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MBA - DIPLOMA STAGE Leading and Managing Change

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Resistance to Organisation Change Martin Hipkiss YogeshBhujbal S10497122 7 April 2011

TABLE OF CONTENTS

Page no. 1. Summery .... 3

2. Literature Review .

3. Sources of Resistance ..

4. How to deal with employee resistan ce to change in an organization

5. Conclusions 6. References ..

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(Words Count 3084)

SUMMARY: This assignment aims at providing an analysis of change in organization structure, values, culture and management in different companies. Italso scrutinizes organizational change, focusing on the division of changes according to their scope and presenting anexploration of evolutionary and strategic changes. It also shows an in-depth study of resistance to change. Bearing in mind different types of changes, I haveanalysed the importance of the sources of resistance to change which are defined theoretically.I have shown which types of resistance sourcescontrast most, according to the scope of change, presenting hints about where organizations should pay distinct attention when inventing a change process.

LITERATURE REVIEW: The reasons for the failure of many change initiatives can be found in resist ance to change. (Lawrence, 1954). Resistance to change introduces costs and delays into the change process that are difficult to anticipate but, must be taken into consideration.(Ansoff, 1990). Resistance has also been considered as a source of information, being useful in learning how to develop a more successful change process (Beer and Eisenstat, 1996; Goldstein, 1988; Lawrence, 1954; Piderit, 2000; Waddell and Sohal, 1998). Undoubtedly, resistance to change is a key topic in change management and should be seriously considered to help the organization to achieve the advantages of the transformation. Considering the importance of resistance to change, this paper aims to deepen in this field through a theoretical exposition of the concept.

Organizational change is an empirical observation in an organizational entity of variations in shape, quality or state over time (Poole, 1995), after thedeliberate introduction of new ways of thinking, acting and operating (Schalk, Campbelland Freese, 1998). The general aim of organizational change is an adaptation to the environment (Barr, Stimpert and Huff, 1992; Child an d Smith, 1987; Leana and Barry, 2000) or an improvement in performance .(Boeker, 1997; Keck and Tushman, 1993).This definition incorporates many situations that should be renowned by applying certain magnitudes to establish different types of change. I am going tomention the scope of change, because it is one of the most used variables in literature to design change typologies. That way, chan ges can be defined along arange starting in low scopeor evolutionary changes to high-scope or strategic ones. With the aim of making the use of this dimension easier, I will describe both extremes of the continuum, but we should always keep in mind that real changes are not a pure type but a mixture.

Resistance is a phenomenon that affects the change process, slowing down its beginning, obstructing its execution, and increasing its costs (Ansoff, 1990). On the other side, resistance is any conduct that tries to keep the statusquo, that is to say, resistance is equivalent to inertia, as the persistence to avoid change (Maurer, 1996; Rumelt, 1995; Zaltman and Dunc an, 1977). So, inertia or disinterest and thus resistance are not negative concepts in general, since change is not inherently beneficial for organizations. Even more, resistance could show change managers certain aspects that are not properly considered in the change process (Waddell and Sohal, 1998). Thisevaluation follows (Rumelt1995), and divides the sources of resistance into five groups. We have added certain sources of resistance to Rumelts proposal, so Ihave also altered the names of the categories in order to include the new topics. Although (Rumelt1995) claims that disinterestsare a problem in the strategy formulation stage as well as in the application one, he does notdifferentiate the five groups of sources of disinterest according to both stages. I have tried to make this difference and suggest that the first, second and third group are sources o f resistance that appear during the creation stage, because they deal with factors that confuse the situations analysis and the evaluation of the various change alternatives. Groups four and five correspond to the implementation stage, since they are an obstacle once the change strategy is already formulated.

SOURCES OF RESISTANCE: Sources of Resistance and Disinterest in the Formulation stage : Change starts with the perception of its need, so a wrong initial perception is the first barrier to change. We call this first group distorted perception, interpretation barriers and vague strategi c priorities. It includes: (1) myopia, or inability of the company to look into the future with clarity (Barr et al., 1992); (2) denial or refusal to accept any information that is not expected or desired (Rumelt, 1995); (3) perpetuation of ideas, meaning the tendency to go on with the present thoughts although the situation has changed (Barr et al., 1992; Krger, 1996;Zeffane, 1996); (4) implicit assumptions, which are not discussed due to its implicit character and therefore distort reality (Greve and Hedberg, 1978); (5) communication barriers, that lead to information d istortion or misinterpretations(Hutt et al., 1995); and (6) organizational silence, which limits the information flow with individuals who do not express their thoughts, meaning that decisions are made without all the necessary information (Morrison and Milliken, 2000; Nemeth, 1997). The second main group of sources of resistance deals with a low motivation for change. I have acknowledged five important sources: (1) direct costs of change (2) cannibalization costs, that is to say, change that brings success to a product

but at the same time brings losses to others, so it requires some sort of sacrifice (3) cross subsidy comforts, because the need for a change is compensated through the high rents obtained withou t change with another different factor, so that there is no real motivation for change Rumelt, (1995); (4) past failures, which leave a pessimistic image for future changes (Lo renzo, 2000); and (5) different interests among employees and management, or lack of motivation of employees who value change results less than managers value them (Waddell and Sohal, (1998). The lack of a creative response is the third set of sources of resistance. There are three main reasons that weaken the innovation in the search for appropriate change strategies: (1) fast and complex environmental changes, which do not allow a proper situation analysis Ansoff, (1990);(2) reactive mind-set, resignation, or tendency to believe that obstacles are inevitable and (3) inadequate strategic vision or lack of clear commitment of top management to changes (Waddell, 1998).

