Change Management

Dr.S.Sivakumar,
Associate Professor
School of Governance and Development Management,
Hawassa University
+251-934 10 50 50
ssiva123@gmail.com

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 Guiding Questions

What is Change?

What is Change Management?

Need for Change?

How to manage Change?

 Definition of Change

• Change is the process of alteration or transformation that individuals, groups, and

organizations undergo in response to internal and external factors.
• Organizational Change refers to "the movement of an organization away from its present
state towards some desired future state to increase its effectiveness” (Broome: 1998).

Present How? Future

• Change is an alteration in
– People
– Structure Known as Change Agents
– Technology

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 •

• Change is always a part of manager's job and it has been happening more
in recent years.
• Managers can stimulate innovation and increase their organization's
adaptability.
 NEED FOR CHANGE
Why change is necessary or important to organizations?
● Environmental change: to adapt to environmental change, organizations must

• To meet changing customer needs

• To meet changing market conditions
• To respond to internal pressures
• To take advantage of new opportunities
ENVIRONMENTAL PRESSURES FOR
CHANGE
 Need for Change…..Cont’d

Two forces act that constrain managers and bring about the need
for change.
●
• Internal forces • External forces
●
External forces create· the need for change to come from
various sources. External forces include:
●
Marketplace • Government laws and
regulations
●
Technology • Fluctuation in Labour markets.
●
Economic changes
● Internal forces can stimulate the need for change.
● The internal forces tend to originate primarily from the:
○ internal operations of the organization

○ from the impact of external changes

● These may include:

CHANGE DEPICTED AS CLOCK-FACE METAPHOR
●
At '0’ minutes on the clock (3000 years ago i.e. 1000 B.C), there was no
scientific/technological development.
●
Agriculture was the only predominant activity of man. It is only in the last 9
minutes,
○
significant changes have taken place in science and technology.
Technological

●
Change is ubiquitous;
■
inevitable;
■
Everywhere there are signs of change;
■
Too much change in some cases.
FORCES FOR CHANGE

● The forces that push organizations to change are many. Only several
key categories of change forces can be studied which are coming
from the following such as:

People Information Processing Competition

Technology Communication Social trends

UNDERSTANDING CHANGE
●
Change is to make or become different.
 Leading Change: A Process Perspective
●
The model conceptualizes the management of change as a purposeful, constructed but often contested process that involves attending to seven core activities:
1. recognizing the need for change and starting the change process
2. diagnosing what needs to be changed and formulating a vision of a preferred future state
3. planning how to intervene in order to achieve the desired change
4. implementing plans and reviewing progress
5. sustaining the change
6. leading and managing the people issues
7. learning.
 FORCES OF CHANGE
● An organization will be under two sets of forces considering the two types of environments
○ Internal environment
○ External environment
● INTERNAL FORCES OF CHANGE
● System dynamics: The organization is made up of sub-systems; similar to that of the super personalities in the
human brain which go on interacting with each other creating changes in human behavior
● Inadequacy of Administrative process: As time progresses, the revision of goals and objectives in an
organization takes place, resulting in changes in existing rules, procedures, and regulations with the demands of
reality.
reality
● Realization of their inadequacy is a force that induces change.
Individual or Group expectations:
● Man acts like a social animal whose needs, and desires keep on
changing.
● This brings differing expectations among individuals and groups.
● To suit the organizational context, they work in their own ways. Positive
factors:
factors one's ambition, need to achieve, career growth, capabilities, etc.
● The negative aspects are one's fears, insecurities, frustrations, etc.
 Structure-focused change: A change that alters any of the basic components of an organization’s structure or overall design (to reduce costs,
increase profitability) e.g.,

