Unit 14

Organizational Change
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BOOK CODE MB – 0022

SMITA CHOUDHARY FACULTY HR/OB

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 Contents
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Introduction
Forces of change
Resistance to change
Responses to change
Characteristics of organizational change
Theories of change
Strategies for change management
Toolkit for managing change

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 Introduction
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 Organizational change may be defined as the adoption of a

new idea or a behavior by an organization (Daft, 1995).
 It means changing an existing organization to increase its
effectiveness in achieving its objectives.
 Successful organizational change must focus on making
organizations respond to changing customer preferences,
norms, change in economy and technological innovations.
 Only organizations that are able to change with changing
times can sustain and survive.

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 Learning Objectives
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After studying this unit, you will be able to

understand
Forces of changes
Resistance to change
Theories of change

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 Forces of Changes
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Forces for change are of two types

Internal forces
External forces

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 Internal Forces
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 Change in the top management: Change in top

management and change in ideas to run the organization
leads to change in system, structure and processes of the
organization.
 Change in size of the organization: It leads to change
in the internal structure and complexity of the organization.
 Performance gaps: When there is a gap between targets
and results, organizations have to change to reduce the gap.
 Employee needs and values: Organizations change
their policies with change in needs and values of its
employees.

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 External Forces
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 Technology: Technological changes are responsible for

changing the nature of the job performed at all levels in an
organization.
 Business scenario: Business scenario is fast changing
with increasing competition and globalization. Hence, the
needs and demands of customers, suppliers and other
stakeholders is also increasing. Organizations have to
change their way of working to fulfill the demands of the
stakeholders.
 Environmental factors: Economic, political and
demographic factors play an important role in working out
organizational policies and strategies.

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 Resistance to Change
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Resistance to change may be of two types:
Individual resistance
Organizational resistance

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 Individual Resistance
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 The results of a change are unknown and thus change leads to

insecurity among employees.
 Employees do not know whether the change will be for their betterment
or not. For example, because of technological change, employees may
feel that their skills will become outdated, they will be paid less wages
or they may lose the job.
 Change may lead to new work relationships. Employees may have to
work with other people which is not liked by most of the employees.

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 Organizational Resistance
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 Change may bring some threat to the

organization power. Therefore, people
try to resist change.
 The structural inactivity in the
bureaucratic organization also
hampers change.
 Limitation of resources play an
important role in resistance to
change.

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 Responses to Change
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 The responses to change depend on

the employee’s perception of the
change.
 Different people have different
attitudes and hence have different
perception towards change.
 Therefore, management must create
a positive attitude among employees
regarding change

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Reactions to change

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 The three major reactions to change are
 Anger: People who believe that change has a negative
impact on their personal situation blame management.
This anger, if not properly handled, may cause some
people to interrupt the change process by showing non-
cooperation and resistance.
 Denial: Many people accept change but many people
enter a denial phase. In this phase, a person makes
excuses on why he or she should not be held responsible
for anything wrong that happens due to change.
 Acceptance: After the person accepts the change, he or
she begins to change his or her role in the new situation.

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 Overcoming Resistance to Change
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• Some approaches to overcome resistance to change are:
• Education and communication: Proper communication and
education helps employee to understand the importance of change
and why it is necessary.
• Employee participation and involvement: People should be
involved in the change process. This make them more committed
towards the change.
• Facilitation and support: Change agents can provide support
to reduce the resistance to change. Counseling sessions can be
organized to reduce stress, fear and anxiety towards change.
• Negotiation and agreement: Organizations that may face
resistance from the union representatives, should directly involve
them in the change process. They should be educated about the
need and value of change.

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 Characteristics of Organizational Change
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• Change is intentional, systematic and well planned.

• Speed of change depends on the level of importance.
• Status quo is challenged.
• Reaction to change can be both negative and positive.
• Focuses on long term change.

