MANAGING ORGANIZATIONAL CHANGE

Organizational change occurs when a company makes a transition from its current state to some desired future state.
Managing organizational change is the process of planning and implementing change in organizations in such a way as to
minimize employee resistance and cost to the organization while simultaneously maximizing the effectiveness of the change
effort.
Today's business environment requires companies to undergo changes almost constantly if they are to remain
competitive. Factors such as globalization of markets and rapidly evolving technology force businesses to respond in order to
survive. Such changes may be relatively minor—as in the case of installing a new software program—or quite major—as in the
case of refocusing an overall marketing strategy, fighting off a hostile takeover, or transforming a company in the face of
persistent foreign competition.
Organizational change initiatives often arise out of problems faced by a company. In some cases, however, companies
change under the impetus of enlightened leaders who first recognize and then exploit new potentials dormant in the
organization or its circumstances. Some observers, more soberly, label this a "performance gap" which able management is
inspired to close.
But organizational change is also resisted and—in the opinion of its promoters—fails. The failure may be due to the
manner in which change has been visualized, announced, and implemented or because internal resistance to it builds.
Employees, in other words, sabotage those changes they view as antithetical to their own interests.

AREAS OF ORGANIZATIONAL CHANGE

Students of organizational change identify areas of change in order to analyze them. Daniel Wischnevsky and Fariborz
Daman, for example, writing in Journal of Managerial Issues, single out strategy, structure, and organizational power. Others
add technology or the corporate population ("people"). All of these areas, of course, are related; companies often must
institute changes in all areas when they attempt to make changes in one. The first area, strategic change, can take place on a
large scale—for example, when a company shifts its resources to enter a new line of business—or on a small scale—for
example, when a company makes productivity improvements in order to reduce costs. There are three basic stages for a
company making a strategic change:
1) realizing that the current strategy is no longer suitable for the company's situation;
2) establishing a vision for the company's future direction; and
3) implementing the change and setting up new systems to support it.
Technological changes are often introduced as components of larger strategic changes, although they sometimes take
place on their own. An important aspect of changing technology is determining who in the organization will be threatened by
the change. To be successful, a technology change must be incorporated into the company's overall systems, and a
management structure must be created to support it. Structural changes can also occur due to strategic changes—as in the
case where a company decides to acquire another business and must integrate it—as well as due to operational changes or
changes in managerial style. For example, a company that wished to implement more participative decision making might
need to change its hierarchical structure.
People changes can become necessary due to other changes, or sometimes companies simply seek to change
workers' attitudes and behaviors in order to increase their effectiveness or to stimulate individual or team creative-ness.
Almost always people changes are the most difficult and important part of the overall change process. The science of
organization development was created to deal with changing people on the job through techniques such as education and
training, team building, and career planning.

RESISTANCE TO CHANGE
A manager trying to implement a change, no matter how small, should expect to encounter some resistance from
within the organization. Resistance to change is normal; people cling to habits and to the status quo. To be sure, managerial
actions can minimize or arouse resistance. People must be motivated to shake off old habits. This must take place in stages
rather than abruptly so that "managed change" takes on the character of "natural change." In addition to normal inertia,
organization change introduces anxieties about the future. If the future after the change comes to be perceived positively,
resistance will be less.
Education and communication are therefore key ingredients in minimizing negative reactions. Employees can be
informed about both the nature of the change and the logic behind it before it takes place through reports, memos, group
presentations, or individual discussions. Another important component of overcoming resistance is inviting employee
participation and involvement in both the design and implementation phases of the change effort. Organized forms of
facilitation and support can be deployed. Managers can ensure that employees will have the resources to bring the change
about; managers can make themselves available to provide explanations and to minimize stress arising in many scores of
situations.
 Some companies manage to overcome resistance to change through negotiation and rewards. They offer employees
concrete incentives to ensure their cooperation. Other companies resort to manipulation, or using subtle tactics such as giving
a resistance leader a prominent position in the change effort. A final option is coercion, which involves punishing people who
resist or using force to ensure their cooperation. Although this method can be useful when speed is of the essence, it can have
lingering negative effects on the company. Of course, no method is appropriate to every situation, and a number of different
methods may be combined as needed.

