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NEELAM ASWAL 521131210 02882 4

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Change Management set -1

10 dec 2012
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Master of Business Administration- MBA Semester 4 MU0018 Change Management

(Book ID: B1339) Assignment Set- 1

Q1. How do change managers recognize resistance of employees to change?

Ans. It is important to be able to spot the resistance to change when it occurs rather than get surprised when the change mysteriously fails. Identifying the same will help you to respond appropriately to it. This is one of the biggest challenges faced by the change managers. If you can catch the resistance early, it will then give you a chance to respond to it before it takes hold, hence, effectively nipping it in the bud. Let us first look into some of the early signs of resistance. These can be in the form of: Gossip When a change is announced, the tom-toms will start beating loudly and the grapevine will bear fruits of much and varied opinion. Keep your ear to the ground so as to know what is being said around the coffee points. Listen particularly for declarations of intent and attempts to organise resistance. Grumbling and complaints are natural ways of airing discomfort, so you should not try to squash it as this will anyway lead you to failure. The biggest danger happens when it is allowed to ferment in an information vacuum. Respond to the gossip by opening it up, show that you are listening to the concerns and that are taking them seriously. Providing lots of valid information will help to fill the vacuum. Testing Just as a high school class tests a teacher's ability to maintain discipline, so will some brave souls test out what would happen when they resist the change. An example, the resisters may not turn up to a meeting or may openly challenge a decision. How you deal with such early resistance has a significant effect on what happens next. For example, you can shout at them and hurt their sentiments, or you can take an adult position, describe what they have done and assertively question their motives. Resistance to change can occur in two ways, namely: Individual action Individuals, may resist, however, this is generally limited to the extent of their personal power. For those with a lower power, this may include passive refusals and covert action. For those with more power, the resistance may include open challenge and criticism. An individual action must be handled individually. It should be started with those who possess a greater power and then the message gets automatically conveyed to those below. An example of dealing with an individual who is resisting change: Disciplining a senior executive can send a strong signal to the other resistors. Collective action

People generally do not bother of organising unless and until they have serious issues with the change. This gives rise to what is known as organised resistance. Organised resistance is usually a sign of a serious problem. When these people find a common voice in the organised resistance, then their words and actions could create a significant threat to the change, even though they might be individually less powerful.

Care should be taken while managing the collectives. It should be done by negotiating with their leaders rather than dealing with a myriad of smaller fires. You may be needed to make some concessions, but you can see to it that at least at the end of the negotiation you should be able to rescue some key elements of the change. You can also use the 'divide and conquer' approach, by striking deals with the individual key players; although this must be done carefully as it can cause a serious backlash. An example of a collective action against resistance to change: Trade Union. Resistance need not always be out in the open, in most cases it often starts out in a more underhand, covert way. Thus, we can conclude that resistance to change is basically expressed in two ways. These include: Covert resistance Covert resistance is the deliberate form of resistance to change, but done in a manner such that it allows the perpetrators to seem as though they are not resisting. Covert resistance should be handled by showing that you know what is happening and investigations should be so designed so as to identify the people responsible. When the resistance is covert in nature, you may also be required to resort to covert methods to identify the source and hence take appropriate action. An example of covert resistance being expressed can be through the sabotage of various kinds. Overt resistance Overt resistance does not try to hide, as it is the result of either of someone comfortable with their power, or someone for whom covert acts are against their values, or someone who may be desperate. Deal with the overt resistance by first seeking to respond openly and authentically. If they are blindly resisting, then you will be left with no alternative but to defend, for example by isolating and disciplining the culprits. Although overt active resistance is potentially damaging, it is at least visible and there is the option of using formal disciplinary actions. An example of overt resistance being expressed can be in the form of an open argument such as refusal or attack. Another aspect of the overt resistance is that it does not necessarily need to take positive action as in some cases it can be passive. Overt resistance can be expressed through two types of actions. They are: Passive resistance Passive resistance occurs when people do not take any specific action. Their main tool will be to refuse to collaborate with the change. They may agree and then do nothing to fulfil their commitments. This could become very difficult to address, as the resisters would have particularly not done anything wrong. One way to address this is by getting the public commitment to an action, and by following it up publicly if required. This will ensure that they complete the action. This process should be repeated until they are either bought in or they give in. For example, during meetings, they may sit quietly and appear to agree with the change. Active resistances

