Organizational change
Introduction
Change is inevitable and it affects all types of organisations. Therefore, managers need to be skilled in ways to respond to change to ensure the survival and success of their organisations. Organisations which fail to respond appropriately to environmental changes go out of existence.
Definition
“The term change refers to any alternation which occurs in the overall work environment of an organisation.”
To quote another definition “When an organisational system is disturbed by some internal or external force, change frequently occurs. Change, as a process, is simply modification of the structure or process of a system. It may be good or bad, the concept is descriptive only.”
Organisational change implies planned alteration in the existing organisational system.
The main features of organisational change are:
- Organisational change is planned change because it is a conscious attempt to modify or change certain operations, functions or processes.
- Planned change can be of two types. A change initiated by the organisation is called proactive change. On the other hand, changes implemented by an organisation due to pressure by external forces are known as reactive change.
For example, when management introduces a new labour welfare scheme in order to improve employee motivation, it is a proactive change. If much a scheme is introduced due to pressure from the trade union it is a reactive change.
- Organisational change disturbs the existing equilibrium of the enterprise and leads to a new equilibrium.
- Change takes place in all organisations but at varying speeds and degrees,
- An organisation may be changed in several ways. Change may be made in its structure, its technology, its people or in other elements.
- The main objective of organisational change is to achieve the objectives of the organisation in the best possible manner.
Causes for Organisational Change
Pressures for change arise from both within and outside the organisation.
1. External Forces. Every organisation exists and operates in an environment. Changes occur frequently in the environment, e.g., economic, social, political changes-. An organisation must change in order to adapt itself to the new environment. Some of the external pressures are given here.
(a) Market Situation. Modern business enterprises operate in a highly competitive market place. Competitors introduce new products, better services, improved advertising, etc. The needs and habits of consumers also change. Organisations must change to survive and grow in such markets.
(b) Technology. Rapid technological changes shorten the life of many products and services. Existing plants and machines become obsolete. Computerisation and automation is a major example. Organisation can ignore technological developments at the cost of their survival.
(c) Population Dynamics. Changing age distribution of population may cause shortage of skilled people and may accentuate different life styles. Geographic movement of people may require changes in marketing strategies. The drive for social equality erosion of the joint family system, rise of working women are other major social changes.
(d) Political and Legal System. Relations between business and government are improving. Legal provisions concerning the corporate sector are being changed rapidly. Transactional corporations and other international developments are forcing organisations to modify their structures and plans.
2. Internal Forces. Pressures for changes also originate within an organization these are as follows:
(i) Deficiencies in the Existing System. Changes are necessary when the present structure or processes are not capable of achieving organisational objectives. Unmanageable span of control, narrow specialisation, too much centralisation of authority, multiplication of committees, line-staff conflict,
etc. are main loopholes in an organisation.
[ii) Changes in Managerial Personnel. New managers replace the earlier ones due to retirement, resignation, transfer and promotion. As a result, new values and ideas enter the organisation. Changes take place in the informed relationships also. A new chief executive may re-examine the entire structure
and functioning of the organisation. Increasing proportion of knowledge workers and women managers is another major change in the composition of workforce.
(iii) Other Changes. Need for improving productivity and quality of working life, scarcity of certain resources, e.g., power, need to avoid inertia, etc. are other internal sources of change.
Change in leadership , Implementation of new technology, Decline in profitability, Changes in employee profile , Union actions
Another internal force is the domino effect which means one change triggers off a sequence of supporting changes. For example, the creation of a new department may lead to introduction of new managerial positions and reallocation of tasks, etc.
Levels of Change
Change can occur in varying degrees at various levels in an organization. At the individual level, changes are minimum; whereas, at the organizational level, changes can be major.
There are three main levels of change, which are as follows:
- Individual Level: Refers to the change at the personal level that is reflected in various developments. For example, changes in the job assignment of an employee or moving an employee to a different location. A significant change at the individual level will have its impact on the group, which in turn might influence the whole organization.
- Group Level: Refers to, the change at the level of a group that occurs because most activities in organizations are managed on a group basis. Groups could be formal and informal in nature. Informal and formal groups can pose a major barrier to change because of the intrinsic strength contained by them.
