1. MANAGING ORGANISATIONAL CHANGE
CHAPTER 13
MANAGING ORGANISATIONAL CHANGE
Edited by Christine Cross and Ronan Carbery

2. Learning Outcomes
Demonstrate an understanding of the nature of organisational change
Explain the forces of organisational change
Discuss the planned approach to change management
Identify why employees resist change and recognise strategies for overcoming resistance
Explain the role of leadership in organisational change
Discuss the field of organisational development (OD) critically

3. The Nature of Organisational Change
Organisational change occurs when a company makes a transition from its current state to some desired future state
Today's business environment requires companies to undergo changes frequently, if they are to remain competitive
Factors such as the internationalisation of markets and growth in technology force businesses to be proactive in order to survive
There are many types and levels of change
Change occurs when an organisation evolves through various life cycles

4. Types of Organisational Change
Planned change is change that an organisation consciously thinks about and decides to engage in, which is designed to specifically change organisational outcomes
Unplanned or emergent change is change that the organisation did not initiate or had no control over planning
Incremental change is a small change aimed at achieving certain goals. It is usually targeted at fixing specific departments of the organisation, or specific problems such as changes agreed in staff performance plans
Quantum or radical change affects the entire organisation and involves a more generic organisation-wide change programme such as business process engineering (BPR)

5. Levels of Organisational Change
At the broadest organisational level, change usually centres on restructuring and reorganising. This can mean the introduction of new policies and rules that affect the entire organisation
At the group level, change is aimed at altering work processes, including the introduction of new technologies to accomplish the work
At the individual level, changes attempt to alter the behaviours, attitudes, norms and perceptions of the employees in the organisation to bring them in line with the new values and cultural context

6. Content-driven Change
Content-driven change is a programmatic change in which specific interventions are used as the driver for change
Examples include lean manufacturing
Content-drive change consists of the following elements:
Serves as the building block for stimulating change throughout the company unit or department
Is directed by top management
Relies on standardised, off the shelf solutions
Is practised in a uniform manner across the organisation

7. Process-driven Change
Process-driven change is an approach to change implementation that emphasises the methods of conceiving, introducing, and institutionalising new behaviours and uses content as a reinforcer rather than a driver of new behaviours
An example involves the use of a process model for new application development
It seeks to foster a cultural context and climate in which employees at all levels of the organisation engage in a mutually collaborative way to achieve the strategic goals of the organisation

8. Forces for Change
Internal forces for change include employee dissatisfaction and industrial conflict, new leadership, new strategy, new structures, redesign of jobs and installation of new technology
External forces for change include the growth in the technological innovations, socio-economic forces, market competition, social trends and global politics
Changes to any one of the external or internal elements of an organisation’s system will cause changes to other elements

9. Kotter’s Integrative Model of Organisational Dynamics
The primary organisational processes in Kotter’s framework consist of information gathering, communication and decision making
More specific processes include the market research process, the product development process and the manufacturing process
Kotter’s framework describes six structural dimensions:
The external environment involving the political and government systems
Employees and other tangible assets such as buildings, plant and inventories
Formal structure, job design and operating systems
Social systems involving organisational culture and social structure
Technology
Dominant coalition embracing the objectives and strategies of those who control policy making
See Figure 13.1, page 314 in your book

10. The McKinsey 7S Framework
The basic premise of the model is that there are seven internal aspects of an organisation that need to be aligned if it is to be successful with a change event
Strategy - the plan devised to maintain and build competitive advantage over the competition
Structure - the way the organisation is structured and who reports to whom
Systems - the daily activities and procedures that staff members engage in to get the job done
Shared Values - the core values of the company that are evidenced in the corporate culture and the general work ethic
Style - the style of leadership adopted
Staff - the employees and their general capabilities
Skills - the actual skills and competencies of the employees working for the company
See Figure 13.2, page 316 in your book

11. The Planned Change Process
At some point in time organisations have desired to change some facet of how they operate and have taken deliberate, planned rational steps to accommodate this change
Leaders seeking to implement organisational change are often surprised by the degree of complacency and lack of interest they face from their employees
The planned approach to organisational change assumes that change strategies are intentional and rational processes, which rely on analysis, forecasting and planning, thus resulting in the logical and rational implementation of change within the organisation (Hayes, 2014)
An example of the planned approach was provided by Kotter (see Table 13.1, page 317 in your book)

12. Lewin’s Change Model
Kurt Lewin identified three stages of change that are the basis of contemporary approaches to change management:
Unfreezing: consists of unlearning past behaviour. To break the social habits that support existing patterns of behaviour, a leader needs to initiate unfreezing or create dissatisfaction with the status quo by alerting organisational members to the need for change
Moving: is where the change actually occurs and the organisation moves to a desired state. During this stage, new policies, procedures, structures, behaviours and attitudes are developed
Refreezing: involves reinforcing and measuring behavioural change. Once change has been implemented, in order to be successful, the new situation must be refrozen so it can be sustained over time

13. Lewin’s Change Model
Lippitt et al. (1958) has expanded the moving stage by differentiating three dimensions which are important to achieving the change:
The clarification or diagnosis of the problem
The examination of alternative routes and goals, and the establishment of goals and intentions for action
The transformation of intentions into actual change efforts
Egan (1996) focused on both the unfreezing and moving stages of Lewin’s model. He identified the importance of
The assessment of the current scenario (diagnosis),
Mapping out the preferred scenario (visioning)
The movement from the current to the preferred scenario (planning for change)

