UU-MAN-1110-MW Management

Week 5 Topic Overview

Change Management

Learning Outcomes

At the end of this week, you should be able to:

1. Understand the concept of Change Management.

2. Recognize the various forces comprising the external environment.

3. Understand the forces of change and explain the issue of Organizational

Development.

4. Recognize the causes of resistance to change.

5. Describe the ways organizations could manage change effectively.

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Table of Contents
1. Introduction ...................................................................................................................... 3

1.1 What is Organizational Change? .................................................................................. 3

1.2 Organizational Development........................................................................................ 4

1.2.1 Organizational Change and Development ............................................................ 4

1.2.2 Elements Internal to the Environment ................................................................... 5

1.2.3 What are External Environment Factors ............................................................... 7

1.3 Organizational Development Process ........................................................................ 10

1.3.1 Objectives of organizational development .......................................................... 11

1.3.2 Organization Development Principles/Values .................................................... 12

2. Managing Resistance to Change ...................................................................................... 14

2.1 Why Do People Resist Change? ................................................................................ 14

2.2 Techniques for Reducing Resistance to Change ........................................................ 15

References ............................................................................................................................ 17

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1. Introduction

1.1 What is Organizational Change?

Organizational change refers to the adoption of a new idea or behavior within a company. This
process involves modifying various aspects of the organization, including people, structure, and
technology, to transition from the current state to a desired future state. As the adage goes, change
is the only constant thing, and in today's fast-paced and dynamic business environment, the
imperative for change is more pressing than ever.

Most managers will have to make changes in their workplace at some point. These changes are
classified as organizational change, which includes any change in people, structure, or
technology. Organizational changes frequently require someone to act as a catalyst and manage
the change process—that is, act as a change agent.

Change agents can be managers within the organization, but they can also be nonmanagers, such
as HR change specialists or outside consultants. Organizations frequently recruit outside
consultants to provide advice and assistance when making substantial changes. They have an
impartial perspective that insiders may lack because they are from the outside.

However, outside consultants have little knowledge of the organization's history, culture,
operational processes, and employees. They are also more inclined to launch extreme change
than insiders because they do not have to live with the consequences of the change after it is
enacted. Internal managers, on the other hand, maybe more deliberate, but maybe overly
cautious, because they must live with the implications of their decisions.

Organizational change is essential for businesses to adapt to new market conditions, remain
competitive, and achieve sustained success. The current reality is such that organizations must be
willing and able to change, or risk becoming obsolete in the face of evolving customer demands
and technological advancements. In this context, organizational change is not just an option, but a
necessity. Overall, organizational change is a critical process that involves modifying different
aspects of an organization to achieve a desired future state. As highlighted by Robbins (2007), in
today's constantly shifting business landscape, the ability to adapt and change is imperative for
businesses to remain relevant and competitive.
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1.2 Organizational Development

The method of increasing organizational efficiency through deliberate change is known as

organizational development (OD). The organization's performance and behavioral attitude will
alter as part of a long-term plan. The organization's overall working efficiency is its primary goal.
The OD paradigm values involvement, collaboration, and organizational and individual
development processes (Robbins, 2007).

1.2.1 Organizational Change and Development

Organizational change and development are linked because organizational change is always
permanent and, on the other hand, organizational development is a challenge to manage the
organizational changes and prosper moving forward (Robbins, 2007).

The following are the forces of change:

Internal forces External forces

(Source: Author’s Own, 2023)

Internal forces refer to the factors that are within an organization or system that can lead to change.
These forces can include changes in leadership, organizational culture, employee turnover,
technological advancements, and shifts in strategy or goals.

External forces, on the other hand, are factors that are outside of the organization or system but
can still impact it. These forces can include changes in the market, economic trends, regulatory
requirements, shifts in customer needs and preferences, and advances in technology.

Internal and external forces can be drivers of change, and organizations need to be aware of both
to adapt and remain competitive. Understanding the impact of these forces on an organization
is critical in order to make informed decisions and take appropriate actions.

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1.2.2 Elements Internal to the Environment

Human resources

Capital resources

Efficiency of operations

Internal forces of change Structure of an organization

Infrastructure

(Source: Author’s Own, 2023)

No matter how tangible or intangible they may be, internal variables include everything that is
controlled by and located within the business. The company's strengths and weaknesses are
categorized from these variables after they have been determined. A factor is regarded as an asset
if it benefits the business. A component is a weakness, however, if it hinders the company's growth.
Several factors must be taken into account within the business (Robbins, 2007).

