Prabha Arya et al. International Journal of Recent Research Aspects ISSN: 2349-7688, Special Issue: Recent Innovation in Science, Engineering & Management, May 2022, pp. 44-50 Strategic Change in Organizations: A Literature Review Dr. Prabha Arya Assistant Professor, Department of Management Studies, DPG Institute of Management, Gurugram. Email id: Prabha.msd@dpgitm.ac.in Abstract: Organizations are facing rapid changes in technology, changing social trends, diversity in the workforce, political changes, globalization, and changes in stakeholders’ needs and preferences. To sustain in a turbulent environment, businesses have to move and change themselves at the same pace at which their surroundings are changing. But the achievement of desired change is directly linked to people and ‘Strategic Change’ helps to manage this people’s side of change effectively so that the business side of change is achieved. This paper explores how to manage people during an organizational change and focuses on promoting readiness to change and reducing resistance to change amongst their employees. As a conceptual business framework for an organization, change management increases the success of critical projects and improves a company’s ability to adapt quickly. Keywords: Organizational Change, Strategic Change, Change Management, Resistance to Change philosophies and models on ‘CHANGE’ will always be on I. Introduction the upper side as managers endlessly strive for the master key to a ‘perfect’ change (Paton and McCalman 2008) Change “Nothing endures but change. The only thing that is simply means to make things different (Robbins et al., 2013). constant in this universe is CHANGE.” Literature portrays Organizational change as a process of movement from the present state to a (potentially desired) (Heraclitus) future state (Lewin, 1951; Buchanan and McCalman, 1989; Businesses, economies, and nations are constantly Burke, 2011; Bridges, 2009; Dawson and Andriopoulus, transforming themselves through both technological and non2014). While for Paton and McCalman (2008) change is like technological innovations and organizations have to compete a journey and managing change is about handling the in this rapidly changing world. Globalization, increasing complexities of travel; Burke (2011) views it as turning an cultural diversity in the workforce, demographic changes, organization in another direction and modifying the ways shifting social trends, fast technological advancements, things are executed. Quoting Burke (2011): economic drifts, and unforeseen happenings across the globe “By ‘change significantly’ I mean…to fundamentally modify has made the events and their aftermaths more unpredictable the “way we do things”, to overhaul the structure-the design and uncertain. of organization for decision making and accountability and Understanding ‘Strategic Change’ helps managers deal with to provide organizational members with a whole new vision such uncertainties efficiently and facilitate organizational for the future.” changes (according to their environment) in a planned and Organizational Change (including time to time realignment structured way (Kotter and Schlesinger, 2008). Moreover, and maintenance of business processes) is necessary to in India percentage of youth (18-23 age group) is improve the quality of output and develop a competitive edge continuously rising; by 2030, India will be amongst the in any industry (Bevington and Samson, 2012). Strategic youngest nations in the world with nearly 140 million people change means facilitating the change carefully and in a in the 18-23 age group accounting for 10% of the total planned and structured way (Kotter and Schlesinger, 2008). population (FICCI report, 2014). These people are upcoming Change in any organization has broadly two facets: The entrepreneurs, managers, business tycoons, and researchers business side of change and the People side of change. of tomorrow, so understanding ‘Strategic Change’ will Organizational changes as described above by various prepare businesses to fight against this external worldwide authors have focused primarily on the business aspect of turbulence proficiently. Burke (2011) recognizes it as the change. It includes a structural change of organization, most difficult attribute of organizational change because the setting up of a new vision for tomorrow, changes in change in organizational culture means a “change in the way organizational processes, changes in tools and techniques, we do things”. Organizational members have to discard old changes in technology used in production as well as services, work habits and learn new ones (Bridges, 1991). corporate restructuring, mergers, expansion, divestments, II. Literature Review launching of new or improvised product and so on. But considering the realization of change, the achievement of Numerous studies and research work has been done in past desired outcomes is directly linked to people the hardware decades to understand the wide dimensions of CHANGE