Unit-VII

Organizational Change
Course Code: 2HS401

Dr. Anshika Sharma

Assistant Professor
OB-HRM Area
Department of Humanities & Social Science
Institute of Technology
Nirma University, Ahmedabad, Gujarat, India.
 Unit VII

Organizational Change
 Managing Change in Organization:
 Definition,
 Forces of change,
 Causes for resistance to change,
 Overcoming resistance to change,
 Force field analysis and Kotter’s model for change
 What is organizational change?

 “Change or die!” is the rallying cry among today’s managers worldwide.

Organizational change refers to the process of making  Organizational change can be
significant alterations to an organization's structure, planned and intentional, or it may
processes, culture, or strategies in order to improve its arise in response to unexpected
performance, adapt to new circumstances, or achieve
events or crises.
specific goals.
 It often involves challenges and
resistance from employees, so
effective change management
It can encompass a wide range of changes, such as: strategies are essential to ensure that
the changes are successfully adopted
 Restructuring,
and integrated into the organization.
 Technology implementation,  The goal of organizational change is
to enhance the organization's
 Leadership transitions, ability to thrive in a dynamic and
evolving environment and to better
 Culture transformation, and more. achieve its objectives.
 Forces of Organizational Change

 Planned changes Change activities that are  Unplanned changes in organizations are those
intentional and goal oriented. that occur unexpectedly and without prior
planning. Some examples of unplanned changes
Planned Change include:
•New product or service launches •Economic downturns
•Organizational restructuring •Natural disasters
•Mergers and acquisitions •Technological disruptions
•Process improvements •Employee turnover
•Technology upgrades •Customer behaviour changes
•Diversity and inclusion initiatives •Regulatory changes

Unplanned changes can be challenging for

Planned changes are typically implemented in a organizations to manage, as they often require a
step-by-step manner, with careful consideration quick and decisive response. However, organizations
of the potential impacts on employees, can prepare for unplanned changes by having a
customers, and other stakeholders. Managers contingency plan in place and by developing a
often use change management tools and culture of resilience and adaptability.
frameworks to help them implement planned
changes effectively.
 Recent examples of Planned & Unplanned Change

Planned Change Unplanned Change

 Google's decision to pivot from cloud • The COVID-19 pandemic, which has forced
gaming to focus on other areas of its many organizations to shift to remote work
cloud business. and make other operational changes.
 Amazon's acquisition of MGM • The war in Ukraine, which has disrupted
Studios. global supply chains and caused energy
prices to rise.
 Microsoft's decision to implement a • The ongoing climate crisis, which is leading to
hybrid work model for its employees. more extreme weather events and other
 Nike's commitment to reducing its challenges for businesses.
environmental impact. • The rise of social media, which is changing
the way that organizations communicate with
 Bank of America's investment in their customers and employees.
artificial intelligence (AI) to improve • The increasing popularity of
customer service. cryptocurrencies and other new
technologies, which is creating new
opportunities and challenges for businesses.
Organizations that are able to effectively
manage both planned and unplanned
changes are more likely to be successful in
the long term.
 Force of Organizational Change
 Competition
 Nature of the workforce  Global competitors
• More cultural diversity  Mergers and consolidations
• Aging population  Increased government regulation of
• Increased immigration and outsourcing commerce

 Technology  Social trends

 Faster, cheaper, and more mobile computers and  Increased environmental awareness
handheld devices  Liberalization of attitudes toward gay, lesbian,
 Emergence and growth of social networking sites and transgender employees
 Deciphering of the human genetic code  More multitasking and connectivity

 Economic shocks  World politics

 Rise and fall of global housing market  Rising health care costs
 Financial sector collapse  Negative social attitudes towards business
 Global recession and executives
 Openings of market in China
 RESISTANCE TO CHANGE
 What is resistance to change?

Resistance to change is the reluctance or opposition to the adoption of new ways of doing
things. It can occur at the individual, group, or organizational level. There are many reasons /
sources why people may resist change, including:
•Fear of the unknown
•Loss of control
•Perceived negative impact on job security, status, or workload
•Lack of trust in leadership
•Poor communication about the change
•Lack of involvement in the change process
•Belief that the change is unnecessary or harmful

 Resistance to change can be positive if it leads to open discussion and debate.

 These responses are usually preferable to apathy or silence and can indicate that members
of the organization are engaged in the process, providing change agents an opportunity to
explain the change effort.
Resistance to change can manifest itself in a variety of ways,
such as:
Overt resistance, such as expressing Passive resistance, such as procrastination,
disagreement, arguing, or refusing to absenteeism, or reduced productivity
cooperate

Covert resistance, such as sabotaging the

change effort, spreading rumours, or
withdrawing from work Conclusion: Resistance to change can be a significant
challenge for organizations, but it is important to
remember that it is a normal reaction to change. By
understanding the root causes of resistance and
taking steps to address them, organizations can
increase the chances of successful change
implementation.
 Causes / Sources for resistance to change
1. Individual Sources

Habit—To cope with life’s complexities, we rely on habits or programmed responses. But when
confronted with change, this tendency to respond in our accustomed ways becomes a source of
resistance.

Security—People with a high need for security are likely to resist change because it threatens
their feelings of safety.

Economic factors—Changes in job tasks or established work routines can arouse economic
fears if people are concerned that they won’t be able to perform the new tasks or routines to their
previous standards, especially when pay is closely tied to productivity.