Human resources

Human resources can be a company's most valuable asset in the contemporary global economy,
where ideas and digital skills—rather than physical resources—are growing where economic value
is realized. Generally speaking, based on their level of practical skills, attitudes toward work,
performance, and other factors, workers can either be a company's strength or weakness. For
instance, if a company has talented and driven employees, they will undoubtedly be its greatest
advantage (Robbins, 2007).

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Capital resources

Financial capital, in a broad sense, refers to the money a company needs to expand and survive.
To create an output, the CEO uses financial resources to engage in both tangible and intangible
resources, such as marketing and employee development. Tangible investments include factories,
machines, tools, and other production equipment (Robbins, 2007).

Efficiency of operations

The idea of operational efficiency includes the practice of enhancing all of your processes, which
are all the actions taken by your business that result in your finished good or service. A
businessman needs to thoroughly understand his organization's processes and follow them to
determine whether they are being carried out properly or not because operational efficiency
directly influences the company's success in the marketplace (Robbins, 2007).

Structure of an organization

The owners must meticulously set up a business management system for the organization to
function properly to have a suitable organizational structure. What matters most is how well the
structure is used by the business, whether it is a centralized or decentralized system. The heads of
departments must ensure that all customers are informed broadly and effectively. To guarantee the

advantages of both employees and the company, appropriate rules and regulations are being
implemented (Robbins, 2007).

Infrastructure

In the context of organizational management, ensuring that the infrastructure is adequate for the
company's requirements is crucial for achieving optimal performance. Once an organization has a
team of well-trained and motivated employees and an efficient organizational and operational
system, attention must be directed towards establishing a functional infrastructure that can meet
the demands of the organization. Modern, high-quality facilities, reliable access to electricity,
internet connectivity, and other essential resources are vital for enhancing the organization's
operational efficiency.

A robust infrastructure creates more opportunities for an organization to succeed and reach its
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goals. A modern and well-equipped workplace enables employees to perform their tasks
efficiently, thereby enhancing productivity and minimizing operational delays. In contrast, a
suboptimal infrastructure can hinder the organization's performance, leading to decreased
productivity, operational inefficiencies, and reduced competitiveness in the market.

Therefore, it is imperative for organizations to prioritize investing in the infrastructure to enable

them to attain optimal performance levels. By doing so, organizations can ensure that they have
the necessary resources to meet the demands of their customers and remain competitive in the
ever-changing business environment. (Robbins, 2007).

1.2.3 What are External Environment Factors

A company's operations may be impacted by variables in the external environment, which are
components that are external to the company's internal environment. The outside forces may either
make your current activities more difficult or be beneficial to your company. Business managers
must monitor a variety of external environmental variables to pinpoint problems, find solutions,
and implement necessary adjustments. These are the outside environmental variables.

Political: The degree to which a government may affect the economy and, consequently,
businesses in a particular industry. Included in this are governmental decisions, political stability,
and commerce and tax laws (Robbins, 2007).

Economic: How changes in the economy impact a company's supply and demand. This
encompasses shifts in interest and inflation rates as well as economic expansion or contraction.

Social: New trends and patterns in population analytics, demographics, and consumer behavior
may point to changes in consumer requirements and preferences, as well as the need for workplace
change (Robbins, 2007).

Technological: The evolution of a market or sector as a result of innovation and development.

This covers automation, rates of technological awareness and adoption, and novel services or
goods (Robbins, 2007).

Environmental: The ecological and environmental factors that have an impact on a business's
operations or customer desire. Access to renewable resources, changes in the weather or climate,
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and business responsibility programs are all included (Robbins, 2007).

Legal: The current rules and regulations in the nations or regions where a company conducts
business. This covers labor rules, consumer protection laws, and health and safety regulations
(Robbins, 2007).