and part of change like new technologies, new organizational various models have been proposed to smoothen the change structures, corporate restructuring, etc. are not exactly the strategically in a system. But demand for more and more the change enablers, more specifically these are essential © 2022 IJRAA All Rights Reserved page- 44- Prabha Arya et al. International Journal of Recent Research Aspects ISSN: 2349-7688, Special Issue: Recent Innovation in Science, Engineering & Management, May 2022, pp. 44-50 building blocks (Hiatt et al. 2012). Thus, change is successful here (Kirkpatrick, 1985; 2001). And finally, the 3rd stage of only when organizational employees have accepted the the bridge’s transition model is the new beginning, filled with change and favorably adapt to new skills and new job roles. acceptance, hope, and enthusiasm when the desired new state Bridges (1991), Prosci (2012), Hiatt and Creasey (2012), and has been achieved. Kotter and Schlesinger (2008), Bareil (2004) have exquisitely Hiatt and Creasey (2012) put forward the resistance to change explained the importance of these people’s side of change, from employees as a ‘norm’ not an ‘exception’ and further which author has also named the ‘software’ part of the state that failing to lead the people’s side of change results in change. William Bridges (1991) has differentiated ‘change’ a poorer capability to move ahead towards change (Hiatt et and ‘transition’. He argues that change is a phenomenon that al., 2012). On the other hand, when change management is happens to people even if they don’t agree with it, while the well-executed, people feel engaged in the change process and transition is something that happens internally in people’s work collectively towards a common goal, substantiating minds when they change. Change is situational and can benefits and delivering outcomes (Prosci, 1985; 2012). happen quickly, but the transition is psychological and thus, III. Objective of the Study is a slow process. Bridges’ (1991) transition model is a threeThe objectives of this study are: stage scheme, with the first stage as ‘ending’ or letting go of 1.1 To explore and understand the concept of the past which means organizational employees have to strategic change in organizations. discard old ways of working and adopt new work habits. 1.2 To analyze the problems in implementing Singh and Bhandarkar (2016) also propound this ending stage strategic change in organizations. as “creative destruction for transformation”. They strongly 1.3 To analyze the benefits of understanding argue that for growth and advancement one has to supplement strategic change for organizations. the old habits with newer approaches because unless creative IV. Research Methodology destruction takes place there is no scope for change (Singh et al., 2016). The second stage is a neutral zone where anxiety This study is exploratory based on an extensive literature rises and motivation falls. People are overloaded with mixed review on strategic change in organizations. signals and confusion is high. Change the manager’s key role here is to minimize the denial, shock, and frustration amongst V. Analysis and Discussion employees by holding regular team meetings and clearing Table 1: Overlapping stages of different models on their doubts. Empathy, communication, and participation; the organizational change Kirkpatrick’s 3 elements to manage change are very effective Lewin(1951)-3 STEP Buchanan and McCalman Kotter (1996)-8 STEP MODEL MODEL (1989)-4 STEP MODEL TRIGGER LAYER VISION LAYER 1. CREATING A SENSE OF URGENCY 2. FORMING A COALITION 3.CREATING VISION MOVEMENT CONVERSION LAYER 4. COMMUNICATING VISION 5.EMPOWERING EMPLOYEES 6. CREATE REWARD SYSTEM 7. CONSOLIDATING IMPROVEMENT AND REASSESS CHANGE REFREEZING MAINTAINENCE AND RENEWAL LAYER 8. REINFORCING THE CHANGE UNFREEZING Source: Author (Compiled from literature review) Buchanan and McCalman (1989) have proposed a fourlayered interlocking transition management model of change: Trigger layer; Vision layer; Conversion layer and finally Maintenance and renewal layer. Kurt Lewin (1951) has mapped this basic change process into a three-step model: © 2022 IJRAA All Rights Reserved unfreezing the status quo; then moving to the desired future state, and finally refreezing the newly achieved state. Does that mean the change process revolves around creating instability and stability? Lewin has (very artistically) simplified the most complicated and multifarious change page- 45- Prabha Arya et al. International Journal of Recent Research Aspects ISSN: 2349-7688, Special Issue: Recent Innovation in Science, Engineering & Management, May 2022, pp. 44-50 process, which at a glance it looks like a simple task. First, may be on the ground of any new tax implications/ new the change agent has to make the existing old state unstable competitor’s arrival/ natural calamity/ sudden takeover/ (Trigger and Vision layer: Buchanan and McCalman, 1989; union strike/ latest technological change etc. Unfreezing