Chapter 3

LEADING AND
MANAGING
OF CHANGE
Unit 1
LEARNIN  An integrated approach to organizational
change

G  Change strategies

 Factors influencing in selection of change

OUTCOM strategy
 Response of employees to change

ES  Steps of planned change

 Change is an integral part of organizational life, and a leader has to get
involved in the process of change.
 To ensure that the organizational vision state is achieved efficiently, a
leader has to use an appropriate strategy considering business
environment, the degree of resistance and urgency level.
 The leader has to manage both, that is, people resisting the change and
people supporting the change.
 For any type of change to achieve the desired state, the first and foremost
thing is to prepare all affected parties for the change by highlighting
the necessity and urgency.
 Every change initiative will be unique; hence a change leader has to deal
with each change by using a different strategy to meet the needs of the
organization.
Successfully managing organisation change means taking a
holistic view of the organization, obtaining top management
support, encouraging participation by all those affected, fostering
open communication and rewarding those who contribute to the
change effort.
—Moorhead and Grif
 AN INTEGRATED APPROACH
TO ORGANIZATIONAL CHANGE
 For implementing change in any situation, 2 common factors
need to be considered are:
1. How to mobilize resources for change
2. How to mobilize people to manage resistance to change

 The objective analysis of this gap will facilitate in identifying

the type of change required and method of implementing the
same.

 A change leader also needs to consider business environment

and carry out SWOT (strength, weakness, opportunities and
threats) analysis before finalizing the change strategy.
 The following point need to be kept in mind while designing the change
strategy:
1. Identify areas requiring change, that is technological change,
structural change or behavioral change.
2. Identify possible intensity of resistance and likely reason for the same.
These could be due to economic reason, social reason, emotional
reason or combination of these. Resistance due to emotional reason
needs more care and tactful approach and normally takes much longer
time that expected.
3. Prepare employees and all stakeholders for the change by highlighting
its importance and urgency. This can be achieved by having a shared
vision that guides the organization to achieve the desired state.
 Integrated Approach to Organizational Development

ORGANIZATIONAL DEVELOPMENT STRATEGY

Behavioural
Behavioural
Structural Strategy Technical Strategy
Strategy
Strategy

Align
Align Employees’
Employees’ Attitude Align
AlignStructure and
Structure and
Align
AlignProcesses and
Processes and
Attitude
and Valuesand Valuesthe
to Support to Organizational Design
Organizational Design Technologies
Technologies
Support the Change
Change

Develop New
Develop New New New
New Processes
Processes
New Relationship
Relationship
Behaviour
Behaviour

IMPROVED QUALITY AND PERFORMANCE

1

Technical Strategy
While introducing new technology, the following points need to be considered:

a. Goal synthesis – The most important factor is that the technology must meet the
requirement of the organization and facilitate to achieve the vision of the
organization. A proper SWOT analysis is expected at this stage.
b. Time frame – Considering the rapid change in technology, organizations have
to decide whether technological change should be implemented on a short term
or on a long term basis.
c. Contingency planning – At times, for introducing new technology,
organizations may require to modify or develop totally new infrastructure, which
may seriously hamper day-to-day operations in the organization.
Organizations are expected to prepare a contingency plan in advance to deal
with such a situation or relax normal operational functioning norms without
affecting the performance.
 1

Technical Strategy
Reaction of organizations to adaptation to new technology varies from prompt
adoption to a slow response.

o n
a l Adopti
ic
e c h nolog
r’s T Curv
e
Roge
2

Structural Strategy
There is a need to have an objective assessment of the type of organization’s
structure to meet the needs of the organization.
Structural change involves major restructuring of the organization, including
changes in the span, job redesign, centralization/decentralization, outsourcing,
downsizing, changes in responsibility/authority and adding or removing layers of
hierarchy.
This type of change can lead to considerable resistance, especially if it involves a
reduction of staff due to outsourcing and downsizing of the organization.
Leaders at all levels need to be more tactful while dealing with this type of change,
especially where change financially affects the people.
 3

