Goals, Vision and Mission Boundaries Pattern of activities/administrative practices Assumptions, values and belief Culture Structure “Organizational change consists of goal-oriented and to a degree, pre-planned actions, the final result of which can be, more or less, clearly formulated in advance”. –Van deer Violist What is planned change? “Planned change is a conscious, deliberate and collaborative effort to improve the operation of a system -whether it be a self-system, a social system, or a cultural system -through the utilization of scientific knowledge”. –Bennie, Been & Chin. “… Nuncios, deliberate and collaborative effort to improve the operation of human system through utilization of valid knowledge”. –Lippie Elements of Planned Change Outcome: goals, results, direction, improvement, renewal History: causes, need, motive, context Actors: External/lanterns Phases: steps, sequences Communication: interaction, cultural aspects Steering: monitoring, directing, guiding Taxonomy to Change Directional Change: Occurs under conditions of severe competitions, regulatory shifts in government policy, and unsuccessful business strategy. Fundamental Change: Redefinition of current purpose or mission.
Operational Change: Improvement of quality, quantity, timeliness, unit cost of operations, in developing products and services. Total Change: Developing a new vision, achieving a turnaround; a drastic surgery of the existing system. Planned Change: Basically an operational change on a calculated basis as a response to internal and external demands e. G. Downsizing. Happened Change: Unpredictable. Occurs due to external causes over which one my have no control. Transformational Change: Change involving the entire or a greater part of the organization due to a severe threat to its survival.
The threat may occur room industrial discontinuities, shifts in a product’s life cycle or internal change e. G. Union-management conflicts. Revolutionary Change: Abrupt changes in the organization’s strategies and design. Recreation: Tearing down the old structure and building a new one. A metamorphosis -becoming not Just better but different. Strategic Change: Change of all or most of the organization’s components. Anticipatory Change: Changes carried out in expectation of an event. In anticipation of such change, the organization may tune-in (incremental change) or re-orient itself. Reactive Change: Response to an event or series of events.
Adaptive changes are limited t a sub-system or apart of the sub-system. Recreation can also be reactive but involves the whole organization. [Source: Management of Organizational Changeably K Hairgrips (Response Books)] External Factors of Change Political forces: Political environment is an important trigger for organizational change. Managers need to understand the political system of the country where they work. During the sass, an all-encompassing phase of globalization began throughout the world. Globalization in turn facilitated free markets. Governments began to withdraw their stake from the business enterprises.
A number of countries De-regulated industries and thus created new opportunities for entrepreneurs. From regulators, the governments have become facilitators. As a result of new thrust given to free market and foreign direct investment, the companies have changed their strategies and they are growing by leaps and bounds. Certain developments in the international political scene such as the transition of the East-European nations to democracy and market economy, opening up of the economy of South-East Asia, the collapse of the erstwhile Soviet Union, the Unification of Germany, the Gulf War, the crisis in Yugoslavia etc. Eve had profound impact on economy and business thereby triggering organizational change in a number of companies. V Militant and S Rampancy in their seminal work Change Management (Response Books) mention that organizational change itself is a political process because it involves influencing, persuading, and negotiating with people in order to bring about a change in their mental models. The manager tries to ensure the support of the key and influential individuals in the organization while implementing any intervention programmer.
Economic forces: The uncertainty about future trends in the economy is a major cause to change. For example, titillating interest rates, declining productivity uncertainties arising from inflation or deflation, low capital investments, etc. Have significant impact on industrial organizations. Economic forces usually determine the direction an industrial organization takes. For instance, Informs has changed its strategy from being a profitability-driven organization to growth-oriented one due to economic slowdown in the USA from where they got maximum number of clients.
According to a report published in Mint (New Delhi) on 29 July 2008, Informs’ new approach is a consequence of what is happening in the market in which it operates. Excerpts from the news item: By focusing on growth now, they (Informs) will be looking to add new customers as their existing clients are cagey about increasing their budgets further. Informs has said it will look to add new customers even as it expands its presence in businesses such as health care, pharmaceuticals, logistics, energy and utilities. Currently, much of its revenue comes from four major areas: financial services, telecommunications, manufacturing and retail.
The company expects to grow revenue 6% in the three months to September as compared with the corresponding period in 2007. The emphasis on growth could mean a further dip in Informs’ operating profit margin, measured as operating profit (or earnings before interest, taxes, depreciation and amortization) expressed as a percentage of revenue. In the quarter ended June, the company’s operating profit margin was 30. 4%, down 2 percentage points from the previous quarter in the wake of higher salaries and visa costs.
Over the past two years, the company’s operating profit margin has stayed in the 30-32% range. Informs’ push for growth reflects the new business reality in the software services business. “Our existing customers are not growing and we need to mind new growth engines,” Supranational said. As part of growth strategy, the company plans to add new customers and newer service lines such as learning services and offering software as a service (where companies pay not for the entire solution but for what they use) by investing in solutions and intellectual property.
