ORGANIZATIONAL

CHANGE

An alteration of an
organization’s environment,
structure, culture, technology
or people.

A constant force
An organizational reality
An opportunity or a threat
 Types
Types of
of Change
Change

Organization-wide Subsystem Change

cultural change addition or removal of a product/service

Transformational Incremental Change

Change of structure QM process or implementation IT system

Remedial Developmental Change

reducing burnout expand the amount of customers served

Unplanned Planned Change

when the CEO suddenly leaves implementation of a strategic plan
a new ones arrives
 Model
Modelfor
forPlanned
Planned Organizational
OrganizationalChange
Change

Source: Adapted from Larry Short, “Planned Organizational Change,” MSU Business Topics, Autumn 1973,
pp. 53–61 ed. Theodore Herbert, Organizational Behavior: Readings and Cases (New York: McMillan, 1976), p. 351.
 Key
Key terms
terms related
related to
to change
change

1) Readiness for change

Readiness for organizational change refers to individuals’ beliefs, attitudes and intentions regarding the extent
to which changes are needed and the organization’s capacity to successfully undertake those changes.

2) Communication during change

Providing the right amount of information to the right people on the right time by using the right channels.
Communication is internal and external as we have so many different stakeholders that will be affected
through change.

3) Leadership in change
Different type of leadership style is required as change has different stages such as plan, implement and
control.

4) Resistance to Change
organization employ to actively deny, reject and refuse to implement, repress or even dismantle change
proposals
 Readiness
Readiness for
for organizational
organizational change
change
 Refers to individuals’ beliefs, attitudes and intentions
regarding the extent to which changes are needed
and the organization’s capacity to successfully
undertake those changes.

Employee readiness is the most

important antecedent of
resistance to change .
 Communication
Communicationin
inchange
change
 Explain why change is happening:
The purpose: to build sufficient ◦ Ensure people understand the rationale
for change
support for the changes and to allow
◦ Talk about the benefits / consequences
these changes to actually take place
◦ Emphasise what’s not changing
successfully.
 Show people where they are going:
◦ Map out the process of change
◦ Identify and recognise key milestones;
celebrate success
 Show people how they will get there:
◦ Break it down into clear, simple steps
◦ Give practical examples
◦ Be directional

You need a map

Who is responsible? Which
channel? How much info? How
frequently? To whom?
Leadership
Leadership Styles
Styles in
in Organizational
Organizational Change
Change
 RESISTANCE
RESISTANCE TO
TO CHANGE
CHANGE

Resistance to change is the

act of opposing or struggling
with modifications or
transformations that alter the
status quo in the workplace

Employees can resist to:

Content of change: what is changed

Consequences of change: outcome of the change

Transition: the psychological process people go through to come to terms with the new
situation

The process: how change is implemented

© 2005 Prentice Hall Inc. All rights reserved. 18–10
CHANGE AND PEOPLE
 Sources
Sourcesof
of
Sources
Sourcesof
of Individual
Individual Organizational
Organizational
Resistance
Resistanceto toChange
Change Resistance
Resistanceto
toChange
Change
Consequences
Consequences of
of Resistance
Resistance to
to Change
Change

– Withdrawal
– Decrements in performance
– Sabotage
– Acting out
– Work slowdown
– Loose of loyalty to the organization
– Loose of motivation to work
– Increase in the number of absenteeism
– Increase errors and mistakes
– Lower levels of job satisfaction
– Higher intentions to quit
– Results in politics or political behavior
– Introduces costs and delays into the change process
– Cripple an organization
 Could be
active or
passive

Symptoms of active-
resistance include: Finding
fault, ridiculing, appealing to fear
and manipulating.

Passive-resistance symptoms
include: Agreeing verbally, but
not following through, feigning
ignorance and withholding
information.
Who
Who resists
resists more?
more?

MANAGERS!

