topic 10 leading and managing change

8/10/2019 Topic 10 Leading and Managing Change

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INTRODUCTION

Managing change can be organised into several major activities. Organisationalleaders must give full attendance to these activities when planning andimplementing change. Cummings and his colleagues described the five majoractivities contributing to effective change management are motivating change,creating a vision, developing political support for change, managing thetransition, and sustaining momentum (Cummings & Worley, 2005; Waddell,Cummings, & Worley, 2004).

The first activity is motivating change, that is, how to obtain employeecommitment to organisational change. It involves creating a readiness andmomentum for change among the employees. Motivation is needed to start thechange because people are not willing to change unless there are strong reasonsto do so. The second activity is creating a vision for change, which is a keyleadership task. The vision provides a reason for change and indicates the future

By the end of this topic, you should be able to:

1. Explain the critical change leadership roles;

2. Identify the skills, characteristics and attributes for effective changeleadership;

3. Describe the types of power used to influence change;

4. Explain why people resist change; and

5. Determine the ways to overcome resistance to change.

LEARNING OUTCOMES

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TOPIC 10 LEADING AND MANAGING CHANGE 137

state that an organisation aims to achieve. The third activity is developingpolitical support for change. There are powerful individuals who can eitherhinder or promote change and their support is needed to implement change. The

fourth activity is managing the transition from the present state to the desiredfuture state. It includes making a road map for change and developing neededstructures for managing the change process. Lastly, the fifth activity involvessustaining momentum for change so that it will be carried out to completion.Providing resources and support for change, reinforcing new behaviour andstaying the course are needed to sustain the change momentum.

The focus of this topic is on leading and managing organisational change. Itexplores several key dimensions of change leadership change leadership roles,effective change leadership attributes, the use of power to influence change,resistance to change and overcoming resistance to change. They are importantelements in supporting the activities contributing to effective change menagement.

CRITICAL CHANGE LEADERSHIP ROLES

In managing and leading change effectively, leaders are required to perform anumber of critical roles (Graetz, et al. , 2006):

(a) Energising and Instilling a Readiness for ChangeThe first key role of the leader in managing change is to energise and instill

the workforce into a state of readiness for change. The leader needs tocreate a sense of urgency, or a felt need for change, among the organisationmembers. This involves making employees see what is wrong with theorganisation to stimulate unrest and dissatisfaction with the status quo.Dissatisfaction with the current state would motivate employees to try newways of behaving, work methods and technologies.

Creating dissatisfaction or a sense of urgency can be difficult. Generally,people will seriously undertake change after experiencing deep levels ofhurt. For example, IBM, General Motors (GM) and Sears (a US departmental

store) experienced threats to their very survival before they undertooksignificant organisational change. Effective strategies for instilling a readinessfor change include:

(i) Seek outside opinion to identify problems and to assess the need forchange.

(ii) Benchmark against successful companies to identify the gap betweenwhere the organisation is currently and where it could be.

(iii) Appoint a new leader to provide a powerful catalyst for change.

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TOPIC 10 LEADING AND MANAGING CHANGE138

(iv) Sensitise the organisation to pressures for change both externally andinternally to the organisation. External pressure for change includefierce competition, globalisation and rapid changing technologies and

customer demands. Internal pressure for change include highproduction costs, poor product quality, and excessive employeeturnover. These pressures serve as triggers for change.

(v) Reveal discrepancies between the organisations current state offunctioning and the future desired state of operations. Feedback onfailure to achieve organisational goals can motivate actions toimprove the organisation.

(vi) Convey positive expectations about the change to the organisationmembers. When members believe that positive outcomes result from

the change, they are more likely to be motivated and committed to thechange process.

(b) Envisioning the Desired Future and Setting the DirectionA primary role of change leadership is to develop a shared vision. A visiongives meaning and structure to the change efforts. Generally, a vision hasthe following functions:

(i) It describes the purpose that guide the organisation.

(ii) It serves as an envisioned future toward which change is directed.

