Change Management

Unit 5 : Lesson 2
Kodak
With the slogan "you
press the button,
we do the rest,"
George Eastman put
the first simple camera
into the hands of a
world of consumers in
1888.
In so doing, he made a
cumbersome and
complicated process
easy to use and
accessible to nearly
everyone.
Business Model of Kodak
For almost a century
Kodak dominated the
photographic business.
The companys
business model was
simple: Sell cameras
cheaply and then make
money by selling and
processing the film. It
worked flawlessly till
1990.
1990s digital cameras
started to appear on
the scene. Suddenly
consumers didnt need
film.
Recognizing the threat,
Kodak started an
aggressive program to
produce digital
cameras.
By 2005 Kodak was
the market leader,
selling 22 percent of all
digital cameras in the
United States.
Kodak at crossroads
The digital camera
business was fiercely
competitive, and
profit margins were
low.
Traditional business
started to decline
and Kodak incurred a
loss of $1.4 billion in
2005.
Antonio Perez, the
companys CEO,
noted that the
company was in the
worst possible place
as it tried to shift
from traditional
photography to
digital imaging.
Issue
Why Kodak posted loss in 2005?
Lesson Objectives
Concept of Change
Types of Change
Forces of Change
Process of change
Resistance to change
Strategies to overcome resistance to change
Challenges facing management
Organizational Development
Key elements to the success of change
Concept of change
Organization is an open system.
It interacts with the external environment.
External environment consists of Socio-
cultural, economic, legal, political and
technological systems
Changes in these systems create both
opportunities and threats to survival and
growth of organizations.
Managers in order to adapt to these
external changes, make internal changes in
the processes, structure and goals of the
organization.
Types of Change
Anticipatory change
Planned. Take advantage of a situation that may arise.
Reactive change
Forced. Unexpected. Sudden change in the
environment.
Incremental change
Adaption to new path. Gradual and done time to
time.
Strategic change
Influencing the overall functioning of the organization.
Change in technology, location, diversification etc.
Forces of Change
External Forces
Socio cultural forces
Economic Forces
Political and legal
forces
Technological forces
Task environment
(suppliers, customers,
community, society)
Internal Forces
Top management
Change in employee
attitudes and beliefs
Change in work
environment (hours,
duties, job content)
Process of change
Model of change process was developed by Kurt
Lewin (1947)
change as a three-stage process.
The first stage he called "unfreezing". It involved
overcoming inertia and dismantling the existing "mind
set".
In the second stage the change occurs. This is typically
a period of confusion and transition. We are aware
that the old ways are being challenged but we do not
have a clear picture as to what we are replacing them
with yet.
The third and final stage he called "freezing". The new
mindset is crystallizing and one's comfort level is
returning to previous levels.
Resistance to change
Insecurity
Loss of employment
Change in status quo
Redistribution of authority and responsibility, redefining
job and reallocation among employees.
Communication Gap
Socio Psychological reasons
Working with strangers and unknown social groups
Group Pressure
Loss of power and control
Sudden change
Rigid organizational structure
Bitter past experiences
Strategies to overcome resistance
to change
Participation and involvement (stakeholders)
Education and communication
Leadership (influential)
Facilitation and support (adjustment)
Negotiation and agreement (powerful
groups)
Timing of change (awareness first)
Use of group pressure (informal)
Use of power (risky)
Challenges facing management
Strategic thinking and acting
Environmental scanning on a continuous basis to understand
opportunities and threats
Creative decision making
Out-of-box solutions are needed.
Restructuring and reengineering of the organization
Transparent and adaptive organizations have to be built
Empowering people
Opportunity to work in teams
Strategic Alliances
Ability to share knowledge, resources and benefits
Visionary Leadership
Develop a clear vision of the future
Managing Relationships
Strong relationships with stakeholders
Organizational Development
Richard Beckhard (1950s)
Integration of organizational and
individual needs
It is a planned, organization-wide, top
management initiative to increase
organizational effectiveness and health
through planned intervention in the
processes of an organization.
Key elements to the success of
change
Leadership supportive and committed to
change
Strong sense of urgency
Clear vision
Reward system to reinforce change
Managers willing to sacrifice their personal
interests
Acceptance of customer needs in the
organization
Clear communication channels
Quick and appropriate implantation of
suggestions
Summary
Change is an inevitable and continuous
process
This process has three steps: unfreeze,
change and freeze.
Employees will resist change. There is a need
to overcome this resistance.
Change management throws new challenges
to managers
Visionary leaders play a major role in moving
organizations through a planned change.
Thank you
End of Unit 5 Lesson 2