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Organizational Change and Change Management

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Contemporary Innovation in Management

Organizational Change and Change Management


H.P.N.I. Kumarasinghe* and H.K.T. Dilan
*Department of Industrial Management, Faculty of Applied
Sciences, Wayamba University of Sri Lanka.

1. Introduction
Organizational Change and Change Management is a significant
field of study to examine its applications to the current innovative
ever-changing world. Models and processes in change management
contributes for the success with new plans in the challenging
environment. Thus, this chapter goes insight to an overview of
Organizational change and Change Management.

It includes brief introduction to Organizational change, Types of


organizational changes, an overview of Change management,
Implication of Change management Models; Kotter’s eight-step
Change Management Model, Kurt Lewin's Three-Step Change
Model, Benefits of Change Management to organizations, Negative
impacts and barriers of Change Management, Key factors for
successful change and a brief analysis of the Interdependent Role
of Communication and Employee Involvement in Effective Change
Management.

2. Organizational change
Organizational Change examines the process through which a
corporation or organization changes its operating procedures,
technology, organizational structure, overall structure, or strategies,
as well as the consequences of those changes. External or internal
influences usually cause or result in organizational change. Small
businesses must change in order to compete with larger businesses
(Stouten et al, 2018). They must also learn to thrive in such setting.
When a smaller, more innovative competitor enters the market,
large competitors must adjust quickly. A company must look for
ways to improve its efficiency in order to avoid falling behind or to
stay ahead of its competitors. It must also aim to be more cost-
effective in its operations (Revenio & Jalagat, 2016).

3. Types of Organizational Change


Identifying the types of change in an organization is more
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significant since, organization need to take into consideration those


changes involve in reorganization or an addition to new products or
services provide. The Authenticity Consulting, LLC (2012) has
identified major types of organizational change; Organization-wide
Versus Subsystem Change, Transformational Versus Incremental
Change, Transformational Versus Incremental Change, and
Remedial Versus Developmental Change. The same were used in
the studies of Gantaand Manukonda (2014) and Revenio & Jalagat
(2016), thereby validating the type of organizational change
prevalent in many organizations.

Type of changes Description Examples


Organization-wide
change refers mostly
to major
collaboration or Change from
rightsizing, and highly reactive
restructuring. Most entrepreneurial
organizations organization into
implement the stable and
Organization- change that covers planned
wide Versus the different level in development.
Subsystem the business life
Change cycle (McNamara,
2006).
Addition or
removal of
subsystem change is
product or
a change that covers
service,
the smaller area of
reorganization of
scope.
certain
department
Transformational
change includes
Transformational fundamental change
Versus that may arise from Business Process
Incremental change in Re-engineering
Change organizational
structure and
organizational

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culture. It follows an
approach of top-
down hierarchical
structure that
requires large
amount of self-
directing teams
(Beer and Nohria,
2000).
Continuous
Incremental change
improvement
deals with the
emphasizing on
introduction of
quality
change in smaller
management
scale gradually.
processes.
Remedial change is
considered an urgent
change that solves or
remedies the current
and existing Improving the
problem. In cases of poor
remedial projects, performance of a
the urgency is product in the
evident and that company,
remedial change solving the cases
Remedial Versus seems more of burnout in the
Developmental appropriate in workplace.
Change measuring the
success of such
project and so, it can
easily be determined.
Developmental Expansion of the
change focuses on number of
improving what was consumers
already existing on served, duplicate
continuous basis but successful
no radical change products or
made. services.
Unplanned Versus Unplanned change Poor
Planned Change happens when there performance and

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is sudden and malfunctioning


surprising event or of the operations
condition that makes due to an
the members to react unexpected
in a disorganized incidence like
fashion. It is abrupt Pandemic
that everyone cannot situation.
take it immediately.
Planned change
occurs when the
organization
recognize the need
for major change and Implementation
device a proactive of a strategic
plan to ensure the plan,
attainment of reorganizational
change. This change plan and others.
is pre-planned and all
the members are
well-informed of the
planned change.