Active resistance occurs when people take specific and deliberate action to resist the change. It may be made overt, with public statements and acts of resistance, or it may be made covert, such as organising others to create an underground resistance movement. Thus, we have seen the different ways of recognising resistance.

Q2-Explain any two Process based change models.

Ans. Process based change models focus on the actual steps as, how of organisational change process. All the models in this category deal with the sequences of steps that are used to bring about changes in an organisation and interventions related to it. Some of the process based models are: o Lewins Model of Change. o Planning Model. o Model of the Change Management Process. o Integrative Model for Planned Change. o Scheins Model of Change. o Action Research Model. a) Lewins model of change This is one of the early models of planned change. It states that organisational change moves from one static state through a progressional shift to another static state. In this model, change affects three levels-individual level, structure and systems level, organisational climate. This model consists of the following three steps to provide a basis for change at all the levels in the organisation: 1. Unfreeze: This step involves creating the right situation for the change to occur. By refusing change, people connect to a sense of identity to their environment. In this step, the alternatives though are beneficial, will initially cause discomfort. The challenge here is to move people from this 'frozen' state to 'unfrozen' state. 2. Changing/transition: This transition is considered as a journey at this level and at the psychological level it is considered a period of confusion. At this stage, people will be aware that the old ways will be challenged, but there wont be a clear understanding of the new ways which will replace them. As roles change, a reduced state of efficiency is created, where goals are significantly lowered. The final goal of this stage is to get people to the 'unfrozen' state and keep them there. 3. Refreeze: The goal here is to achieve refreeze, re-establish stability and comfort level of people. It takes people from low productivity in the transitional stage to a productive state.
UNFREEZE

REFREEZE

TRANSITION / CHANGE

b) Planning model This model was initially proposed by [5]Lippit et al. (1958) but later modified by Kolb and Frohman (1970). This model proposes seven-steps for change. This plan states that there should be free sharing of information between the organisation and the change agent. This information must be further translated into action.

This model goes through series of steps. In the first step, organisation and change agents together explore the need for and the areas that require change. They enter into it. This will be followed by diagnosing of specific goals towards improvement. Changes cannot be made without handling resistance so reasons for resistance will be identified and worked out and then planning will be done for specific improvement. This plan will be put into action which is next step and followed by evaluation and termination of the system or to begin another. Model of the change management process Galpin (1996) proposed this model and states that a successful organisational change effort should target two levels-the strategic level and the grassroots level. Strategic level refers to upfront, initial effort involving executives, senior managers, few employees, and consultants who provide an outside view. Grassroots level drives changes deeply and stresses on implementation at the local levels. This model involves nine stages: 1. Establishing the need for change. 2. Developing a vision of change. 3. Diagnosing the current situation. 4. Generating change recommendations. 5. Detailing recommendations. 6. Testing of pilot. 7. Preparing recommendations for roll out. 8. Rolling out changes. 9. Measuring, reinforcing, and refining changes. All these stages showcase creating and implementation of changes in the organisation. Integrative model for planned change Bullock and Batten (1985) proposed this model to describe both temporal states and change processes involved in change. It is based on the principle that organisation exist in different states at different times. This model involves four
Exploration Phase