Sources of Resistance and Inactivity in the Implementation stage: Application is the critical stage between the decision to change and the regular use of it at the organization (Klein and Sorra, 1996). In this stage, two more resistance groups can be found. The first of them deals with political and cultural deadlocks to change. It consists of: ( 1) implementation climate and relation between change values and organizational values, considering that a strong implementation climate when the values relation is negat ive will result in resistance and opposition to change (Schalket al., 1998); (2) departmental politics or resistance from those departments that will suffer with the change implementation (Eisenstat, 1996); (3) incommensurable beliefs, or strong and definitive disagreement among groups abou t the nature of the problem and its consequent alternative solutions (Zeffane,1996); ( 4) deep rooted values and emotional loyalty (Strebel, 1994); and (5) forgetfulness of the social dimension of changes (Lawrence, 1954). Last but not least, a set of five sources of resistance with different featureshave been gathered together around the last group of sources of resistance: ( 1) leadership inaction, sometimes because leaders are afrai d of uncertainty, sometimes for fear of changing the status quo (Hutt et al., 1995) (2) embedded routines (Hannan and Freeman, 1984) (3) collective action problems, specially dealing with the difficulty to decide who is going to move first or how to deal with free-riders (Rumelt, 1995); (4) lack of the necessary capabilities to implement change capabilities gap and (5) cynicism (Reichers, Wanous and Austin, 1997).

HOW TO DEAL WITH EMPLOYEE RESISTANCE TO CHANGE IN AN ORGANIZATION: 1. Factual aspect of dealing with resistance to change A well-executed communication strategy is vital to a successful change management initiative, and is integral to dealing with the factual aspects of resistance. People need facts. They need to know the rationale and the logic for the change. They need to hear the specifics about the intended organisational benefits that will be realised through the change. The structural and content aspect of your communications will benefit greatly from the discipline of a programme-based approach to leading and ma naging your change initiative. 2. Emotional aspect of dealing with resistance to change The idea of the importance of the human and emotional dimension of change is now increasingly mainstream as most of the main thought leaders in the world of change management and change leadership are now speaking vocally about this. This is also an essential aspect of a well-executed communication strategy, and is a key function of change leadership - "primal leadership" as Daniel Goleman now defines it. 3. Personal aspect of dealing with resistance to change If your people don't like you - if they are resistant to you - you've got problems. A frequently overlooked and ignored f actor is YOU as change leader. Given that the primary causes of failure in change initiatives are all people related, it seems fairly self-evident that change leadership requires some very special qualities in the persons leading the change. 4. Individual and collective capacity for change There is a point beyond which individuals and organisations just cannot change even if they want to. This is yet another often over -looked factor. It is assumed that given enough information and support just about anything is possible. In theory it may be - in strategic reviews and planning exercises - but in practise it is not. There are very real limits as to how far and how fast people and organisations can change. In very simple terms those limits are to do with the degree and level of individual and organ isational evolution. There is an evolutionary path of progression that we all follow as our awareness and capabilities expand in response to increasingly complex change s in our external environment. So to take a simple example, an individual cannot jump f rom childhood to adult maturity in one step and without evolving through all of the intervening stages of development. To make practical use of this understanding it is necessary to have a cognitive map and simple tools of analysis to facilit ate our understanding of this. In a change leadership and management context, this can be cultural

mapping and analysis and also the selective use of a range of maturity models. For example, this could include project, programme and change management maturity models.

5. Acceptance of the limitations of change One final dimension that is rarely, if ever, discussed in dealing with resistance to change, is that however well a change initiative is prepared and delivered, "stuff happens" - often unexpected "stuff"! The unpalat able reality is that regardless of whether we accept it or not, there are significant aspects of our personal and organisational live s that are out of our control. In the context of an organisational change, the experience for many, many people is that change is imposed upon them, and even senior management often find that they are considerably constrained by factors totally beyond their control. All of these things are frequently very stressful and often not fully resolvable. And so the remaining necessar y skill is learning to recognise and accept the limitations of the situations we find ourselves in. 6. Education and Communicationapproaches to deal with change First and foremost, one of the most effective approaches to dealing with resistance to change that managers can use is Education and communication. Effective communication with the employees helps them to see the logic behind the change, especially if it is assumed that the source of resistance lies in the misinformation or poor communication. Deliveri ng honest facts about the change and clearing all misunderstandings reassures the employees and make them accept the changes. In the case of Makerere University, presenting position papers, holding one on one meeting with workers leaders and putting up circulars/reports could go along way in building trust between the workers and the employers hence reducing resistance to change. 7. Participation in Change process Resistance to change of any sort can be neutralized by the participation of the employees in the change process. Experience show that it is very difficult for individuals to resist a change decision in which they participated. Therefore, prior to making a change, those opposed can be brought into the decision making process. If the participants have taken part in contributing to the change, chances are high that they will be committed to the change and even help to enhance the quality of the change decision. Selecting high caliber members of staff and opinion leaders within the workforce and taking them for retreats could make this involvement very effective. However, arriving at a change through this approach could be time consuming and the potential for