4. Change Management
The world of business today is very dynamic and it is changing so
rapidly in very short periods of time. These changes may come in
organizational structures, technologies that are using by companies,
organizational employees and their perceptions, production
techniques and concepts as well as in the concepts of business
management. When some changes arising above areas,
organizations have to adapt with those very quickly for getting
competitive advantages as well as for the survival in the industry.
So, the concept of change management can be defined when
companies deciding to alter the current concepts of business
procedures into new style or model with smooth implementation of
change (Hashim, 2013). According to him the ultimate goal of the
change management is to achieve long term sustainability for
businesses. The existence of a proper communication procedure in
organizations is very critical for carried out an effective change
within that company (Christensen, 2014).

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5. Implications of Change Management Models


Under a variety of labels, such as "total quality management,"
"reengineering," "right sizing," "restructuring," "cultural change,"
and "turnaround," organizations undertake change programs with
high expectations. However, in nearly every case, the core goal is
the same: to radically change the organization's style of doing
business in order to survive in the new, more difficult market
environment (Kotter 1995). But, only a small percentage of these
transformation initiatives succeed; some fail miserably, and the
majority fall somewhere in the middle, with a clear bias toward the
lower end of the spectrum. Successful cases, on the other hand,
show that the change process passes through a succession of stages,
each requiring a significant amount of time and dedication, and that
key errors in any of the stages can have a disastrous effect on the
change process' momentum (Kotter 1995). These Change
Management Models can be used by as management tools for
current organizations in this changing world of work.

5.1 Kotter’s eight-step Change Management Model

The efforts to better understand and manage organizational change


prompted researchers to create a variety of models, each with its
own set of assumptions and philosophical foundations. In the
literature on change management, Kotter's eight-step change
paradigm is a prominent exemplar. The model outlines a method
for successfully managing change and avoiding the traps that
plague failed change initiatives (Kavanagh & Thite 2009).

Step 1 – Establishing a sense of urgency


The first stage of the transformation process emphasizes a growing
sense of urgency and the need for collaboration. It's difficult to
persuade important personnel to join in a change process when the
urgency is low, and without incentive, the endeavour will fail. This
first phase, according to Kotter, is critical since getting an
organizational change program off the ground necessitates the
aggressive participation of many employees, and he claims that half
of the organizations he studied failed in the first stage (Kotter
1995).

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Step 2 – Building the guiding team


While change in business practices is commonly referred to as
organizational change, according to Kee and Newcomer (2008),
change is not truly organizational until it is preceded by individual
and then the change team. Major renewal projects, according to
Kotter, often begin with just one or two people, and in the event of
successful transformation attempts, the leadership coalition gets
even larger. Organizations are hierarchical but more complex in
today's world, and leaders need internal and external stakeholder
support (workers, partners, investors, and regulators) for a variety
of activities (Kotter 1998).

Step 3 – Creating a vision.


A vision is a representation of the future that includes some explicit
or implicit commentary on why people should strive for that future.
It refers to a picture of the future with some explicit or implicit
commentary on why people should strive to create that future.
Furthermore, vision inspires people to take action in the right
direction and aids change managers in coordinating the efforts of
various stakeholders (Kotter 1995). Kee and Newcomer (2008)
explore the role of the leader in change, stating that effective
leadership necessitates a vision-oriented rather than goal-oriented
approach.

Step 4 – Communicating the vision


Employees will not make compromises, even if they are dissatisfied
with the status quo, unless they believe that beneficial change is
possible (Kotter 1995). Also, the true force of a vision is unleashed
only when the majority of people agree on its aims and directions.
Failures in vision communication are frequently attributed to
lower-level employees' inability to communicate vision, as well as
a general human tendency to resist change and, as a result,
resistance to accepting change information (Kotter 1996).

Step 5 – Empowering the action and removing obstacles


People are already empowered by effectively completing steps one
through four of the transformation processes. Step five's major goal
is to mobilize a large number of individuals to take action by
removing as many impediments to the change vision's realization
as possible (Kotter 1996). Empowering employees literally implies
giving them the authority to carry out the change process's
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requirements. Empowering employees also entails giving them the


knowledge, skills, opportunity, autonomy, self-confidence, and
resources they need to manage and be accountable for change (Gill
2003). According to Kotter, there are four key impediments to
empowerment: (a) information and personnel systems, (b) a lack of
required skills, (c) managers who discourage employees from
acting, and (d) formal structures that make it difficult for employees
to act (Kotter1996, 102). Change managers should align structures
that obstruct action, train employees to provide them with the
necessary skills and attitudes for the project, connect information
and people systems to the vision, and challenge supervisors who
undercut the change effort to eliminate such barriers.

