The concept of change management in today’s business world

Information and Knowledge Management www.iiste.org
ISSN 2224-5758 (Paper) ISSN 2224-896X (Online)
Vol.3, No.6, 2013
28
The Concept of Change Management in Today’s Business World
Naveed Saif
PhD scholar Gomal University D.I Khan
Tel: +92-333-9300811 Email: naveedsaif_naveedsaif@yahoo.com
Nasir Razzaq
PhD Scholar SZABIST Islamabad
Tel: +92-336-5505398 E-mail: master_nasir18@yahoo.com
Shafiq Ur Rehman
Lecturer University of Malakand, Pakistan
Tel: +92-333-9842005 E-mail:shafiquol@hotmail.com
Dr. Aziz Javed
Department of Business Administration Gomal University
Dera Ismail Khan KPK Pakistan
Bilal Ahmad
MS Scholar Air University Islamabad
Tel:+92-345-9111858 E-mail:bamafeap@gmail.com
Abstract
Companies are most likely to be successful in making change work to their advantage are the ones that no longer
view change as a discrete event to be managed, but as a constant opportunity to evolve the business. The purpose
of this study is to critically evaluate the concept of change management in today’s business world. Focus of the
debate should be on existing literature.
Keywords: Change management, Lewin’s change model, business world.
1. Introduction
In today’s hyper turbulent environment, organizations are challenged on regular basis to make strategic change
in response to the dynamic customer demand, technological advancements, and competitive activities. To be
competitive and cope with the advancement in the market place, organizations need to familiarize their structures
and processes in a flexible way. Nowadays organizations change constantly and effective change management is
essential for organizational development and survival. In contrast, such changes may lead to a great deal of
uncertainty and stress among employees (Callan, 1993; Terry & Jimmieson, 2003). Studies have shown that 60
percent of change initiatives fail (CIPD, 2011). Though, in practice we find that employees often respond
negatively toward change due to increased work pressure and stress (Jones et al., 2008; Self & Schraeder, 2009;
Pech & Oakley, 2005). If employees are ignored in the planning and implementation of organization change, it is
expected that the entire practice will be extremely stressful for individuals, and the adverse effects of which will
manifest themselves in a variety of ways which are costly to the organization (McHugh, 1997). Firms that fail to
convey the urgency of the need to change to their employees, that do not provide a behavioral roadmap for the
change, and that fail to institutionalize the change (Cummings & Worley, 2008; Kotter, 1995; Lewin, 1947).
Employees are the key asset of any organization and they are affected the most in change activity, for long
lasting successful change activity you must properly address your employees to gain the acceptance and
agreement. Change is the only constant and those companies which are changing on a regular basis in order to
gain the market share and not viewing change as a discrete event to be managed, are successful and grasping
market opportunities in order to achieve their core purpose of generating profit maximization.
1.1 Main Body
We live in a world that has been turned upside down. Companies are pouring money, technology, and
management expertise into regions that were once off limits, acquiring new enterprises, forming joint ventures,
creating new global businesses from the ground up. Many major companies are going through significant
changes, including outsourcing, downsizing, reengineering, self-managed work teams, flattening organizations,
and doing routine jobs with automation and computers. Today’s organizations are in completely flux: changing
their ways, concentrations, increasing or narrowing their activities and redesigning their products and services. It
is expected that in the coming few years’ organizations will not be the same as they are today. “The next few
decades will bring about an avalanche of change and that most people and organizations will not be prepared for
the vastly accelerated pace of change” (Toffler, 1970). He focuses on the rate or pace of change, quality and
quantity of change, individuals, organizations and unpreparedness. He depicts the future picture, which is quite
right looking at the rapid changes and advancement in almost every part of life. Individuals, groups and

Vol.3, No.6, 2013
29
organizations have to prepare themselves in advance for the upcoming changes and make their strategies
accordingly. According to Schein (2002), “Learning that creates stability and culture is different from the
learning that enables organizations to innovate as they encounter changing conditions in both their external and
internal environment.” Here Schein (2002), referred to the phenomenon of change, as managers and consultants,
we need to distinguish three basic types of change that occur in all human groups and organizations, natural
evolutionary changes, planned and managed changes and unplanned revolutionary changes.
