LESSON 3

STUDY UNIT NUMBER IOP4862

TITLE OF STUDY UNIT Managerial and Organisational Psychology

TITLE OF LESSON Theme 1: A holistic perspective on organisations and their

environmental context

Lesson 3: Organisational change

NOTIONAL STUDY HOURS

NUMBER OF PLANNED
SELF-REFLECTIVE ACTIVITIES

NUMBER OF ASSESSMENT-
LINKED ACTIVITIES

NOTIONAL DESCRIPTION COMMENTS

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Change is a constant feature of organizational life and the ability to manage it is seen as a core
competence of successful organizations. However, there are significant differences in how it is
perceived: is it incremental, punctuated (disrupted/interposed), or continuous; can it be driven
from the top down or is it an emergent process?
(Burnes, 2004)

Learning outcomes:

On completion of lesson 3, you should be able to:

 apply the action research approach to organisational change in a case study

Introduction
With the culture of learning comes change within the organisation. Change is not an easy
process the same as adjusting and learning new ways of surviving or initiatives adopted to earn a
competitive edge by the organisation. The next section will deliberate on organisational change.
Lesson 3 is depicted by the diagram below:
 HOLISTIC PERSPECTIVE – Organisations
and their environment

Lesson 3: Organisational change

1. Organisational change
Pervasive and relentless change in technologies, competition and the demand-side of markets
have made business organisations well aware of the practical need to make continuous and
sometimes transformational changes to their strategies, structures, systems and the ways they
do business. In management theory, the response has been a re-conceptualisation of the
business organisation, from one structured around functionally specialised department to one
structured around cross-functional adaptive processes focused on defining, developing and
delivering customer value (Oxtoby et al., 2002). In their search for competitive success, business
leaders and managers are often urged to select and nurture the development of dynamic
capabilities (e.g. product development; supply chain management; customer relationship
management; strategic partnering) – embedded organisational processes that lie behind the
resource reconfigurations needed to acquire and sustain competitive advantage (Oxtoby et al.,
2002).

2. Resistance to change
Change within the organisation is not an easy process. According to Diedericks et al (2019), the
changing environment in which organisations function requires flexibility and innovation in the
development of employees’ knowledge, skills and expertise (Avey, Reichard, Luthans, & Mhatre,
2011). This phenomenon is forcing organisations to look for specific competencies and
behaviours in employees that can adapt to changes and challenges (Salanova & Schaufeli, 2008).
Some of the employees may find it difficult to embrace change and thus resist any initiatives
towards change.
Resistance to change is a multifaceted concept, originating as a psychodynamic construct, which
Lewin (1947) used to describe as the active force obstructing the efforts of change leaders. Oreg
(2006) conceptualised and operationalised it as a reactive passive attitude towards change.

Organisations are cooperative systems that rely on the willingness of members to behave in
ways that support the organisation (Barnard, 1938). However, people's personal goals often
differ from those of the organisation, and a primary responsibility of managers is to persuade
members to direct their efforts toward organizational goals (Cyert & March, 1963). The
importance of employee cooperation may be particularly salient (relevant) during organisational
change – when an organization sets out to establish conditions that are different from the
current conditions (Roberts & Porras, 1993). As the primary link between the organisation's
change strategy and the employees responsible for implementing that strategy, managers must
be able to "unfreeze" employee beliefs that the status quo is acceptable and motivate
employees to make the desired changes (Lewin, 1951). Yet, employees often resist
organisational changes (Reger, Gustafson, Demarie, & Mullane, 1994), and reducing this
resistance may be difficult given employees' disparate motives, interests and needs.

As transformation processes often mean resistance, a systems psychodynamic perspective

enables an understanding of the dynamics between individuals and system elements, such as
ineffective interventions (Koortzen & Cilliers, 2002), conflict (Mayer, 2011) or decreased health
and well-being (Mayer & Surtee, 2015), which may contribute to an increased understanding of
non-conscious dynamics within the individual (Diedericks et al., 2019).

Boundaries, often set by leadership in the organisation, determine what belongs or does not
belong to the system (Cilliers & Koortzen, 2005), and if individuals are unable to deal with
anxiety and change in organisations, it is blocked out of the conscious mind, which largely shapes
the nature of the system and leadership. Organisational dysfunction and destructive cycles are
caused by narcissistic (self-absorbed/egotistic/selfish), controlling, depressive, abrasive
(rough/harsh), negativistic, hypomanic (disinhibition) charismatic and neurotic
(fixated/disturbed/fearful) leadership styles as identified by De Vries (2009).