Planning Phase

Action Phase

Integration Phase

Scheins model of change Schein (1987) extended Lewins basic model and included newer concepts. This model has been explained next: Unfreezing: According to Schein, unfreezing is a process for creating enthusiasm and readiness

for change. Cognitive restructuring/ redefinition: It is a process by which an enthusiastic learner can learn something new that is related to his thought processes, feelings, values, and attitudes. Defensive identification with a role model: When a learner is motivated to change, that person realises that a concept may be interpreted in different ways than ones own. So one can adopt new perspective that facilitates change. A very good example for this is brainwashing. Action research model This model is proposed by [9]Cummings and Huse (1989). It is assumed that planned change is a cyclical process. This model proposes that organisations need to undertake research initially to have adequate information that guides in their future action. This model involves eight steps and they are as follows: 1. Identifying the problem. 2. Consulting an expert. 3. Gathering data and diagnosing at preliminary level. 4. Collecting feedback. 5. Diagnosing the problem jointly. 6. Planning of action jointly. 7. Action. 8. Gathering of data after action. Scheins model of change Schein (1987) extended Lewins basic model and included newer concepts. This model has been explained next: Unfreezing: According to Schein, unfreezing is a process for creating enthusiasm and readiness for change. Cognitive restructuring/ redefinition: It is a process by which an enthusiastic learner can learn something new that is related to his thought processes, feelings, values, and attitudes. Defensive identification with a role model: When a learner is motivated to change, that person realises that a concept may be interpreted in different ways than ones own. So one can adopt new perspective that facilitates change. A very good example for this is brainwashing. Action research model This model is proposed by [9]Cummings and Huse (1989). It is assumed that planned change is a cyclical process. This model proposes that organisations need to undertake research initially to have adequate information that guides in their future action. This model involves eight steps and they are as follows: 1 Identifying the problem. 2 Consulting an expert. 3 Gathering data and diagnosing at preliminary level. 4 Collecting feedback. 5 Diagnosing the problem jointly. 6 Planning of action jointly. 7 Action. 8 Gathering of data after action.

Q3. Describe in detail transformation through mcKinseys plan.

Ans. The McKinseys Plan gives the ten ways of transformation for an organisation. Organise mainly the processes not the task. Minimise the subdivision of processes. Give in charge of the change process to the senior persons. Link the objectives to the customer satisfaction. Focus mainly on the teams rather than the individuals. Focus on combining both the managerial and non managerial activities as much as possible. Focus more on the development of competencies among all the individuals. Inform and train the people without the delay. Increase the supplier and customer contact with all the individuals in the organisation. Reward the skill development and team performance rather than the individual performance alone.

Q4-What are the challenges that managers face in implementing successful change?

Ans
There are many challenges that have to be addressed for implementing the change. It is human tendency to resist the changes since the change require learning new skills when we are very much comfortable with the old rules. There are many challenges that have to be faced by the organisation that have to be implemented by the organisation. They are: There is more competition from other countries in the market of today. In this situation we have to look with our organisation whether the organisation is able to cope with the market after implementing the change. There will be some socio, economic problems like the resource allocations and the impact of the resource allocation like depletion of resources on the environment. There are some changes may effect the life style of the people. There may be extra effort that is needed in the case of change process. There is a need to learn about the learning of new skills in the case of implementation of change that has to be carried out. There are many theories that explain why the people resist the change even when there is a necessity for the change. The resistance to change is the major challenge that is faced in all the organisations of todays world, Resistance to change can be averted via some factors. They are: Commitment: From the top level authorities in the organisation to the low level authorities, each employee has to commit for the plan. This begins at the top so that it shows the good leadership. A change mandate: it is necessary to tell the employee in a very convincing way that the change is necessary and it is not a choice. Input: Any employee who is going to undergo the change must be given an opportunity to raise their queries in the respected way. Accountability: Every individual those who are involved in the change process are responsible for implementing their own individual change activity. If they do not meet that responsibility then they may have to face some consequences. Rewards and celebrations: The successful implementation in the organisation should be well acknowledged. The organisation as a whole should honour the successful implementation. Evaluation: The Examination of the implementation is carried at the regular intervals for the success of the organisation. Whenever a change takes place in an organisation, the personal compact, that is, the relationship between the employers and employees gets affected. The personal compacts are of three types. They are: The formal compact: This involves the formal basic tasks and performance requirements as defined by the documents of the company like job descriptions, employment contracts and performance agreements. The psychological compact: This involves the trust between the employee and the employer. This is needed for the better achievement of the individual as well as the company's objectives.

