Question 1- (a) What is change management? (b) Explain the importance of change management.

Answer: Change is any variation/alteration/transformation, a passing phase from one state or form to another, for example, a change of countenance; a change in habits or principles. Change implies dissatisfaction with the old one and an urge for the new one. Change can be perceived in two ways-changes as intrinsic and continuous, and extrinsic and discontinuous to the organisation. Change Management is a systematic approach of dealing with change, both from organisation and individual perspective. Change Management can be seen from two perspectives, one is from those implementing change and the other is the recipients perspective. Importance of change management: Change management plays an important role in any organisation, as the task of managing change is not an easy one. When we say managing change, it means making changes in a planned and systematic fashion. With reference to the IT projects, the change means the versions of a project and managing these versions properly. Changes in the organisation can be initiated within the organisation or externally. Technology has compressed the distances across organisations. Internet and web technologies have given rise to honest corporations. Automation, mechanisation, manufacturing systems affects at both micro and macro levels of the organisation. These technological advancements are examples of an external factor that impacts on change within the organisation. How the organisation responds to these changes is important. Managing these changes come under change management. Reactive and proactive responses to these changes come from the organisation. Technology not only refers to machinery, equipment, and tool but is concerned with the use of information and knowledge as inputs that are transformed into final outputs. This process involves technology; hence choice of appropriate technology is a key factor for competitive edge in the new environment. Changes are brought into the system when the organisation faces challenges such as customer demands and technological updates. Change management process undergoes the following steps: 1. Identifying the need for change in an organisation. 2. Designing the changes as per organisations requirement. 3. Making others to understand the need for change for the proper functioning of an organisation. 4. Altering some organisational processes such as technology, performance meters to incorporate changes. 5. Managing both production and changes in such a way that the customers and stakeholders are bonded with each other in a long run. Managing the changes in an organisation requires certain set of skills like political skills, analytical skills, people skills, system skills, and business skills. If we have good analytical skills, we can be a good change agent. We should examine the financial and political impacts of the changes that can take place. We should have the knowledge that following of a particular process will fetch immediate financial effects and start that process so that the change process is noted by the management. So, change management is important in the business world, where the things are assessed based on their perfection and capacity to address the needs of customers and clients.

Question 2 - List and explain the stages in organizational Life cycle? Answer: Organisations also go through various phases/stages like a human life cycle. The first challenge that leaders face is to understand what phase of the organisational life cycle one is in. Different experts have argued on how many phases there are, but the smartness lies in using something that is easy to remember. Organisational life cycle is divided into the following phases:

The Start-Up phase In this phase, the entrepreneur thinks about the business, forms a management group, write a business plan. The company goes into the growth phase when the investor writes the check. The start-up ends for those that don't need outside funds. The growth phase In the growth phase, we expect to see revenues increasing, new services and products developing, more employees recruiting and so on. For example: The management textbooks believe that sales grow each year but in reality it is different as a company can have both good and bad years depending on the market conditions. The decline phase Corporate insanity is seen in this phase. 5Corporate insanity can be defined as doing the same thing in same way but expecting different results. Management expects to be better next year, but doesn't know or is unwilling to change to get better results. The renewal phase Once the organisation starts declining, it doesnt mean that it should continue. Some of the external experts have focused on the importance of organisational development as a way for preventing decline or reducing its effects. This assumes that though you have enough transformational leaders to change the status quo, without the right type of leadership, the organisation will go down to bankruptcy. The death phase About 80% of business failures occur due to the factors related to leadership control. Even firms that are close to bankruptcy can overcome this adversity and nurse themselves to be financial healthy. According to 8Richard L. Daft, there are four stages in an Organisational Life Cycle. The four stages are: 1. Entrepreneurial stage This stage has a strong leadership. 2. Collectivity stage This stage has delegation. 3. Formalisation stage This stage has too much of red tape. 4. Elaboration stage This stage needs revitalisation.