- Organisational Level : Refers to major changes that influence the entire organisation. These changes involve major programs that affect both individuals and groups. Decisions regarding these changes are generally made by senior management
Types of Change
Organizational changes can be of various types depending on their mode of planning, development, and
implementation. Various types of organizational changes are as follows:
• Planned Change: Refers to a conscious change that occurs as a result of logic. A planned change is within the hands of the change implementer.
• Emergent Change: Refers to a spontaneous occurrence arising out of factors beyond the reach of a change implementer.
• Episodic Change: Refers to a change that does not occur on a daily basis. Episodic change occurs only for a particular time period. This change is often termed as second order change.
• Continuous Change: Refers to a change that occurs on a daily basis. It is often termed as first order change.
• Remedial Change: Refers to a change that calls for transformation in a particular situation, task, procedure, or policy. This type of change is focused on the corrective measure.
• Developmental Change: Refers to a change that is taken up for the purpose of improvement and is vague in nature.
• Subsystem Change: Includes a transformation within a department, team, or group. This type of change may not affect the overall functioning of the organization.
• Organization-wide Change: Refers to a change that affects the entire organization, ft is generally triggered by macro level factors, such as economic changes, including boom and recession.
• Transactional Change: Refers to the first order change whose outcome is predictable and execution is not difficult. For example, a change in supply and the equilibrium point is given and one has to forecast demand. In such a case, the change in demand is predictable and the change implementation and execution is not complex.
• Transitional Change: Refers to change in which old processes and work procedures are replaced with new ones. For example, in an organization, transitional change occurs when it replaces its old technology with the new one.
• Transformational Change: Refers to a second order change. The outcome of such a change is not clearly distinguishable. An example of such a change would be a merger of two organizations.
Sources of Resistance
There can be various types of sources that trigger resistance to change. Two of the important sources of resistance are explained as follows:
• Rational Resistance: Occurs when people do not have the proper knowledge or information to evaluate the change. When people arc provided with relevant information in the form of data or facts, the resistance deceases and I hey become more open for change.
• Emotional Resistance: Involves the psychological problems of fear, anxiety, suspicion, and insecurity. These problems arise when people think that change will affect them negatively. The management of an organization can deal with emotional resistance of people by counseling and convincing them about the positive outcomes of change.
Reasons for individual Resistance to Change
Every individual has a unique set of attributes, thoughts, and characteristics. Therefore, there can be varying factors that cause resistance among them. Individual resistance can occur because of various reasons, which are as follows:
• Economic Reasons: Refer to the reasons that arise due to fear of economic losses. These fears might include various factors, such as decline in profit, salary, wage, or skills, which may directly or indirectly affect individuals.
Such factors may include decline in profit, salary, wage, or skills. The economic reasons are described as follows:
- Fear of Technological Up-gradation: Refers to the fear of unemployment among people as they feel that due to technological up-gradation they can be replaced by machines.
- Fear of Salary Reduction: Refers to the fear of getting less pay after change. If the change is done for better style of working, it might result in reducing working hours, which would result in pay reduction. Such fears force individuals to resist change.
- Obsolesce of Skills: Refers to the fear of people that their present skills would get obsolete and they would be not able to master the new skills. This fear becomes one of the major reasons for individuals to resist change.
• Psychological Reasons: Refer to the reasons of an innate resistance amongst individuals. They can be better understood as follows:
- Inherent liking for Status Quo: Indicates that some people just want to continue the way they are at present and any kind of change is not accepted by them. It might be possible that they would forego something rewarding even to avoid change. For example, an employee does not want to take the promotion as it is associated with transfer to other area.
- Fear of the Unknown: Points towards the fear of an individual for the unforeseen future events. Such fear necessitates that an individual must understand the type of required change and the way it should be implemented.
- Ego-Defensiveness: Refers to a reason for resistance in which a superior discard good ideas of subordinates because of his/her ego problem.
- Threatened Power: Indicates that employees might have the fear of losing their powerful position after the implementation of change. Therefore, they resist the change.
Change management process
Change is inevitable; therefore, an organization needs to constantly device ways to manage the change. An efficient organization not only manages the current changes but also looks forward to deal with any future contingency. Change can be managed by a step-by-step procedure,
Following points explain the five steps of change management:
• Recognizing the Forces Demanding Change: Refers to locating the places where change is required, or
where the problem or opportunity lies
• Diagnosing the Problem: Refers to the step in which the problem is identified
• Planning the Change: Refers to the step in which an action plan is designed to manage the change. In this step, it is decided who would bring the change and how the entire process would proceed.
