Organizational Change

Organizational change is the movement of an organization from one state

of affairs to another. Organizational change can take many forms. It may
involve a change in a company’s structure, strategy, policies, procedures,
technology, or culture. The change may be planned years in advance or
may be forced on an organization because of a shift in the environment.

Organizational change can be radical and swiftly alter the way an

organization operates, or it may be incremental and slow. In any case,
regardless of the type, change involves letting go of the old ways in
which work is done and adjusting to new ways.

Therefore, fundamentally, it is a process that involves effective people

management. Organizational change is often a response to changes in the
environment.

Organizational change as a process is simply modification of structure or

process of a system. It may be good or bad. In simple words, change may
refers to any alteration which takes place in overall work environment of
an organization.
Change affects an individual , a group and the whole of the organization.
If the change is beneficial to parties, it may be immediately accepted. On
the other hand , if the change is not beneficial to parties , they will resist
change.

Forces for organisation change

•External forces of change.

•Internal forces of change.

External forces of change :

➢ Government rules and regulations:- From time to time government

bring changes in their policies, rules and regulations which necessitate
change in the organization.
➢ Technological advances :-It is the major external force which calls
for the change. The adoption of new technology such as computers,
telecommunication system and flexible manufacturing operations
have affected the working of all the organization.
➢ Change in customer requirements :-In these days, being buyer’s
market, customer does not want to purchase what is given to him,
rather he goes to purchase what he desire to purchase. So the sellers
have to produce and provide products and services to customers
exactly as per their requirements. In service industry, Example Five
Star Hotels have started providing new services such as business
centre's , conference hall facilities, Exhibition Halls etc.
➢ Marketing competition :- At present, marketing condition are no
more static. They are in the process of rapid change as per the
changing needs, desires and expectations of the customer. New media
of advertisement and publicity are being used for influencing the
customers.
➢ Social changes :- It is found that because of fast spread of education ,
knowledge explosion and government efforts, social changes are
taking place at fastest speed. Social equality like equal opportunity to
 women, equal pay for equal work have posed new challenges for
management.
➢ Technology is continually changing jobs and organization. Ex: faster,
cheaper and more mobile computers and hand held devices.
➢ Economic shocks: Rise and fall of global housing market, financial
sector collapse, global recession.

Internal forces of change

➢ Deficiencies in existing management structure :- Sometimes
changes are necessary because of some deficiencies in existing
organizational structure, arrangement and processes.These
deficiencies may be in the form of : Larger no. of managerial levels,
lack of co-ordination among various departments, obstacles in
communication etc. All these deficiencies requires change and
revision from time to time.
➢ Nature of the workforce: Almost every organization must adjust to a
multicultural environment, demographic changes, immigration and
outsourcing.
➢ Change in managerial staff:- With the passage of time, due to high
degree of professionalism and specialization, senior managers have to
replaced by new managers. Qualified manager with broader vision
bring their innovative ideas.
➢ Change in operative staff :- With the change of time the profiles of
workers have also changed .New generation of workers have better
education qualification, broader vision and outlook.
➢ Resource constraints :- Resources refers to money , material ,
machinery , personnel , information and technology. Inadequacy of
these resources may result in a powerful force of change for
organization.
➢ Declining effectiveness is a pressure to change. A company that
experiences loss within a fiscal year is undoubtedly motivated to do
something about it. Some companies react by instituting layoffs and
massive cost cutting programs, whereas others look at the bigger
picture, view the loss as symptomatic of an underlying problem, and
seek the cause of the problem.
➢ A crisis situation also may stimulate change in an organization.
Strikes or walkouts may lead management to change the wage
structure.

Factors affecting organizational change

1. Psychological factors
2. Personal factors
3. Social factors

Psychological factors :- One of the most important psychological factor

affecting attitudes is the individual reaction to stress. Some employees are
rather comfortable under stress but some people cannot bear stress and
seek a calm environment.

Personal factors :- One of the most important personal factor is

experience. People who have faced similar changes in the past draw the
results on the basis of those changes and evaluate the current change i.e.
same people are flexible to change but other may not be.

Social factors :- Social factors refers to the individuals work group. If the
change is as per the norms and values , the group will accept the change.
If management attempts to bring about organizational changes that will
breakup the group , the member will resist to change.

