Concept and Definition of Change in Organizational Behavior (OB)
In general words, change is shift from one state to another state. In the dynamic business world, none of the organizations can sustain competitively with same products with same level of product benefits to the customers. Organizations need to change their status quo to maintain their competitive strengths and extend market share. Business environment is dynamic. Level of competition, changing nature in workforce, technology, consumer's preferences, political-legal shifts, economic shocks, etc. are making business environment more dynamic and uncertain. To cope with such forces, business organizations are, nowadays, making their management philosophy as 'change or disappear'.
The Darwinian notion i.e. survival of the fittest, is being more realistic in today's business world. To survive, grow and sustain the business, managers must work hard to evolve new ideas, procedures and products. For this, organizations should adapt several changes in their structures, technology and people. Change is not overnight success of any company. It takes series of improvements. It incurs cost and is difficult task as many people involved in the business do not accept the change easily. There can be three types of response towards change as i) defiance ii) compliance iii) alliance. Defiance response is to reject the change, compliance is to accept change and alliance is to support the change.
Target of Change Process in OB
Change is inevitable. The issue is that some organizations adopt change very fast while some organizations response slowly. But, it is important to understand the basic area of change process. Organizational change process focuses in the following three areas:
1. Change in organizational structure
To cope with change in business environment, organizations can change or alter or amend the current organizational structure. This is the way of changing or rearranging roles, responsibilities and authority level, span of control in the organization. Centralization can be changed with decentralized with approach in decision making. At the same time, structural change can be made simpler job structure with the provision of written policies, job responsibilities and working procedures.
2. Chance in technology
Technology indicates the way of doing jobs. Machine, information, procedure, means of communication, level of technology, etc. are such things which can be changed to conduct the jobs more smoothly, more efficiently and effectively. All the organizations wish to reduce wastage, increase the productivity and market shares for sustainable growth. Computers helped to record, store, transmitting and analyzing information. Computer technology changed the job at the great extent that many employees lost their job at a hand but at the same time more uniform and quick decision making software, robotics, etc. to make jobs easier, to increase productivity, efficiency and effectiveness. With change in technology, job responsibilities are being changed. Skills and knowledge requirements are also being changed.
3. Change in people
Organizational change can be realized with bringing change in people associated with the organization and its business. It is the way to change in thinking, attitude and behavior of people affecting work. For example, instead of trying solving the mechanical problem by each employee, they need to change their behavior of reporting to supervisor. Keeping suggestion box in the organization helps to initiate improvements in faulty system or procedures. We can put printed request to the riders not to lock the handle of their motorcycle inside the organization, asking guest in hotel rooms to switch off the light not in use. All such things are obviously not easy but they bring certain change in working process, cost minimization of process, etc. Though, there can be different approaches in changing people's behavior, following common steps should be followed while changing in people.
Unfreezing is the process of recognizing that the current state of affairs is undesirable i.e. realizing change is essential. Realizing some unacceptable conditions like antiquated equipment, inadequately trained employees, etc. and or realizing some serious organizational crisis or threats like a serious financial loss, employee's strike, accident, major lawsuits etc. are enough for unfreezing. This is approach of stimulating change before there could be too late.
Creating more desirable state for organization and their member is changing. It follows the first step unfreezing. Change can be minor or ambitious.
This is the situation in which all employees accept new changes in the organization. They change their attitude and behavior. Work process will be more smooth and client friendly. Organization realizes the process gain instead of process loss.
Planned and Unplanned Change and OB
Organizations adapt changes in the business environment with its own plans and sometimes encounter with unexpected forces to change. In this way, change can be planned and unplanned.
1. Planned Change
Planned changes are intentional or wishful changes of the organization management. Management of organization does not want to keep organization in its status quo and hence it plans various changes in working procedures, marketing plans, technology, and even in its objectives and goals. Training and development activities are initiated to make their employees positive for change. Such changes are well identified and do not affect in attitude and behavior of employees suddenly. Such changes can be managed easily. Organizations can fix magnitude of planned changes.