Despite all the attention to capabilities that drive continuous change in dynamically stable
organisations, there is considerable evidence of a high failure rate (as much as 70 per cent) in
organisational change initiatives (Daft & Noe, 200; Day, 1999a). This is undoubtedly because the
process of organisational change is vulnerable to a variety of mistakes, any one of which is alone
sufficient to cause failure. In view of this, change managers would find it helpful to work with an
explicit model of change that identifies all the elements that must be dealt with effectively if a
change initiative is to succeed. Such a model is a useful tool to help sustain change, by making
managers consciously aware of all the elements required in the change process (Day, 1999b,
p.21).
The change management literature has explored the various strategies that managers use to
reduce employee resistance to organisational change (e.g., Kotter & Schlesinger, 1979; Nutt,
1986). There are various change models that organisation may adopt to cope with change (Furst
& Cable, 2008).

3. Managing change – Change management models

There are different change management models that can be used by organisations to manage
resistance to change. One such model is by Oxtoby et al. (2002) who introduced the “Listen –
Interpret – Translate – Transfer” (LITT) process. It is used to build an explicit model of change,
based on the often only implicit experience of the organisation. In this process, model symbiosis
(co-operation/interdependence/relationships) can be used by internal managers or outside
consultants to accelerate the development of organisational change capability in any
organisation. The article considers organisational change capability as generic to all the other
dynamic capabilities embedded in an organisation, and as essential if a dynamically stable
organisation is successfully to operate any of the other dynamic capabilities around which it is
structured.

Another model of change management is one by Kurt Lewin and the concept of planned change.
Lewin believed that the key to resolving social conflict was to facilitate planned change through
learning, and so enable individuals to understand and restructure their perceptions of the world
around them. Lewin’s planned approach to change comprised four elements: field theory, group
dynamics, action research and the three-step model of change. To understand the planned
approach, please read Kurt Lewin’s article: “Kurt Lewin and complexity theories: back to the
future” (In the Journal of Change Management, Vol. 4, No 4, 309–325.)

Although all the four elements of planned approach to change are important, for now I would
like you to focus more on the action research element. The action research element focuses on
the objective of this lesson as depicted at the beginning of this lesson above.

Lewin conceived of Action Research as an iterative, two-pronged(branched) process

whereby research leads to action, and action leads to evaluation and further action
(Lewin, 1946; Bennett, 1983). Its theoretical foundations lie in gestalt psychology, which
stresses that change can only successfully be achieved by helping individuals to reflect on
and gain new insights into the totality of their situation (Smith, 2001). Lewin (1946: 206)
stated that Action Research ‘... proceeds in a spiral of steps each of which is composed of
a circle of planning, action, and factfinding about the results of the action’. As Schein
(1996: 64) comments, it was Lewin’s view that ‘... one cannot understand an
organization without trying to change it ...’ Indeed, Lewin’s view was very much that the
understanding and learning which this process produces for the individuals and groups
concerned, which then feeds into changed behaviour, is more important than any
resulting change as such (Lewin, 1946). Action Research draws on both Field Theory, to
identify the forces that focus on the group to which the individual belongs, and Group
Dynamics, to understand why group members behave in the way they do when subjected
to these forces. It stresses that for change to be effective, it must be a participative and
collaborative process which involves all of those concerned (Lewin, 1947b; Allport, 1948;
French and Bell, 1990; Bargal et al., 1992; Day et al., 2002).

Read and understand the three-step model to be one part of an integrated approach to
analysing, understanding and bringing about planned change at the group, organisational and
societal levels. The three steps involve the unfreezing, moving and refreezing. For a detailed
discussion of unfreezing, moving and refreezing, read the article by (Burnes 2004) attached
under the prescribed sources. You also need to do the following exercise reflected as an activity
below. Also refer to all the recommended articles attached below to answer all questions
relating to the reflective activity 3.1 as well as the discussion activity 3.2 and 3.3.
Reflective activity 3.1
1. Identify forces that act as stimulants to change, and contrast planned and unplanned
change.
2. Describe how planned change can be adopted to fit different kinds of conditions.
3. Demonstrate two ways of creating culture for change.
4. List and explain the forces for resistance to change.
5. Compare the four main approaches to managing organisational change.

Discussion activity 3.2

1. Discuss the changes required to be a successful organisation in the 21st century.
2. Describe how an organisation should move (change) from the now (current culture) to a
future state (desired culture) by applying a change model, and give some useful guidelines
for change.