14. Employee Resistance to Change
Resistance refers to action, overt or covert, exerted on behalf of maintaining the status quo
Resistance to change can have a significant impact and influence upon the success of an organisational change project
According to Jones et al. (2008) the reasons why employees resist change include the following:
Satisfaction with the status quo
Perception of change as a personal threat
View the cost of change as outweighing the benefits
Belief that management is mishandling the process
Belief that the change effort is not likely to succeed

15. Employee Resistance to Change
Dijk & Dick (2009) discuss two individual sources of resistance to change
Person-orientated resistance to change - involves an employee’s fear of a loss of status, loss of pay or concern that the change has or will have a negative impact on their job security
Principle-orientated resistance - centres on employee beliefs that the proposed or enacted change carries more costs than it does benefits for the organisation

16. Improving Employee Reactions to Change
Kotter & Schlesinger (1979) propose six methods that managers can draw upon to facilitate change and overcome resistance and we look at these in turn below
Education and communication
Participation and involvement
Negotiation and agreement
Manipulation and co-optation
Selecting people to lead change
Explicit and implicit coercion

17. Learning How Employees Respond to the Change
A framework by Hayes and Hyde (2008) provides managers with an insight into employee attitudes towards the change and the issues they encounter 
This diagnostic change tool can be used by management to promote an open discursive culture around the change initiative
It can also be used to capture employees’ opinions over time and to assess employee experiences in different departments, functions and organisational levels
Managing change involves helping an individual, group or organisation to change their existing behaviour and providing feedback that signals the effectiveness of new behaviours

18. Learning How Employees Respond to the Change
Adapted from: Hayes, J. (2010) The Theory and Practice of Change Management. Basingstoke: Palgrave Macmillan

19. Leadership and Organisational Change
Leadership is widely regarded as the primary enabler of the change process and that a strong vision can make a valuable contribution to the success of a change initiative
Focus has been directed on differentiating between transactional and transformational types of leadership
Transactional leaders are those who guide their followers towards established goals by clarifying role and task requirements.
Transformational leaders inspire followers to transcend their self-interest for the good of the organisation and can have an extraordinary effect on their followers

20. Characteristics of Transactional and Transformational leaders
Transactional Leader
Transformational Leader
Contingent reward
Management by exception (active)
Management by exception (passive)
Laissez-faire
Idealised influence
Inspirational motivation
Intellectual stimulation
Individualised consideration

21. Kotter’s Change Model and Leadership
Establish a sense of urgency
Form a coalition with enough power to lead the change
Create a new vision to direct the change and strategies for achieving the vision
Communicate the vision throughout the organisation
Removing barriers to change
Plan for, create, and reward short-term wins that move the organisation toward the new vision
Consolidate improvements, reassess changes, and make necessary adjustments in the new programmes
Reinforce the changes by demonstrating the relationship between new behaviours and organisational success

22. Organisational Development
French and Bell (1978) described organisational development as the long term effort to improve an organisation’s problem-solving and renewal processes
Systems perspective - Outstanding performance depends on interactions between and among the multiple elements of the organisation; between the people, processes, structure, and values of the organisation, and between the organisation and its external environment
Alignment perspective - The effectiveness of organisations will be determined by a state of congruence between people, process, structure, values and environment
Participation perspective – People will become more committed to implementing solutions if they have been involved in the problem-solving process

23. Organisational Development
Social-capital perspective - To achieve outstanding performance, organisational leaders seek to create a network of interdependent relationships that provide the basis for trust, cooperation, and collective action
Teamwork perspective - Accepting a shared purpose and responsibility for interdependent tasks enhances coordination, commitment, and creativity and supports outstanding performance
Multiple stakeholder perspective - Outstanding performance requires the organisational leaders to balance the expectations of multiple stakeholders
Problem-solving perspective - Conflicts over task issues can increase the quality of decisions if they occur in an environment of collaboration and trust

24. Organisational Development
Open communications perspective - Open and candid communication, especially upward in the hierarchy, creates the opportunity for learning and development while building trust and collaboration
Evolution/revolution perspective - Organisations must develop competencies to engage in both incremental (evolutionary) and fundamental (revolutionary) change
Process facilitation perspective - Individuals who reside outside of the organisational hierarchy can become both facilitators and teachers of effective implementation processes in partnership with organisational members

25. Defining and Explaining Organisational Development
Organisational Development places emphasis on:
Group and organisational processes
The work team as the key unit for learning more effective modes of organisation
The collaborative management of work-team culture
The use of employees as change agents
OD assumes
That employees are motivated if provided with an environment that is both supportive and challenging
That employees wish to be accepted and to interact cooperatively and that the interplay of the dynamics of work teams has a powerful effect on the attitudes and behaviours of people
The leadership style and the climate of the team are powerful in the change effort

26. Summary Outline the different types of organisational change
How can a manager analyse the change context?
What are the considerations for organisations when deciding upon the nature and type of change, and how change should take place?
What are some of the potential forces acting for and against a change initiative? Use Lewin’s model as a guide
How can organisational development (OD) improve organisational performance through managing change?
A significant feature of Kotter’s model is the role of leadership in the management of change. Discuss this statement