Behavioral Strategy
Greater resources and new technology can make an organization
more efficient and effective only if it has a positive work culture and
well-trained team.
This may require a change in human behavior, which involves
developing a positive attitude, change in perception and improving
motivation level of employees.
The shift in the core values of employees, empowerment and sense
of ownership, will create a workforce that will embrace change
willingly, only if they feel that they are a part of the change process.
CHANGE STRATEGIES
 1

 The selection of change strategy will

be guided by the work culture of the
organization, possible reasons for
resistance, urgency for change and
finally sponsorship and support from
top management.
 Bennis, Benne and Chin (1985)
prescribed that, strategies can be
broadly classified as:
a. pull categories
b. push categories
 2

Change through Persuasion

 Precisely this strategy is applicable for dealing with the resistance due
to emotional reason.
 The leader must keep the following points in mind while implementing
change through persuasion:
1. Preparing a suitable environment for announcing new desired state
or a new policy if it relates to culture, customs, traditions or bringing
social change.
2. Emotions are guided not by head but by feelings. The leader must try
to analyze how the change message will be interpreted by the people.
3. During implementation stage, leader must not push hard. Give people
time to manage their mood so that emotional feelings support
implementation of change.
4. Once change is implemented, leaders must ensure follow-up action
to reinforce it.
3

Boonstra’s Barter Strategy

 During any change program, people do their own cost-benefit
analysis and if they get convinced and confident regarding the
likely gains to them, they use to support it.
 The degree of support depends on the degree of dissatisfaction
with the present state and type and level of incentive being
offered for supporting the change program.
4

Chanakya’s Saam, Daam, Dand and Bhed Strategy

 Chanakya, a professor at Takshashila University and is known as
“The Indian Machiavelli” in western world has prescribed 4 ways
for mustering support and ensuring implementing change:
1. Saam (Advice and Educate) – This strategy means convincing
by logic/education or by process of pacifying to accept different
points of views leading to change.
2. Daam (Pay Price to Gain Support/Buy) – This strategy
recommends managing and manipulating by offering incentives
or rewards for supporting change.
3. Dand (Use authority to Push the Change) – This strategy means
pushing people to accept the new ideas, and if required use of
authority to ensure desired results are achieved.
4. Bhed (Exploiting the Secrets) – This is like a principle of divide
and rule by exploiting the secrets of the opposing party.
4
All the 4 strategies can be grouped between “Educating and Motivating”
and “Explicit and Implict Coercion”. They can be divided into 3 broad
categories -

Participative Manipulation Directing

• Maximum (+) Degree of Participation ( -- ) Minimum

•Educate people about need and • Announcing the
•Highlight the importance
urgency for change change program.
and urgency of change
•Identify the people who resist and • Formal/informal
support the change
. •Publicize the gains from negotiations to
change for employees and •Lure resisting forces to support the overcome resistance.
the organization change and reward supporting
forces • Use of authority to
•Use change agent and try to convert implement change.
•Involve people in
some of the opposing people to • Combination of
participative decision-
support the change process
making reward or threat for
•Use limited authority to implement compliance.
change programme
•Educate opposing forces • Written notice for
about their gains by •Use formal and informal
communication channel to mobilize
termination of contract
supporting change if creating hurdles for
the support the change
change process.

High ---- Degree of Maturity /Concern for Organizational Interests ( Work Culture ) ----
Low
 FACTORS INFLUENCING IN
SELECTING A CHANGE STRATEGY
 Urgency level is high : Use the authority based strategy.
 Level of degree of resistance : A mix of directive and manipulating strategy
needs to be firm but tactful.
 Emotions : Use strategy of persuasive and participative.
 Dependency level :

1. When organization is dependent, it is persuasion and participative strategy.

2. When employees are dependent, they can follow directive strategy.
 Population level : For large population, authority based strategy may not
work. Mixed strategy will produce better results.
RESPONSE OF EMPLOYEES
TO CHANGE
 A change leader must cater to both :
 People resisting the change, and
 People supporting the change.

