INTRODUCTION

Change is inevitable in the life of an organisation. In today’s business world, most of the

organisations are facing a dynamic and changing business environment. They should

either change or die, there is no third alternative. Organizations that learn and cope with

change will thrive and flourish and others who fail to do so will be wiped out. The major

forces which make the changes not only desirable but inevitable are technological,

economic, political, social, legal, international and labour market environments. Recent

surveys of some major organizations around the world have shown that all successful

organizations are continuously interacting with the environment and making changes in

the structural design or philosophy or policies or strategies as the need be.

According to BARNEY AND GRIFFIN, “the primary reason cited for organizational

problems is the failure by managers to properly anticipate or respond to forces for

change.”

Thus in a dynamic society surrounding today’s organizations, the question whether

change will occur is no longer relevant. Instead, the issue is how managers cope with the

inevitable barrage of changes that confront them daily in attempting to keep their

organizations viable and current. Otherwise the organizations will find it difficult or

impossible to survive.

MEANING OF CHANGE

In very simple words, we can say that change means the alteration of status quo or

making things different. “The term change refers to any alterations which occurs in the

overall work environment of an organisation.”

“When an organizational system is disturbed by some internal or external force, change

frequently occurs. Change, as a process, is simply modification of the structure or process

of a system. It may be good or bad, the concept is descriptive only.”

From the above definitions, we can conclude that change has the following

characteristics:

1. Change results from the pressure of both internal and external forces in the

organisation. It disturbs the existing equilibrium or status quo in the organisation.

2. The change in any part of the organisation affects the whole of the organization.

3. Change will affect the various parts of the organizations in varying rates speed

and degrees of significance.

4. Change may affect people, structure, technology and other elements of the

organisation.

5. Change may be reactive or proactive. When change is brought about due to the

pressure of external forces, it is called reactive change. Proactive change is

initiated by the management on its own to increase organizational effectiveness.

FORCES FOR CHANGE

There are a number of factors both internal and external which affect organizational

functioning. Any change in these factors necessitates changes in an organisation. The

more important factors are as follows:

EXTERNAL FORCES

Every organization exists in some context; no organization is an island in itself. Each

must continually interact with other organizations and individuals- the consumers,

suppliers, unions, shareholders, government and many more. Each organization has goals

and responsibilities related to each other in the environment. The present day

environment is dynamic and will continue to be dynamic. Changes in social, political,

economic, technology, and legal environment force organizations to change themselves.

Such changes may result in organizational changes like major functions production

process, labour-management relations, nature of competitions, economic constraints,

organizational methods etc. In order to survive in the changing environment, organization

must change. How the change in various environmental, organizations, must change.

How the changes in various environmental factors necessitate change in the organization

may be seen in following context:-

1. Technology: when there is a change in technology in the organizational

environment and other organizations adopt the new technology, the organizations

under focus become less cost effective and its competitive position weakens.

Therefore, it has to adopt new technology, its work structure is affected and a new

equilibrium has to be established.

2. Marketing conditions: Since every organization exports its outputs to the

environment, an organization has to face competition in the market. There may be

two types of forces which may affect the competitive position of an organization

–other organizations supplying the same products and, buyers who are not buying

the product. Any changes in these forces may require suitable changes in the in

the organization. For example, when Indian economy was liberalized, there were

many foreign organizations that entered the Indian market. This forced many

Indian organizations to realign themselves with the new situations. The result in

that there have been many cases of divesting the business and concentrating on

the core business, acquiring core business, and developing competitive

competence to face competitive threats. Similarly, there may be changes in buyers

in terms of their needs, liking –disliking and income disposal for a product. These

changes from the organizations to bring those products which meet buyer’s

requirement.

3. Social changes: Social changes reflect in terms of people’s aspirations, the needs,

and their ways of working. Social changes have taken place because of the several

forces like level of education, urbanization, feeling of autonomy, and international

impact due to new information sources. These social changes affect the behavior

of people in the organization. There, it is required to make adjustment in its

working so that it matches with people.

4. Political and legal changes: Political and legal factors broadly define the

activities which an oganisation can undertake and the methods which will be

followed by it in accomplishing those activities. Any changes in these political

and legal factors may affect the organization operation.

INTERNAL FORCES

It is not only the changes in external factors, which may necessitate organizational

changes; any change in organization’s internal factors may also necessitate changes. Such

a change is required because of two reasons: changes in managerial personnel and

deficiency in existing organizational practices.

1. Changes in the managerial personnel: Besides environmental changes there is a

change in managerial personnel. Old managers are replaced by new mangers,

which necessitated because of retirement, promotion, transfer or dismissal. Each

new manager brings his own ideas and way of working in the organization. The

relationships, more in the organization. The relationships, more particularly

informal ones, changes because of changes in managerial personnel. Moreover,

attitude of the personnel change even though there is no changes in them. The

result in that an organization has to change accordingly.

2. Deficiency in Existing organization: Sometimes, changes are necessary because

of deficiency in the present organizational arrangement ad process. These

deficiencies may be in the form of unmanageable span of management, large

number of managerial levels, lack in co-ordination between various departments,

obstacles in communication, multiplicity of committees, lack of uniformity in

policy decisions, lack of cooperation between the line and staff, and so on. Beside

these internal factors, there are two more internal factors that give rise to

organizational changes.

3. Nature of the work force: The nature of work force has changed over a passage

of time. Different work values have been expressed by different generations.

