UNIT 03

CHANGE MANAGEMENT
PART 1:
UNDERSTANDING CHANGE
CONTENT
v Define organizational change and compare and
contrast views on the change process.
v Explain how to manage resistance to change.
v Explain how to manage organizational change
v Discuss techniques for stimulating innovation
v Explain what disruptive innovation is and why
managing it is important
TOP 10 MANAGEMENT TOOLS
WHAT IS CHANGE?

Change is with us and will always be here

WHAT IS CHANGE?

Change is with us and will always be here

WHAT IS CHANGE?

Larry E. Greiner (2004)

Change is with us and will always be here

WHAT IS CHANGE?
THE FIVE PHASES OF GROWTH

Larry E. Greiner (2004)

Change is with us and will always be here
WHAT IS CHANGE?
There are three ways of dealing with it:
v Reactively, by responding only when one has to,
usually too late
v Proactively, by planning for change and trying to
keep, if not one step ahead, then at least in the
vanguard of change
v Ignore it and hope it will go away.

Which one is better?

WHAT IS CHANGE?
v Change is any planned or unplanned alternation
to existing situation.
WHAT IS CHANGE?
v Organizational change
² The process by which organizations move from their present state
to some desired future state to increase their effectiveness.
² Any alternations in people, structure or/and technology
² Goal is to find improved ways of using resources and capabilities in
order to increase an organization’s ability to create value
TYPES OF CHANGE
Changing structure includes any
Structure alternation in:
v authority relations,
v coordination mechanism,

Technology
v degree of centralisation,
v job redesign, or
v similar structural variables.
People
TYPES OF CHANGE
Changing Technology encompasses
modifications in: the way work is
Structure performed or methods and
equipment that are used.
v Introduction of new equipment, tools or
work methods
v Computerizing work processes and
Technology procedures
v Adding robotics to work areas
v Installing energy usage monitors,
v Equipping employees with mobile
People communication tools implementing
social media tools,
v Installing a new computer operating
system.
TYPES OF CHANGE

Structure Changing People includes any

alternation in attitudes,
expectations, perceptions, and
behaviour.
Technology v Changing employee attitudes
and behaviors to better support a
new customer service strategy
v using team building efforts to
People make a team more innovative
v training employees to adopt a
“safety-first” focus
EXTERNAL FORCES FOR CHANGE
v IR4.0: IoT, Robotics, AI,
Industrial Autonomous Vehicles,
Revolution 4.0 Blockchain, 3D Printing
Impact:
Globalization v Easier information transfer
& Competition
v Facilitates global structures
v Requires new competencies and
expectations
Demography
v Facilitates telecommuting; new
employment relationships
v More emphasis on knowledge
Others management
EXTERNAL FORCES FOR CHANGE
Industrial
Revolution 4.0 v Global competition

v Technology makes it easier to

Globalization compete quickly
& Competition
v Results in restructuring,
outsourcing, mergers
Demography ²produces many employment changes

Others
EXTERNAL FORCES FOR CHANGE
Industrial
Revolution 4.0
v More educated workforce
²want involvement; interesting work
Globalization
& Competition v Younger generation
²less intimidated by status
²want a more balanced work life
Demography
v Cultural changes
²more individualism in traditionally
Others collectivist countries
EXTERNAL FORCES FOR CHANGE
Industrial
Revolution 4.0

Globalization
& Competition

Demography v Governments laws and

regulations
v Economic changes
Others
INTERNAL FORCES FOR
CHANGE
Strategy & v Changes in: field of business,
Performance customer segment, goals,
competitive advantages
Workforce v Results in the changes in:
change ²Structure
²Technology
New equipment ²HRM policies
& Technology ²Business processes

Employee
Attitudes
INTERNAL FORCES FOR
CHANGE

Strategy

Workforce v Downsizing
change v Low motivation
v Diversity
New equipment
& Technology

Employee
Attitudes
INTERNAL FORCES FOR
CHANGE
Strategy &
Performance

Workforce
change

v Introduction of new equipment, tools

New equipment
or work methods
& Technology
v Automation
Employee v Computerisation
Attitudes
PLANNED VS.
UNPLANNED CHANGE
Change

Planned Unplanned

Reaction to changes in
To achieve a specified
the organization's
future scenario
operating environment

Statistical Business
Total Quality
Process Process Re-
Management
Control engineering
DISCUSSION

Why change fail?