The company is focusing on newer geographies such as West Asia, India, Latin America and South Africa. Informs, which serves customers such as British Telecoms Ply. And Cummins Inc. , derives about 63% of its revenues from North America, 27% from Europe and about 10% from the rest of the world including India. We want to reduce our dependence on the US by growing operations in other geographies such as Europe and rest of the world,” Supranational said, adding that the target revenue ratio from these three geographies for the company would be 40:40:20.
He did not elaborate on the time it would take the company to achieve this revenue mix. Informs ended 2007-08 with revenue of Errs,692 core and a net profit of RSI,659 core. The company has issued a guidance of revenue up to Errs,622 core and earnings per share of up to Risks. 06 in 2008-09, a growth of 29. 5% and 24%, respectively. Shares of Informs closed flat at RSI ,538. Each on the Bombay Stock Exchange even as the exchange’s benchmark Senses index closed marginally down at 14,349 points and the technology index ended marginally lower at 3,606. 81 points.
In the past year, shares of Informs have touched a high of RSI,140 each and a low of RSI ,212 each. (Source: http://www. Livening. Com/ 29 July, 2008) Global Competition: Companies often change due to explicit or implicit pressure from their competitors who might have better technologies, better systems, better products, better brand image, better HER practices, better tearless service or better supply-chain. Moieties, the competitors might have advantages of being a first mover in the market or having a monopoly in raw material procurement (a captive mine for Steel companies, for example).
When the competition is sharp-edged, the companies have no choice but to usher in necessary changes. Ionians strategic move to reengineering its Research and Development unit is a case in point as reported in Economic Times (New Delhi) on 6 August 2008. Excerpts from the news item: In a major strategy change, handset major Monika is re-engineering its research and development (R;D) model world-wide to tackle growing competition from unconventional sources of competition like Apple’s ‘phone and Google’s mobile phone platform Android.
Taking a cue from companies like P&G, Monika which till now largely carried out in-house innovation and R&D, is looking at external collaborations for product innovation. Nearly 50% of its new innovations are expected to come from external sources, a fact which is expected to help the company cut R&D costs significantly. It is expected to spare higher resources for product design and marketing, reduce time-to-market and improve return on investment (ROI), sources said.
The Finnish giant’s move, which will be implemented throughout the company, is based on findings that breakthrough innovation sometimes originates from external sources. The company has also initiated a company-wide cultural change program, called ‘Living it working to directly involve and expose employees to consumers The major change in the way Monika will now look at R&D has been caused by a slew of reasons. Not only are consumer preferences changing faster than ever, competition is emerging from hitherto unknown quarters. Computerize Apple has swept the world with its phone, which now poses a huge halogen for Monika.
Google, which started as a search engine, has now launched a mobile phone platform called Android and the first handsets from this initiative are expected in the second half of this year. (Source: The Economic Times, New Delhi, 6 August 2008) There are other illustrations of completion-led organizational change as well. Facing stiff competition from the American automobile majors, the Japanese automobile companies such as Toyota, Ionians and Mediumistic have been forced to relocate their manufacturing and assembly operations to South East Asia where the cost of labor is quite low.
Simultaneously, they have established their plants all over Europe and America to get past the import restrictions. In this process, they have been able to retain their competitive edge in catering to the global automobile market. Technological forces: The world is characterized by the dramatic technological shifts. The technological advancements, particularly in information and communication technologies, have revolutionized the workplaces and have helped create new range of products and services.
For example, a super communication system is on the anvil in which about 20 Japanese companies will Join a Motorola-led project to set up a atelier cellular telephone system that can be used anywhere on the earth. The partner companies include Sony, Mediumistic, Crockery, among others. The estimated cost of the project is IIS$ 132 million or 15 billion Yen. Globalization: Globalization meaner integration of capital market, labor market and commodity market. This integration has touched almost all the aspects of business lifestyle.
Hence, globalization is a unique trigger to change present everywhere. Internal Factors of Change System dynamics: An organization is made up of sub-systems, similar to that of the sub-personalities in human brain. The sub-personalities in the brain are in constant interaction with each other creating changes in human behavior. Similarly, the sub- systems within an organization are in constant and dynamic interaction. The factors that influence the alignment and relationships are, for example, technology, internal politics, dominant groups, and formal and informal relationships within it.
Inadequacy of administrative process: An organization functions through a set of procedures, rules, and regulations. With changing times and the revision of organizational goals and objectives, some of the existing rules, regulations and reoccurred could be at variance with the demands of reality. To continue with such functionally autonomous processes can lead organizational in-effectiveness. Realization of their inadequacy induces change in the organization. Individual/group expectations: The organization as an entity is a convergence f people, each one aiming to satisfy his/her needs and aspirations.
