Module-5

Organizational change refers to the process of growth, decline and transformation within the
organization. Though one thinks that organizations are enduring structures in a changing
society. However, the truth is that organizations are changing all the time. Organizational
change takes different forms.
Organizations may change their strategy or purpose, introduce new products or services,
change the way they produce and sell, change their technology, enter new markets, close down
departments or plants, hire new employees, acquire other organizations become acquired by
other organizations and what not ! In doing so, they may turn larger, smaller or stay the same in
terms of size.
Sometimes, organizations change quite radically yet retaining their name; the new organization
may be nothing like the old one except in the name. All this makes organizational change a
complex and confusing phenomenon or a process. It is much more complex than normal human
behavior.
The rapidity of change taking place in the social, political and economic environment is creating
marked impact on organizations as well as individuals. Though the change has been coeval with
human existence, the pace of it has varied in recent times—most of the developments we
witness now have been taking place in the last 100 years and is likely to accelerate in the
present century.
Nature of Organizational Change
Change is a part of life and provides opportunity for growth. It is a conscious decision by the
management of organization. In any organization, we have people engaged in production,
research, development, administration, etc. The organization in order to change should prepare
a stock of the situation and should effect change in their attitude and style of functioning.

An organization is an open system which implies that it is in a constant interaction and

interdependent relationship with its environment. Any change can occur in its environment,
such as change in consumer tastes and preferences, competition, economic policies of the
government, etc.
An organization consists of interrelated and interacting system, to perform complicated tasks
such as:
1. Authority and power system.
2. Reorganization of the tool and techniques used in the system evolving proving of better
equipment.
3. Change in the attitudes and behaviors and interpersonal relationship of people working in
the organization through systematic manpower planning.
4. De-layering to flatten structures.
5. Change to multiple reporting relationships.
6. Jobs designed to grow.
7. Increase in job flexibility.
8. Increase in organizational flexibility.
9. Need for clear, measurable, and flexible standards of performance at all level, etc