Workers who are in the age group of 50 plus value loyalty to their employers.

Workers in their mid thirties to forties are loyal to themselves only. The youngest

generation of workers is loyal to their career.

The profile of the workforce is also changing fast. The new generation of workers

has better educational; they place greater emphasis on human values and

questions authority of managers. Their behavior has also become very complex

and leading them towards organizational goals is a challenge for the managers.

The employee turnover is also very high which again put strain on the

management.

4. To avoid developing inertia: In many cases, organizational changes take place

just to avoid developing inertia or inflexibility. Conscious manager take into

account this view of organization that organization should be dynamic because

any single method is not the best tool of management every time. Thus, changes

are incorporated so that the personnel develop liking for change and there is no

unnecessary resistance when major change in the organization are brought about.

TYPES OF CHANGE

The various types of changes are:

1. INDIVIDUAL LEVEL CHANGE

Individual level changes may take place due to changes in job assignment,

transfer of an employee to a different location or the changes in the maturity level

of a person which occurs over a passage of time. The general opinion is that

change at the individual will not have the significant implications for the

organization. But this is not correct because individual level changes will have

impact on the group which in turn will influence the whole organization.

Therefore, a manager should never treat the employees in isolation but he must

understand that the individual level change will have repercussions beyond the

individual.

2. GROUP LEVEL CHANGE

Management must consider group factors while implementing any change,

because most of the organizational changes have their major effects at the group

level. The groups in the organization can be formal groups or informal groups.

Formal groups can always resist change for example; the trade unions can very

strongly resist the changes proposed by the management. Informal groups can

pose a major barrier to change because of the inherent strength they contain.

Changes at the group level can affect the work flows, job design, social

organization, influence and status systems and communication patterns.

The groups, particularly the informal groups have a lot of influence on the

individual members of the group. As such by effective implementing change at

the group level, resistance at the individual level can be frequently overcome.

3. ORGANISATIONAL LEVEL CHANGE

The organizational change involves major programmes which affect both the

individuals and the groups. Decisions regarding such changes are made by the

senior management. These changes occur over long periods of time and require

considerable planning for implementation. A few different types of organization

level changes are:

i. Strategic change. Strategic change is the change in the very basic

objectives or mission of the organization. A simple objective may have to

be changed to multiple objectives. For example, a lot of Indian companies

are being modified to accommodate various aspects of global culture

brought in by the multinational or transnational corporations.

ii. Structural change. Organizational structure is the pattern of relationships

among various positions and among various position holders. Structural

change involves changing the internal structure of the organization. This

change may be in the whole set of relationships, work assignments and

authority structure. Change in organization structure is required because

old relationships and interactions no longer remain valid and useful in the

changed circumstances.

iii. Process oriented change. These changes relate to the recent technological

developments, information processing and automation. This will involve

replacing or retraining personnel, heavy capital equipment investment and

operational changes. All this will affect the organizational culture and as a

result the behaviour pattern of the individuals.

iv. People oriented change. People oriented changes are directed towards

performance improvement, group cohesion, dedication, and loyalty to the

organizations as well as developing a sense of self-actualisation among

members. This can be made possible by closer interaction with employees

and by special behavioural training and modification sessions.

To conclude, we can say that changes at any level affect the other levels. The strength of

the effect will depend on the level or source of change.

MANAGING PLANNED CHANGE

A planned change is a change by the organization; it does not happen by itself. It is

affected by the organization with the purpose of achieving something that might

otherwise by unattainable or attainable with great difficulty. Through planned change, an

organization can achieve its goals rapidly. The basic reasons for planned change are:

To improve the means for satisfying economic needs of members

To increase profitability

To promote human work for human beings

To contribute to individual satisfaction and social well being

The planned change process may comprise, basically the three following steps:

1. Planning for change

2. Assessing change forces

3. Implementing the change

PLANNING FOR CHANGE

The first step in the process of change is to identify the need for change and the area of

changes as to whether it is a strategic change, process oriented change or employee

oriented change. This need for change can be identified either through internal or external

factors. Once this need is identified the following general steps can be taken:

i. Develop new goals and objectives. The manager must identify as to what new

outcomes they wish to achieve. This may be modification of previous goals due to

changed internal and external environment or it may be a new set of goals and

objectives.

ii. Select an agent of change. The next step is that the management must decide as

to who will initiate and oversee this change. One of the existing managers may be

assigned this duty or even sometimes specialists and consultants can brought in

from outside to suggest the various methods to bring in the change and monitor

the change process.

iii. Diagnose the problem. The person who is appointed as the agent of the change

will then gather all relevant data regarding the area of problem or the problem

where the change is needed. This data should be critically analysed to pinpoint the

key issues. Then the solutions can be focused on those key issues.

iv. Select Methodology. The next important step is to select a methodology for

change; employee’s emotion must be taken into consideration when devising such

methodology.

v. Develop a plan. After devising the methodology, the next step will be to put

together a plan as to what is to be done. For example, if the management wants to

change the promotion policy, it must decide as to what type of employees will be

affected by it, whether to change the policy for all the departments at once or to

try it on a few selected departments first.

vi. Strategy for the implementation of the plan. In this stage, the management

must decide on the ‘when’, ‘where’ and ‘how’ of the plan. This includes the right

time of putting the plan to work, how the plan will be communicated to the

employees in order to have the least resistance and how the implementation will

be monitored.