“If we could understand the ways in which individuals were motivated we could influence them by changing the
components of that motivation process” (Handy, 1976). The fundamental theme here is that individuals can be
control and their behavior can be foreseen in a scientific or methodological manner which is the major emphasis
of management that is how to control, predict and motivate human behavior for productivity enhancement.
During the change process employees may suffer the most, which have different reasons and they may resist due
to loss of control, shock of the new, uncertainty, inconvenience, threat to status and competence fear. (Rafferty
& Griffin (2006) have contended that employees’ perception of change is influenced by the following three
change characteristics: the frequency of change, the degree of planning involved in the change, and the
magnitude of the change. Many things can cause organizational change which may include challenges of growth,
especially global markets, challenge of economic downturns and tougher trading conditions, changes in strategy,
technological changes, competitive pressures, including mergers and acquisitions, customer pressure,
particularly shifting markets, to learn new organization behavior and skills, government legislation/initiatives
(CIPD, 2011).
The chief information officer (CIO) of a major insurance company noted: In the late 1980s, I began to look at
how technology was linked to our overall corporate strategy. I tried to assess how new applications impacted the
enterprise; my intuition was that we were investing a lot but not getting the desired productivity. As I began to
focus on what we were doing, it was clear that, generally, we did not change the processes that were being
automated. Rather, we took sophisticated applications and layered them onto an old organization. I began to
envision a need to reengineer. Further, in all of our years of focus on the technology, it was as if we had been
looking through the wrong end of the telescope.
The successful twenty-first century manager must deal with a chaotic world of new competitors and constant
innovation. In the future the only winning companies will be the ones that respond quickly to change. Modern
manager must not only be flexible and adaptive in a changing environment but must also be able to diagnose
problems and implement change programs. Keeping in view today’s changing environment managers have to be
able to introduce and manage change to ensure the organizational objectives of change are met, and they have to
ensure that they gain the commitment of their people, both during and after implementation. Often, at the same
time, they also have to ensure that business continues as usual (CIPD, 2011). According to Lazarus & Folkman
(1984), the effective management of the psychological transition of employees is vital to achieve successful
organizational change. Poor management of this transition is associated with feelings of threat, frustration and
anxiety in relation to issues of job security and uncertainty (Nielsen et al., 2007). Kotter (1990) has studied
effective leadership of change for many years. One of his messages is that leadership involves establishing
direction, aligning people and then motivating and inspiring to accomplish the outcomes planned. To be effective
and to gain long lasting results, the process of change needs to be planned sensibly. McKinsey 7S framework
confirms that all parts of your organization work in coordination with each other. Developed by (Waterman,
Peters, & Phillips, 1980) working at the McKinsey & Company consulting firm, the core principle of the model
is that there are seven internal characteristics of an organization which needs to be united if it is to be successful.
Let's look at each of the elements precisely: Strategy: the plan formulated to sustain and construct competitive
advantage. Structure: the way the organization is structured and who reports to whom. Systems: the daily
activities and procedures that staff members engage in to get the job done. Shared Values: called "superordinate
goals" when the model was first developed, these are the core values of the company that are evidenced in the
corporate culture and the general work ethic. Style: the style of leadership adopted. Staff: the employees and
their general capabilities. Skills: the actual skills and competencies of the employees working for the company.
Shared Values is placed in the middle of the model, highlights that these values are central to the development of
all the other critical components. The company's structure, strategy, systems, style, staff and skills all originated
from why the organization was originally created, and what it stands for. The original vision of the company was
formed from the values of the creators. As the values change, so do all the other components.
Whatever the type of change restructuring, new processes, organizational merger, new systems, change of
leadership, and so on, the model can be used to understand how the organizational elements are interrelated, and
so ensure that the wider impact of changes made in one area is taken into consideration.
Taking the example of New Trilogy Software–A New Kind of Company:
A failure of Stanford, Joe Liemandt, formed a small software company; Trilogy Software Inc. Beginning with a
small investment, the company cultivated from 400 to 1000 employees within a short duration of four years.

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Currently, Trilogy is among the world’s leading privately held software companies and is a prominent supplier
of industry-specific software.
