FUNDAMENTALS OF CHANGE MANAGEMENT

Abstract

To understand the mechanisms of change within an organization, as well as those of innovation, one must consider the constructed character of change. Change is not a natural phenomenon, it is an issue that requires research. However, change should not be understood as a crisis, or even as a mere process of adaptation or development, but rather as a manifestation of a multitude of mutations within institutions. The main subject of study in change management is organization. The exercise of management functions in processes of change comprises diverse activities starting at the moment of realizing the need for change, and up until the moment of transformations imposed by the implementation of these changes.

Headnote

ABSTRACT

To understand the mechanisms of change within an organization, as well as those of innovation, one must consider the constructed character of change. Change is not a natural phenomenon, it is an issue that requires research. However, change should not be understood as a crisis, or even as a mere process of adaptation or development, but rather as a manifestation of a multitude of mutations within institutions. The main subject of study in change management is organization. The exercise of management functions in processes of change comprises diverse activities starting at the moment of realizing the need for change, and up until the moment of transformations imposed by the implementation of these changes.

Key words: Management, change, resistance, evaluation, organizational culture

I. Concept. Definitions.

Change is "the replacement, alteration or transformation of a process or phenomenon"20, or, in the opinion of other authors21, a "continuous process of confrontation, identification, evaluation and action". Change is a universal process, whether voluntary or not, present in all areas of our lives, both professional and personal. Regardless of its causes, change must be known, analyzed and, to the extent where this is possible, controlled. The knowledge of this process is a prerequisite for high-performance management which ensures the competitiveness and development of contemporary organizations.

Change management22 is focused on "identifying sources of resistance to change and providing ways to overcome them". The management of organizational change is correctly defined building on concepts of change and management, which presupposes the exercise of management functions: forecast, organization, coordination, engagement and control23.

The issue of change24 is a constant concern in the sociology of organizations, perhaps due to the importance given to bureaucratic slowness and rigidity, or to the concrete issues ceaselessly faced by both enterprise leaders and the enforcers of administrative reforms.

Change is "the replacement, alteration or transformation of a process or phenomenon"25, or, in the opinion of other authors26, a "continuous process of confrontation, identification, evaluation and action". Change is a universal process, whether voluntary or not, present in all areas of our lives, both professional and personal. Regardless of its causes, change must be known, analyzed and, to the extent where this is possible, controlled. The knowledge of this process is a prerequisite for high-performance management which ensures the competitiveness and development of contemporary organizations.

Change management 27 is focused on "identifying sources of resistance to change and providing ways to overcome them". The management of organizational change is correctly defined building on concepts of change and management, which presupposes the exercise of management functions: forecast, organization, coordination, engagement and control28.

The issue of change 29 is a constant concern in the sociology of organizations, perhaps due to the importance given to bureaucratic slowness and rigidity, or to the concrete issues ceaselessly faced by both enterprise leaders and the enforcers of administrative reforms. There are researchers in the field who30 show us how many difficulties a new manager faces, for example, in reorganizing an industrial enterprise, while wishing to rationalize its functioning. The number of unsuccessful or only partly successful reforms is impressive, however, regardless of organization.

Thus, to understand the mechanisms of change, as well as innovation, within an organization, one must consider the constructed nature of change. Change is not a natural phenomenon, it is an issue that requires research. However, change should not be understood as a crisis, or even as a mere process of adaptation or development, but rather, as a manifestation of a multitude of mutations within institutions.

Organizations that succeed in maintaining their competitiveness regard change not as a one-time event, but as a permanent process, vital for their survival, development and/or improvement. Change must be perceived as an intrinsic element of an organization and must be integrated into its philosophy and patterns of action.

1.1. Factors underlying change

There are numerous factors underlying change. These factors can be organized into four large groups: political factors, economic factors, socio-cultural factors, technological factors.

a. Political factors include: political legislation; political ideology; international laws/regulations; universal rights; wars; local regulations; the tax system; the activity of trade union groups.

b. Economic factors include: competition; providers and collaborators; currency exchange networks; unemployment rate; wage rates; the government's economic policy; the economic policy of other countries; loan policies; status changes (public to private); degree of autonomy.

c. Technological factors include: information technologies (the internet); new production processes; digitalization of processes; changes in transportation technology.

d. Socio-cultural factors include: demographic trends (employees, tax payers); lifestyle changes; attitude towards work; attitude towards minority groups; gender issues; care for the environment; business ethics.