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THE CALM WATERS METAPHOR. At one time, the calm waters metaphor was fairly descriptive of
the situation that managers faced. It’s best discussed using Kurt Lewin’s three-step change process.
According to Lewin, successful change can be planned and requires unfreezing the status quo, changing
to a new state, and refreezing to make the change permanent. The status quo is considered equilibrium.
To move away from this equilibrium, unfreezing is necessary. Unfreezing can be thought of as preparing
for the needed change. It can be done by increasing the driving forces, which are forces pushing for
change; by decreasing the restraining forces, which are forces that resist change; or by combining the two
approaches. Once unfreezing is done, the change itself can be implemented. However, merely
introducing change doesn’t ensure that it will take hold. The new situation needs to be refrozen so that it
can be sustained over time. Unless this last step is done, there’s a strong chance that employees will
revert back to the old equilibrium state—that is, the old ways of doing things. The objective of
refreezing, then, is to stabilize the new situation by reinforcing the new behaviors. Lewin’s three-step
process treats change as a move away from the organization’s current equilibrium state. It’s a calm
waters scenario where an occasional disruption (a “storm”) means changing to deal with the disruption.
Once the disruption has been dealt with, however, things can continue on under the new changed
situation. This type of environment isn’t what most managers face today (Robbins & Coulter, 2012).

The change model attributed to Kurt Lewin is a seminal framework that provides guidance for the
effective implementation of change in organizational settings. Upon acceptance and recognition of the
need for change and its objectives, management is tasked with initiating a change process that results in
a sustained and lasting shift. Lewin's model prescribes three stages that enable a more substantial
transformation: unfreezing, movement (changing), and refreezing.
• Unfreezing

• Movement(changing), and

• Refreezing.

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Moving to new
Refreezing
Unfreezing the condition
situation

(Source: Author’s Own, 2023)

Unfreezing the situation. Everything necessary to get someone ready and willing to change is
included in the first stage of the procedure. Unfreezing describes this condition, which occurs when
someone isn't yet dedicated or certain. It might, for instance, entail learning about an issue or
getting the go-ahead to take action (Robbins, 2007).

Moving to new conditions. People change during the second period. This suggests moving or
changing, and those things are rarely simple. People encounter a variety of difficulties, from
discomfort to apprehension about making adjustments. Additionally, leaving behind one's previous habits
may make employees feel as though they are losing something significant, which would result in
resistance during this time (Robbins, 2007).

Refreezing. People can eventually refreeze into a new state in the final phase. When they reach this
point, they have accepted their changes and believe that the effort put into creating them was
worthwhile. Additionally, they might feel more at ease than ever with how their lives are currently
unfolding. The change management method can be deemed successful if all three phases are
successfully finished (Robbins, 2007).

1.3 Organizational Development Process

Development is a continuous process and it accommodates in itself many changes that occur in
science and technology, economics, market, political environment, education, knowledge, values,
attitude and behavior of people, culture, etc. Organizational Development is a part of the overall
development in general. It cannot remain unaffected by the developmental process. The organization
has to change its beliefs, values, and its structure to accommodate new ideas, beliefs, and new
technologies for progress. In order to increase the efficacy of the organization and the well-being of
its employees, organizational development accommodates and integrates a variety of planned changes
based on humanistic democratic values and technology. OD is a strategy that is practical and

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systematic for bringing about and sustaining change in organizations. It is an effort to increase
corporate efficiency all around. It exhibits a thorough method of handling inter-organizational
connections (Robbins, 2007).

1.3.1 Objectives of organizational development

Excellent
Improve Focus on
Results
Productivity Teamwork

Dispute Change with

Settlement Environmental
Change the Structure

(Source: Author’s Own, 2023)

Excellent Results. One of the objectives of organizational development is to bring effectiveness to

organizational performance. It emphasizes cooperation, independence, and mutual support among the
members. It facilitates to proper acquisition and utilization of resources in changing environments to
meet objectives (Robbins, 2007).

Improve Productivity. OD emphasizes efficiency development and providing incentives to

employees. It helps to improve employee efficiency through training, workshop, seminar, interpersonal
competency, education, etc. It also seeks to improve living standards through a proper incentives
system, a good working environment, etc.

Focus on Teamwork. OD emphasizes teamwork. Team members are complementary in skills and
supportive of each other. It helps to promote cooperation, learning, and effectiveness in organizational

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performance (Robbins, 2007)

Dispute Settlement. One of the objectives of organizational development is to resolve conflict in

organizational performance. When employees work in a group conflict is natural. However, OD
emphasizes taking initiation to resolve conflict. It is essential for the smooth functioning of the
organization (Robbins, 2007).