(iii) It reflects why change is needed and is worth the effort.

(iv) It provides employees with a common goal in making changes.

(v) It provides a direction for designing organisational changes.

(c) Demonstrating Commitment and InvolvementSuccessful leaders recognise that change must be everyones business; andthey strive to inspire others with their enthusiasm, commitment andinvolvement. Successful implementation of change occurs in organisationswhere leaders walk the talk and teach new behaviour by example. Theability of the leader to build relationships with people inside and outsidethe organisation is vital to the success of any change effort. In addition, theleader builds trust and confidence by engaging in open communicationwith organisation members. Communication is about informing andsharing information at all levels of the organisation in the change processand providing feedback about the change results. Hence, opencommunciation by the leader is an effective mechanism in demonstratingtheir commitment and involvement to organisational changes.


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ATTRIBUTES FOR EFFECTIVE CHANGELEADERSHIP

Managing change is a multi-disciplinary activity. Leading and managing changerequires leaders to possess a wide range of skills and knowledge (Graetz, et al. ,2006). For example:

(a) Communications and listening skills are essential.

(b) The abilty to maintain motivation is a must.

(c) Negotiation and influencial skills are invaluable.

(d) The ability to facilitate change activities is crucial.

(e) Knowldge of the rationale for change is essential.

The list of competencies, or attributes, for effective change leadership could befurther categorised and extended as shown in Table 10.1.

Table 10 1: Attributes for Effective Change Leadership

Strong Image and Belief in Oneself

Self-confidence;

Ability to draw others to a vision;

Ability to take decisive action; and

Awareness of own strengths and weaknesses.

High Energy Levels

A passion for the job;

Being energetic and focused; and

Contagious enthusiasm and involvement.

A Love for People

Belief in, and sensitivity to, followers;

Genuine interest in followers needs, concerns and views;

Behave as a friend; and

Theory Y leaders: subordinates who are capable and willing to work to their potentialand take on responsibilities.

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Functional Competence

Knowledge, experience and credibility that are key factors in gaining support and

commitment of others for the change effort.Knowledge of the Organisation

An understanding of the operational context: the organisations culture and history,including the background and personalities of key individuals who may help orhinder the change process.

Strong Drive

Ambition; desire to make an impact; and

Challenge status quo: strong sense of self-control, purpose and competence.

Adapted from: Graetz, F., Rimmer, M., Lawrence, A., & Smith, A. (2006).Managing organisational change. Milton Qld: John Wiley & Sons Australia, Ltd

Note that effective change leadership requires strong interpersonal skills and ahigh degree of emotional intelligence. Change leaders need a high level of energyto build networks and to motivate and involve as many people as possible in thechange process. Table 10.1 above also underlines that change leaders need tohave sound knowledge of the history and workings of the organisation and ofthe personalities that have contributed to its identity. This knowledge can beinvaluable in detemining forces for and against change in the organisation.

Provide a list of attributes for effective change leadership.

SELF-CHECK 10.2

Identify a change agent from your organisation and determine thecompetencies of this person.

ACTIVITY 10.2


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THE USE OF POWER TO INFLUENCECHANGE

To understand how leaders manage change, we need to look at the sources ofpower and how leaders use their power to influence change. There are manysources of power within an organisation. The power of a change leader maycome from the position held, from the possession of scarce resources orinformation, or from expertise. A leader who has certain power will learn howand whom to influence to achieve his or her objectives. Where do individualorganisation members get their power from? George and Jones (2005)distinguished between two types of individual power formal and informal.

When individuals accept a position in an organisation, they accept the formalduties and responsibilities associated with the position. In return, theorganisation gives them formal authority to use organisational resources toaccomplish the duties and responsibilities. The types of formal individual powerinclude legitimate power, reward power, coercive power and information power.

In addition to the individuals formal position in an organisation, power alsocomes from a persons characteristics, skills and knowledge. Power stemmingfrom personal qualities is informal individual power. The types of informalindividual power include expert, referent and charismatic power.