Step 6 – Creating short term wins


Due to a real transformation of a company takes time, short-term
goals and victories are helpful in maintaining momentum. People
are more likely to give up or become change resistant if they don't
see immediate results (Kotter 1995). The short-term gains should
be unambiguous and apparent, and they should be tied to the
transformation effort. Employees are put under more pressure to
achieve short-term victories, which reduces their commitment to
the change attempt (Kotter 1996).

Step 7 – Consolidating improvements


Change is a very personal and emotional issue for many
individuals, and accepting change, especially when it concerns their
work environment, can be tough. Employee resistance can be a
significant roadblock to change, especially for projects that aim to
modify the way people work. In order to consolidate improvements,
Kotter proposes a number of actions, including increasing
credibility to change systems, structures, and policies that do not
align with the vision; hiring, promoting, and developing employees
who can carry out the vision; and giving the process a boost with
new projects, themes, and change agents (1998, 32).

Step 8 – Anchoring new approaches in the culture and making


change stick
Employees' common ideals and behavioural conventions are
referred to as culture. It's not easy to integrate fresh approaches into
established cultures. The common idea is that in order for a change
initiative to succeed, it must first change the company culture.
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Change, on the other hand, occurs last, not first (Kotter 1996). It
may be difficult to anchor new techniques in cultures that are more
status quo focused (Kee and Newcomer 2008). When a new style
of conducting business becomes the norm and permeates into the
organization's bloodstream, the shift becomes a culture. Two key
factors in institutionalizing change in corporate culture, according
to Kotter, are a conscious effort to demonstrate the importance of
new approaches, behaviours, and attitudes that helped improve
performance, and the establishment of a promotion system that
moves people to the next generation of top management who truly
personify the new approach (Kotter 1995).

Source: Eayrs et al. (2014)


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5.2. Kurt Lewin's Three-Step Change Model


This model contends that successful organizational change involves
unfreezing from the status, changing to a desired end-state, and then
refreezing the change to make it permanent (Lewin, 1965).

Source: Hussain et al (2016) - Kurt Lewin's process model for


organizational change

Unfreezing stage

This is the initial stage of transition and one of the most important
in the change management process. It entails cultivating a
realization for transitioning from one's current comfort zone to a
transformed circumstance, as well as enhancing people's
preparedness and willingness to change. It entails raising awareness
of the need for change and increasing people's motivation to adopt
new ways of working in order to achieve better results. Effective
communication is critical at this stage in gaining the needed support
and participation of people in the change process (Hossan, 2015).

Changing stage

This stage is also known as the Transition Stage or the Stage of


Actual Change Implementation. It entails a willingness to adopt
new ways of doing things. The persons are unfrozen at this point,
and the actual modification is applied. This step necessitates careful
preparation, good communication, and promoting individual
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participation in endorsing the change. This stage of transition is said


to be difficult due to uncertainties or people's concern of the
implications of implementing a change process (Hussain et al.,
2016).

Refreezing stage

The organization is ready to refreeze once the changes have taken


shape and personnel have accepted the new ways of functioning. A
steady organizational hierarchy, consistent job descriptions, and so
on are visible evidence of the refreeze. People and the organization
must also internalize or institutionalize the changes during the
refreeze stage. This entails ensuring that the changes are
implemented consistently and that they are integrated into daily
operations. Employees are more confident and at ease with the new
ways of working as a result of the new sense of stability (Hussain
et al., 2016).