2. Unplanned changes
Unplanned changes are unexpected and forceful changes that the organizations are compelled to adopt. Such plans are normally not wishful in the organization. External forces like legal compliance, intense competition, technological change, economic crisis, etc. force to adapt change in the organizations. Unplanned changes are beyond the control of organizations.
Magnitude of Change in OB
Organizational change offers in its magnitude. How much change is desirable and appropriate depends upon the nature and need to change. Some of the organizations initiate change in limited scope and less complexity whether some others prefer extensive change. Change for increasing sale revenue demands limited and less complex change whereas product differentiation, acquisition of new firm, merger with other organizations, etc. are more extensive and complex changes. Magnitude of change thus, can be classified into two orders i.e. first order change and second order change.
1. First-order change
Regular changes in the organization and its operation are first-order changes. First-order changes do not carry major shifts in organizational operation. "This is apparent in the very deliberate, incremental changes that Lexus has been making in continuously improving the environmentally friendly nature of its production process." A college will follow first-order change if it adds gradually new books in the library, a restaurant follows first-order change if it adds food items in its menu in continuous basis. This means first-order changes are made even prior to the analysis of success or failure of any one product, process or idea. It is simple in nature.
2. Second-order change
More radical and major shifts in the organization are second-order changes. Second order changes involve different levels of the organization and affect in different aspects of the business. Second order changes are more complex and dramatic. "General Electric and Tenneco have radically altered the ways they operate, their cultures, the technologies they use, their structures, and the nature of their relations with employees."
Forces for Organizational Change
Change is inevitable to sustain any organization in the dynamic business environment. There can be several reasons for change in organizations. Some of such reasons can be internal while some of other external. Factors or reasons for change are called forces of change. Some of these forces are discussed as below:
1. Shifting Workforce demographics
Workforce is major force to bring changes in organization. Organizations need to employee different types of workforce in terms of skills, gender, socio-cultural background, etc. With the increasing pace of globalization, organizations must adjust to a multicultural working environment, demographic changes, immigration, and outsourcing. Human relations in the organizations are greatly changed with such adjustments. Diversity management programs, conflict management programs and stress management programs are being added with the human resource management. Organizations are changing their culture, norms and values with such shifts in workforce demographics.
2. Change in technology
Technology has changed the work system of organizations. Advanced technology reduces the human efforts at work. Many organizations are attaining greater productivity and profitability by means of advance technology. Organizations cannot remain isolated with changing technology in competitive environment. They want to leading organization in technological change. At least, each organization wishes to adopt new technology to increase productivity and profitability. Technology changes the job responsibility of employees. Most of employees reject technological change in technology because of the fear of losing job and need of improvement of their skills. Management need to work hard to convince employees for adapting change and managing capital for investment in technology.
3. Organizational performance gaps
Organizational performance gap is the difference between expected level of performance and actual performance of the organization. Problem in operating product line, decreasing or not maintaining sales, increasing employee turnover, a vanishing profit margin, etc. can be well known gaps in organizational performance. Organizations, by nature, want to continue the projects which are reaping good profit while wish to change if there is some problem realized in performance. Organizational changes for coping with performance gaps may be sudden and unexpected. Organizations which adapt change quickly in response of performance gaps are found more successful.
4. Economic crisis
Economic crisis is one of the major forces for change in organization. At the economic crisis, organizations can not operate their business activities. They have to curtail many jobs. They may have to sale their properties to collect means to investment and maintain regular operations. Many organizations like real estate companies, banks and financial institutions, manufacturing industries and service oriented organizations have faced great shock after the economic recession 2008 spread from USA. In such situation, organization may eliminate their existence, become bankrupt, compel to sale property, or need to merge with other organizations. Economic crisis changes the organizations in profitability position, technology, market share, profitability. They have to reduce their employees, may need to curtail in operation, change in objectives and goals.
5. Government regulation
Government regulates the business organizations. As on requirement, it brings new rules and regulations for business organizations. Business organizations must follow such regulations. Thus, government regulation is the force to unplanned organizational change. In Nepal, India, Pakistan, vehicle failed to get green sticker (test pas for non-emission of greenhouse gases) are restricted to drive, Monetary policy of government compels banks and financial institutions to increase paid-up capital within certain time, manufacturing industries producing greenhouse gases and harmful chemical need to shift from community area, employers need to maintain minimum pay as government rules, etc. are some representative examples of government regulations. In such cases, to follow such regulations, organization must adapt change.