1.2. Diagnosing issues that entail change.

In order to act correctly and efficiently, the manager must identify and be very knowledgeable of the situation that requires change. To this end s/he must carry out a pragmatic and real diagnosis of issues.

The main phases of diagnosis are:

* Identifying the main type of issue. It entails the discovery of all issues faced by managers of an organization, which actually determine change. For more in-depth identification and knowledge of issues, a number of methods and techniques can be used, such as a list of issues, suggestion box, etc. Then it is recommendable to identify the scope and type of change: whether total or partial, fast or slow. Yet, it is certainly the complexity of issues and possibilities of organization that actually influence the process of implementing changes.

* Defining the positive and negative symptoms generated by the issue. Any issue, whether identified or not, directly or indirectly generates positive and negative symptoms. In this phase one must structure both positive and negative symptoms generated by current issues. This can only be possible after conducting the analysis in the previous phase (identifying the type of issue).

* Establishing the causes which generate the issue and the effects which factual situations have or may have for each type of issue. In this phase, it is essential to understand the nature of causes which have generated positive and negative symptoms.

Causes can be: direct or indirect, primary or secondary.

Effects can be: immediate, medium-term or long-term.

* Specifying ways in which issues can be addressed, as well as resources entailed by this process. The main action paths will thus lead to a diminished or enhanced influence of the causes that generated the negative symptoms, but also the positive ones. Then one proceeds to establish the necessary resources involved by those action paths and the process of implementing changes.

* Estimating the outcomes reached by addressing change. This last phase seeks to anticipate quantifiable and unquantifiable efficiency matters, which will appear as a consequence of addressing the aspects of change.

1.3. Defeating resistance to change

a) Resistance is the main obstacle faced by change. Some of the main reasons that generate an individual's resistance to change are:

* personal interests;

* habits;

* dependence;

* failure to understand the essence of change;

* tolerance to change (lack of interest);

* fear of the consequences of change (fear of the unknown);

* a tendency to self-limit effort;

* a desire for security;

* economic reasonings.

To minimize this phenomenon of resistance to change, managers could implement a set of activities, such as:

* preparing for the moment of change by holding talks with those involved in this process;

* supporting and encouraging those involved in the process of change through actual participation in it;

* organizing debates on the topic of change;

* interpersonal influence;

* exerting pressure - this may also generate resent and hostility;

Reasons principally generating resistance to change in an organization31:

* threats on power and influence;

* organizational structure;

* limited resources;

* fixed capital;

* inter-organizational agreements.

b) Change means, in essence, a transformation or alteration of the status quo, a transition from one state of affairs to another, from one set of conditions to another. Change means, for many people, uncertainty or insecurity regarding their own future, workplace, and relationships with others. This is why it is highly likely that this fear or anxiety regarding change might lead people to attempt to block or resist its implementation.

In a way, resistance to change is a positive phenomenon, as it proves the existence of a certain degree of stability and enables the prediction of organizational behavior. However, the effects of resistance to change are mostly negative: it may generate conflicts within the organization, but most of all it can hamper progress.

1.4. Stages of change

In the view of Kurt Levin32, the process of change within an organization must cover the following stages:

§ opening (unfreezing) - this stage is aimed at changing the balance between the desired situation which determines the change and the actual one.

§ changing (shifting) - which introduces transformations enabling transition to the desired situation.

§ closing (freezing) - this stage seeks to achieve a new balance in the system.

Change management involves a systematic succession of processes, accompanied by permanent feedback. Implementing change management involves numerous stages, among which we regard the following as essential:

* defining factors generating change;

* acknowledging and understanding the need for change;

* diagnosing issues requiring change;

* identifying the methods to carry out change;

* establishing ways to implement change;

* defeating resistance to change;

* implementing change;

* evaluating the outcomes of implementing change.

1.5. How to reduce resistance to change

Knowing and understanding the causes that determine resistance to change is essential in finding the most appropriate means to reduce or even defeat that resistance.

One of the most important ways to reduce people's resistance to change is to involve them in planning the change by focusing it on their own feelings, their own insecurities, their own resistance. Then people openly face each other, and when information replaces insecurity, they can participate in the change sooner than resist it. People must be given the chance to discuss and understand the nature of change and their own fears triggered by it.