●
Global competition has made many companies act mean and lean
● Technological change: A change that impacts the actual process of
transforming input to output is known as Technological change. E.g..,,)
●
Person focused change: A change that is concerned with
human resource planning and with enhancing employee
competence and performance.
●
Redefining organizational strategy and goals;
goals structural
change in terms of expansion, contraction or resizing, and
technological input-
input All these have implications for human
resource management.
●
The focused changes are as under:
●
Replacement: When an employee's further training does not help.
●
Replacement: Where an employee's current skills are best suited.
●
Employee training and development
●
Laying down new recruitment and selection policies in tune with changing technologies
● Profitability issues: By restructuring (downsizing, resizing), and re-
engineering to improve revenue, market share, and productivity.
● Resource constraints: Resources are:
● • Money • Machinery
● • Material • Information
● • Personnel • Technology
● Depletion, inadequacy, or non-availability of the above will lead to a
powerful change force in the organization.
● Thus a variety of forces within the organization as mentioned above
will cause change relating to system dynamics
 EXTERNAL FORCES OF CHANGE
●
Forces The
Political Forces:changes happened in Germany (Unification of the East with the West), also in the other nations of east European countries to democracy and market economy, and also in the USSR,
the Ukraine- Russia war, crisis, and the recent happenings in Israel- Palestine are good examples of political upheavals and necessitated change in other nations that are well-knitted with them.
●
Economic Forces: The uncertainty about future trends in
the economy is a major cause of change. Many of the
countries are undergoing changes in declining
productivity, inflation, deflation, interest rates, capital
investment, petrol prices, lower consumer confidence,
recessions etc.
●
These have a marked impact on different economies and
organizations.
●
Technological Forces:
●
Technological advancements (Especially in the IT field i.e., Computer and Communications; Information systems, Communication field, Internet technologies) are found everywhere and have revolutionized the workplace. New quality products are rolling out; Improved services are provided, and costs are dramatically reduced e.g. PCs, TVs, and Laptop prices have gone down, and communication costs have been slashed.
●
Advances in technology have contributed to the development of economies.
●
Bio-chemical and bio-medical technologies are replacing several technologies in the future, especially in medicine, agriculture and industry.
●
Government Forces: Governmental interventions in the form of regulations also lead to change.
●
The changes are:
■
deregulation,
■
foreign exchange,
■
antitrust laws,
■
antidumping duties,
■
suspension agreements,
■
protectionism.
 Increased global competition: Companies have to operate globally for survival and growth.
●
Automobile industries are competing globally to retain a competitive edge.
●
Companies have also gone virtual by establishing strategic alliances.
●
No single company can survive on its own unless it ties up with other companies.
●
Relationship enterprises are to be built like IBM, Siemens, Toyota, Toshiba etc.
 Changing customer needs and preferences: Organizations are innovating and bringing new products continuously to meet customer needs and preferences which are changing quite often.
●
E.g. Products of Maruti, Centro, Sony, Sansui, and Samsung.

Not all changes are actually effective. Some changes may fail.
EFFECTIVENESS OF CHANGE

Effectiveness of change is going to be seen when the following points are achieved.

Change is achieved when the organization is moved from a less desired state to a more desired one, and the indicators for this are:
●
Organization meets planned expectation
●
No undue costs to the organization
●
No undue costs to the individuals
 FAILURE FOR CHANGE PROGRAMS
●
Change programs are common but research indicates that two-thirds of all organizational changes fail
●
Several of the most common reasons for failed change programs include:
○
lack of commitment from the top
○
change overload
○
lack of incentives tied to the change initiative
○
lack of training
 Communication breakdown
 lack of space and support
 unclear objectives
 lack of performance measures, and
 underestimating emotions
 TARGETS FOR ORGANIZATIONAL CHANGE
• The five major areas of change include:
– Strategy – develop new visions, missions, strategic plans
– Structure – add a new department or division, or consolidate two existing
ones
– People – replace a person or change knowledge, skills, attitudes, or
behaviors
– Technology – upgrade a data processing system
– Management –encourage participation by those involved in solution of
problems
 CHANGE MANAGEMENT

Change management is the process of planning, directing and
controlling all activities involved in a state of change to ensure that
change programs meet preset objectives and goals.

Change management is an important issue in all industries and
organizations.

It is of relevance to a wide range of situations at all levels from
individual, team and organization to leadership.
 APPROACHES OR STRATEGIES FOR ORGANIZATION
CHANGE
• The planned changes are sought
through the following three
Strategies/Approaches:
 Structural changes
 Technological changes
 Value-centered changes
 3. Models of Change

• Kurt Lewin has proposed two models of change in 1951.