the status quo: Lewin,1951) by creating a sense Planned organizational change is usually on large scale of urgency to change (Kotter, 1996); increasing the driving affecting the entire system and is not a routine activity forces and decreasing the restraining forces (Lewin, 1958) of (Burke, 2011). Such changes are backed by a solid motive change. Once attained the new situation is desired, the change behind; that may vary from simple cost reduction to creativity agent has to work on stabilizing it (Maintenance and renewal and innovation. But Burke (2011) questions the layer: Buchanan and McCalman, 1989; Refreezing stage: successfulness of large-scale fundamental organizational Lewin, 1951; 8th Step-Reinforcing the change: Kotter, 1996). change because of many reasons: changing organizational But the real picture isn’t that simple and linear because the culture may not be an easy task; when an organization is change process does not always progress as planned (Burke, working already well, what to change, and the improper 2011; Lawler, 1986; Paton and McCalman, 2008). Burke knowledge of change implementation. Moreover, in his view, (2011) denotes it as the “Paradox of Planned Organizational most of the changes in any organization are unplanned and Change”. He admits that planning for change is linear gradual. according to specified phases of change more or less like Based on swiftness, change can be revolutionary or John Kotter’s 8 step plan for implementing change (Kotter, evolutionary. Revolutionary (also termed ‘episodic’) changes 1996; 2012): Creating a sense of urgency to change; forming are occasional and are deliberately designed for a particular a coalition; creating as well as communicating the vision; purpose (Bhattacharyya, 2014). Burke (2011) recognizes it as empowering employees to reduce resistance to change; any significant overhaul in leadership/culture/strategy of an creating reward system; consolidating improvement and organization that may also be for a newly revised mission. reassess change, and finally reinforcing the change. Ackerman (1986) has characterized three types of organizational change – developmental, transitional, and The actual execution of the above linear plan is non-linear transformational. Developmental organizational change is an and often complicated. Warner Burke states that incremental type and is a first-order change with the least implementation of change does not always go as planned complexity. While Van Tonder (2004) explains it as simply because employees have their thought process about change improvement in an existing setting; Bhattacharyya (2014) and may not follow the plan or sudden unexpected behavior recognizes it for process and skill upgradation. The of stakeholders-those who were expected to support/resist introduction of a self-service kiosk in the library of the may behave in just opposite way. Similarly, Lawler (1986) University of Rajasthan to help students search for books is states that it is very difficult to execute the overall change in an example of developmental change. Moving up to the a highly programmed way. Paton and McCalman (2008) category of a second-order change or type II (Van Tonder, echoing Lawler’s thoughts emphasizes recognizing issues 2004), comes transitional and transformational change. and disturbances that keep impeding the change process from While first-order change limits itself to upgradation in the being moved as per the plan. Many Organizations are existing process, second-order change is a complete unsuccessful because they see change as a well-programmed departure from the existing system and reliance on the new process confined to a few steps and fail to address the system (Conrick, 2006). Transitional change is planned, potential implications of change scenario (Paton and controllable, and aims to achieve a new and known desired McCalman, 2008) that keep diverting the change from its state in a time period but in its opposite; transformational path throughout its execution. organizational change is most complex, uncontrollable, and All Changes at all times are not identical (Heterogeneous unpredictable as it tries to achieve a new state that is unknown face of change) and thus it’s difficult to time-bound it too (Ackerman, 1986; Change can be classified depending upon the type and Bhattacharyya 2014; Van Tonder, 2004). Transformational intensity of change triggers and its scope and complexity change is radical, demanding higher-order innovation (Ackerman, 1986; Burke, 2011; Bhattacharyya, 2014). (Conrick, 2006) and thus requires a shift in the assumptions Change can be ‘Planned’ or ‘Unplanned/ Emergent’ or made by the organization and its members. Since the desired ‘Revolutionary’ vs ‘Evolutionary’ (Burke, 2011; state is unknown, change facilitators have limited initial Bhattacharyya, 2014). In the researcher’s view, any change information which makes it more difficult to manage that is carried out intentionally in an organization for solving (Conrick, 2006). a