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5.

Process of Organisational Change:


Understanding the process of change requires careful consideration of
the steps in the change process, employee resistance to change and
how this resistance can be overcome.

The management of change requires the use of some systematic


process that can be divided into a few stages or sub-processes. This is
the essence of the most representative model of managing change. It
emphasises the role of the change agent who is an outsider, taking a
leadership role in initiating and introducing the process of change.

The process of change must involve the following so as to lead to


organisational effectiveness. Firstly, there is a re-distribution of power
within the organisational structure. Secondly, this redistribution
emanates from a developmental change process.

Phases of the Change Process:


Fig.15.5 indicates that the process of change has to pass
through six different phases:
1. Internal pressure:
The process of change begins as soon as top management starts feeling
a need of pressure for change from within the enterprise. This is
usually caused by some significant problem(s) such as sharp drop in
sales (profits), serious labour trouble, and/or high labour turnover.

2. Intervention and reorientation:


An external agent is often invited to suggest a definition of the
problem and start the process of getting organisation people to focus
on it. If internal staff people are competent enough and can be trusted
they can also manage the process of change equally well.

3. Diagnosis and recognition of problem(s):


The change agent and manager start gathering necessary information
and analyse it so as to recognise the more important problems and
give attention to these.

4. Invention of and commitment to solutions:


It is important for the agent to stimulate thought and try to avoid
using the ‘same old methods’. Solutions are searched out by creatively
developing new and plausible alternatives. If subordinates are
encouraged to participate in the process, they will develop a sense of
involvement and are likely to be more committed to the course of
action finally chosen.

5. Experimentation and search for results:


The solutions developed in phase 4 are normally put to tests on a
small-scale (e.g., in pilot programmes) and the results, analysed. If the
solution is successful in one unit, or a certain part of a unit, it may be
tried in the organisation as a whole.

6. Reinforcement and acceptance:


If the course of action is found desirable (after being properly tested),
it should be accepted voluntarily by organisation members. Improved
performance should be the source of reinforcement and thus should
lead to a commitment to the change.

6. Resistance to Organisational Change:


In planning for change, managers must also take into account the
various reasons for which people may resist the change, regardless of
how ‘necessary’ it may appear to be.

The following four reasons explain why people resist


change:
(i) Uncertainty:
Perhaps the main reason of employee resistance to change is
uncertainty. In the face of impending change, employees are likely to
become anxious and feel nervous. Diverse feelings among workers
may lead to substantial resistance force to change. For example, they
may worry about their ability to meet the new job demands, they may
think their job security is threatened, or they may simply dislike
ambiguity.

(ii) Self-Interests:
Secondly, many impending changes threaten the self-interests of a
particular manager or unit. So, he may resist such change.

(iii) Different Perceptions:


It is often observed that a manager recommends a plan for change on
the basis of his (her) own assessment of a situation. His peers and
subordinates may resist this change because they do not agree with the
manager’s assessment or simply perceive the situation differently.

(iv) Feelings of Loss:


Finally, organisational people often resist change simply because of
feelings of loss. Many changes involve altering work arrangements,
which may disrupt existing social networks. Since social relationships
are important to most people, they will resist any change that might
adversely affect those relationships. Other intangibles that are
threatened by change include power, status, security, familiarity with
existing procedures and self-confidence.
8 ESSENTIAL STEPS FOR AN EFFECTIVE CHANGE MANAGEMENT PROCESS

Your organization is constantly experiencing change. Whether caused by new


technology implementations, process updates, compliance initiatives,
reorganization, or customer service improvements, change is constant and
necessary for growth and profitability. A consistent change management process
will aid in minimizing the impact it has on your organization and staff.

Below you will find 8 essential steps to ensure your change initiative is successful.

1. Identify What Will Be Improved

Since most change occurs to improve a process, a product, or an outcome, it is


critical to identify the focus and to clarify goals. This also involves identifying the
resources and individuals that will facilitate the process and lead the endeavor.
Most change systems acknowledge that knowing what to improve creates a solid
foundation for clarity, ease, and successful implementation.
2. Present a Solid Business Case to Stakeholders

There are several layers of stakeholders that include upper management who
both direct and finance the endeavor, champions of the process, and those who
are directly charged with instituting the new normal. All have different expectations
and experiences and there must be a high level of "buy-in" from across the
spectrum. The process of onboarding the different constituents varies with each
change framework, but all provide plans that call for the time, patience, and
communication.

3 .Plan for the Change

This is the "roadmap" that identifies the beginning, the route to be taken, and the
destination. You will also integrate resources to be leveraged, the scope or
objective, and costs into the plan. A critical element of planning is providing a
multi-step process rather than sudden, unplanned "sweeping" changes. This
involves outlining the project with clear steps with measurable targets, incentives,
measurements, and analysis. For example, a well-planed and controlled change
management process for IT services will dramatically reduce the impact of IT
infrastructure changes on the business. There is also a universal caution to
practice patience throughout this process and avoid shortcuts.