ASSESSING CHANGE FORCES

The planned change does not come automatically, rather there are many forces in

individuals, groups and organization which resist such change. The change process will

never be successful unless the cooperation of employees is ensured. Therefore, the

management will have to create an environment in which change will be amicably

accepted by people. If the management can overcome the resistance, change process will

succeed.

In a group process, there are always some forces who favour the change and some forces

that are against the change. Thus, an equilibrium is established is maintained. Kurtlewin

calls in the “field of forces”. Lewin assumes that in every situation there are both driving

and restraining forces which influence any change that may occur.

Driving forces are those forces which affect a situation by pushing in a particular

direction. These forces tend to initiate the change and keep it going.

Restraining forces act to restrain or decrease the driving forces.

Equilibrium is reached when sum of the driving forces equals the sum of the restraining

forces as shown in the following figure:

Current state: Forces maintaining a status quo

Desired state

Pushing forces

Restraining /

pulling forces

After Kurt Lew in

Force Field Analysis

There may be three types of situations, as both driving and restraining forces are

operating:

i. If the driving forces far out weight the restraining forces, management can

push driving forces and overpower restraining forces.

ii. If restraining forces are stronger than driving forces, management either

gives up the change programme or it can pursue it by concentrating on

driving forces and changing restraining forces into driving ones or

immobilizing them.

iii. If driving and restraining forces are fairly equal, management can push up

driving forces and at the same time can convert or immobilize restraining

forces.

Thus, to make the people accept the changes, the management must push driving forces

and convert or immobilize the restraining forces.

IMPLEMENTING CHANGE

Once the management is able to establish favourable conditions, the right timing and

right channels of communication have been established the plan will be put into action. It

may be in the form of simple announcement or it may require briefing sessions or in

house seminars so as to gain acceptance of all the members and specify those who are

going to be directly affected by the change.

After the plan has been implemented there should be evaluation of the plan which

comprises of comparing actual results to the objectives. Feedback will confirm if these

goals are being met so that if there is any deviation between the goals and actual

performance, corrective actions can be taken.

CHANGE PROCESS

Any organizational change whether introduced through a new structural design or new

technology or new training programme, basically attempts make employees change their

behaviour. Unless the behavioural patterns of the members change the change will have a

little impact on the effectiveness of the organization. Behavioural changes are not

expected to be brought about overnight. These are the most difficult and marathon

exercises.

A commonly accepted model for bringing about changes in people was suggested by

KURT LEWIN in terms of three phase’s process:-

1. Unfreezing

2. Changing

3. Refreezing

1. Unfreezing

Unfreezing means that old ideas and attitudes are set aside to give place to new ideas. It

refers to making people aware that the present behaviour is inappropriate, irrelevant,

inadequate and hence unsuitable for changing demands of the present situation.

According to EDGAR SCHIEN the following four elements are necessary during this

unfreezing phase:-

• The physical removal of the individuals, being changed from their accustomed

routines, sources of information and social relationships.

• The undermining and destruction of social support.

• Demeaning and humiliating experience to help individuals, being changed, to see

their old attitudes or behaviour as unworthy and think to be motivated to change.

• The consistent linking of reward with willingness to change and of punishment

with willingness to change.

Unfreezing thus involves discarding the orthodox and conventional methods

and introducing dynamic behaviour, most appropriate to the situation. People are

made to accept new alternatives.

2. Changing

Unlike unfreezing changing is not uprooting of the old ideas, rather the old ideas are

gradually replaced by the new ideas and practices. In changing phase new learning

occurs. The necessary requirement is that various alternatives of behaviour must be made

available in order to fill the vacuum created by unfreezing phase. During the phase of

changing, individuals learn to behave in new ways, the individuals are provided with

alternatives out of which choose the best one.

KELMAN explains changing phase in terms of the following elements:-

Compliance: - it occurs when individuals are forced to change either by reward or

by punishment.

Internalisation: - it occurs when individuals are forced to encounter a situation and

calls for new behaviour.

Identification: - it occurs when individuals recognize one among various models

provided in the environment that is most suitable to their personality.

3. Refreezing

Refreezing is on the job practice. The old ideas are totally discarded and new ideas are

totally accepted. Refreezing reinforced attitudes, skills and knowledge. He practices and

experiments with the new method of behaviour and sees that it effectively blends with his

other behavioural attitudes.

FERSTER and SKINNER have in this connection introduced the main reinforcement

schedules namely- Continuous and Intermittent reinforcements. Under continuous

reinforcement individuals learn the new behaviour within no time. And intermittent

reinforcement on the other hand, consumes a long time but it is has the greatest advantage

of ensuring a long lasting change.

CHANGE AGENTS

Change agents are the persons who initiate change and manage change in the

organizations. They are specialized in theory and practice of managing changes. The

change agent may be a member of organization or an outsider such as a consultant. An

internal agent very well knows the organization and have ability, knowledge and

experience of directing people for changes. But, internal agent is removed from regular

duties to concentrate on the transition. However, external agents view the organization

from the system point of view and is much affected by the organization norms. Top

managers also prefer hiring specialized consultant change agents as they can offer more

objective prospective than insiders. External experts are, however, not well aware of the

desires and attributes of the employees, therefore, the changes suggested by them are

generally resisted by the employees.

Change agents have five set of powers as support of managers is essential but not enough.