The social compact: This involves the employee's opinion about the culture of an organisation and the success of that organisation. Change usually destabilises the relationship between the employee and the employer, since they will not be comfortable with these changes. These will cause the resistance to change. It is not simply the new idea that causes the resistance to change. As soon as the change is announced in the organisation, many employees will adapt some tactics to protect themselves. The position of the employees in the organisation will be: Argumentative: There are some employees who aggressively challenge against the change which is necessary. This is the time waster and it opposes the critical objectives that have to be met. The employee must agree that every idea is worth of consideration. We need to ask some suggestions from the employees those who challenge the change. Avoidance: Some managers and the members of the leadership team will simply avoid the change without refusing the change process. This is done by showing some kind of avoidance like not attending the meetings, denying the resources, or withholding the feedback. Leading the change is difficult in this as it requires the time and money for the change process management. Distraction: Many employees in the organisation show this type of attitude by showing some diversions during the change process that definitely reduce the effort. A distracted individual shows this by not involving physically as well as mentally in the change process. Once the resistances are identified, then we can use several strategies that are used to overcome the resistance to changes. All the employees must be given the same respect, since every individual will have their own opinion for the change. It is advisable to seek the agreement in all the stages of change process. When there are many on the board in the organisation then it is good to ask and address the few holdouts which are helpful to drive the goal. Finally the resistance is overcome by making sure that the change is communicated in the proper way that is in the multi dimensional format. Adult learning theory supports the need to propagate the messages that are seen, heard and felt.

Q5- What are the requirements for making organisational change?

Cummings and Worley (Organization Development and Change, 1995) describe a comprehensive, five-phase, general process for managing change, including: motivating change, creating vision, developing political support, managing the transition and sustaining momentum. That process seems suitable for organizing and describing general guidelines about managing change. Whatever model you choose to use when guiding organizational change, that model should include the priorities and areas of emphasis described in the following five phases of change. The collaborative consulting model described integrates highlights from all of the five phases. Motivating Change This phase includes creating a readiness for change in your client organization and developing approaches to overcome resistance to change. General guidelines for managing this phase include enlightening members of the organization about the need for change, expressing the current status of the organization and where it needs to be in the future, and developing realistic approaches about how change might be accomplished. Next, organization leaders need to recognize that people in the organization are likely to resist making major changes for a variety of reasons, including fear of the

unknown, inadequacy to deal with the change and whether the change will result in an adverse effect on their jobs. People need to feel that their concerns are being heard. Leaders must widely communicate the need for the change and how the change can be accomplished successfully. Leaders must listen to the employees people need to feel that the approach to change will include their strong input and ongoing involvement. Creating Vision Leaders in the organization must articulate a clear vision that describes what the change effort is striving to accomplish. Ideally, people in the organization have strong input to the creation of the vision and how it can be achieved. The vision should clearly depict how the achievement of the vision will improve the organization. It is critically important that people believe that the vision is relevant and realistic. Research indicates that cynicism is increasing in organizations in regard to change efforts. People do not want to hear the need for the latest silver bullet that will completely turn the organization around and make things better for everyone all the time. They want to feel respected enough by leaders to be involved and to work toward a vision that is realistic, yet promising in the long run. Often the vision is described in terms of overall outcomes (or changes) to be achieved by all or parts of the organization, including associated goals and objectives to achieve the outcomes. Sometimes, an overall purpose, or mission, is associated with the effort to achieve the vision, as well. Developing Political Support This phase of change management is often overlooked, yet it is the phase that often stops successful change from occurring. Politics in organizations is about power. Power is important among members of the organization when striving for the resources and influence necessary to successfully carry out their jobs. Power is also important when striving to maintain jobs and job security. Power usually comes from credibility, whether from strong expertise or integrity. Power also comes from the authority of ones position in the organization. Some people have a strong negative reaction when talking about power because power often is associated with negative applications, for example, manipulation, abuse or harassment. However,