4. Provide Resources and Use Data for Evaluation

As part of the planning process, resource identification and funding are crucial
elements. These can include infrastructure, equipment, and software systems.
Also consider the tools needed for re-education, retraining, and rethinking priorities
and practices. Many models identify data gathering and analysis as an
underutilized element. The clarity of clear reporting on progress allows for better
communication, proper and timely distribution of incentives, and measuring
successes and milestones.
5. Communication

This is the "golden thread" that runs through the entire practice of change
management. Identifying, planning, onboarding, and executing a good change
management plan is dependent on good communication. There are psychological
and sociological realities inherent in group cultures. Those already involved have
established skill sets, knowledge, and experiences. But they also have pecking
orders, territory, and corporate customs that need to be addressed. Providing
clear and open lines of communication throughout the process is a critical element
in all change modalities. The methods advocate transparency and two-way
communication structures that provide avenues to vent frustrations, applaud what
is working, and seamlessly change what doesn't work.

6. Monitor and Manage Resistance, Dependencies, and Budgeting Risks


Resistance is a very normal part of change management, but it can threaten the
success of a project. Most resistance occurs due to a fear of the unknown. It also
occurs because there is a fair amount of risk associated with change – the risk of
impacting dependencies, return on investment risks, and risks associated with
allocating budget to something new. Anticipating and preparing for resistance by
arming leadership with tools to manage it will aid in a smooth change lifecycle.

7. Celebrate Success

Recognizing milestone achievements is an essential part of any project. When


managing a change through its lifecycle, it’s important to recognize the success of
teams and individuals involved. This will help in the adoption of both your change
management process as well as adoption of the change itself.

8. Review, Revise and Continuously Improve

As much as change is difficult and even painful, it is also an ongoing process.


Even change management strategies are commonly adjusted throughout a
project. Like communication, this should be woven through all steps to identify and
remove roadblocks. And, like the need for resources and data, this process is only
as good as the commitment to measurement and analysis.
Factors Influencing Organizational Change
Organization Change is a response of the organization to the various forces within and external to it.
Organizations exist within a society and therefore respond to various factors like the economic, the
political and legal framework as well as various socio cultural factors. An organization is like a
system and is constituted of various sub systems. However what determines an organizations
sustainable competitive advantage is its ability to accept change and plan for it.

The two major factors, which can influence an organizations strategy and its ability to survive and
grow, are: Business Cycles and Industry Life Cycle.

Business Cycles
Just as a biological organism grows and dies, organizations too experience life and death based on
the overall economic activity. Growth in the economy means a growth for the organization and slump
in the economy may reflect in a slump in the business. However all organizations do not respond the
same way to the fluctuations in the economy, some organizations are likely to be more affected as
compared to other organizations.

Parkin and Bade’s text “Economics” gives the following definition of the business cycle: The
business cycle is the periodic but irregular up-and-down movements in economic activity, measured
by fluctuations in real GDP and other macroeconomic variables.

A business cycle is not a regular, predictable, or repeating phenomenon like the swing of the
pendulum of a clock. Its timing is random and, to a large degree, unpredictable. A business cycle is
identified as a sequence of four phases:

1. Contraction (A slowdown in the pace of economic activity)


2. Trough (The lower turning point of a business cycle, where a contraction turns into an expansion)
3. Expansion (A speedup in the pace of economic activity)
4. Peak (The upper turning of a business cycle)

In some years most industries are booming and unemployment is low; in other years most industries
are operating well below capacity and unemployment is high. Periods of economic expansion are
typically called booms; periods of economic decline are called recessions or depressions. The
combination of booms and recessions, the ebb and flow of economic activity, is called the business
cycle.

There are two main reasons why organizations need to understand business cycles. First it is easier
to manage organizations in the period of growth than when they are in a slump. Secondly the major
changes which occur during a business cycle like a new product introduction, expanding to a new
market require a great deal of investment by the organization. Improper timing of any of these
changes may threaten the very existence of the business. The underlying factor is that if
organizations want to survive they must learn to face uncertainty since managing uncertainty is the
key to effective change management.
Industry Life Cycle
Just like organizations grow and die, the industry also goes through various stages in its life span.
The three major forces, which have an impact on the life cycle of an industry, are competitive
structure, technology and institutional rules.

The stages of the life cycle of industry evolution are:

1. The embryonic stage


2. The growth stage
3. The shakeout stage
4. The maturity stage
5. The decline stage

The industry life cycle model is a useful tool for analyzing the effects of an industry’s evolution on
competitive forces. Using the industry life cycle model, we can identify five industry environments,
each linked to a distinct stage of an industry’s evolution:

1. An embryonic industry environment


2. A growth industry environment
3. A shakeout industry environment
4. A mature industry environment
5. A declining industry environment

Competitive structure
The competitive structure of the industry in the early stages of embryonic and growth is
disorganized. The number of competitors will be large and the relative position of the competitors
would keep continuously changing. In this stage a competitor who adopts superior technology would
definitely get an edge over the others. Organizations who make investments in their people by
training them to adopt new technology would have a greater chance of survival and growth as
compared to those who don’t.