6. Global competition
Growing global concern of business organizations has increased the level of competition. Almost in each new day, more attractive and cheaper product at cheaper price are introducing in market. Global organizations for business are developing new provisions to the governments to make the market open to all products. Customers, in such situation, prefer best quality product at their comfortable area at reasonable price. So, organizations must work harder to maintain the market share and sales revenue. For this, organizations need to follow change. Today's organizations are being learning organizations. They are being more flat and adopting project based organizational structure. Such changes are responsible for many changes in costs, roles, responsibilities and authority. Nokia has greatly suffered with global competition, many large manufacturers in automobiles are decreasing market share and profitability, Samsung launches new product with new features, there is cut-through competition in telecommunication companies and similar situation is there in aviation companies. They must adapt change for long term survival and growth.
7. Social trends
Social trends are ever dynamic in nature. Such trends help to build perception towards product and producers. Customers nowadays, share any information whether creating positive or negative influence. They immediately react which affects in the marketability of any products. Organizations thus need to understand changing social trends. They must be plan and executive the plan as per social trends. For instances, consumers are more sensitive towards environment, human rights, animal rights, green campaign, liberalization attitudes towards transgender employees, etc. Such forces are also playing important role in organizational changes.
Resistance to Change in OB
Naturally people first reject change, then only start thinking to what extent the change is beneficial. Because of the fragile ego of human being, change is normally taken as threatening. Such normal tendency of people i.e. employees refusing or rejecting the change creates vital situation in implementation of change programs in organization. "Resistance to change can be positive if it leads to open discussion and debate." In such situation, change implementation becomes easier as change agent gets energy to change efforts. But, if the strength of refusing change is high, there will be the great chance of dysfunctional conflict. The tendency of refusing or rejecting the organizational change is resistance to change. "It is negative or opposing force to bring changes in organization. Resistance can be overt, implicit, and immediate or deferred." Employees show their resistivity at work openly like complaints against change, a work slowdown, strike threat as overt and immediate resistance. Such resistance is easy to deal. Implicit and deferred resistance i.e. covert in nature are more serious and last long to react and manage. Employees normally lose their loyalty towards job and organization. "Employees express their covert resistance by increased tardiness and absenteeism, demanding transfer, loss of job motivation, resignation, lower morale, and higher accident or error rates."
a. Individual sources for resistance to change
Employees resist organizational change for variety of reasons stemming from their own individual concerns, qualities and interests. Here are some important individual sources for resistance to change:
We feel the jobs in practice or regular basis are more comfortable and easy to accomplish. New jobs need new skills and knowledge for which employees need to learn more. Learning new skills and knowledge for new job becomes source for resistance to change. This means, because of habit of doing easy jobs, individual resists organizational change.
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Everyone needs security at job. They feel threatening from new job in physical security, social security and job security. They do not want to have physical hazards, do not want to lose friendship bonds at job by new job, and do not want to lose the job because of low productivity at new job. Thus, feelings of security become source of resistance to change.
3. Economic factors
People think that if they cannot perform good at the new job responsibility or with new technology, they have to quit the job. Their pay may be reduced because of the lower performance. They think the consequences may be serious economic threat for their livelihood. Because of fear of economic insecurity, individual resist for change.
4. Fear of unknown
At the current job, employees derive a sense of security as they know working procedures, their coworkers, and supervisors. They do not want to disrupt such situation and join new and unknown working environment. They feel fear of adjustment in completely new working situation, new coworkers and new supervisors to whom they should be accountable for. This creates resistivity towards the organizational change.
