ACHARYA INSTITUTE OF GRADUATE STUDIES

(NAAC Re Accredited ‘A’ Grade & Affiliated to Bengaluru City University)

Soladaevanahalli, Bengaluru-560107

DEPARTMENT OF MANAGEMENT
ACADEMIC YEAR 2023-2024 ODD

FACULTY NAME : MANJULA BK

COURSE : BBA
SEMESTER : III SEM
SECTION : D
SUBJECT : ORGANISATIONAL BEHAVOIUR

LECTURE NOTES

MODULE NO 3: CHANGE MANAGEMENT

Organizational Change
Organizational Change refers to any alternation that occurs in total work environment.
Generally people are accustomed to a well-established way of life and any variation in or
deviation from that life may be called a change.
Organizational change involves disequilibrium in the situation and environment in which the
people and the group exist.
Organizations are, of course, learning to cope with the devastating rate of internal and external
changes with the help of some fundamental changes in management philosophy and
organizational technology.
Organizational changes are the changes of the structure or process of a system that may be
good or even bad. It disturbs the existing equilibrium or status quo in an organization.
The change in any part of the organization may affect the whole of the organization, or various
other parts or organization in varying degrees of speed and significance. It may affect people,
structure, technology, and other elements of an organization. It may be reactive or proactive in
nature.

DEFINITIONS:
Nwestrom and Davis: Change is any alteration occurring in the work environment that affects
the ways in which employee must act.
French and Bell: Change means the new state of things which is different from the old state
of things.
R. W Griffin: Organizational change is any substantive modification to some part of the
organization.

Nature/ Characteristics of Change

i. Change results from the pressure of both internal and external forces in the
organization. It disturbs the existing equilibrium or status quo in the organization.
ii. The change in any part of the organization affects the whole of the organization.
iii. Change will affect the various parts of the organization in varying rates of speed
and degrees of significance.
iv. Changes may affect people, structure, technology and other elements of the
organization.
v. Change may be reactive or proactive. When change is brought about due to the
pressure of external forces; it is called reactive change. Proactive changes is
initiated by the management its own to increase organizational effectiveness.
Reasons for Organizational Change
i. Change in technology used.
ii. Changes in customer expectations or tastes.
iii. It as a result of competition.
iv. Changes as a result of government legislation.
v. Changes in communication media.
vi. Changes in supply chain.
vii. Changes in the distribution chain.
 viii. Changes in society’s value systems.

Planned Change
We can define planned change as any kind of alteration or modification which is done in
advance and differently for improvement.
Every change should have a planned way. Planned change may help the person, people to adapt
to the changing environment, planned change is predetermined. It is decided in advance what
is to be done in the future. It is a deliberate process.
For making any planned change, pre-thinking is supposed to be done about the outcomes and
impact of change also. Despite carefulness, if any negative impact is seen, one can have
preparation or plan to face the changes. Here is a definition of planned change given below:
Definition of planned change
Definition of Planned Change as follows: Any kind of alteration or modification which is done
in advance and differently for the improvement of the present position into a brighter one is
called planned change.
Forces for planned change is an Organization
An organization’s planned change may take place-having demand for two sources. These
forces are classified into internal sources and external sources. These two forces demanding
for planned change are shown in the following diagram:

The Need for Planned Change

Planned change takes places in an organization when there is a demand for change due to two
types of forces. These forces are grouped into internal sources and external sources.
Internal forces that lead to a planned change in an organization include obsolescence of
production and service, new market opportunities, new strategic direction, increasing
workforce diversity, and shift in socio-cultural values.
External forces that lead to a planned change in an organization include regulators, competitors,
market force, customers, and technology. Each of these forces can create pressing demand for
change in small or big, public or private, business or non-business organizations.
Process of Planned Change
Once the management decides to implement some changes in the organization, it needs to be
done carefully as it is a very sensitive issue. It is very important for all the employees to adapt
to change. According to Kurt Lewin, the planned organizational change is implemented in three
different stages. They are −
 − In this stage, the organization studies if the change is required or not, what
and why is the change necessary. Considering the entire situation, the
organization decides for appropriate change. Thus a plan and strategy is
formulated as required.
 Changing − In this stage, the organization executes the plan and program for
change. For this purpose, proper precautions are taken in order to maintain
cooperation and coordination between the employees and management,
avoiding miscommunication or disputes. Adequate supervision and control is
arranged as needed.
 Refreezing − This is the final stage, in order to bring organizational change. By
way of supervision, the organization tries to evaluate the effectiveness of
change. Collecting all this information, the management interprets whether to
continue or replace change by some other alternatives or to make further minor
changes.
Types of Planned Change
On the basis of a company’s requirement planned change is classified into three types. They
are −
 Change in structure
 Change in technology
 Change in people
Change in Structure
We say that the planned change required is change in structure when development is required
in these following areas −
  Change in management
 New management
 Change in position or location
 Change in objective, rules, regulations etc.
 Launching new branches
Change in Technology
We say that the planned change required is change in technology when development is required
in these following areas −
 Need of office automation
 Installing new hardware and software
 Executing new working procedures
 New methods in production function
 Producing new products and devices
 New training, research and development program