Types of Organizational Change

Organizational changes are of two types:
1. Reactive changes and
2. Proactive changes (planned changes).
1. Reactive Changes:
Reactive changes occur when forces compel organization to implement change without delay.
In other words, when demands made by the forces are compiled in a passive manner, such a
change is called reactive change.
2. Proactive Changes:
Proactive changes occur when some factors make realize organization think over and finally
decide that implementation of a particular change is necessary. Then, the change is introduced
in a planned manner.
The difference between reactive and proactive changes can made on the basis of behavioural
angle:
1. Reactive change involves a reflexive behavior whereas proactive change involves purposive
behavior.
2. Reactive change covers a limited part of the system but proactive change co-ordinates the
various parts of the system as a whole.
3. While reactive changes respond to immediate symptoms, proactive changes address to
underlying forces creating symptoms.
An example will help you distinguish the two changes in clearer manner.
Remember, you respond reflexively to a sudden intense light by blinking your eyes or by
pupillary contraction. Undoubtedly, yours this is an automatic and instant response to a force
(intense light) without giving any thought.
But, your purposive response to the same force would involve devising a plan either to shield
the eyes or removing the light. Obviously, yours this action would involve co-ordination of
central nervous system and psychomotor capacities.
Planned Changes:
When changes are effected after working out when and how they will be carried out, planned
changes occur. For initiating planned change, the manager needs to constantly watch the
changes taking place in the external and internal environment of the business so that corrective
measures are taken accordingly and the changes could be effected successfully.
Reasons for Changes:
Following are some of the causes of organizational changes which lead to disequilibrium end
resistance:
i. Change in Tools, Machines and Equipment:
Technological or mechanical changes in machines, tools and equipments may bring change in
the organization. For example, installation of an automatic machinery in place of old machinery,
may result in displacement or re- placement of people or loss of job to people and may create
disequilibrium.
ii. Change in Methods and Procedures:
Man is a creature of habits. He feels irritated when change occurs in methods and procedures
of work of which he is accustomed to. As it takes time to adjust to the new environment, it cre -
ates disequilibrium till the complete adjustment to the new environment.
iii. Change in Business Conditions:
Changes in business conditions such as change in the quality of the product, change in the
marketing system or practices, business cycles, change in industrial policy etc. all create
disequilibrium in the work-environment and it needs adjustment accordingly.
iv. Change in Managerial Personal:
Change in the managerial personal in the organization may result in disequilibrium. A personnel
may retire or change place or may be appointed afresh, this will all affect the policies, practices,
procedures and programs of the organization and the people are to adjust themselves
accordingly.
v. Change in Formal Organization Structure:
The formal organization structure establish a form and line of command of authority and re-
sponsibility in an organization. Along with these lines, channels of communication and interper-
sonal relations are established. If there is a change in this formal organizational structure, there
will be a change in the formal relationship which creates disequilibrium.
vi. Change in Informal Organization:
Informal organization is a must in every formal organization and is a very important part of our
existence because many of our motivational forces find satisfaction in this relationship. Conse-
quently when management likes to introduce any change that disturbs the informal relation-
ship established among people there is bound to be a state of imbalance.
A short list of some of the changes which affected almost all organization in the past few
decades is given here:
i. Technological innovations have multiplied, products and knowhow are fast becoming
obsolete.
ii. Basic resources have progressively become more expensive.
iii. Competition has sharply increased.
iv. Environmental and consumer interest groups have become highly influential.
v. The drive for social equity has gained momentum.
vi. The economic inter-dependence among countries has become more apparent.
All the reasons for organizational change can be classified into two categories external
reasons and internal reasons:
a. External Reasons:
A number of changes in the external environment may cause change in the organization. Here,
we are mentioning some of the most common and obvious external reasons of organizational
change-
1. Government Rules and Regulations:
One can catalogue a long list of the Government’s rules and regulations necessitating changes
in organizations. For example, the recent slashing of grants by the University Grants
Commission (UGC) to the Universities have forced them to strengthen their revenue generating
functions, such as training programs, consultancy, offering self-financing courses, etc.
Likewise, the Government’s policy to privatize the power sector encouraged Jayprakash and the
DLF to diversify into the power sector.
2. Competition:
The present time is the survival of the fittest. Organizations need to come up the challenges
posed by the competitors to sustain and survive. In 1993, Mudra Communication decided to
reorganise itself to counter the threats from its competitors Lintas and HTA.
3. Technological Advances:
Technology has become the buzzword of the time. Rapid changes in technology has posed a
question before the organization – either run or ruin. The revolutionary change in
communication technology, i.e., communication satellite, cable networking, dish antenna, etc.,
compelled the Doordarshan to restructure itself by segmenting its services to different
categories of viewers and become more competitive.
4. Change in People Requirements:
Customers dictate organization what they actually require. With changing requirements of
customers, the five-star-hotels have, of late, started to offer new services, such as business
centres, conference hall facilities, secretarial services, etc.
b. Internal Reasons:
Though there may be a host of internal factors that may also cause change in organizations,
some of the illustrative ones are listed here:
1. Change in Leadership:
Leadership changes culture and values in the organizations. V. Krishnamurty of SAIL, Tapan
Mitra of INDAL, Ratan Tata of Tata Sons are the examples how the change in leadership led to
internal changes in these organizations.
2. Introducing New Technology:
Introduction of new technology in an organization is bound to have consequences for other
functions as well. For examples, the computerisation of the Examination Division of the M.K.
University affected other aspects as well, such as reporting relationships, span of control, co-
ordination mechanism and so on.
3. The Domino Effect:
The source of change is change itself. The domino effect means one change triggers off a series
of related changes. For example, establishing a new department, e.g., the Department of
Business Administration may cause the creation of teaching and non-teaching positions,
budgeting allocation, building construction etc. Ignoring domino effect leads to the problems of
co-ordination and control.
4. For Meeting Crises:
Just like human life, some unforeseen happening, say, crisis in the organization makes
continuation of the status quo unthinkable and difficult. Sudden death of a CEO, the resignation
of the executives holding key positions, loss of major suppliers, a drastic cutback in budget and
civil disturbances are the examples of unforeseen crises.
These make the organizational condition unstable and this instability becomes the stimulus for
thorough self-assessment and reform to change the organization to overcome the crisis before
it.
5. Organizational Life-Cycle:
As human beings pass through certain sequential stages of life-cycle, so do the organizations
also. As an organization grows from tiny sized to giant sized or from young to mature stage,
according to Larry Greiner, it passes through five stages.
Each stage creates new demands for adjustment for the organization and so, act as a potent
sources of organizational change. Each stage culminates in a crisis (which Greiner calls
‘revolution’), which the organization must overcome before graduating to the next stage.
 Levels of Organizational Change
‘Consistency is the quality of a stagnant mind’, says John Sloan. This is rightly said, as it finds
great application in the current unpredictable business scenario. Change, resistance to change,
and managing change are popular terms and processes in the business world, more so to
employees in change-prone organizations.
Well, enthusiasm to change is quite obvious in today’s employees. However, whatever it takes
to bring out innate change is not ingrained in the change management programs or
organization's conduct. The initiative to hold change management and performance
enhancement programs have never fallen apart but the structure and the content of such
programs definitely need refurbishing.
Change is possible only if employees are persuaded to think about their jobs in fresh
perspectives. A transformation in the attitudes and behavior of an individual can bring about a
fresh outlook to one’s job.
There can be three levels of change as mentioned below:
(i) Lifeless-Change:
Depending on the extent of change desired CEOs could take to any of the three levels of
change. The first is related to the outcomes of the business decisions. It has nothing to do with
the work patterns or the workplace behavior of employees. For instance, consider divesting
non-core assets to emphasize on core business. In no way does it affect employees change in
attitudes or behavior. This is the least complex, rather the most straightforward level of change
that could be brought about in organizations.
(ii) Half-Minded-Change:
The next level involves slightly more complex change process. This level demands of employees’
adjustment in the existing practices or adoption of new ones to achieve predetermined targets.
A financially unstable company for instance, might solicit change in working patterns or look for
innovative ways to reduce or even eliminate waste.
(iii) Abysmal-Change:
The third and the most complex and deepest of all the levels of change is cultural change.
Cultural change involves a complete change in employees’ behavior across the board. If a
company could become competitive by changing from being reactive to proactive, hierarchical
to collegial, or reflective to externally focused, then cultural makeover is the ideal change that
one could look for. Since change is collective and affects the culture of organizations, it must
aim at transformation of the minds of all those employees involved in the change.
Reasons for Organizational Change
Many things cause organizational change.
These includes:
1. Challenges of growth, especially global markets
2. Changes in strategy
3. Technological changes
4. Competitive pressures
5. Customer pressure, particularly shifting markets
6. To learn new organizational behavior and skills
7. Government legislation/initiatives.
8. Change in organizational structure
9. Change in managerial personnel.
Research indicates that organizations are undergoing major change approximately once in
every three years, whilst smaller changes are occurring almost continuously. There are no signs
that this pace of change will slow down.
Hence, organizations have to modify and change to adapt to the changing internal and
external environment:
1. Technological innovations have multiplied
2. Basic resources have progressively become more expensive.
3. Competition has sharply increased.
4. Communication and computers have reduced the time needed to make decision
5. Environmental and consumer interest groups have become highly influential
6. The drive for social equity has gained momentum
7. The economic interdependence among countries has become more apparent.
How to manage Organizational Change
Though the people have agreed and are convinced of expected change in organization, the
immediate question before the strategists is how to manage the change? No company wants to
be the victim of change but victor of the change. This managing is an import art that asks for
display of skills of developing an action plan or a process that makes the company to turn the
corner successfully.
KL Strategic Change Consulting House of Kaula Lampur-Malaysia has come out with a model of
manage the change which is cited by Professor Victor S.L. Tan in his title Changing the Mind-
sets. Ensuring the future of Asian Organization published by Times Books International,
Singapore.
1. Anticipating Change:
To start with the leaders of the organization are expected to anticipate change by analysing the
external environment and applying their intuitions to predict the change management can
magnify the opportunities and miniaturing the threats from the forces of change in the market
place by anticipating the change.
The management can leverage the resources and exploit opportunities for its own growth
which is possible with superior skills of anticipation.
2. Identifying the Change:
The organizational leaders are to identify the changes and evaluate as to how their organization
can match its strategy, structure, systems, skills styles, staff and super-ordinate the goal to the
external driving forces of competitors, customers, contradictions and other conditions of the
market place.
This calls for an intricate diagnosis of the organization in the back- drop of changing
environment. Wise leaders are bold and frank enough to question themselves about their
vulnerability to strategic changes, opportunities they can pocket out of the change, gap
between the desired performance and the real ground performance.
3. Selling the Change:
There is dire need for selling the change through effective communication to different
executives and the employees at all the levels to bring about change. It is effective
communication that creates awareness about change and to prepare the people for extending
their whole-hearted support through commitment for change.
Hence, it is up to the leaders at top to bring home the benefits of change that accrue to the
organization and, therefore to the people who make the organization.
4. Mobilizing Resources for Change:
Introduction of change can be effective only when the people responsible build a team or sub-
teams and assimilate resources. The leader at the top has to involve the people at different
positions commanding authority. Further, the people with requisite expertise, acumen and
experience are to be consulted. This cements the task of mobilizing the resources and
channelizing in right direction.
5. Breaking Down the Comfort Zones:
The challenge of introducing change is the crucial task of changing the mind-set of people so
that they feel comfortable with old habits and the deep rooted practices, even when they are
misdirected. People prefer status-quo in order to avoid change. It is the inertia of these status-
quo seekers of doing something in a different way.
Hence, it is the major task of the lenders to break down these comfort zones through injecting
and bolstering the sense of urgency. It can be done in different ways; We way to raise
organizational goal in terms of increased market share or revenue; another way is to go in for
professionals from outside for diagnosing the problem area and bringing up the performance
level.
Again, managers at various levels are expected to always question themselves of their
perceptions and the existing practices.
6. Reinforcing Change Success:
In case the change-leaders and change-teams are convinced of an early success, it is the proof
of the fact that change has worked. This gives a kick-start arid the momentum continues to
propel and impel change efforts pushing forward. This should be brought to the notice of
people which helps to get a lasting commitment to change.
7. Continuous Learning and Change:
Effective implementation of change warrants turning of an “existing” organization into
‘learning” organization and “creative” organization in which people learn continually and put
forth their new ideas which are innovative and creative and share these ideas with others.
This process can be further facilitated by making the organization structure more flexible and
easy gliding where people at different layers and at different points of layers communicate
freely, frankly and immaculately.