5. Selective information processing
By nature, majority people tend to start thinking from negative angle. They first consider the threat of change instead of benefits of change. They only perceive the fact or objects which they want to be or get. They do not want to even listen what they do not like. Such behavior of individual let them not to consider the positive side of organizational change. They really do not know at what extent the change will benefit to organization and employees. Thus, they resist change thinking that change does not benefit to them.
b. Organizational sources for resistance to change
Organizational factors also resist change in organization. Such factors are organizational sources for resistance to change. Following factors are the organizational sources for resistance to change:
1. Structural inertia
Organizations are built for stability. They form rules, regulations, working procedures, responsibility-authority relationship, etc. for executing plans to attain organizational goals. Employees are selected with fixed procedures and performance-reward system is formulated. All of these things encourage whole organization to work in a mechanistic approach. When such organizations confront with certain changes, such provisions counterbalance. Thus, such more stable organizational structure which tends to functioning in a more fixed system is structural inertia. This inertia resists initiating and implementing change.
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2. Limited focus of change
Organization is the integration of many sub-system because of which organization gets complete system. Change in one sub-system affect on other sub-systems but positive impact in one sub-system can be nullified by the effect of other. This minimizes the real benefits of change in organizational system. Change in sub-system should be fit to other remaining sub-systems too. The change should work with the same spirit to whole organizational system. If this could be difficult, change becomes impossible.
3. Group inertia
Work group inertia is the tendency of work forces which encourages employees to perform their jobs in certain ways, thereby making them resistant to change. Work groups from certain norms and values knowingly or unknowingly. Such group norms and values also resist the change. For instance, if management brings in a specialist in organizational structure from outside organization, employee union may reject. Group inertia is more powerful resistance to change in organization.
4. Threat to expertise
Changes demand on improvement on expertise of employees and managers too. Specially, many managers fear of getting new level of expertise required as per change. They afraid of demotion, transfer, technological unemployment, etc. as a consequence of change. Thus, managers oppose decentralization, direct communication, and management information system. Because of such, fear, organizational change becomes impossible.
5. Threat to established power relationship
Organizational change in many cases make the existing responsibility-authority relationship useless. Expertise as on change need to be changed in responsibility and hence in authority. Participative management, group decision making, team and project management work system, open communication, performance-based reward system, etc. through change cannot be accepted easily by existing power block of organization. Established authority relationship does not want to lose control over resources as well as decision making power. This creates resistivity for organizational change.
Overcoming Resistance to Change in OB
Change is inevitable for sustaining and continuous growth of organization in global competition. But, it is not easy task to overcome the resistance to change as resistivity may be created both in individual as well as organizational level. Manager should be sensitive to its barriers so that they can be solved at right time and change can be implemented without any disturbances. It is not easy task to overcome resistance to change but there can be some true effort as they can be change agents. Some of these tactics are discussed below:
1. Communicating change
Many people involved in organization may not estimate the benefits or positive consequences of change. Some of them may perceive change cause personal loss of job, reduced income, or need to learn new skills and knowledge. Thus, managers need to communicate with employees about the consequences of change well in advance. Communication helps to reduce the effect of misunderstanding regarding change and anxiety of employees because of change. It also becomes helpful to "sell" the need for change.
2. Educating employees
People often resist change because they think there can be uncertainty in the future. They fear about economic security, job loss, and need to new skills and knowledge. Top management must show considerable amount of emotional sensitivity to educate regarding what organizational change may mean for employees. By educating employees regarding organizational change, its consequences and new role of employees after change, ways of gathering new skills and knowledge, management can assist to escape the fear from employees so that they can supportive for change.
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3. Participating employees
Participation of employees and or their representatives in change planning and programs helps to accept change in organizations in great extent. Employees, they are participated in decisions for change, make remarkable contribution and commitments for meaningful implementation; will be morally liable to implement change. They understand the benefits of change while discussing in planning session. They suggest their best for making change programs and hence convince their coworkers to accept change. Thus, employee participation is the most significant technique for overcoming resistance to change.
4. Building commitment
Building commitment and support to employees to overcome resistance to change is another emotional backup. "When managers or employees have low emotional commitment to change, they favor the status quo and resist it." Employees who are committed to the organization can be supportive for implementing change in organization. Thus, by building organizational commitment and support for change from employees, managers can overcome change effectively.
5. Gaining leadership support
For change to be accepted, it is necessary to win the support of the most powerful and influential supervisors and employees in the organization. Managers must get the favor of key personalities in different responsibilities. They have to thus, need to select various influential personalities from various level and area and convince for the support of manager i.e. for organizational change. Such personalities become the change agent in organization.
