Management and Leadership

 MBA Intake 20 Gikondo

 Dr Eugenie BYUKUSENGE

 College of Business and Economics

 UNIT 3: LEADING CHANGE
Learning outcomes:

Having successfully completed this unit , you should be able

to:
Explain the importance of change and types of

change

Discuss the causes of resistance to change

Describe different approaches to implement

successfully change
 Cont’d
This unit focuses on the critical challenges faced by
organizations in implementing change. In considering how
change leadership can be developed, it is important to
consider the emerging changes impacting
organizational life in more detail. In particular, it is relevant
to reflect on:
 the drivers of and difficulties associated with change;

 the differing types of change;

experience of organizations in implementing change and

lessons which may be learned;

 developing an understanding of what works and what does

not work in implementing change.

3.1 Why change is so important and difficult?

The external environment is increasing in its complexity and volatility and

by extension this becomes a significant driver within organizations. This is
not to say that all organizational change is reactive. The environment
establishes a broad context; much organizational change represents either
a response to this changing context or an anticipation of future contextual
changes. In broad terms, there is much agreement that the main
contextual change drivers are:
 Increasing levels of competition: The competitive landscape is
impacted by changes in entrants to the market as well as changes
in consumer demands and expectations.
 Investor and stakeholder demands: In the private sector,
investors’ demands for improved performance and returns are a
frequent driver of organizational change. The relatively recent
emergence of the impact of private equity funds has, to a
significant extent, increased this driver for change. At the same
time, in the public sector , demands from both service users and
government create pressures for organizational change.
Cont’d
 Globalization: The emergence of a global economy gives rise not only to
changing competition but also to challenges relating to working across
cultural boundaries and managing culturally diverse workforces often in
diverse locations. In broad terms, this places pressures on organizations to
change ways of working, leading and developing their business.
 Changing nature of the workforce: Whilst the process of globalization
leads to greater workforce diversity, organizations are also faced with a
workforce with different values, expectations and communication media
usage. ‘Traditional’ ways of leading and managing are no longer acceptable
to many employees. Increasingly, organizations are struggling with ways of
securing employee commitment and attracting and retaining key talent. This
creates significant pressures to change and develop appropriate leadership
behaviors, human resource systems and ways to share knowledge.
 Technology: Few of us have not been touched by the ever-advancing pace
of technological developments. Such developments create conditions which
demand organizational changes in terms of finance, production, marketing,
work processes communication and even location (both of business units
and employees).
Cont’d
 Legal and regulation: It is a paradox that as business acts globally
and requires flexibility in order to respond to the challenges of a local
and global market- place, they are faced with an increasing level of
legal interventions and regulation. Whilst the details vary from country
to country, there are also changes which have global effects.

 Societal changes: Broader societal developments can lead to

significant pressures on organizations to change their business
practices and ways of working. The current concerns relating to ‘global
warming’ are leading to pressures for change to both public and private
sector organizations, through corporate social responsibility agendas,
clean and energy efficient technologies, social entrepreneurship and
not-for-profit agencies.
These change drivers create an organizational context in a way which leads to
ever-increasing levels of complexity. In addition, there is a growing recognition
that in order to achieve longer term viability, organizations need to become
more flexible, adaptive and innovative.
3.2 Types of change

Many interventions in organizations are described as

changes. However, in reality it is important to understand
that there are different types of change, each of which
presents differing challenges and may require differing
approaches. One way of characterizing types of changes is
essentially based on the extent or degree of change being
considered. Three broad categories may be identified.
These are:
Cont’d
1. Developmental change can be either planned or emergent; it
tends to be incremental. It is change that enhances or corrects existing
aspects of an organization, often focusing on the improvement of a
skill or process.

2. Transitional change is intended to achieve a known desired state

that is different from the existing one. It is episodic, planned and often
radical. Much of the organizational change research and literature is
based on this type.

3. Transformational change is sustainable in nature and requires a

shift in assumptions made by the organization and its stakeholders.
Transformation can result in an organization that differs significantly in
terms of structure, processes, culture and strategy. It may,
therefore, result in the creation of an organization that subsequently
operates in a way in which it continuously learns, adapts and
improves.
Carnall (1999) proposed a somewhat different typology which he
described as follows:

 Organization-specific change: This category relates to single change

initiatives applying to a bounded part of the organization. For
example, the development of a new product or goods/services distribution
channel.

 Generic organization-wide change: This covers changes which tend

to have an impact across the whole of the organization. For example,
the introduction of Business Process Re-engineering, Total Quality
Management programs, tend to touch all parts of the organization.

 Generic multiorganizational change: These are changes which

involve more than one organization. Examples here would include
mergers and acquisitions.
Within this framework, a further categorization emerges which is
concerned with the distinction between episodic and continuous
change. Episodic change tends to be infrequent, discontinuous
and intentional. In essence episodic change tends to be radical and
frequently entails the replacement of one strategy or program with
another.

On the other hand, continuous change is ongoing, evolving and

cumulative. It is seen as ‘improvement’ change and is characterized
by people constantly adapting ideas they acquire from different
sources. At an organizational level, these continuous adjustments
made across all parts of the organization can create significant
leadership challenges. The principles of continuous change
engender the flexibility to accommodate and experiment with
everyday contingencies, breakdowns, exceptions, opportunities and
unintended consequences that punctuate organizational life.
 In considering types of change, it is also important to think about
the part (or parts) of the organization which is the focus of
the change. Those changes which impact on the core activities,
structures or processes of the organization are likely to be more
difficult to manage than those which impact on peripheral activities.
Combining the dimension of radical: incremental change with the
dimension of core: peripheral provides a framework for assessing
the degree of challenge involved in any change.

