Management and Organisational Development

Unit 2

Unit 2

Change Process and Models

Structure: 2.1 Introduction Objectives 2.2 Organisational Change 2.3 Strategies for Change 2.4 Theories of Planned Change Lewins change model Action research model The positive model 2.5 Action Research as a Process 2.6 Resistance to Change Why individuals resist change? Why organisations resist change? Overcoming resistance to change 2.7 Summary 2.8 Glossary 2.9 Terminal Questions 2.10 Answers 2.11 Case Study

2.1 Introduction
In the previous unit, you studied how businesses and managers are facing highly dynamic and ever more complex operating environments and how OD is relevant. You covered basics of OD such as meaning and definition of OD, history, characteristics and assumptions of OD. You need to understand that change is most important for any organisation as without change it would lose its competitive edge, constant progress and will fail to meet the needs of growing base of its loyal customers. But you must also remember that to change, to bring benefits and advancements to organisation, it must be driven by knowledge. You will analyse it in this unit by studying the concept of Organisational Change. This unit will help you to understand the concept of organisational change, the strategies used by the organisations to transform individuals, teams and organisations from current to desired change. It will also help you to identify
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different theories of planned change and models used in organisational change such as Lewins Change Model, Action Research Model, etc. This will also give you an in-depth understanding of reasons as to why organisation resist to change. Objectives: After studying this unit, you should be able to:

explain the concept of organisational change identify the strategies for organisational change identify and discuss the theories and models of change analyse the action research as a process highlight the concept of resistance to change

2.2 Organisational Change

As discussed earlier, you must have analysed that any organisation that ignores change does so as on its own risk. To survive and prosper, a firm must adopt strategies that realistically reflect their abilities to manage multiple future scenarios. You must recognise that change occurs continuously, exists because of multiple causes and needs to be properly addressed. Lawler (1986) has summed this quite effectively by noting that: Overall planned change is not impossible but it is often difficult. The key point is that change is an ongoing process, and it is incorrect to think that a visionary end state can be reached in a highly programmed way. Organisational Change is as a framework aimed at managing the effect of new business processes, changing organisational structure and systems or due to cultural changes occurring within the organisation. In simplest term, you can address it as the people side of change management. You need to remember that organisational change in most of the cases is stimulated by external forces. Usually organisations undertake strategically, technical and structural changes to enter into a different level of their life cycle. Modification of a highly reactive organisation into a much stable proactive environment is an instance of such a change. Figure 2.1 illustrates the sum total of the range of changes involved in organizational change.

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(Source: http://www.results-in-business.com/activities/org_ch.htm) Figure 2.1: Organisational Change

On the other hand, you can say that ever-changing conditions pose a formidable challenge to organisations precipitating changes which can be either planned or quite intentional. It must be understood that the large variety of determinants of organisational change forces dictating change can be organised into 4 major categories. These categories are evolved by combining two key distinctions: (1) Whether the organisational change is planned or unplanned by the organisation, (2) Whether it derives from factors internal or external to the organisation.
Table 2.1: Determinants of Organisational Change
Type of Change Internal Planned Internal Planned Change Change in Product or services Change in Organisation size or structure External Planned Change Introduction of new technology Advanced Information and Communication system Unplanned Internal Unplanned Change Changing Employee demographics Performance gaps Internal Planned Change Government Regulations External Competition

External

(Source: Organisation Change and Development, 2nd-Edition, Kavita Singh, Excel Books) Sikkim Manipal University Page No. 28