CASE STUDY – THE RELUCTANT CEO

To reduce cost and improve customer service, a financial group wanted to consolidate its
customer contact centres across several divisions. A consultant was hired to support the effort
and to prepare implementation plans. As the project started, rumours spread through several
departments that this organisational change was not good for the company. Supervisors and key
managers in the existing customer care centres began resisting the change. In some cases, they
would not show up for design reviews or fail to show up for key decision-making meetings.
Information requested by the consultant and the design team was withheld or half-complete. At
breaks and around the coffee pot, employees complained about potential leadership changes.
Both employees and managers were distracted from their day-to-day work and productivity
suffered. Key managers were rumoured to quit if the change was implemented. The consulting
firm met with the CEO, repeatedly warning that this resistance would undermine his change and
would ultimately begin to affect customers. The CEO, however, was reluctant to become
personally involved. He viewed change management as the job of his project team and the
consultant, and not the responsibility of the head of the company. After several months of
difficulties and delays, the consultants finally declared the consolidation in jeopardy. With the
project at a stand-still, the CEO requested an emergency briefing with his leadership team. To
prepare for this status report, the consultants conducted interviews with key managers
throughout each department. They quickly identified a manager in an existing customer care
centre who viewed his job at risk with the potential change. Arguments against the change
initiated by this manager were spreading throughout the ranks. His supervisors were the same
people who were presumably threatening to leave the organisation. Even armed with this
information, the CEO remained reluctant to take definitive action. The only recourse at this stage
was reassignment or termination of this manager. Both options could have negative fall-out for
the company and the affected manager. The CEO was faced with a stalled project and a
potentially lose-lose decision for a long-tenured manager.

Source: Adapted from: The Prosci 3-phase change management process (2014). Prosci.com
Discussions activity 3.3

Questions based on above case study:

1. Link Kurt Lewin’s change model to the change process that needs to take place in this
organisation, and explain how the consultant should manage the process by providing
guidelines for change.
2. What kind of resistance to change have the employees of the project displayed? Discuss
individual sources of resistance to change and indicate what strategies or tactics can be
used to overcome or reduce the employees’ resistance to change.

Prescribed articles

SUMMARY

In this lesson, you were introduced to organisational change. The lesson also described the
nature of planned change. Various articles on organisational change have been selected since
they relate to important perspective on organisational change. The holistic perspective of
managing change was described and discussed, which included Lewin’s change model, action
research as an element of planned change, as well as the positive model. The planned change
models were also compared and critiqued. The next lesson will present ethics and corporate
social responsibility.

Oher related references for the lesson

 Ahmed, M. & Shafiq, S. (2014). The Impact of Organisational Culture on Organisational

Performance: A Case Study of Telecom Sector. Global Journal of Management and Business
Research: Administration and Management 14(3) 20-30.
 Avey, J. B., Reichard, R. J., Luthans, F., & Mhatre, K. H. (2011). Meta‐analysis of the impact of
positive psychological capital on employee attitudes, behaviors, and performance. Human
resource development quarterly, 22(2), 127-152.
 Barnard, Chester I. (1938). The Functions of the Executive. Cambridge, Mass.: Harvard
 University Press.
 Barsade, S. & Bernstein, J.K., (2015). Five Steps for managing culture change. Wharton
University of Pennsylvania, Nano tools for leaders. Open Rubric
  Bulach, C., Lunenburg, F. C., & Potter, L. (2012). Creating a Culture for high performing
schools: A comprehensive approach to school reform. Lanham: Rowman & Littlefield.
 Cilliers, F., & Koortzen, P. (2002). The psychoanalytic approach to team
development. Handbook of organisational consulting psychology: A comprehensive guide to
theory, skills, and techniques, 261-283.
 Cusick, J. J.  (2018). Organizational Design and Change Management for IT Transformation: A
Case Study. Journal of Computer Science and Information Technology. 6, (1), 10-25 ISSN:
2334-2366 (Print), 2334-2374 (Online). DOI: 10.15640/jcsit.v6n1a2
 Cyert, R. M., & March, J. G. (1963). A behavioral theory of the firm. Englewood Cliffs, NJ, 2(4),
169-187.
 Daft, R. & Noe, R. (2000) Organisational Behaviour. Harcourt, London.
 Diedericks, J. C., Cilliers, F. V., & Bezuidenhout, A. (2019). Resistance to change, work
engagement and psychological capital of academics in an open distance learning work
environment. SA Journal of Human Resource Management.
 Mayer, C. H., May, M. S., & Surtee, S. (2015). Meaningfulness of work for a diverse group of
women working in higher education institutions. South African Journal of Higher
Education, 29(6), 182-205.
 Nelson, D. watson & Quick, J. C. (2011). Understanding Organizational Behaviour. Belmont:
Cengage Southwestern. 
 Oreg, S. (2006). Personality, context, and resistance to organizational change. European
journal of work and organizational psychology, 15(1), 73-101.
 Reger, R. K., Gustafson, L. T., Demarie, S. M., & Mullane, J. V. (1994). Reframing the
organization: Why implementing total quality is easier said than done. Academy of
Management Review, 19(3), 565-584.
 Robertson, P. J., Roberts, D. R., & Porras, J. I. (1993). Dynamics of planned organizational
change: Assessing empirical support for a theoretical model. Academy of Management
Journal, 36(3), 619-634.
 Salanova, M., & Schaufeli, W. B. (2008). A cross-national study of work engagement as a
mediator between job resources and proactive behaviour. The International Journal of
Human Resource Management, 19(1), 116-131.
 Tănase, I. A. (2015).  The importance of organisational culture based on culture transfer.
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