Those who work for Trilogy are all shareholders. They are all managers. They are all partners. To call them as
“workers” would be wrong. Since the foundation of Trilogy Software, the founder knows one thing that Trilogy
is governed by talented people. He also knows that his biggest problem isn’t competitive companies but to hold
and retain the talented people he got. He thinks that recruiting and developing people is of immense of
importance, that’s number one task to perform. Trilogy is going head-to-head with Microsoft and other biggies
in the talent hunting. They have a very clear viewpoint of what Trilogy is and what they practice. They know
how to empower people, how to make bold decisions.
The economy is developing new types of organizations with new kinds of practices and operating rules for
dragging people together. These companies offer many of the advantages of free agency; flexibility in how,
when, and where you work; compensation linked to what you contribute; autonomy to move from project to
project. On the other hand, they also offer the advantages of belonging to an organization in which
mutual commitment forms continuity.
The rapid growth in global, economic and technological advancement creates change an unavoidable aspect of
organizational life. Though, change that is planned by its affiliated can be distinguished from change that takes
place to an organization. It is normally originated and implemented by managers, usually with the help of an
organization development practitioner who may be internal or hired from outside of the organization.
Organizations can practice planned change to deal with problems, to learn from experience, to reframe joint
perceptions, to familiarize with external environmental changes, to improve current performance, and to
influence upcoming changes. All approaches to organization development depend on some theory about planned
change. These theories describe various stages with the help of which planned change may be effectively
implemented in organizations and describe the process of applying organization development methods to help
organization members accomplish change.
According to Lewin’s change model, who define three stages of change, unfreezing, change movement and
refreeze. The first step of change processes it to unfreeze the current scenario of behavior as a technique of
managing confrontation to change. Contingent on the level of organizational change envisioned, this stage of
unfreezing might be, on the individual level, selectively promoting, demoting or firing employees; on the
structural level, developing highly empirical training programs on different organization designs as matrix
management; or, on the climate or interpersonal level, providing data based response on how employees respond
to certain management activities. Change may involve on any level, proper roadmap has to be created for such
kind of interventions which makes organizational members address that level’s requirement for change, enhance
awareness in your employees of their personal behavioral patterns, and allow them response positively and more
friendly to the change process.
The second stage, change movement, involves the actual action steps need to be taken to which will move the
organization to some other level of response. We would assume to see people responding in a different way,
perhaps representing new skills or new supervisory practices on the individual level. Structural level might
include expected changes in real organizational structures, change in reporting of employees, and reward
systems that may affect the way people do their routine task. Lastly, on the climate or interpersonal level,
expectation is to realize behavior patterns that specify better interpersonal trust and openness and less
dysfunctional exchanges.
The third and final stage, refreezing, involves making change stable and institutionalizing all those changes by
forming systems that make such behavioral patterns comparatively more safe and secure against change. The
refreezing stage may involve, for example, redesigning the organization’s recruitment process to increase the
likelihood of hiring applicants who share the organizations new management style and value system. During the
refreezing stage, the organization may also ensure that the new behaviors have become the operating norms at
work, that the reward system actually reinforces those behaviors, or that a new, more participative management
style predominates.
According to Lewin, the first step to achieving long-term organizational change is to deal with confrontation to
change by unblocking the existing system. This unblocking usually requires some kind of conflict and a
reeducating process established on planned behavioral changes in the anticipated path. Finally, thoughtful steps
need to be occupied to strengthen these changes in place; this “institutionalization of change” is planned to make
the changes semi-permanent until the need for another change arises.
The action research model emphases on planned change as a repeated process in which preliminary research is
about the organization provides information to guide succeeding action. Then the outcomes of the action are
measured to provide further facts and figures to guide further action. This repeated cycle of research and action
involves significant teamwork among organization members and organization development practitioners. It
mainly focuses on data collection and diagnosis before action planning and implementation, along with vigilant

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evaluation of results after action is taken. The main phases involved in the action research model are: entry phase
(problem identification), contracting phase (consultation with behavioral science expert), diagnosis (data
gathering and preliminary diagnosis), feedback (feedback to a main client or group), planning change (joint
action planning), intervention (action), and evaluation (data gathering after action).
