

Reasons for restructuring

• Downsizing or rightsizing (market conditions or competitiveness)
• Rationalization or cost cutting (market conditions or competitiveness)
• Efficiency or effectiveness (drive towards internal improvement)
• Decentralization or centralization (drive towards internal improvement)
• Flattening the hierarchy (drive towards internal improvement)
• Change in strategy (strategy implementation)
• Merger or acquisition (strategy implementation)
• New product or service (strategy implementation)
• Cultural change (strategy implementation)
• Internal or external crisis (unforeseen/unplanned change)

The restructuring process

• Strategic review and reasons for change: Any attempt to restructure needs to have a clear
communicable rationale. This will typically come from a review of strategy that highlights the
need to address a specific issue relating to the internal or external business environment.
Example: restructuring is often done to improve customer responsiveness, gain market share or
improve organizational efficiency.
• Critical success factor: Planning a structure requires the generation and understanding of
critical success factors. Because if they are met, they will ensure success for the new structure.
For example, the new structure will facilitate a performance and feed back culture across the
organization.
• Design options: Design options are the different ways in which the particular organization can
be structured. It is important to demonstrate that the success factors will be better achieved this
structure rather than any other one.
• Risk assessment: As each options have some limitations, organization will need to identify the
specific risks associated with moving from one structure to another. The management needs to
understand fully the nature of these risks. For example, risk may be associated with consistency,
corporate identity, cost effectiveness etc.
• Learning from previous projects and best practices: Clearly we don’t have to reinvent when it
comes to restructuring. The most organizations have a reservoir of knowledge as to what has
worked before and what has not worked. Now is the time to check back to see what the learning
are from previous change projects. We also sometime rely on the best practices. In terms of best
practice there are many resources like, a wide range of literature, professional bodies and
consultancy firms. It is important to get the right balance between what has worked elsewhere
and what will work in our organization.
• Project planning: Now it’s the time to make a complete plan to operate the new structure. At
this stage the change agents will make a communication plan, selection/recruitment plan and
contingency plan.
• Implementation: The complexity of the restructuring task is often underestimated. Timescales
are often not met. Staff directly affected by the change and potentially facing redundancy are
subjected to undue stress because the whole process takes too long to complete. So, in order to
 make the restructuring smooth the management needs to provide visible support, continued
communication of the purpose, and constructive consultation.
• Monitoring and review: monitoring and review is not something just to be done at the end of
the process and written up for the next time. The restructuring plans need to be monitored
constantly to see how both the task and people aspects of the plan are progressing. Feed back
loops need to be built into the plan so the senior managers and the those responsible for
implementation have their fingers on the pulse of the organization
 Chapter 7: Organizational Culture and Change
If a manager of an organization is asked to give a new recruit some words of encouragement on how to
be successful within the organization, what would he say? He might give some formal advice about
carrying his ID at all times, but he might also make some of the following suggestions:
• Keep your head down
• It’s OK to make mistakes here, as long as you don’t repeat them
• The boss likes to see you working really hard at all times
• It does not pay to ask too many questions
• You will find everyone pulls together here and will want to see you as part of the team
With this helpful advice, he begins to educate the person about the way things get done around the
organization. He also reveals what some of the required behaviors are, and thus he actively reinforces
the prevailing culture.
As Schein (1990) says, culture is the ‘pattern of basic assumptions that a given group has invented,
discovered or developed in learning to cope with its problems of external adaptation and internal
integration’.
Culture is not just about induction programs, it is everywhere in organizational life. Molenaar (2002)
says, ‘the characteristics of the culture must be understood for truly understanding the corporate culture’.
The following is a compilation of the most cultural characteristics:
• Corporate culture represents behaviors that new employees are encouraged to follow (Kotter
and Heskett)
• It creates norms for acceptable behavior (Hai)
• Corporate culture reinforces ideas and feelings that are consistent with the corporation’s
beliefs (Hampden – Turner)
• It affects worker motivation and goals (Hai)
If we want to learn about how to change culture, we need to understand how it is created. Schein
suggests that there are six different ways in which culture evolves. Some of these can be influenced by
leaders and some can not:
• A general evolution in which the organization naturally adapts to its environment
• A specific evolution of teams or subgroups within the organization to their different
environments
• A guided evolution resulting from cultural ‘insights’ on the part of leaders
• A guided evolution through encouraging teams to learn from each other, and empowering
selected hybrids from sub-cultures that are better adapted to current realities
• A planned and managed culture change through creation of parallel systems of steering
committees and project oriented task forces
• A partial or total cultural destruction through new leadership that eliminates the carriers of the
former culture (turnarounds, bankruptcies etc.)

