MU0018 CHANGE MANAGEMENT

Q1. What is change management? Explain the importance of change management. Ans1. Change Management: Change is any variation/alteration/transformation, a passing phase from one state or form to another, for example, a change of countenance; a change in habits or principles. Change implies dissatisfaction with the old one and an urge for the new one. Change can be perceived in two ways-changes as intrinsic and continuous, and extrinsic and discontinuous to the organisation. Change Management is a systematic approach of dealing with change, both from organisation and individual perspective. Change Management can be seen from two perspectives, one is from those implementing change and the other is the recipients perspective. Your view on change management varies if you are an executive who is demanding a change, versus an employee on whom the change is executed. Change management plays an important role in any organisation, as the task of managing change is not an easy one. When we say managing change, it means making changes in a planned and systematic fashion. With reference to the IT projects, the change means the versions of a project and managing these versions properly. Changes in the organisation can be initiated within the organisation or externally. Technology has compressed the distances across organisations. Internet and web technologies have given rise to honest corporations. Automation, mechanisation, manufacturing systems affects at both micro and macro levels of the organisation. These technological advancements are examples of an external factor that impacts on change within the organisation. How the organisation responds to these changes is important. Managing these changes come under change management. Reactive and proactive responses to these changes come from the organisation. Earlier, change management was an integral part of business management, but with the emergence of Information Technology (IT), it has gathered importance. Information Technology Infrastructure management is one broad term, which includes all the elements necessary to ensure smooth functioning of business processes. Good change management techniques always help businessmen to adopt new ways of doing business. Technology not only refers to machinery, equipment, and tool but is concerned with the use of information and knowledge as inputs that are transformed into final outputs. This process involves technology; hence choice of appropriate technology is a key factor for competitive edge in the new environment. Changes are brought into the system when the organisation faces challenges such as customer demands and technological updates. Change management process undergoes the following steps: 1. Identifying the need for change in an organisation. 2. Designing the changes as per organisations requirement. 3. Making others to understand the need for change for the proper functioning of an organisation.

4. Altering some organisational processes such as technology, performance meters to incorporate changes. 5. Managing both production and changes in such a way that the customers and stakeholders are bonded with each other in a long run. Managing the changes in an organisation requires certain set of skills like political skills, analytical skills, people skills, system skills, and business skills. If you have good analytical skills, you can be a good change agent. You should examine the financial and political impacts of the changes that can take place. You should have the knowledge that following of a particular process will fetch immediate financial effects and start that process so that the change process is noted by the management. You should change the workflow in such a manner that it should reflect the financial changes that are taking place. Reconfigure the operations and systems in the organisation in such a manner that you get the desired financial impact. So, change management is important in the business world, where the things are assessed based on their perfection and capacity to address the needs of customers and clients.

Q2. List and explain the stages in organizational Life cycle? Ans2. Stages of Organisational Life Cycle The Start-Up phase In this phase, the entrepreneur thinks about the business, forms a management group, write a business plan. The company goes into the growth phase when the investor writes the check. The start-up ends for those that don't need outside funds. The growth phase In the growth phase, we expect to see revenues increasing, new services and products developing, more employees recruiting and so on. For example: The management textbooks believe that sales grow each year but in reality it is different as a company can have both good and bad years depending on the market conditions. In organisations that have been running for a few years, dry rot sets in. Dry rot refers to decaying of timber in buildings and wooden furniture caused by fungi. So, many companies have their own types of programs relating to organisational development in place. The decline phase Corporate insanity is seen in this phase. [5]Corporate insanity can be defined as doing the same thing in same way but expecting different results. Management expects to be better next year, but doesn't know or is unwilling to change to get better results.
[6]

An easy truth was shown in 2003 study of 1,900 professionals who helped businesses that were in trouble. The source of the below table is [7]Buccino and Associates of Seton Hall University Stiffman School of Business, as reported in August 25, 2003, Business Week.

Table 3.1: Reasons for Decline Too much Debt Inadequate Leadership Poor Planning Failure to Change Inexperienced Management Not Enough Revenue 28% 17% 14% 11% 9% 8%

Many organisations will not enter decline phase unless there are precise program of transformational leadership development. If senior leaders detect the symptoms of decline at early stage, they can easily deal with it. Some of the noticeable signs include: Declining sales relative to competitors. Disappearing profit margins. Growing of debt continuously year after year. However, by the time the accountants discover that the organisation is in trouble, it takes remarkable leadership to get the organisation to change course. The renewal phase Once the organisation starts declining, it doesnt mean that it should continue. Some of the external experts have focused on the importance of organisational development as a way for preventing decline or reducing its effects. Dry rot can be reversed through the use of training as a way of injecting new knowledge and skills. You can also have rigorous programs to change and transform the organisation's culture. This assumes that though you have enough transformational leaders to change the status quo, without the right type of leadership, the organisation will go down to bankruptcy. The death phase About 80% of business failures occur due to the factors related to leadership control. Even firms that are close to bankruptcy can overcome this adversity and nurse themselves to be financial healthy. A very good example is Lee Iacoccas turnaround of the Chrysler Corporation. These are the different stages of organisational life cycle. According to [8]Richard L. Daft, there are four stages in an Organisational Life Cycle. The four stages are: 1. Entrepreneurial stage This stage has a strong leadership. 2. Collectivity stage This stage has delegation. 3. Formalisation stage This stage has too much of red tape.