TECHNIQUES FOR MANAGING CHANGE EFFECTIVELY

Managing change effectively requires moving the organization from its current state to a future desired state at
minimal cost to the organization. Key steps in that process are:
Understanding the current state of the organization. This involves identifying problems the company faces, assigning
a level of importance to each one, and assessing the kinds of changes needed to solve the problems.
Competently envisioning and laying out the desired future state of the organization. This involves picturing the ideal
situation for the company after the change is implemented, conveying this vision clearly to everyone involved in the change
effort, and designing a means of transition to the new state. An important part of the transition should be maintaining some
sort of stability; some things—such as the company's overall mission or key personnel—should remain constant in the midst
of turmoil to help reduce people's anxiety.
Implementing the change in an orderly manner. This involves managing the transition effectively. It might be helpful
to draw up a plan, allocate resources, and appoint a key person to take charge of the change process. The company's leaders
should try to generate enthusiasm for the change by sharing their goals and vision and acting as role models. In some cases, it
may be useful to try for small victories first in order to pave the way for later successes.
Change is natural, of course. Proactive management of change to optimize future adaptability is invariably a more
creative way of dealing with the dynamisms of industrial transformation than letting them happen willy-nilly. That process will
succeed better with the help of the the company's human resources than without.

Organizational change is both the process in which an organization changes its structure, strategies, operational methods,
technologies, or organizational culture to affect change within the organization and the effects of these changes on the
organization. Organizational change can be continuous or occur for distinct periods of time.

Organizational change is about reviewing and modifying management structures and business processes. Small businesses
must adapt to survive against bigger competitors and grow. However, success should not lead to complacency. To stay a step
ahead of the competition, companies need to look for ways to do things more efficiently and cost effectively. There is no need
to fear change. Instead, small businesses should embrace change as a way to lay the foundations for enduring success.

Drivers
A company's change drivers include the competitive environment, new technologies, consumer demand, economic
conditions and government policy actions. Information technologies have changed how businesses operate and interact with
one another. New business models, such as outsourcing and virtual collaboration, would not be possible without high-speed
communications and the Internet. Government regulations also force businesses to adapt, as do changing consumer
preferences. Recessions usually lead to layoffs, which may require restructuring, and mergers and acquisitions lead to changes
in organizational culture.
Significance
Companies that refuse to embrace change may disappear. However, change is difficult because it involves modifying
people's behavior. Resistance may come from employees who are generally skeptical of change initiatives, especially if they
have lived through botched implementations in the past. Successful organizational change requires top management
leadership and a clear explanation of how the contemplated changes can help employees do their jobs more efficiently.

Implementation
Organizational change typically consists of three stages: establishing the need, implementation and monitoring. To
establish a need for change, senior management could articulate where the company wants to be in five to 10 years and what
it needs to do to get there. For example, a saturated local market may force a company to consider international expansion.
The second stage involves changing structures and processes, such as reducing the number of management layers, combining
business units, reassigning management, reducing employee headcount and giving division managers more decision-making
flexibility. The final stage involves monitoring the results from the organizational changes and making appropriate
adjustments.
Issues
Change efforts fail for different reasons, including lack of focus and inadequate communication. Change initiatives
that try to do too much tend to fail. It is better to succeed with small change projects, such as improving the response time in
customer service centers, and then building on this success to implement complicated changes. Leadership should talk to
employees in one-on-one and group settings to answer questions, exchange ideas and generally alleviate concerns.

REASONS FOR RESISTANCE TO CHANGE

1. Misunderstanding about the need for change/when the reason for the change is unclear — If staff do not
understand the need for change you can expect resistance. Especially from those who strongly believe the
current way of doing things works well…and has done for twenty years!
2. Fear of the unknown — One of the most common reasons for resistance is fear of the unknown. People will
only take active steps toward the unknown if they genuinely believe – and perhaps more importantly, feel –
that the risks of standing still are greater than those of moving forward in a new direction
3. Lack of competence — This is a fear people will seldom admit. But sometimes, change in organizations
necessitates changes in skills, and some people will feel that they won’t be able to make the transition very
well
4. Connected to the old way — If you ask people in an organization to do things in a new way, as rational as that
new way may seem to you, you will be setting yourself up against all that hard wiring, all those emotional
connections to those who taught your audience the old way – and that’s not trivial
5. Low trust — When people don’t believe that they, or the company, can competently manage the change there
is likely to be resistance
6. Temporary fad — When people belief that the change initiative is a temporary fad
7. Not being consulted — If people are allowed to be part of the change there is less resistance. People like to
know what’s going on, especially if their jobs may be affected. Informed employeestend to have higher levels
of job satisfaction than uninformed employees
8. Poor communication — It’s self evident isn’t it? When it comes to change management there’s no such thing as
too much communication
9. Changes to routines — When we talk about comfort zones we’re really referring to routines. We love them.
They make us secure. So there’s bound to be resistance whenever change requires us to do things differently
10. Exhaustion/Saturation — Don’t mistake compliance for acceptance. People who are overwhelmed by
continuous change resign themselves to it and go along with the flow. You have them in body, but you do not
have their hearts. Motivation is low
11. Change in the status quo — Resistance can also stem from perceptions of the change that people hold. For
example, people who feel they’ll be worse off at the end of the change are unlikely to give it their full support.
Similarly, if people believe the change favours another group/department/person there may be (unspoken)
anger and resentment
12. Benefits and rewards — When the benefits and rewards for making the change are not seen as adequate for
the trouble involved

