MANAGING CHANGE AND

COMMUNICATION
(BSMH 5093)
CHAPTER 4 :
WHAT CHANGES IN ORGANIZATION
Presented by :
Noorliza Binti Md Noordin (814780)
Norazlina Binti Mansor (814778)

PRESENTATION OVERVIEW:

Spectrum of Changes
First

Order Change - Incremental

Second Order Change - Transformational

Beyond First and Second Order Change

Mid

Range Changes
Punctuated Equilibrium
Robust Transformation

Types of Changes
Downsizing
Technological

Change
Mergers and Acquisitions

Key Change Challenges

SPECTRUM OF CHANGES

FIRST ORDER CHANGE INCREMENTAL

FIRST ORDER CHANGE

Incremental
Maintains and develops the organization
Adjusting

systems, processes, structures, but

no strategies and values

Taking of individual initiatives

Development of local routines
E.g.:
Continuous

& smaller changes to the structure of

the organization.

SPECTRUM OF CHANGE

SECOND ORDER CHANGE

- TRANSFORMATIONAL

SECOND ORDER CHANGE

Transformational
Fundamentally changes the way an organization
functions
Move from entrepreneurial to professional
management structure
Revitalization of already-established company
Visionary change in the business
E.g.:
Downsizing

TYPES OF ORGANIZATIONAL
CHANGE
INCREMENTAL

PROACTIVE

REACTIVE

TUNING

ADAPTATION

TRANSFORMATIONAL

REORIENTATION

RE -CREATION

TYPES OF ORGANIZATIONAL
CHANGE INCREMENTAL

Tuning
The

management decided to change the

whole organization business structure or
objective.

Require

fine tuning or minor changes to

existing organization either to increase
organization efficiency towards achieving its
objectives or defending its strategic goal.

TYPES OF ORGANIZATIONAL
CHANGE INCREMENTAL

Tuning
Continuous

activities within the organization in

order to maintain alignment between internal
elements of the organization and between the
organizations strategy and external
environment.

E.g.:

improving existing processes, policies,

organization methodology, procedures;
introduction of new technology;

TYPES OF ORGANIZATIONAL
CHANGE INCREMENTAL

Adaptation
Incremental

and adaptive requirement for a

change of an organization due to external
environment or circumstances that the
organization needs to adapt with.

Involves

responding to a successful new

marketing strategy adopted by competitor or
to a change in the availability of a key
resource.

TYPES OF ORGANIZATIONAL
CHANGE INCREMENTAL

Adaptation
Involves

doing more of the same but doing it

better in order to remain competitive. This
kind of change is not about doing things in
fundamentally different ways or about doing
fundamentally different things.

E.g.:

E-commerce and online adaptation to offline

business strategies.

TYPES OF ORGANIZATIONAL
CHANGE TRANSFORMATIONAL

Re-orientation
Program

that involves a redefinition of the

organization or enterprise for future
opportunities or problems.

To ensure

that the organization will be aligned

and effective in the future.

Involves

a gradual process of continuous frame

modification.

TYPES OF ORGANIZATIONAL
CHANGE TRANSFORMATIONAL

Re-creation
Involves

transformation of organization that

basically involves all basic elements within the
organization.
Involves either a portion of the organization or
the entire structure and system of the
organization. i.e. organization frame breaking and
the destruction of some elements of the system.
Can lead to disorientation because the orientation
involved many changes including people at every
level.

INTENSITY OF CHANGE

BEYOND FIRST & SECOND ORDER CHANGE

MID RANGE CHANGES

MID RANGE CHANGES

Organization seeks to modify the company

without destroying employee loyalty and other
positive company attributes.

Avoids the alarming implications of large scale

change.

Avoids the negative perception of change

announcement:
High

inertia - result when change is perceived as

unnecessary.
High stress result when the change is perceived as
unattainable.

BEYOND FIRST & SECOND ORDER CHANGE

PUNCTUATED
EQUILIBRIUM

PUNCTUATED EQUILIBRIUM

Another alternative other than adaptive and

transformational change.
Long periods of stability followed by short
bursts of change and instability.
E.g.
Strategic

stability as a group over a long period

but at times of any environmental
disturbances, there were minor instability.