In anthropological context, man is a social animal whose needs and desires keep changing. This creates differing expectations among individuals and groups as to the needs they intend to satisfy in the organizational context. Positive factors such as one’s ambition, need to achieve, capabilities, career growth, and negative aspects such as fear, insecurities, frustrations, etc operate as complex inter-individual and inter-group processes inducing change in n organization’s functioning and performance.
Organization design and structure: Over the years, structure of a company might become redundant due to new technologies and paradigm shift in managerial practices. At times, structure becomes a stumbling block in retaining competitive edge because of cost as well as procedural issues. Such a situation invariably leads to structural changes in the organizations. Many companies have launched structural reforms in their endeavourer to remain at the top. Examples include: MOM, Data, Ford, Hounded etc.
Skills of a Change Agent Any person who has the power and knowledge to make a difference, challenge the stereotypes and create prototypes can be termed as change agent. A change agent must possess the following: Knowledge of the business environmental (understanding); A value system and self-concept to support and under gird the actions of a change agent (motivation); Change agent abilities (skills). Change Agent Abilities: The following is a listing of change agent abilities compiled room numerous sources. Ђ Resilient Optimistic Tenacious Committed Passionate Patient Emotionally intelligent Assertive Persuasive Empathetic Authentic Ethical Self-Aware Competent Curious They can: Communicate ideas clearly, concisely, and precisely both orally and in writing Listen to others and incorporate their ideas and perspectives Accommodate individual differences (cultural, socioeconomic, global, etc. ) in your decisions and actions and be able to negotiate across these differences. Ђ Engage in self- assessment, self-reflection, and analysis Reflect on what is happening to make meaning, gain perspective and understanding Engage in civil discourse and debate Mediate and resolve conflicts Analyze power, structures of inequality, and social systems that govern individual and communal life Recognize the global implications of their actions Span boundaries Challenge the status quo effectively when appropriate Creatively and collaboratively solve problems using critical thinking skills; search for “families” of solutions for complex multi-faceted issues Collaborate, network What makes good change agents? When assessing potential candidates for roles as change agents, three questions need to be asked: Do they have the right attitude? Do they possess the appropriate knowledge? And do they have the necessary skills? Here is an exploration of each of these questions: The Right Attitude Change agents cannot succeed without great persistence.
Change is a complex and labor-intensive process that arouses feelings and emotions. Angry people, frustrated teammates, conflicting priorities, unforeseen problems and behind-the-scene resistance are typical daily challenges. Project leaders or managers cannot lead names through these difficulties without determination and stamina. To avoid changes in leadership in the midst of change, change agents must be fully committed to see projects through to completion. A good way to ensure such commitment is to appoint ambitious and enthusiastic individuals who have potential for career advancement within the organization. They will look at the challenges as a career-development opportunity and will be highly motivated to succeed.
These high potential employees will gain a broader understanding of the business, an extended network of relationships and stronger leadership skills. Attitude is one aspect of good hanged agents that is often overlooked. A person with relevant knowledge and skills but inappropriate attitude will not be able to contribute as much to the organization and the community. Moreover, the higher the skills and knowledge of a person, the greater damage they can do to the organization if their attitude is flawed. Change agents must be prepared to stand up for their projects, even if it meaner tactfully challenging powerful executives – including the senior leadership.
In many cases, implementation problems are due to the project sponsors or top management under-estimating the significance of their own duties. They are reluctant to commit the necessary resources; they sometimes send conflicting messages about the importance of change by failing to apply enough pressure to those who resist; or they alter priorities half-way through the change. Change agents must act as “voices of conscience” when any mid-course corrections are contemplated. It is the responsibility of change agents to make sure such issues get a complete airing in order to avoid the project ending in failure. One effective change agent summed up the attitude needed: “My primary goal is to ensure this project succeeds, no matter what.
My secondary objective is to preserve my personal relationship with all senior management. ” The best change agents are tactful and diplomatic. “Political skills” are necessary, not so change agents can Join in the game, but so they can better understand it. Change leaders must make their own Judgments and keep their own counsel. No one can do that for them. The Appropriate Knowledge Project sponsors should be seasoned change agents with a general understanding of the business. However, project managers should be subject-matter experts in their respective area of responsibility. Having someone with excellent project management kills is simply not enough.
They will crash due to lack of detailed understanding of the subject area. Expertise also brings the credibility and respect needed to succeed in their role. Simply put, change agents better understand how a business works – in particular, the business in which they are involved. This entails understanding money – where it comes from, where it goes, how it goes and how to keep it. The Job also requires knowledge of markets and marketing, products and product development, customers, sales, selling, buying, hiring, firing and Just about every other aspect of the business. In addition to the relevant expertise, change agents also should be well-connected throughout the organization.