Resistance to Change
Resistance to change is the unwillingness to adapt to altered circumstances. It can be covert or
overt, organized, or individual. Employees may realize they don't like or want a change and
resist publicly, and that can be very disruptive.

Employees can also feel uncomfortable with the changes introduced and resist, sometimes
unknowingly, through their actions, their language, and in the stories and conversations, they
share in the workplace.

In a worst-case scenario, employees can be forceful in their refusal to adopt any changes,
bringing confrontation and conflict to your organization.
How Resistance to Change Works
Resistance to change is evident in actions such as:

 Criticism
 Nitpicking
 Snide comments or sarcastic remarks
 Missed meetings
 Failed commitments
 Endless arguments
 Sabotage

When employees are poorly introduced to changes that affect how they work, especially when
they don't see the need for the changes, they may be resistant. They may also experience
resistance when they haven't been involved in the decision-making process.
Resistance to change can intensify if employees feel they have been involved in a series of
changes that have had insufficient support to gain the anticipated results. They also become
weary when changes happen too frequently, becoming a flavor-of-the-month instead of
strategic action.

Whatever causes the resistance to change can be a big threat to the success of your business
and can affect the speed at which your organization adopts an innovation. It affects the feelings
and opinions of employees at all stages of the adoption process. Employee resistance also
affects productivity, quality, interpersonal communication, employee commitment to
contribute, and the relationships in your workplace.

Spotting Resistance
Note whether employees are missing meetings related to the change. Late assignments,
forgotten commitments, and absenteeism can all be signs of resistance to change.

Some employees will publicly challenge the change, its purpose, or how it is unfolding. An
employee who has a higher position and more seniority may be more resolute in their
resistance. Less well-positioned employees may resist collectively in ways such as a work
slowdown, staying home from work, deliberately misunderstanding directions, and, in rarer
cases, organizing to bring in a labor union.

Employees also resist change by failing to take action to move in the new direction, quietly
going about their familiar and accustomed business in the same ways as always, withdrawing
their interest and attention, and failing to add to conversations, discussions, and requests for
input.

Covert resistance to change can damage the progress of your desired changes seriously as it is
more difficult to deal with the resistance that isn't visible, demonstrated, or expressed publicly.

Minimizing Employee Resistance to Change

Managing resistance to change can be a challenge. Be mindful that you aren't the reason
behind the resistance. You can cause serious resistance when you repeatedly introduce change
to your organization.
Organizations are constantly evolving, which means change is inevitable. But introducing
changes without consulting the people they affect, explaining the need for change, and
providing support through the process will alienate your employees and drag down morale.