Following are the powers,

1. High status given by the members of the client organization, based on their

perception that the change agent is similar to them in behaviour, language etc.

2. Trust based on his consistent handling of information and maintaining proper role

in the organization.

3. Expertise in the practice of organizational change.

4. Credibility based on experience with previous clients.

5. Dissatisfied constitutions who see the change agents as the best opportunity to

change the organization to meet their needs.

CHANGE OPTIONS

There are four subject matters which a change agent can change.

Structure

Structure is defined as how the tasks are formally divided, grouped and co-ordinated. For

inastance, change in plant layout or new technique can only succeed when the structure is

changed according to change in environment. He may also change responsibility,

authority, functions, performance according to the need of the change. He might also

redesign jobs or work schedule.

Technology

The introduction of new equipment and work process is technological change.

Automation or computerization is the common technological change. Major

technological changes involve introduction of new tools and equipment, automation,

computerization.

People

This involves changing attitudes and behaviour of members thorugh communication,

decision making and problem solving. They help individuals to work more efficiently and

effectively together. The changes may only be possible in case the members are positive.

In case there is lack of agreement, stress and tension occurs with the employees.

Physical Setting

It involves change in interior design, equipment placement, plant layout, tool placement.

These changes are helpful in organizational development. Physical setting considers flow

process, information flow and outcome. The smoothness of flow increases the

effectiveness of changes.

The basic objective of change agents is to increase effectiveness, performance and

satisfaction.

ACTION RESEARCH

An organizational change based on research contributing towards betterment of the

sponsoring organization. In this, generally the agent is an outside person, involved in total

process from diagnosis to evaluation. This person contracts with the sponsoring to engage

in research. Action research consists of five steps as explained below:

Diagnosis

The agent gathers information about problem, anxiety and required problems by asking

questions, interviews, review of records and listening to employees. It helps to find what

actually the problem is.

Analysis

The gathered information is analysed. The consistency and pattern of problem is studied.

Feedback

The agent shares with the employees what has been done in steps one and two. Thus,

employees will be actually involved in change programme. In participation of employees

the change agent develops action plan for bringing the required change.

Action

Plans decided in the previous step are set in motion. Required action is taken to correct

the problems identified.

Evaluation

In this step the agent evaluates the effectiveness of action plans. Using initial data as

benchmark any subsequent changes can be compared and evaluated.

Action research is a problem focus based method. The agent decides the action on the

basis of the identified problem.

HUMAN REACTION TO CHANGE

There is a very close relationship between change and human attitudes. Every individual

reacts to the change according to their individual attitude. Human reaction to change does

not depend upon logic. Generally, depends upon how a change will affect ones needs and

satisfaction in the organization. Attitudes are very important in determining the resistance

to change.

The reaction to change any occur in any of the following forms,

ACCEPTANCE

Acceptance of the change depends on the perception of the employees towards the

change. So, all the changes are not necessarily restricted. If an employee perceives that

the change will affect his/her favorably, then he/she will accept the change. For example

if workers have to stand before a machine throughout the shift, they will like the

introduction of new machine which will allow them to sit while working.

RESISTANCE

All the changes are not necessarily resisted. Resistance to change arises due to deferring

perception, personalities and needs. If the employee perceives the change is unfavorable

to them, they resist to the change. Individual generally feel comfortable in the

environment that they are habituated to. So, when the change arises, the thought of

moving from the environment they are accustomed to become a source of resistance.

Human resistance to change may be in any of following forms,

1. Hostility or Aggression.

Hostility or aggression is the immediate reaction if an individual to change.

Hostility can be expressed verbally, but the combined form of hostility and

aggression is of a more intense character and can also take physical forms.

2. The individual may develop lack of interest towards has work. If individual do

not like the change it may result to spoilage of materials, idling of time and

decline in performance. This will alternately decrease this efficiency in work.

3. Employee remains absent in their work as well slow performance in their work.

4. Employee find themselves uncomfortable, shaky and tensed on the job.

Resistance develops anxiety and tension in the employee.

5. Strikes are usual symptoms of the group resistance.

INDIFFERENCE

In some cases changes in the organization or environment fails to bring the reaction of

the employee. There are two reaction to change, acceptance & resistance, but in some

cases there is no reaction. This is because sometimes employee fails to realize the impact

of change or some people feel that they will not be affected by the change. In both these

cases there is no reaction to the change, so they will remain indifferent to change.

FORCED ACCEPTANCE

Employee or the people may resist to the change in initial state but if he changes force are

stronger the resistance force, then they have to accept the change. This is known as

forced acceptance of the change. This is known as forced acceptance of the change.

KEITH DAVIS absorbed that “People develop an established set of relations with their

environment. They learn how to deal with each other, how to perform their job and what

to expect next. Equilibrium exists, individuals are adjusted when change comes along,

and it requires individuals to make new adjustments, as the employee seeks a new

equilibrium. When employees are unable to make adequate adjustment to change which

occur, the organization is a state of imbalance or disequilibrium. Managements general

human relations objective regarding change is to restore and maintain the group

equilibrium and personal adjustment which change upsets.”

CAUSES OF RESISTANCE TO CHANGE

The main reasons for resistance to change are both individual and organization. The

research document of individual and organizational behavior has found that organization

groups and individuals resist change. Resistance to change provides a degree of stability

and predictability to behavior, as it does not allow immediate change. If there was no

resistance to change the organization will take on characteristics of chaotic randomness.