Nature of organizational culture

The culture of an organization may reflect in various forms and norms adopted by the organization:
• The physical infrastructure
• Routine behavior, language, ceremony
• Gender equality, equity in payment
 • Dominant values like quality and efficiency
• Philosophy that guides the organization’s policies toward its employees and customers like
‘customer first’ and ‘customer is king’ and the manner in which employees deal with a customer.

Levels of organizational culture

One comes across a number of elements in the organization, which depict its culture. Organizational
culture can be viewed at three levels based on manifestation of the culture in tangible and intangible
form:
• Level 1: Organizational culture can be observed in the form of physical objects, technology and
other visible forms of behavior like ceremonies and rituals. Though the culture would be visible
in various forms, it would be only at the superficial level. For example, people may interact with
one another but what the underlying feelings are or whether there is understanding among them
would require a further probe.
• Level 2: At this level, there is a greater awareness and internalization of cultural values. People
in the organization try solutions of a problem in a typical way, which has been the method tried
earlier. If the group is successful there will be shared perception of that success. Through
perception there is a cognitive change, which turns this perception into values and beliefs.
• Level 3: When the group repeatedly observes that the method that was tried once works most of
the time, it will be taken as the ‘preferred solution’ and will covert the values into underlying
assumptions or dominant value orientation. An organization’s current traditions, customs and the
ways of doing things are largely due to the success it had with those endeavors. We have
examples of this in WIPRO, culture and NIIT culture where quality, competitiveness, customer
satisfactions and leadership are greatly emphasized.

Functions of organizational culture and change

Culture being the genetic code of an organization has significance from various perspectives. It is
observed that small organizations draw on organizational culture and achieve competitive advantage in a
niche market because these are able to change and adapt themselves to changing market needs. One can
find example of this in Southwest Airlines in the USA, which provided cheap air transportation for a
number of years. However, big firms like IBM and Sony have penetrated the world market through
various business strategies and culture of effective managerial practices. Thus organizational culture can
contribute in the following ways:
• Culture supplements rational management: Creation of appropriate work culture is a time-
consuming process. Therefore, organizational culture can not suddenly change the behavior of
people in an organization, a number of management tools are used to channelize the behavior of
people in a desired way. No change can effectively brought about without involving people.
Culture communicates to people through symbols, values, physical settings, language and
thereby supplements the rational management tool such as technology and structure.
• Culture facilitates induction and socialization: Induction is a process through which new
entrants to an organization are socialized and indoctrinated in the expectations of the
organization, its cultural norms and undefined conduct. The new comer takes the culture of the
organization that may involve changing his/her attitudes and beliefs for achieving an internalized
commitment to the organization.
• Culture promotes code of conduct and customer focus: Strong culture in an organization
explicitly communicates accepted modes of behavior so that people are conscious that certain
 behaviors are expected and others would never be visible. While on the one hand promotion of
culture of quality, customer focus, responsiveness can help achieve good business results and
customer satisfaction and retention; on the other hand, inappropriate culture can be detrimental to
organizational interests and act as an obstacle in transforming the culture of the organization.
• Subculture contributes to organizational diversity: Sub-cultures, subsystems of values and
assumptions, which may be based on departmentalization, activity centre, or geographical
location, provide meaning to interests of localized specific group of people within the macro
organization. Subculture can affect the organization in one of the following ways: 1) These may
strengthen the existing culture; 2) Promote something different from the present; 3) Promote
totally opposite subculture or counter culture in a difficult situation (care needed to exercised
when promoting a counter culture as it may be detrimental to larger organizational interest).

Change in Culture: Cross Cultural Research

Hofstede’s framework for assessing cultures
One of the most widely referenced approaches for analyzing variations among cultures was done in the
late 1970s by Geert Hofstede. He surveyed more than 116000 IBM employees in 40 countries about
their work related values. He found that managers and employees vary on five value dimensions of
national culture. They are listed and defined as follows:
• Power distance: The degree to which people in a country accept that power in institutions and
organizations is distributed unequally.
• Individualism vs. collectivism: Individualism is the degree to which people prefer to act as
individuals rather than as members of group. Collectivism emphasizes a tight social framework
in which people expect other in groups of which they are a part to look after them and protect
them.
• Masculinity vs. femininity: Masculinity describes the extent to which the culture favors
traditional masculine work roles of achievement, power and control. Femininity is characterized
by the culture attribute that has little differentiation between male and female roles, where
women are treated as the equals of men in all aspects of the society.
• Uncertainty avoidance: A national culture attribute describing the extent to which a society
feels threatened by uncertain and ambiguous situations and tries to avoid them.
• Long term vs. short term orientation: It focuses on the degree of a society’s long term
devotion to traditional values.

