LALA LAJPATRAI COLLEGE OF COMMERCE AND ECONOMICS MAHALAXMI, MUMBAI- 400034.

PROJECT TOPIC:

MANAGEMENT OF CHANGE

SUBMITTED BY: GRISHMA S. KHAJANCHI

PROJECT GUIDE: DR. PURNIMA SHARMA

MASTERS OF COMMERCE PART-I ACADEMIC YEAR 2012-2013

CERTIFICATE

This is to certify that the student of M.COM PART - I, have successfully completed the project titled MANAGEMENT OF CHANGE, for M.COM PART - I, University of Mumbai, under our supervision and is the result of her earnest work. The information given by her in this project is original and true to the best of our knowledge.

Date:

______________ External Examiner Guide

____________ Project

______________ Principal

DECLARATION

I, the student of M.COM PART I of LALA LAJPATRAI COLLEGE of Commerce & Economics hereby declare that the information submitted by me, in this hardcopy on MANAGEMENT OF CHANGE has been done by me, and is true and original to the best of my knowledge.

Name

Roll No

Signature

GRISHMA KHAJANCHI

611

________________

ACKNOWLEDGEMENT

I would sincerely like to thank all those people who have been giving me any kind of assistance in the making of this project report. I express my gratitude to Dr. Purnima Sharma who has through her vast experience and knowledge has given me the moral support and guided me both ably and successfully towards the completion of the project. I hereby make most of the opportunity by expressing my sincerest thanks to all the faculties whose teachings gave me conceptual understanding and clarity of comprehension which ultimately made my job easier. Their continuous support has given me the strength and confidence to complete the project without any difficulty. Last but not the least I would like to acknowledge my gratitude to the respondents without whom this survey would have been incomplete.

INDEX Sr No. 1 2 3 4 5 6 7 PARTICULARS

INTRODUCTION ORGANISATIONAL CHANGE INTERVENTION STRATEGIES FORCES OF CHANGE RESULTS CASE STUDY BIBLIOGRAPHY

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1. INTRODUCTION
Change management is an approach to shifting/transitioning individuals, teams, and organizations from a current state to a desired future state. It is an organizational process aimed at helping change stakeholders to accept and embrace changes in their business environment or individuals in their personal lives.\In some project management contexts, change management refers to a project management process wherein changes to a project are formally introduced and approved. Change management uses basic structures and tools to control any organizational change effort. The goal is to maximize benefits and minimize the change impacts on workers and avoid distractions. Organizations change over time in a variety of ways. There are a number of ways in which they might. 1. From small companies to larger companies - for example, they may grow from being sole trader enterprises to partnerships and then to companies. There are two types of companies: Private companies have access to less capital because their shares are not traded on the Stock Exchange. Public companies like Cadbury Schweppes and Vodafone are substantially larger because they can raise much larger amounts of capital on the Stock Exchange.

2. By a growth process - they can either grow organically by ploughing back profits and owners capital into the business. Alternatively they can borrow external finance, or grow by taking over and merging with other companies.

Other ways in which organisations change are by:

Altering their culture, i.e. changing the typical patterns and behaviours within the organisation e.g. moving from a top-down organisation to a more democratic form.

Becoming more customer or marketing focused as opposed to production oriented. Most organisations today are developing this customer focus.

Altering the scope of their activities e.g. by taking on new activities or by operating in new geographical areas. For example, most large companies today have become global enterprises and they have often reduced the number of brands and products they offer in order to concentrate on powerbrands in global markets.

SLEPT analysis
Organisations typically change in response to the external environment, as well as through the development of competitive strengths within the organisation. External environmental factors include:

Social factors - e.g. changes in demography and consumer buying patterns.

Legal factors - legal pressures that force organisations to change to comply with laws, e.g. by responding toe environmental legislation.

Economic factors - relate to booms and slumps in general economic activity, changes in interest rates, inflation rates etc.

Political factors relate to wider political changes - for example, a government taking a particular line on privatization/the role of the state in society.

