Topic

10

Leading and
Managing
Change

LEARNING OUTCOMES
By the end of this topic, you should be able to:
1.

Explain the critical change leadership roles;

2.

Identify the skills, characteristics and attributes for effective change

leadership;

3.

Describe the types of power used to influence change;

4.

Explain why people resist change; and

5.

Determine the ways to overcome resistance to change.

X INTRODUCTION
Managing change can be organised into several major activities. Organisational
leaders must give full attendance to these activities when planning and
implementing change. Cummings and his colleagues described the five major
activities contributing to effective change management are motivating change,
creating a vision, developing political support for change, managing the
transition, and sustaining momentum (Cummings & Worley, 2005; Waddell,
Cummings, & Worley, 2004).
The first activity is motivating change, that is, how to obtain employee
commitment to organisational change. It involves creating a readiness and
momentum for change among the employees. Motivation is needed to start the
change because people are not willing to change unless there are strong reasons
to do so. The second activity is creating a vision for change, which is a key
leadership task. The vision provides a reason for change and indicates the future

TOPIC 10

LEADING AND MANAGING CHANGE

137

state that an organisation aims to achieve. The third activity is developing

political support for change. There are powerful individuals who can either
hinder or promote change and their support is needed to implement change. The
fourth activity is managing the transition from the present state to the desired
future state. It includes making a road map for change and developing needed
structures for managing the change process. Lastly, the fifth activity involves
sustaining momentum for change so that it will be carried out to completion.
Providing resources and support for change, reinforcing new behaviour and
staying the course are needed to sustain the change momentum.
The focus of this topic is on leading and managing organisational change. It
explores several key dimensions of change leadership change leadership roles,
effective change leadership attributes, the use of power to influence change,
resistance to change and overcoming resistance to change. They are important
elements in supporting the activities contributing to effective change menagement.

10.1

CRITICAL CHANGE LEADERSHIP ROLES

In managing and leading change effectively, leaders are required to perform a

number of critical roles (Graetz, et al. , 2006):
(a)

Energising and Instilling a Readiness for Change

The first key role of the leader in managing change is to energise and instill
the workforce into a state of readiness for change. The leader needs to
create a sense of urgency, or a felt need for change, among the organisation
members. This involves making employees see what is wrong with the
organisation to stimulate unrest and dissatisfaction with the status quo.
Dissatisfaction with the current state would motivate employees to try new
ways of behaving, work methods and technologies.
Creating dissatisfaction or a sense of urgency can be difficult. Generally,
people will seriously undertake change after experiencing deep levels of
hurt. For example, IBM, General Motors (GM) and Sears (a US departmental
store) experienced threats to their very survival before they undertook
significant organisational change. Effective strategies for instilling a readiness
for change include:
(i)

Seek outside opinion to identify problems and to assess the need for
change.

(ii)

Benchmark against successful companies to identify the gap between

where the organisation is currently and where it could be.

(iii) Appoint a new leader to provide a powerful catalyst for change.

138 X TOPIC 10 LEADING AND MANAGING CHANGE

(iv) Sensitise the organisation to pressures for change both externally and
internally to the organisation. External pressure for change include
fierce competition, globalisation and rapid changing technologies and
customer demands. Internal pressure for change include high
production costs, poor product quality, and excessive employee
turnover. These pressures serve as triggers for change.
(v)

Reveal discrepancies between the organisations current state of

functioning and the future desired state of operations. Feedback on
failure to achieve organisational goals can motivate actions to
improve the organisation.

(vi) Convey positive expectations about the change to the organisation

members. When members believe that positive outcomes result from
the change, they are more likely to be motivated and committed to the
change process.
(b)

Envisioning the Desired Future and Setting the Direction

A primary role of change leadership is to develop a shared vision. A vision
gives meaning and structure to the change efforts. Generally, a vision has
the following functions:
(i)

It describes the purpose that guide the organisation.

(ii)

It serves as an envisioned future toward which change is directed.

(iii) It reflects why change is needed and is worth the effort.

(iv) It provides employees with a common goal in making changes.
(v)
(c)

It provides a direction for designing organisational changes.