particular problem / to up-gradation a system / to grab any Ackerman has expressed this peculiarity of transformational opportunity coming up / to fight against any expected future change in one line (1986, pg. 7): threat / or to accomplish any pre-defined task can be denoted “Transformational change is akin to letting go of one trapeze as a planned change. While unplanned change has to be in mid-air before a new one swings into view.” carried ‘out of a sudden’ due to unexpected slue in the internal or external environment. Such unexpected changes Figure 1: Features of transformational change © 2022 IJRAA All Rights Reserved page- 46- Prabha Arya et al. International Journal of Recent Research Aspects ISSN: 2349-7688, Special Issue: Recent Innovation in Science, Engineering & Management, May 2022, pp. 44-50 requires higher order innovation limited initial informatio n Uncontroll able Unpredicta ble features of transformational change identified from lit. review unknown future state impacts input and / or output of a system difficult to time bound second order change Source: Author (Compiled from literature review) Good recipes always have a few secret ingredients that Legion dynamics that compel an organization to change intensify their aroma, taste, and texture; similarly, a recipe for must be well-known to upcoming managers (Forces of a successful change ought to have such inputs. The first Change) The forces that act as stimulants to change are the driving dimension for a successful change is to have a crystal clear vision and purpose to transform (Ghoshal et al., 2000; Singh forces of change (Robbins 2007). But what are these entities and Bhandarker, 2016; Burke, 2011; Kotter, 1996; 2012). and events that force an industry or organization towards Then, education and proper communication of - what the change? Many studies (Robbins et al., 2013; Pettigrew, 1985; organization is actually planning, why it’s essential – to all Paton et al., 2008; Dawson et al., 2014; Nilakant et al., 2009; its members from top to bottom (Kotter, 1996; Kotter et al., Burke, 2011) have mentioned such change triggers as 2008; Bridges, 1991; Prosci, 2012; Kirkpartrik, 1985). This globalization, nature of the workforce, technology, further helps in building a good relationship between change competition, social trends, world politics and economic initiators and resisting elements present in the system (Kotter issues, government and legislation, industry and business and Schlesinger, 2008). Now begins the most difficult and cycles, etc. challenging phase of change, after realizing that the Pettigrew (1985) states that both external and internal factors organization has finally decided to go through change, are responsible for the change in an organization and employees undergo psychological turbulence filled with managers need to keep a bird’s eye view on these business frustration, uncertainty, stress, and ambivalence. Employees and economic events as a signal for change. While Hughes view this reorganization as a threat because of risk in job (2010) has formed code PESTLE to discover external forces security, fear of the unknown (what will happen next?), of change, Dawson and Andriopoulus (2014) have proposed discomfort from a disturbance in status quo due to the notion the code PACT to describe internal change triggers. of negative impact on current job role, resistance to adopting Globalization has interconnected markets, nations and new skills and technology as they feel they are more economies thus happening in another part of the world comfortable with traditional ways of doing work and view potentially impacts the national business (Nilakant et al., change as unnecessary and time and effort wasting activity, 2006). Changing customer taste and expectations, changes in lack of awareness of the need to change, selective the supply chain or distribution change, intensifying information processing (they hear what they want to hear), competition threat, increasing cultural diversity in the lack of support from top-level, threat to expertise, threat to workforce, increasing women’s participation at work, and changing communication media must not be ignored as established power relationship, organization’s past internal changes can be very well seen as a response to these performance with change was not good and so on (Bridges, external triggers (Paton and McCalman, 2008). 