Change Management: Impact on Business and Employees

This report delves into the multifaceted realm of change management within organizations. It begins with an overview of change management, emphasizing its significance in today's dynamic business environment, and explores the factors that necessitate organizational transformations, such as competition, technological advancements, and the need to improve existing processes. The report then addresses the challenges associated with change management, including employee resistance and communication issues, and analyzes the impact of change on both employee and business performance, highlighting the importance of employee confidence and resource optimization. Real-world examples from companies like Asda, McDonald's, Marriott International, and Tesco are used to illustrate change management practices. Finally, the report provides insights into how to effectively manage changes in a business, referencing Kurt Lewin's three-stage model, and concludes with recommendations for successful implementation.

BEHAVIORAL SCIENCE – CHANGE
MANAGEMENT

TABLE OF CONTENTS
Overview about Change Management.................................................................................................3
Importance of change management.................................................................................................3
Factors that bring changes in the organization ....................................................................................4
Challenges associated with change management............................................................................5
Impact of change management on employee and business performance ............................................6
Examples from organizations..........................................................................................................7
How to manage changes in the business..............................................................................................7
Conclusion and Recommendations .....................................................................................................9
References ..........................................................................................................................................11

OVERVIEW ABOUT CHANGE MANAGEMENT
Organizational change management is a framework for managing effect of new business
processes and changes in cultural and structural aspects. Transformations are required to be
implemented in the business entity and this is one of the greatest challenges managers face today in
their work management (Galvin, 2003). Change is something new to the organization which takes
lot of efforts to adjust in the existing work processes and sometimes it affects the business entity in
positive and negative aspects. It usually occurs when a company makes transition from its current
state to some desired future state (Galvin, 2003). Thus, change management is considered as the
process of planning and implementing transformations in the organization in such a way as to
minimize employee resistance. Due to adequate change management, organizations can reduce the
cost of operations and through that innovative and creative things can be facilitated in the business
processes.
In today's business environment, every company is required to undergo changes constantly if
they desire to remain competitive in the external environment. From many research studies, it has
been found that in order to globalize the business, companies are emphasizing on lot of changes and
under that they also install new processes for managing all the work processes. Factors such as
globalization of markets and rapidly evolving technology forces the business entities to respond to
the change and that further also aids in long term sustainability. Sometimes, change initiatives takes
e place in the organization for the purpose of reducing organizational problems and issues (Helms,
Dye and Mills, 2008). Change brings new standards to the business entity and it also helps the
organization in building competitive edge over the other rivalries. Most of the companies think that
modification is the only aspect that leads the business entity to adopt new tools and technologies;
but change is more than adopting technological facets.
Importance of change management
If an organization aims to survive in the competitive market place, it should facilitate more
transformations in the business courses and proper attention should be given to all the resources as
well. One of the most common examples that have been seen in the realm of change management is
transformations in hospitality industry of UK. Change has the potential to enhance efficacy level of
hotels and it also plays crucial role in encouraging employee efficiency (Khandekar and Sharma,
2005). Hence, from the below mentioned discussion, tremendous importance of change can be
identified. Comprehending business environment: It is vital for every business organization to
comprehend and gauge the dynamics in the external environment so as to envisage and
establish appropriate relationship among external business stakeholders (Benefits of change