Something as simple as listening to how employees talk about the change in meetings and hall
conversations can tell you a lot about any resistance they are experiencing. Some employees
may come directly to you for help navigating the changes. That's a great opportunity to listen to
their concerns.

When employees believe their input is considered, they are less likely to experience resistance
to change. Smart employers recognize this and collect input before employees are asked to
make any changes.

In an organization that has a culture of trust, transparent communication, employee

involvement and engagement, and positive interpersonal relationships, resistance to change is
easy to see—and also much less likely to occur.

In such a work environment, employees feel free to tell their boss what they think and have
open exchanges with managers about how they think the changes are going. They are also
more likely to share their feelings and ideas for improvement.

In a trusting environment, employees think about how to make the change process go more
smoothly. They are likely to ask their managers what they can do to help.

When a change is introduced in this environment, with a lot of discussions and employee
involvement, resistance to change is minimized. Resistance is also minimized if there is a
widespread belief that the changes are needed and will have a positive effect. It helps to
present your reasoning for why a change is necessary instead of withholding that information.
Taking employee feedback into account can help improve the chances of success for your
change.

Top Reasons for Resistance to Change

Although change management decisions are normally made at the C-level, it’s still very
important to have the rest of the employees bought in to the change. Having employees who
are opposed to what is going to be changing from the start is a major setback and one that
needs to be dealt with carefully in order to be successful with the change management.

Job Loss
Job loss is a major reason that employees resist change in the workplace. In any business, there
are constantly going to be things moving and changing, whether it is due to the need for more
efficiency, better turnaround times, or the need for the employees to work smarter. With all
these needs comes the opportunity for the company to downsize or create new jobs, and this is
where the fear of job loss comes into play.

Poor Communication and Engagement

Communication solves all ills. But a lack of it creates more of them. This is another crucial
reason why employees oppose change. How the change process itself is communicated to the
employees is very important because it determines how they react. If the process of what
needs to be changed, how it needs to be changed and what success would look like cannot be
communicated, then resistance should be expected. Employees need to understand why there
is a need for change, because if they are just thrown the notion that what they have been used
to for a long time is going to be completely renovated, with that will come much backlash.

Lack of Trust
Trust is a vital tool to have when running a successful business. In organizations where there is
a lot of trust in management, there is lower resistance to change. Mutual mistrust between
management and employees will lead to the company going into a downward spiral, so trust is
a must.

The Unknown
We already mentioned communication, and a lack of it causes employees to feel like they don’t
know what’s going on. If companies are constantly experiencing times where the future is
unknown, there is also a good possibility that employees won’t respond to change well. When
the thought of change is brought up in this case, it would come as a surprise, leading to
employees being caught off guard, which makes the situation much worse.

Poor Timing
Timing is one of the biggest problems when it comes to change. A lot of the time, it’s not the
act itself that creates the resistance, but how and when it is delivered.

How to Overcome Resistance and Effectively Implement Change

1. Overcome opposition Regardless of how well companies manage a change, there is always
going to be resistance. Companies should engage those who are opposed to a change. By
doing this, they can actively see what their concerns are and possibly alleviate the problem
in a timely manner. By allowing employees time to give their input, it assures them that
they are part of a team that actually cares about its employees.

Communicating both early and often is necessary when trying to convey anything to
employees. There should be a constant conversation between the C-Suite and the general
employees on what is happening day to day, and for what is to come in the future. The best
piece of advice that a company can take in this regard is to be truthful, straightforward, and
timely with big changes in the workplace. Company-wide emails and intranets are great
tools to utilize and this allows for employees to ask questions and stay informed.
An explanation for why the change is needed is always a good idea. By helping employees
better understand why a change is important for the company, it’s easier to get them on
board with the change, and it can also encourage them to become an advocate for change.
With this, an explanation of “what’s in it for me?” helps employees see the big picture and
the benefits of the change, instead of only giving them a narrow view of what is to happen
in the near future. Innovation and improvement are two things that are occurring on a daily
basis. With new ideas and suggestions there are always ways to improve as a company,
whether it be changing the outlook on an assignment, or changing the way the office
 dynamic is on a day-to-day basis. Regardless of what it is, there are always ways to improve,
and this could really affect how employees look at change management in the workplace.
2. Effectively engage employees Listen, listen, listen. If there is another piece advice that a
company should take, it’s to receive and respond to the feedback that is provided by the
employees. They are the ones making sure that all the clients are happy and that all the
work gets done, so keeping them in the loop is vital. Ask employees probing questions: Is
the change working? What can we do to make it work better? Do employees have any
questions or concerns? These are all great questions to ask, but if feedback is going to be
collected, it actually needs to be read and utilized. Leveraging an employee engagement
survey is a great first step. These answers can be used to change the plan accordingly,
and show employees that their ideas and concerns are being heard. Understanding that no
two employees are the same is another important tactic to use when trying to understand
the employee’s concern. Being able to realize that there are going to be many different
reasons for opposition depending on the person is pertinent, because then managers can
tailor ways to work out these problems.
3. Implement change in several stages Change doesn’t happen all at once. Companies should
first prepare for the change, then take action on the change and make a plan for managing
the change, and third, support the change and assure that all is going as planned.
4. Communicate change effectively The best way that you as an employer can communicate
change is to explicitly tell employees what is going on. Using a blend of formal and informal
communication allows you to ensure that all employees receive the news about the change
in some way or another. With all the communication outlets such as email, company
intranets, town halls, and face-to-face meetings, the message is going to get across the
company. Employing several different ways to communicate change helps explain the
vision, goals and expectations for what needs to happen and why.
Lewin’s 3 Stage Model of Change
A leader in change management, Kurt Lewin was a German-American social psychologist in the
early 20th century. Among the first to research group dynamics and organizational
development, Lewin developed the 3 Stage Model of Change in order to evaluate two areas:
  The change process in organizational environments
 How the status-quo could be challenged to realize effective changes

Lewin proposed that the behavior of any individual in response to a proposed change is a
function of group behavior. Any interaction or force affecting the group structure also affects
the individual’s behavior and capacity to change. Therefore, the group environment, or ‘field’,
must be considered in the change process.