 From this, it is clear that the changes which present the greatest
leadership challenge are those which impact core activities and
where a radical approach is adopted. These introduce a high level
of complexity into the change process. Yet, many organizations are
increasingly drawn and attempt to deal with the complexity through
the development of comprehensive and detailed process and
project planning mechanisms.
 More recent research has indicated that the 70% failure rate may
overstate the degree of challenge faced in implementing change.
However, these studies still indicate significant levels of change failure.
So what are the reasons for consistent failure and what leads to
success?

 Research has shown that one of the causes of the failure to manage
change is that managers have neither the expertise nor the capacity to
implement change successfully and that managing change according to
‘textbook theory’ is difficult . Others argue that the prevailing
theoretical paradigms are based on assumptions that:

 (1) managers can choose successful changes in advance of

environmental changes,
 (2) change is a linear process and
 (3) organizations are systems tending to states of stable equilibrium.
3.3 Resistance to change

Discussion in pairs

Using examples from your respective workplaces or

academic studies, identify and discuss the causes of
resistance to change.
 In working with practicing managers in organizations, a major
common difficulty associated with implementing change is the
challenge of dealing with the resistance to change which is
inevitably encountered. As witnessed in discussing the problems
of successfully implementing the changes associated with
Business Process Re-engineering, ‘people are the problem!’,
even though change initiatives tend to forget, or over or
underestimate, the likely responses of the people.

 In exploring the nature and causes of resistance to

change, the following have been identified as significant
factors:
Cont’d
 When the reason for the change is unclear. Ambiguity (whether it is about
costs, equipment or jobs) can trigger negative reactions among employees.

 When those impacted by the change have not been consulted about the
change and it is offered to them as a fait accompli.

 When change threatens to modify established patterns of working

relationships between people.

 When communication about the change (purpose, scope, timetables,

personnel, etc.) has been inadequate. Employees need to know what is
going on especially if their jobs may be affected. Informed employees tend
to have higher levels of job satisfaction than uniformed ones.

 When the benefits and rewards for making the change are not seen as
adequate for the trouble involved.
 When the change threatens jobs, power and status in an organization.
3.4 Approaches to change and how change
happens

In practice, relatively few organizations consciously consider the

options available to them in terms of how they might approach the
implementation of a significant change. Approaches to change may
be summarized under five headings:
 Directive

This strategy focuses on the leaders’ right to manage change and the
use of authority to impose change with little or no involvement of
other people. The advantage of the directive approach is stated to be
that change can be under- taken quickly. However, the disadvantage
of this approach is that it does not take into consideration the views,
or feelings, of those involved in, or affected by, the imposed change.
This approach may lead to valuable information and ideas being
missed and there is usually strong resentment from employees when
changes are imposed rather than discussed and agreed.
 Expert
 Within this approach, the management of change is seen as a
problem-solving process that needs to be resolved by an
‘expert’. In general, the approach is applied to more technical
problems and is normally led by a specialist project team or
senior manager. There is likely to be little involvement with
those affected by the change.

 The advantages to using this strategy are that experts play a

major role in the solution and the solution can be implemented
quickly as a small number of ‘experts’ are involved. Again, there
are some issues in relation to this strategy as those affected
may have different views from those of the ‘expert’ and may not
appreciate the solution being imposed or the outcomes of the
changes made.
 Negotiating
 This strategy emphasizes the willingness on the part of leaders to
negotiate and bargain in order to effect the desired change. In
employing such an approach, leaders need to accept that adjustments
and concessions may need to be made in order to implement the
change. The approach acknowledges that those affected by change
have the right to have a say in what changes are made, how they are
implemented and the expected outcomes.

 A major perceived disadvantage is that the approach takes more time

to effect change, the outcomes cannot be predicted and the changes
may not fulfil the total expectations of the leadership team. However, a
significant advantage is that individuals will feel involved in the change
and be more supportive of the changes made.
 Educative
 Within this approach, the emphasis is on changing people’s
values and beliefs, ‘winning hearts and minds’, in order for them
to fully support the changes being made and move toward the
development of a shared set of organizational values that
individuals are willing and able to support.

 As with a negotiating approach, the disadvantage is that the

approach is asserted to take longer to implement. However, the
advantage is that individuals within the organization will have
positive commitment to the changes being made.
 Participative

 This strategy emphasizes extensive involvement of all of those involved

and affected by the anticipated changes. Although driven by leaders,
change processes are less management dominated and driven more by
groups or individuals within the organization. The views of all are taken
into account before changes are made.

 The main disadvantages of this approach are the length of time taken
before any changes are made and it can be more costly due to the
number of meetings that take place. However, the benefits are that
changes made are more likely to be supported due to the involvement
of all those affected. The commitment of individuals and groups within
the organization will increase because they will feel ownership of the
changes.
3.5 Steps to accelerate change in the
organisations

Kotter has identified 8 steps as indicated below:

 Create a sense of urgency

 Build a guiding coalition

 Form a strategic vision and initiatives

 Enlist a volunteer army

 Enable action by removing barriers

 Generate short-terms wins

 Sustain acceleration

 Institute change(See detail in attached doc)