Resistance to change and ways to overcome them:

Resistance to change is unwillingness to adapt to new circumstances

or ways of doing things. Resistance to change is the reluctance
of adapting to change when it is presented. Employees can be either overt
or covert about their unwillingness to adapt to organizational changes.
This can range from expressing their resistance publicly to unknowingly
resisting change through their language or general actions.

1. Mistrust and Lack Of Confidence

When employees do not trust or feel confident in the person making the
change, their resistance to it can be a huge barrier.

2. Emotional Responses
Changing the status quo is difficult. Many people will have emotional
reactions to anything that upsets their routine. This is a natural and
inevitable response. As such, change-makers must be prepared to manage
these emotions and move people towards acceptance of the change.
Begin by coaching change leaders to approach resistance to change with
empathy, recognizing that people will have a wide range of emotional
reactions. In order to manage these reactions, change leaders should
clearly explain the need for change while also listening attentively to the
feedback from those affected by it.
People want to feel heard. Make it clear that their opinions are valuable to
the change process. Additionally, change leaders should check in
frequently to provide support, gather additional feedback, and nudge
people towards change acceptance and adoption.

3. Fear of Failure

People will not support a change if they’re not confident in their own
abilities to adapt to it. When people feel threatened by their own
shortcomings (real or imagined), they protect themselves from failure by
resisting the change.
Knowledge is about training. The goal is to give people the tools they
need to make the change, including those needed to handle transitions.
Let’s take a technological change as an example. If your company is
integrating a new software system, employees should know how to move
existing information into it, as well as how to make the most of the new
system in the future.
Ability is more about self-confidence. After training, people need to feel
comfortable applying the knowledge they have acquired. Give employees
enough hands-on experience to develop and test their new skills before
fully launching the change.

4. Poor Communication
The key to great change management communication is to create an
active conversation. When you talk at people as opposed to with people,
you’re bound to get resistance to change.
Start by making a change communication plan. Before you initiate
change, you should have several communication actions planned, such as
the announcement of the change, small group discussions, one-on-one
meetings, and methods for gathering feedback. People want to know how
the change will benefit them specifically and what they will need to do to
implement and solidify the change. When employees are recognized for
their efforts, it builds their enthusiasm as well as their desire to support
the change.
5. Unrealistic Time lines
Find a balance between creating a sense of urgency and allowing time to
transition. Don’t force change too quickly. When you push too hard for a
change to happen, it’s easy to get tunnel vision and neglect important
elements of your change plan.

Begin with a change implementation timeline. Map out every action and
set deadlines so that you have a general idea of how long the entire
transformation will take. Often, designing the path between the current
state and change adoption helps you identify additional steps that are
needed to facilitate the transition.

6. Problem of Adjustment

Perhaps most important factor for resistance to change is the problem of

adjustment. Each individual tries to maintain a sort of equilibrium, both at
formal level as well as at informal level. When change comes, it requires
people to make adjustment so as to cope with the new situation.
People seek status quo because once they establish equilibrium, they may
not like that it is disturbed. Status quo gives them more satisfaction
because the existing equilibrium has been arrived at by eliminating those
forces which give people discomforts. When change is introduced, this
equilibrium does not remain as satisfactory as it was before the change.

7. Economic Reasons

People resist change if they feel that it is likely to affect them unfavorably
so far as their economic needs are concerned. The greater the amount of
loss perceived, greater is the degree of resistance. People may perceive
several types of economic losses because of change, major of them being
as follows:

1. Fear of technological unemployment;

2. Fear of reduced work hours and consequently reduced monetary

benefits;

3. Fear of demotion and consequently reduced pay;

4. Fear of speed-up and reduced incentive wages; etc.

8. Obsolescence of Skills

Change may result in obsolescence of skills specially when altogether a

new method of working is adopted. With the adoption of new method of
working, old techniques become useless and consequently old skills
become obsolete. Therefore, when people sense that new method of
working poses a threat of replacing them or in some way affecting them
adversely, they will resist it.

9. Ego Defensiveness
Sometimes people resist change because it is ego deflating. Ego defensive
people always resist such a change. Everyone has some ego which one tries
to maintain. Ego is the state of a person’s way of behaving, thinking, and
feeling. Any attack on these, actual or perceived by the person, will be
resisted. For example, a foreman is unlikely to accept a change suggested
by a worker because he may feel that his ego has been hurt.