Ultimately organizations who cannot adopt new technology or who don’t develop requisite skills in
their manpower would be erased from the competition. This stage is the shakeout stage since in this
stage many organizations are shaken out of the competition. The result is that there are fewer
organizations in the industry with a larger market share.

Each organization tries to consolidate their position and this leads to an increase in industry
concentration. (Concentration here refers to the number, size and strength of competitors.) At this
point of time, the market growth slows down and the industry reaches a stage of maturity. From this
stage of maturity the markets grow smaller and the industry may go to the decline stage.

Technological Changes
Technology refers to the “equipment, machinery and information, knowledge and activities that are
involved in the physical transformation of inputs into outputs.” In the competitive environment, which
exists at present, organizations are highly concerned about technology because it is a major
determinant of success. Selecting and using the right technology thus becomes a very important
factor in giving the organization a competitive advantage in the competition.
Technology is basically of two types – general and specific. General technologies or general-
purpose technologies are common and are utilized by all organizations, for e.g.: electricity, steam,
computers and the Internet. Specific or specific purpose technologies are those, which are industry
specific and sometimes are customized by organizations for their purpose. Such technologies give to
the organization an edge over the competition.

Institutional Rules
Institutional Rules refer to the formal or written and unwritten rules, regulations and norms a
company must follow. The formal rules are the statutory compliance’s and legislation’s that an
organization must follow, for e.g., laws regarding environment, health and safety, employment,
consumer protection and wages/salary. The informal rules are the unwritten but implied codes of
conduct for the organization as well as for the employees who work within. Norms and codes of
conduct evolve over a period of time and in some case get institutionalized in such a way that they
become more rigid than legislation’s.

Violation of written laws lead to the organization being legally punished or sanctioned for the offense
where as violation of unwritten and informal norms and codes of conduct lead to social sanctions,
like ostracism, boycott and a loss of credibility and reputation in the society.

Institutional rules evolve rather slowly but when they change, they change the way that business is
conducted in a competitive industry. Those organizations, which are not proactive and cannot
prepare for such a change, will experience a slump in the performance. An example for this would
be the response of nationalized banks towards emerging customer needs. Slow response and
unattractive schemes made the customers move to look for other outlets and this led to the boom for
non banking financial institutions, who came up with very attractive schemes like personal loans, etc.

Organizational Culture
The values and behaviors that contribute to the unique social and psychological environment of an
organization.
Organizational culture includes an organization's expectations, experiences, philosophy, and values
that hold it together, and is expressed in its self-image, inner workings, interactions with the outside
world, and future expectations. It is based on shared attitudes, beliefs, customs, and written and
unwritten rules that have been developed over time and are considered valid. Also called corporate
culture, it's shown in
(1) the ways the organization conducts its business, treats its employees, customers, and the wider
community,
(2) the extent to which freedom is allowed in decision making, developing new ideas, and personal
expression,
(3) how power and information flow through its hierarchy, and
(4) how committed employees are towards collective objectives.

It affects the organization's productivity and performance, and provides guidelines on customer care
and service, product quality and safety, attendance and punctuality, and concern for the
environment.
Meaning of Organisational Change:
Organisational change refers to any alteration that occurs in total work
environment. Organisational change is an important characteristic of
most organisations. An organisation must develop adaptability to
change otherwise it will either be left behind or be swept away by the
forces of change. Organisational change is inevitable in a progressive
culture. Modern organizations are highly dynamic, versatile and
adaptive to the multiplicity of changes.

Organisational change refers to the alteration of structural


relationships and roles of people in the organization. It is largely
structural in nature. An enterprise can be changed in several ways. Its
technology can be changed, its structure, its people and other elements
can be changed. Organisational change calls for a change in the
individual behaviour of the employees.

Meaning of Organisational Change:


Organisational change refers to any alteration that occurs in total work
environment. Organisational change is an important characteristic of most
organisations. An organisation must develop adaptability to change otherwise
it will either be left behind or be swept away by the forces of change.
Organisational change is inevitable in a progressive culture. Modern
organizations are highly dynamic, versatile and adaptive to the multiplicity of
changes.

Organisational change refers to the alteration of structural relationships and


roles of people in the organization. It is largely structural in nature. An
enterprise can be changed in several ways. Its technology can be changed, its
structure, its people and other elements can be changed. Organisational
change calls for a change in the individual behaviour of the employees.

Organizations survive, grow or decay depending upon the changing behaviour


of the employees. Most changes disturb the equilibrium of situation and
environment in which the individuals or groups exist. If a change is
detrimental to the interests of individuals or groups, they will resist the
change.

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