These are:
- Force field analysis
- A three step change process
1. Force field analysis
• By force field analysis, we have three step change
process which involves an interplay of multiple
opposing forces.
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 Models of Change…

• These forces are driving forces, restraining forces and the

change manager’s role in the interaction between these two
forces (interaction management).

Driving Forces
Forces Interaction Restraining
Mgt.

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 Models of Change…
The steps of change as put forward in the Force field analysis are:

• The first step is identifying and analyzing driving & and restraining forces.
• The second step is assessing which forces are critical.
- Not all forces are equally important in driving or holding the change back.
• The third and foremost important step is increasing the critical driving forces
and decreasing the critical restraining forces.

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 Models of Change…

• Force field analysis: Example

Driving Forces Restraining forces

e.g., e.g.,
• Experienced • Fear of unknown
workforce (fear of loss of job)
• Committed work • Unskilled, obsolete
force human resource
• Flexible • Loss of influence
organizational (may be from top
culture management)

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 Models of Change…
2. Three phases (steps) of change theory
• This theory is about unfreezing, changing and refreezing.
• What do we unfreeze? What do we change? What do we
refreeze?
• Lewin thinks that any change suffers from three problems.
1)unwillingness to change
2)Inability to change
3)Inability to sustain the change
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 Models of Change…

• Lewins 3 Phases Change Theory

Unfreeze Change Refreeze
•Behavior
Raised State of •Change
advocated and stabilized
Tension
implementation
Climate adapted begins •Desired
to minimize Attitudes
resistance Changes tested
•Values
Dissatisfaction and adapted for
internalized
with status quo desired results
& reinforced

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 Models of Change…
Illustration

A Awareness of the need for change

Desire to support and participate in

D change

K Knowledge of how to change

A Ability to implement change

R Reinforcement to sustain change

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Kotter’s 8 Step Change Model

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Eight Step Change Model
 KOTTER’S MODEL -
THE 8 STAGE PROCESS

STEP 1

CREATE URGENCY
Helping others see the need for change &
the importance of acting quickly
Slide 44
 KOTTER’S MODEL -
THE 8 STAGE PROCESS

STEP 2

BUILD A GUIDING TEAM

Ensuring there is a powerful group, with the appropriate leadership
skills, credibility & and authority to guide the change process

Slide 45
 KOTTER’S MODEL -
THE 8 STAGE PROCESS

STEP 3
CREATE A VISION FOR CHANGE

Creating a picture of the future & and how it

will be different from the past
Slide 46
 KOTTER’S MODEL -
THE 8 STAGE PROCESS

STEP 4

COMMUNICATE THE CHANGE VISION

Ensuring everyone understands

& accepts the vision
Slide 47
 KOTTER’S MODEL -
THE 8 STAGE PROCESS

STEP 5

REMOVE OBSTACLES

Removing the barriers to making change successful

Slide 48
 KOTTER’S MODEL -
THE 8 STAGE PROCESS

STEP 6

CREATE ‘SHORT TERM WINS’

Create clear, visible success stories early in the process.

Slide 49
 KOTTER’S MODEL -
THE 8 STAGE PROCESS

STEP 7

CONSOLIDATE GAINS &

PRODUCE MORE CHANGE – DON’T LET UP

Recognize more change opportunities following the

‘quick wins’ to take full advantage of the momentum for change

Slide 50
 KOTTER’S MODEL -
THE 8 STAGE PROCESS

STEP 8

ANCHOR THE NEW APPROACHES

IN THE CULTURE
Ensure the new ways of behaving are recognised & and
rewarded to embed the change into the organisational
culture
Slide 51
 Management of Change

Some of the techniques/strategies used to overcome resistance to change

are:
Education and communication: educating and communicating people
who resist change using one- to one discussion, conference, broachers and
reports
Participation and involvement: involving those who resist change in
designing and implementation of change
Facilitation and support: facilitating grounds for change by providing
training, counseling so that barriers to change can be prevented
Negotiation and agreement: when necessary management offer
incentives ( bonus, wage, salary and recognition) for cooperation with the
changeand
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 cont’d
Manipulation and cooptation: giving an informal group
leader a desirable role in the designing and
implementation of a potential change. It is a tactic of
neutralizing or wining over a minority by assimilating
them in to established groups
Explicit and implicit coercion: applying punishment to
those who resist change.
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 Minimizing Resistance to Change