WHY CHANGE FAIL?
v Too much complacency
v Failing to create a sufficiently powerful guiding
coalition
v Underestimating the power of vision
v Under-communicating the vision
v Permitting obstacles to block the new vision
v Failing to create short-term wins
v Declaring victory too soon
v Neglecting to anchor changes firmly in the
corporate culture.

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PART 2:
CHANGE MANGEMENT
CONTENT
• Lewin’s Change Model
• Resistance to change
• Evolutionary and revolutionary change
• Tactics for minimizing resistance to change
• Process of creating change
RESISTANCE TO CHANGE
RESISTANCES TO CHANGE
v One of the main reasons for some
organizations’ inability to change is
organizational inertia that maintains the
status quo

v Resistance to change lowers an

organization’s effectiveness and reduces its
chances of survival

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LEWIN'S FORCE-FIELD THEORY
OF CHANGE

30
FORCES FOR AND RESISTANCES TO CHANGE

31
 RESISTANCE TO CHANGE

vDirect Costs

vSaving Face

vFear of the Unknown

Forces for
Change vBreaking Routines

vIncongruent Systems

vIncongruent Team Dynamics

RESISTANCE TO CHANGE
vDirect cost
oHigher expenses and lower benefit or wage
vSaving face
oTaking preventive actions so that you, yourself will
not be humiliated
vFear of unknown
oAfraid of entering and exploring the new ground
because of they think they might fail to adopt new
change
RESISTANCE TO CHANGE
v Breaking routine
o People do not want to give up their comfort zone and daily
routine that provide predictability
v Incongruent team dynamics
o Team norm may conflict with the desired change and
consequently reinforced to maintaining status quo.
v Incongruent organizational systems
o Control system for rewards, training ect. are harder to change
and might not adapt quickly to the new system so may
discouraging employee to adapt the change,
LEWIN'S FORCE-FIELD THEORY OF CHANGE
v Theory of change which argues that two
sets of opposing forces within an
organization determine how change will
take place
² Forces for change and forces making organizations
resistant to change
² When forces for and against change are equal, the
organization is in a state or inertia
² To change an organization, managers must increase
forces for change and decrease forces resisting change

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CASE DISCUSSION
Case 01: A leading electronic corporation in Vietnam decided to replace their existing
production system (technology and machine) with a new system that integrates robots and AI
into the production process. This plan helps the corporation to offer high-end products but
higher efficiency and satisfy their customers better.

Case 02: A leading cement corporation has 8 regional companies, each has their own
factories and distribution systems in the local market and some other subsidiary companies
in other industries. The corporation plans to restructure itself by reducing its diversification to
focus on core – cement industry and relocating its production and distribution systems
through merging local companies into three to four regional companies with larger-scale
production plants and larger market coverage. This plan helps the corporation to maximize its
efficiency, lower production and distribution costs and serve their customers timely.

Questions
1. Identify relevant stakeholders that will be affected by the change projects.
2. What are possible resistances to the changes from relevant stakeholders?
3. What are possible tactics and solutions to overcome the resistance?