There may be reasons for resistance to change for analytical purpose, lets us categories

the causes into the following.

1. Individual Resistance.

2. Group Resistance.

3. Organizational Resistance.

INDIVIDUAL RESISTANCE

Individual arise due to differing perceptions, personalities and needs. Some of these

reasons appear to be rational and emotional. These reasons are listed below,

ECONOMIC FACTORS

The economic reasons for the resistance to change may be the following:

i. In organization when the development or change on technology takes place,

employee resists the change. Employee may fear that the change will lead to

technological unemployment. Generally, new technology is associated with

education of labor intake and therefore they resist the change. For example the

introduction of computer in an organization means that employee will have to

learn the certain package to work efficiently. They may not be liked by some

employees and they develop negative attitude towards computer and resist them.

ii. In organization where pay is tied to productivity individuals usually resists change

as they fear that they will not be able to perform new task effectively, thus

causing a decline in productivity and a decrease in their income.

iii. Workers may fear that they will be demoted if they do not acquire the skills

required for the new jobs.

iv. Workers resist the changes which lead to high standards which in turn may reduce

the opportunities for bonus or incentive pay.

Habit

All human being are creatures of habit. Individual generally feel comfortable in the

environment that they are habituated to. The modern life is very complex and no one

likes to consider the full range of option for the hundreds of decision which has to be

made everyday. Instead we rely on habit or programmed responses. When confronted

with change, the thought if moving away from the environment they are accustomed to

become a source of resistance.

Insecurity

Safety and security are high priority for every individual. One of the major reasons for

resistance to change is uncertainty about the impact of change, especially on the job

security. When employees feel that the security of the job is threatened by change, they

resist it. The fear unknown always has a major impact on the decision of the individual.

Lack of Communication

If the workers are given an opportunity to participate in the process of change, the

resistance is likely to be less. But if the change is not properly communicated that to in an

acceptable manner to the employees, it is likely to cause resistance.

Extent of Change

If there is a minor change and the change involves only the routine operations the

resistance will be minimum or no resistance. But incase of major changes like reshuffling

of staff will lead to major visible resistance. Similarly the process of change is slow, the

resistance will be less as compared to rapid or sudden change.

PSYCHOLOGICAL FACTORS

One of the major reasons for resistance can be emotional turmoil that a change may cause

especially if the past experiences with the change have not been positive. The

psychological reasons for the resistance to change are:

1. Workers may have the fear that the new job will bring boredom and monotony as

a result of specialization brought by the new technology.

2. Change in technology brings new method of doing the job and it must be learnt

and adopt the new ideas of doing the job. To learn these ideas they need work

hard and they do not want to take the trouble in learning new things.

3. The workers may be incapable of understanding the implications of new ideas and

method.

4. Workers may not like criticism implied in a change that the present method is

inadequate and unsuitable.

5. New changes may lead to reduction of the personal pride of the workers because

they fear that new work changes will do away with the need for much manual

work.

SOCIAL FACTORS

Every individual have social needs like friends, belongingness, etc. In organization, while

working employee develop social relationship with the other employees. They become

members of certain informal group. The change will bring a fear in mind of people

because generally people dislike with for new adjustment, breaking present social

relationship reduce social relationship, feeling of outside interference in the form change

agent etc.

GROUP RESISTANCE

While working in an organization the employee form informal group in the organization.

The most organizational change has impact in informal group in the organization.

Breaking up a close knit work group or changing social relationship can provoke a great

deal of resistance. The main reason why the groups resist change is that they fear that

their cohesiveness or existence is threatened by it. This is particularly true in case of

group which are very cohesive where people have a strong case of belongingness to

group and where member consider the group as superior to the other groups.

ORGANISATIONAL RESISTANCE

Organizational resistance means that the change is resisted at the level of the

organizational itself. Some organizations are so designed that they resist new ideas, this is

specifically true in case of organizations which are conservative in nature. Government

agencies want to continue doing what they have been doing for a number of years even

though there is need for the change in their services. Majority of the business firms are

also resistant to changes. The major reasons for organizational resistance are:

1. Threat to Power. Top management generally considers change as a threat to

their power and influence in the organization due to which the change will be

resisted by them. The introduction of participative decision making or self-

managed work teams is the kind of change which is often seen as threatening by

the middle and top level management.

2. Group inertia. Sometimes, the individuals resist change because the group to

which they belong resists it. The degree and force of resistance will depend upon

how loyal one is to the group and how effectively the group resists the change.

3. Organizational structure. Change is often resisted by the bureaucratic

structures where jobs are narrowly defined, lines of authority clearly spelled and

flow of i9nformation is stressed from top to bottom. Moreover, organizations are

made up of a number of interdependent subsystems, one system cannot be

changed without affecting the others.

4. Threat to specialization. Change in organization may threaten the expertise of

specialized groups. For example, giving computer training to all the employees in

the organization and giving personal computers was perceived as a threat by the

experts in computer department of the organization.

5. Resource constraints. Organizations need adequate financial resource for

training change agents and for offering rewards to those who support change. An

organization who does not have resources for implementing the change resists it.

6. Sunk cost. The change is generally resisted by the top management because it

often leads to the problem of sunk costs. The heavy capital which already

invested in the fixed assets or the amount which has already been spent on the

training of the employees will go waste if the change is introduced.