management, 2012). Therefore, managers by knowing the subject of change management
can better prepare organizational members to comprehend what is going on in the external
environment. Reduces technological issues: Adopting new tools and technologies aids the business entity
to reduce technological and organizational issues. Technology is basically considered as the
engine of growth in today's world (Leban and Stone, 2007). Perhaps, the greatest challenge
for contemporary organizations (like British Airways) is the acquisition and integration of
technology in its strategy, structure and process. With the help of change management,
employees of British Airways are able to adopt new tools and techniques and through this,
they can contribute in the organizational goals and objectives. Enhances the opportunities of globalization: Adopting new things in the business entities
aids the organization to grow more and develop more (Todnem, 2005). When the business is
able to adopt new things, they get diverse opportunities to work in other international
markets. All the business is required to identify the potential of change. Proper response to market conditions: Change management is a planned approach;
therefore it assists the organization to plan for business uncertainties. Thus, adopting new
trends and aspects can assist the business entity to analyze needs and preferences of
customers and accordingly, customer satisfaction can be acquired.
 Enhances performance and capability of the employees: Through change aspects,
employees of British Airways resist adopting changes in the business; however, change
helps them to enhance their efficiency level. It has been observed that change management
aids the employees to learn new and different things which further aid them to accelerate
their own competency and capability. Change also helps the employees to identify new
alternatives and options for performing their job roles and responsibilities (Wang, 2005).
Hence, from the discussion, it is clear that changes are useful for the business entity because
that helps in responding faster to the customer demands. Further, organizational efficiency and
effectiveness can be maintained or it can be improved by acknowledging the concerns of staff
members. Employee performance increases when changes are positively taken and when employees
support the management in all the areas. Thus, concluding the discussion it can be said that change
management brings optimum growth to the organizations.
FACTORS THAT BRING CHANGES IN THE ORGANIZATION
Competition: In the contemporary scenario, every company aims to develop the level of
competency so that it can survive for the longer period. For example- Asda (one of the largest retail
entities in UK market) has been operating business in competitive market place as numerous entities

are delivering same sort of products and services. Thus, for the same purpose, the business
emphasizes on adopting new things and aspects so that customers can be retained and performance
of business entity can be encouraged among the competent entities.
Technology: Each and every business strives to enhance technological reach; therefore for
such purpose wide range of transformations are brought into the organizations. Innovations in
technology can force a business to adopt new changes; thus technology is one of the major drivers
of the change management. Every business desires to grow more and for that requisite changes
should be adopted. Hence, in such respect, retail business organizations of UK like Tesco, Asda and
Morrison have been emphasizing greatly on technological aspects.
Need to improve the existing processes: Several times changes occur in the business entity
for the purpose of improving existing processes (Witcher and Chau, 2010). It is not necessary that
change is bringing positive outcomes always; but most of the time changes are adopted for
innovative and advanced things. Moreover, it also reflects versatile nature of business and its ability
in adopting new and diverse aspects.
Workforce diversity: Workforce diversity is another reason for which the business adopts
new things and policies (Witcher and Chau, 2010). All the companies in the contemporary scenario
have been changing the procedure of recruitment and selection so that culturally diversified
employees can be selected for the business processes. Hence, to recruit efficient and skilled people
in the organization, managers have been emphasizing on selecting new people.
To enhance the value of resources: Every business entity in hospitality industry aims to
utilize all the resources in a proper manner and for that frequent change should be made in the
business processes. Moreover, this is also another way of developing innovation and creativity
aspects in the organization (Todnem, 2005). Most of the business entities implements changes so
that new cultural values and norms can be adopted.
Challenges associated with change management
Though changes are essential for the business management, yet the hard side of change
management hampers existing as well as planned processes of Vodafone. Improper planning,
unavailability of adequate organizational resources and lack of consensus are the major factors
which affect all the processes of Vodafone that are associated with the change management. Time
has been changed and so have the requirements for effective configuration and change management.
In the below mentioned section, several challenges are discussed which are associated with the
change management process: Employee resistance: In most of the cases, employees of Vodafone resist for change because
they are comfortable with the way they manage their job roles (Cameron and Green, 2009).