Change in People
We say that the planned change required is change in people when development is required in
these following areas −
 New candidate requirement
 Promotion or demotion
 Transfer to other location
 Suspension or dismissal
 Deputation
 Training and development

Factors Influencing Change:

According to a research, 25-30% of business entities, companies and organizations are wiped
out every two to three years.
What is the one single reason for this?
These organizations fail to adopt change.
The organizations which adopt change these are one which thrive and flourish. Therefore,
change is inevitable even it is not desirable.
Organizational change is a change, reorganization or replacement in process, method, system,
operations, technology and structure of organization. Organizational change can be
developmental, transitional and transformational.
How does this change occur?
What does cause this change at organizational level?
There might be one single factor affecting organizational change or there might be varied
factors behind this change. These can be financial or economic, technological, political, social,
legal, staff performance, vision of leadership etc.
All of these and many others can be categorized into two groups- internal and external factors
of change
Let’s discuss each of category in detail.
INTERNAL FACTORS AFFECTING ORGANIZATION CHANGE.
Internal factors are those which are originated from an organization itself. These are predictable
factors because these lies within organization.
Leadership and management has clear understanding and quickly analyze that what are internal
factors and how can organization respond to these and embark on journey of making change.
Following are some of the key internal factors which affect organizational change.
Vision
Some organizations are vision focused. Such organizations continuously make changes to
achieve its vision. These organizations also have tendency to revisit and redefine vision. And
this is key force behind accepting and executing changes.
Values
Organizations core values are also driver of change. For instance, values like gender balance,
cultural and ethic diversity etc are some powerful principles that often lead to big changes in
organizational strategies and processes.
Organizational Culture
Organizational culture has a powerful impact on the future of the organization. If work place
culture is vibrant, dynamic and leadership encourages creativity, then it is likely that
organization accepts and implements change.
Core Expertise
Core expertise of an organization also dictate change. If organization is strong in one technical
area, it will create innovate solutions and disrupt the existing methods and culture of the entire
industry.
Leadership
Sometimes change in leadership is the reason behind organizational change. Every new
leadership brings new vision, new strategies and new working culture to his/her organization.
So new leadership is a strong internal factor which affects change.
Performance
This is perhaps the most important factor which drives change. Good Leaders makes strategic
shift in their approach to business when performance of an organization is not satisfactory.
Then, drastic changes are made in role and responsibilities of different players within
organization to perform better in industry.
Employees
Confidence of an organization to make change depends on attitude and skills of its employees.
If employees approve and accept change and their skills are also in line with intended change
then there is more chances that organization will be successful in managing change.
EXTERNAL FACTORS AFFECTING ORGANIZATION
Organizations function in a large environment. This environment around organizations
includes customers, government, policy and laws, social norms, economy, technology,
competitors etc.
All of these exist mainly outside of an organization which has no control over these. Besides
control, Leadership and managers even has less understanding and knowledge about external
changes. So these external factors also drive organizational change.
The external factors of organizational change are difficult to manage because these are
unpredictable than the internal factors.
Following are some of the key external factors affect organizational change.
New Opportunities
Economic growth brings new business opportunities. And organizations expand when they
seize new opportunities in the market. For this to happen organization make changes in their
strategies, acquire new expertise and take new staff on board.
Fashion
Latest trends dictate changes. For instance, people are becoming more sensitive about health
and hygiene. So organizations are offering healthy products and communicating to their
customers that how much they take care of health and hygiene of the customers.
Competition
Competition is getting tougher every day. Organizations innovate new marketing tool and
strategies and disrupt the entire trend of market. It is such a compelling factor that every player
of the industry has to respond and develop it own strategy to survive and thrive in market.
New Technology
Technology is also a powerful factor which shapes changes. In this digital world, organizations
need to upgrade technologies in order to remain competitive in the market. For instance, it is
absolutely necessary nowadays for every organization to have its presence on online marketing
platforms which was not the case ten years ago.
Government Regulation
Government laws and regulation such as trade policies, taxation, industry specific regulation,
labour laws greatly affect the way of doing business. Organizations need to stay vigilant in
connection to government policies and adapt to changes.
Politics and Economy
Internal and external politics and economy also affect business. One single event can damage
country’s economy. Organizations need to closely follow and analyze political events and
economy and make changes as situations demand.
Social Change
The social changes refer to change in norms, change in level of education, urbanization,
migration etc. These social changes are also powerful external factors which affect the
environment which push organizational change to make change.