Demonstrating Commitment and Involvement

Successful leaders recognise that change must be everyones business; and
they strive to inspire others with their enthusiasm, commitment and
involvement. Successful implementation of change occurs in organisations
where leaders walk the talk and teach new behaviour by example. The
ability of the leader to build relationships with people inside and outside
the organisation is vital to the success of any change effort. In addition, the
leader builds trust and confidence by engaging in open communication
with organisation members.. Communication is about informing and
sharing information at all levels of the organisation in the change process
and providing feedback about the change results. Hence, open
communciation by the leader is an effective mechanism in demonstrating
their commitment and involvement to organisational changes.

TOPIC 10

(d)

LEADING AND MANAGING CHANGE

139

Reinforcing the Message and Institutionalising the Change

Once organisational changes are under way, explicit efforts must be
directed to sustaining energy and commitment for implementing them. To
ensure the success of organisational change over the long-term, change
leaders need to install mechanisms that will reinforce and institutionalise
change and help to sustain the momentum. Such mechanisms include:
(i)

Providing financial and non-financial resources for change.

(ii)

Building a support system for the change agent. A support system

typically consists of a network of people who can provide emotional
support to the change agent.

(iii) Establishing new organisational systems and structures to support the

changes. For example, a team-based structure may be formed in
attempting to move to a more flexible organisation.
(iv) Reinforcing new behaviour by linking financial rewards directly to
the desired behaviour. As it is commonly known, what gets
rewarded, gets repeated.
(v)

Reinforcing desired behaviour by non-financial rewards such as

informal recognition, encouragement, and praises; as well as formal
recognition by holding special ceremonies to acknowledge successful
changes.

While there is no guaranteed recipe for successful change leadership, effective

change leaders appear to perform a number of critical roles as described above.

SELF-CHECK 10.1
Identify the critical roles of top managers in leading and managing the
change.

ACTIVITY 10.1
Find out the mechanisms used in your organisation to reinforce and
sustain change.

140 X TOPIC 10 LEADING AND MANAGING CHANGE

10.2

ATTRIBUTES FOR EFFECTIVE CHANGE

LEADERSHIP

Managing change is a multi-disciplinary activity. Leading and managing change

requires leaders to possess a wide range of skills and knowledge (Graetz, et al. ,
2006). For example:
(a)

Communications and listening skills are essential.

(b)

The abilty to maintain motivation is a must.

(c)

Negotiation and influencial skills are invaluable.

(d)

The ability to facilitate change activities is crucial.

(e)

Knowldge of the rationale for change is essential.

The list of competencies, or attributes, for effective change leadership could be

further categorised and extended as shown in Table 10.1.
Table 10.1: Attributes for Effective Change Leadership
Strong Image and Belief in Oneself
x Self-confidence;
x Ability to draw others to a vision;
x Ability to take decisive action; and
x Awareness of own strengths and weaknesses.
High Energy Levels
x A passion for the job;
x Being energetic and focused; and
x Contagious enthusiasm and involvement.
A Love for People
x Belief in, and sensitivity to, followers;
x Genuine interest in followers needs, concerns and views;
x Behave as a friend; and
x Theory Y leaders: subordinates who are capable and willing to work to their potential
and take on responsibilities.

TOPIC 10

LEADING AND MANAGING CHANGE

141

Functional Competence
x Knowledge, experience and credibility that are key factors in gaining support and
commitment of others for the change effort.
Knowledge of the Organisation
x An understanding of the operational context: the organisations culture and history,
including the background and personalities of key individuals who may help or
hinder the change process.
Strong Drive
x Ambition; desire to make an impact; and
x Challenge status quo: strong sense of self-control, purpose and competence.
Adapted from: Graetz, F., Rimmer, M., Lawrence, A., & Smith, A. (2006).

Managing organisational change. Milton Qld: John Wiley & Sons Australia, Ltd

Note that effective change leadership requires strong interpersonal skills and a
high degree of emotional intelligence. Change leaders need a high level of energy
to build networks and to motivate and involve as many people as possible in the
change process. Table 10.1 above also underlines that change leaders need to
have sound knowledge of the history and workings of the organisation and of
the personalities that have contributed to its identity. This knowledge can be
invaluable in detemining forces for and against change in the organisation.

SELF-CHECK 10.2
Provide a list of attributes for effective change leadership.

ACTIVITY 10.2
Identify a change agent from your organisation and determine the
competencies of this person.

