Module 6 : Managing change in workplace through Ethics

According to Francis and Sinclair “ Organisational change is an ongoing

process of social construction that compromises spiral patterns of discursive
change and restructuring of collective meanings”.

Factors influencing change

External factors : technology, marketing conditions, social changes, changes in

policies and laws, Political forces, Globalisation, workforse diversity, changing
economic conditions.

Internal Factors : changes in managerial personnel, changes in Operative

personnel, Deficiencis in Existing Structure, Changes in Employee
Expaectaions, changes in Work Climate.

Process of organisational change :

 Identify the problem

 Recognise the cause of problem
 Implementing change
 Motivating for change
 Managing the transition
 Supporting the change
 Evaluating the change

Resistance to Change : Resistance to change is a multifaceted phenomenon

which introduces unanticipated delays, costs, and instabilities in to the process
of strategic change.”

Reasons for Resistance to change

Habit, security, Economic factors, Fear of uncertainity, Selective Information

processing, Power and conflict, Organisation culture, Group Noms etc.

Models of Change management

This change management model was created in the 1950s by psychologist
Kurt Lewin. Lewin noted that the majority of people tend to prefer and
operate within certain zones of safety. He recognized three stages of change:

Unfreezing : This stage is concerned with minimising the resistance to change.

It actually refres to melting the deeply entrenched existing system., so that the
new system could be introduced. It also involves breaking all barriers to
change, so that space could be created for the new system. Thus, the manager

has to undertake following tasks,

Highlight and explain what is wrong with the present state of the affairs.

Expalin the importance benefits and consequences of the change.

Help employees unlearn old attitudes, skills, behaviouaral patterns, etc so that
new ones could be adopted with ease.

Clear all doubts of employees. Persuade all no changers to accept change using
various means.Ex. rewards.

Help individuals to leave their comfort zones.

Bringing change or Moving to the New level :

Once the employees accept the change managers must bring forward the
planned change with the help of employees. This can be achieved by a process
of :

Identification : Superiors are the first one to adopt the new changes in work
practices, so that they can act as role models for others. Thus employees folloe
their superiors and learn new ways of adopting change.

Internalisation : this is like giving individuals the “swim or sink” choice. They
are put in situations where the new behaviours are expected from them and they
do not have any choice. Thus, soon they internalise the new change.

Rre-freezing at new level: this emphasises the need for making changes
permanentso that individuals do not slip back to o;d behaviours or practices.
Efforts must be made to transform the new behaviours in to habits or normal
natural behaviours. This can be ensured by continuous motivation .

III Kotter’s 8 Step Change Model

This model, created by Harvard University Professor John Kotter, causes change to
become a campaign. Employees buy into the change after leaders convince them of the
urgent need for change to occur. There are 8 steps are involved in this model:

1. Increase the urgency for change –unfreeze the organisation by creating a

compelling reason for why change is needed.

2. Build a team dedicated to change- Create a cross functional , cross level

group of people with enough power to lead the change..

3. Create the vision for change – Create a vision and strategic plan to guide the
change process.

4. Communicate the need for change – Communicate the new vision and
strategic plan.

5. Empower staff with the ability to change – Eliminate barriers to change, and
use target elements of change to transfom the organisation. Encourage risk-
taking and creative problem solving.
6. Create short term goals/ wins – plan for and create short term “wins” or
improvements. Recognise and reward people who contribute to the wins.

7. Consolidate gains and produce more change – the guiding coalition uses
credibility from short term wins to create more change. Additional people are
brought into the change process as change cascades throughout the
organisation.

8. Make the change permanent – Reinforce the changes by highlighting

connections between new behaviours and processes and organisational
success. Develop methods to ensure leadership development and succession.

Significant advantages to the model are:

– The process is an easy step-by-step model.

– The focus is on preparing and accepting change, not the actual change.

– Transition is easier with this model.

There are some disadvantages offered by this model:

– Steps can‘t be skipped.

– The process takes a great deal of time.

It doesn‘t matter if the proposed changed is a change in the process of project planning or
general operations. Adjusting to change is difficult for an organization and its employees.
Using almost any model is helpful, because it offers leaders a guideline to follow, along with
the ability to determine expected results. This is helpful because change is difficult to
implement and manage.