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BULLOCK AND BATTEN’S
FOUR-PHASE MODEL OF
PLANNED CHANGE
1. Exploration phase.
2. Planning phase.
3. Action phase.
4. Integration phase.
BULLOCK AND BATTEN’S
FOUR-PHASE MODEL OF
PLANNED CHANGE
1. Exploration phase.
v Exploring and decide whether it wants to make
specific changes and, if so, commit resources to
planning the changes.
v Be aware of the need for change;
v Searching for outside assistance (a
consultant/facilitator) to assist with planning and
implementing the changes;
v Establishing a contract with the consultant which
defines each party’s responsibilities.
BULLOCK AND BATTEN’S FOUR-
PHASE MODEL OF PLANNED CHANGE
2. Planning phase.
v Collecting information in order to establish a correct
diagnosis of the problem;
v Establishing change goals and designing the
appropriate actions to achieve these goals;
v Persuading key decision-makers t approve and
support the proposed changes.
BULLOCK AND BATTEN’S FOUR-
PHASE MODEL OF PLANNED CHANGE
3. Action phase
v Move an organisation from its current state to a
desired future state,
v Establishing appropriate arrangements to manage
the change process and gaining support for the
actions to be taken;
v Evaluating the implementation activities and feeding
back the results so that any necessary adjustments
or refinements can be made.
BULLOCK AND BATTEN’S FOUR-PHASE
MODEL OF PLANNED CHANGE
4. Integration phase.
Consolidating and stabilising the changes so that they become
part of an organisation’s normal, everyday operation and do not
require special arrangements or encouragement to maintain them.
v Reinforcing new behaviours through feedback and reward
systems and gradually decreasing reliance on the consultant;
v Diffusing the successful aspects of the change process
throughout the organisation;
v Training managers and employees to monitor the changes
constantly and to seek to improve upon them.
ORGANIZATIONAL DEVELOPMENT
MINIMIZING RESISTANCE TO CHANGE

²Education and communication: inform workers

about change and how they will be affected
²Participation and empowerment: involve
workers in change
²Facilitation: help employees with change
²Bargaining and negotiation
²Manipulation: change the situation to facilitate
change
²Coercion: force workers to accept change

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MANAGANGING
STAKEHOLDERS IN CHANGE
ORGANIZATIONAL DEVELOPMENT
MINIMIZING RESISTANCE TO CHANGE
Communication § Highest priority and first
strategy for change
§ Improves urgency to change
§ Reduces uncertainty (fear of
unknown)
§ Problems -- time consuming
and costly
ORGANIZATIONAL DEVELOPMENT
MINIMIZING RESISTANCE TO CHANGE
Communication

§ Provides new knowledge

Training
and skills
§ Includes coaching and
action learning
§ Helps break old routines and
adopt new roles
§ Problems -- potentially time
consuming and costly
ORGANIZATIONAL DEVELOPMENT
MINIMIZING RESISTANCE TO CHANGE
Communication
§ Increases ownership of
Training change
Employee § Helps saving face and
Involvement reducing fear of unknown
§ Includes task forces, search
conferences
§ Problems -- time-consuming,
potential conflict
ORGANIZATIONAL DEVELOPMENT
MINIMIZING RESISTANCE TO CHANGE
Communication
§ When communication,
training, and involvement
Training do not resolve stress
Employee § Potential benefits
Involvement
üMore motivation to change
Stress üLess fear of unknown
Management üFewer direct costs

§ Problems -- time-
consuming, expensive,
doesn’t help everyone
ORGANIZATIONAL DEVELOPMENT
MINIMIZING RESISTANCE TO CHANGE
Communication

Training
§ When people clearly lose
something and won’t
otherwise support change
Employee
Involvement § Influence by exchange--
Stress reduces direct costs
Management § Problems
• Expensive
Negotiation
• Increases compliance, not
commitment
ORGANIZATIONAL DEVELOPMENT
MINIMIZING RESISTANCE TO CHANGE
Communication

Training
§ When all else fails
Employee § Assertive influence
Involvement
§ Firing people -- radical form
Stress
Management
of “unlearning”
§ Problems
Negotiation • Reduces trust
• May create more subtle
resistance
Coercion
PROCESS OF CREATING
STRATEGIC CHANGE
PROCESS OF CREATING CHANGE
Establishing a sense of § Examining the market and
urgency
competitive realities
§ Identifying and discussing
crises, potential crises, or
major opportunities.
PROCESS OF CREATING CHANGE
Establishing a sense of
urgency