6. Rewarding constructive behavior
While implementing change in organization, we must change the behavior of people around it. Constructive behavior of people plays vital role to make the change success in organization. Such behavior dominates the resisting behavior of other people too. Thus, organization should establish the reward system to constructive behavior towards organizational change. It is critical while the organization is in transition period of initiating change.
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7. Manipulation and cooperation
Manipulation is conscious exaggeration of facts to make them more attractive, withholding information, and creating false rumors to increase the positive consequence of change among employees. Pay cut to the employees resisting employees can be manipulation if it is untrue. Cooptation is technique of participating key personalities from resisting group in key responsibilities after change. For instances, an employees can be participated in change evaluation committee because of whose participation in committee, other employees can be positive towards change. Both manipulation and cooptation are relatively less expensive technique to get support from resisting group but can be more expensive if they are more aware about the technique.
8. Implementing change fairly
By applying fair implementation of change in organization, we can minimize negative impact. In case of employees perceive the outcome of change negative, managers need to have procedural fairness. Procedural fairness helps to change the negative perception towards change into positive and hence, employees accept change comfortably.
9. Selecting people who accept change
Personality and attitude of people plays significant role to make them positive towards change. People with positive attitude accept change more easily and such people become open to share experience, willing to bear risk and more flexible for their behavior. Managers need to search such people from group of employees and select as change agent. With changing individual with positive attitude towards change, managers need to form team of such individual. Thus, to overcome potential resistance to change by employee in organization, managers need to select people with positive attitude and personality to form well motivated teams.
Coercion is the technique in which change is implemented forcefully whether employees resist or accept it. Employees are given choice either they have to accept the change or be ready for punishment. They are even threatened about the termination of job. This tactic is applied if all other tactics have not worked to overcome the resistance. More common threatens during coercion are pay cut, transfer, suspension, demotion, etc. Managers must be aware for the negative consequences of coercion.
Approaches to Managing Organizational Change
Several approaches can be used to manage organizational change. Here, lewin's classical three-step model of the change process, kotter's eight-step plan, action research and organizational development are discussed as below:
1. Lewin's Three-Step Change Model
Kurt Lewin, in 1951 proposed three steps for managing change successfully. He argued that unfreezing the status quo, movement to a desired end state, and refreezing the new change to make it permanent are such three steps. This model is more constructive and scientific approach for analyzing a change situation. This model is also called force field analysis.
a. Unfreezing status quo
Status quo is an equilibrium state. Unfreezing helps to breakdown i.e. overcome the individual resistance and group conformity to move from status quo. During unfreezing, there can be balancing status between two forces as restraining forces and driving forces. The restraining force hinders the movement away from equilibrium. It is the force decreasing the efforts to change the status quo. While driving forces are positive efforts to change status quo i.e. such forces want to move the change towards desired status. To bring equilibrium, restraining force try to decrease the driving forces while driving forces try to overcome restraining forces.
Unfreezing can be done with following three ways:
- Increase driving forces: With increasing driving forces, we can change the status quo to desired state. Increasing driving forces, restraining forces can be reduced. It can be done with high performance goals, new equipment, competition, employee with new skills, desire for increased influence and rewards, etc.
- Decreasing restraining forces: By decreasing restraining forces which pressurize opposite to driving forces can also increase the power of driving force i.e. forces to change status quo to desired state. We can decrease the restraining forces by group norms for output, familiarity with present equipment, complacency; need to learn new skills, fear of reduced influence and rewards, etc.
- Combining the first two approaches: We can apply both approaches i.e. increasing driving forces and decreasing restraining force at the same time as far as possible.
Movement is the change process from status quo to be desired end state. During this phase, driving forces start overcoming restraining forces and hence organization moves from previous state to the desired state with change. In this transition phase, employees and management of organization get ready for change.
This is more permanent stage in which change interventions are stabilized. For this, restraining forces are balanced by driving forces. Management should have strategic commitment for continuous improvement for making the change steady.
