BBA 202 – ORGANIZATION THEORY

TOPIC 7: ORGANIZATIONAL CHANGE AND DEVELOPMENT

Change
Change is to make or become different, give or begin to have a different form.
Change can result from dissatisfaction with old and belief in the new. Dissatisfaction
can arise out of perceived inefficiency of an existing system or the inability of a
system to respond to environmental pressure and technological impact.

Managing Change

To survive and eventually prosper, an organization must monitor its external

environment and align itself with changes that will occur or tend to occur. Though
sometimes change could be rapid that there is no time to adjust before the change
takes place, the organization should plan, implement and manage the change that
seems to be the core factor that separates successful organization from the
unsuccessful.

FORCES OF CHANGE

Forces of change mostly stem from external environment. They are;

EXTERNAL

1. Political Forces

Political instability in a country/nation may cause major changes in organizations.

2. Economical Forces

The uncertainty about future trends in an economy is a major cause of change e.g.
fluctuating rates of interest, declining productivity, uncertainties arising from
inflation have a marked impact on different economies and therefore on
organizations.

3. Technological Forces

Technological advancements particularly in communication and computers have

revolutionized the workplace.

4. Government Forces

Government interventions in the form of regulations also lead to changes in

organizations.

5. Global Competition

Companies may respond to changes in the global arena in order to survive and
grow.
6. Changing in customer needs and preferences

Organizations are forced to adapt and constantly innovate their product offering in
order to meet these changing needs.

Change may also be internally driven and these may stem from;

INTERNAL

1. System Dynamics

An organization is made up of sub-systems. These subsystems within an

organization are in constant and dynamic interaction. The factors that influence the
alignment and the relationships among the various subsystems in the context of an
organization are for example technology, internal politics, dominant groups/cliques
and the formal and informal relationships within it.

2. Inadequacy of Administrative Process

An organization functions through a set of rules, procedures and regulations. With

changing times, these rules and procedures could be at variance with the demands
of the environment. This inadequacy of the administrative processes may induce
change.

3. Individual and Group Expectations

The organization is a confluence of people, each aiming to satisfy their needs and
aspirations. These needs and desires keep changing thereby influencing the
organizational context.

4. Profitability Issues

A significant change that has necessitated a number of organizations to restructure

and reengineer themselves relate to profitability issues such as a loss of revenue,
market share and low productivity.

5. Resource Constraints

Resource refer to money, material, machinery, personnel, information and

technology. A depletion, inadequacy or non-availability of these can be a powerful
force for change in any organization.

TYPES OF CHANGE

Change is to move from present to future, from a known state to a relatively

unknown state. To be able to or deal with the impact of change few organizations
may plan for, experience or undergo change.
1. Reactive Change

Changes that are clearly in response to an event or a series of events.

2. Anticipatory Change

This is change that is carried out in anticipation of an event or a series of events.

Organizations may reinvent themselves in anticipation of future demands.

3. Planned Change

Planned change or developmental change is undertaken to improve upon the

current ways of operating. It is calculated change, initiated to achieve a certain
desirable output/performance and to make the organization more responsive to
internal and external demands.

4. Incremental Change

Changes directed at the micro level units within an organization. These changes are
brought in gradually and help set the stage for large changes.

5. Strategic Change

Change that is addressed to the organization as a whole or to most of its

components. These are generally futuristic in nature. Example change in the
organization’s management style.

6. Operational Change

This is necessitated when an organization needs to improve the quality of its

products or services due to external competition.

7. Transformational Change

Involves an entire or a larger part of an organization. It could be change in size and

complexity, structure and organizational processes.

8. Technological Change

Requires that organizations learn how to manage the innovation process.

Technological capabilities provide new products, change existing ones, and create a
core competence.

MODELS OF ORGANIZATIONAL CHANGE

Change is an inevitable feature in an organizational life in today’s competitive

business world. Change can manifest itself in two forms. i.e. it can either simply
happen to an organization (unintended change) or it can be systematically planned
(planned change).
To increase an organization’s effectiveness, calls for interventions by experts who
may rely on certain models which are;

1 LEWIN’S CHANGE MODEL (KURT-LEWIN 1978)

According to him, change underlines the modification of those forces that keep an
organization stable. The level of behaviour at any point of time is the result of two
sets of forces. One striving to maintain the status quo and the other pushing for
change.