Adapted from Field Guide to Consulting and Organizational Development power, like conflict, exists in all human interactions and is not always bad. It is how power and conflict are used and managed that determine how power and conflict should be perceived. Matters of power and politics are critically important to recognize and manage during organizational change activities. Change often means shifts in power across management levels, functions and groups. To be successful, the change effort must recruit the support of all key power players, for example, senior management, subject matter experts and others who are recognized as having strong expertise and integrity. A strong mechanism for ensuring alignment of power with the change effort is to develop a network of power-players who interact and count on each other to support and guide the change effort. Means to manage power can include ensuring that all power-players are involved in recognizing the need for change, developing the vision and methods to achieve the vision, and organization-wide communication about the status of change. Any recommendations or concerns expressed by those in power must be promptly recognized and worked through. Managing Transition This phase occurs when the organization works to make the actual transition from the current state to the future state. In consultations, this phase usually is called implementation of the action plans. The plans can include a wide variety of interventions, or activities designed to make a change in the organization, for example, creating and/or modifying major structures and processes in the organization. These changes might require ongoing coaching, training and enforcement of new policies and procedures. In addition, means of effective change management must continue, including strong, clear, ongoing communication about the need for the change, status of the change, and solicitation of organization members continuing input to the change effort. Ideally, the various actions are integrated into one overall Change Management Plan that includes specific objectives, or milestones, that must be accomplished by various deadlines, along with responsibilities for achieving each objective. Rarely are these plans implemented exactly as planned. Thus, as important as developing the plan, is making the many ongoing adjustments to the plan with

key members of the organization, while keeping other members up-to-date about the changes and the reasons for them. Sustaining Momentum Often, the most difficult phase in managing change is this phase when leaders work to sustain the momentum of the implementation and adjustment of plans. Change efforts can encounter a wide variety of obstacles, for example, strong resistance from members of the organization, sudden departure of a key leader in the organization, or a dramatic reduction in sales. Strong, visible, ongoing support from top leadership is critically important to show overall credibility and accountabilities in the change effort. Those participating in the change effort often require ongoing support, often in the form of provision of resources, along with training and coaching. The role of support cannot be minimized despite its importance during organizational change, the role of support is often forgotten. At this point in a consulting project, it may be wise for you to ensure you have ongoing support (often from other consultants) that can provide you ongoing objectivity, affirmation, provision of resources and other forms of support. Employee performance management systems play a critical role in this phase of organizational change, including in setting goals, sharing feedback about accomplishment of goals, rewarding behaviors that successfully achieve goals and accomplish change, and addressing performance issues.

Q6. Explain the Greiner's Growth Model of organizational growth in detail. ? Ans. Greiner's Growth Model describes various phases that organisations go through as they grow. All kinds of organisations from design shops to manufacturers, construction companies to professional service firms experience these phases. Each growth phase is made up of a period of stable growth that is followed by a "crisis" when there is a need for major organisational change if the company wants to continue growing.

Crisis here means positive turning point or transition. Originally, Larry E. Greiner proposed this model in 1972 with five phases of growth. Later on he added a sixth phase [12](Harvard Business Review, May 1998). All the six growth phases are described below: Phase 1: Growth through creativity This phase is characterised by the following: Technically or entrepreneurially oriented founders. Frequent and informal communication. Long hours and modest salaries. Reactive to marketplace feedback. Here, the entrepreneurs who have founded the firm will be busy in creating products and opening up markets. There wont be many staff, so informal communication is allowed. Rewards for long hours are through profit share or stock options. However,