10. Group Norms

People also resist change because the group to which they belong resists it.

Overcome Resistance to Change

1. Show the Value in the New Change by Educating Employees
A few of the main reasons why employees resistance change is a lack of
trust and a lack of communication. To avoid change resistance, provide
proof that a new process, tool, or change will greatly benefit them.
Educate your employees on how this new change will directly make their
lives better.
2. Collect Employee Input Before a Change
Many times, employees resist change because they believe their opinion
doesn’t matter and wouldn’t impact the decision to make an
organizational change. Run surveys with your team on how they feel
about the change and how they would make the process easier.
3. Come to an Agreement with Your Employees
Never make a decision without consulting those on the front lines – your
employees. This is the case with making the decision to implement a
large change. After consulting with your team, come to an agreement on
the timeline and overall plan for managing and implementing a new
change.
4. Include Employees in the Change Management Plan
Employees feel they are taken seriously and their opinion matters when
they’re included in processes. Be sure to add key members of your team
into the change management and implementation process so they feel
ownership of the project.
5. Support Your Employees During Organizational Transformation
Finally, don’t leave your employees out on an island – support your team
members with resources, change management tools, knowledge bases,
and training on the new process or tool you’re implementing. This will
help your employees find value in a new system quickly, causing them to
build trust with you when it comes time for a future change.
Kurt Lewin’s Change Management Model:

According to Lewin, Change for any individual or an organization is a

complicated journey which may not be very simple and mostly involves
several stages of transitions or misunderstandings before attaining the
stage of equilibrium or stability.

For explaining the process of organizational change, he used the analogy

of how an ice block changes its shape to transform into a cone of ice
through the process of unfreezing.

If you have a large cube of ice but realize that what you want is a cone of
ice, what do you do? First you must melt the ice to make it amenable to
change (unfreeze). Then you must mold the iced water into the shape you
want (change). Finally, you must solidify the new shape (refreeze).

Stage 1 - Unfreezing: This first stage of change involves preparing the

organization to accept that change is necessary, which involves breaking
down the existing status quo before you can build up a new way of
operating. It involves improving the readiness as well as the willingness
of people to change by fostering a realization for moving from the
existing comfort zone to a transformed situation. It involves making
people aware of the need for change and improving their motivation for
accepting the new ways of working for better results. During this stage,
effective communication plays a vital role in getting the desired support
and involvement of the people in the change process.

Here are some practical steps that can be taken to "melt the ice" of
the Unfreeze stage:

• Determine what needs to change by surveying your team or

organization to understand the current state.

• Understand why change has to take place.

• Identify and win the support of key people within the organization.

• Frame the issue as one of organization-wide importance.

• Create a compelling message about why change has to occur.

• Use your vision and strategy as supporting evidence.

• Communicate the vision in terms of the change required.

• Emphasize the "why."

• Remain open to employee concerns and address them in terms of

the need to change.

Stage 2 - Change: This stage can also be regarded as the stage of

Transition or the stage of actual implementation of change. It involves the
acceptance of the new ways of doing things. After the uncertainty created
in the unfreeze stage, the change stage is where people begin to resolve
their uncertainty and look for new ways to do things. People start to
believe and act in ways that support the new direction.This is the stage in
which the people are unfrozen, and the actual change is implemented.
During this stage, careful planning, effective communication and
encouraging the involvement of individuals for endorsing the change
isnecessary. It is believed that this stage of transition is not that easy due
to the uncertainties or people are fearful of the consequences of adopting
a change process.

Stage 3 - Refreeze : During this stage, the people move from the stage of
transition (change) to a much more stable state which we can regard as
the state of equilibrium. The stage of Refreezing is the ultimate stage in
which people accept or internalize the new ways of working or change,
accept it as a part of their life and establish new relationships. For
strengthening and reinforcing the new behaviour or changes in the way of
working, the employees should be rewarded, recognized and provided
positive reinforcements, supporting policies or structures can help in
reinforcing the transformed ways of working.

Here are some steps that can be taken to anchor the changes into your
organization's or team's culture:

• Identity what supports the change.

• Identify barriers to sustaining change.

• Ensure leadership support.

• Create a reward system.

• Establish feedback systems.

• Adapt the organizational structure as necessary.

• Keep everyone informed and supported.

• Celebrate your success!