Resistance to Change:
Resistance to change is the opposing behaviours of employees in the change made by the
organization. There are many reasons employees resist change one of them is, they think the
frequent change made in an organization has a bad effect on their position.
Resistance to change is one of the important sources of functional conflict. It brings obstacles
in change adaptation and process. Resistance to change can be seen in terms of overt or
immediate and covert nature.
It is not so difficult to manage and deal with resistance when it is overt or immediate. Examples
of such resistance involve work slowdown, compliant voice, and a threat for a strike, etc. Cover
or implicit is more complex and as such more difficult to recognize. An example of such
resistance involves loss of loyalty and motivation to the organization, increased errors,
increased absenteeism due to sickness, etc.
Mainly there are two types, sources, factors, reasons, causes of resistance to change consisting
of individual and organizational.
Why Do People Resist To Change?
Reasons for resistance to change: Consider the following reasons,

#1 Individual Reasons For Resistance To Change

Individual reasons for resistance to change are based on some basic human characteristics such
as perceptions, personalities, and needs. Following are the reasons that individuals may resit to
change:
Habit
Human beings by nature have a habit to do regular work or making programmed decisions.
They satisfy and feel secure in regular work and adjust themselves to family, society, and work-
life. They do not want to accept change if it needs to change in their habit.
They analyze the weightage of benefit and cost before accepting any change. For example,
when an employee used a route to go to the office, it becomes his habit to go to the office
through the same route regularly. As far as possible he does not want to change the regular
route. He thinks many times about merits and demerits when he needs to change the route.
Security (Job Security)
Generally, people think that change brings a threat to job security and that is the reason that
they hesitate to accept it. They find security in the job possesses and system that they are doing.
In the case of management of an organization plans to change the present work system, many
employees would feel that it may pose a threat to their job security.
For example, when the computer system was introduced in traditional banks of Nepal, at the
primary stage many employees resisted that change by feeling job insecurity.
Economic Factors
The probability of loss of preset economic gain is one of the reasons for resistance to change.
Many people believe that change would bring complexity and it becomes difficult for them to
adapt to changing systems and procedures. They may fear a reduction in responsibilities and
working hours and due to which remuneration will be automatically minimized.
Fear of Unknown
Change brings new knowledge and system in working procedures. People having limited
knowledge, lack of creativity and initiation may feel fear of the unknown if any change
occurred in the workplace, co-workers, or in a working system. They feel difficult to make
decisions, to accept change.
For example, when a computer system was first introduced in Nepal, employees of many
organizations feel difficult to accept computerization because of fear of the unknown.
Selective Information Processing
Individuals shape their world through their perceptions. When something is selected in the
processing of information, people do not want to divert their perceptions towards others. They
hear what they want to hear. They ignore information that challenges the world they have
created. Therefore, when any change occurred in working procedures against the perceived
world, people resist the change. In this way, it also becomes one of the reasons for resistance
to change.
#2 Organizational Reasons For Resistance To Change
Organizations are conservative in nature and they do not want to accept any change easily. The
structure and design of the majority of business organizations are also difficult to change. The
following are the sources of organizational resistance to change:
Structural Inertia
Organizations have their own structure and system to maintain stability in performance. They
have specific procedures of selection, training, role, and other socialization techniques.
Employees have a formal job description, and they have to follow specified rules and
procedures for the completion of a given job. When an organization is confronted with change,
this structural inertia acts as resistance.
Limited Focus on Change
The organization’s total system is constituted of a number of inter-related and inter-dependent
subsystems. A subsystem can not be changed without affecting other subsystems. For example,
the computerization of the financial system may become ineffective if other systems of the
organization remain unchanged. Therefore, limited changes in subsystems become worthless
as they may be neutralized by the total system.
Group Inertia
Individuals work in the organization in a group and they consider the group norms, systems,
and values. If individuals want to change their behavior, group norms act as a constraint. For
example, an individual of a union member may be willing to accept change in his job suggested
by management. But if union norms dictate resisting any change made by the management,
employees resist change in their job.
Threat To Expertise
Fear of losing the importance of the job is one of the reasons for resistance to change. Change