as more staffs join, production expands and capital is provided then there will be a need for formal communication. The leadership crisis As the company grows, new systems will be in demand such as manufacturing, accounting, personnel, etc. The founders usually are not experts who manage this new set of systems and cant motivate new employees. This is called Leadership Crisis and phase one ends with this crisis. At this time the company might bring the management that can manage in this new environment or may struggle as founders and try to maintain the old guard. Phase 2: Growth through direction This phase is characterised by the following: Functional organisation structure. Accounting systems. Formal and impersonal communication. Concentrate on directing the new, top managers. Growth continues in an environment that has formal communications, budgets and that focus on separate activities like marketing and production. As a financial reward, incentive schemes replace stock. However, the situation arises where the products and processes become abundant and there wont be enough hours in the day for one person to manage them all. It is not possible for that one person to know much about all these products or services as that of people in the lower hierarchy. Autonomy crisis As the company grows further, centralised management becomes inappropriate. Lower level managers gain better knowledge of the marketplace but wont be able to react quickly. The second revolution comes from a demand for greater independence. By this, the solution to the first phase becomes the crisis for the second phase. The solution to this crisis is to push decision-making responsibility to lower levels. Managers who fail to do this will see their companies being passed by quicker organisations. Phase 3: Growth through delegation This phase is characterised by the following: More responsibility in the place and field marketing managers Use of profit sharing and bonuses for incentives Managing of exclusion by top managers Activating management through acquisitions Infrequent communication from the top With middle-level managers given freedom to react fast to opportunities for new products in markets, the organisation continues to grow. The top level management just monitors and deals with the big issues like looking at merger or acquisition

opportunities. Many businesses struggle at this stage because the managers whose directive approach solved the problems at the end of Phase one finds it difficult to give the responsibility for middle managers. Even then the middle-level managers struggle with their new roles as leaders. Control crisis Field operations will be broadened and inefficiencies come into the system. Top management loses power over planning, money, technology, and manpower. Narrowmindedness in field operations symbolise this new revolution. Management must solve it by adopting and implementing special coordination techniques.

Phase 4: Growth through coordination and monitoring This phase is characterised by the following: Merging of decentralised units into product groups. Establishing and reviewing formal planning procedures. Hiring staff at headquarters to initiate company-wide programs. Reviewing and distributing capital expenditures across the organisation. Measuring field operations through the criteria of Returnon-Capital. Centralising technical functions such as data processing. Using stock options and profit sharing to encourage identity with the firm. Growth continues with the previously isolated business units re-organised into product groups or service practices. Investment finance is owed centrally and managed according to Return on Investment (ROI) and not just profits. Red tape crisis A lack of confidence starts between the line and the staff, and between the headquarters and the field. Systems begin to survive their usefulness and field managers begin to dislike formalised control by staff managers who do not understand the local markets. Staff personnel dislike the uncooperative line managers. The organisation becomes unmanageable and everyone starts disliking the bureaucratic system that has evolved. A new crisis will come into being. Phase 5: Growth through collaboration This phase is characterised by the following: Focusing on solving problems through team action. Forming teams for various departments. Reducing and reassigning headquarters staff to teams that consult field units. Developing a matrix organisation structure. Simplifying and combining formal systems. Holding conferences for key managers frequently. Utilising educational programs to train

managers. Using real-time information systems in decision making. Equipping with economic rewards for team performance. Encouraging experiments in new practices. Growth crisis Here, Greiner guesses about the solution to this new crisis that comes from employees who turn saturated emotionally. They become exhausted both emotionally and physically by the intensity of teamwork and the heavy pressure for innovative solutions. He illustrates this with a European company that created a structure that allowed employees to include a reflective period in their daily activities. Phase 6: Growth through extra-organisational solutions Greiner's added this sixth phase recently and it suggests that growth may continue through merger, outsourcing, networks and other solutions involving other companies. Growth rates vary between and even within phases. The duration of each phase depends totally on the rate of growth of the market in which the organisation operates. The longer a phase lasts, the harder it will be to implement a transition. This is one of the useful models but not all businesses go through these crises in this order.