Expecting resistance to change and planning for it from the start of your change management progamme will allow you to
effectively manage objections.
Understanding the most common reasons people object to change gives you the opportunity to plan your change strategy to
address these factors.
It’s not possible to be aware of all sources of resistance to change. Expecting that there will be resistance to change and being
prepared to manage it is a proactive step. Recognizing behaviors that indicate possible resistance will raise awareness of the
need to address the concerns.
At the end of the day all sources of resistance to change need to be acknowledged and people’s emotions validated.
It’s far better to anticipate objections than to spend your time putting out fires, and knowing how to overcome resistance to
change is a vital part of any change management plan.

(1) Loss of status or job security in the organization.

It is not our nature to make changes that we view as harmful to our current situation. In an organizational setting, this means
employees, peers, and managers will resist administrative and technological changes that result in their role being eliminated
or reduced. From their perspective, your change is harmful to their place in the organization!
Forcing a change on others has its place. Over time, however, when this is the only approach that you use to make change,
you’ll find that your change results suffer. If you overuse this approach, you will harm your effectiveness over the long term as
others will find direct and indirect ways to resist you. Without a thoughtful change strategy to address resistance to change,
you will trigger strong resistance and organizational turnover.

(2) Non-reinforcing reward systems.

There is a common business saying that managers get what they reward. Organizational stakeholders will resist change when
they do not see any rewards.

When working with managers, I will ask them, Where is the reward to employees for implementing your change?

Without a reward, there is no motivation for your team to support your change over the long term. This often means that
organizational reward systems must be altered in some way to support the change that you want to implement. The change
does not have to always be major or costly. Intrinsic rewards are very powerful motivators in the workplace that are non-
monetary.

(3) Surprise and fear of the unknown.

The less your team members know about the change and its impact on them, the more fearful they will become. Leading
change also requires not springing surprises on the organization! Your organization needs to be prepared for the change.

In the absence of continuing two-way communication with you, grapevine rumors fill the void and sabotage the change effort.
In fact, ongoing communication is one of your most critical tools for handling resistance to change. But, it’s not just telling!
The neglected part of two-way communication — listening — is just as powerful.

(4) Peer pressure.

Whether we are introverted or extroverted, we are still social creatures. Organizational stakeholders will resist change to
protect the interests of a group.

You might see this among some of your team members who feel compelled to resist your change to protect their co-workers.
If you’re a senior executive or middle manager, your managers who report to you may will resist your change effort to protect
their work groups.

As the psychologist Abraham Maslow discussed, the need to belong to a group is a powerful need in the workplace. If your
change effort threatens these workplace social bonds, some of your team members may resist your change effort.

(5) Climate of mistrust.

Meaningful organizational change does not occur in a climate of mistrust. Trust, involves faith in the intentions and behavior
of others. Mutual mistrust will doom an otherwise well-conceived change initiative to failure.

If you are trying to implement your change effort in an environment where most of the people working with you mistrust each
other, you’ll have limited success. You’ll need to spend some time rebuilding trust if you want better results from your change
effort.

Trust is a fragile asset that is easily harmed.

(6) Organizational politics.

Some resist change as a political strategy to “prove” that the decision is wrong. They may also resist to show that the person
leading the change is not up to the task. Others may resist because they will lose some power in the organizational. In these
instances, these individuals are committed to seeing the change effort fail.

Sometimes when I work with managers they become frustrated with the political resistance that they encounter from others.
Political obstacles are frustrating when you are trying to implement needed change. My advice to you is to acknowledge what
you are feeling and then take positive steps to counter the organizational resistance you are facing.

Politics in organizations are a fact of life!