Communication
Coercion

Training
Manipulation &co-operation Minimizing
Resistance
to Change Employee
Involvement
Negotiation
Stress
Management

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What has all this got to do with Management and Change?
Because the rate of change in Knowledge, in technology,
and in
how we live our lives means that no part of the economy is
immune from these developments.
People have to live with greater levels of uncertainty,
causing stress and making people feel that they can have
no loyalty to their employer because their employer can
no longer offer any guarantees to them.
This uncertainty is not confined to the private sector either.
Privatization,
Public– Private Partnerships,(PPP)
the Private Finance Initiative,
Compulsory Competitive Tendering,
Best Value,
League Tables and Targets,
- are some of the very many policies that have hit the public
sector and led to wholesale changes in the way people work
and who they work for.
The private and voluntary sectors are now major suppliers of
services to the public on behalf of Government instead of
Government doing the work itself, which means regular re-
tendering and fixed term contracts for staff.
Management in this context has become more and more
necessary because people feel that they live in a world
without trust, and they need to feel trust to have confidence in
the world about them.
Leaders, as we know, have to be trusted to perform
effectively and so leadership is one way that organizations
can give people the stability that they look for.

To provide that leadership and earn that trust you need to be

able to cope with the pressures of change and help people to
respond positively to the changes that they experience.
Change is not bad nor is people naturally afraid of it.
What they fear is the uncertainty of change, the lack of
control (that it is ‘done to them’ rather than something that
they have some power over) and the feeling that they do
not matter.
To do this you need to understand what is causing the
changes that affect you,
you the people you Managing and your
organization.
 THE PRESSURES FOR CHANGE

Organizations exist in a world where changes are

happening all the time.

One way of trying to make sense of these pressures is

a

PESTLE analysis.
POLITICAL
 Political pressures for change include decisions by local
councils, national Governments, and supra-national
bodies (the EU or the World Trade Organization).
 Different organizations are affected in different ways at
these different levels of political decision-making.
 For example, small business may find its local council
prevents it from expanding, national government imposes
new rules on its operations and the WTO removes trade
protection that brings in cheap imports.
ECONOMIC
Economic pressures for change include both the state of the
national and international economies (including exchange
rates) and the markets the organization operates in, including
the competition it faces and the behaviour of customers.
For example, a reduction in interest rates encourages people to
increase their mortgages to pay for house extensions and
improvements, or a competitor introduces a new product that
cuts demand for your organization’s products.
SOCIAL
Social pressures for change include Changing Demographic
Characteristics (an ageing population living and working
longer), Changing attitudes, expectations and behaviours.
For example, there are now more older than younger people
in the UK, affecting the demand for all kinds of goods and
services, including health and social care.
TECHNOLOGICAL
Technological pressures for change are critical in many
organizations, affecting
how the organization produces goods and services,
what goods and services it supplies, and
what other goods and services customers may use that could affect the
level of demand for what the organization supplies.
For example, the development of mobile ‘phones has significantly
altered the way many people work, making them far more mobile as
they can now access information anywhere and keep in touch
permanently with their base.
LEGAL
Legal (or legislative) pressures for change can affect all aspects of an
organization’s activities, including the employment of people,
design of processes, sale of goods and services, finance and
governance, and information.
Each change in the law can mean changes are needed in some aspect
of the way the organization works, and some of these changes can
have a knock-on effect, requiring further changes in related areas.
For example, legislation to prohibit disability discrimination has led
to many products being redesigned and retail outlets altered
structurally, to avoid prosecution.
Environmental
Environmental (or ecological) pressures for change are of
two forms – those that arise from the increasing concern
internationally about the environment and the effect this
has on the other areas listed above, to encourage more
environmentally-friendly behaviour by organizations, and
those that arise (or may potentially arise) from a changing
physical environment and climate.
For example, rising sea levels in parts of East Anglia are
causing local councils to abandon attempts to prevent coastal
flooding and allowing farm land to turn to salt marsh.
Each of these headings can be used to analyze the external
environment within which the organization operates, identifying
what pressures for change exist and the likely effect they will have.
Of course, they also interact with each other – legal changes arise
from political decisions, and can have social and economic effects.
This analysis of the external environment, identifying pressures for
change and their likely consequences for the organization , is not
about certainty but probability – what might happen or what might
be the effect if it does.
Some pressures will be stronger than others,
others and some will
have a greater impact on the organization than others.
There is a limit to what any leader can do in helping people
to seize opportunities when those opportunities are not
worth seizing.
Leadership means being honest and trustworthy, and
effective leaders do not pretend that bad news is really good.
What leaders can and should do is to be honest, telling
people the truth and being as open as possible.
The bad news is always worse than the fear of bad news, and the
ability to manage decline is as much the mark of an effective
leader, if not more so.
This is where your ethical standards your character and your skills
as a leader are tested,
but if you know what your values are,are if you have the strength
of character and personal skills that you have been Leadership,
Leadership
then you will cope well with the challenge.
 THE ABILITY TO CHANGE
You were encouraged to undertake a personal SWOT to assess your own
development needs.
You should do the same for your organization and for your part of it; a
SWOT analysis compares the external pressures for change with an
analysis of the organization’s capacity to respond and to determine its
development needs.
You will remember that SWOT stands for:
Strengths
Weaknesses
Opportunities
Threats
Strengths and Weaknesses are internal and all about the
characteristics and features of the organization.
organization
They reflect the capacity of the organization to respond to external
pressures for change, while Opportunities and Threats arise from
what is happening outside in the external environment, the results of
the PESTLE analysis.
As a leader, the questions you should be asking about the internal
abilities of the organization, its strengths and weaknesses, are:
How well are people prepared for new roles and
responsibilities, in terms of skill levels, attitudes and
commitment?