BEYOND FIRST & SECOND ORDER CHANGE

ROBUST
TRANSFORMATION

ROBUST TRANSFORMATION

Considers environmental conditions as being

temporary and requiring robust responses
including the enactment of new capabilities.

E.g.
Rebranding

TYPES OF CHANGES

TYPES OF CHANGES

DOWNSIZING

DOWNSIZING
What is organizational downsizing ?

Reduction in organizational size

- Laying off employees
- Eliminates operating units

Why organization carry out downsizing ?

Achieve cost cutting

Improve organizational efficiency
Improve productivity
Increase competitiveness of the organization

DOWNSIZING
Approaches to Downsizing

DOWNSIZING
o Centralize operations to improve
productivity
Retrenchment o Remove unnecessary jobs and amenities
o Increase economies of scale and
maintain competitive advantages

Downscaling

o Permanent changes to employment and

tangible resource capacity
o Reduces firms economies of scale and
competitive market share

Downscoping

o Eliminate business that are unrelated to

organizations core business

TYPES OF CHANGES

TECHNOLOGICAL
CHANGE

TECHNOLOGICAL CHANGE

Advancements in technology has

led to evolution of newer and faster
modes of data and information
transfer.

Computer and Internet technologies are global and

have changed every sector - medicine, tourism,
education, entertainment or any other.

Technology has touched every aspect of life, making

it easier, better and different. Technology has
changed living.

TECHNOLOGICAL CHANGE
Types of Technologies being used

TECHNOLOGICAL CHANGE
Types of Technologies being used
Enterprise
Resource
Planning
(ERP)

o Business management software that

collect, store, manage and interpret data
from business activities

Customer
o System that manage companys
Relationship
interactions with current and future
Management
customers to forecast future demand
(CRM)
Wireless
Technology

o Devices that transmit information from

remote point to central point

TECHNOLOGICAL CHANGE

Business
o Process of redesign, business
Process
transformation, or business process
Reengineering
change management
(BRP)

Six Sigma

o Process of quality control through

statistical information

TYPES OF CHANGES

MERGERS
AND
ACQUISITIONS

MERGERS AND ACQUISITIONS

Mergers
Absorption of one company by another

Acquisitions
Purchase of some portion of one company by
another

MERGERS AND ACQUISITIONS

Companies generally increase in size with a

merger or acquisition

Reasons for merger and acquisition:

Change

in strategic focus

Synergy
Financial

needs

MERGERS AND ACQUISITIONS

MERGERS AND ACQUISITIONS

Types of Mergers and Acquisitions
Excessive
Capacity

o When firm has opportunity to reduce

excessive capacity and consolidate
operations in matured industries

o When firm acquires operations in

Neighbouring
neighbouring areas to increase value for
Market
consumers and lowering the overhead
Expansion
costs
New
Product/
Market
Investment

o When two firms wish to explore on new

product line or global scope

MERGERS AND ACQUISITIONS

Types of Mergers and Acquisitions
o When firm wish to increase market
Research
position at more rapid rate, especially
and
when the products that being developed
Development
has shorter life cycle
Leveraging
to create
New
Industries

o When resources of two firms are pooled to

launch new industry

TYPES OF CHALLENGES

KEY CHANGE
CHALLENGES

KEY CHANGE CHALLENGES

DOWNSIZING
Employee retention
Avoiding hard landings
Minimizing political
behavior & loss of teamwork
Survivor syndrome
Communication
Due diligence
Cultural adjustment
Choice of restructuring technique

KEY CHANGE CHALLENGES

NEW TECHNOLOGIES
Goal synthesis
Choice of technology
Identifying political barriers
The IT team
Communication
Time frame
Contingency planning

KEY CHANGE CHALLENGES

MERGERS AND ACQUISITIONS
Cost savings
Cultural adjustment
Balancing change and continuity
Due diligence
Employee retention
Contingency planning
Power structure
Communication

THANK YOU

Q & A SESSION