The ADKAR® model of change is a practical answer to effective change

management for individuals and organisations. Built on practical research
conducted in more than 900 organisations the model is simple to learn, makes
sense, and focuses on the actions and outcomes required for change.
What really gives this model the edge is its emphasis on individual change.

While many change management projects focus on the steps necessary for
organisational change, ADKAR® emphasises that successful organisational
change occurs only when each person is able to transition successfully.

It makes sense then that this model, developed by Jeff Hiatt, CEO of
Prosci® Change Management (www.prosci.com), and first published in 2003,
focuses on 5 actions and outcomes necessary for successful individual change,
and therefore successful organisational change.

The ADKAR® model of change management

Hiatt refers to each of these five actions as building blocks for successful
individual change, and therefore successful organisational change. As the
graphic indicates the process is sequential. In other words each step must be
completed before moving on to the next. Hiatt emphasises that it is not possible
to achieve success in one area unless the previous action has been addressed.

The ADKAR® model consists of five sequential steps or actions:

1. Awareness of the need for change.

Understanding why change is necessary is the first key aspect of successful
change. This step explains the reasoning and thought that underlies a required
change. Planned communication is essential. When this step is successfully
completed the individual (employee) will fully understand why change is
necessary.

2. Desire to participate in and support the change.

In this step the individual is able to reach a point where they make a personal
decision to support the change and participate in the change. Naturally a desire
to support and be part of the change can only happen after full awareness of the
need for change is established. Building desire is partly achieved by addressing
incentives for the individual and creating a desire to be a part of the change.

3. Knowledge on how to change.

The third building block of the model, providing knowledge about the change,
can be achieved through normal training and education methods. Other methods
of transferring knowledge, such as coaching, forums and mentoring, are equally
useful, so don't limit this process to formal training. Two types of knowledge
need to be addressed: knowledge on how to change (what to do during the
transition) and knowledge on how to perform once the change is implemented.

4. Ability to implement required skills and behaviors.

In this model Ability is understood to be the difference between theory and
practice. Once knowledge on how to change is in place (theory) the practice, or
actual performance of the individual, needs to be supported. This can take some
time and can be achieved through practice, coaching and feedback.

5. Reinforcement to sustain the change.

This final stage of the model is an essential component in which efforts to
sustain the change are emphasized. Ensuring that changes stay in place and that
individuals do not revert to old ways can be achieved through positive feedback,
rewards, recognition, measuring performance and taking corrective actions.

This is often the part of change management that is most difficult as

organisations are already moving towards the next change.

In fact, the Kurt Lewin change management model receives the most criticism
in this area. However, for successful change, reinforcement is essential to ensure
that changes are maintained and new outcomes can be measured.
II McKinsey 7-S Model

The McKinsey 7-S model offers a holistic approach to organization. This model, created
by Robert Waterman, Tom Peters, Richard Pascale, and Anthony Athos during a meeting in
1978, has 7 factors that operate as collective agent of change:

1. Shared values

2. Strategy
3. Structure

4. Systems

5. Style

6. Staff

7. Skills

The

McKinsey 7-S Model offers four primary benefits:

1. It offers an effective method to diagnose and understand an organization.

2. It provides guidance in organizational change.

3. It combines rational and emotional components.

4. All parts are integral and must be addressed in a unified manner.

The disadvantages of the McKinsey 7-S Model are:

– When one part changes, all parts change, because all factors are interrelated.

– Differences are ignored.

– The model is complex.

– Companies using this model have been known to have a higher incidence of failure.

The Ethics of Managing Change

Code of Ethics for Successful Six Sigma Change Management

We seek to use our knowledge and skills for the enhancement of the organization.

 We do not exercise the power of our expertise or position to influence the decisions
or actions of others in order to benefit personally at their expense.

 We do not engage in communications or behavior designed to deceive others,

including but not limited to, making misleading statements, stating half-truths,
providing information out of context or withholding information that, if known,
would render our statements as misleading or incomplete.
 We perform services only within our areas of competence.
 We seek to understand the organizational culture so as to avoid engaging in
behaviors perceived as disrespectful.
 We listen with empathy and seek first to understand others‘ points of view.
 We behave professionally even when it is not reciprocated.
 We avoid conflicts of interest or the appearance of conflicts of interest.
 When we make errors or omissions, we take ownership and make prompt corrections.
 We apply the rules of the organization without favoritism or prejudice.
The role of ethics and responsibilities in leading innovation and change

Innovation and change are inevitable processes in the business world. Organizations are
constantly evolving and changing in response to market trends. If your business is on the
verge of restructuring or undergoing some other significant transformation, give due
consideration to the role of ethics and responsibility as you move forward.