(7) Fear of failure.
Sweeping changes on the job can cause your team members to doubt their capabilities to perform their duties. What is known
is comfortable! Your team members may be resisting these changes because they are worried that they cannot adapt to new
work requirements.

Fear is a powerful motivator that can harden people’s intent to resist your efforts to implement change. If you want your
change effort to be successful, you’ll need to help your team members move beyond these fears.

(8) Lack of tact or poor timing.

Sometimes it is not what a leader does, but it is how s/he does it that creates resistance to change! Undue resistance can
occur because changes are introduced in an insensitive manner or at an awkward time.

In other words, people may agree with the change that you want to implement but they may not agree with how you are
going about making the change.

For any significant organizational change effort to be effective, you’ll need a thoughtful strategy and a thoughtful
implementation approach to address these barriers.

TYPES OF RESISTANCE TO CHANGE

Logical and Rational Resistance

These resistances are the outcomes of disagreement with rational facts, rational reasoning, logic and science. These arise from
the actual time and effort required to adjust to change including new job duties that must be learned.
These are too costly which might be borne by the common employees and managers. Even though change may be beneficial
for the employees in the long run. But the short run costs for change must be paid first. Logical resistance to change include
the following:
1. Time required to adjust
2. Extra efforts to relearn
3. Possibility of less desirable condition
4. Economic costs of change
5. Questionable technical feasibility of change

Psychological Resistance
These types of resistances are typically based on emotion and attitude. It is internally logical from the perspective of the
employee attitude and feelings about change. Employees may fear the unknown, mistrust management, or feel that their
security and ego needs are threatened.
Even though management may believe that there is no justification for these feelings they are very rational to employees, and
as such mangers must deal with them. Psychological or emotional resistance may take place in the following manner:
1. Fear of unknown
2. Low tolerance of change
3. Dislike of management/change agent
4. Lack of trust in other
5. Need for security
6. Desire for status quo

Sociological Resistance
Sociological resistance may sometimes be logical. This happens when it is seen as a product of challenge to group interests,
norms, and values. Since social values are powerful force in the environment, they must be carefully considered.
On a small group level, there is work friendship and relationships that may disrupt buy change. Then resistance occurs.
However, sociological resistance includes the following:
1. Political coalitions
2. Opposing group values
3. Parochial/narrow outlook
4. Vested interest
5. Desire to retain existing friendships
Kurt Lewin's Change Model
Kurt Lewin developed a change model involving three steps: unfreezing, changing and refreezing. The model represents a
very simple and practical model for understanding the change process. For Lewin, the process of change entails creating the
perception that a change is needed, then moving toward the new, desired level of behavior and finally, solidifying that new
behavior as the norm. The model is still widely used and serves as the basis for many modern change models.

Unfreezing
Before you can cook a meal that has been frozen, you need to defrost or thaw it out. The same can be said of change. Before a
change can be implemented, it must go through the initial step of unfreezing. Because many people will naturally resist
change, the goal during the unfreezing stage is to create an awareness of how the status quo, or current level of acceptability,
is hindering the organization in some way. Old behaviors, ways of thinking, processes, people and organizational structures
must all be carefully examined to show employees how necessary a change is for the organization to create or maintain a
competitive advantage in the marketplace. Communication is especially important during the unfreezing stage so that
employees can become informed about the imminent change, the logic behind it and how it will benefit each employee. The
idea is that the more we know about a change and the more we feel it is necessary and urgent, the more motivated we are to
accept the change.

Changing
Now that the people are 'unfrozen' they can begin to move. Lewin recognized that change is a process where the organization
must transition or move into this new state of being. This changing step, also referred to as 'transitioning' or 'moving,' is
marked by the implementation of the change. This is when the change becomes real. It's also, consequently, the time that
most people struggle with the new reality. It is a time marked with uncertainty and fear, making it the hardest step to
overcome. During the changing step people begin to learn the new behaviors, processes and ways of thinking. The more
prepared they are for this step, the easier it is to complete. For this reason, education, communication, support and time are
critical for employees as they become familiar with the change. Again, change is a process that must be carefully planned and
executed. Throughout this process, employees should be reminded of the reasons for the change and how it will benefit them
once fully implemented.