Guideline for achieving successful cultural change

Esther Cameron & Mike Green draw together some of the key themes arising from their experience,
which they think will help the managers to address the issues of cultural change in their organizations:
• Always link to organizational vision, mission and objectives: Culture change as an isolated
objective is meaningless. Organizations should only involve themselves in culture change if the
current culture does not adequately support the achievement of strategic objectives. Ensure that
there is a clear vision and a real need to change. People need to be convinced by a compelling
vision rather than compelled in a coercive way. They need to see the overwhelming logic of the
proposed change. The more people are drawn towards the vision the better.
• Create a sense of urgency and continually reinforce the need to change: The introduction of
a foreign element into the organizational system is a good way of making change happen. This
can come from external or internal source. Whatever it is, it needs to have the force to kick start
 the culture change process. And there need to be plans and processes in place which keep the
momentum going.
• Attend to stakeholder issues: When you want culture to change you have to put yourself into
the shoes of stakeholders. Address the issue of the people who need to change by involving them
as much as possible. Whether change is being proposed for positive or negative reasons the
organization’s future success is dependent on engaging staff to enter into the new way of doing
things.
• Remember that the how is as important as the what: Culture is about the way do things
around the organization. So if your organization has a set of core values, then you need to
manage the cultural change in line with these values. If you say one thing but do another then
you might as well give up now. For instance, a stated value of ‘integrity’ is rather hollow if
senior managers do not keep their promises, or fail to explain why the plan has been changed.
• Build on the old, and step into the new: You will need to retain and build on the current
strengths and ensure that you do not throw the baby out with the bathwater. You also need to
start in modeling aspects of the new culture – if you want a coaching culture then start coaching;
if you want people to be empowered then start empowering.
• Generating enabling mechanisms: It is important to generate enabling mechanisms such as
reward systems and planning and performance management systems that support the objectives
and preferred behaviors of the new culture. For example, this means ensuring that teams have
clear objectives that are closely aligned to organizational objectives.
• Act as role models: Managers need to act as role models. They will need to model the new
values but also support individuals and teams through a period of upheaval. This can be done
through using some of the strategies like, working with teams through the stages of forming and
storming, and working with individuals as they adjust to the new ways of doing things.
• Insist on collective ownership of the change: One common trap is to make the HR department
the owners of cultural change, while the CEO and the senior management team own the changes
in business strategy. This type of functional decomposition of a change initiative is doomed to
failure. When people will be treated as the owner of the change they will be enforced to make it
effective.
 Chapter 8: Roles of Change Agents and Leadership
Persons who act as catalysts and assume the responsibility for managing change are called change
agents. Change can be brought about by managers, non-managers, employees or an outside consultant.
So the change agents may play one of the following roles:
• Internal consultant: One of the important roles played by the change agent is that of an internal
consultant. When the change is initiated by the management of the organization that is treated as
internal consultant. The management needs to have extensive understanding of the environment
surrounding their organization and have a fairly good idea about threats and opportunities.
Therefore, as an internal consultant he/she needs to monitor and scan external drivers of change.
• External consultant: It is often observed that organizations engage external consultant as expert
who has a fairly good knowledge about comparative business situation and has the experience of
handling change in a variety of organizations. In such a situation, the consultant needs an internal
resource person/s who would act as facilitator in implementing change.
• Task force: With a view to bring about transformation in the organization, the management
creates a task force or a group of like-minded people who share commitment to renewal
programs. Such a task force needs to strong and powerful in terms of expertise, reputation,
communication skill and relationships.

The role of organizational management in the change process

For a successful management of change, the organizational management as change agent needs to
follow the following steps that would serve as building blocks:

Freeze change (Providing support to sustain in embedded change)

Implementing change
Managing transition (Incremental changes for improvement)
Communicating effectively (Developing awareness/winning confidence)
Challenging the status quo (Stirring the environment of psychological discomfort)
Developing visionary leadership (Creating shared vision)
Predicting and managing resistance (Mobilizing commitment)
Developing process of change/culture

Role of leader
The change agent needs to play the following role as leader:
• They need to inspire a shared vision, a clear image of the future to take the people along
• They need to inspire trust and make people believe that they have their interest at their heart
• In order to unite people they need to forge unity of purpose, by expressing enthusiasm for the
compelling vision of the organization
• They need to challenge the status quo, which is ineffective and search for options and
opportunities to innovate, grow and improve
• They need to develop collaboration by promoting cooperative goals and developing trust among
people
 • They need to recognize and appreciate individual contributions and excellence and encourage
people to share and celebrate common success