Active relationships in all areas of the organization are important in communicating effectively with stakeholders, developing coalitions and designing a successful roll. The Necessary Skills The pressure on the project leadership can be tremendous. Change agents have to be able to operate during times of instability and uncertainty. They have to manage conflicting priorities, multiple constituencies and fast-approaching deadlines. They are responsible for guiding the organization through the numerous challenges of ruinations. Therefore, in order to survive, change agents must possess the ability to remain highly effective under intense pressure. In addition to being well organized and disciplined, change agents need strong analytical skills. Guessing won’t do.
Insight is nice, even useful and is sometimes mistaken for brilliance, but insight is often difficult to sell and almost impossible to defend. A rational, well-argued analysis can be ignored, but not successfully contested. Change agents must learn to take apart and reassemble operations and systems in novel ways, and then determine the financial and political impacts of what they have done. At the same time, good change agents must be flexible enough to work around roadblocks and handle evolving priorities. In short, a disciplined and yet flexible approach is needed to tackle the challenges of change. People skills – team-building, forging strong interpersonal relationships and communicating within groups – are mandatory tort good change agents.
The challenge is to build the project team, putting the team members’ competencies to best use. To succeed, change agents must create a strong sense of identity, purpose and Joint-ownership, as well as a high-performing mindset. To manage resistance – a natural part of the change process – change agents must start by understanding and acknowledging the resistance. They need a lot of empathy, with good listening skills. Change agents must be able to put themselves in the shoes of people affected by the change. Resistance is most damaging when it remains unnoticed. It usually occurs when the feelings and concerns of employees are ignored or when they feel change is forced upon them.
In order to avoid resistance or the risk of hidden resistance, change agents must learn to listen to the voice of employees and involve them in decisions whenever possible. During the change, communication is the glue that keeps the organization together and moving toward the desired goal. Change agents need to be able to communicate effectively at all levels and across all organization boundaries. Choosing a Good Leader for a Change… Change is never easy and the failure rate can be high. Top management must take a hard look at the candidates for change agent positions. If none of the in-company candidates closely match requirements of the Job, then a search outside the company is required.
And, once an organization finds the right individual to be its hanged agent for a project, management has one more commitment to make – assuring the change agent has between 50 and 100 percent of their work time available to dedicate to the success of the initiative. Resistance to Change People like Comfort Zone Stability Predictability Familiarity Conventions Status quo People do not like Change Risk Instability Uncertainty Both these factors have an impact on how people react to any change programmer at a workplace. More precisely, why people resist change? Fear of Unknown Fear of Failure Disagreement on need for change Losing something of value
False beliefs/Misunderstanding Lack of Trust Personals TTY Conflicts Peer pressure Loss of status/Job Phases of Organizational Change Organizational change causes individuals to experience a reaction process comprising four phases: Initial Denial: Employees feel that change is not at all required in the company. Resistance: Employees try to prevent the implementation of change programmer Gradual Exploration: Employees try to explore their role in the new scheme of things and start cooperating with the management Eventual Commitment: Employees commit themselves to new way of doing things. Resistance is a natural and normal response to change because it involves going from known to unknown.
Conceptual Framework of Resistance to Change Perception-cognition-Affect-Resistance Perception: Employees try to perceive the impact of change at this stage. The force or resistance is directly proportionate to the perceived impact of change on an individual. Cognition: During organizational change, individuals create their own interpretations of what is going to happen, how they themselves are perceived, and what others are thinking or intending. Generally, people have a tendency to develop negative self-schema about themselves and their life events (organizational change, for example). This results in cognitive distortions as they are not able to remain objective in the cognitive process.
In case of any change programmer, the employees construct irrational ideas as part of cognition. Affect: Affective processes are usually personalized as emotions and feelings that are related to actions. Emotions in the context of organizational change can be described as a state of arousal involving facial and bodily changes, brain activation, ejective feelings, cognitive appraisals, which can be either conscious or unconscious, rational or ‘rational. Psychologists have identified a number of primary emotions experienced by individuals universally such as fear, anger, sadness, Joy surprise, disgust, contempt, etc. Organizational change generally leads to feelings of anger, denial, loss and frustration.
Individuals experience loss and grief when established ways of doing a Job are changed. Changes and losses role identity can lead to feeling of anger, sadness, anxiety and low self-esteem. Resistance: At this stage, the employees display physical actions that can be seen and heard. Moreover, it also includes mental process which cannot be seen or heard. So the employees may oppose, argue, obstruct, stall, dismantle and undermine a change effort. At the same time, they may withdraw, avoid or ignore the change efforts. How the companies respond to change Failure of many corporate change programmer is often directly attributed to employee resistance.