Introduction

Organizational change occurs when business strategies or major sections of an organization are
altered. It is defined as a change that has significant effects on the way work is performed in an
organization.
Organizational change may be apparent when there is a gap between how the work area is
operating and how it should be operating to ensure successful future growth. Organizational
change may be a result of the work area identifying goals that they want to achieve.
Concept of organizational change
Organization change is any substantive modifications to some parts of the organization. The
concept of change is what procedures departmentalization, the skill of management, machinery
organizations design as well as people themselves.
Organizational change is both the process in which an organization changes its structure,
strategies, operational methods, technologies, or organizational culture to affect change within
the organization and the effects of these changes on the organization. Organizational change can
be continuous or occur for distinct periods of time.
Types of organization change
Organizations may changes by two types:

Planned change and

Reactive change

Planned change
It is a change resulting from a deliberate decision to alter the organization. Companies that wish
to move from a traditional hierarchical structure to one that facilitates self-managed teams must
use a proactive, carefully orchestrated approach. Not all changes are planned.
Reactive change
Reactive change is that change which depends on the circumstances of organization like;
environment, organization structure, goals etc. of the organization.
In this era of globalization, Organizations need to cope up with the dynamic and inevitable
changes, which take place very often. Because of these changes the competition among firms is
becoming intense and every organization should be flexible enough to implement the changes
whenever required for its survival.

Forces for Change

Organizations are not static; they are continuously changing in response to a variety of forces
coming from both inside and outside. For leaders, the challenge is to anticipate and direct change
processes so that the performance is improved.

EXTERNAL FORCES
The major external forces for change are:1. Nature of the workforce: Almost every organization must
adjust to a multicultural environment, demographic changes,
immigration and outsourcing.
2. Technology is continually changing jobs and organization. Ex:
faster, cheaper and more mobile computers and handheld
devices.
3. Economic shocks: rise and fall of global housing market,
financial sector collapse, global recession.
4. Competition is changing. Competitors are as likely to come from
across the ocean as from across town. Ex: increased government
regulation of commerce.
5. Social trends dont remain static. Companies must continually
adjust product and marketing strategies to be sensitive to
changing social trends. The State Bank of India did the same
when it started a zero-balance bank account program for
villagers.
6. World Politics
A global context for OB is required. No one could have imagined
how world politics would change in recent years.
Weve seen a major set of financial crises that have rocked global
markets, a dramatic rise in the power and influence of China, and
dramatic shakeups in government across the Arab world.

INTERNAL FORCES
Pressures for change that originate inside the organization are generally recognizable in the form
of signals indicating that something needs to be altered, such are the internal forces.
Declining effectiveness is a pressure to change. A company that experiences its third quarterly
loss within a fiscal year is undoubtedly motivated to do something about it. Some companies
react by instituting layoffs and massive cost cutting programs, whereas others look at the
bigger picture, view the loss as symptomatic of an underlying problem, and seek the cause of the
problem.
A crisis situation also may stimulate change in an organization. Strikes or walkouts may lead
management to change the wage structure. The resignation of a key decision-maker is one crisis
that causes the company to rethink the composition of its management team and its role in the
organization.
Changes in employee expectations also can trigger change in organizations. A company that
hires a group of young newcomers may be met with a set of expectations very different from
those expressed by older workers. The work force is more educated than ever before.
Although this has its advantages, workers with more education demand more of employers.
Todays workforce is also concerned with career and family balance issues, such as dependent
care. The many sources of workforce diversity hold potential for a host of differing expectations
among employees.
Changes in the work climate at an organization can also stimulate change. A workforce that
seems lethargic, unmotivated, and dissatisfied is a symptom that must be addressed. This
symptom is common in organizations that have experienced layoffs. Workers who have escaped
a layoff may grieve for those who have lost their jobs and may find it hard to continue to be
productive. They may fear that they will be laid off as well, and many feel insecure in their jobs.

Approaches To Managing Organisational Change: Lewins Three Step Model

Kurt Lewin argued that successful change in organizations should follow three steps: unfreezing
the status quo, movement to a desired end state, and refreezing the new change to make it
permanent.