Action research has to go through two key adaptations. First, contemporary applications have increased
significantly the amount of member participation in the change process. That compares with traditional methods
to planned change, whereby consultants perform most of the change activities, with the settlement and
cooperation of management. Although consultant still dominated change activities in organization, there is a
growing inclination of involving organization members in learning about their organization and about how to
change it. This method to plan change highlights the necessity for organization members to learn firsthand about
planned change if they are to gain the knowledge and skills needed to change the organization.
The second adaptation to action research is the combination of a "social constructionist" approach to planned
change known as "appreciative inquiry"; this model suggests that words and conversations govern what is
significant and meaningful to organizational life. Appreciative inquiry supports organization members to
recognize and describe their organization when it is functioning at its best. This information is then used for
generating an influential and guiding image of what the organization needs to be. High participation of
organization members in generating the vision starts a new conversation about the organization's potential and
makes a new emphasis and encouraging expectation.
These three models of change (Lewin's change model, the action research model, and contemporary adaptations
to the action research model) suggest a general framework for planned change. The framework describes the four
basic activities that practitioners and organization members jointly carry out in organization development which
are; entering and contracting, diagnosing, planning and implementing change, evaluating and institutionalizing

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32
change. The arrows connecting the different activities in the model show the typical sequence of events, from
entering and contracting, to diagnosing, and to planning and implementing change, to evaluating and
institutionalizing change. The lines connecting the activities emphasize that organizational change is not a
straightforward, linear process but involves considerable overlap and feedback among the activities.
Although the planned approach to change is well-known and held to be highly effective, although there is some
criticism on planned change. Firstly, it is suggested that this approach’s emphasis on small-scale and incremental
change, and it is, therefore, not applicable to situations that require rapid and transformational change (Senior,
2002).
Secondly, the planned approach is based on the assumptions that organizations operate under constant conditions,
and that they can move in a pre-planned manner from one stable state to another (Bamford & Forrester, 2003).
Moreover, it is suggested that organizational change is more an open-ended and continuous process than a set of
pre-identified set of discrete and self-contained events (Burnes, 1996, 2004). By attempting to lay down
timetables, objectives and methods in advance it is suggested that the process of change becomes too dependent
on senior managers, who in many instances do not have a full understanding of the consequences of their actions
(Wilson, 1992).
Thirdly, the approach of planned change ignores situations where more directive approaches are required. This
can be a situation of crisis, which requires major and rapid change, and does not allow scope for widespread
consultation or involvement (Burnes, 1996, 2004). Finally, the critics argue that the planned approach to change
presumes that all stakeholders in a change project are willing and interested in implementing it, and that a
common agreement can be reached (Bamford & Forrester, 2003). This presumption clearly ignores
organizational politics and conflict, and assumes these can be easily identified and resolved (Burnes, 1996, 2004).
Keeping in view all these discussion, theories and models, we came to know about the process of effective
change management and different steps involved in it. Change is an inevitable activity for today's businesses and
organizations. But on the other hand if this change is not managed appropriately it may severely affect
organization performance, efficiency and effectiveness. This may result in loss of market position, loss of
stakeholder trustworthiness, loss of important employees and removal of senior management.
1.2 Conclusion
Hence, change will remain to be a most important feature of organizational life; effective change management
will lead organization to the path of success, leader in the industry and gaining competitive advantage. Managers
will need to devote considerable time and resources in helping employees deal with uncertainty of change. A
prerequisite approach to change help individuals to cope with uncertainty of change is a better understanding of
the psychological nature of and response to uncertainty, which will result in a successful change implementation
and gain a competitive advantage. The pace of change has never been greater than in the current continuously
progressing business environment. Therefore, the successful management of change requires expert level of
skills and techniques. However, the management of organizational change still in the current era tends to be
reactive, not on regular basis and unplanned. This may indicate a basic lack of a valid framework of how to
successfully implement and manage organizational change since what is currently available is a wide range of
contradictory and confusing theories and approaches, which are mostly lacking empirical evidence. Leading
change is a difficult task, so it is significant for managers to be skillful in how to overcome confrontation to
change, including education and communication, participation and involvement, negotiation and agreement,
manipulation and cooperation, and the use of coercion. Hence, today’s businesses and organizations must see

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33
change as an opportunity to further advance their performance, but if on the other side, they shown resistance to
change they will remain far behind or may be fired from the market.
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