Creating the guiding § Putting together a group

coalition with enough power to lead
the change
§ Getting group to work to
together like a team
PROCESS OF CREATING CHANGE
Establishing a sense of
urgency
§ Creating a vision to help
Creating the guiding direct the change effort
coalition
§ Developing strategies for
Develop a vision and
strategy achieving that vision
PROCESS OF CREATING CHANGE
Establishing a sense of
urgency § Using every vehicle
possible to constantly
Creating the guiding
coalition communicate the new
vision and strategies.
Develop a vision and
strategy
§ Having the guiding
Communicating the coalition role model the
change vision behavior expected of
employees.
PROCESS OF CREATING CHANGE
Establishing a sense of
urgency

Creating the guiding

coalition

Develop a vision and

strategy
§ Planning for visible
Communicating the improvements in
change vision performance , or “win”

Generating short- § Creating those win

term wins
§ Visibly recognizing and
rewarding people who made
the win possible.
PROCESS OF CREATING CHANGE
Establishing a sense of
urgency

Creating the guiding

coalition § Using increase credibility to
change all systems,
Develop a vision and structures, and policies that
strategy
don’t fit together and don’t
Communicating the
fit the transformation vision
change vision
§ Hiring, promoting, and
developing people who can
Generating short- implement the change vision
term wins
§ Reinvigorating the new
Consolidating gains and process with new projects,
producing more change themes, and change agents
PROCESS OF CREATING CHANGE
Establishing a sense of
urgency

Creating the guiding

coalition § Creating better performance
through customer- and
Develop a vision and productivity-oriented
strategy behaviors, more and better
leadership and more effective
Communicating the management
change vision
§ Articulating the connection
Generating short- between the new behavior and
term wins organizational success

Consolidating gains and § Developing means to ensure

producing more change
leadership development and
succession
Consolidating gains and
producing more change
REFREEZING THE DESIRED
CONDITIONS
vRealigning organizational systems and team
dynamics with the desired changes
²Alter rewards to reinforce new behaviors
²Feedback systems
²Help employees learn how they are doing
²Provide support for the new behavior patterns
EVOLUTIONARY AND REVOLUTIONARY
CHANGE IN ORGANIZATIONS

v Evolutionary change: change that is

gradual, incremental, and narrowly focused

v Revolutionary change: change that is

sudden, drastic, and broadly focused

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DEVELOPMENTS IN REVOLUTIONARY
CHANGE (CONT.)
v E-engineering: refers to companies’ attempts to
use information systems to improve their
performance

v Restructuring: changing task and authority

relationships and redesigning organizational
structure and culture to improve organizational
effectiveness
² Downsizing: the process of streamlining the organizational
hierarchy and laying off managers and workers to reduce
bureaucratic costs

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 DEVELOPMENTS IN REVOLUTIONARY
CHANGE (CONT.)
v Innovation: the process by which
organizations use their skills and resources
to:
²Create new technologies
²Develop new goods and services
²Better respond to the needs of their customers

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APPENDIX
TEN TASKS INVOLVED IN THE DESIGN,
DEVELOPMENT, IMPLEMENTATION, AND
EVALUATION OF BEHAVIOR CHANGE
INTERVENTIONS

1. Understand and define the problem (including assessing the needs of target
groups).
2. Clarify how behavior change can ameliorate or resolve the problem.
3. Identify which group/s of people need to change which behavior, or behavior
patterns, and at what level.
4. Understand behavioral antecedents, that is, the contexts, cues, and underlying
mechanisms that maintain the targeted behavior patterns for each targeted group.
5. Design interventions/intervention components that can alter some, or all, of these
behavioral antecedents and regulatory mechanisms.
6. Pilot, or pretest, intervention prototypes to discover whether they are acceptable,
feasible, and affordable.
7. Refine and develop the intervention with those who will implement and experience
it to optimize fidelity of implementation and effectiveness.
8. Implement the intervention and identify and minimize embedding problems.
9. Evaluate efficacy by investigating whether the intervention shows evidence of
changing targeted antecedents and behaviors.
10. Evaluate effectiveness by testing the intervention in new contexts and scaling up
to target new groups or populations.