People who are well trained are usually more open to

retraining and learning new skills than people with low
skills or who have not taken part in training for some time.
How open is the organization, internally?
Is it easy for people to move from one area of activity
to another, for workgroups and teams to be reformed
and processes redesigned to cope with new patterns of
demand and new operations?
Is the organization flexible, with permeable boundaries
between its different parts?
(‘Permeable boundaries’ is a term used in systems
theory and refers to the way that the organization is
divided up into its different component parts, and the
ease with which they deal with each other.
An organization with permeable boundaries is one
where people, information and resources can move
easily around the organization.)
Does the organization have a culture that welcomes
change rather than being afraid or resistant to it?
Culture has been defined as ‘the way things are around
here’ and is hard to define but easy to identify in the
language people use, the symbols and dominant mind-
sets.
There are limits to what you can do to change the whole
organization, its policies, culture, management strategies
and leadership. However, you should make sure that the
part of the organization.
Styles of Change Management
All too often, when major change is being made to an
organization, managers adopt one of two styles:
1. A Rational-Empirical style, which assumes that
people are rational and will accept a logically argued case for change
especially if there is some incentive for the to do so –simply
explaining that this redesigned system works better than another
will convince people to accept change.
A Power-Coercive style, which assumes that people will do what
they are told.

A new system is designed, based on a detailed analysis

of what was there before, to remove any problems or
respond to external pressures for change, and then
people are told how they will now work.
It uses the authority of managers and the ability to
coerce people by using threats to their jobs.
 The Normative-Re-educative style acknowledges that
people are social beings and that they care about their
roles (what they do in the organization),
- their relationships (whom they work with and how they
work together) and the culture of the organization or
their part of it (the norms and values which guide them,
and the significance of symbols and behaviours which
demonstrate their status and power).
 Managers do not have to be told that these things matter;
for them the Normative-Re-educative approach is the
obvious way to go.
 If people are involved from the beginning, they own the
change, it is most likely to work and can be introduced
most easily.
 So, Why do managers choose the Rational-Empirical or
Power-Coercive approach?
Because they do not trust the people affected by the change,
because it means being open and discussing the external
pressures which makes them fearful they will lose authority
(they do not control the world outside), and
it means they have to spend a lot of time explaining things they
may not fully understand themselves.
In other words, it reflects their lack of confidence in
themselves.

Leaders are open about what is happening, have the

confidence to admit what they do not know and are willing
to listen to anyone else who may know – they trust the
people they lead.