6. Benefits of Change Management to Organizations


Effective Change Management provide number of positive impacts
that help organizations to achieve Employee Confidence,
Competitive advantage, Growth and Dynamic culture in the ever-
changing world. Revenio & Jalagat (2016) has derived following
benefits of Change Management to Organizations. They have stated
that these benefits include but not limited to the following:
1) Managing change enables the organizations to respond
quickly to the changing customer demands.
2) The management and the organization will realize the
importance of change and the expected benefits it derived
when implemented in the right way.
3) It allows more flexibility whenever pressures for change
arise. The ability to adapt change when it occurs help the
organization improve in terms of processes, decision
making capabilities, financial returns and others.
4) Easy identification of problem that requires change efforts
and enable organization to familiarize those problems that
requires change plan.
5) Change can be implemented without affecting the daily
activities of the organization.

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6) It provides the management the know-how in assessing the


overall impacts of change.
7) Understanding the change process by all employees would
likely improve their performance thus, improve
organizational performance.
8) Change management helped the organization to identify
accurately the problems or anticipate challenges and
respond to it efficiently and effectively.
9) Change management enable organizations to save cost and
increase return on investment thereby reduce waste of
resources, time and efforts.
10) Establish opportunities for the development of best
practices, leadership development and team development.

7. Negative impacts and barriers of Change Management


Although the Change management model can be used as one of the
best management tools to overcome organizational issues in this
challenging business world, there can be seems its’ negative
impacts and barriers also. Thus, having a good understanding on
such negativities is also very important for managers.

1) Resistance to Change.
Although change is accepted by many, there are also some
members of the workforce that would likely resist to change.
Resistance has become undeniable that cannot be ignored in any
change efforts whether in individual level or organizational level.

2) Incompetence of Change Agents.


Organization should consider on evaluating the readiness of
implementing the changes since change cannot be underestimated.
Thus, it requires people who have the adequate knowledge and
expertise to manage and oversee the change processes.

3) The Status Quo Concept.


When the management along with their employees are comfortable
with the current performance without any plans to improve, some
barriers can be occurred on implementing the needed changes. If
anybody in the organization may refuse to learn new things with
the changes, drive for increasing the performance may become
insignificant.
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4) Lack of Information.
When implementing changes, organizations struggle in properly
communicating any efforts for change. Although the change plan is
much better, if not communicated to the workforce and the
organization, its effectiveness is questionable and employees less
likely to participate to the change efforts.

5) Lack of Management Support.


Success or the failure of the change management process depends
on the top management and the shareholders’ response relative to
its implementation. Many companies consider change as a waste of
time, money and effort so, they are not convinced with the positive
impacts of change. They neglected to understand the significance
of making authoritative progress if the change is lined up with the
organizational goals and objectives.

8. Key factors for successful change


Parag (2018) has identified six critical factors that affecting to the
success of organizational change process.

1) Develop a clear vision and strategy for organizational


change process that is backed up by distinct rewards.
Employees are more inclined to accept change if they are aware of
why it is taking place, what it includes, and how it will affect them.
Individual change projects and programs must be coordinated and
linked with the firm's overarching strategy to produce a wide
"image" of change.

2) Ensure that the company have strong leadership and


sponsorship.
Actions are more effective than words. Senior leaders and sponsors
of companies must lead by example and push for change. To
deliver, sponsors need the right sphere of influence, time, and
personality attributes including communication and listening skills,
honesty, the ability to connect and inspire, trust, emotional
intelligence, and gravitas.
Include the right individuals in the process of driving and

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supporting change so that it is truly owned by the company. In order


to improve, it's also vital to have feedback mechanisms in place.

3) All stakeholders must be understood, engaged with,


committed to, and supported.
Stakeholders of companies will notice and respond to change the
organizational change in a variety of ways, so it's critical to
understand, engage, acquire commitment from, and support them
throughout the change process of a company. Identify stakeholders
early in the change process, conduct a prospective change impact
assessment, and establish a commitment-building engagement and
communication strategy.

4) Create a strong change team with the skills that need to


succeed.
Create and cultivate a high-performing transformation team that
combines a clear focus on its mission with strong interpersonal
relationships. Make that the team's mission or remit is properly
defined, both in terms of itself and in relation to other teams, such
as the overall program or project team. To facilitate successful
change, provide team members with the essential change process
and soft/people talents or skills.

5) Define and implement a well-structured, integrated strategy.


