Important Elements Of Change Management Commerce Essay

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"We may like change and regard it as an essential feature of living; it does not mean that we always welcome it" (Hughes, 2006). Resistance to change is a very important element of change management. Stick land has defined resistance as a phenomenon which is continuous for change agents. Whereas, Randall suggested that it is the first obstacle to bring in change programs. Resistance in organizations is all the time referred to and viewed as a crucial component in decisions of change management. Employees, stakeholders and consumers show resistance to change not only employees. (Hughes, 2006).

It is almost every type of organizational change entails what is called role transations of some type. Concerning role transitions, according to Richardson(2002), it is natural for every employee to resist changes in the work environment. Serious decisions have to be made during the change process. Employees are intimidated by new priorities as Richardson (2002) has pointed out "the ones who most often have to live with the effects of these decisions. The simple announcement of changes in an organization can bring forth feelings of fear, insecurity and fear - leading to stress".

This paper will discuss a case study about changes in AEGON organization as well as the approaches that an organization can take in order to reduce resistance to change.


Case Study:

The AEGON group is one of the largest life insurance and pensions companies. This company has 27,000 employees and more than 25 million customers all over the world. Since 1994, the UK has become its major market. This case study gives information about the external factors influencing change as well as the impact of it on the given company.

AEGON operates in an insurance and pension's industry world. This world has had a very poor reputation lately. Some companies have not provided their customers with good product for their needs. That is why the Financial Services Authority has put great amounts of regulation on the industry in order to prevent the same situation in the future.

Intensive competition has characterised the industry during last few years. AEGON has been trying to be in the lead because of the competition with other organizations which provides the same product and better known in the UK. Through financial advisers, AEGON distributes all its services. And has had to address and control that problem that has been preventing it from achieving its goals in order to remain competitive.

The changes influenced the organization internally and externally. These changes affected the behaviour of people and the way they communicate within the company that put more focus on the customer. They become focused on making information clear to the customers.

This organization has established a relationship with the British woman athlete Shirley Robertson that has won gold medals at Olympic Games. The company was able to bring the value back for staff by the association with an individual who expresses and represents the same values. However, it developed its brand using many ways. First, what helped reinforcing the local knowledge and keeping the company famous for British customers is the external promotion that has emphasized the relationship between the AEGON group in the UK and other companies such as Scottish Equitable. Second, strong positive feedback results from the brand refreshing in both areas, internal and external. Finally, this organization introduced and used new ideas and launched new products. These days, the AEGON brand is affecting the financial services industry. There has been an increase in the company's business through products and services which are profitable, showing its strength in this competitive world.

Change exists all the time. Business organizations are always affected by External factors. AEGON simplified, clarified and strengthened its brand in order to deal with those external factors.

Literature Review:


"Resistance can happen both on an individual basis or people may group together and exhibit resistance" (Straker, 2009).

Concerning individual action, individuals may reject change, even though it is limited to their personal abilities and authorities. Hidden action and slow refusals may be depicted from individuals having less impact. Whereas, those who have more power could react to change in an initiative way by opening challenge and criticism (Straker, 2009).

Concerning action of management, management should deal with individual action individually, by starting with those who have more power. Moreover, Straker (2009) stated that "If necessary the management may discipline a senior executive which may act as a warning for other employees".

Concerning collective action, resisting change on a collective basis may lead to creating major danger to the change by people's words and actions, even though they have individually less impact (Straker, 2009).

Strong breakup could be depicted by organized resistance. Employees are not opposed to change collectively except if they realize that change would adversely influence their work (Straker, 2009).

Concerning action by management, managing resistance to change is shown by groups and by discussing with their leaders that could be very easy instead of behave towards employees in small groups. Management might need to bargain, but it should have the ability to save some change key elements. Moreover, by making some deals with some important individuals, management could "break up and rule", this can cause some problems if it is not done very carefully (Straker, 2009).



According to Robbins and Sanghai (2006) "Habit Human beings are creature of habit, everyday we do things out of habit", if change faced by individuals who feel uncomfortable in to adjust with the change, that means that they resist change (Robbins & Sanghai, 2006). For example, security individuals would resist change because they think it is a danger to their current safe and secure state Robbins & Sanghai, 2006).

Economic Factors: for example, if the working established patterns have been changed, individuals would resist change because they fear not to be able to carry out, particularly if the pay is based on performance (Robbins & Sanghai, 2006).

Fear of unknown: change is leading to confusion because it involves an unknown future state (Robbins & Sanghai, 2006).

Selective Information Processing: people could only understand things they need to know and ignore things that creates challenges for them ( Robbins and Sanghai, 2006).

Disagreement with the need for change: Kotellnkov (2001) has stated that associates could feel that "new direction is always a wrong direction"

False beliefs: "putting themselves at ease and avoid taking the risk, many people fool themselves into believing everything will all work out someday by itself" (Kotellnikov, 2001).