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2. Kotter's Eight-Step Plan for Implementing Change
"John Kotter of the Harvard Business School built on Lewin's three step model to create a more detailed approach for implementing change." Manager may make mistakes while initiating change. Sensing this thing, Kotter started listing the common mistakes the common mistakes of managers may make while initiating change. He listed some mistakes like managers may fail to create a sense of urgency about the need for change, to create a coalition for managing the change process, to have a vision for change and effectively communicate it, to remove obstacles that could impede the vision's achievement, to provide short-term and achievable goals, to anchor the changes into the organization's culture, and declaration of victory soon. He then, suggested eight-steps to solve such problems.
Following eight-step plans are suggested for implanting change:
- Establish a sense of urgency by creating a compelling reason for why change is needed.
- Form a coalition with enough power to lead the change.
- Create a new vision to direct the change and strategies for achieving the vision.
- Communicate the vision throughout the organization.
- Empower others to act on the vision by removing barriers to change and encouraging risk taking and creative problem solving.
- Plan for, create, and reward short-term "wins" that move the organization toward the new vision.
- Consolidate improvements, reassess changes, and make necessary adjustments in the new programs.
- Reinforce the changes by demonstrating the relationship between new behaviors and organizational success.
Kotter's above steps are considered as the best guidelines to managers and change agents for more successful implementation of change. Step one to four are related with unfreezing stage, step five to seven are related with movement and step eight is related with freezing stage suggested by Lewin's Three-Step model.
3. Action Research
Action research involve a continuous gathering and analyzing of research data during normal on-going operations of an organization. "It is designed to identify effective ways of dealing with problems in the real world." Action research is one of the most effective research which diagnoses the problem issues, collects information and evaluates the information to suggest best way to handle the change. This approach focuses on problems solving process.
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As this research deals with prevailing problems in various processes, management can rely on findings of action research. The major concern of action research is to build research competencies in the organization and assisting people to develop skills of diagnosis, action planning and evaluation. It integrates the theory and research process. Therefore, action research can be milestone in change management. Action research can be beneficial in two ways as:
- It is problem focused which determines the types of problems facing. This helps to determine the types of change action needed.
- It participates employees in the process continuously. So, resistivity for change can be reduced.
Action research consists of five steps which are closely related with scientific research methods. It consists of diagnosis, analysis, feedback, action and evaluation. Diagnosis is the process of finding the root cause of change barriers through reviewing records, interviewing employees and listening their concerns. Diagnosis is done with the help of consultant researcher and managers in participation of employees. From this step, organization ensures the area of change required.
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After diagnosis, action research is forwarded to analysis. In analysis, pattern of problem in information are carefully studied. Data are analyzed to conform problem area and possible action. This helps to identify the person to be involved in change process.
On the basis of analysis i.e. identification of actual problem, different actions are implemented for initiating change. For this purpose, appropriate employees are selected and the feedback of first and second steps is given by change agent. This means in third step, change agent provide the information obtained from first and second step to the employees in which change is to be initiated.
In the fourth step, real change is initiated. Change agent and employees take corrective actions in needed areas. In this stage, change agent has to face resistive behavior of employees. Actions of employees are carefully observed and feedback is provided to the employees as well as system.
Finally, actions for change are evaluated. This is most essential to check the effectiveness of program. This helps to get employee's satisfaction and feedback for future action. Successful implementation of action plans help to encourage employees and management to carry-out the changes in organization in future.
4. Organizational Development
Organizational development is integration of change methods initiated for improving organizational effectiveness and well-being of employees. "It is a collection of planned change interventions, built on humanistic democratic values, that seeks to improve organizational effectiveness and employee well being." "OD methods value human and organizational growth, collaborative and participative processes, and a spirit of inquiry." In the words of French and Bell, organizational development is a long-term effort to improve an organization's visioning, empowerment, learning and problem-solving process through an on-going collaborative management of organization culture.
Organizational development depends on some underlying values like respecting to the people, trust and support, power equalization, confrontation, participation, employee well being and spirit of enquiry. Six different techniques work for change management through organizational development. These six OD techniques are as sensitivity training, survey feedback, process consultation, team building, inter group development and appreciative enquiry.
Through orgnizational development, each component of organization is expected to accept change. Each component acts as change agent and hence the change becomes possible.