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The above table 2.1 shows you that the result from combining these two dimensions are planned internal change, planned external choice, unplanned internal change and unplanned external change. Let us now look into organisation change with help of VELUX UK Systems as an example. Case-let: Velux UK Systems The VELUX Group is mainly known for their roof windows and skylights. The group is one of the strongest brands in the global building materials sector. In 2004, Laurence Barrett was the Executive Director of VELUX in the UK. The company had the highest market share and everyone was happy. But Barrett wasnt pleased. He was aware of a continuous stream of customer dissatisfaction. Then, the situation completely aggravated when an annoyed customer sent a recorded delivery letter to every director of the company. Vanguard Scotland was called-in to help. Their first move was to form a team of frontline VELUX UK staff to analyse the nature of customer contact demand and study the value created for the customer. It was discovered that the level of failure demand was around 45% and Barrett recalls that It was clear that the customer was getting the run around. Only 52% of our calls were handled in one stop (i.e. by the first person they spoke to). Barrett took action immediately. He proposed a new pay structure into place and started to run experiments to see how many calls could be handled in one stop if a combination of skills were used to deal with the customer. Within a few months the call centre was handling nearly all the calls in one stop. Within three years, Barrett had replaced the fourteen different functional service desks with one large desk that could handle any demand. Moreover, in an independent survey, positive customer ratings had increased by 40%.
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The improved system allowed staff to feel they were really able to help customers, empowering them and making them happier in their work. Staff turnover dropped to just 22 employees a year saving 148,000. This new way of working, not only made staff and customers happier, it also enabled the staff to do more value work. Under the previous system, VELUX would have required 81 staff; whereas, they now only required 64. This was due to the increased efficiency and removal of failure demand. This saved them over 600,000. Taken together over a 3 year period, the client saved in excess of 1m from the above, staff morale improved and the reduction in transferring calls around the organisation and increase in its one stop capability to over 90% sent their customer satisfaction levels back up to where they should be. Planned internal change: You must know that a great deal of organisational change comes from the strategic decision to alter the way one does business or the very nature of the business itself. Example: Now try to understand two examples of planned internal organisational change to understand these changes. (a) Change in Products or Services: Suppose a firm is taking decision to take on a new direction to the business, to add a new, specialised service. You can assume the requisite amount of organisational change required in this change. You will need new equipment and new supplies, new personnel will have to be hired and trained, new insurance will have to be purchased and new accounts will have to be secured. Changes in Organisational Size and Structure: As the name suggests, it involves adjustment of employees required to work in a newly designed organisation, also known as rightsizing. In recent years, organisations need fewer people to operate. Another way in which organisation can restructure is through complete elimination of parts that focus on the non-core sectors of the business, and are hiring outside firms to perform these functions instead a practice best known as outsourcing.

(b)

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Planned external change In addition to planning changes in the ways organisations are run, it is often possible to plan which change variables originating outside the organisation will be incorporated into it. The underlying example will help you to understand how planned external changes occur. Example: One of the best example for planned change is the implementation of information technology (IT) in the banking sector. All over the world, banks have started utilizing IT to operate accounts, transfer money and monitor their own performances. Use of IT has enabled banks to attain increased productivity and lower down their costs. Unplanned internal change You must understand that not all the factors of change are the results of strategic planning. Indeed organisations often are responsive to changes that are unplanned especially the ones which are derived from factors internal to the organisation. Example: Changing employee demographics and performance gaps can be categorised as some unplanned internal changes. Looking at the present employee demographics, you can observe that the composition of workforce has changed. The percentage of women in the workforce is now greater than ever before. Additionally, the workforce is getting older. Many of the old retired employees from government and public sector are joining the private sector. To people concerned with the long-term operation of organisations, these are not simply sociological trends, but shifting conditions which force organisations to change. The second internal change that you can examine is performance gaps. Few things force change more than sudden unexpected information about poor performance. You have to understand here that organisations generally follow a win-stay/lose-change rule. Several studies have also shown that a performance gap is one of the key factors providing a force for organisational innovations (Wheeler & Hunger, 1989). Now analyse how those organisations that are best prepared to mobilise, change in response to unexpected downturns are expected to be the one that succeed. Example: Organisational downsizing is a classic example of change. Management looks at the situation and decides from which departments and
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which people to terminate. Since it seems simple enough, management often just re-assigns the roles and responsibilities of the former employees to the remaining employees. In those situations, management remains unaware of the crucial impact of the terminations on the surviving employees. Without the knowledge of these top executives, many employees experience major concerns, such as guilt of having survived the downsizing, increased pressure to perform or be terminated, and ambiguity surrounding their new job responsibilities. At the same time, the remaining employees are unsure what steps they need to succeed; they lack clarity about reporting relationships and power, and are uncertain of budgetary implications in the new arrangement. Unplanned external change It is one of the greatest challenges of an organisation to respond to change from outside on which it has little or no control. Research has shown that organisations that can best adapt to changing conditions tend to survive. Two of the most important unplanned external factors are governmental regulation and economic competition. Example: One of the most commonly witnessed unplanned organisational change that you can observe is the one resulting from government regulation like liberalisation and introduction of various laws passed by the government related to de-licensing, fully or partial convertibility of the rupee, etc. Recent change that you can notice is entry of foreign players in the competitive market. Indian industries have to find ways and mechanisms to safely and profitably run their businesses. Self Assessment Questions 1. Organisation change is a framework aimed at managing the effect of new business processes, changing organisational structure and systems or to the effect of cultural changes occurring within the organisation. (True/False) 2. Organisation change can be ______________ and ______________. 3. Which of the following are examples of Internal Planned Change? (a) Change in Product and Services (b) Change in Administration (c) Change in Organisation size (d) All the above
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2.3 Strategies for Change