 Not aware of the business need for change

 Layoffs were announced or feared
 Unsure if they had necessary skills for success
 Comfort with the current state
 Believed they were being asked to do more with less, or more for the same pay
 Overcoming
Overcoming Resistance
Resistance to
to Change
Change

Tactics
Tacticsfor
fordealing
dealingwith
with
resistance
resistancetotochange:
change:
• • Education
Educationand
and
communication
communication
• • Participation
Participation
• • Facilitation
Facilitationand
and
support
support
• • Negotiation
Negotiation
• • Manipulation
Manipulationand
and
cooptation
cooptation
• • Coercion
Coercion
There
There are
are manly
manly different
different strategies
strategies to
to use
use
to
to deal
deal with
with resistance:
resistance:

Lewin’s
Lewin’s Three-Step
Three-Step Change
Change Model
Model
Kottler’s
Kottler’s 88 Step
Step Process
Process
ADKAR
ADKAR
Lewin’s Three-Step Change Model
http://www.youtube.com/watch?v=Iq8zAFvYw84
ADKAR
ADKAR Model
Model
 Prosci's ADKAR® Model is one
of the most widely-requested
and sought after models for
change management. It is a
simple but extraordinarily
powerful model to help drive
successful change.

A: Awareness of the need for change

D: Desire to participate and support the
change
K: Knowledge
K: on how to change
A: Ability to implement required skills
and behaviors
R: Reinforcement to sustain the change
Mergers
Mergers &
& Acquisitions
Acquisitions
Biggest failed mergers
 If half of all M&A deals fail
Yet study after study puts the failure
rate of mergers and acquisitions
somewhere between 70% and 90%

Why to merge?
Rationale Behind Mergers

 Synergy
 Economies of scale
 Economies of scope
 Dynamic efficiency (managerial
ability, know-how, technology)
 Market power
 Market access
 Access to inputs
 Complementarity of products
 Diversification (risk-spreading)
 Preemption
 “Empire-building” CEOs
 The Acquisition Process
Phase 1: Building the business plan
Planning Stage
Phase 2: Building the M&A implementation plan
Phase 3: Search

Phase 4: Screening process

Phase 5: First contact

Implementation Stage Phase 6: Negotiation

Phase 7: Developing integration planning

Phase 8: Closing

Phases 9: Implementing post closing integration

Phase 10: Conducting post closing evaluation

Conclusion: M&As are the most popular corporate strategies, therefore,
they require special attention.
Organizational
Organizational Development
Development

A collection of planned interventions, built on

humanistic-democratic values, that seeks to improve
organizational effectiveness and employee well-being.

OD
ODValues
Values
Sensitivity Training 1.1. Respect
Respectfor
forpeople
people
Team Building 2.2. Trust
Trustand
andsupport
support
Survey Feedback Approach
3.3. Power
Powerequalization
equalization
4.4. Confrontation
Confrontation
Process Consultation (PC)
5.5. Participation
Participation
 Learning Organization

Peter M. Senge

‘Strategist of the Century’

The Fifth Discipline (1990)

An organization that has

developed the continuous
capacity to adapt, change
and continuously
transforms itself.
 Examples
Examples of
of Learning
Learning Organizations
Organizations
 General Electric: Its Crotonville learning center drives continuous learning by managers
and other leaders.
 Goldman Sachs: Its Pine Street learning center provides essential learning to a large
segment of its managerial population on an ongoing basis.
 Pizza Hut: It constantly invents and implements new technology and by recognizing the
lifetime value of their customers, it treats them as long-term assets.
 Honeywell: By applying Six-Sigma approaches, quality is constantly improved, while costs
are simultaneously decreased.
 Microsoft: It successfully made the massive shift in mindset from desktop to Internet when
its marketplace changed.
 Johnson & Johnson: Driven by its famous credo, it constantly improves products and
invents new ones, always with the user at the center of its focus.
 Apple: It perceives unrecognized marketplace needs and creates new products to fill them.
 Toyota Motor Co.: It uses lean manufacturing and continuous improvement to make
small but never-ending improvements in products and processes.
 USA Today: It invented and kept reinventing publishing technology to move information
colorfully and electronically, as well as to manage distribution.