• Implementing the Change: Refers to the step where the change is implemented in the real-life scenario. If the change is not implemented properly, the entire exercise becomes futile.
Following Up: Refers to the last stage in which the result of the change is derived.
Lewin’s Three Step Model
According to Lewin, the process of managing change includes three steps. These steps ensure the successful implementation of change in an organization. Figure-3 shows the three steps of change management
Following points briefly explain the three steps of Lewin’s change management model:
1. Unfreezing: Refers to recognizing the necessity for change; identifying the old values, behavior, or organizational structure; and dissociating from them consciously. In this step, the organization is quite stable. Unfreezing involves casting aside existing value systems, managerial behaviors, or organizational structure so that new ones can be learnt. It creates the need for change that can be brought about by performing the following three actions:
- Increase the strength of forces that lead to change
- Decrease the strength of forces that resist change
- Change a resisting force into one supporting the change
2. Changing: Means that the organization replaces the old values, behavior or •organizational structure with the new ones. It is very important to forget the old structure to establish and implement a new paradigm. This is the action- oriented step, where the planned change process is implemented.
3. Refreezing: Indicates the last step that gives rise to a new social system to make change permanent by including it in all formal policies and procedures.
Overcoming Resistance to Change
It is natural for human beings to resist change. The main problem in introducing and implementing change is to overcome resistance to change. Efforts for overcoming resistance to change can be made both at the individual level and the group level. The main techniques that can be used to overcome resistance to change are given below:
1. Education and Communication. One of the simplest techniques to overcome resistance to change is to educate people, counsel them, train them to adopt change, people can be educated to become familiar with the nature and process of change. Counselling and training can be used to change the basic values and attitudes of people. They can be taught new skills and helped to develop new relationships.
Communication is very useful because many people resist change due to lack of information or misunderstanding. While communicating change, a manager should explain:
(a) What the change is?
(b) When it is to be introduced?
((c) How it will be implemented?
(d) Why the change is needed?
(e) What is the basic objective of change? and
(f) How the change will be beneficial to all?
This will help people to visualise the need for and logic of change. They will appreciate the change much better and will accept it easily. The main advantage of this method is that once convinced, people themselves will help in the implementation of change. However, it is a very time-consuming method and requires continuous effort.
2. Participation and Involvement. In this method, the change agent involves the resistors in the design and implementation of change so as to overcome resistance. A continuous dialogue with people is arranged to discuss and explain the proposed change. It allows the individuals to express their views and opinions. Such involvement and participation clears misunderstanding, reduces resistance and
increases acceptance of change. Participation not only generates compliance but commitment too. Commitment implies an agreement between the change agent and the change resistors to take active part in the actual mechanics of the change.
3. Facilitation and Support. Physical and emotional support may be provided to deal with potential resistance. This includes compassionate, listening, giving employees time off and helping them to adjust to the new situation. Managers may use this technique when fear and anxiety are the causes of resistance or when people are resistive due to adjustment problems. However, it is a time-consuming and expensive exercise.
4. Leadership. A manager cannot always use his formal authority to get support for the change. Therefore, he should use his personal qualities to get consent and willing support for people. A manager with strong leadership qualities can create a climate where people not only accept change but are willing to propose change.
5. Negotiation and Agreement. Offering Incentives to resistors is another fruitful way of overcoming resistance to charge. Negotiation and agreement arc helpful when some persons in a group incur loss due to change and the group has considerable power to resist. It becomes relatively easy to avoid resistance through negotiation. However, it can be expensive if it alters others to negotiate for compliance.
6. Manipulation and Cooptation. Manipulation involves conscious structuring of events and the very selective use of information. Cooptation implies giving people a desirable role in the design and implementation of change. Managers may resort to manipulation when all other tactics fail to overcome resistance. It can be quick and economical method. However, serious problems may arise if people feel they are manipulated.
7. Coercion. In this method, managers force people to accept change by explicit or implicit threats, e.g., termination, demotion, stopping pay increments, transfers, etc. This method is used when immediate change is required and the change agent possesses considerable power. The main merit of this echnique is speed but it can be a very risky approach.