Fear of the unknown—Change substitutes ambiguity and uncertainty for the unknown.

Selective information processing—Individuals are guilty of selectively processing information in

order to keep their perceptions intact. They hear what they want to hear, and they ignore
information that challenges the world they’ve created.
2. Organizational Sources
Structural inertia—Organizations have built-in mechanisms—such as their selection processes
and formalized regulations—to produce stability. When an organization is confronted with change,
this structural inertia acts as a counterbalance to sustain stability.
Limited focus of change—Organizations consist of a number of interdependent subsystems.
One can’t be changed without affecting the others. So limited changes in subsystems tend to be
nullified by the larger system.
Group inertia—Even if individuals want to change their behaviour, group norms may act as a
constraint.
Threat to expertise—Changes in organizational patterns may threaten the expertise of
specialized groups.
Threat to established power relationships—Any redistribution of decision-making authority can
threaten long-established power relationships within the organization.
Overcoming resistance to change

Eight tactics can help change agents deal with resistance to change. Let’s review them briefly.

1. Education and Communication 2. Participation It’s difficult to resist a

 Explain logic of change change decision in which we’ve
 Communication: “sell” the need for change by participated. Assuming participants have
packaging it properly. the expertise to make a meaningful
contribution, their involvement can reduce
resistance, obtain commitment, and
A study of German companies revealed changes increase the quality of the change decision.
are most effective when a company communicates
a rationale that balances the interests of various
stakeholders (shareholders, employees,
community, customers) rather than those of
shareholders only.

Another study of a changing organization in the

Philippines found that formal change information
sessions decreased employees’ anxiety about
the change, while providing high-quality information
about the change increased their commitment to it.
3. Building Support and Commitment: 6. Manipulation and Co-optation Manipulation
refers to covert influence attempts. Twisting facts
 When employees’ fear and anxiety are high, to make them more attractive, withholding
counselling and therapy, new-skills training, or a information, and creating false rumours to get
short paid leave of absence may facilitate employees to accept change are all examples of
adjustment. manipulation.
 When managers or employees have low Co-optation, on the other hand, combines
emotional commitment to change, they favour the manipulation and participation. It seeks to “buy off”
status quo and resist it. the leaders of a resistance group by giving them a key
 Employees are also more accepting of changes when role, seeking their advice not to find a better solution
they are committed to the organization as a whole. but to get their endorsement.
4. Develop Positive Relationships People are 7. Selecting People Who Accept Change
more willing to accept changes if they trust the Research suggests the ability to easily accept and
managers implementing them. adapt to change is related to personality—some
people simply have more positive attitudes about
5. Implementing Changes Fairly One way change than others.19 Such individuals are open to
organizations can minimize negative impact is to experience, take a positive attitude toward change,
make sure change is implemented fairly. are willing to take risks, and are flexible in their
behaviour.
8. Coercion: Last on the list of tactics is coercion, the
application of direct threats or force on the resisters. If
management really is determined to close a manufacturing
plant whose employees don’t acquiesce to a pay cut, the
company is using coercion. Other examples are threats of
transfer, loss of promotions, negative performance
evaluations, and a poor letter of recommendation. The
advantages and drawbacks of coercion are approximately
the same as for manipulation and co-optation.
Force field analysis and Kotter’s model for change

Force field analysis and Kotter's model of change are two popular change management
frameworks.
 Force field analysis is a simple but Kotter's model of change is a more
powerful tool for identifying and comprehensive framework that provides a
understanding the forces that are step-by-step approach to implementing
driving and resisting change. It is change in organizations. It consists of eight
based on the idea that any situation is in steps:
a state of equilibrium, maintained by two 1.Create a sense of urgency.
opposing forces: 2.Form a powerful guiding coalition.
 Driving forces and resisting forces. 3.Create a vision for change.
Driving forces are those forces that are 4.Communicate the vision for change.
pushing for change. 5.Empower employees for broad-based
 Resisting forces are those forces that action.
are trying to maintain the status quo. 6.Generate short-term wins.
7.Consolidate gains and produce more
change.
8.Anchor new approaches in the culture.
Step 1: Create a sense of urgency: Step 3: Create a vision for change:
The company's executives could communicate the The team could develop a vision for the benefits of
need for the new ERP system to all employees, the new ERP system and how it will improve the
explaining the benefits of the system and how it will company's operations.
help the company to remain competitive.

Step 2: Form a powerful guiding coalition.

The company could create a cross-functional team of Step 4: Communicate the vision for change:
employees to lead the change effort. The team should The team could communicate the vision for the new
include representatives from all departments and ERP system to all employees through a variety of
levels of the organization. channels, such as town hall meetings, email, and
one-on-one conversations.
Step 5: Empower employees for broad-based Step 7: Consolidate gains and produce more
action: change:
The company could provide employees with the The company could build on the success of the
training and resources they need to use the new ERP short-term wins to implement more complex
system. It could also give employees opportunities to changes.
participate in the implementation process.

Step 8: Anchor new approaches in the culture:

Step 6: Generate short-term wins: The company could integrate the new ERP system
The company could identify and implement quick into its culture by rewarding employees for using
wins, such as small improvements to the new ERP the system and by making the system a central
system or new processes that make it easier for part of the company's operations.
employees to use the system.