4. Elaboration stage This stage needs revitalisation.

Q3. Explain briefly the recent approaches to organisational development and change. Ans3. Recent Approaches to Organisational Development and Change Organisational development is an important mechanism that helps to impress organisation and its employees. It includes structural and technological changes and focuses on the working environment among the employees within the organisation. It is a modern approach to manage change for human resource development. The basic approaches of organisational development are techno-structural approach and human process oriented approaches. The former is related to theories of intervention into the structure and technology of the organisation. The latter focuses on the organisational process and human participants. Researchers have developed various models on organisational change. The recent approaches to organisational development and change are broadly divided into two categories: The Top Down Approach: the classical paradigm. The Bottom Up Approach: the systems paradigm. The top down approach: The classical paradigm Organisations consist of functional areas such as production, sales and accounting, etc. The top management will drive these areas through command and control. The assumption here is that management should try hard to maintain change. This approach adopts the steps (Binney and Williams, 1997) to: Develop a vision. Communicate the vision. Maintain top managements determination. Plan and program. Adopt the best practice. The bottom up approach: The systems paradigm This approach deals with organisation as a system which easily gets affected by environmental changes. It is also known as the living-systems approach because the organisation is considered to be a learning organisation which has many feedback systems between its sub-systems. Here, change occurs continuously and is considered natural when an opportunity is present and is not driven externally. The main features of this approach are as follows:

 Studying of organisation in relation to the contextual environmental factors such as size, structure, technology, and leadership patterns (Smircich, 1983). Composing of many interdependent subsystems within the organisation where change in one or more parts affects the entire system (Sisaye, 2005). Persisting organisations comprises of individuals, groups/teams, structures, systems, and policies (Beer, 1980). Such systems allow both individual learning and social interactions. Here, the leader provides a clear vision and helps in the change process by facilitating, identifying, and directing the emerging patterns of behaviour and thinking (Binney and Williams, 1997). The other features of this approach help us to understand the: Assumptions made in any organisation are always dynamic, flexible, self organised, and interdependent. Facts about the leaders showing that they are democratic i.e., release the potential for change and not autocratic who drive changes. Need for both change and stability. Importance of both current reality and future orientations. Uniqueness of each organisation and respect the individuality and its need for change. Subsystems interdependency within the organisation and their influence on each other subsystem. According to systems approach, organisations should simultaneously pursue both process and structural intervention strategies in order to bring about change. Process intervention strategies focus on changing peoples behaviour, culture, attitudes, interpersonal and inter-group interactions, and also organisational communication styles and flow of information (Beer, 1980). These strategies help to bring in team work, cultural change, and systems maintenance in the organisation. Structural intervention strategies focus on and change the components of organisational systems such as the organisation and job design, reward systems, performance management systems, and accounting control systems. Both process and structural intervention strategies should be simultaneously handled to guarantee effective team characteristics, functions, cultural interactions, and structural aspects of management systems. Another way of analysing change models is to consider the external or internal forces as influencing change. The adaptation model focuses on the role of external factors in bringing about changes in the organisation. Some of the examples include a new government policy, competitive environment. The proaction model says that explanation comes from within the organisation as actions and change by itself. Another explanation of organisational change lies in an emphasis of the structure or the process. According to structure model, successful change needs to prepare the necessary structural details and introduce them systematically. Some of the examples are technology, design of the organisation and systems. People will also change by this.

According to process model, successful change needs to be planned by helping people to develop process competencies. Some of the examples are ways of planning, decision-making, problem solving, communicating, etc. People will find new ways of organising things by this. Some of the change models have had relevance and existed over a span of time. These models are categorised based on their nature of change, analysis, and treatment into three groups. They are: Process-based models. Content-based models. Integrated models.