The 3 Stage Model of Change describes status-quo as the present situation, but a change
process—a proposed change—should then evolve into a future desired state. To understand
group behavior, and hence the behavior of individual group members during the change
process, we must evaluate the totality and complexity of the field. This is also known as Field
Theory, which is widely used to develop change models including Lewin’s 3 Stage Model.

Source
The 3 Stages of Change
Let’s look at how Lewin’s three-step model describes the nature of change, its implementation,
and common challenges:

Step 1: Unfreeze
Lewin identifies human behavior, with respect to change, as a quasi-stationary equilibrium
state. This state is a mindset, a mental and physical capacity that can be almost absolutely
reached, but it is initially situated so that the mind can evolve without actually attaining that
capacity. For example, a contagious disease can spread rapidly in a population and resist initial
measures to contain the escalation. Eventually, through medical advancement, the disease can
be treated and virtually disappear from the population.

Lewin argues that change follows similar resistance, but group forces (the field) prevent
individuals from embracing this change. Therefore, we must agitate the equilibrium state in
order to instigate a behavior that is open to change. Lewin suggests that an emotional stir-up
may disturb the group dynamics and forces associated with self-righteousness among the
individual group members. Certainly, there are a variety of ways to shake up the present status-
quo, and you’ll want to consider whether you need change in an individual or, as in a company,
amongst a group of people.

Let’s consider the process of preparing a meal. The first change, before anything else can
happen, is to “unfreeze” foods—preparing them for change, whether they’re frozen and
require thawing, or raw food requiring washing. Lewin’s 3 Step Model believes that human
change follows a similar philosophy, so you must first unfreeze the status-quo before you may
implement organizational change.

Though not formally part of Lewin’s model, actions within this Unfreeze stage may include:

 Determining what needs to change.

 Survey your company.
 Understand why change is necessary.
  Ensuring support from management and the C-suite.
 Talk with stakeholders to obtain support.
 Frame your issue as one that positively impacts the entire company.
 Creating the need for change.
 Market a compelling message about why change is best.
 Communicate the change using your long-term vision.

Step 2: Change
Once you’ve “unfrozen” the status quo, you may begin to implement your change.
Organizational change in particular is notoriously complex, so executing a well-planned change
process does not guarantee predictable results. Therefore, you must prepare a variety of
change options, from the planned change process to trial-and-error. With each attempt at
change, examine what worked, what didn’t, what parts were resistant, etc.

During this evaluation process, there are two important drivers of successful and long-term
effectiveness of the change implementation process: information flow and leadership.

 Information flow refers to sharing information across multiple levels of the organizational
hierarchy, making available a variety of skills and expertise, and coordinating problem
solving across the company.
 Leadership is defined as the influence of certain individuals in the group to achieve
common goals. A well-planned change process requires defining a vision and motivation.

The iterative approach is also necessary to sustain a change. According to Lewin, a change left
without adequate reinforcement may be short-lived and therefore fail to meet the objectives of
a change process.

During the Change phase, companies should:

 Communicate widely and clearly about the planned implementation, benefits, and who is
affected. Answer questions, clarify misunderstandings, and dispel rumors.
  Promote and empower action. Encourage employees to get involved proactively with the
change, and support managers in providing daily and weekly direction to staff.
 Involve others as much as possible. These easy wins can accumulate into larger wins, and
working with more people can help you navigate various stakeholders.

Step 3: Refreeze
The purpose of the final step—refreezing—is to sustain the change you’ve enacted. The goal is
for the people involved to consider this new state as the new status-quo, so they no longer
resist forces that are trying to implement the change. The group norms, activities, strategies,
and processes are transformed per the new state.

Without appropriate steps that sustain and reinforce the change, the previously dominant
behavior tends to reassert itself. You’ll need to consider both formal and informal mechanisms
to implement and freeze these new changes. Consider one or more steps or actions that can be
strong enough to counter the cumulative effect of all resistive forces to the change—these
stronger steps help ensure the new change will prevail and become “the new normal”.

In the Refreeze phase, companies should do the following:

 Tie the new changes into the culture by identifying change supports and change barriers.
 Develop and promote ways to sustain the change long-term. Consider:
 Ensuring leadership and management support and adapting organizational structure
when necessary.
 Establishing feedback processes.
 Creating a rewards system.
 Offer training, support, and communication for both the short- and long-term. Promote
both formal and informal methods, and remember the various ways that employees learn.
 Celebrate success!

Lewin’s 3 Stage Model of Change provides an intuitive and fundamental understanding of how
changes occur, in context of the social behaviors observed at an individual and collective level
within a group. Since the theory was first introduced in 1951, change management has taken
both supportive and opposing directions. This is a vital reminder: when modern-day change
management frameworks are not working for specific use cases and business needs, consider
these fundamentals of understanding social behavior in light of change.
McKinsey 7S Change Model
McKinsey 7S model was developed by Robert Waterman and Tom Peters during early 1980s by
the two consultants McKinsey Consulting organization. The model is a powerful tool for
assessing and analyzing the changes in the internal situation of an organization. It is based on 7
key elements, which determine the organization’s success, which should be interdependent
and aligned for producing synergistic outcomes. The model can be used widely in various
situations where an alignment is required:

 For improving organizational performance.

 Analyzing and evaluating the effects of futuristic changes on the organization.
 Can be a useful framework during the situation of Merger and Acquisition involving
striking an alignment between the key processes of an organization.
 Providing a recommendative framework for implementing a strategic plan of action.
 The model can be effectively applied to various teams or groups or projects as well.