142 X TOPIC 10 LEADING AND MANAGING CHANGE

10.3

THE USE OF POWER TO INFLUENCE

CHANGE

To understand how leaders manage change, we need to look at the sources of

power and how leaders use their power to influence change. There are many
sources of power within an organisation. The power of a change leader may
come from the position held, from the possession of scarce resources or
information, or from expertise. A leader who has certain power will learn how
and whom to influence to achieve his or her objectives. Where do individual
organisation members get their power from? George and Jones (2005)
distinguished between two types of individual power formal and informal.
Formal individual power is the power that originates from a persons position
in an organisation (George & Jones, 2005, p. 409).

Informal individual power is the power that stems from personal

characteristics such as personality, skills and capabilities (George & Jones,
2005, p. 411).

When individuals accept a position in an organisation, they accept the formal

duties and responsibilities associated with the position. In return, the
organisation gives them formal authority to use organisational resources to
accomplish the duties and responsibilities. The types of formal individual power
include legitimate power, reward power, coercive power and information power.
In addition to the individuals formal position in an organisation, power also
comes from a persons characteristics, skills and knowledge. Power stemming
from personal qualities is informal individual power. The types of informal
individual power include expert, referent and charismatic power.
Table 10. 2 describes the sources of both formal and informal individual power.

TOPIC 10

LEADING AND MANAGING CHANGE

143

Table 10.2: Sources of Formal and Informal Individual Power

Formal Individual Power

Informal Individual Power

Legitimate Power

Expert Power

x The power to control and use

organisational resources to accomplish
organisational goals.

Informal power that stems from

superior ability or expertise in
performing a task or in a particular
field.

Example: IT managers have expert

power in IT communications and
technologies.

x Example: Subordinates must comply

with the directives given by the
supervisors.

Reward Power

Referent Power

x The power to give pay raises,

incentives, bonues, promotions, prasies,
recognitions, interesting job
assignments, and other rewards to
subordinates.

People who gain power and influence

because they are liked, admired or
respected, are said to possess referent
power.

People with referent power are liked

just because of who they are.

Example: Subordinates tend to listen to

managers with pleasant personalities
and respectable traits.

x Example: Managers decide on the

amount of pay increment upon yearly
performance appraisal.

Coercive Power

Charismatic Power

x The power to give or withhold

punishment.

Charismatic power is an intense form

of referent power that originates from
an individuals personality, physical, or
other abilities that induces others to
believe in and follow that person.

Example: Domenico De Sole and Tom

Ford not only possess expert power,
but they also gained charismatic power
because of their ability to turn Gucci
around and restore its position as a
leading fashion house. Other examples
include Bill Gates at Microsoft and the
late Steve Jobs at Apple.

x Punishments range from suspension to

demotion, termination, unpleasant job
location, or even the withholding of
praise and financial rewards.

x Example: Supervisors issue warning

letters to subordinates for failure to
comply with orders.

144 X TOPIC 10 LEADING AND MANAGING CHANGE

Information Power
x

The power that stems from access to

and control over important
information.

The more information a manager

possesses, the greater is the
subordinates dependence on the
manager.

Example: Marketing research managers

possess critical customer information
which may be much needed for
promotion and production purposes.
Source: George & Jones (2005)

SELF-CHECK 10.3
Identify the sources of power within an organisation.

ACTIVITY 10.3
What kind of power do you have given your position in the organisation?
Identify the sources of your power.

10.4

RESISTANCE TO CHANGE

Very often organisation members resist change. Why do people resist change?
The reason may be that they fear the unknown and uncertainties. Generally,
people are comfortable with the familiar and try to minimise changes. Individual
sources of resistance to change come in various forms. Robbins (2003) described
several reasons why people resist change:

TOPIC 10

LEADING AND MANAGING CHANGE

145

(a)

Habit
Human beings are creatures of habit. We rely on habits when we deal with
our daily lives. We are accustomed to behave in a certain way. When we are
confronted with changes, we will respond in our accustomed ways and this
becomes a source of resistance. Just imagine what will happen when there
is a relocation of office. Relocation means we are likely to have to change
many habits waking up earlier, taking a new route to work, finding a new
parking space, adjusting to the new office environment and working
conditions, developing a new lunch time routine, and so on.

(b)

Security
People with a high need for security and safety are likely to resist change,
because change threatens their sense of security. When there is an
introduction of new systems to streamline business processes, these people
are concerned that their existing position and power will be lost.

(c)

Economic Factors
A reason for resistance to change is financially related. Employees are
concerned that changes will lower their incomes. Job-related changes can
arouse economic fears if employees are afraid that they wont be able to
perform the new tasks, especially when pay is closely tied to their
performance.

