The Factors That Influence Organizational Change Commerce Essay

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1st Jan 1970 Commerce Reference this

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There are different factors which influence organizations change. These factors can be external (technology, Government policies, social pressure, cost of raw material etc) or internal (change leadership, decline in profit, union action etc).in this era of globalization the most commonly seen organizational changes are implementation of new technologies, mergers and downsizing.

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To survive in the market with the increased competition it is very tough for the employees of the organization to accept the change. In this kind of situation the management should ensure the acceptance of change at every level. Change Management is defined as organizations ability to implement and maintain change for the survival. For the survival of the organization change management is the best option.

Figure : Phases of change

If organization is not in a constant phase of change management and continually assessing and adjusting then business may be at best average within its industry. For some organizations this means they may be going backwards and eventually bankrupt. Only those companies can survive which can adapt to changes.

This change management model follows all other change management models and theories. Every organization can be summed up to be a combination of these three elements which includes the structure, the people and the strategy. Any change in any area of an organization will affect at least one or all of these elements.

Figure : Three elements for change

The structure of the system is the process that provides the strategic objectives of organization with physical resources. Change management specialists will review management operating system (MOS) with complete and proper structure.

The people involved in this process are stakeholders, resourced people, and management team. All people involved in this process should be well informed and should pay attention to the right things. They should communicate with each other.

Figure : people involve in change management

To achieve the target for the continued existence of the organization strategy is the best method. Change management provides the guidelines for the growth of the firm.

The Skill of Change Management

Managing change in the workplace while ensuring the operations strategy is on the right path. This can be achieved by the support of people and structure elements towards achieving the organizations corporate strategy.

Phases of Change

Organizational change involves the fear of loss inherent in this process, and this loss is mostly felt by employees. The Kubler Ross Grief Model addresses the emotional issues associated with change. The four emotional states experienced throughout the change process may be expressed by employees in behaviors that are obstacles to the process of change. This model consists of four stages given below:


The first emotional state during change is denial. This is the stage in which employees don't believe this is happening to them. They have certain fears and these fears should be addressed during this phase. This fear can be reduced by taking them in confidence. Fear and mistrust need to be replaced by acceptance.

Resistances to change

The second emotional state is resistance to the change process. Resistance is natural reaction to change. Eric B. Dent and Susan Galloway Goldberg (1999) gave the idea that managers and leaders of the organization must reduce the resistance to compete with other organizations. Kurt Lewin, the social psychologist, introduced the term "resistance to change" as a systems. As we know that people of any organization are generally resistant to change. According to Scott & Jaffe 'resistance is a stage that ends as individuals begin to separate from the past & become more confident of their capability. They play their role by their participation to reduce resistance to change'. For example, competition might force a business to organize work around processes to improve operating efficiencies. Functional departments involved in these processes would be combined. Employees might not see a need for this change. The reasons for change must be fully explained so that employees understand why it is necessary to embrace the change. Chew (1990) studied the case of Machinists' Mutiny. In his study he revealed that due to poor planning and implementation the change is stopped due to employee resistance. This article also includes expert opinions that organization should adopt so they have better implementation of change

For the implementation and maintain change satisfaction of the people is very important. The response to resistance is very important. Forcing compliance may increase resistance. Those affected by the change probably know a lot about what is required to implement something new, and their input is important to the change process. The degree to which employees will support your new initiatives depends on how many of their recommendations are used.


The third emotional state encountered is exploration. employees will search new roles if they are incapable to stop the changes. In this stage both individual role as well as the group role are defined. it is important that unresolved issues that continue to surface be addressed during this stage. One should be ready for the negative reaction of the employee. Those individuals should be warned at the first sign of falling back to old behaviors. This negative reaction can be changed to the positive if trust can be created among groups.


The final emotional state is commitment to the change initiative. Mutual commitment is established for the change effort. Obstacles have been removed and the focus is on successful implementation of the changes.

Models of the change process

After years of failed change efforts, researchers are saying that knowledge of the change process is critical. To thrive we need to know successful change during and before the change process. There are five most popular models of the change process(Lewin's three-step change model, Kotter's eight-step plan, Harris's five-phase model, Fullan's change themes set, and Greiner's six-phase process).But in this report we will discuss only two of them.