Different strategies can be employed to manage changes in the human system in organisations and society. These include: 1. Normative Re-educative strategy: This strategy gives major emphasis on the fact that behaviour is influenced largely by social and cultural norms of the group, organisation or the society to which an individual belongs. You can bring successful change by changing the norms as it is believed that individuals have promised commitments to such norms.

Figure 2.2: Strategies for Change

2. Rational Empirical strategy: This strategy assumes that people are basically rational individuals and you can bring about a change by convincing them that it is for their best interest. 3. Power Coercive strategy: This strategy leads you to the use of power which is invested in managers position, or power springing from the use of resources, to coerce individuals into accepting change. 4. Action Oriented strategy: This strategy basically focuses on use of action orientation in bringing changes in the organisations. It involves development of specific steps necessary to achieve a goal or an objective which is also called as action plan. Self Assessment Questions 4. Power Coercive Strategy entails the use of power which is invested in managers position from the use of resources, to coerce individuals into accepting change. (True/False) 5. ___________ strategy gives major emphasis on the fact that behaviour is influenced largely by social and cultural norms of the group, organisation or the society to which an individual belongs.
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6. Which strategy focuses on use of action orientation in bringing changes in organisation? (a) Action oriented (b) Power Coercive (c) Rational Empirical (d) Normative Re-educative Strategy

2.4 Theories of Planned Change

Now, in this section we will study the theories of planned change. 2.4.1 Lewins change model Lewins Change Model, is a three step model given by the social scientist Kurt Lewin in the year 1951. He viewed behaviour as dynamic balance of forces working in inverse directions. He believed that such driving forces can help in pushing employees in right direction. On the other hand, there are some limiting forces which restrict employees to move in the right direction. He claimed that such forces should be analysed and can be easily shifted using this three-step change model. This model is also termed as Unfreeze-Change-Refreeze Model as reflected in figure 2.3.

(Source: http://www.peoi.org/Courses/Coursesen/orgbeh1/contents/frame 14b.html)

Figure 2.3: Lewins Change Model Sikkim Manipal University Page No. 34

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Lewin suggested that change is a three-stage process: the unfreezing the old behaviour or situation, moving to a new level of behaviour and refreezing the behaviour at the new level. According to this model, change entails moving from one equilibrium point to another. The three steps may be detailed as follows: Stage 1: Unfreezing: This is one of the most important change stages that you can relate to your real life. In this stage, people are motivated to get ready for change because they realise the importance of change. For example, when you attach reward or punishment to deadlines in completing a job, the urge to change is increased and employee gets motivated to finish the work before the scheduled deadline. Stage 2: Change: Kurt Lewin stated that change is not an event, but rather a process. He called that process a transition. The term transition implies inner movement or journey you take in response to change. It is at this stage that the actual desired change is made. People are 'unfrozen' and moving towards a new way of being. The stage is most difficult to pass through as the people learn and make the change. You should know that people in this stage are aware of the fact that old methods are being challenged. Since at this stage role changes, the state of efficiencies get reduced. At this point of time, it becomes important for managers to provide good leadership, coaching, counselling and psychological support to keep people in unfrozen state. Stage 3: Freezing (Refreezing): In this stage, the manager aims at establishing stability and elevates comfort level by reconnecting people to their familiar environment once the change is initiated. At this point of time, changes are accepted and become norms. Therefore, you must understand that certain new relationships are formed and routines are comforted. Activity 1 Think of any important Change Event that you have experienced in your organisation like mergers, downsizing or cultural change. If this is not something you have experienced, talk to someone you know who has. Were you prepared for the change? How did you respond? How did others react? What were the consequences? What did you learn about the change experience? What lessons can you draw for practice?
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2.4.2 Action research model Action research model is the basic model of Organisational Development (OD) activities. It is a database problem solving model which replicates the steps that you can easily observe in a scientific method of inquiry. To simply understand this model, you can say that it focuses on planned changes as a cyclic process involving collaboration between organisation members and OD practitioners. You must know that the process in action research model includes data collection, taking feedback of data from client and planning the actions based on the data. It can be, therefore, defined as an approach as well as paradigm to the problem solving. According to Sussman & Evered, 1978 Action research aims at both helping a specific organisation to increase its effectiveness and developing new knowledge that can be applied in other settings. The Figure 2.4 mentioned below helps you to learn the cyclic process of problem solving used in action research, which we will discuss later in this chapter in detail.

