Chapter 13, Essential VCE Business Management Unit
3 & 4
Jeffery, M (2013). Change Management, VCTA
Compak issue 6
Change is any alteration to an organisation
and/or its work environment. Taking an existing
organisation, altering it and establishing a new
or altered form.
Changes can be;
Proactive: initiate change
Reactive: responding to events or external
changes once they have already occurred.
Change management is a structured
approach to shifting individuals, teams and
organisations from the current state to the
desired future state.
Employees may resist change, but effective
change management will help them adapt
and embrace change. Change occurs to
ensure that an organisation remains
competitive, abide by regulations &
Change pressure is any factor that forces or
creates stimulus for change.
It is important that all organisations
anticipate the need for change, plan for it
and implement it effectively. If they do not
do this, they will fall behind their competitors
and/or become irrelevant.
Force field analysis
Kurt Lewin developed concept of force-field
analysis as a tool to understand problems and
the effects of change on an organisation. This
analytical approach involves four steps:
1 defining the target of change
2 identifying the forces that act to drive and
those that act to restrain
3 analysing the forces that can be changed
4 developing an action plan about what can
Examples of driving forces for change Examples of restraining forces for change
A positive corporate culture where employees
are more likely to take a positive view of
Employees feel alienated from the
organisation and do not feel appreciated.
Therefore, they are less likely to embrace
change and undertake proposed changes.
A positive relationship between employees
Employees and management distrust each
other. There is a lack of consultation. Change
is not accepted or trusted.
A management style based on consultation
and employee participation.
The use of an autocratic management style
may mean that employees do not trust or
understand the need for change.
The organisation is able to plan ahead and
put strategies in place ahead of time.
The organisation has not been proactive and
has not anticipated the need for change. The
effect of this is that there is little time to
High productivity means that an organisation
can easily modify operations in order to
Low productivity may mean changes may
Successful change is influenced by whether
the change is being driven by driving or
When driving forces are dominant the
change is more likely to be successful.
However, if the driving forces are met by
restraining forces at a similar level, it is less
likely that the change will be successful.
Role of leadership
If change is to be successfully implemented, it is important
that there is an effective leadership team in place to drive
and oversee the change. Successful change managers
(change agents) must:
articulate the organisational vision for the future (‘this is
what we want to achieve and this is how it will be done’)
motivate and inspire staff to work towards successful
change as envisaged
have strong and effective communication and
have effective and clear plans and strategies developed
before undertaking the change
gather the necessary resources to implement the
Role of leadership
Effective change management also requires managers
perform an accurate diagnosis of the current
situation and accurately anticipate what is likely to
occur in the future (proactive analysis and planning)
adapt their behaviour to suit the situation at hand
communicate their expectations and vision to those
being led effectively, which includes coaching and
articulation of the vision. In doing this they will
develop positive relationships with different
stakeholder groups affected by the change.
The most crucial factor in successful change management is
‘winning people’s hearts and minds’.
Kotter believes that for successful change management to
occur, the manager/leader responsible for implementation
of the change must take into account all elements of the
organisation, including both:
visible (obvious) factors—such as policies, uniforms and
non-visible (hidden) factors—such as people’s aspirations,
beliefs, feelings, the corporate culture and the
step theory for
Note: this image does not use the same terms
as the textbook, rather it is a simple overview.
1 Create the urgency for
Inspire people to want to change. Develop
a sense of urgency around the need for
change to help spark the initial motivation
needed to get things moving.
‘We need to change because …’
2 Form a powerful coalition
Assemble a group of leaders to lead the
organisation through the changes. Get the
right people in place with the right
emotional commitment to making the
change successful. These people must have
the required skills to introduce the change.
‘These people are the best choice to guide
you through the change.’
3 Create a vision for change
Clarify how this vision will be better than
what has happened in the past. A vision will
help everyone understand what is being
asked of them and directions given to them
will make sense.
‘It will be better because …’
4 Communicate the vision
Communicate the essential aspects of the
vision. Everyone must understand and
accept the strategy and work towards
achieving the vision. All aspects of
operations need to be tied to the vision.
‘It will be best to achieve our goals this way
5 Empower Others
Continually check for barriers to change.
Remove obstacles. Identify change leaders
who can implement the change and
reward those who can make the change
‘You have the authority to …’
6 Create short-term wins
Create short-term targets (rather than large-
scale targets) that become short-term
successes, as these will help motivate staff.
Change does not occur overnight.
‘One step at a time. Be patient …’
7 Build on the change
After every success in the process, analyse
what went right and what needs improving.
Set goals to continue building on the
momentum that has been achieved and
encourage continuous improvement.
‘Keep pushing one step at a time.’
8 Anchor the change in
Institutionalise new approaches and create
a new culture so the changed state
becomes the norm. Include change ideals
and values when hiring and recruiting staff.
Make plans to replace key leaders of the
change team as they move on.
‘We will keep it going by …’
Characteristics of an change-ready organisation
A change-ready organisation has the following
a decentralised organisational structure
a participative management style
encourages staff ideas and risk-taking
breaks down barriers between departments so
that they work as a team
puts an emphasis on leadership and people
adopts a client/customer focus
establishes informal links at all levels
is enabling rather than controlling.
Low-risk vs. High-risk change practices
Low Risk High Risk
Two- way communication
between employees and
Threatening employees who do
not agree with strategies
Participative management style,
employees help in decision
making (sense of ownership)
Manipulation of a situation,
Support (counselling and time)
for those going through change
Use of autocratic management
style, like input from employees
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