Consider adopting one of the numerous well-documented change
techniques and standards if your organization lacks a clear and
structured approach to change management. In such circumstances,
make sure you employ a holistic, integrated approach that considers
all factors and is appropriate for your endeavour and its
surroundings. This is critical in order to ensure that everyone on the
change team is on the same page, to ensure consistency in delivery,
and to improve competence and maturity in order to achieve higher
success.

6) Assess the success of the change initiatives


Organizational transformation is frequently a non-linear,
evolutionary learning process, and it is impossible to know
everything right away. The external and internal organizational
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environments might alter during the process, and evaluating a


change effort in the same way as other parts of the business, such
as operations, is difficult, if not impossible.
Measures may be a powerful tool for involving and communicating
with the rest of the organization and stakeholders about the change's
success and impact over time, as well as soliciting feedback. At the
outset, establish a baseline and success criteria, and link metrics to
the vision, outputs, outcomes, and benefits that were originally
defined. Use a mix of qualitative and quantitative metrics, paying
special attention to relevance, measurability, and the simplicity
with which data may be collected, analysed, and presented.

9. The interdependent Role of Communication and Employee


Involvement in Effective Change Management.
The concept of change management can be defined when
companies deciding to alter the current concepts of business
procedures into new style or model with smooth implementation of
change (Hashim, 2013). According to him the ultimate goal of the
change management is to achieve long term sustainability for
businesses. The existence of a proper communication procedure in
organizations is very critical for carried out an effective change
within that company (Christensen, 2014). Employee involvement
also a strategic area when executing the change management in a
company specially to deal with resistances to change of employees
(Morgan & Zeffane, 2003). According to De Silva (2020) there are
interdependent roles have to play by the concepts of
communication and employee involvement within the change
period of a company.
When an organization identified there are urgencies to make
changes within the company, they are developing a change vision
for the company. This change vison includes where the company
needs to be after the change period ended (McGuire, 2001). This
change vision must be shared comprehensively within the members
of the relevant company to execute the change process effectively
(Maximini, 2015). Thus, many scholars have mentioned that the
proper communication is the key to effective and smooth utilization
of change process within organizational environments (Hasanaj &
Manxhari, 2017). Because, a roper communication enables the
exchange of ideas from the management to employees as well as
from employees to the management (Lotich, 2017). If a company
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experiencing their change period with absence or lacking with


effective two-way communication procedures throughout the all
levels of the company, their change effort may fail due to lack of
awareness within the stakeholders that affecting to the change. The
lack of awareness about the change vison and procedure causes to
increase the resistances to change within the company stockholders.
Thus, purpose or the role of communication in the change process
of a company to building two-way conversations within the
management and stakeholders while developing awareness and in
attaining the successive support to the change process. (Malek &
Rashad, 2012).

The communication involving in many ways to implement the


change process smoothly to the company environment. As I
mentioned above the critical thing is it helping the management to
share the change vision clearly to the company stakeholders. It is
very critical to acknowledge the stakeholder about what the
company needs to achieve after the change done and this this
acknowledgement should convey in very simple and
understandable format. (Haque et al 2016).

The presence of an effective communication procedure for a


company helps to highlighting the paybacks and the possible good
and bad impacts of change. The acknowledgement of possible
benefits is inspiring the stakeholders to assist to the change process
and on the other hand this helps to convey the probable impacts in
both when the company remain without changing and impacts after
making changes. This situation helps to reduce resistances to
change of their organizational members (Stacho et al, 2019). The
management or the change management committee must use
communication procedures to convey the information in multiple
methods. Because some stakeholders may not interesting to engage
with some communication methods. Clarke et al, (2006) have
explained that visual learners are interesting in material methods to
get information while the effective listeners are interesting in some
presentation modes. Thus, the one of critical activity of
communication within change process is to acknowledge
information using many methods. Apart from that communication
has a repetitive responsibility too. By using communication
methods organization should repeat the important massages for the
stakeholders within the change process to enhance their likelihoods
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with the change process. Because when repeatably conveying the


important information regarding the change the resistances to
change will reduce. Matos Marques et al (2014) have stated that, as
a role of communication in the change process, it should provide
enough opportunities for exchanging ideas and information
between the stakeholders and the management party. It requires
two-way communication to do so. Further through that kind of
communication leaders of the company could present the
importance of the change process while getting the members ideas
as a technique of reducing change resistances. But over
communication in the organization that are functioning for change
may provide negative impacts on the change process. Because some
of employees are not willing to repeat the same things always and
some are like to work self directedly. Thus, the management of the
company should ensure that, there is an optimum level of
communication within the company.