(Source: http://en.wikipedia.org/wiki/File:Systems_Model_of_Action Research_Process.jpg) Figure 2.4: Model of Action Research

2.4.3 The positive model Cummings and Worley discovered the Positive Model of Planned Change which contradicts the general model. You must understand the contradiction
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here is that the positive model is not linear; rather, it overlaps and relies on the feedback of one another.

(Source: http://www.scribd.com/doc/49723194/pptch02) Figure 2.5: The Positive Model

The table 2.2 given below explains you the stages of the positive model.
Table 2.2: Stages of the Positive Model
Stage 1: Inquire the Best Practices This step states that with the help of planned change, negative problems can be eliminated. Here, the managers have the choice whether he wants to continue or postpone or hault the planned changes which are based on the data gathered. After the Inquiry, the best step is to discover or diagnose the themes. Here, the experts find out the main cause of the success or failure of the organisation. The next step after enquiry and diagnosing is the intervention planning, execution change management and organisation culture and structure. The final stage is delivering, evaluating and analyzing to verify if the desired outcome is achieved or not.

Stage 2: Discover Themes

Stage 3: Envision a Preferred Future

Stage 4: Design and Deliver ways to create the future

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Self Assessment Questions 7. Lewin Change Model, viewed behaviour as dynamic balance of forces working in inverse directions. (True/False) 8. Lewin Change Model can be divided into ________________ phases/stages. 9. The process in action research model includes which of the following from client and planning the actions based on the data. (a) Data collection (b) Holding Discussions (c) Taking feedback (d) All the above

2.5 Action Research as a Process

Action research, is a process of an ongoing series of events and actions as seen in figure 2.6. Action research involves the process of actively participating in an organisation change situation whilst conducting research. French & Bell, 1978 defined Action Research as A process of systematically collecting research data about an ongoing system relative to some objective, goal or need of the system; feeding this databack in the system; taking actions by altering selected variables within the system based both on the data and on hypotheses; and evaluating the results of action by collecting more data.

(Source: http://www.whataboutus.org.uk/make_a_difference/action_ research_cycle/) Figure 2.6: Action Research Cycle Sikkim Manipal University Page No. 38

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It will be fascinating for you to know that several authors have laid emphasis on the importance of viewing action research as a process. Stephen Corey (1953), an early advocate of action research in education, states that, The process by which practitioners attempt to study their problems scientifically in order to guide, correct and evaluate their decisions and actions is what a number of people have called action research He defines action research more in terms of a practitioners tools stating that Action research in education is research undertaken by practitioner in order that they may improve their practices. Phases of the model Figure 2.7 below shows the cyclical phases of planned change as viewed from the action research model.
Joint action planning (setting objectives and goals)

Perception of problems by key individuals

New Action

Consultation with behavioural science expert

Action

New data gathering as a result of action

Data gathering and preliminary diagnosis by consultants Feedback to the key client or group

Data gathering after action

Rediagnosis of situation

Feedback to the client group by consultant Etc.

Joint diagnosis of the problem

Rediagnosis and action planning with client and consultant

Etc.

(Source: Organisation Change and Development, 2nd Edition, Kavita Singh, Excel Books) Figure 2.7: Phases of Planned Change

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The phases of action research model can be categorised into seven main steps. Lets examine these steps in detail. 1. Problem identification: The first stage of problem identification begins when a key executive in an organisation, or anyone with power and influence, senses that the organisation has one or more problems that might be solved with the help of an OD practitioner. 2. Consultation with a behavioural science expert: In this second stage, an initial contact takes place between the organisation executive and change agent. The change agent has his or her own normative, developmental theory or frame of reference. He is conscious of these assumptions and values. He shares them with the manager from the beginning to establish and open a collaborative atmosphere. 3. Data gathering and preliminary diagnosis: This stage is usually completed by the consultant, often in conjunction with organisational members. There are four basic methods of gathering data that are used such as interviews, process observation, questionnaires, and organisational performance data. 4. Feedback to the key client or group: In this step, the consultant provides all relevant and useful data to the members of the organisation regarding the information collected by them. It helps the members determine the strengths and weaknesses of the organisation or the department under study. 5. Joint diagnosis of problem: In this stage, the feedback is discussed among members of the organisation. After discussion, decisions are drawn in order to identify the problem on which the group intends to work. It will be interesting for you to know that Schein suggested that the action research process is very different from the doctor-patient model, in which the consultant comes in, makes a diagnosis, and prescribes a solution. 6. Action: In the next stage, the consultant and management jointly agree on further action to be taken. You can say this as the beginning of the unfreezing process, due to the fact that the organisation moves to a different quasi-stationary equilibrium.

