Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Change Management and

Organisational Transformation

2e

Radha R. Sharma

Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter
1

Organisational Change: An Introduction

AN OVERVIEW OF CHANGE

Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

In the 1970s theories relating to change dealt with both

social needs and technical efficiencies giving equal attention
to both these aspects. This led to the emergence of two
approaches Organisational development (OD) and social
technical system theory (STS)
Recent Developments
From 198599, there has been an upsurge in international and
global competition due to pressure from economic reforms
Consequently, many organisations in late 1980s and 1990s in
the West and in 1990s in South Asia started substituting
transformation change for incremental change
It is being realised by managers of many organisations that
their organisations ought to be flexible to move between
incremental and transformational change to remain aligned with
the market conditions and also intra-organisational conditions

FORCES OF CHANGE
External Forces Affecting the Organisation

Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Globalisation and government policies

With globalisation and liberalisation, any organisation in
any part of the world can manufacture, process and sell
its products/services to other parts that is liberalised
With the opening up of the economy, the market is
flooded with a variety of products at competitive prices

Shift in Trends

Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

FORCES OF CHANGE

CHANGES DUE TO GLOBAL

ECONOMIC MELTDOWN
Mortgage Backed Securities (MBS) and Collateralised Debt
Obligations (CDO) were used whose value was derived
from mortgage payments and housing prices

Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Political factors
Technological changes
Changing customer needs and preferences
Economic factors
Environmental Factors

CHANGES DUE TO GLOBAL

ECONOMIC MELTDOWN

Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Focus on Inclusive Growth

To raise awareness, create understanding and develop
openness for reflection on inclusive culture
To develop a vision focused on inclusion
To rethink the concepts and principles of management
To acclimatise the HR systems and processes for inclusive
culture

IT/ICT Security Issues (Information

Technology/Information and Communication Technology
Changes due to Emergence of New Technologies/Media
Disruptive Changes: Security ThreatsTerrorism and
Social Violence

CHANGES DUE TO GLOBAL

ECONOMIC MELTDOWN

Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Internal Forces Affecting the Organisation

System dynamics
Structure-focused change
Technological change
Inadequacy of administrative processes
Individual/group expectations
Person-focused change
Resource constraints
Profitability issues

Strategic Flexibility
Need for Strategic Excellence

CHANGES DUE TO GLOBAL

ECONOMIC MELTDOWN

Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Autonomy and Flexibility for Employees

Corporate Entrepreneurship/Intrapreneurship

Safety and Security of Employees

Unethical Practices by Employees

TYPES OF CHANGE

Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Change as Incremental and Intrinsic to an

Organisation
Change as Extrinsic and Revolutionary
Change as Patterned and Predictable vs. Change
as Complex and Unpredictable

TYPES OF CHANGE
Duality or Bipolarity of Change

Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Relatively calm periods of continuous change are called

evolutions and the period of turbulent rapid discontinuous
change are called revolutions
minor incremental organisational change is convergence and
the discontinuous change is frame breaking change or
upheaval
Reinvention is used to describe discontinuous change
Discontinuous change is also referred to as strategic change,
which they further distinguish into two types reactive
(change made in direct response to external environment;
they refer to as re-creation) and anticipatory (change made
in expectation of a future event as re-orientation)

THEORETICAL FRAMEWORKS OF
ORGANISATIONAL CHANGE

Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Life Cycle Theory

Teleological Theory
Dialectical Theory
Evolutionary Theory

Four Process Schools of thought of

Organisational Change

THEORETICAL FRAMEWORKS OF
ORGANISATIONAL CHANGE
Life Cycle Theory

Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Teleological Theory
Dialectical Theory
Evolutionary Theory
Process Theories of Organisational Change

THEORETICAL FRAMEWORKS OF
ORGANISATIONAL CHANGE
Theories of Change at the Individual Level

Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Lewin (1951) identified three ways that lead to

organisational change:
Change the individual workers, implying change at
the individual level
Change various organisational structures and
systems
Change the organisational climate, implying the
interpersonal style

Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

THEORETICAL FRAMEWORKS OF
ORGANISATIONAL CHANGE

Comparison of Theories of Change

 Summarily, one can infer that organisational change is a

broad and multidimensional area of research in the
organisation theory

Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Complexity theory when applied to organisational change

underlines that organisational change has to keep in mind
that fact that it has to operate with a moving target whose
durability is highly elusive
In the words of Styhre (2002), Complexity theory
suggests that changes are produced on the basis of
multiplicity of interconnected causes and effects whose
relationships are complicated to conceive of from within
the analytical framework assuming linearity.
From the foregoing it is evident that organisational change
literature includes a number of perspectives and theories
on change