Transitions cannot be easily managed if employees of the business are not ready to support
the management; thus organizations have to adopt various strategies for meeting all the
needs of employees (Carnall, 2007).
 Communication related issues: Since change brings new things in Vodafone, therefore it
hampers the comfort zone of the employees. This brings negative attitude in them and as a
result it generates communication gap between management and employees. At the same
time, it also affects potential of service delivery.
IMPACT OF CHANGE MANAGEMENT ON EMPLOYEE AND BUSINESS
PERFORMANCE
Change creates confidence in the employees: Apparently, change is one such aspect that
brings new thing in the organizational work processes (Effects of Change on the Organization.
2001). When employees learn different things, they become more competent to contribute in
organizational goals and success. Thus, this leads the employees to enhance level of confidence and
as a result, they become more competent as compared to other employees. Thus, in terms of
positive impacts, it can be said that change brings efficacy in employee performance which helps
them to become skilled enough for the organizational affairs (Todnem, 2005).
Change increases the value of organizational resources: Change seems to be effective
because it aids the organization to emphasize on new things; thus as a result it contributes in
utilizing all the resources in an optimum manner (How Organizational Change Impacts Projects.
2011). While adopting new practices and processes, managers of the business entity have to make
sure that changes are integrated as per organizational resources; thus more value can be added to the
work processes.
Transformation increases challenging ability of the organization: It is an apparent fact that
transformation brings new things in the organization; therefore similarly management learns
numerous aspects to meet challenging aspects prevailing in the market place (Problems in
Managing Change, 2001).
Examples from organizations
In the contemporary scenario, all organizations have been implementing changes in the
business entity and they get numerous benefits out of change implementation. For instance -
 Conflict management procedure of Asda has been changed in which the managers now
focus on regulatory framework so that work processes may not get hampered. Conflict
management procedure of Asda seems to be effective because it considers the opinion of
both the parties (Khandekar and Sharma, 2005).
 Further, changes have also been seen in the finance department of McDonald's in which the

entity has adopted new means of managing financial resources. The procedure adopted is
competent enough and helps company to remove all the errors and issues. Similarly,
duplication of entries are also reduced afterwards the adoption of new procedure for finance
management.
 Transformations have also been observed in the areas of database management at Marriott
International hotel in which the hotel has established new database entry system. While
evaluating the outcomes, it has been seen that the executed procedure helps hotel to record
all the entries manually and the system can only be accessed by the authorized members.
 Tesco has brought changes in business in which the employees have to manage all their
activities through technological aspects (Leban and Stone, 2007). During this period, most
of the employees got de-motivated as they were comfortable with the existing way of
management. However, after a certain period of time, all human resources gave support to
the management and as a result, organizational efficiency got increased.
HOW TO MANAGE CHANGES IN THE BUSINESS
One of the most prominent theories of change management is Kurt Lewin’s model which is
a three stage model that is useful for the managers to manage employee resistance to change.
 Unfreeze: This is the stage where employees will typically resist adopting changes because
they are more comfortable with their existing procedures. This usually presents a
provocation problem because people react towards the policy of change management. At
this stage, usually, employees tend to behave in a negative manner (Carr and Gabriel, 2001).
 Transition: At this stage, employees of the organization develop positive behavior and
attitude towards change management which helps them to respond properly to the change
management. However, confusion also arises during this stage because people have different
opinions regarding each and every aspect. This is the most critical stage in which employees
try to develop mutual bond with each other for producing optimum results and outcomes for
the organization (Dodds, 2003).

 Refreeze: This is the final stage where employees give their support to cope up with the
change processes. Managers also monitor and control the activities so that areas of
improvements can be identified. Hence, it is suggested to all the organizations to manage
change through theoretical perspectives.
Further, Kotter's eight stage model can be applied in this situation and this has been briefly
discussed in the below section.
 At the initial level, managers develop the sense of urgency and they also need people who
can introduce change successfully in the business organization (The 8-Step Process for
Leading Change, 2012).
 In the second stage, organization is requisite to build proper collaboration with other
employees so that they can support and lead changes in the subsequent business processes.
 Here, in the next stage, strategic vision is required to be developed so that desired outcomes
can be acquired (Dodds, 2003).
 In the next step, business entity must influence employees so that they can get ready to work
according to the strategy.
 All the associated barriers should be removed by proper care so that goals can be acquired.
 Further, for the purpose of managing changes in the business entity, it is vital for the
organization to determine short and long term objectives that are integrated with the change
processes.
Illustration 1: Kurt Lewin’s model
(Source: Leban and Stone, 2007)