Refreezing
Lewin called the final stage of his change model freezing, but many refer to it as refreezing to symbolize the act of reinforcing,
stabilizing and solidifying the new state after the change. The changes made to organizational processes, goals, structure,
offerings or people are accepted and refrozen as the new norm or status quo. Lewin found the refreezing step to be especially
important to ensure that people do not revert back to their old ways of thinking or doing prior to the implementation of the
change. Efforts must be made to guarantee the change is not lost; rather, it needs to be cemented into the organization's
culture and maintained as the acceptable way of thinking or doing. Positive rewards and acknowledgment of individualized
efforts are often used to reinforce the new state because it is believed that positively reinforced behavior will likely be
repeated.
Some argue that the refreezing step is outdated in contemporary business due to the continuous need for change. They find it
unnecessary to spend time freezing a new state when chances are it will need to be reevaluated and possibly changed again in
the immediate future. However - as I previously mentioned - without the refreezing step, there is a high chance that people
will revert back to the old way of doing things. Taking one step forward and two steps back can be a common theme when
organizations overlook the refreezing step in anticipation of future change.

The Transtheoretical Model (also called the Stages of Change Model), developed by Prochaska and DiClemente in the late
1970s, evolved through studies examining the experiences of smokers who quit on their own with those requiring further
treatment to understand why some people were capable of quitting on their own. It was determined that people quit smoking
if they were ready to do so. Thus, the Transtheoretical Model (TTM) focuses on the decision-making of the individual and is a
model of intentional change. The TTM operates on the assumption that people do not change behaviors quickly and
decisively. Rather, change in behavior, especially habitual behavior, occurs continuously through a cyclical process. The TTM is
not a theory but a model; different behavioral theories and constructs can be applied to various stages of the model where
they may be most effective.

The TTM posits that individuals move through six stages of change: precontemplation, contemplation, preparation, action,
maintenance, and termination. Termination was not part of the original model and is less often used in application of stages of
change for health-related behaviors. For each stage of change, different intervention strategies are most effective at moving
the person to the next stage of change and subsequently through the model to maintenance, the ideal stage of behavior.

1. Precontemplation - In this stage, people do not intend to take action in the foreseeable future (defined as within the
next 6 months). People are often unaware that their behavior is problematic or produces negative consequences.
People in this stage often underestimate the pros of changing behavior and place too much emphasis on the cons of
changing behavior.
2. Contemplation - In this stage, people are intending to start the healthy behavior in the foreseeable future (defined as
within the next 6 months). People recognize that their behavior may be problematic, and a more thoughtful and
practical consideration of the pros and cons of changing the behavior takes place, with equal emphasis placed on
both. Even with this recognition, people may still feel ambivalent toward changing their behavior.
3. Preparation (Determination) - In this stage, people are ready to take action within the next 30 days. People start to
take small steps toward the behavior change, and they believe changing their behavior can lead to a healthier life.
4. Action - In this stage, people have recently changed their behavior (defined as within the last 6 months) and intend to
keep moving forward with that behavior change. People may exhibit this by modifying their problem behavior or
acquiring new healthy behaviors.
5. Maintenance - In this stage, people have sustained their behavior change for a while (defined as more than 6 months)
and intend to maintain the behavior change going forward. People in this stage work to prevent relapse to earlier
stages.
6. Termination - In this stage, people have no desire to return to their unhealthy behaviors and are sure they will not
relapse. Since this is rarely reached, and people tend to stay in the maintenance stage, this stage is often not
considered in health promotion programs.

To progress through the stages of change, people apply cognitive, affective, and evaluative processes. Ten processes of change
have been identified with some processes being more relevant to a specific stage of change than other processes. These
processes result in strategies that help people make and maintain change.

1. Consciousness Raising - Increasing awareness about the healthy behavior.

2. Dramatic Relief - Emotional arousal about the health behavior, whether positive or negative arousal.
3. Self-Reevaluation - Self reappraisal to realize the healthy behavior is part of who they want to be.
4. Environmental Reevaluation - Social reappraisal to realize how their unhealthy behavior affects others.
5. Social Liberation - Environmental opportunities that exist to show society is supportive of the healthy behavior.
6. Self-Liberation - Commitment to change behavior based on the belief that achievement of the healthy behavior is
possible.
7. Helping Relationships - Finding supportive relationships that encourage the desired change.
8. Counter-Conditioning - Substituting healthy behaviors and thoughts for unhealthy behaviors and thoughts.
9. Reinforcement Management - Rewarding the positive behavior and reducing the rewards that come from negative
behavior.
10. Stimulus Control - Re-engineering the environment to have reminders and cues that support and encourage the
healthy behavior and remove those that encourage the unhealthy behavior.