Proper handling of both is important to manage any

change process successfully.
1

Reaction of people opposing the change

Explained by Elisabeth Kubler and Ross
The curve is based on a model originally developed in 1960s to
explain the grieving process of a person who is seriously ill or has
lost someone dear.
As per them, a person passes various stages of grief when informed
about the sad news starting from total denial to accepting the
changed situation.
 Kubler-Ross Five Stage Change Curve Model

1. Denial 2. Anger 3. Depression 4. Bargaining 5. Acceptance

Once opposing forces Once people realize When people opposing

The first reaction will If the management realize that they are that the management will realize that the
lead to total denial does not agree with unable to muster
is firm about change process cannot
and a refusal to their demands of support, they will feel
accept change. They maintaining status depressed and take implementing change, stop, they will accept it.
will feel that there is quo , it would lead little interest in the they try to bargain to The resistance will drop
no need for any to anger. work. Performance will get something in and performance will
change. drop. return to support the improve.
change.

Shock and Denial Acceptance

Anger

Bargaining

Depression

Limitation
Benefits [Link] model is too simplistic to explain emotional
1. The model explains the likely reaction of people to reaction of people to change, which is very complex.
change. This will help managers in dealing with 2. This reaction is not applicable to all the employees.
people and develop communication strategy. 3. Transition between stages is not clear.
2

Reaction of people with positive response

Most of the research highlights the negative reaction of employees.
However, in every change, there are some people who support the
change.
Like employees who resist the change, people who support the
change also passes through five emotional reactions.
PROCESS OF PLANNED CHANGE
 Starts with identifying its necessity and selecting the desired
state.
 This is followed by mustering support from all affected parties
to work for achieving a desired state.
 A sound plan need to be developed which must be supported
by proper organizational structure, resources, technology and
above all, well-trained manpower having positive attitude
towards change.
 Before any change is planned, need analysis and cost-benefit
analysis must be carried out.
 Based on these said factors, change objectives with its time
frame must be fixed.
Process of mustering support for change
STEPS OF PLANNED CHANGE
 STEP 1: Set Clear Objectives for 1. Identify preferred desired state
Change 2. Analysis of present state—strengths and weaknesses
3. Identify the gap between present state and desired state
4. Analysis of risk of maintaining ‘status quo’ vs going for change

1. Diagnosis of existing vision, mission and objectives

STEP 2: Diagnosis of present
2. Diagnosis of technology, organizational design and present work culture
performance of the organization
3. Diagnosis of effectiveness of leaders at all levels
4. Cost-benefit analysis of proposed changes and take go/no-go decision

1. Develop a shared vision by mobilizing support of all stakeholders

STEP 3: Mobilize Ownership by 2. Select change leaders, both external and internal
Management 3. Initiate dialogue with the employees and all stakeholders regarding need and urgency
for change
.

1. Select correct strategy considering type of change, type of organization, work culture and
business environment
2. Design broad plan for change
STEP 4: Decision to implement change 3. Divide plan into phases with time plan
4. Coordinate with change leaders

Continuous communication throughout change process

 Continued …

1. Implement the plan in a phased manner with fixed time line for each phase of the plan
2. Fix responsibility for change leaders at each level
STEP 5: Implement Change Plan 3. Initiate new ways of working at all levels
4. Two-way communication by leaders at all levels to motivate supporters of change and
counter restraining forces

[Link] reinforcement of new vision (desired state)

2. Reinforce ‘new way of working’ as a habit and as an organizational norm
STEP 6: Reinforce New Desired State 3. Develop work culture of ‘ WE and US’
and New Way of Working 4. Celebrate and publicize each success
5. Obtain continuous feedback for improvement

Continuous communication throughout change process