Table 10. 2 describes the sources of both formal and informal individual power.

Informal individual power is the power that stems from personalcharacteristics such as personality, skills and capabilities (George & Jones,2005, p. 411).

Formal individual poweris the power that originates from a persons positionin an organisation (George & Jones, 2005, p. 409).

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Table 10 2:Sources of Formal and Informal Individual Power

Formal Individual Power Informal Individual Power

Legitimate Power

The power to control and useorganisational resources to accomplishorganisational goals.

Example: Subordinates must complywith the directives given by thesupervisors.

Expert Power

Informal power that stems fromsuperior ability or expertise inperforming a task or in a particularfield.

Example: IT managers have expertpower in IT communications andtechnologies.

Reward Power

The power to give pay raises,incentives, bonues, promotions, prasies,recognitions, interesting jobassignments, and other rewards tosubordinates.

Example: Managers decide on theamount of pay increment upon yearlyperformance appraisal.

Referent Power

People who gain power and influencebecause they are liked, admired orrespected, are said to possess referentpower.

People with referent power are likedjust because of who they are.

Example: Subordinates tend to listen tomanagers with pleasant personalitiesand respectable traits.

Coercive Power

The power to give or withholdpunishment.

Punishments range from suspension todemotion, termination, unpleasant joblocation, or even the withholding ofpraise and financial rewards.

Example: Supervisors issue warningletters to subordinates for failure tocomply with orders.

Charismatic Power

Charismatic power is an intense formof referent power that originates froman individuals personality, physical, orother abilities that induces others tobelieve in and follow that person.

Example: Domenico De Sole and TomFord not only possess expert power,but they also gained charismatic power

because of their ability to turn Gucciaround and restore its position as aleading fashion house. Other examplesinclude Bill Gates at Microsoft and thelate Steve Jobs at Apple.


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Information Power

The power that stems from access to

and control over importantinformation.

The more information a managerpossesses, the greater is thesubordinates dependence on themanager.

Example: Marketing research managerspossess critical customer informationwhich may be much needed forpromotion and production purposes.

Source:George & Jones (2005)

RESISTANCE TO CHANGE

Very often organisation members resist change. Why do people resist change?

The reason may be that they fear the unknown and uncertainties. Generally,people are comfortable with the familiar and try to minimise changes. Individualsources of resistance to changecome in various forms. Robbins (2003) describedseveral reasons why people resist change:

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Identify the sources of power within an organisation.

SELF-CHECK 10.3

What kind of power do you have given your position in the organisation?Identify the sources of your power.

ACTIVITY 10.3


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(a) HabitHuman beings are creatures of habit. We rely on habits when we deal withour daily lives. We are accustomed to behave in a certain way. When we are

confronted with changes, we will respond in our accustomed ways and thisbecomes a source of resistance. Just imagine what will happen when thereis a relocation of office. Relocation means we are likely to have to changemany habits waking up earlier, taking a new route to work, finding a newparking space, adjusting to the new office environment and workingconditions, developing a new lunch time routine, and so on.

(b) SecurityPeople with a high need for security and safety are likely to resist change,

because change threatens their sense of security. When there is an

introduction of new systems to streamline business processes, these peopleare concerned that their existing position and power will be lost.

(c) Economic Factors

A reason for resistance to change is financially related. Employees areconcerned that changes will lower their incomes. Job-related changes canarouse economic fears if employees are afraid that they wont be able toperform the new tasks, especially when pay is closely tied to theirperformance.

(d) Fear of the UnknownChanges give rise to the unknown and uncertainties. People will resistchange when they do not know about the consequences or outcomes of thechange. People are more likely to resist change if they do not know thereasons for a change and its impact on them.

(e) Low Tolerance for ChangePeople vary in their abilities to cope with change. Some people just cant takerisks associated with new changes. A change with unknown consequencescan be very threatening to people with a low tolerance of ambiguity.