Without good communication, workers would not be able to


participate in effective change management. Employees are
involved at every step of the change process by the delivery of the
change's expected information over effective communication (De
Silva, 2020). Stakeholders, especially workers, have a prevailing
occasion to sabotage a company's change goals. Through taking
these steps to better include workers in making the required
changes, you will make them feel as though they are part of a
broader change management process. Employee involvement can
be seen as a critical component of a successful change management
process. This employee involvement is developing through the
effective communication at the company. According to Neill,
(2018) the existence of effective communication at a company can
enhance the awareness of their employees about the change vision
and the process. This awareness helps to enhance the understanding
of employees regarding the whole change procedure and the
benefits and impacts of the process too. That understanding helps
to reduce the resistances of employees to engage with the change
process and ultimately helps to accept the changes expecting by the
management of the company. That will help to enhance the
effective involvement of employees with the change process of the
company (Elving, 2005). This situation can identify as the
interdependency between effective communication and employee
involvement within the change process (De Silva, 2020). That
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means employees will feel more in charge of a transition that


directly affects them if they are actively involved in it. This will
increase their commitment to the change and decrease the
likelihood of resistance. Employee involvement can be described
as a procedure that links engagement, communication, and
decision-making within an organization to promote industrial
democracy and employee motivation (Price, 2004). Employee
involvement will allow the association to ensure the successful
accomplishment of the change vision since the change goals in the
business or organization will be effectively accomplished if
employee engagement is aligned with the change process (Dobre,
2013). When you build employee involvement, commitment,
loyalty, ownership, and transparency, things get a lot simpler.
However, this does not mean that an organization should rest easy,
assuming that committed workers will still accept change. They
would be unable to take it further and become a part of it if they do
not see a positive shift in their way of functioning, organizational
culture, work climate, or overall personality growth.

According to the review of the above study, change management is


critical in ensuring a company's or organization's stable growth
route and survival by enhancing the competitive advantages within
the relevant business industry. Due to the dynamic nature and the
rapid changes in internal and external environmental factors,
organizations must have to change their existing business module
with the changes. For attaining an effective change implementation
to an organization depends on many critical factors. Here we have
focused on the role of communication and the employee
involvement in the change management. Communication is
important in conveying the planned vision of the change process,
employee involvement in decision-making interrelated with the
successful change within a company, avoiding resistances of
stakeholders to involve with change process, confirming the senior
manager’s active participation with the change process via various
forms of platforms and media for message delivery, and delivering
the intended message on a regular basis. Employee’s involvement
with the change process is also important for promoting successful
employee participation, for promoting the employee morale, to
provide a sense of belonging, and dedication, to confirming a lesser
amount of resistance to change, productive and effective use of
organizational properties, and effective accomplishment of the
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change goal. Finally, according to the above descriptive


information review, we can understand that there are some critical
and interdependent roles to play by the communication procedures
as well as by the employee and other stockholder’s involvement
with the change management process.

10. Conclusion
Organizational Change and Change Management goes insight to a
wider area. Change is inevitable and unavoidable. It exists in
different dimensions and can be described as internal factors
external factors. It is a significant field of study to examine its
applications to the current innovative ever-changing world. In
addition, change occurs in different types. Different views and
perspective of change varies between organizations as it can give
positive and negative impacts to organizations while arising some
barriers too. Organizational change enables organizations to find
ways to implement change management effectively using different
change models. Kotter’s eight-step Change Management Model
and Kurt Lewin's Three-Step Change Model were discussed in this
chapter. Those models contribute for the success with new plans in
the challenging environment. There can be identified some key
factors for a successful change in an organisation. Finally, we could
understand that there are some critical and interdependent roles to
play by the communication procedures as well as by the employee
and other stockholder’s involvement with the change management
process in an organization.

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