OVERCOMING RESISTANCE TO CHANGE

Problem of overcoming resistance to change can be handled at two levels:-

1. At the individual level.

2. At the group level through group dynamics.

EFFORTS AT THE INDIVIDUAL LEVEL

The management can use the following strategies to overcome resistance by the people

and to introduce changes successfully:

1. Participation and Involvement

Individual will find it difficult to resist the change which they participated. Prior to

making a change, all those persons who are going to the affected by the change, can

be brought into the decision making process. Their doubts and objectives should be

removed to win their cooperation. Getting opinions out in the open, so that they are

looked at and evaluated is an important trust building task. This involvement of the

workers can overcome resistance, obtain personal commitment and increase the

quality of the change decisions. But this method may lead to a lot of time

consumption as well as it may be a potential for poor solutions.

2. Effective Communication

Inaccurate information can be a reason for the resistance to change. An appropriate

communication program can help in overcoming this resistance. Workers can give

necessary education about the change, its process and its working through training

class, meeting and conferences. The reasons about change must be communicated

very clearly and without ambiguity. Communication can help dissipate some fear of

unknown elements. Management should also see that there is a two way

communication between the management and workers so that the so former comes to

know about the reactions of the latter directly without delay. All this will help

persuade employees about the necessity of change and once persuaded they may

actively want to have the change.

3. Facilitation and support

Change agents can offer facilitation and supportive efforts to overcome resistance.

Facilitative support means removing physical barriers in implementing change by

providing appropriate training, tools, machinery etc.

Supportive efforts include listening, providing guidance, allowing time off after a

difficult period and providing emotional support. Emotional support is provided by

showing personal concern to the employees during periods of stress and strain.

The drawback of this method is that it is time consuming and expensive and its

implementation offers no assurance of success.

4. Leadership

Leadership plays an important role in overcoming resistance to change. A capable

leader can reinforce a climate of psychological support for change.

The greater me prestige and credibility of the person who is acting as a change agent,

the greater will be the influence upon the employees who are involved in the change

process. A strong and effective leader can exert emotional pressure on his

subordinates to bring about the desired change. Most of the times, there is no

resistance from the subordinates and if they resist, the leader tries to overcome

resistance by leadership process.

5. Negotiation and Agreement

Negotiation and Agreement technique is used when costs and benefits must be

balanced for the benefit of all concerned parties. If people or groups are losing

something significant in the change and if they have enough power to resist strongly.

Negotiation before implementation can make the change go much more smoothly,

even if at the later stages if some problems arise, the negotiated agreement can be

referred to.

6. Manipulation and Cooptation

This method is used in the situation, where other methods are not working or are not

available. Managers can resort to manipulation of information, resources and favours

to overcome resistance. Or they can resort to cooptation which means to co-opt an

individual, perhaps a key person with in a group, by giving him a desirable role in

designing or carrying out the change process. This technique has some doubtful ethics

and it may also backfire in some cases.

7. Coercion

Managers may resort to coercion if all other methods fail or for some reason are

inappropriate. Coercion may be in form of explicit or implicit threats involving loss

of jobs, lack of promotion and the like. Managers sometimes dismiss or transfer

employees who stand in the way of change. Coercion can seriously affect employee’s

attitudes and have adverse consequences in the long run.

8. Timing of Change

Timing of introduction of change can have a considerable impact on the resistance.

The right time will meet less resistance. Therefore, management must be very careful

in choosing the time when the organizational climate is highly favourable to change.

An example of right time is immediately after a major improvement in working

conditions.

EFFORTS AT THE GROUP LEVEL

A group is a cluster of persons related in some way by common interests over a period of

time. Members of the group interact with each other and develop group cohesiveness

among themselves. That is why although change can be obtained individually; it is more

meaningful if it is done through group. Therefore, management should consider the group

and not the individual as the basic unit of change. Group dynamics offer some basic help

in the regard.

Darwin Cartwright has identified the following characteristics of group as a means of

overcoming resistance to change:

• If both the change agent and the people target for change belong to the

same group, the role of group is more effective.

• If the people have more cohesiveness and strong belonging to the group,

change is easier to achieve.

• The more attractive the group is to the numbers, the greater is the

influence of the group to accept or resist a change.

• Group can exert pressure on those factors of the members which are

responsible for the group being attractive to the members. Normally

attitudes, values and behaviour are more common factors determining the

group attractiveness.

• The degree of prestige of a group, as interpreted by the members will

determine the degree of influence the group has over its members.

• If any attempt is made to change any individual or some individuals who

deviates the group norms there is likelihood of the change attempt being

resisted by the group.

Thus, the management should consider the group as the basic unit of change. Group

interactions should be encouraged; it should be provided full information by the

management. The management should also explain the rationale of change and try to

convince that the interests of the group members would not be adversely affected. Group

dynamics also help in providing various training programmers for accepting and

implementing change.

The Obstacles to Innovation

There are a number of obstacles to realizing and profiting from innovation to the fullest. Among these are; the tendency to fight over recognition for one’s individual innovations, the development and guarding of “industrial voodoo”, the risk that time and energy will be spent on innovations that are not relevant to the company’s central purpose, and the risk that an innovation will be over- or underestimated in a way that will result in mismanagement and cause a financial loss or a lost opportunity.

Fighting Over Recognition

Wilbur and Orville Wright locked up their airplane for 5 or 6 years while they tried to lock up commercial contracts. They did not allow anyone to see it. They soaked up information from others but did not share their detailed drawings. Some feel that this may

have caused companies that otherwise would have been interested in the new invention to be distrustful of it.