 It is crucial for the management of company to align the procedures with vision and mission
so that business sustainability opportunities can be acquired (Carr and Gabriel, 2001).
Hence, both the above mentioned models are used by the entities for the purpose of
managing resistance to change. Apart from theoretical viewpoint, managers of business should
emphasize on encouraging the employees towards change procedures.
Another model that can be executed for change management purpose is Lewin's Force Field
Model. The model states that change management is an important aspect of management that tries
to ensure that a business properly responds to external environment in which it operates. Lewin's
force field model helps the business entity to implement change policies in a proper manner. As per
the model, there are forces that drive changes and along with that, there are several other forces that
restrain such changes. In order to implement the change properly, driving force must exceed the
restraining force. This model can be used for all the following aspects:
 Model investigates the balance of power involved in an issue.
 It also identifies key stakeholders on the issue.
 It is useful in terms of identifying the target groups.
There are several internal and external factors that drive business towards change and all
such factors also change the business processes. Among internal forces, the need for change and
ability to do better drives business the most. This is the major aspect that helps business to enhance
flexibility in work processes. Further, concern towards ineffective communication, de-motivation
Illustration 2: Kotter's eight stage
model
(Source: Dodds, 2003)

and poor business relationships leads business entities to implement new changes and
modifications. In contemporary scenario, every organization aims to emphasize on greater
flexibility in organizational structural aspects. Therefore, this is one of the prominent reasons for
change. On the contrary, greater competition, higher cost of inputs, ethics and technological change
and globalization are some of the factors that drive business entities towards change. Despite of the
potential positive outcomes, change is nearly always resisted. One of the most common examples of
change resistance has been seen at LIDL where individuals resist changing because they are
familiar with the comfort and security zone.
Illustration 3: Lewin's Force Field Model
(Source:Cameron and Green, 2009)
Thus, it can be said that change is surrounded by supporting and impeding both the
factors. However, it is the capability of organization that aids business entity to implement
change aspects. On the basis of below table, both supporting and influencing factors are
discussed which are like:
Forces for change Forces against change
To enhance the organizational ability Loss of staff overtime
To augment the value of organizational structure Low tolerance of change
To improve the organizational productivity Fear of economic implications
To reduce the operational and other costs of Insecurity due to work burden

business entities
CONCLUSION AND RECOMMENDATIONS
Summing up the entire study, it can be said that engagement strategy can be adopted as that
is highly beneficial for the organization to convince employees to meet the requirements of change
practices. Being the most beneficial strategy, it will manage entire functions of an organization
(Carnall, 2007).
Managing change effectively requires the organization to move from its current state to a
future desired state at minimum cost so that investment capacity may not get hampered. Key steps
in that process are:
Understanding the current state of the organization: The business needs to be identify the
problems which the organization faces; thus on that basis duties and authorities should be assigned
to each and every one in the organization. However change must have the capability to resolve all
the problems.
Competently envisioning and laying out the desired future state of the organization: This
specific step involves picturing the ideal situation for the organization once transitions are
implemented. At the same time, the vision should be conveyed clearly to everyone involved in the
change effort by designing a means of transition to the new state. Here, in this process, one of the
most important parts of change process should be maintaining some sort of stability. This will aid in
acquiring company's overall mission or objectives (Cameron and Green, 2009).
Implementing the change in an orderly manner- This integrates managing the transition
procedure effectively. It might be helpful to draw up a plan, allocate resources and appoint efficient
members who can manage change process effectually. Further, the leaders of the company should
try to generate enthusiasm among the employees and they should also share organizational goals
and vision and acting as role models. Hence, this can also work for direct motivation for the
employees. Therefore, change is called as a natural process that comes in business processes for
specific reason. The process of change should be adequately managed by motivating and informing
all the employees.
Further, leaders of the organization should encourage employees for the process so that
optimum results can be acquired (Black, 2008). Interest of stakeholders should be considered while
managing changes in the business as this will aid in managing all the processes in an effectual
manner.

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