Employees

One of the primary responsibilities of leading change and innovation is the need to keep your
employees in mind as you implement changes. As a small business owner who has the
economic well-being of your employees in your hands, you have a certain level of
responsibility to examine the changes you make from your employees' perspective. As much
as possible, you should want them to come out better on the other side of the change. As you
plan for changes, assess the impact the changes will have on your employees.

Disruption

Change and innovation are disruptive, not only to workers, but to everyone involved with
your business. This disruption requires that business owners take into account everyone
involved in the process of change. Ask questions about how the change is disruptive, and how
to make it less so. The disruption caused by change and innovation will have outcomes that
need to be planned for, and the business owner should do everything possible to preserve the
rights and interests of others, rather than trampling to accomplish a goal. The Business
Institute Roundtable for Corporate Ethics notes that business owners should make efforts to
not treat stakeholders as a mere means to an end.

Communication Ethics plays a role in the process of change and innovation in terms of the
need for open and honest communication among employers and employees, and between the
company and the public. Communication needs to be transparent during the process of
change so that continued trust in the organization will continue to exist once the changes have
been completed. Companies that are not up front about the changes taking place may lose the
trust of their employees, and possibly of the community as well, depending upon the nature
of the business and its involvement in the community.

Teamwork

Ethical behavior towards the community and employees will help the business owner to build
a stronger organization. The sense of pride that employees take away from participating in the
process of change will provide them with a greater sense of belonging and purpose. The
responsibility of the business owner and manager is to make innovation and change a process
that affects and benefits everyone. Giving all involved a stake in the outcome, and treating
them in an ethical manner in the process, will bring greater results in the long run.

Ethics based model for change management (ECM Model)

1. Define Required Change

Study the internal requirement and external pressures for change in order to identify the need
of change that whether the change is really required by the organization or not. o If the
change is not extremely required then try to steer away from change implementation if
possible, and do not disturb the existing status-quo. If the change is required then define the
exact change that has been figured out as need of the organization.

2. Evaluate Defined Change in terms of Ethics o Identify all the stakeholders for the defined
change o First the Employer should itself evaluate the change in terms of ethics in order to
know whether this change is right and justifiable for all the stakeholders rather than being just
in favor of employer and need sacrifices from employees in name of change management or
organizational development. Then the change that has been evaluated and defined by
employer in terms of being ethical for all (employer and other stakeholders) is then presented
to all the stakeholders or the representatives of stakeholders for further evaluation (here the
stakeholder means the organization‘s employees in specific and other stakeholders in
general). Second; the stakeholders will then define the change in their moral perspective that
to what extent the change is ethical for all the stakeholders. This step is not a mechanistic
recipe but focus on the sensitivity to become aware of the ethical issues surrounding the
change and making a deliberate attempt to deal with these issues in a moral way. Defining the
ethics of change with a contribution of all stakeholders will help in designing a change with
them rather than for them. After all; it is the stakeholders whose lives are going to be
impacted by the change.

3. Define an Ethical Change by aligning the Defined Change and combined ethics of all
stakeholders o This is a step where change will be defined in such a way that no one
will have an objection over it in terms of ethics, as every one would have been
involved in the defining phase of an ethical change. This participative approach to
defining ethical change will tend to decrease the fear of change and so the resistance
to change by employees and make the change a win-win situation for all. o It should
be made clear while defining ethical change that the employer and stakeholders must
equally share the benefits or losses that are arising from the change.
 4. Communicate the Defined Ethical Change to all Stakeholders and inform them about the
implementation plan .The combiningly defined change is then communicated to stakeholders
as a mutually agreed and shared objective for all. Make the people aware before final
implementation of the ethical change.

5. Implement the Ethical Change- Implement the change by keeping all of the
stakeholders in loop. o Involve the people in change implementation and train them.
The change should be implemented on all, from top management to lower level staff.
The employer, employees and other stakeholders must equally share the benefits or
losses that are arising from the change.