poor solution or high jacking the change ideas altogether are very high if it is not well moderated by the change agents. 8. Facilitation and Support approaches to deal with resistance to change A very important approach in reducing resistance to change is facilitation and Support. Change agents could offer a range of supportive measures to reduce resistance to change. Where employee fears and anxiety are high about a proposed change, employee counselling and therapy, new skills training, or a short paid leave of absence may facilitate adjustment. This eventually cou ld help reduce the resistance to change. The disadvantage of this tactics is that it is expensive, time consuming, and implementing does not offer a concrete assurance that the resistance will die down. 9. Negotiation The other tactic is where the change agen t chooses to engage in negotiation with the resisting employees. If the resistance for example is centred on a few powerful individuals, a specific reward package could be negotiated that will meet their individual needs. Negotiation as tactics can only work best if the resistance comes from a powerful source. The disadvantage of this approach is that it is too costly. Secondly, once a change agent negotiates to avoid resistance, he/she could also be open to the possibility of being blackmailed by the powerful group he is negotiating with. 10. Manipulation and Co-option Managers have also often used Manipulation and Co -optation as useful tactics to reduce resistance to change. Manipulation is covert influence on the employees to overcome resistance to change. This could involve twisting and distorting of information to make it appear more attractive. It could also take the form of withholding undesirable information or creating false and alarming rumours to get the employees to accept change. Co-optation on the hand is a form of both manipulation and participation. It seeks to buy off the leaders of the resistance group by giving them a key role in the change decision. The leaders advise is sought not to get a better decision but for purposes of getting their endorsement. Both manipulation and co -optation are relatively cheap, and easy ways to gain support from the opponents of change. The disadvantage here is that the tactic can back fire if the targets realize they are being used. This once discovered destroys the credibility of the change agent irredeemably. 11. Pressure Lastly, resistance to change can be fought off by the application of coercion, which is a direct threat or use of force upon the resistors. For example, the managers could threaten or actually effect demotions, transfers; give negative

performance evaluations or poor letters of recommendation to resistors of change. Again the weakness of this approach is that it could back fire if the resistors realize they are being given empty threats.

CONCLUSIONS: Resistance to change is an essential factor to be considered in any change process, since a proper management of resistance is the key for change success or failure. By resistance to change we understand any phen omenon that hinders the process at its beginning or its development, aiming to keep the c urrent situation. Therefore, itwill establish a similarity between the concepts of resistance and inertia. Literature offers many studies with sources of resistance to change. This paper follows the five-group classification of Rumelt (1995), completing it with other authors contributions. Furthermore, our research has also allowed us to order the importance of the sources of resistance to change. Later, we have distinguished how they affect changes according to their scope, that is to say, how they affect evolutionary and strategic changes. We arrived to the conclusion that resistance to change is generally higher in strategic changes than in evolutionary ones. It is important to note that the source of resistance identified as most powerful for any type of change, dealing with the existence of deep-rooted values, is also one of the sources that presents the highest differences between evolutionary and strategic changes. Moreover, four more of the top-ranked overall resistance factors present high variations when considering change as evolutionary or strategic. These factors are the different interests among employees and management, communication barriers, organizational sile nce, and capabilities gap. This conclusion leads to the suggestion that these are the most significant issues managers leading a strategic change process should be aware of. Could change leaders do anything to deal with those sources of resistance? There might not be universal advice to avoid resistanc e to change, however, according to these results;it suggests that managers should pay special attention to certaintopics. First, to reduce resistance caused by deep -rooted values, managers shouldconsider how much organizational culture fits with change objectives and what could be done to improve such fit before the change process starts. This cultural consideration would also help to bring employees and management interests closer and to avoid organizational silence. Another key aspect in change seems to point towards training. Training would be a good tool to surpass communicat ion difficulties and thus avoid resistance caused by communication barriers, as well as to help reduce the

gap between the present situation and the capabilities required for the change process. This paper adds valuable insights to both the acad emic and the business community. From the academic point of view, our research contributes to the knowledge of resistance to change by a compendium of previous works, which has been later tested with an empirical study. Furthermore, we insist on the difference of resistance to change according to both types of changes. The business world, on the other hand, will find in this paper a set of reflections th at will help to determine which aspects should be specially considered at an organizational change.

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