Lewin's Three-Step Change Model

Change involves a sequence of organizational processes that occurs over time. Lewin (1951) suggests this three step process. These steps mostly involve reducing the forces acting to keep the organization in its current condition.

Figure : Three step model


This is the first step which is accomplished by introducing new information that points out failure in the current state. Crises often arouse unfreezing. This crisis can be due to increase in employee, demographic shifts, and an unexpected strike. This is not necessary that during unfreezing crisis always occur. For determining problem creating zones in organizations financial data, climate analysis and enrollment projections can be used.


Once the organization is unfrozen, it can be changed by moving. This step generally involves the change in structure, development of new standards, attitudes, and behaviors. Some changes may be minor and involve a few members.


The final step is refreezing which involves stabilizing the change. In this step mostly the changes in organizations policy, organizational culture, or modification in organizational structure often accomplishes. (Fred C. Lunenburg, 2010)

Kotter's Eight-Step Model

John Kotter (1996) of Harvard University developed a more detailed model for managing change which was based on Lewin's three-step change model. The steps involved in this model are given below.

Establish a sense of urgency: Unfreeze the organization by creating a convincing reason for change.

Create the guiding coalition: Create a cross-functional, cross-level group of people with enough power to lead the change.

Develop a vision and strategy: Create a idea and strategic plan which leads to the change process.

Communicate the change vision: Produce and implement a communication strategy with the employees about the new ideas and strategic plan.

Empower broad-based action: Eliminate barriers to change, and use target elements of change to transform the organization. Encourage risk taking and creative problem solving.

Generate short-term wins: Plan for and create short-term "wins" or improvements. Recognize and reward people who contribute to the wins.

Consolidate gains and produce: The guiding coalition uses credibility from short-term wins to create more change. Additional people are brought into the change process as change cascades throughout the organization. Attempts are made to reinvigorate the change process.

Anchor new approaches in the culture: Reinforce the changes by highlighting connections between new behaviors and processes and organizational success. Develop methods to ensure leadership development and succession.

Types of Change

Change can be categorized into four categories, structural change, cost change, process change, and cultural change.

As the organizational structure of the company changes the structural change takes place. This change in structure is due to the merger of the company. The improvement in the organization can be achieved by changing its long established structure into more flexible form. This can be done by small teams.

In order to improve performance and efficiency by reducing cost, cost changes are the best option. This can be done by reducing budget, reducing unnecessary activities and by shifting employees according to the need.

Process changes are applied in the organization to improve the efficiency. This change takes place in production department where these products are formed, packed and shipped.

Cultural changes are the least substantial of all the types of change. If an organization tries to adopt a more participative style this requires a shift in many organizational activities. Mainly the relation of employees and mangers suffer with the change in culture

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The proper implementation is based on number of steps. The first step in implementing change involves people of higher management and executives. For instance, an organization wants to install new system of computers in its areas. Then they major personal are not only top management but managers with lower ranked will supervise the employees for the use of the new technology. In cost cutting change different personals are involved. If a company wants to reduce its budget in a particular department then the managers of that department should be involved in cutting the cost. As the important personnel have been identified, the second step involved is implementing change properly. For the implementation of the change the successful change in plan is required. This plan defines the responsibilities of the key personals.

The third step in implementing change. This change supports the plan. Implementation involves the management. This key step involves facilitating employees to accept the change. The organization should provide the basic support to the employees like training, reward system etc. if organization does not provide this kind of support there are chance for the failure of the plan

Change process is the final step of booming change implementation. Communicating with the employee about the change and its importance will be very helpful through out the process. As we know that change can create fear in employees and to relax them increased communication can help a lot. Managers should carefully listen to all their question and their advises to overcome their fear. Creating opportunities for employee like giving them positive feedback or holding meetings may facilitate change more successfully. (Wendy H. Mason ,2003)

Abrahamson (2000) gave the view of "Change without Pain". The main theme in this article was change must take place, but change does not always have to be disturbing to the organization. The author calls this "tinkering and kludging. By placing small changes between large changes, companies can manage change through active stability. The goal of dynamic stability is to create a change which can be sustained long term, not just in the short term. To achieve dynamic stability the big and small changes must be done at the right time, at the right pace and the organization must "tinker and kludge". "Tinkering" is taking a current process and making small changes to it. This is done at a low cost to the company and the results are often very quick. "Kludging", on the other hand, is tinkering but on a larger scale. "Kludging" looks at outside resources for improved parts or processes and looks at the unused resources within the company. Many companies do not realize they have resources not being used because the processes using the resources are to slow to fully utilize the capacity of the resource.