Structural Inertia: rules and procedures such as chain command and selection processes have been established by organizations. When the change appears, this structural inertia in the company tries to the status "quo with an equal power in the opposing direction" (Robbins and Sanghai, 2006).

Limited Focus of Change: if there is a change in a subsystem of a company, it can also influence other parts of that company. The change should be brought to all parts of an organization in order to result in fruitful outcomes of change (Robbins and Sanghai, 2006).

Group Inertia: individuals are strongly affected by norms in a group and these norms may impede an individual to accept change ( Robbins and Sanghai, 2006).

Threat to Expertise: changing the organization structure or work patterns results in posing a danger to the specialized groups (Robbins and Sanghai,2006).

Threat to existing relationships: if there is a change in decision making authority, there would be a threat to the long power relationships which is established within the company or the organization (Robbins and Sanghai, 2006).

Threat to existing allocations: people who possess many resources all the time see change as great danger because they feel satisfied with the existing work conditions ( Robbins and Sanghai,2006).

Misunderstanding and lack of trust: individual resist change when they think that it is a loss for them and when they understand its implications and when they realize that it will cost them more than they gain. This is happening if there is a luck of trust between the employees and the person who initiate the change (Kotellnikov, 2001).


There are many techniques which are used to reduce resistance to change. Change can be reduced by utilizing these following techniques:

Education and communication: Communicating the rationale for the change decision to the employees can reduce resistance. Resistance would be negligible if employees realize the facts. Change can be communicated using many methods such as face to face , memos, group presentation. This would help if all members of the organization trust each other (Robbins & Sanghai, 2006).

Participation: resistance to change ca also be reduced by involving employees who are against change in the decision process. If the participants are able to make valued suggestions, their involvement would decrease resistance, rise their loyalty and the change decision would have a meaning. But, the advantage is that "there is a tendency of making inappropriate decision and taking too much time" (Robbins & Sanghai, 2006).

Facilitation and Support: agents of change can provide help to employees in many ways to reduce resistance. The change agent can provide employees with counselling and therapy when their apprehension and tension are at a high point. Employees should be taught new skills and helped to develop new competencies or should be given incentives. But, the danger of this technique is that it is not guaranteed to succeed and expensive (Robbins & Sanghai, 2006).

Negotiation: resistance could also be reduced if the change agent exchanges or bargains the value with the target of change who are employees. For example, an individual who is resisting change can be given a reward and has a strong impact in the organization. The disadvantage is that it is costly and the change agent may be threatened by other individuals who are very powerful in the organization ( Robbins & Sanghai, 2006).

Manipulation and Co-optation: the former means having impact through hidden means. Here the figures are represented in the wrong way and diverted from truth in order to make them more appealing. Moreover, employees welcome change results from creating false rumours and hiding additional information. Whereas, Co-optation combines both manipulation and participation. It tries to minimize resistance by giving a crucial role to the leaders of resistance in change decision. Manipulation and Co-optation are not very expensive and a good way of getting the support of the people refusing the change (Robbins & Sanghai, 2006).

Coercion: this means to threat directly or force the people against the change in order to accept it. When all other techniques fail, Coercion should be applied. There are many examples of Coercion such as not giving promotions, transferring employees who are resisting change, and threats to close down the manufacturing factory (Robbins & Sanghai, 2006).

Creation of a learning organization: this is ideal because it has the capacity, elasticity and flexibility to change. Concerning learning organization, employees make suggestions and participate in change decisions (Vancevich, Konopaske, & Matteson, 2005).

In the industry, any organization can become a learning system that can flourish on change. To set aside old ways of thinking and reduce the resistance to change may become a habit, especially for those organizations who want to become a learning organization. "An increasing number of organizations are appointing Chief Learning Officers to facilitate the process of becoming learning Organization" (Vancevich, Konopaske, & Matteson, 2005).


Change management is extremely important to the survival and development of organizations. The more a company handle change effectively, the more likely it is to thrive. However, most individuals do not like change because they do not like being changed. When change comes to an organization, resistance to that change and fear follow despite its obvious benefits.


- Hughes, M. (2006). Change Management. London: Chartered Institute Of Personnel

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- Judith Richardson, M. (2002). FrugalMarketing.Inc. Retrieved may14th, 2009, from

- Robbins, S., & Sanghai, S. (2006). Organization Behavior (11th ed.). Delhi: Prentice


- Straker, D. (n.d.). sign_resistance.htm. Retrieved April 28, 2009, from Changing


- Vancevich, J. M., Konopaske, R., & Matteson, M. T. (2005). Organizational

Behavior & Management (7th ed.). Singapore: Mc Graw-Hill Companies, Inc.

- Kotellnikov, V. (n.d.). Vadim kotelnikov, GIVIS. Retrieved may 14th, 2009, from guide/crosscuttings/change-