Environmental Change. OD focuses on adaptation to changing environment of society. It

emphasizes training, counseling, orientation, and encouragement for employees to accept the change
to meet the common goals (Robbins, 2007).

Change with the Structure. Organizational development emphasizes making changes based on
organizational systems and procedures. All members should perform activities according to the new
programs. Change in the system encourages teamwork and cooperation to meet objectives.

1.3.2 Organization Development Principles/Values

Respecting others. People are the organization's core value and are in charge of developing
chances for advancement. Therefore, they must be handled with decency and respect (Robbins, 2007).

Trust and Assistance. To have a successful organization, you must believe in and support the people
who make up your organization. When people are trusted, taken into confidence, and given the required
support when they require it, a healthy environment prevails (Robbins, 2007).

Confrontation. Any disagreement should be allowed to exist on any subject. It should be handled in an
honest manner. The mood is dampened by suppression. It is possible to raise employee morale and
foster a positive work atmosphere by identifying the issue and its causes, discussing them openly, and
coming up with workable solutions (Robbins, 2007).

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Respecting others

Trust and Assistance

Confrontation
Organizational development
values/principles

Employee involvement

Expression

(Source: Author’s Own, 2023)

Employee involvement. Employees who will be impacted by the OD should be asked to participate in
decision-making (Robbins, 2007).

Expression. In terms of experience, maturity, ideas, views, and outlook, people vary. The group is the
target of the attack. It benefits from the diversity of its people's abilities, viewpoints, and life situations.
Humans are social creatures with feelings, emotions, and other attitudes. They ought to be able to
communicate their emotions and thoughts. As a result, there will be a rise in morale and increased
motivation for hard work, which will eventually lead to greater productivity (Robbins, 2007).

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2. Managing Resistance to Change

Kanter (1995) identifies numerous reasons why people resist change: The most prevalent causes are loss
of control, excess uncertainty, surprise, and a lack of time to digest changes; the "difference" impacts,
i.e., consciousness to retraining habits; loss of face, as well as concerns about future competency and the
ripple consequences. Individuals may also resist change because they reject putting in extra work to
achieve a new scenario or because they have prior resentments (e.g., unsolved complaints). Other causes
for resistance to change could include the threat of disrupting their current status quo as well as power
issues.

We know it's healthier for us to eat healthy and exercise, yet few of us do. We are resistant to making
lifestyle adjustments. Volkswagen Sweden and ad agency DDB Stockholm conducted an experiment
to explore if they could modify people's behavior and encourage them to take the stairs instead of the
escalator (Shinn, 2009, p. 6). How? To see if commuters would use it, they installed a working piano
keyboard on a stairwell in a Stockholm subway station. (You can see a video of it on YouTube).

The experiment was a resounding success, with stair traffic increasing by 66%. The lesson is that if you
make the change enticing, people will change. People in an organization can be threatened by change.
Organizations can build up inertia that motivates people to resist changing their status quo, even though
change might be beneficial. Why do people resist change and what can be done to minimize their
resistance?

2.1 Why Do People Resist Change?

Most people, it is said, despise any change that does not jingle in their pockets. Change resistance is
extensively established (Ford et al., 2008, pp.362-377). Why do people object to change? The major
reasons include uncertainty, habit, anxiety about a personal loss, and the feeling that the change is not in
the best interests of the company (Reichers et al., 1997, pp. 48-59).

Uncertainty replaces the known in the face of change. Whatever you loathe about college, at least you
know what is expected of you. When you graduate from college and enter the world of full-time work, you
will swap the known for the unknown. Organizational employees endure comparable uncertainty. For
example, when statistical model-based quality control procedures are implemented in manufacturing
plants, numerous quality control inspectors must learn new methodologies. Some may be afraid that they

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will be unable to do so, and as a result, they may acquire a negative attitude toward the change or behave
badly if forced to use them.

Another cause of resistance is that we do things out of habit. Every day when you go to school or work
you probably go the same way, if you’re like most people. We’re creatures of habit. Life is complex
enough—we don’t want to have to consider the full range of options for the hundreds of decisions we
make every day. To cope with this complexity, we rely on habits or programmed responses. But when
confronted with change, our tendency to respond in our accustomed ways becomes a source of resistance.