6. Re-evaluate the Implemented Change in light of Ethics by getting feed back from all
stakeholders Take feed back from all stakeholders or the representatives of
stakeholders in order to reevaluate the change implementation. The satisfaction rate of
people regarding the implementation of ethical change will show the success
percentage of the change implemented.

a. In Response of positive feedback celebrate the successful implementation of

Change .If the majority of stakeholders feel that the implemented change is a win-win
scenario for all, celebrate the successful implementation of change. This positive
response is an indication that future change projects in this manner will also run
smoothly as the employers had won the trust of stakeholders by the implementation of
ethical change in their organization.
b. In Response of negative feedback review First 5 steps of the ECM Model for any
Mishandling If the majority of stakeholders are not satisfied with the implementation
of change and perceive that this change has not ethically favored all the stakeholders
then figure out the gap by reviewing first five steps of this model. If possible, again
initiate the whole change process or learn from the shortcomings of this change
process in terms of ethics and beware in future change endeavors.
Ethics and risks of change management

Ethics and compliance have been with us at least since Moses and the Ten
st
Commandments. Yet here we are in the 21 century, continuing to make headlines with
ethics and compliance breaches leading to unprecedented fines and ever-longer criminal
sentences. Investigations of corruption, bribery, fraud and money laundering are
increasing while laws and regulations are being enacted or strengthened around the world
—even in countries once presumed to be lax— with greater frequency, broader territorial
reach and stiffer penalties for violators. Moreover, corporations are now being held
accountable, not simply for their own conduct, but for the conduct of third parties with
whom they contract.

What does this mean for leaders of manufacturing companies? It means addressing three
aspects of corporate ethics and compliance that are critical for success in today‘s global
marketplace:
 Establishing and actively promoting a culture of integrity that is evident in every aspect of
your company.

 Ensuring your company has adequate policies and processes in place to manage ethics
and compliance risks.

 Understanding the extent to which you are accountable for the behavior of your business
partners
and preparing yourself
accordingly.

Culture of Integrity

Regulators want companies to demonstrate a serious commitment, not merely lip service,
to ethics and compliance. Manifestations of this commitment can be:

 A Code of Conduct that clearly articulates the company‘s values and expectations.

 Demonstrably rewarding those whose behavior reflects the code, whether they are
speaking up and raising concerns, or refusing to accept lavish gifts or entertainment
offered by influence-peddlers.

Demonstrably taking corrective action against code violations, such as conflicts of interest,
fraud, or retaliation against people raising ethical or compliance questions in good faith

A true culture of integrity also involves training and communications that are appropriately
designed and evident, incorporating ―acting with integrity‖ in a meaningful way into the
performance objectives of managers and employees alike.

Adequate Policies and Procedures

As a strong corporate leader, you must take full and active responsibility for assessing risks
based on your particular industry and the regions where your company is active. You also
must identify risk areas, such as potential encounters with government officials, and have an
effective program in place to manage business partners. This latter point is critical; you must
recognize that the perimeter of risk does not stop at your company‘s door.

Regulators are now of the opinion that what you can‘t do yourself you also can‘t do through
third parties, and they no longer accept willful ignorance or benign negligence as an excuse.
This may be one of the most significant changes in the ethics and compliance arena in recent
years.
Salient Risk factors of organisational change are as follows

Resistance : resitance to change is a common risk factor. People are reluctant to

accept new procedures. There is a fear of losing jobs, if the change involves the
process of automation. one way to overcome resistance is to scale down
ambitions, meaning not to try to implement everything at once.

Leadership : organisational change management requires leadership. Managers

should have experience with previous change management exercises or be
adequately trained to handle the demands. Commitment and conviction are
essential leadership qualities.

Interference : Operational interferences are another risk factor of organisational

change. A small consulting firm could implement a software upgrade in a few
hours without major disruptions. However a medium or large company that is
implementing enterprise resourse planning (ERP) software solution should
expect significant disruptions.

Forcing changes: organisations should be cautious against forcing change.

Instead companies should create a need for it at every level with senior
management reinforcing the message internally and externally. Employees and
mid level managers should understand why the change is necessary.

Loss of data : Another risk in change management is the possibility of losing

important data during the conversion process especially if the change involves a
change in software, or a change from paper to software.