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7. Data gathering after action: As you know action research is a cyclical process, data must also be gathered after action has been taken in order to monitor, measure, and determine the effects of the action and feed the results back to the organisation. This in turn, results in rediagnosis and new action. Self Assessment Questions 10. Action research is an ongoing series of events and actions. True/False 11. According to _____________, action research in education is research undertaken by practitioner in order to improve their practices. 12. Action research involves (a) Problem identification (b) Data gathering and preliminary diagnosis (c) Feedback and joint diagnosis of problem (d) Action and data gathering after action (e) All the above

2.6 Resistance to Change

In this section, we will try and find out the reason why change is often resisted. Change may be of two types, viz. explicit or implicit. It depends on how the resistance to a change is expressed. Let us now discuss them briefly.

Explicit resistance: You can easily recognise the resistance to change which is manifested in form of strikes, slowdowns, and complaints Implicit resistance: Implicit resistances include decreased motivation or loyalty, errors, absenteeism, and foot-dragging when changes are introduced. Such changes are more difficult to detect and cope with.

Many times, however, change is resisted even when its benefits outweigh its costs. Why does this happen? Lets observe several overlapping reasons why people and organisations resist change. 2.6.1 Why individuals resist change? Individuals at all levels are prone to resisting change. 1. Selective perception: You know that people have a natural tendency to perceive the same thing differently. When changes are initiated, as per their psychology, individuals tend to focus on how they will be personally affected rather than seeing the big picture for the entire organisation.
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For Example, suppose a manager announces that members of his group henceforth will be paid on piecework rather than on hourly basis. Manoj, who is fast and highly skilled, may eagerly embrace the change as an opportunity to increase his pay. Yogesh, a new employee may object for the fear of lagging behind others. 2. Lack of information: People will resist change if they lack knowledge about why the change is required and what is expected from them. Suppose, you own an organisation that is now entering into a merger with a new firm to gain the benefits of synergies. In such situation, if you do not give your organisation members the reasons for such a change, they tend to fill in the missing pieces, with speculation. This often portrays the worst in terms of our intentions and personal impact and increase their fear of making mistakes 3. Fear of the unknown: Individuals usually resist change when they are uncertain about how it will affect their well-being. For example, if a firm is downsizing, an employee may ask himself how will downsizing, or new web-based B2B marketing, affect my job security? 4. Habit: It is easy to understand that many people prefer familiar action and events, even if they are not optimal. For example, ask an individual to leave a bad habit like smoking, drinking too much coffee, or not exercising? Quitting a habit is difficult because it takes hard work and involves giving up perceived benefits from the habit, even if the new behaviour has more desirable consequences. In the context of the workplace, employees are often in a comfort zone which makes them secure. Any attempt to do things differently may be opposed as they are moving away from that safe zone. 5. Resentment towards the initiator: You would know or have even experienced that individuals may resist change where they feel that it is illogical or unreasonable, or when the timing and manner of implementation lacks the concern for the people expected to carry it out. You can simply assume the result of such change is either resentment or anger.