The fear of losing something already owned is the third source of resistance. Change jeopardizes your
previous investment in the status quo. People are more resistant to change the more invested they are in
the current system. Why? They are concerned about losing their status, money, authority, friendships,
personal convenience, or other economic rewards. This anxiety explains why older workers are more
resistant to change than younger workers. Older employees have more invested in the current system and
so have more to lose if it is changed.

A last source of resistance is a person's opinion that the change is incompatible with the organization's
goals and interests. For example, an employee who believes that a proposed new job method will lower
product quality is likely to oppose the change. When communicated positively, this form of opposition can
be good for the company.

2.2 Techniques for Reducing Resistance to Change

What can managers do when they perceive opposition to change to be dysfunctional? Several ways of
coping with change resistance have been proposed. Education and communication, involvement,
facilitation and assistance, negotiation, manipulation and co-optation, and coercion are all examples of
these tactics. Table 6 summarizes and describes these strategies. Managers should regard these strategies
as tools and employ the most appropriate one based on the type and source of the resistance.

Education and Communication can help employees to see the rationale of the change effort, which can
assist lessen resistance to change. Of course, this strategy implies that much of the opposition stems from
misinformation or poor communication.

Participation involves bringing those individuals directly affected by the proposed change into the

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decision-making process. Their participation allows these individuals to express their feelings, increase
the quality of the process, and increase employee commitment to the final decision.

Negotiation involves exchanging something of value for an agreement to lessen the resistance to the
change effort. This resistance technique may be quite useful when the resistance comes from a powerful
source.

Manipulation and co-optation refer to covert attempts to influence others about the change. It may
involve distorting facts to make the change appear more attractive.

Finally, coercion can be used to deal with resistance to change. Coercion involves the use of direct threats
or force against the resisters.
Technique When Used Advantage Disadvantage
Education and When resistance is Clear up May not work when
communication due to misinformation misunderstandings mutual trust and
credibility are lacking
Participation When resisters have Increase involvement Time-consuming; has
the expertise to make and acceptance potential for a poor
a contribution solution
Facilitation and When resisters are Can facilitate needed Expensive; no guarantee
support fearful and anxiety adjustments of success
ridden
Negotiation When resistance Can “buy” commitment Potentially high cost;
comes from a opens doors for others to
powerful group apply pressure too
Manipulation When a powerful Inexpensive, easy way Can backfire, causing
and co-optation group’s endorsement to gain support the change agent to lose
is needed credibility
Coercion When a powerful Inexpensive, easy way May be illegal; may
group’s endorsement to gain support undermine the change
is needed agent’s credibility
Table 6. 1 Techniques for Reducing Resistance to Change (Robbins & Coulter, 2012)

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References

Baligh, H. (2006). Organization Structures: Theory and Design, Analysis and Prescription.
Information and Organization Design Series. Vol. 5. Boston,

Daum, D. L., & Maraist, C. C. (2021). The importance of culture in the era of COVID-19.
Industrial and Organizational Psychology, 14(1-2), 160-162.

Ford, J. D., Ford, L. W., & D'Amelio, A. (2008). Resistance to change: The rest of the story. Academy
of management Review, 33(2), 362-377.

Gorran Farkas, M. (2013). Building and sustaining a culture of assessment: Best Practices for
Change Leadership. Reference services review, 41(1), 13-31.

Jacobides, M. G. (2007). The inherent limits of organizational structure and the unfulfilled role of
hierarchy: Lessons from a near-war. Organization Science, 18(3), 455-477

Lunenburg, F. C. (2012). Organizational structure: Mintzberg’s framework. International Journal

of Scholarly, Academic, Intellectual Diversity, 14(1), 1-8.

Reichers, A. E., Wanous, J. P., & Austin, J. T. (1997). Understanding and managing cynicism about
organizational change. Academy of management perspectives, 11(1), 48-59.

Robbins, S. (2007). Organizational Behavior. 12th edition. Pearson Education Inc., p. 551-557.

Robbins, S., P., & Coulter, M., (2012). Management. (11th ed.). New Jersey: Pearson Education.

Shin, S., Stairway to reinvention, BizEd, Jan/Feb, p.6

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