(d)

Fear of the Unknown

Changes give rise to the unknown and uncertainties. People will resist
change when they do not know about the consequences or outcomes of the
change. People are more likely to resist change if they do not know the
reasons for a change and its impact on them.

(e)

Low Tolerance for Change

People vary in their abilities to cope with change. Some people just cant take
risks associated with new changes. A change with unknown consequences
can be very threatening to people with a low tolerance of ambiguity.

(f)

Selective Information Processing

Individuals shape their world through their perceptions and experiences.
Once they have created their own world, they are reluctant to change it.
This becomes a resistant to change. They tend to process information
selectively to keep their world and perceptions intact. They hear what they
want to hear, and they see what they want to see. They ignore information
that challenges the world they have created.

146 X TOPIC 10 LEADING AND MANAGING CHANGE

(g)

Misunderstanding and Lack of Trust

People will resist change if they misunderstand what the change is all
about. In addition, they resist change when there is a lack of trust in the
change agent. This will result in selective perceptions about what the
change agent says.

Resistance to change is inevitable. It is a natural reaction to change and part of

the process of adaptation. Organisations just have to recognise the sources of
resistance to change and overcome them by some means. The following section
describes several means to overcome resistance to change.

ACTIVITY 10.4
Can you think of any other reasons why people resist to change? List all
the possible reasons why people resist to change.

10.5

OVERCOMING RESISTANCE TO CHANGE

Resistance to change occurs at all levels of an organisation. Since resistance to

change is inevitable, leaders should plan ways to deal with it early in the change
process. Tactics that leaders can use to reduce resistance to change include
communication and education, participation and empowerment, facilitation and
support, bargaining and negotiation, manipulation and cooptation and coercion
(Robbins, 2003).
(a)

Communication and Education

Frequent communication and providing education to employees are
essential for any organisational change. McShane and Von Glinow (2009)
stated that communication improves the change process in at least three
ways. First, leaders develop an urgency to change by candidly telling
employees about the driving forces for change. Second, communication
reduces fear of the unknown. Third, communication educates employees
and help them see the logic of a change. One of the most common
impediments to change is uncertainty about what is going to happen.
Through communication and education, the leader can inform organisation
members about the change and how it will affect them. Communication can
be achieved through formal group meetings, memos, one-to-one discussions,
oral presentations, e-mails, video-conferencing and reports. Education and
training on change management will reduce resistance to change.

TOPIC 10

LEADING AND MANAGING CHANGE

147

(b)

Participation and Empowerment

Employee involvement has become a popular method of overcoming
resistance to change. Employees will accept a change decision in which they
participated. Rather than viewing themselves as agents of someone elses
decision, employees prefer to own part of the decision and be personally
responsible for the decision outcomes. Employee participation can reduce
resistance, minimise fear of the unknown, obtain acceptance and
commitment and increase the quality of the change decision.

(c)

Facilitation and Support

Organisational change is a stressful experience for many employees
because it creates uncertainty, alters established tasks and role relationships
and threatens self-esteem. Leaders can offer a range of supportive efforts to
reduce resistance. When employees fear and anxiety are high, stress
management, employee counseling and therapy, new-skills training, or
time off from work may facilitate the adjustment. Stress management
reduces resistance to change by increasing the employees ability to cope
with the unknown and their motivation to support the change process.

(d)

Bargaining and Negotiation

Bargaining and negotiation are important tactics that help leaders influence
others and manage conflict. Bargaining and negotiation can counter
resistance to change by offering incentives and benefits to actual or
potential resistors in exchange for assurance that the change will not be
blocked.
Negotiation uses formal bargaining to win acceptance and approval of a
desired change. It is a more formal means of achieving cooperation. For
example, if the customer service department fears losing power if a new
management structure is implemented, leaders may negotiate with the
department to reach a resolution.
Formal negotiation may be needed to deal with unions in accepting change.
Companies that have strong unions formally negotiate change with the
unions. The change may become part of the union contract reflecting the
agreement of both parties.