Another way to reduce people's resistance to change addresses the anxiety created by change. The emphasis must be laid on finding the sources of discomfort in people who are afraid of change, rather than using penalties or threats as means to convince people to get involved in the change.

In a process of change, given that habits and routines are sources of resistance to change, one must not ignore behavioral patterns at work which have already been stipulated or "institutionalized".

Communication is one of the ways to reduce resistance to change.

Resistance can be reduced by communicating with employees, helping them understand the need for change. This method is efficient when the main cause of resistance is the lack of information among the individuals in connection to the process of change. The time and effort involved by this tactic are its main disadvantages, especially when change impacts a large number of people.

Manipulation is another way to reduce resistance to change. Deforming facts and thus making them look more attractive, hiding unpleasant information or spreading false rumors to cause employees to accept change are as many examples of manipulation. This method is less costly, but risky, because if people find out they were duped, the credibility of the agent of change is reduced to zero.

The first step in initiating a process of change is diagnosis, that is, finding answers to questions like "What changes are necessary in the organization to ensure smoother operation?" We often witness changes that nobody needs. Does it often happen that we only understand that a change did not address real issues only after it was implemented?

The organization is involved in a process of uninterrupted interactions with its environment. In this environment, in addition to the organization, there are other systems - providers, customers or end users - which influence the organization and are in turn influenced by it.

Within it, the organization may be perceived as having four interacting components:

* Tasks form the primary component of an organizational system. They comprise activities that must be undertaken, the characteristics of these activities, the quantity and quality of services or products provided by the organization.

* Organizational structures and systems comprise: responsibilities and lines of subordination, information systems, monitoring and control mechanisms, job descriptions, formal remuneration and reward systems, structures of meetings, operation procedures etc. Even if these features of the organization are relatively easy to describe, they often become obsolete, unable to cope with the changing world.

* Organizational culture refers to values, rituals, sources of power, norms and loyalties within the organization, as well as the informal reward or penalty system, which determines the way in which people act in that organization.

* People come with their different skills, knowledge, experiences, personalities, values, attitudes and behaviors.

The organization must adopt changes in order to be able to survive in an increasingly unpredictable environment. The organization must regard change as a favorable occasion, helping it to develop and prosper. Changes are a part of managerial and organizational life. They can be important, occur with increasing frequency and may be decisive in the survival of the organization.

Changes can provide different opportunities to the people involved: increased professional satisfaction, improved work conditions, better practices, enhanced efficiency etc.

External pressures favoring change may be due to socio-technological, economic and political factors exerted by the external environment of the organization. Other external pressures are derived from the demand and supply on the market, competitive conditions and changes in conditions. External pressures favoring change are beyond the control of the organization.

nternal pressures favoring change are often linked to external ones. These include the need to increase productivity, improve levels of quality, increase sales, improve services, enhance staffmotivation and keep the staffwithin the organization. Internal pressures favoring change are under the control of the organization.

There are three usual approaches to generating internal pressures favoring change:

* the top-down approach;

* the bottom-up approach;

* the approach based on expert services;

each with their advantages and disadvantages.

Nadler and Tushman's diagnostic model can be used33 to understand the current state of the organization and describe the prospective one. The essential components of this model are the tasks performed by the organization, organizational structures and systems, its culture, and the people who work within it. In addition to these, the model highlights the need to identify a collective vision shared within the organization and the people (or groups) that can facilitate change. By specifying the level of change, we can estimate the duration of its implementation and the complexity and difficulty of the process. It is also necessary to analyze our own reactions to change and establish the influence of our attitude towards change on our capacity to steer it. We have, thus, a way to analyze the forces at play which can favor or hamper a proposed change. Thus, we find out which forces imposing change must be strengthened and which repelling forces must be weakened. Opposition to change is one of the typical repelling forces. There are several possible approaches to reducing or eliminating it.

Change can occur on one or several of the levels listed below:

a. individual level;

b. team level;

c. group/ division level;

d. organizational level.

The duration and difficulty of implementing change directly depend on the level on which it takes place. The force field diagram34 is an analytical tool which can be used to identify forces opposing and imposing change, their relative magnitude and the potential elements favoring change, which might be drawn to the side of forces imposing change.