The basis of change, according to Lewin’s model, consists of 3 steps;

i. Unfreezing

This involves reducing the forces, maintaining the status quo. The purpose of
unfreezing is to heighten employee awareness about discrepancies currently
prevailing in their behaviour, the systems and the organizational climate and adjust
them for change.

ii. Moving

This refers to a shift in employee behaviour to a new level resulting in development

of new behaviour, values and attitudes in individuals as a result of changes in
organizational structure and processes. Changes initiated must be perceived as
solutions to problems identified during the unfreezing stage.

iii. Refreezing

This is the stage where the organization stabilizes and achieves a new state of
equilibrium and a preferred behaviour. It is often accomplished through the use of
support mechanisms such as organizational culture, norms, policies and reward
systems aimed at reinforcing the new organizational state. The new system is made
relatively secure against change until the next cycle of change is planned.

2 PLANNING MODEL (BY LIPPTI, WATSON AND WESTLEY 1985)

This model is based on the principle that information must be freely and openly
shared between the organization and the change agents and that this information
should be translated into action through the following process.

i. Scouting

This is the phase where the change agent and the organization jointly explore the
need for and areas requiring change.

ii. Entry
Refers to the development of mutual contract and mutual expectations between the
two parties.

iii. Diagnosis

Refers to specific improvement goals that have been identified.

iv. Planning

Refers to actual and possible reasons that have been identified for resistance to
change in addition to planning for specific improvement goals.

v. Action

This indicates the implementation of steps identified in the planning stage.

vi. Stabilization and evaluation

This is the phase where evaluation is undertaken to determine the extent of success
and need for further action.

vii. Termination

Refers to the phase where a decision is made to either stop the change process or
to make improvements and begin another.
3 ACTION MODEL/ RESEARCH

The model focuses on planned change activity as a cyclical process. Initial research
about the organization is undertaken which then provides the requisite information
to guide further action. The results of the action are assessed to provide further
information that will guide further action.

The steps involved are;

a. Problem identification

Problems are picked out with the help of an expert.

b. Consultation with a Behavioural scientist

After sensing the problem and realizing that it can be dealt with, this stage then
helps gain further insight into the problem.

c. Data/information gathering
Interviews can be employed or questionnaires distributed to gain performance data
or information.

d. Feedback

Data or information is gathered to determine strengths and weaknesses.

e. Joint action planning

The specific action to be taken depend on the organization’s structural,

technological and work environment problem to be solved, and time and cost
associated with the desired organizational development intervention.

f. Action

This involves the implementation of change e.g. installing new methods and
procedures, reorganizing structures and work designs or reinforcing new behaviour.

g. Data gathering after action

As this model is cyclical in nature, new data is again gathered after action has been
taken to measure and determine the effects of the action. Based on the feedback,
the situation may be re-diagnosed and new action taken.

4 INTEGRATIVE MODEL

The basis of this model is on the fact that an organization exists in different states
and so can change from one state to another. Those states can be seen as
temporary. Bullock and Button (1985) developed an integrative model of planned
change describing the organizational state and change process. An integrative
model of change consists of;

1. Exploration Phase

The organization decides to plan for a specific change or commit resources for it.
The organization members become aware of the need for change and initiate the
change process. Each member is expected to have a responsibility and the
questions asked include, "What does each party expect on the change?", "How
much time should be invested?", and "What are the rules of carrying out the
planned change?"

2. Planning Phase
Planning commences once the problem has been understood and the resources for
organizational development are committed. The change process is undertaken
following diagnosis where an organization discovers the source of problems by
collecting pertinent information about organizational functioning and then analyzing
it.

3. Action Phase

Change is implemented and the organization is transmitted from the current state
to a desired state. Change activities are also monitored and evaluated periodically.

4. Integration Phase

Involves making the change part of the organizational functioning after having
successful implementation and stabilization. The new behavior is reinforced through
feedback, incentives and rewards.