(e)

Manipulation and Cooptation

Manipulation refers to covert attempts to influence others (Robbins, 2003, p.
563). Examples of manipulation are providing selective information,
twisting or distorting facts, withholding damaging information and
creating false rumours. If leaders threaten to punish employees when they

148 X TOPIC 10 LEADING AND MANAGING CHANGE

refuse the change and if the threat is untrue, this is manipulation. These
covert attempts aim to get organisation members to accept the change.
Cooptation, on the other hand, is a form of both manipulation and
participation (Robbins, 2003, p. 563). It seeks to buy off the leaders of a
resistance group by giving them a key role in the change decision. The
leaders advice is sought to gain their endorsement and support, not to seek
a better decision.
Manipulation and cooptation are inexpensive and easy ways to gain the
support of adversaries. But these tactics can backfire when employees feel
that they have been tricked or cheated. The leaders or the change agents
credibility may drop to zero.
(f)

Selecting People Who Accept Change

The ability to adapt to change may be related to personality. Some people
have more positive attitudes and are more readily accepting of change than
others. People who cope better with change may have these characteristics:
open to experience, positive attitude towards change, willing to take risks,
flexible in their behaviour, high in risk tolerance and open-minded. Leaders
can facilitate the change process and reduce resistance to change by
selecting employees who score high on these characteristics.

(g)

Implementing Changes Fairly

As mentioned previously, most people do not like change and tend to react
negatively towards change. One way leaders can mimimise this negative
reaction of change is to make sure that the change is implemented fairly.
Procedural fairness becomes especially important when employees perceive
an outcome as negative. It is crucial for the leaders to ensure that employees
perceive the changes are being implemented consistently and fairly.

(h)

Coercion
Leaders may inform employees that they do not have a choice in the matter
and that they must accept the change. Coercion applies when people are
threatened with negative incentives such as unwanted transfers, denial of
promotion and pay increment, negative performance evaluations and poor
recommendation if they do not accept a change. Most people resent
coercion, and its use will harm relationships. Hence, coercion should only
be used when there is no other alternative to reduce resistance.

TOPIC 10

LEADING AND MANAGING CHANGE

149

In conclusion, there are a number of key considerations in overcoming resistance

to change. Firstly, organisation members must understand the reason for change.
An understanding of the required change facilitates the acceptance of change.
Secondly, the more involved people are in the planning and implementing of the
change, the higher the likelihood of success. Employees will be more committed
to the change when they are part of the decision-making process. Finally,
ongoing communication is the key to the success of any change programme.
There is never over communication in managing organisational change.
Communication can educate and prepare people in a way that reduces fear,
anxiety, and uncertainty. Anticipating and overcoming resistance to change will
give leaders a major advantage in managing change.

ACTIVITY 10.5
If you were the change agent, suggest how you would overcome resistance
to change.

The five major activities contributing to an effective change management are

motivating change, creating a vision, developing political support for change,
managing the transition and sustaining momentum.

The four critical leadership roles in managing change are energising and
instilling a readiness for change, setting a vision, demonstrating commitment
and sustaining the momentum for change.

Attributes for an effective leadership include self-confidence, high energy

levels, a love of people, competence in gaining support and commitment of
others for the change effort, knowledge of the organisation and a strong drive
for change.

Types of formal individual power include legitimate power, reward power,

coercive power and information power.

Types of informal individual power include expert, referent, and charismatic

power.

150 X TOPIC 10 LEADING AND MANAGING CHANGE

Individual sources of resistance to change include habits, security, economic

factors, fear of the unknown, low tolerance for change, selective information
processing and misunderstanding and lack of trust.

Tactics that managers can use to reduce resistance to change include

education and communication, participation and empowerment, facilitation
and support, bargaining and negotiation, manipulation and cooptation,
selecting people who accept change, implementing changes fairly and
coercion.

Attributes for change leadership

Readiness for change

Formal individual power

Resistance to change

Informal individual power

Shared vision

Institutionalise change

Sources of power

Open communication

Cummings, T. G., & Worley, C. G. (2005). Organization development & change.

Mason, Ohio: South-Western Thomson.
George, J. M., and Jones, G. R. (2005). Understanding and managing
organizational behavior (4th ed.). New Jersey: Prentice Hall.
Graetz, F., Rimmer, M., Lawrence, A., & Smith, A. (2006). Managing
organisational change. Milton Qld: John Wiley & Sons Australia, Ltd.
McShane S. L., and Von Glinow, M. A. (2009). Organizational behavior (4th ed.).
New York: Mcgraw-Hill.
Robbins, S. P. (2003). Organizational Behavior (10th ed.). Upper Saddle River, NJ:
Prentice Hall.
Waddell, D. M., Cummings, T. G., & Worley, C. G. (2004). Organisation
development and change (2nd ed.). Thomson.