(f) Selective Information ProcessingIndividuals shape their world through their perceptions and experiences.Once they have created their own world, they are reluctant to change it.This becomes a resistant to change. They tend to process informationselectively to keep their world and perceptions intact. They hear what theywant to hear, and they see what they want to see. They ignore informationthat challenges the world they have created.


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(g) Misunderstanding and Lack of TrustPeople will resist change if they misunderstand what the change is allabout. In addition, they resist change when there is a lack of trust in the

change agent. This will result in selective perceptions about what thechange agent says.

Resistance to change is inevitable. It is a natural reaction to change and part ofthe process of adaptation. Organisations just have to recognise the sources ofresistance to change and overcome them by some means. The following sectiondescribes several means to overcome resistance to change.

OVERCOMING RESISTANCE TO CHANGE

Resistance to change occurs at all levels of an organisation. Since resistance tochange is inevitable, leaders should plan ways to deal with it early in the change

process. Tactics that leaders can use to reduce resistance to change includecommunication and education, participation and empowerment, facilitation andsupport, bargaining and negotiation, manipulation and cooptation and coercion(Robbins, 2003).

(a) Communication and EducationFrequent communication and providing education to employees areessential for any organisational change. McShane and Von Glinow (2009)stated that communication improves the change process in at least threeways. First, leaders develop an urgency to change by candidly telling

employees about the driving forces for change. Second, communicationreduces fear of the unknown. Third, communication educates employeesand help them see the logic of a change. One of the most commonimpediments to change is uncertainty about what is going to happen.

Through communication and education, the leader can inform organisationmembers about the change and how it will affect them. Communication can

be achieved through formal group meetings, memos, one-to-one discussions,oral presentations, e-mails, video-conferencing and reports. Education andtraining on change management will reduce resistance to change.

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Can you think of any other reasons why people resist to change? List allthe possible reasons why people resist to change.

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(b) Participation and EmpowermentEmployee involvement has become a popular method of overcomingresistance to change. Employees will accept a change decision in which they

participated. Rather than viewing themselves as agents of someone elsesdecision, employees prefer to own part of the decision and be personallyresponsible for the decision outcomes. Employee participation can reduceresistance, minimise fear of the unknown, obtain acceptance andcommitment and increase the quality of the change decision.

(c) Facilitation and SupportOrganisational change is a stressful experience for many employees

because it creates uncertainty, alters established tasks and role relationshipsand threatens self-esteem. Leaders can offer a range of supportive efforts to

reduce resistance. When employees fear and anxiety are high, stressmanagement, employee counseling and therapy, new-skills training, ortime off from work may facilitate the adjustment. Stress managementreduces resistance to change by increasing the employees ability to copewith the unknown and their motivation to support the change process.

(d) Bargaining and NegotiationBargaining and negotiation are important tactics that help leaders influenceothers and manage conflict. Bargaining and negotiation can counterresistance to change by offering incentives and benefits to actual orpotential resistors in exchange for assurance that the change will not be

blocked.

Negotiation uses formal bargaining to win acceptance and approval of adesired change. It is a more formal means of achieving cooperation. Forexample, if the customer service department fears losing power if a newmanagement structure is implemented, leaders may negotiate with thedepartment to reach a resolution.

Formal negotiation may be needed to deal with unions in accepting change.Companies that have strong unions formally negotiate change with theunions. The change may become part of the union contract reflecting theagreement of both parties.

(e) Manipulation and CooptationManipulation refers to covert attempts to influence others (Robbins, 2003, p.563). Examples of manipulation are providing selective information,twisting or distorting facts, withholding damaging information andcreating false rumours. If leaders threaten to punish employees when they


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refuse the change and if the threat is untrue, this is manipulation. Thesecovert attempts aim to get organisation members to accept the change.

Cooptation, on the other hand, is a form of both manipulation andparticipation (Robbins, 2003, p. 563). It seeks to buy off the leaders of aresistance group by giving them a key role in the change decision. Theleaders advice is sought to gain their endorsement and support, not to seeka better decision.