This case study was based on a company called Trail Manufacturing which produces cable crane components. This study was done by Chew(1990).The company was a mid-sized company set up to run high volume jobs on manual equipment. But with today's economy and competition, Trail determined the best money was in low volume jobs. The President of Trail decided to bring in new technology to replace the old machines. He researched the new machines and decided to bring in eight flexible manufacturing cells which would replace twenty-eight old six-spindle screw machines. Since this was new technology and training would be needed a plan was laid out to set up teams, one for each cell, and the company would phase in the new machines. Each team would be trained and then they would construct and run their own cell. Once one cell was on-line a new cell team would start up until all eight cells were on-line. The first five teams went through the process fine, but at team six the company had a problem. Team six consisted of men who had been at the company many years. The team went to the president and told him they refused to switch over to the new machines. They felt the old machines were running fine and the new machines did not show the expected improvements, so they wanted to continue working on three six-spindle screw machines. At this point the president had to determine if he wanted to keep going with the project or alter it to keep some of the old machines. Some management personnel felt that if the new cells were going to work, a clean break had to be made from the old machines. Others felt that since the productivity gains were not being seen yet by the new cells, the possibility of keeping the old machines for a short time might be a good idea. The case ends without a decision being made by the company. Four experts in operations management give their opinions on the situation. Only one out of the four said the company should continue on with the original plan and if the members of team six leave the company then it is the price to be paid for progress. The other three are quick to point out the president made a wrong assumption in the planning. He assumed that by bringing in new technology productivity would improve. This is a wrong assumption because technology is only as good as the company and how the company works. One of the experts points out "truly understanding how the whole system plays together, and not just implementing the latest technique, means bridging the gap between the emotional and the technical. The president did not see that by bringing in new technology it would change the culture of the shop floor. Men who had years of experience on the old machines and were in seniority would be at the same level or lower than the younger more computer literate employees. This would be a big culture change for the employees. Most of the experts suggested slowing down the remainder of the cell startups and specifically addressing the concerns of the men on team six. If team six's concerns are not addressed there could be more problems with the rest of the teams. This article showed a good picture of how a company has to go about major changes, especially ones affecting the culture of the company. The expert opinions enhanced the article and I would highly recommend this article because it is an example of a case that is played out in companies all over.


Today change is the necessary for carrying business and survival of the organization. Organization or firms should under go change with the passage of time otherwise will survive. This change along its success also brings fear of employees. This leads to resistance to change. In this situation top management and leadership can play a vital role. The success of the organization depends on management team that how efficiently they resolve the issue. They can take help by reviewing past model of change and replacing them with new ideas. The good communication process is very important for the smooth process of change.


Following are some recommendations.

Managers should improve their interpersonal and communication skills so that they could help their staff overcome the pains associated with change.

Tell people the truth and give as much information as you can. Keep giving information as soon as possible.

Give them time to digest the news.

Give them time to vent there might be anger because this is normal reaction.

Listen to staff and their concerns don't interrupt them so they can reduce their fear.



Abrahamson, E. (2000). "Change Without Pain." Harvard Business Review, 75-79.

Chew, W. (1990). "The Case of the Machinists' Mutiny." Harvard Business Review, 4-8.)

Dent, Eric B., and Susan Galloway Goldberg. "Challenging 'Resistance to Change.'" Journal of Applied Behavioral Science (March 1999): 25.

Fred C. Lunenburg. (2010). "Approaches to Managing Organizational Change." international journal of scholarly academic intellectual diversity volume 12

Kotter, J. P. (1996). Leading change. Cambridge, MA: Harvard Business School Press

Lewin, K. (1951). Field theory in social science. New York, NY: Harper & Row.

Oliver Recklies "Managing Change - Definition und Phases in Change Processes" ""changeHYPERLINK ""_HYPERLINK ""phasesHYPERLINK "".htm. (accessed on 12 of November)

Supreet Ahluwalia and Vivek Joshi (2008)managing Change in an Organization. (accessed on 13 of November)

Wendy H. Mason (2003) "ManagingChange" (accessed on 12 of November) (Accessed on 13 of November)

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