LEWINS THREE STEP MODEL

Unfreezing: means getting ready for change. Its include following activities

Arouse dissatisfaction with the current state

Activate and strengthen top management support
Use participation in decision making
Build in rewards

Moving: means making the change. Its include following activities

Establish goals
Institute smaller, acceptable changes that reinforce and support change
Develop management structures for change
Maintain open, two-way communication

Refreezing: means stabilizing the change. Its include following steps

Build success experiences.

Reward desired behaviour
Develop structures to institutionalize the change
Make change work

Driving forces

Driving forces are forces that push in a direction that causes change to occur.
Driving forces facilitate change because they push the person in the desired direction.
They cause a shift in the equilibrium towards change.

Restraining forces

Restraining forces are forces that counter driving forces.

Restraining forces hinder change because they push the person in the opposition direction
Restraining forces cause a shift in the equilibrium which opposes change.

Equilibrium

Equilibrium is a state of being where driving forces equal restraining forces and no
change occurs
Equilibrium can be raised or lowered by changes that occur between the driving and
restraining forces.

Figure: Unfreezing the Status Quo

The status quo is an equilibrium state. To move from equilibriumto overcome the pressures of
both individual resistance and group conformity unfreezing must happen in one of three ways
The driving forces , which direct behavior away from the status quo, can be increased. The
restraining forces, which hinder movement away from equilibrium, can be decreased. A third
alternative is to combine the first two approaches. Companies that have been successful in the
past are likely to encounter restraining forces because people question the need for change.

Sources of Resistance to Change

Individual Sources
Organizational Sources

Individual Sources
HabitTo cope with lifes complexities, we rely on habits or programmed responses. But when
confronted with change, this tendency to respond in our accustomed ways becomes a source of
resistance.
SecurityPeople with a high need for security are likely to resist change because it threatens
their feelings of safety.
Economic factorsChanges in job tasks or established work routines can arouse economic fears
if people are concerned that they wont be able to perform the new tasks or routines to their
previous standards, especially when pay is closely tied to productivity.
Fear of the unknownChange substitutes ambiguity and uncertainty for the unknown.
Selective information processingIndividuals are guilty of selectively processing information
in order to keep their perceptions intact. They hear what they want to hear, and they ignore
information that challenges the world theyve created.
Self Interest
Ego often interferes with the ability to adapt to change. Some want to maintain the status quo to
better advance their own personal agendas; others have different motivations. In the end,
employees acting in their own self-interest, instead of the organization's greater good, will resist
change.
Fear of the Unknown
Change often brings with it substantial uncertainty. Employees facing a technological change,
such as the introduction of a new computer system, may resist the change simply because it
introduces ambiguity into what was once a comfortable situation for them. This is especially a
problem when there has been a lack of communication about the change.

Fear of Loss
When a change is impending, some employees may fear losing their jobs, particularly when an
advanced technology like robotics is introduced. Employees also may fear losing their status
because of a change. Computer systems experts, for example, may feel threatened when they feel
their expertise is eroded by the installation of a more user friendly networked information
system. Another common fear is that changes may diminish the positive qualities the individual
enjoys in the job. Computerizing the customer service positions at Southwestern Bell, for
example, threatened the autonomy that representatives previously enjoyed.
Fear of Failure
Some employees fear changes because they fear their own failure. Introducing computers into
the workplace often arouses individuals self doubts about their ability to interact with the
computer. Resistance can also stem from a fear that the change itself will not really take place. In
one large library that was undergoing a major automation effort, employees had their doubts as to
whether the vendor could really deliver the state of the art system that was promised. In this
case, the implementation never became a reality the employees fears were well founded
Poor Communication
Changes within an organization start with key decision makers. It is up to them to pass along the
details to team members and ensure all questions and complaints are handled before changes go
into effect. Unfortunately, as news of a change spreads through the hierarchy, details are
sometimes skewed and members end up receiving inaccurate, second-hand information. Poor
communication can therefore cause resistance to change.
Disruption of Interpersonal Relationships
Employees may resist change that threatens to limit meaningful interpersonal relationships on the
job Librarians facing the automation effort described previously feared that once the
computerized system was implemented, they would not be able to interact as they did when they
had to go to another floor of the library to get help finding a resource. In the new system, with
the touch of a few buttons on the computer, they would get their information without consulting
another librarian.
Personality Conflicts
When the change agents personality engenders negative reactions, employees may resist the
change. A change agent who appears insensitive, to employee concerns and feelings may meet
considerable resistance, because employees perceive that their needs are not being taken into
account.
Internal and External Politics
Organizational change may also shift the existing balance of power in the organization.
Individuals or groups who hold power under the current arrangement may be threatened with
losing these political advantages in the advent of change.

