Course

: 7063M Project and

Change Management
Effective Period : September 2015

Why Organizations Change and

What Changes in Organizations
Session 7

Acknowledgement

These

slides

have

been

adapted

from:

1.Nadler
and
Tushman,
1995
2.
Dean
Anderson&
L.A.
Anderson,Beyond
Change
Management
3.Leana
and
Barry,
2000
4. Ian Palmer; Richard Dunford; Gib Akin . (2009) Managing
Organizational Change: A Multiple Perspectives Approach 2
edition, McGraw-Hill/Irwin;Chapter3and4

Learning Objectives

Explain why organizations change and what is change management

Contents
Why Need Change Management
Pressures for Change: Environmental and
Organizational
Drivers of Change
Type of Changes: Incremental and Discontinuous
Downsizing, Technological Change, Mergers and
Acquisitions

The Impacts to Us
Project related work become more critical to
organizations success.
Projects are increasingly complex and
interconnected in unexpected ways.
Tolerance for failure is near to none as the cost of
poor project implementation can easily run into
millions of dollars
Speed to market can yield a short term advantage to
organizations that implement projects faster
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Project Management and

Change Management
The emphasis of most project management
activities is more on technical issues, with
significant lack of attention to the human aspects.
These human elements are addressed by
another management disciplines, known as
Change Management.

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Change Management Defined

The application of

behavioral science to the

decision making, planning,
execution, and evaluation
phases of the change
process, all focused on the
management of unnecessary
Change
Management does not focus on what
disruption.
is to be changed, but on how the solution is to
be implemented.

Its purpose is to substantially increase the

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likelihood of successful project implementation

by addressing the human aspects
of the
7

Change Management Defined:

Methodology + Process + Discipline = Strategy + ROI
Change management can be defined as a
methodology, a process, and a discipline for
facilitating and accelerating business initiatives by
aligning resources in a timely manner to efficiently
execute a chosen strategy and accelerate ROI.

Why managers participate in change

Perspectives of organizational change:
Management as control economic perspective.

Manager conduct change to produce better organizational

performance, better quarterly results, hence better company share
prices that will satisfy the shareholders

Firm survival depends on shareholders; failure to do this, will lead them

to move their capital to other companies or replace the senior
management

Management as shaping organizational learning perspective

Manager conduct change to build capacity in response to external
changes
Organizations and human systems are complex and evolving

Need to increase organizations adaptive capacity

Pressures for Change

Environmental

Organizational

1. Fashion Pressures

1. Growth Pressures

2. Mandated Pressures

2. Integration and
Collaboration Pressures

3. Geopolitical Pressures
4. Market Decline Pressures
5. Hyper competition Pressures
6. Reputation and Credibility
Pressures

3. Identity Pressures
4. New Broom Pressures
5. Power and Political
Pressures

Organizational Pressures for Change

1. Growth Pressures
Business organizations grow from small to medium and
large at a different speed
2. Integration and Collaboration Pressures
Change made to better integrate the organization and
create economic of scale
3. Identity Pressures
4. New Broom Pressures
When new CEO (or manager) change the old ways
5. Power and Political Pressures
Internal political pressures associated with changes of
board and CEO levels

Forces for Change vs. Forces for Stability

Forces for Change
Adaptability (of organizations to
their environment)
Cost containment (making HR as
variable rather than fixed cost)
Impatient capital market
(demanding more immediate
investment returns)
Control (greater control and power
through managerially imposed
performance targets)
Competitive advantage
(responsive to changing market)
Source: Derived from Leana and Barry, 2000

Forces for Stability

Institutionalism (of current practices due to
solidity of past practices and power structures)
Transaction cost (stability in employment
enables firms to invest in employee
development)
Sustained advantage (stable organizational
relationship not easily imitated or substituted)
Organizational social capital (trust among
co-workers as org asset)
Predictability & uncertainty reduction (the
need that may inhibit change)

social speed of delivery

business
customization
& economics
capability
political
level of quality
environment
governmental
need for innovation
technological
level of customer services
demographic
etc.
marketplace
legal
req. for natural environment

success

companys mission
strategy
goals
business model
products
services
pricing
branding

business
imperativ
es

organizations structure
systems
processes
collective way of being
technology
working
resources
skillrelating
base
staffing

organization
al
imperatives

The Drivers of Change

cultural
imperativ
es

style
worldview
tone
assumptions
character
beliefs
mental models

leader and
employee
behavior
leader and employee
mindset

environment
external &
impersonal

marketplace
req. for
success
business
imperativ
es

organization
al
imperatives

The Drivers of Change

cultural
imperativ
es

internal &
personal

leader and
employee
behavior
leader and
employee mindset

First Order and Second Order Changes

First order change incremental change.
Adjustment in systems, processes or structures
Does not involve fundamental change in strategy, core values,
or corporate identity

Maintain and develop the organization to support continuity

and order

Second order change discontinuous change

Transformational, radical and fundamentally alter the
organization at its core
Not developing but transforming the nature of the organization

Key Challenges in Destabilized Environments

Source: Adapted from Nadler and Tushman, 1995

5. Why Organizations Change and

What Changes in Organizations
Why Need Change Management
Pressures for Change: Environmental and
Organizational
Drivers of Change
Type of Changes: Incremental and Discontinuous
Three Common Changes:

Three Common Changes

1. Downsizing: form of organizational restructuring
Retrenchment: centralizing or specializing; re-engineering; outsourcing
Downscaling: restructuring, closing or selling BU,
Downscoping: divest activities or market

2. Technological Change: implementation of new technology

ERP / CRM:
Six Sigma
BPR (Business Process Reengineering)

3. Mergers and Acquisitions: form of organizational growth

Excessive capacity(A): consolidate operation in more mature industries
Neighboring market expansion (A): acquired neighboring areas to
lower cost and increase customer value
New product or market investment (M): two firms explores to extend
product line or global scope
Leveraging to create new industry (M): two firms pooled and
reconstructed to create new industry

References
1. Ian Palmer; Richard Dunford; Gib Akin . (2009)
Managing Organizational Change: A Multiple
Perspectives Approach 2 edition, McGrawHill/Irwin; Chapter 3 and 4
2. http://www.herridgegroup.com/pdfs/managing_org
_change.pdf