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2.6.2 Why organisations resist change? The reasons of resistance to change by organisations are same as of individuals. Kotter and Schlesinger (1979), the authors of Choosing strategies for change, said that there are many forces inside the organisation that creates resistance to changes initiated by environmental conditions. Some of the main ones are summarised below: 1. Power maintenance: Changes in decision-making authority and dilution of power in organisations create resistance to change. You can observe it easily that it is very natural for the units benefiting from the change to endorse the change, but those losing power will resist it. For instance, managers often resist the establishment of self-managed work teams or, manufacturing department often resist the purchasing departments to have the authority to control input quality. 2. Structural stability: Organisations are composed of hierarchies, subgroups, rules, and procedures which promote order and guides behaviours. These designs develop consistent, predictable behaviours and are resisted to change. 3. Organisational culture: You must be aware that organisational culture includes established values, norms and expectations that promote predictable ways of thinking and behaving. So, it is obvious for the organisational members to resist changes that force them to abandon established assumptions and approved ways of doing things. 4. Group norms: When you work in groups, your group develops their own norms to promote desirable behaviours. Consequently, you will resist any change that disrupts those group norms, tasks, or role relationships. Activity 2 Little is known about the psychology of resistance or change inertia. Define resistance to change in psychological terms? Can resistance be prevented? If Yes how? 2.6.3 Overcoming resistance to change Table 2.3 illustrates the situations in which these approaches might be used, along with the advantages and disadvantages of each. It is the managers
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job to match the demands of a change situation with the best approach to overcome resistance with minimum disruption.
Table 2.3: Approaches to Overcome Resistance
Approach Education and Communication Commonly used When there is lack of information or inaccurate information and analyses Where the initiators do not have all the information they need to design the change, and where other have considerable power to resist. When people are resisting because of adjustment problems When someone or some group will clearly lose out in a change and when that group has considerable power to resist Where other tactics will not work or are too expensive Advantages Once persuaded people will often help with the implementation of the change People who participate will be committed to implementing change, and any relevant information they have will be integrated into the change plan. No other approach works as well with adjustment problems Sometimes its a relatively easy way to avoid major resistance Disadvantages Can be very time consuming if lots of people are involved

Participation and Involvement

Can be very time consuming if participants design an inappropriate change

Facilitation and Support

Can be very time consuming, expensive and still fail Can be too expensive in many cases if it alerts other to negotiate for competence.

Negotiation and Agreement

Manipulation and Co-optation

It can be relatively quick and inexpensive solution to resistance problems. It is speedy and can overcome any kind of resistance.

Can lead to future problems if people feel manipulated.

Explicit and implicit coercion

Where speed is essential, and the change imitator possess considerable power

Can be risky if it leaves people mad at the initiator

(Source: Organisation Change and Development, 2nd-Edition, Kavita Singh, Excel Books) Sikkim Manipal University Page No. 44

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Self Assessment Questions 13. The resistance to change manifested in form of strikes, slowdowns, and complaints are examples of Implicit Resistance. (True/False) 14. When you work in groups, your group develops their own ___________ to promote desirable behaviours. 15. Individuals are resistant to change because of which of the following reason? (a) Selective perception (b) Lack of information (c) Fear and Habit (d) All the above

2.7 Summary
Let us recapitulate the important concepts discussed in this unit:

Organisational change is as a framework aimed at managing the effect of new business processes, changing organisational structure and systems or due to cultural changes occurring within the organisation. Organisational changes can be planned and unplanned external and internal changes. Normative Re-educative, Rational Empirical Strategy, Power Coercive Strategy, Action oriented Strategy, etc. are the strategies that modern managers employ to resist change. Action Research is the process by which practitioners attempt to study their problems scientifically in order to guide, correct and evaluate their decisions and actions is what a number of people have called action research. Individuals and organisations resist change but can be motivated through education and communication, participation and involvement, support and negotiation, etc.

2.8 Glossary
Action research: The process by which practitioners attempt to study their problems scientifically. Change: Change means the new state of things and is different from the old state of things.
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Explicit resistance: The resistance to change which is manifested in form of strikes, slowdowns, and complaints Implicit resistance: The resistances including decreased motivation or loyalty, errors, absenteeism, and foot-dragging when changes are introduced. Organisation: It can be defined as a social group which undertakes the task of achievement of collective objectives or goal. Organisational change: It is a framework for managing the effect of new business processes, changes in organisational structure or cultural changes within an organisation. Strategy: It is a consciously and well developed long term plan which is designed within the challenging environment in order to meet the demands and needs of the market.

2.9 Terminal Questions

1. Identify and discuss the various types of changes faced by business world today? 2. What strategies would you employ to manage change in your organisation? 3. Highlight the importance of Lewins Change Model. 4. Define action research as a process giving a real life example for an organisation. 5. How do mangers cope up with resistance to changes in the organisation?