2009; Robbins, 2007; Kotter et al., 2008; Kotter, 1996; Bareil, 2004; Lewin, 1952; Hiatt et al., 2012; Prosci, 2012). Managing Change successfully is a multi-elementary Due to these reasons, this resistance from employees towards affair: Strategic change management helps prepare a change is pretty obvious. good recipe for successful change © 2022 IJRAA All Rights Reserved page- 47- Prabha Arya et al. International Journal of Recent Research Aspects ISSN: 2349-7688, Special Issue: Recent Innovation in Science, Engineering & Management, May 2022, pp. 44-50 Change Managers need to reduce this emotional turmoil in employees towards change. Change gurus (Bridges, 1991; 2009; Kotter and Schlesinger, 1979; 2008, Kirkpatrick, 1985; 2001, Prosci, 1985; 2012) have time to time prescribed different methods to reduce employee’s resistance toward change, and many studies ahead have appreciated, elaborated, and further refined these ways of reducing resistance to change (Bareil, 2004; Ghoshal et al., 2000; Singh et al., 2016; Robbins, 2007; Burke, 2011; Hiatt et al., 2012; Dawson et al., 2014). Communicate benefits to employees and show them their brighter future with the implementation of this change. Motivation increases the dynamism and passion in teamwork toward goal achievement (Singh and Bhandarkar, 2016). Employee empowerment again helps in boosting employee morale, significantly reducing resistance as individuals feel they are important to the organization, and facilitating change is their responsibility. This empowerment comes along with accountability, participation, and involvement (Kirkpatrick, 1985; Kotter et al., 2008; Kotter, 1996; Bridges, 2009). Soft skills or interpersonal skills play a much more vital role than technical skills when it comes to managing people. Thus, People connect, and engagement facilitates re-gaining the once lost trust of employees. Shaping talent and building leaders (Singh et al., 2016) has also been identified as a characteristic of a change master as it boosts faith and trust in employees for change leaders and they work enthusiastically towards change because they are assured that learning new skills for this change has a brighter tomorrow for themselves. These key techniques help change facilitators make employees enthusiastic, accept the change and ensure that they work forward passionately towards the achievement of the desired new state. Due to rapid changes and rising uncertainties in worldwide happenings, managers need to be proactive towards change and must develop suitable capabilities and expertise to become change leaders not the victims of change (Dawson et al., 2014; Paton, 2008). The proactive approach helps managers identify and explore the opportunities well in advance. Ghoshal, Piramal, and Bartlett (2000) emphasize the need to follow a radical approach to change. The change agent must radically respond to changing economic, and competitive situations and changing consumer demography. Considering consumers’ tastes, needs, aspirations, and expectations are inevitable to sustain in a competitive world as today’s consumers are very smart and their tastes and preferences keep on changing (Ghoshal et al., 2000; Singh and Bhandarkar, 2016). To obtain customer delight and retain them, frequent innovation in the product is very essential. In addition to moving ahead in the competition, innovation brings variety, and spice and positions a tailored product (Ghoshal et al., 2000). When customers are over satisfied, change implemented is automatic a success. Once the change has been implemented, reinforcing it helps in making the change permanent till the new one appears. This is done by a reward system or contribution-centric © 2022 IJRAA All Rights Reserved meritocracy (Bridges, 2009; Kotter, 1996; Kotter et al., 2008; Prosci, 2012). Identify and acknowledge the champions, and ensure prizes and incentives for those who have contributed to change. Also, reward and celebrate the short-term wins that move the organization towards change (Kotter, 1996; 2012). Groups and employees react differently to change, some passively resist change, some aggressively, and some seriously undermine and oppose it (Kotter and Schlesinger, 2008). So, different techniques need to be used to tackle different levels of resistance. Simple passive resistance can be removed by keys mentioned above like education, communication, participation, empowerment, people connection and engagement, and fair negotiation. But many times, things are not that simple. There are few antiorganizational elements that heavily resist change, for their manipulation, co-optation, and even coercion can also be used (Kotter and Schlesinger, 2008). Manipulation and cooptation include twisting the facts to make them look attractive, withholding facts, and creating false rumors to convince employees to accept change. Coercion even includes the application of direct threat on resistors, the threat of transfer, loss of promotion, negative performance evaluation, and poor letter of recommendation. (Robbins et al., 2007). VI. Conclusion Strategic change is a time to time process to manage the people side of change so that the business side of change is achieved. This process seems very simple, linear, and to move in planned steps but things do not proceed as planned because of people’s resistance to change, their reactions may be unpredictable, and also due to unanticipated consequences in the middle of execution. Moreover, huge costs and risks are associated with a change in an organization as if the poorly managed organization can crash in days. 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