Technological factors relate to new developments in technology - e.g. the development of new web based selling methods by companies. On top of the above SLEPT Factors a major influence on the organization is what the competition is doing. A

SLEPT analysis is an analysis of key changes in an organizations environment. It is sometimes referred to as scanning the environment. The management of change is a key aspect of the way in which an organization responds to change in an appropriate way. The emphasis should be on managing the change rather than reacting to change. Kurt Lewin identifies three stages involved in managing change. After identifying the direction of change and how it is to be achieved, you must:1. Unfreeze the existing way of doing things in the organization.

2. Organizational change
Organizational change may be defined as 'the adoption of a new idea or behavior by an organization' (Daft). It is a way of modifying an existing organization. The purpose of undertaking such modifications is to increase organizational effectiveness, that is, the extent to which an organization achieves its objectives. Organizational change is largely structural in nature as it brings about modifications in organizational structure, methods and processes.

The Dilemma of Change 1. Stability Vs. Change: Organizations desire change in order to remain competitive and in harmony with everchanging Environment. Side by side organizations want to achieve internal stability because of the predictability and certainty it provides. What Type of Change? Changes can be seen in varieties of ways, posing another dilemma. 1. Evolutionary Change Vs. Revolutionary Change. 2. Planned Change Vs. Unplanned Change. 3. Proactive Change Vs. Reactive Change Proactive change takes place when some forces to Change lead an organization to conclude that a particular change is desirable. Reactive change occurs when these forces to change make it necessary for a change to be implemented.

Determinants: It may be the identification of an opportunity upon which management wants to capitalize. However it is in anticipation of or reaction to a problem. These opportunities may exist inside or outside the organization. There are numerous factors capable of initiating structural change. Some determinants of structural change: Change in objectives Purchase of new equipment Scarcity of labor Implementation of a sophisticated information- processing system Government regulations

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The economy Unionization Mergers or acquisitions Actions of competitors Decline in employee morale Increase in turnover Sudden internal or external hostility Decline in profits

Who initiates structural change? The Organizational Initiator Change agents are those in power and those who wish either to replace or constrain those in power. They include senior executives, managers of major units, internal staff development specialists, powerful lower level employees. Also includes consultants brought from outside. Change agents are the intermediaries between the forces initiating change and the choice of intervention strategy. Eg: President of Scandinavian Airline

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3 Intervention Strategies
The term intervention strategies are used to describe the choice of means by which the change process takes place. Strategies tend to fall into one of four characteristics: People, structure, technology, and organizational processes.

Structure: includes changes affecting the distribution of authority, allocation of rewards, alterations in chain of command, degree of formalization and addition or deletion of positions , departments and divisions. Technology: encompasses modifications in the equipment that employees use, interdependencies of work activities among employees and changes that affect the interrelationships between employees and technical demands of their jobs. Organizational Processes: The final strategy considers changing organizational processes such as decision making and communicational patterns. Implementation The Change Process Implementation Tactics

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4 FORCES OF CHANGE

Approaches to Managing Change/Change Process 1. Kurt Lewins Three Step Model Successful change in organizations should follow three steps: a) Unfreezing: Change efforts to overcome the pressures of both individual resistance and group conformity. b) Moving: A change process that transforms the organization from the status quo to desired end state. c) Refreezing: Stabilizing a change intervention by balancing driving and restraining forces.
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2.Force Field Analysis: Force Field Analysis is a management technique developed by Kurt Lewin, a pioneer in the field of social sciences, for diagnosing situations. It is useful when looking at the variables involved in planning and implementing a change programme and is undoubtedly be of use in team building projects, when attempting to overcome resistance to change. Driving Forces

Driving forces are those forces affecting a situation that are pushing in a particular direction; they tend to initiate a change and keep it going. In terms of improving productivity in a work group, pressure from a supervisor, incentive earnings, and competition may be examples of driving forces.

Restraining Forces

Restraining forces are forces acting to restrain or decrease the driving forces. Apathy, hostility, and poor maintenance of equipment may be examples of restraining forces against increased production. Equilibrium is reached when the sum of the driving forces equals the sum of the restraining forces.