The usual causes of opposition to change are:

* limited personal interest;

* misunderstanding and lack of confidence;

* differences in appraising the situation;

* low tolerance for change;

* pressures exerted by peer groups;

* fear of stress associated to change;

* negative experiences connected to past changes.

Among the approaches that can be adopted to reduce opposition to change are the following:

* training and communication;

* participation and engagement;

* facilitation and support;

* negotiation and agreement;

* manipulation and co-opting;

* explicit and implicit coercion.

In the work entitled "In Search of Excellence", the authors35 draw attention to some characteristics that any organization open to innovating change must have:

* focus on action;

* closeness to customers;

* autonomy;

* productivity by way of good administration of human resources;

* simple structures;

* centralization of essential issues;

* decentralization of action/implementation and daily control;

* focus on strengths.

1.6. Assessing the outcomes of implementing change

Knowing the impact of change on efficiency is crucial when continuing the implementation of change. Managers initiating this kind of complex process are aware of the fact that change requires time for results to become apparent. Likewise, they know that unforeseen issues may appear during the implementation, which must be addressed in a timely manner, otherwise the very running of the process would be compromised.

Managers dealing with the implementation of change can (and must) carry out partial, periodic evaluations to strengthen the employees' conviction that the chosen course of action is the right one, but that the implementation process is complex and long-lasting. Consequently, in response to these requirements, a second generation of requirements for organizational development was outlined, called organizational transformation, substantially different from the previous one. Organizational transformation involves changes on the following (three) levels:

§ A first level is represented by changes in attitudes and behavior among the employees of the company.

§ The second level of change refers to the managerial system as a whole,

§ The last level concerns the deep layers of the organization, the systems of values, beliefs, affects within the community of employees. This level is the basis of the other two.

Another feature of organizational transformation resides in the fact that changes are not limited to the mere maintenance of operation in the organization, but they target the renewal of the organization as a whole.

Nadler's matrix of organizational changes is based on the following aspects:

A. In terms of content, organizational changes can be

* improving

* strategic.

Improving changes are aimed at improvements in the functionality of the organization within the existing design and strategic coordinates.

Strategic changes target the core elements of the company and/or the system of power.

B. Under the aspect of time, organizational changes can be:

* reactive, when solutions are offered to events that occur outside the company;

* anticipated, when they are programmed according to the expected evolutions of the environment and that company.

The intersection of these coordinates results in the four types of changes in organizational culture and the organizational system:

1. harmonizing, i.e. improvements aimed at anticipated future events;

2. adapting, consisting of improvements made in response to unanticipated external events;

3. reorienting, of a strategic nature, achieved according to the period and place of occurrence of certain anticipated strategic events;

4. rethinking of the organization or some of its components, usually in relation to the occurrence of events in the context of the company, which threaten its existence. In this situation, radical changes are necessary in the organization, aiming at organizational culture, managerial strategy, managerial system etc.

Most of the times, organizational transformation translates into profound changes concomitantly aimed at harmonizing, adapting and reorienting an organization. Organizational transformation often involves rethinking the organization as a whole.

The operationalization of organizational transformation is conditioned, according to several specialists, by the existence of a set of prerequisites:

* the management of the company must be devoted to change;

* each employee should be able to visualize a good organization and its underlying values;

* there should be certain exogenous conditions in the organization, so that the issues it faces could not be addressed using previous methods;

* key people within the organization should support the accomplishment of organizational changes;

* managers and specialists accomplishing change should be prepared and devoted to a long-term process;

* those who implement change should be aware, from the very beginning, that they will face an "opposition" to changes;

* during changes, a large number of people should be willing to learn;

* most of the staffof the organization should be convinced of the need to achieve the planned changes;

* the organization should be ready to seek any assistance and/or contribution that is available and useful for change, both inside and outside the organization;

* assurance of access to information involved in all phases of organizational change.

II. Qualities and knowledge required of a manager who carries out change - specialist in organizational development and change.

Here, the literature prevalently refers to personality features, experience, knowledge and abilities. In this sense, we can summarize that they should have following qualities:

* ability to diagnose;

* practical specialization;

* managerial experience;

* basic knowledge of behavioral psychology;

* knowledge of social psychology;

* charisma;

* ability to set goals;

* ability to solve problems;

* ability to communicate;

* objectivity;

* imagination;

* flexibility;

* conscientiousness;

* confidence.