The Wright Brothers’ rival Glen Curtis in Hammondsport, New York; meanwhile, developed another airplane called the June Bug. Curtis was the first to sell an airplane to another person, the first to fly from one city to another, and the first to obtain a pilot’s license. Curtis believed in open, shared access to innovation. He collaborated with others to solve problems and make improvements to his airplane, and was much more commercially successful, although much less known by history.

The Wright brothers sued Curtis for violating their patent, and it became an ugly personal feud. Many historians feel that Orville Wright’s insistence on enforcing his patent, and forcing both companies to devote their time to court battles rather than concentrating on innovation and on their businesses may have put the United States behind in military positioning for World War I.

The US Government finally paid off both companies to quit suing one another and get on with building airplanes to help with the war effort. Had the legal wrangling continued, the United States would not have had an air force during World War I, and things might have turned out very different.

This is an example that approximates what happens in many companies to a greater or lesser extent. People guard their own innovations and ideas carefully, fearing that sharing them will rob them of the recognition for their creativity and hard work. There is a risk that people will take their best ideas to a competing company where they feel they will be recognized and compensated, or to start their own business in competition with yours. They cause untold damage in terms of lost opportunities and time and energy spent fighting with co-workers rather than collaborating.

“Industrial Voodoo”

A closely related phenomenon to overt fights over ownership of a particular innovation is “Industrial Voodoo” or those small secrets that any experienced worker tends to acquire. These are tools and methods that are not in any procedure manual that improve productivity and are used to improve individual performance.

The Wall Street Journal recently ran a story on a manufacturing plant that was trying to find out the “secrets” of a machinist who could retool a machine in half the time that other workers were taking to do the same job.

The machinist refused to share his secret. He felt that if his methods became common knowledge and standard practice in the company, it would remove his own competitive edge over other machinists, raise the company’s expectations for performance, and “have us running all day long” without any added compensation.

Experienced workers tend to collect knowledge about how to do their job better and faster than everyone else, and they may or may not share this information with other workers. The ethical question about this “industrial voodoo” is this: is this knowledge (acquired through the workers’ own intelligence, innovation, experience and sweat) owned by the worker or by the company that is paying them for their time? (The LEGAL

answer to this question, in the United States, is that the company owns this knowledge. The ethical and practical questions remain.)

Irrelevant Innovations

One of the problems with allowing the time and space to think out of the box is that sometimes workers come up with innovations that are of questionable relevance to their jobs and to the bottom line of the company.

One IT manager was irritated by innovation. The software developers working for him were continually coming up with “cool” things that were flashy or interesting from an academic point of view, but didn’t significantly contribute to the company’s products or services. “I don’t want to be paying people to be inventing better paper airplanes on company time. We have a hard enough time meeting the deadlines we have. I wish they would put their energy into the task at hand.”

The developers were exercising some very natural urges to experiment with technology and supplement their training, the problem was that they were obviously out of step with their manager’s priorities and deadlines, and his views on how company time and equipment should be used.

Booms and Busts

Even successful innovations cause incredible booms and busts. People under- or over-estimate the importance and potential profits of innovations. Electricity, the railroad, the telephone, the fax machine, the 8 track tape, and the Internet are all examples of the chaos that new innovations can cause for people who work with and/or invest in them.

The larger an innovation is, (that is, the greater potential gain) the more difficult it can be to manage. More people get involved, more money is staked, and more is put at risk.

A Framework for Innovation

In order to capitalize on the innovative capacities within your company, you have to provide some basic elements that foster it in your organization. The way that you provide these elements can be formal or informal, and adapted to the size and nature of your company, but they must be present in some form to truly encourage and leverage innovation. They are direction and alignment between the goals of the individuals and the company, a safe environment to take risks and share ideas, and a compensation system that recognizes and rewards innovation and its close cousin, collaboration.

Direction and Alignment

The best place to start is to ensure that everyone in your company has a “line of sight” from their individual job to their department’s goals to the company’s mission. There are so many people in the workplace that simply follow the directions of their superiors without any idea of how their work will be used. Understanding the larger picture of how the products of their work will be used gives people a perspective to think creatively. They may come up with better ways of meeting their work requirements, or moving beyond them.

In the “Industrial Voodoo” section, there is a clear example of opposition rather than alignment. The machinist felt that his goals were different (even opposed!) to the company’s goals. This is an intolerable situation brought about, probably, from years of history that told the machinist he couldn’t trust the company and that “anything he said would be used against him” for the company’s profit but not his own.

A correction in that case would involve time and trust built up on both sides. We’ll talk about this example in more detail when we talk about compensation.

A Safe Environment

Innovation involves risk. There is the risk that the idea will fail. There is also the risk of having one’s ideas “stolen,”

The free marketplace has some checks and balances that help manage risk – the stock market spreads the risk among many stockholders, who make decisions based on their knowledge and experience (or that of their brokers.) Bankruptcy laws and corporate entities in the United States are set up to have various levels of risk protection – an entrepreneur who starts a business based on an innovation that turns out to be a flop has some protection from being financially ruined for life. The penalties for failure are mitigated somewhat so that this person may eventually go on to improve his idea and become a raging success.