Level 5 Leadership: Good to Great

Collins (2001) has given alternate model of organizational change based on his team’s research of
financial performance of 1435 firms, which appeared in the list of ‘Fortune 500 Companies’ during 1965
to 1995. The list included only those companies that had sustained performance for at least 15 years. Out
of these firms only 11 made a leap from being a good to a truly great company. All these companies
were led by modest and capable men who were reserved and had a strong determination to make the
firm great. They had personal humility and professional will; Collins levels them as Level 5 leaders. He
found that every good to great company had Level 5 leaders during critical transition and journey to
greatness had six common steps:
• First who then what: These leaders focused on choosing their team before developing vision and
goals. This shows their focus on person based on their talent and skills.
• Confront the brutal facts: These leaders confronted the reality squarely and did not evade the
situation. They also had faith in the capability of their organization to meet the challenges.
• The Hedgehog concept: These companies aimed at being the best in the world; and nothing short
of it. They were consistent and passionate about applying the fundamental principles and key
economic denominator that made them great.
• A culture of discipline: The great companies hired disciplined people and had a culture of self
discipline in thought and action. The firms had a consistent system and gave freedom and
autonomy to people.
• Technology accelerators: These companies used technology to enhance business results and did
not focus on pioneering a technology; in fact these became pioneers in application of some of the
technologies.
• The Flywheel and the Doom loop: In these companies transformation from good to great
happened through relentless hard work and sustained efforts in one direction for a long period of
time building momentum till the company reached the point of break-through and crossed it. It is
evident that organization transformation is neither simple nor one off effort. Sustainable efforts
and momentum in a specified direction bring about this change.

Transformational and transactional leadership

These two styles are not mutually exclusive but have difference in approach and focus. These are
followings:
Transformational leadership Transactional leadership
• Promotes change • Maintains stability
• Shares vision, values, and emotional • Goes into contractual arrangement
bonding
• Provides intellectual stimulation • Provide guidance & role clarification
• Develops pride, gains, trust and respect • Promises reward for performance
• Provide personal attention • Interactions mostly formal and officious
 Key competencies of the transformational leaders in managing change
An effective change leader should have the following skills:
• Clarity of goals: Goals clarity implies the strategic intent. As a change agent the role of a leader
is to be a part of the process by which the implicate order unfolds. Learning about the process
he/she needs to clarify it to the implementing body clearly.
• Clarity about role: It’s important for a leader as a change agent to identify a viable and effective
role in nurturing the future where everything appears to be a roadblock. It is to be understood by
the leader that the course of change can not directly be affected by the leader himself but at times
it may be desirable to wait and watch to mentally reflect on the process of change.
• Professionalism and knowledge of subject: The leader is required to have personal and
professional competence. Through understanding about various dimensions of change, the nature
of change, its impact on various elements of the organization will facilitate execution of change.
Without a thorough knowledge of the subject, he is likely to be misled.
• Creativity and innovativeness: For leading the change it is important for the leader to develop
new ideas, models, and application of technology that differentiate from the run of the mill and
help it stand apart.
• Collaborative and networking skills: Change requires collaborative efforts, therefore, skills to
work with people, making connections within and outside the organization are important to
extend an organization’s reach, promote its offerings and energizing people.

Leading change
The role of leader is to facilitate change that helps in improving organizational performance. But the
challenge before a leader is how to be effective in the face of dissatisfaction, discomfort, dislocation and
increased stress among people. Various organizations adopt various strategies. The management can
take action in favor of change in the form of behavior modification and providing training opportunities.
Alongside, management needs to knock down or eliminate barriers that prevent people from resisting
change. But the management as change leader requires a bit different actions to perform, like:
• Establishing relevance: It is not enough for the change leader to create a sense of urgency but in
order to get a high level of commitment from the employees they need to see the relevance of
change. In other words, the change leaders need to get into the shoes of the employees and see
from the employees perspective about the impact of change.
• Asking right questions: The starting point of any change process is enquiry, which means
asking relevant and strategic questions. People are also required to visualize the future and
identify various possible scenarios. One of the methods to take initiative could be benchmarking
against the best practices or to set up internal benchmark to improve performance.
• Changing the mindset: Transforming individuals can bring about organizational transformation.
The process starts with changing oneself. The change master requires a candid self appraisal and
see if he has the qualities – flexibility and understanding. It is important because every word
spoken or every action taken by the change leader either reinforce or undermines the change
efforts.
• Declaring every victory: As the process of change may take years before providing any
significant return, people may lose patience and therefore, the leader needs to make an effort to
do things that produce results. This implies that opportunities for early victories have to be
identified while pursuing the change efforts.
• Becoming your own competitors: Leadership results from competing against one’s own
achievement than against competitors only. This spirit promotes learning, experimenting and
evolving.
• Leading change involves coalition: Coalitions are highly beneficial in brining about change.
Firstly, they help in having a broad base of ideas and a broader perspective. Secondly, by
involving a large number of people the likelihood of support for change increases.
• Creating a learning organization: The concept of learning organization has now been
considered as a prerequisite for developing competencies, having a competitive advantage and
enhancing productivity. Organizations, like individuals, need to learn overcoming their learning
disabilities and blind spots. Learning involves listening, questioning, reflecting, challenging or
experimenting.