Manipulation and cooptation are inexpensive and easy ways to gain thesupport of adversaries. But these tactics can backfire when employees feelthat they have been tricked or cheated. The leaders or the change agentscredibility may drop to zero.

(f) Selecting People Who Accept ChangeThe ability to adapt to change may be related to personality. Some peoplehave more positive attitudes and are more readily accepting of change thanothers. People who cope better with change may have these characteristics:open to experience, positive attitude towards change, willing to take risks,flexible in their behaviour, high in risk tolerance and open-minded. Leaderscan facilitate the change process and reduce resistance to change byselecting employees who score high on these characteristics.

(g) Implementing Changes FairlyAs mentioned previously, most people do not like change and tend to reactnegatively towards change. One way leaders can mimimise this negativereaction of change is to make sure that the change is implemented fairly.Procedural fairness becomes especially important when employees perceivean outcome as negative. It is crucial for the leaders to ensure that employeesperceive the changes are being implemented consistently and fairly.

(h) CoercionLeaders may inform employees that they do not have a choice in the matterand that they must accept the change. Coercion applies when people arethreatened with negative incentives such as unwanted transfers, denial ofpromotion and pay increment, negative performance evaluations and poorrecommendation if they do not accept a change. Most people resentcoercion, and its use will harm relationships. Hence, coercion should only

be used when there is no other alternative to reduce resistance.


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In conclusion, there are a number of key considerations in overcoming resistanceto change. Firstly, organisation members must understand the reason for change.An understanding of the required change facilitates the acceptance of change.

Secondly, the more involved people are in the planning and implementing of thechange, the higher the likelihood of success. Employees will be more committedto the change when they are part of the decision-making process. Finally,ongoing communication is the key to the success of any change programme.There is never over communication in managing organisational change.Communication can educate and prepare people in a way that reduces fear,anxiety, and uncertainty. Anticipating and overcoming resistance to change willgive leaders a major advantage in managing change.

The five major activities contributing to an effective change management are

motivating change, creating a vision, developing political support for change,managing the transition and sustaining momentum.

The four critical leadership roles in managing change are energising andinstilling a readiness for change, setting a vision, demonstrating commitmentand sustaining the momentum for change.

Attributes for an effective leadership include self-confidence, high energylevels, a love of people, competence in gaining support and commitment ofothers for the change effort, knowledge of the organisation and a strong drive

for change.

Types of formal individual power include legitimate power, reward power,coercive power and information power.

Types of informal individual power include expert, referent, and charismaticpower.

If you were the change agent, suggest how you would overcome resistanceto change.

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Individual sources of resistance to change include habits, security, economicfactors, fear of the unknown, low tolerance for change, selective informationprocessing and misunderstanding and lack of trust.

Tactics that managers can use to reduce resistance to change includeeducation and communication, participation and empowerment, facilitationand support, bargaining and negotiation, manipulation and cooptation,selecting people who accept change, implementing changes fairly andcoercion.

Attributes for change leadership

Formal individual power

Informal individual power

Institutionalise change

Open communication

Readiness for change

Resistance to change

Shared vision

Sources of power

Cummings, T. G., & Worley, C. G. (2005). Organization development & change.Mason, Ohio: South-Western Thomson.

George, J. M., and Jones, G. R. (2005). Understanding and managingorganizational behavior(4th ed.). New Jersey: Prentice Hall.

Graetz, F., Rimmer, M., Lawrence, A., & Smith, A. (2006). Managingorganisational change. Milton Qld: John Wiley & Sons Australia, Ltd.

McShane S. L., and Von Glinow, M. A. (2009). Organizational behavior(4th ed.).New York: Mcgraw-Hill.

Robbins, S. P. (2003). Organizational Behavior(10th ed.). Upper Saddle River, NJ:Prentice Hall.

Waddell, D. M., Cummings, T. G., & Worley, C. G. (2004). Organisationdevelopment and change(2nd ed.). Thomson.

topic 10 leading and managing change

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