Question 3 - Explain briefly the recent approaches to organisational development and change. Answer: Organisational development is an important mechanism that helps to impress organisation and its employees. It includes structural and technological changes and focuses on the working environment among the employees within the organisation. It is a modern approach to manage change for human resource development. The basic approaches of organisational development are techno-structural approach and human process oriented approaches. The former is related to theories of intervention into the structure and technology of the organisation. The latter focuses on the organisational process and human participants. Researchers have developed various models on organisational change. The recent approaches to organisational development and change are broadly divided into two categories: The Top Down Approach: the classical paradigm. The Bottom Up Approach: the systems paradigm. The top down approach: The classical paradigm Organisations consist of functional areas such as production, sales and accounting, etc. The top management will drive these areas through command and control. The assumption here is that management should try hard to maintain change. This approach adopts the steps to: Develop a vision. Communicate the vision. Maintain top managements determination. Plan and program. Adopt the best practice. The bottom up approach: The systems paradigm This approach deals with organisation as a system which easily gets affected by environmental changes. It is also known as the living-systems approach because the organisation is considered to be a learning organisation which has many feedback systems between its sub-systems. Here, change occurs continuously and is considered natural when an opportunity is present and is not driven externally. The main features of this approach are as follows: Studying of organisation in relation to the contextual environmental factors such as size, structure, technology, and leadership patterns. Composing of many interdependent subsystems within the organisation where change in one or more parts affects the entire system. Persisting organisations comprises of individuals, groups/teams, structures, systems, and policies. Such systems allow both individual learning and social interactions. Here, the leader provides a clear vision and helps in the change process by facilitating, identifying, and directing the emerging patterns of behaviour and thinking. The other features of this approach help us to understand the: Assumptions made in any organisation are always dynamic, flexible, self organised, and interdependent. Facts about the leaders showing that they are democratic i.e., release the potential for change and not autocratic who drive changes. Need for both change and stability. Importance of both current reality and future orientations. 3

Uniqueness of each organisation and respect the individuality and its need for change. Subsystems interdependency within the organisation and their influence on each other subsystem.

According to systems approach, organisations should simultaneously pursue both process and structural intervention strategies in order to bring about change. Process intervention strategies focus on changing peoples behaviour, culture, attitudes, interpersonal and intergroup interactions, and also organisational communication styles and flow of information (Beer, 1980). These strategies help to bring in team work, cultural change, and systems maintenance in the organisation. Structural intervention strategies focus on and change the components of organisational systems such as the organisation and job design, reward systems, performance management systems, and accounting control systems. Both process and structural intervention strategies should be simultaneously handled to guarantee effective team characteristics, functions, cultural interactions, and structural aspects of management systems.

Question 4 - Discuss in brief about the role of leaders in the change process. Answer: The leaders play an important role in the change management. The leaders at different levels in the organisation will have different roles to play. The leaders work towards achieving the goals in the organisation. Whenever the leaders are planning to manage change, it is necessary to follow few principles. They are: Different people react in different way for the changes. Everyone has fundamental needs that have to be met. Change often involves a loss, and people go through the "loss curve". Expectations need to be managed realistically. Fears have to be dealt with. This can be explained in detail as follows: Different people react in different way for the changes: The opinion of different people varies in a different way. Some people like to follow the old system and they want things to be as it is, so they like to be at the stability end of the spectrum. Some other people encourage for the new upcoming change, so they like to be at the change end. Many problems come when the people find that their opinions do not match with the situations. In such a condition the individuals will be dissatisfied, experience stress, and dislike individuals at the other end. The below diagram represents the spectrum of change:

The figure shows the spectrum of change. The opinion of the people varies from person to person. There are some people who like to follow the old system and they will be at the stability side of the spectrum. There are some other people who will be encouraging the change process so that the people will place themselves at the change side of the spectrum. Everyone has fundamental needs that have to be met: The need vary depending on the people. There is some degree for each of the needs. The change programme has to meet the control, inclusion and openness needs of the individuals otherwise there is chance for negative reactions ranging from the resistance to the opposition. Will Schutz2, a famous psychologist have identified three fundamental needs in people's reaction to change. They are: o The need for control. o The need for inclusion. o The need for openness. Change often involves a loss, and people go through the "loss curve": The loss of curve explains the feelings of the individuals as the time proceeds in the change process. The loss curve is shown in the figure below:

The loss curve depends on the extent of loss in the chain management programme. If someone is promoted to higher position then the loss in the lower position is not a big issue, since something better has replaced the old one. But if someone is made with a purpose of getting a new job then the losses will have a harmful effect. The common factors that can be found in all loss curves are: o At the initial position, there can be no sinking of the change. For example, there are some people in the organisation who will be very confident that the changes will not occur at all. In such a situation, it is very difficult to start with the new process. Whenever there is a loss then the individual hits a deep low. The depth will be more if the loss is sudden or unexpected. o Adjusting to the new situations takes a longer time. Expectations need to be managed realistically: Some of the enforced changes do not meet the expectations of the employees that time certainly they will be unhappy and the expectations have to be set at the realistic level. For example: Suppose that we are a contractor for any project and we expect to be paid in 14 days but the contract says 30 days then we need to discuss and make sure that we get what we are expecting. If this not happening then we must make sure that the expectations are managed by both contractor and buyer. Fears have to be dealt with: It is the tendency of human beings to go out of the window, whenever there are some significant changes. Some people fear the worst since their minds will not be very conscious to know the things better. There are many fears which an employee faces during a changing phase. Some of them are like: Loosing the job. Inability to survive in changed setup Not getting a new job. Future problems arising due to loss of job. The fears have to be addressed by leaders in an understanding way by making them understand that the redundant people can get the better job.

Question 5 - Explain the strategies for competitive advantage. Answer: A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices. Michael Porter 4has given four generic business strategies that are analysed by him on his work in the competitive industry. He has given four strategies taking consideration of the scope of a business versus the degree of product differentiation. Figure below illustrates the competitive strategies.

From the diagram, we can come to the conclusion that the Differentiation and Cost Leadership needs the competitive advantage in the broad range of business market. The Differentiation focus and the cost focus can operate in the narrow (small) market. Strategy: Differentiation These are the strategies which include the selection of one or more criteria that can be used by the customers for taking the product in the market. According to the criterias, the organisation can develop the special strategy to meet the needs of the customers. This often involves the product with the premium price to demonstrate the production costs and the value added features that are present for the customer needs. This strategy gives the clear idea about the product and what is the advantage of using this product compared to the other product in the market for the benefit of the consumer. Strategy: Cost leadership The main aim of this strategy is to provide the product with the less cost in the market. The lowest cost producer is its main aim. Even the market segments suggest the same thing. The lowest cost producer will be benefited when the product rate is at minimum equal to the average price in the market. Usually this type of strategy is associated with the large scale industries which aim at offering the standard products with a minimum differentiation and perfect product. Majority of the customers prefers the perfect product with the minimum differentiation. The low cost leader always tries to put the discount on the products with the goal of maximising the sales. This will work out particularly when there is much of competition on the market. Strategy: Differentiation focus This strategy aims at differentiating the product with a minimum number of target market segments. This strategy is applicable to the special needs of the customer. The customer well in advance informs the industry for the production of the special with the needs that will be differentiated with the already existing product in the market. There is a valid factor for the differentiation and the existing competitor products are not meeting those needs. Strategy: Cost focus This strategy focusses on the cost of the product which is the base for the business of the organisation. There are some products, which have features that are not needed for the customers. That time the sale will also be less since the cost is more, which is not worth according to their needs. During that time, it will be very helpful if the organisation provides the product with the, less cost and the specific needs that are required for the customers. 7

Question 6 - (a) Define learning organization. (b) Explain the need for learning organization. Answer: (a) Learning Organization Senge defines Learning Organisation as the organisation in which you cannot not learn because learning is so insinuated into the fabric of life." Also, he defines Learning Organisation as "a group of people continually enhancing their capacity to create what they want to create." We can define learning organisation as the organisation which has embedded the philosophies like anticipating, reacting and responding to change, complexity and uncertainty. The competitive advantage mainly depends on the rate at which the organisation can learn. (b) Need for learning organisations Many of the companies in the world focus on improving the existing products and services, and innovating things to excel in the business strategy. This resulted in the starting of many activities like TQM (Total Quality Management) and BPR (Business Process Reengineering). These programmes can be successful or a failure, depending on some factors likes individual skills, attitudes and organisation culture. There are few factors that are needed for learning organisation to deal with. They are to: Face sudden and unexpected changes where there are no responses for the existing programmes. Expect the changing situations. Allow the staff to respond to the customer needs in a proper way. Types of learning The learning organisation helps in developing skills. The four level models help in learning and developing skills in an organisation. The different levels in the diagram can be explained as follows: Level 1: This involves learning facts, knowledge, processes and procedures. This is applicable when there are minor changes. Level 2: This involves learning new job skills that can be transferred to other situations. This can be applied to the situations when there is a need for changing the existing responses. The introduction of outside knowledge is the useful tool in this case. Level 3: This involves developing the solutions. This is applicable in the ever changing situations. This level focuses on experimentation and learning from the success and failure. Level 4: This level is called as the learning to learn. This involves mainly the innovation and creativity in developing the future rather than adjusting with the old. In this level, only the assumptions are more challenged and the knowledge is formed again.