The McKinsey 7 S model refers to the seven key interrelated or integrated elements of an
organization which are subdivided into hard and soft elements:

The Hard elements are within the direct control of the management as it can be easily defined
and identified. The following elements are the hard elements in an organization.

1. Strategy: It is the plan of action, or the roadmap or the blueprint by way of which an
organization gains a competitive advantage or a leadership edge.
2. Structure: This refers to organizational structure or the reporting pattern.
3. Systems: This includes the day to day activities in which the staff members involve
themselves for ensuring the completion of their assigned tasks.

The Soft elements are less tangible and are difficult to be defined and identified as such
elements are more governed by the culture. But according to the proponents of this model,
these soft elements are equally important as the hard elements in determining an
organization’s success as well as growth in the industry. The following elements are the soft
elements in an organization:

1. Shared Values: The superordinate goals or the core values which get reflected within
the organizational culture or influence the code of ethics.
2. Style: This lays emphasis on the leadership style and how it influences the strategic
decisions, people motivation and organizational performance.
3. Staff: The general staff or the capabilities of the employees
4. Skills: The core competencies or the key skills of the employees play a vital role in
defining the organizational success.

McKinsey 7S Model

As per the above diagram, the shared values in the center of the model influence all the other
elements of the model which are interconnected and interrelated. The rest other elements
originate from the very reason for the existence of the organization which is the vision which is
formed by the creators of the values in an organization. If the values change, the rest other
parameters equally undergo a change.
The 7S model identifies the inconsistencies or gaps between various elements and provides a
strategic plan of action for reaching from the current state to the desired organizational state.
The alignment between each element can be checked by paying attention to the following
steps:

 Assessing the Shared Values: Assessing whether the shared values are in consistency
with the elements such as structure, systems and strategy and if not then determining
what may be changed.
 Assessing the Soft Elements as well as the Hard Elements in terms of interdependence
and alignment between them and the possible course of action if these elements do not
support each other.
 Making changes or adjustments and then analyzing whether these elements function in
alignment or not.

According to Waterman and Peters, this model can be used by following five steps: The first
step involves identification of those elements of the framework which do not align properly. It
equally involves assessing the inconsistencies in the relationships between all the elements. The
second step is concerned with the organizational design optimally and this optimal fit will be
different for different organizations. The third step involves deciding the course of actions or
the changes which are required to be implemented. The fourth step is the actual
implementation of the change and the final stage or the fifth stage is the final review of the 7S
framework.

Limitations of 7S Model

 Ignores the importance of the external environment and depicts only the most crucial
elements in this model for explaining the interdependence of the key processes and
factors within the organization.
 The model does not explain the concept of organizational effectiveness or performance
explicitly.
 The model has been criticized for lacking enough empirical evidences to support to
support their explanation.
  The model is considered to be more of a static kind of model.
 It is rather difficult to assess the degree of fit with accuracy successfully.
 Criticized for missing out the intricate or finer areas in which the actual gaps in
conceptualization and execution of strategy may arise.

Kotter’s 8 step Model of Change

John Kotter (1996), a Harvard Business School Professor and a renowned change expert, in his
book “Leading Change”, introduced 8 Step Model of Change which he developed on the basis
of research of 100 organizations which were going through a process of change.
The 8 steps in the process of change include: creating a sense of urgency, forming powerful
guiding coalitions, developing a vision and a strategy, communicating the vision, removing
obstacles and empowering employees for action, creating short-term wins, consolidating gains
and strengthening change by anchoring change in the culture. Kotter’s 8 step model can be
explained with the help of the illustration given below:

1. Creating an Urgency: This can be done in the following ways:

 Identifying and highlighting the potential threats and the repercussions which
might crop up in the future.
  Examining the opportunities which can be tapped through effective
interventions.
 Initiate honest dialogues and discussions to make people think over the
prevalent issues and give convincing reasons to them.
 Request the involvement and support of the industry people, key stakeholders
and customers on the issue of change.
2. Forming Powerful Guiding Coalitions

This can be achieved in the following ways:

 Identifying the effective change leaders in your organizations and also the key
stakeholders, requesting their involvement and commitment towards the entire
process.
 Form a powerful change coalition who would be working as a team.
 Identify the weak areas in the coalition teams and ensure that the team involves
many influential people from various cross functional departments and working
in different levels in the company.
3. Developing a Vision and a Strategy

This can be achieved by:

 Determining the core values, defining the ultimate vision and the strategies for
realizing a change in an organization.
 Ensure that the change leaders can describe the vision effectively and in a
manner that people can easily understand and follow.
4. Communicating the Vision
 Communicate the change in the vision very often powerfully and convincingly.
Connect the vision with all the crucial aspects like performance reviews, training,
etc.
 Handle the concerns and issues of people honestly and with involvement.
5. Removing Obstacles
  Ensure that the organizational processes and structure are in place and aligned
with the overall organizational vision.
 Continuously check for barriers or people who are resisting change. Implement
proactive actions to remove the obstacles involved in the process of change.
 Reward people for endorsing change and supporting in the process.
6. Creating Short-Term Wins
 By creating short term wins early in the change process, you can give a feel of
victory in the early stages of change.
 Create many short term targets instead of one long-term goal, which are
achievable and less expensive and have lesser possibilities of failure.
 Reward the contributions of people who are involved in meeting the targets.
7. Consolidating Gains
 Achieve continuous improvement by analysing the success stories individually
and improving from those individual experiences.
8. Anchoring Change in the Corporate Culture
 Discuss the successful stories related to change initiatives on every given
opportunity.
 Ensure that the change becomes an integral part in your organizational culture
and is visible in every organizational aspect.
 Ensure that the support of the existing company leaders as well as the new
leaders continue to extend their support towards the change.