Your company can provide similar checks and balances to make sure ideas have venues to be aired, evaluated for risk, and implemented in a responsible way that compensates the individual for his contribution but doesn’t punish too harshly for an idea that doesn’t work out for whatever reason. Having a Research and Development board that receives ideas from employees can be similar to the patent or copyright function. This board can also launch individual special projects to further explore or implement ideas. The originator of the idea should be involved in this process whenever possible to ensure continuity and morale. The board should include a variety of members, including legal, accounting, marketing and other skills to ensure that the idea aligns well with the company’s direction.

For innovations to be truly exploited, they need to be shared. Great developments by lone inventors, such as Thomas Edison, are largely of the past- most truly great inventions of today are the result of collaborations. Ideas are usually just starting points. They need to be refined, augmented, and merged with other ideas.

Having common goals with co-workers, aligned with the goals of the company, goes a long way in this regard. It’s also important to have an environment as free of cliques, back-stabbing and idea stealing as possible. As a manager, it is important to be alert to these types of behaviors that are hostile to collaboration and to have (and enforce!) disciplinary procedures for any type of harassment or unethical behavior.

Like the Wright Brothers, many people hide their ideas to avoid having them stolen or criticized. Much time and energy is wasted defending the intellectual property of various employees. This can be avoided.

Many companies focus solely on individual achievement, to the detriment of other qualities essential to innovation and teamwork. You can resolve this, somewhat, by

including references to people’s interactive behaviors on performance reviews. Some companies even have co-workers participate in the performance review process by rating their teammates.

Resources and Equipment

Most companies have programs for education and training of their employees. Beyond that, many companies provide resources and equipment for employees to innovate without impacting their “real jobs.”

At Conoco, for example, developers were allowed to use the mainframe computers during lunch times or during a 6-hour window on Sunday to run their own projects and experiments. Groups of developers would bring ideas that they would like to try out or experiment with, some which may have dubious practical value to the company but all of which were great learning opportunities. Many of the “lunchtime programs” were later implemented into production and did provide great value to the company.

Many other companies have a portion of a server where employees can build their own web pages, or try new things, without impacting business critical systems. These companies are building a “sandbox” for their employees to play in, and putting up well-marked, well-understood “fences around the sandbox” to ensure that innovative, creative play stays in its time and place, and is clearly separated from “regular business.”

Although many irrelevant innovations rise from this use of resources, the constraints on their use ensure that the impact on your bottom line is minimal. Our IT manager’s concern in the above example with software developers coming up with “cool” tricks would be mitigated by these limits.

Providing resources, and putting careful restraints on the conditions of their use, can be an inexpensive way for companies to encourage innovation.

A Compensation System

This is the final, and perhaps most important ingredient in managing innovation as a company. It is important to reward innovators for their contributions, and to reward people who collaborate as well as individual performers.

So many compensation systems are dependent solely on the easiest metrics to measure- personal performance metrics based on the company’s current structure (or whatever it was last year when the budget was drawn up!)

The inherent problem is that when someone creates something new, it may challenge the way the company measures and compensates employees.

Profit sharing programs are an outstanding means of rewarding individuals for improving the company’s standing. The down side is that everyone generally gets an equal proportion that doesn’t recognize their individual contributions that year. A person who makes a revolutionary contribution will be rewarded the same as his co-worker who performed adequately.

Bonuses based on performance evaluations that emphasize innovation and collaboration are a more specific option. Just be sure that the criteria are laid out beforehand and are as fair and objective as possible.

Even if you have no control over financial compensation, there are generally other things, like time off with pay, and recognition programs that can be utilized to reward innovators and collaborators.

CONCLUSION

To conclude we can say that change may be forced on an organization or an organization

may change in response to the environment or an internal need. Whatever the case

changes must be properly planned and members should be properly prepared to accept

these changes enthusiastically, because the real world is turbulent, requiring

organizations and their member to undergo dynamic change if they are to perform at

competitive levels.

I’ll conclude with an example of a situation using these principles successfully. In this situation, John Williams had just accepted a position as a data center manager.

Entering the job, he found that morale was low, inspections had been failed, and there was an atmosphere of distrust. John had some barriers because it was a civil service situation and he did not control the salaries of the individuals working for him. After evaluating the situation, he called a meeting and announced that everyone would be cross-training everyone else, and all procedures would be documented.

This was met with significant resistance, as you can imagine. Each employee had his or her own small innovations – “cheat sheets,” informal procedures, and other “industrial voodoo” that they guarded jealously. They each felt that his or her own job security was dependent on their exclusive knowledge of some essential part of the data center. John explained that participation in the cross training was mandatory, and failure to successfully teach one’s job to one’s teammates would result in termination.

He also indicated that once the cross-training was completed, employees would rotate getting a week off with pay every six weeks, rotating alphabetically through the six-member team. The caveat to that was that the employee “on leave” would have to be near a phone in case his teammates needed assistance, and could be in the office within one hour.

Everyone was much more enthusiastic, given this motivation. People became helpful to one another, they supported and helped one another, systems were documented, trained and explained. The staff working was very careful not to disturb the team member on

leave because they knew they would have their turn soon and wanted the same consideration.

The data center passed the next inspection with improving ratings, and the following one with nearly perfect ratings.

The team had truly accomplished something, and had accomplished it together. They were successful, and success breeds success!

By creating common goals, an atmosphere of collaboration, and a compensation system that recognizes and rewards innovation, your company can mitigate the risks and maximize the rewards of innovations from within the ranks.