The forces for change are

• Organization-environment relationship (merger, alliances, etc.)–
Organizations try to change their relationship with changing social and
political environment.
• Organizational life cycle – Change in culture and structure of
organization from birth to growth and to maturity.
• Political nature of organization – Change in internal control
structures to handle change in political scenario

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 Theories of Change
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Force field analysis theory

• Lewin (1951) proposed a three step model for change process:
• Unfreezing: Unfreezing means eliminating the factors that
maintain the status quo in the organization. It creates a need for
change.
• Moving/changing: This stage cause a shift in the behavior of
organizations by modifying system, process, technology and
people.
• Refreezing – At this stage, steps are taken so that the change is
sustained and becomes a part of the day-to-day routine of the
organization.

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Action research model
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 This is also a model for planned change.

 According to this model, planned change is a cyclical
process in which initial research about organization
provides data for future actions to make the required
changes.
 It highlights the importance of collection and diagnosis
before planning and implementation.
 This model describes change in eight steps:

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1. Problem identification: The first step is to identify one or more

problems in the organization and why there should be changes in
organizational practices.
2. Consultation with the expert: In this step the organization
takes help from the experts in the field to get ideas for improving
the situation.
3. Data gathering and preliminary diagnosis: At this stage data
is collected with the help of members of the organization. Data is
collected using four mode, namely, interview, observation,
questionnaires and organizational performance data.
4. Feedback to key client or group: Action research is a joint
activity. The diagnostic data is fed back to client.

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5. Joint diagnosis of the problem: At this stage,
clients and experts jointly decide whether they want to
work on the identified problems.
6. Joint action planning: The consultant and the client
jointly decide on the further action. At this stage,
specific actions are taken depending on the culture,
technology and environment of the organization.
7. Action: At this stage, actual change takes place. It may
be in the form of new methods and procedures,
reorganizing structures and work designs and new
behaviors.
8. Data gathering after action: Action research is a
cyclic process, data is also gathered at the end of action.
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Dimensions of planned change

 The models of change describe how to implement change
but the steps of planned change can be implemented in
many ways depending on the client’s needs and goals, the
change agent’s skills and values, and the organizational
situation.
---- Cummings and Worley (1997)
Magnitude of change
 Planned changes can be
 Incremental changes, i.e., minor changes in the operations of the
organization
 Quantum changes, i.e., major changes in the structure, culture,
reward system, information processes, etc.

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Degree of organization 20

 In mechanistic and bureaucratic organizations, the

organizational structure, job design, leadership styles,
policies are very rigid and inflexible. In this type of
organization, communication is restricted, conflicts are
avoided and employees are uninterested.
 In flexible organizations, the task definition is flexible,
communication is uneven, and job responsibilities are
not clear.

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 Strategies for Change Management
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 According to Bennis, Benne and Chin (1969), there are four

strategies to manage change:
 Empirical-rational: According to this approach, people
are logical and wise and will take care of their self-interest
when a change is shown to them. Change is based on
communication of information and the offering of
incentives.
 Normative-Re-educative: According to this approach,
people are social beings and follow cultural norms and
values. Change is based on redefining present norms and
values, and make people commit to the new norms and
values.

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 Power-coercive: According to this approach, people

generally follow what they are told. Change is based on
use of authority.
 Environmental-adaptive: According to this approach,
people oppose loss and interference, but they adjust
quickly to the new situation. Change is based on building
a new organization and slowly transferring people from
the old organization to the new organization.

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 Toolkit for Managing Change
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 According to Nicklos (2004), some factors to select an

effective change strategy and some tips to manage change
are:
 Degree of resistance: Strong resistance requires a blend
of power coercive and environmental adaptive strategies.
Weak resistance requires a blend of empirical-rational and
normative-re-educative strategies.
 Target population: Large population requires a mix of all
four strategies.
 The stakes: High stakes require a mix of all four
strategies. This is so because when stakes are high, we can
leave nothing on chance or luck.

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 The time frame: Short24time frame requires power
coercive strategy. Long time frames require a mix of
empirical-rational, normative-re-educative and
environmental-adaptive strategy.
 Expertise: Having proper knowledge of making changes
requires a mix of strategies. Not having knowledge of
making changes requires power-coercive strategy.
 Dependency: If the organization is dependent on its
people, management cannot command or demand very
much. If people are dependent on the organization, they
cannot oppose much. If both are dependent on each
other, it will require some amount of negotiation.

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