2.10 Answers
Self Assessment Questions 1. True 2. Planned and Unplanned 3. All the above 4. True 5. Normative-Reductive strategy 6. Action Oriented
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7. True 8. Unfreeze, Transition and Freezing 9. All the above 10. True 11. Stephen Corey 12. All the above 13. False 14. Norms 15. All the above Terminal Questions 1. Organisational change may be planned or unplanned. Based on the factors influencing change, it may be internal or external. For more details refer to section no 2.2. 2. Normative Re-educative, Rational-Empirical strategy, Power-coercive strategy and action-oriented strategy. For more details refer to section 2.3. 3. Lewin Change Model, a three step change model was given by the social scientist Kurt Lewin in the year 1951 who viewed behaviour as dynamic balance of forces working in inverse directions. For more details refer to section 2.4.1. 4. Action research as a process is as an ongoing series of events and actions and involves seven stages. For more details refer to section 2.5. 5. Managers can cope up change in their organisation through education and communication, participation and involvement, support and negotiation and participation. For more details refer to section 2.6.3.

2.11 Case Study

Sea Side: Mail Order Retailing Agent 1991 accompanied a new era for Sea Side, the mail order retailing agent. The Billion Rupees Company was growing faster than ever before and was no longer the small, home-grown catalogue store. Located in South Kolkata, its five thousand employees reflected the local culture, as did its management practices and the philosophy of its founder and Chairman,
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Shantanu Das. In 1991, Mr. Das decided that the company needed to apply modern management principles to keep up with its growth in size and complexity. The first step was to recruit a new executive vice president from competitor Mountain View, Subodh Marwah, to lead the changes. Mr. Marwah quickly made numerous changes to modernise the management systems and processes. The company also created one new international venture and one new business each year, resulting in well-established businesses in UK, Japan and Germany. The first two years, the changes seemed to be working as the company added 100 million Rupees in revenue and posted record profits. In spite of the many programs aimed at employees welfare, training, and teams, many employees complained of always having to meet production and sales quotas. The doubts grew until late 1994, when the board, led by Mr. Das decided that the new management was moving the company too far, too fast away from the basic philosophies that made the company successful. Mr. Das then chose thirty-four-years-old Vikash Sen as chief executive officer to guide the return to basic. Mr. Sen, an eleven-year veteran of Sea Side (his entire working career), immediately started the about-face by dismantling most of the teams, reorganising the others, and returning to the basics of the top quality and excellent customer service. Shortly after his takeover, however, paper prices doubled, postal rates increased, and clothing demands dropped sharply. The third-quarter profits dropped by 60 percent. Rather than cutting quality and laying-off people, Mr. Sen spent even more on increasing quality and employee benefits, such as adoption assistance and mental health referrals. His philosophy was that customers still demand quality products and employees who feel squeezed by the company will not provide good customer service. Early results were positive, with first-quarter profits being three times those of the year before. Critics of Mr. Sens return to basic, argue that the modernisation attempts were necessary to position the company for global competition and faster reaction to competition in several of its catalogue lines. Its return to growth
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Management and Organisational Development

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occurred primarily in acquisition and new specially catalogue lines and not in the main catalogue for which it was so famous. Mr. Sen has put further acquisition and global expansion on hold as he concentrates on the core businesses. Employees say that they have fewer meetings and more time to do their work. 1. How would you characterize the two sets of changes made at Sea Side? Which set of change is really modernisation? 2. How did the change processes differ? 3. How do you think employees will view future attempts to change Sea Side? References:

Bettis, R.A., Bradley, S.P. and Hamel, G. (1992) Outsourcing and Industrial decline, Academy of Management Review, 6, 7-22 Drucker, P.F. (1997), The future that has already happened, Harvard Business Review, September-October pp 20-4 Faw Rob (1999), World Best Value: Global Competition in the Information Age (Safety Harbour, FL: Worlds best value.com) Hendricks, C.F. (1992), The Rightsizing Remedy, Homewood, IL: Business Irwin

E-References:

http://utils.babylon.com/abt/index.php?url=s7%20addthis%20static% 20r07%20linkedin018 8th June 2012, Time 1:00 P.M. http://www.lmcuk.com/management-tool/lewins-3-stage-model - 8th July 2012, Time 4:14 P.M. http://nationalforum.com/Electronic%20Journal%20Volumes/Kritsonis,% 20Alicia%20Comparison%20of%20Change%20Theories.pdf 8th June 2012, Time 4:44 P.M http://www.change-management-coach.com/kurt_lewin.html-8th June2012, Time 4:47 P.M. http://www.web.ca/robrien/papers/arfinal.html - 8th June 2012, Time: 6:08 P.M.

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