Advantages of Kotter’s Model

 It is an easy step by step model which provides a clear description and guidance on the
entire process of change and is relatively easy for being implemented.
 Emphasis is on the involvement and acceptability of the employees for the success in
the overall process.
 Major emphasis is on preparing and building acceptability for change instead of the
actual change process.
Disadvantages of Kotter’s Model

 Since it is a step by step model, skipping even a single step might result in serious
problems.
 The process is quite time consuming (Rose 2002).
 The model is essentially top-down and discourages any scope for participation or co-
creation.
 Can build frustration and dissatisfaction among the employees if the individual
requirements are given due attention.

Individual and Organizational Sources of Resistance to Change

Individual sources of resistance towards a change exist in the basic human tenets or
characteristics and are influenced by the differences in perception, personal background, needs
or personality-related differences. It is important to understand those triggering factors or
issues which refrain individuals from endorsing change or extending their support and
cooperation towards any change initiatives at an organizational level.

Criticizing the individuals or the teams for not being supportive in the stages of transition or
compelling them cannot be an effective solution for implementing change smoothly or in a
hassle free manner.

The resistance towards change at an individual level can be due to various reasons:

 How satisfied they are with the existing state of affairs

 Whether they appreciate the overall end product of change and it’s outcome on them
 How much practical or realistic the change is
 What will be the possible cost change on the individual in terms of potential risks
involved, pressure to develop new competencies and disruptions
The following factors explain why individuals may pose resistance towards change:

 Habits: We individuals are influenced by our habits in our ways of working and accept or
reject a change depending upon the effect which a change may have on the existing
habits of the individuals. For example, change in the office location might be subjected
to resistance from the individuals as this might compel them to change their existing life
routine and create a lot of difficulties in adjustment or coping with the schedule. The
individuals might have to drive a longer way for reaching their office, or start early from
home for reaching their office in time, etc.
 Lack of Acceptability or Tolerance for the Change: Some individuals endorse change
and welcome a change initiative happily while few individuals fear the impact of change.
Over a period of time change fatigue also builds up.
 Fear of a Negative Impact Economically or on the Income: During the process of
organizational restructuring or introduction of organization-wide change as a strategic
move on the part of the management, several inhibitions, and fear rule the thought
process of the individuals. Fear of possible loss of a job as a result of change or a change
in their income structure or may be a change in their work hours could be one amongst
the possible reasons.
 Fear of the Unseen and Unknown Future: Individuals develop inertia towards the
change due to the fear of unknown or uncertainties in the future. This can be tackled
through effective communication with the participants of change and making people
aware of the positives of change and the course of action which individuals are expected
to follow to cope with the changing requirements successfully.
 Fear of Losing Something Really Valuable: Any form of threat to personal security or
financial security or threat to the health of the individuals may lead to fear of losing
something precious as a result of the implementation of change.
 Selective Processing of Information: It can be considered as a filtering process in which
the individuals perceive or make judgments by gathering selective information which is
greatly influenced by their personal background, attitude, personal biases or prejudices,
etc. If an individual maintains a negative attitude towards any kind of change, then they
 are having a usual tendency of looking at the negativities associated with the change
and involve all the positive aspects of it.
 A Rigid Belief that change cannot bring about any facilitating change in the organization
and it only involves the pain and threats to the individuals.

Now, we will look into the organizational factors which result in resistance to change.

 Resistance Due to the Structural Rigidities or Limitations: Structural resistance is a

characteristic feature of bureaucracies, which focus more on stability, control, set
methodologies or routine.
 Ignoring all the interconnected factors which require change or lack of clarity in
understanding the ground realities.
 Inertia from the Groups: Groups may resist change because just like individuals, groups
equally follow set behavioral patterns, norms or culture and as a result of change the
groups might have to change their existing ways of conduct or behavior.
 Possible threats to Power, Resources or Expertise can also result in resistance towards
an organization level change. Any kind of devolution of power or transfer of resources
from some agency or group to some other agency or a group will definitely lead to a
feeling of fear or inertia towards a change initiative.

In the end, it can be concluded that any kind of change will surely involve heavy resistance at
the individual as well as organizational level. But through effective communication during all
stages and consulting, desirable outcomes can be ensured by breaking all the possible barriers
or resistances towards a change. What is more important is identifying the main source of
resistance and accordingly developing action plans for dealing with it.

Successful change in an organization will require strong commitment and involvement on the
part of the top management, focused and an integrated approach, strong and a stable
leadership, effective and open communication from the internal change agent for making
people sensitive and more aware of the realities and the ultimate need for change.

For minimizing the resistance towards the change employee participation and involvement in
the overall process plays a crucial role in building acceptability and seeking the cooperation of
the employees towards the change. Hence proper planning, coordinated approach and
complete involvement of all the stakeholders, play a decisive role in implementing strategic
decisions and determining the success of change.

Learning Organization

“Learning Organization” describes an adaptable and flexible organization, which is able to react
fast on inside and outside influences. It is an organization which responses to an increasingly
unpredictable and dynamic business environment. The model of a learning Organization is
ideally a system, which is permanently in move. The idea of this model was created in the 90
years and would be developed over the time. Problems will take over as a possibility to grow, as
a process of development to fit the base of knowledge on the new requirements. It is a concept
that is becoming an increasingly widespread philosophy in modern companies. The learning
organization has its origins in companies like Shell, where Arie de Geus described learning as
the only sustainable competitive advantage. Peter Senge, 1990, describes it, as an organization
where people continually expand their capacity to create the results they truly desire, where
new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and
where people are continually learning to learn together.

Strategies for developing a “Learning Organization”

Starting the process

To change a “surviving organization” into a “learning organization”, is about doing it from

within, and about building a solid foundation (social, technical) into a company for the change.