Cultural Assumptions and Values

Sometimes cultural assumptions and values can be impediments to change, particularly if the
assumptions underlying the change are alien to employees. This form of resistance can be very
difficult to overcome, because some cultural assumptions are unconscious. Some cultures tend to
avoid uncertainty may be met with great resistance.
Lack of Trust
Trust plays a big role in running a successful organization. When organization members feel they
cannot trust each other or key decision makers, it becomes difficult for them to accept
organizational changes. They may ascribe the changes to some negative underlying reason or
even assume they will eventually lose their jobs.
Organizational Sources
Structural inertiaOrganizations have built-in mechanismssuch as their selection processes
and formalized regulationsto produce stability. When an organization is confronted with
change, this structural inertia acts as a counterbalance to sustain stability.
Limited focus of changeOrganizations consist of a number of interdependent subsystems. One
cant be changed without affecting the others. So limited changes in subsystems tend to be
nullified by the larger system.
Group inertiaEven if individuals want to change their behavior, group norms may act as a
constraint.
Threat to expertiseChanges in organizational patterns may threaten the expertise of
specialized groups.
Threat to established power relationshipsAny redistribution of decision-making authority can
threaten long-established power relationships within the organization.

Overcoming Resistance to Change

Eight tactics can help change agents deal with resistance to change. Lets review them briefly.
Education and Communication Communicating the logic of a change can reduce employee
resistance on two levels. First, it fights the effects of misinformation and poor communication: if
employees receive the full facts and clear up misunderstandings, resistance should subside.
Second, communication can help sell the need for change by packaging it properly.
Participation Its difficult to resist a change decision in which weve participated. Assuming
participants have the expertise to make a meaningful contribution; their involvement can reduce
resistance, obtain commitment, and increase the quality of the change decision. However, against
these advantages are the negatives: potential for a poor solution and great consumption of time.

Building Support and Commitment When employees fear and anxiety are high, counseling
and therapy, new-skills training, or a short paid leave of absence may facilitate adjustment. When
managers or employees have low emotional commitment to change, they favor the status quo
and resist it. Employees are also more accepting of changes when they are committed to the
organization as a whole.
Develop Positive Relationships People are more willing to accept changes if they trust the
managers implementing them. 13 One study surveyed 235 employees from a large housing
corporation in the Netherlands that was experiencing a merger. Those who had a more positive
relationship with their supervisors, and who felt that the work environment supported
development, were much more positive about the change process.
Implementing Changes Fairly One way organizations can minimize negative impact is to make
sure change is implemented fairly. Procedural fairness is especially important when employees
perceive an outcome as negative, so its crucial that employees see the reason for the change and
perceive its implementation as consistent and fair.
Manipulation and Cooptation Manipulation refers to covert influence attempts. Twisting facts
to make them more attractive, withholding information, and creating false rumors to get
employees to accept change are all examples of manipulation. Cooptation, on the other hand,
combines manipulation and participation. It seeks to buy off the leaders of a resistance group
by giving them a key role, seeking their advice not to find a better solution but to get their
endorsement. Both manipulation and cooptation are relatively inexpensive ways to gain the
support of adversaries, but they can backfire if the targets become aware they are being tricked or
used. Once thats discovered, the change agents credibility may drop to zero.
Selecting People Who Accept Change Research suggests the ability to easily accept and adapt
to change is related to personalitysome people simply have more positive attitudes about
change than others. 17 Such individuals are open to experience, take a positive attitude toward
change, are willing to take risks, and are flexible in their behavior. One study of managers in the
United States, Europe, and Asia found those with a positive self-concept and high risk tolerance
coped better with organizational change.
Coercion Last on the list of tactics is coercion, the application of direct threats or force on the
resisters. If management really is determined to close a manufacturing plant whose employees
dont acquiesce to a pay cut, the company is using coercion. Other examples are threats of
transfer, loss of promotions, negative performance evaluations, and a poor letter of
recommendation. The advantages and drawbacks of coercion are approximately the same as for
manipulation and cooptation.