in organizational systems and procedures may threaten the expertise of one specialized group
whereas another group of expertise may get the opportunity. One group of expertise may have
fear of loss of a job, demotion, less economic gain, etc due to change in the present working
system.
For example, managers and supervisors of traditional attitudes do not want to decentralize
authority and responsibility by feeling that it may reduce their expertise and importance.
Threat To Established Power Relationships
Any delegation of decision-making authority to subordinates may re-establish the power
relationships within the organization. Managers who always want to remain in power do not
want to accept change as it may reduce their status in the organization, even if that change is
beneficial for the organization.
For example, middle-level managers and supervisors do not accept a participative decision-
making system of a self-managed work team because it can minimize their status and role.
Threat To Established Resource Allocation
Any change in the organizational system may bring the concept of reallocation of resources
into departments. Departments or groups in the organization that uses more resources often see
change as a threat. For them, change is a reduction of budgets or cut-offs of their staff’s size.
For example, the production department is getting more resources in the traditional system of
production, employees of this department may oppose automation because it would minimize
the number of staff.
Hence, we see all these reasons or sources of resistance to change as they have a major impact
on the achievement of organizational objectives, thus these reasons should be minimized at an
acceptable level and if possible they should be eliminated.
Overcoming Resistance to Change
Six change approaches
Kotter and Schlesinger suggested Six Change Approaches to handle resistance to change:
1. Education and communication
First and foremost, employees need to understand the reasons for the change initiative. It’s
important for people to see the leaders’ logic and hear the rationale, even if they don’t agree
with it. And this should be done before any steps towards the change are taken. To help
employees really understand the reasons behind the change, leaders should use a range of
techniques and multiple meetings to hammer home the message. This is especially true if they
know there’s a lack of knowledge on the subject or that inaccurate information is being
circulated.
2. Participation and involvement
When building a change management team, it’s important to gather input from all levels and
departments of the organization. Having people involved in the process helps them engage in
(or at least tolerate) the change in a positive way. If people are given a chance to come up with
ideas, discuss the ideas of others, or otherwise be involved in the process, they’ll become
invested in the change and understand it better.
When it’s clear that certain individuals are more likely to resist the change, leaders should make
sure to include them in the design aspect of the plan. They will then have ownership of it and
they’ll feel more involved, leading to commitment, which is worth much more than meek
compliance. This approach is most useful when leaders don’t yet have all the necessary
information to plan the change and where there is a chance that employees will have the power
to resist.
3. Facilitation and support
Leaders need to invest a little more time to provide facilitation and support when people are
resistant due to fear and anxiety. Training alone is not enough. Leaders should think about
guided discussion groups to help people talk about their worries or even vent their frustrations.
In anxiety-inducing situations, the change curve can help leaders understand what kind of
support is needed at each stage.
4. Negotiation and agreement
When individuals or groups value logic and stability, and think they’d be worse off because of
the change, leaders need to take an approach that is fair, logical and consistent. Employees
have to see clearly that the change—whether they agree with it or not—is being introduced and
implemented in a way that makes sense. For example, if an action needs to be performed,
leadership should communicate the reasons behind it and the outcomes that are expected. This
will ensure that employees will see why certain choices are being made and provide the much-
needed stability.
5. Manipulation and co-optation
In order to encourage change-resistant people to adjust their position, information must be used
in a selective way. Leaders need to determine which employees are happy with the prospect of
change and appoint them as “change agents”. Their mission will be to sell the change to others
in the organization, so leaders must choose their agents wisely. For individual employees or
well-respected group leaders, this could mean including them in the change management team.
This approach can be a bit of an ethical dilemma, but it’s often the only option left when all
others have failed. If it’s done incorrectly, and people realize that they are being manipulated,
it can intensify resistance and lead to more problems.
6. Explicit and implicit coercion
If there’s absolutely no willingness from people to accept and participate in the change, leaders
could consider communicating potential negative consequences of continuing the status quo.
This approach should be the absolute last resort, only to be used if all else fails.

…………………………….THANKYOU……………………..…