This can be made by taking into account the following points:

- Awareness
- Environment
- Leadership
- Empowerment
- Learning

Awareness
Organizations should be aware that learning is necessary before they can develop into a new
learning/mental model, beyond the “single loop learning”. This may seem to be a strange
statement, but learning should take place at all levels; not just the management level, because
the opposite of learning is surviving. Once the company has accept the need for change, it is
then responsible for creating the appropriate environment for this change to occur in.

Environment

Ingrained old and immovable structures/traditions do not create a good environment for a
learning organization. Employees don’t have a full picture of the whole organization and its
goals, not enough information. This cases political and restricted systems to be set up which
stifle the learning process. Therefore a more flexible, innovative and open structure should be
formed. This set up, should encourage innovations, creativity and create more informed
employees. The model should create an atmosphere of development, trust, and joy in being
and effectiveness.

Leadership

Leader should foster the concept and encourage learning to help both, the individual and
organization in learning. The management should provide commitment for long-term learning
in the form of resources.

Empowerment

The employees become responsible for their actions; but the manager do not lose their
involvement. They still need to encourage, enthuse and co-ordinate the team member. The
team member should learn from each other on all levels. They should feel free, to come up with
new ideas and creative solutions in an open, flexible and safety atmosphere in the organization.

Learning

Companies can learn their need to find out what failure is like so that they can learn from their
mistakes in the future. It’s the idea to implement the idea of a “double-loop” and even “triple-
loop” learning.

To bring it short and clear to a point, which include the mentioned facts I want to repeat Larry
Liberty:
“Upset in a learning organization is a information, that helps to know, to learn and at the end to
get wisdom.

Upset in a surviving organization is a problem.”

But, for a “learning organization” to work there must also be a high level of mature adults as a
base in the company. (Larry Liberty)

Models of learning

Valuing different kinds of knowledge, learning styles and creating a learning environment, so
each organizational member can realize his/her full potential, is the point of departure. We can
find a lot of information about this point in the literature of Peter Senge, founder of the center
for Organizational Learning, at MIT’s Sloan school of management. He saw the possibilities of a
Learning organization, which used “system thinking”, already in the year of 1987, as the
primary tenet of a revolutionary management philosophy.

Peter Senge (1990) suggests that there are five disciplines that describe the practices of a
learning organization. These are team learning, shared vision, mental models, personal mastery
and systems thinking.

The concept of team learning is about teams developing skills in how to learn together. Teams
are the fundamental learning units. Unless a team can learn, the organization cannot learn.
Adults learn best from each other, by reflecting on how they are addressing problems,
questioning assumptions, and receiving feedback from their team and from their results. With
team learning, the learning ability of the group becomes greater than the learning ability of any
individual in the group.

Shared vision is about working as a team to answer the question “what do we want to create
together?” It is the future picture of a perfect world from the customers prospective. Building a
shared vision is an ongoing process, where people express ideas about vision, purpose, values,
why their work matters, and how it fits in the larger world. All members of the organization
must understand, share and contribute to the vision for it to become reality. A shared vision
generates commitment, because it reflects people’s own personal vision. It provides the focus
and energy for learning, and expands our ability to create. With a shared vision, people will do
things because they want to, not because they have to.
Mental models

Each individual has an internal image of the world, with deeply ingrained assumptions.
Individuals will act according to the true mental model that they subconsciously hold, not
according to the theories, which they claim to believe. If team members can constructively
challenge each other’s ideas and assumptions they can begin to perceive their mental models,
and to change these to create a shared mental model for the team. Openly, respectfully and
trustingly sharing views and developing knowledge about each other’s and the organizations
assumptions can also help to create new solutions to problems.

Personal Mastery is the process of continually clarifying and deepening an individual’s personal
vision. This is a matter of personal choice for the individual and involves continually assessing
the gap between their current and desired proficiencies in an objective manner and practicing
and refining skills until they are internalized. This develops self-esteem, self-actualization, self-
awareness and creates the confidence to tackle new challenges. (It is also explained in the point
3.2 role of manager/leader).

The fifth discipline - systems thinking

The cornerstone of any learning organization is the fifth discipline – systems thinking. The
purpose is to provide a bigger picture of issues by mapping interconnected parts of common
processes in the organization. It shows us that the essential properties of a system are not
determined by the sum of its parts but by the process of interactions between those parts.
System thinking is the discipline used to implement the disciplines. Without systems thinking,
each of the disciplines would be isolated and therefore not achieve their objective. The fifth
discipline integrates them to from the whole system, a system whose properties exceed the
sum of its parts. However, the converse is also true – system thinking cannot be achieved
without the other core disciplines. The purpose of this is to give a direction, only human being
design their destinies, these are the mechanism to design the direction.

Implementation of a ”Learning Organization”

Any Organization that wants to implement a “learning organization philosophy” requires an

overall strategy with clear and well defined goals. Once these have been established, the tools
needed to facilitate the strategy must be identified.
It is clear that every company has their own interpretation of the “learning organization” idea,
so to produce an action plan that will transform groups into learning organizations might seem
impossible. However, it is possible to identify three generic strategies that highlight possible
routes to developing learning organizations.

Sure, there are risks in implant the Changes like:

- Not all employees want to learn and will resist the change
- The openness created endangers the trust between employees
- Ignorance about learning; that is not following the proper learning cycle
- Too much freedom and information can create misunderstandings
- Information overload, too much to absorb at once “to love knowing and not learning:
shallowness”, Confucius
- The culture of the country may be a disadvantage.

But, on the other hand we have also risks in not changing the model, like:

- Survival of the fittest

- Fail to embrace new ideas and increase productivity and effectiveness
- Become inefficient
- Overtaken by the competitors.