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Burke-Litwin Model of Organizational Change: This model shows how to create first order and second order Change (transactional change and transformational change ). First Order Change : some features of the organization change but fundamental features remain same. First Order change goes by many different labels: transactional, evolutionary, adaptive, incremental or continuous change. Change in organizations structure, management practices, systems(policies and procedures)

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 Second Order Change: Nature of the organization is fundamentally and substantially altered-the organization is transformed. Second Order Change goes by many different labels: transformational, revolutionary, radical or discontinuous change. Change in mission and strategy, leadership and organizational culture The model distinguishes between Transactional leadership and Transformational leadership styles.

Transactional leadership Style

Transactional leaders guide/motivate their followers in the direction of established goals by clarifying role and task requirements. Transactional leadership is sufficient for causing first-order change.

Transformational Leadership Style

Transformational leaders inspire followers to transcend their own self interest for the good of the organization and who are capable of having a profound and extraordinary effect on their followers. This leadership is required for causing second-order change.

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Implementation Tactics
Four Tactics i.e. change agents use are intervention, participation, persuasion, and edict. Intervention tactic is characterized by change agents selling their change rationale to those who will be affected. Participation, change agents delegate the implementation decision to those who will be affected. The internal or external experts then use persuasion to sell their ideas. Top management avoid any participation and told those effected what the change would be. This is called implementation by edict.

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5 Results

It shows the organizational effectiveness. Whether it is positive, negative, temporary, or , permanent depends on the earlier steps.

Need for change is continuous, hence the feedback loop. Therefore change is never at rest.

Sources of Resistance to Change

1.Individual Sources: Habit Security Economic factors Fear of the unknown. Selective information processing. 2. Organizational Sources Structural inertia Limited focus of change Group inertia Threat to expertise Threats to established power relationships Threats to established resource allocations

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Managing Resistance
Education and commitment Participation Building support and commitment Negotiation Manipulation and cooptation Selecting people who accept change Coercion

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6 CASE STUDY
L&T Infotech's change team addressed the dual nature of change - Process and People to ensure a smooth transition to the desired stage

The Client Client is USD 50 million Food Processing company established in 1970 and involved in General Catering, Ready to Eat Catering, Private Labeling and Industrial Products.

The Challenge The client required a highly integrated system with good business security sensitivity, to handle anticipated business growth. As part of the transformation program it was proposed to undertake SAP R/3 full life cycle implementation including FI/CO, SD, MM, PP, QM, PM, HR, BASIS & ABAP development. In order to prepare for Process/ Practice Change due to SAP R/3 Implementation, a Change Management Program was conducted for the Executives and the Top Management.

The Solution Change Team provided a customized program to executives and leaders, to ensure that they take ownership of the changes and set an example to the rest of the organization in driving home the desired benefits. A communication charter was prepared with the mission that the Change Team will provide consistent information tailored to the specific needs of the stakeholder groups. As a result, stakeholders will be able to embrace the proposed changes

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The Benefits

The Change team Minimized Project Risks, Accelerating Project Benefits and Optimizing current & future processes and structures

The Change Team provided consistent information tailored to the specific needs of the stakeholder groups. As a result stakeholders were able to embrace the proposed changes

The exact roles for important functions (e.g. Demand Planner & MRP Controller) were first ascertained and then necessary training was imparted.

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7 BIBLIOGRAPHY

http://en.wikipedia.org/wiki/Change_management#References

http://books.google.com/books?id=WbpH7p5qQ88C&printsec=frontcover&dq=beyond+chan ge+management&hl=en&sa=X&ei=kEfzTpewMYKpiQLGz5S8Dg&ved=0CD0Q6AEwAA# v=onepage&q=beyond%20change%20management&f=false

http://www.slideshare.net/wikipediaCM/cm-consultantnews

http://onlinelibrary.wiley.com/doi/10.1002/hrm.3930220125/abstract

http://www.businessballs.com/changemanagement.html

http://searchcio-midmarket.techtarget.com/definition/change-management

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