Q4. Discuss in brief about the role of leaders in the change process. Ans4. Roles of a leader in change process: According to Senge, Leadership occur at different locations in an organisation. Some leaders have the traditional hierarchical leadership they are more formal. Some local leaders have to transfer the vision into an action. Network leaders have the job of connecting different parts of an organisation that are involved in the change. Bate has given the list of roles of leaders according to his idea of five dimensions of cultural leadership. The five dimensions are: The aesthetic culture deals with the ideas about the change. This is the sensate, ideational and idealistic culture. This is the species culture. The political culture deals with the meaning of change and involves putting ideas into the words. This gives the ownership to that political idea of the community. The ethical culture deals with the standards in the change and involves the guiding of learning process. This involves some ethics that have to be followed in the organisation. The action culture involves the translations from cultural meanings into the cultural practices. This involves the practices that are followed around in the environment. The formative culture deals with the structures those are in change. This involves the architecture of culture. This involves the structures around the change. The role model leader provides the confidence to manage the change process and demonstrates some of the characters which play an important role in the change process. They are: Wider context: The leader has the ability to deal the changes in wider way since it is not only limited to the organisation strategy but it is spread to the team, division and the organisation. Empathy: The leader has the ability to see others and understand and acknowledge others for managing the change process.

 Communication or being straight: The leader communicates directly to the people about the present and future changes and keeps the people well informed. Leader communicates both the good and the bad news with the people. Leader will be honest in terms of the change and the consequences of the change on the individual as well as the team. Counselling: The leader counsels the individuals who are undergoing change and respects the individuals change by understanding their emotions. Challenging: The leader identifies the unacceptable attitudes and behaviours and suggests for the acceptable attitudes and behaviours and maintains the comfort among the individuals and groups. Involving: The leader encourages the individual and team to involve fully in the change process and make sure that the change is successful. Reframing: The leader has the ability to see the situation from different perspectives and encourages others to do in the same way. This helps to create solutions in order to put the situations in a coherent framework. Enable learning: The leader enables the people to learn new skills, gain knowledge and the behaviours. Reviewing: The leader ensure that the certain reviews are done on regular basis for the proper management process. Recognitions set a positive environment so it is necessary to give positive feedback for the individuals as well as the group when they achieve their objectives.

Q5. Explain the strategies for competitive advantage. Ans5. A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices. Michael Porter has given four generic business strategies that are analysed by him on his work in the competitive industry. He has given four strategies taking consideration of the scope of a business versus the degree of product differentiation. Figure 9.3 illustrates the competitive strategies. The Competitive Strategies Strategy: Differentiation These are the strategies which include the selection of one or more criteria that can be used by the customers for taking the product in the market. According to the criterias, the organisation can develop the special strategy to meet the needs of the customers. This often involves the product with the premium price to demonstrate the production costs and the value added features that are present for the customer needs. This strategy gives the clear idea about the product and what is the advantage of using this product compared to the other product in the market for the benefit of the consumer. Strategy: Cost leadership The main aim of this strategy is to provide the product with the less cost in the market. The lowest cost producer is its main aim. Even the market segments suggest the same thing. The lowest cost

producer will be benefited when the product rate is at minimum equal to the average price in the market. Usually this type of strategy is associated with the large scale industries which aim at offering the standard products with a minimum differentiation and perfect product. Majority of the customers prefers the perfect product with the minimum differentiation. The low cost leader always tries to put the discount on the products with the goal of maximising the sales. This will work out particularly when there is much of competition on the market. Strategy: Differentiation focus This strategy aims at differentiating the product with a minimum number of target market segments. This strategy is applicable to the special needs of the customer. The customer well in advance informs the industry for the production of the special with the needs that will be differentiated with the already existing product in the market. There is a valid factor for the differentiation and the existing competitor products are not meeting those needs. Strategy: Cost focus This strategy focusses on the cost of the product which is the base for the business of the organisation. There are some products, which have features that are not needed for the customers. That time the sale will also be less since the cost is more, which is not worth according to their needs. During that time, it will be very helpful if the organisation provides the product with the, less cost and the specific needs that are required for the customers.

Q6. Define learning organization. Explain the need for learning organization. Ans6. Learning Organisation: Senge defines Learning Organisation as the organisation in which you cannot not learn because learning is so insinuated into the fabric of life." Also, he defines Learning Organisation as "a group of people continually enhancing their capacity to create what they want to create." We can define learning organisation as the organisation which has embedded the philosophies like anticipating, reacting and responding to change, complexity and uncertainty. The competitive advantage mainly depends on the rate at which the organisation can learn. Need for learning organisations Many of the companies in the world focus on improving the existing products and services, and innovating things to excel in the business strategy. This resulted in the starting of many activities like TQM (Total Quality Management) and BPR (Business Process Reengineering). These programmes can be successful or a failure, depending on some factors likes individual skills, attitudes and organisation culture. There are few factors that are needed for learning organisation to deal with. They are to: Face sudden and unexpected changes where there are no responses for the existing programmes. Expect the changing situations. Allow the staff to respond to the customer needs in a proper way.