STRATEGIC LEVERAGES TO CHANGE DEFINITION

This are modes or means that would assist an organization move from the present
to the desired state.

The right kind of change helps an organization to maintain its viability in the
changing environment whereas the wrong kind of change can destroy an
organization.

The strategic leverage to change include;

1. Advancement in Information Technology

The technological advancement in Information Technology for example the use of

the internet and other computer related technologies has made it possible for firms
to change faster. Information is not restricted and is freely accessible.
2. Structural Change

Many organizations are moving towards horizontal structures. Some large

organizations are breaking up needless hierarchies and are adapting flatter and
more lateral structures.

3. Changing Roles of Management

The modern trend is towards decentralizing authority to the points of action. Day to
day organizational problems are handled by frontline managers who are at the
interface of customers, suppliers etc, rather than by managers of higher levels.

4. Increasing Customer Focus

Organizations are increasingly becoming customer driven. They are re-organizing

their structure and redefining their product/services to meet the changing customer
needs, preferences and demand.

5. Boundary Reduction

The internal boundaries of bureaucracy within an organization have been seen as a

hindrance to employee interaction. The idea of internal customers has forced
organizations to break down the walls that separate departments and different
functional areas.

THE PROCESS OF CHANGE IN ORGANIZATION

Once an organization has made the decision to change, careful planning and
analysis must take place. Part of the planning involves the recognition that
individuals, when faced with change may resist. Some individuals are more open to
change than others. The process of change may be characterized by resistance.

Resistance to Change

People resist change based on a number of reasons. Some of the major reasons for
resisting change are;

a. Fear of the unknown

Change often brings with it substantial uncertainty. i.e. Employees who have not
adopted to the use of technology may want to resist a change process simply
because it introduces ambiguity into what was once a comfortable situation for
them.

b. Fear of loss
Some employees may fear losing their jobs or status because of change. Change
may also diminish the positive qualities the individual enjoys in the job e.g.
autonomy.

c. Fear of failure

Some employees may resist change simply because it may expose their
inadequacies.

d. Disruption of interpersonal relationships

Employees may resist change that threatens to limit meaningful interpersonal

relationships on the job. i.e. Employees may fear that some of their colleagues may
have to be shifted from their jobs thereby breaking personal bonds.

e. Organizational Politics

Change may also shift an existing balance of power in an organization. Individuals

or groups who hold power under the current arrangement may feel threatened with
losing these political advantages and therefore resist change.

MANAGING RESISTANCE TO CHANGE

The key strategies for managing resistance to change are;

1. Communication

Communication about impending change is essential if employees are to adjust

effectively. The details of the changes should be provided but equally important is
the rationale behind the change. Those who will be affected by the proposed change
should be consulted. Information provided to them should be both accurate and
timely.

2. Participation

There is a substantial research support underscoring the importance of participation

in the change process. Participation helps employees become involved in the
change and establish a feeling of ownership in the process. It also creates a sense
of commitment to the change process.

3. Providing empathy and support

To employees who have trouble dealing with the change, active listening is an
excellent tool for identifying reasons behind resistance and for uncovering fears. An
expression of concern about the change can provide important feedback that
managers can use to improve the change process.

4. Resources
When a change process is under financed, it runs the risk of failure. Support may
also include human resource, material and time.

BEHAVIORAL REACTION TO CHANGE

In spite of attempts to minimize the resistance to change in an organization, some

reactions to change are inevitable.

People show four basic identifiable reactions to change;

a. Disengagement

It is psychological withdrawal from change. The employee may appear to lose

initiative and interest in the job.

b. Dis-identification

Is where individuals feel that their identity has been threatened by change. Many a
times, they cling to a past procedure because they had a sense of mastery over it
and it gave them a sense of security.

c. Disenchantment.

It is usually expressed as negativity or anger. Disenchanted employees realize the

past is gone and they are mad about it.

d. Disorientation

Occurs where employees are lost and confused and often they are unsure of their
feelings, they waste energy trying to figure out what to do instead of how to do
things. Disoriented individuals ask a lot of questions and become very detail
oriented.