Also, the main knowledge and skills required of specialists in organizational development and in the process of change should be the following:

* intra- and interpersonal qualities;

* general qualities in consultancy;

* knowledge of the theory of organizational development and change.

III. The need to apply change management37

The implementation of change within an organization forces managers to act in order to modify the existing dynamic balance of forces within the organization, by:

* increasing the force of pressure towards change;

* reducing or suppressing the forces that oppose change;

* shifting the direction in which a force acts by transforming a force of resistance to change into a force that pressures for change.

Thus, a process of change requires planning, coordination, training and control, in other words, a change management.

Change management is mainly focused on the organization.

Thus, a process of change requires planning, coordination, training and control, in other words, a change management.

Change management is mainly focused on the organization.

The exercise of management functions in processes of change comprises diverse activities starting at the moment of realizing the need for change, up until the moment of transformations imposed by the implementation of these changes.

Footnote

20 Burdus, E, Caprarescu, Gh., Androniceanu, A., Managementul schimbarii organizationale, Ed.a treia, Editura Economica, Bucuresti, 2008

21 Paton, R.A. and McCalman, J. , Change Management, London: Sage , 2000 , Chapter 4

22 Kotter, J, Schlesinger, L., Choosing Strategies for Change, Harvard Business Review 57 (1979):106-14;

23 Ricardo, R, Overcoming Resistance to Change, National Productivity Review 14 (1995): 28-39

24 Braica, A.P., Managementul resurselor umane, "Vasile Goldis" University Press, Arad, 2009

25 Burdus, E, Caprarescu, Gh., Androniceanu, A., Managementul schimbarii organizationale, Ed.a treia, Editura Economica, Bucuresti, 2008

26 Paton, R.A. and McCalman, J. , Change Management, London: Sage , 2000 , Chapter 4

27 Kotter, J, Schlesinger, L., Choosing Strategies for Change, Harvard Business Review 57 (1979):106-14;

28 Ricardo, R, Overcoming Resistance to Change, National Productivity Review 14 (1995): 28-39

29 Braica, A.P., Managementul resurselor umane, "Vasile Goldis" University Press, Arad, 2009

30 Gouldner, A.W., The Coming Crisis of Western Sociology, London: Heinemann Educational Books Ltd, 1971

31 Burdus, E, Caprarescu, Gh., Androniceanu, A., Managementul schimbarii organizationale, Ed.a treia, Editura Economica, Bucuresti, 2008

32 http://www.change-management-coach.com/kurt_lewin.html

33 Nadler, D., Tushman, M., Organisational framebending. Academy of Management, Executive, 3:1989, pp.194-202

34 http://www.change-management-coach.com/kurt_lewin.html

35 Peters, T.J., Waterman, R.H. In Search of Excellence: Lessons from America's Best - Run Companies, Harper, New York, 1982, p. 31

36 Nadler, D., Tushman, M., Organisational framebending. Academy of Management, Executive, 3:1989

37 Burdus, E, Caprarescu, Gh., Androniceanu, A., Managementul schimbarii organizationale, Ed.a treia, Editura Economica, Bucuresti, 2008

References

References:

1. Braica, A.P., Managementul resurselor umane, "Vasile Goldis" University Press, Arad, 2009

2. Burdus, E, Caprarescu, Gh., Androniceanu, A., Managementul schimbarii organizationale, Ed.a treia, Editura Economica, Bucuresti, 2008

3. Gouldner, A.W., The Coming Crisis of Western Sociology, London: Heinemann Educational Books Ltd, 1971

4. Kotter, J, Schlesinger, L., Choosing Strategies for Change, Harvard Business Review 57,1979

5. Nadler, D., Tushman, M., Organisational framebending. Academy of Management, Executive, 3:1989

6. Paton, R.A. and McCalman, J. , Change Management, London: Sage , 2000

7. Peters, T.J., Waterman, R.H. In Search of Excellence: Lessons from America's Best - Run Companies, Harper, New York, 1982

8. Ricardo, R, Overcoming Resistance to Change, National Productivity Review 14 , 1995

9. http://www.change-management-coach.com/kurt_lewin.html