Business and the Business

Environment
Session 10
Ms. Ama De Silva

J/618/5035-Human Resource Management

Organisation operations

Business and the Business Environment 2

Outline
• What is change management
• Organisations’ responses to transformation and managing resistance
to change
• Crisis management and recovery

Business and the Business Environment 3

What is…
• Management
• Management is the attainment of organizational goals in an effective and
efficient manner through planning, organizing, leading and controlling
organizational resources.
(Daft,2014)
• Strategic management
• Understanding the strategic position of an organization, making strategic
choices for the future and managing strategy in action.
(Johnson & Scholes,2008)
• Change Management
• A structured process and set of tools for leading the people side of change to
achieve a desired outcome.
(Prosci, 2022)
Organizational Change

• Refers to a modification or • In the structure of an organization

transformation of the • In the structure of an
organization’s structure, organizational operation and size
processes or goods. of a workforce
• It is defined as change that has • In working hours or practices
an impact on the way work is • In the way roles are carried out
performed and has significant • In the scope of a role that results
effects on staff. in a change in the working
situation, structure, terms and
conditions or environment.
Change Management
Models

Business and the Business Environment 6

Lewin’s three step change models- Nissan
example
Unfreez Change Refreezing
• The Japanese automaker Nissan • Carlos Ghosn was faced with the • For refreezing the behavioral
Motor Company was on the verge challenge of implementing a change of the team members, he
of bankruptcy due to its huge debt transformational change and introduced performance-based
and constantly declining market turning around the operations of pay, empowered employees to try
share. However, Nissan entered Nissan to make it profitable. He non-conventional methods, and
into a strategic alliance with formed multiple cross-functional implemented an open feedback
Renault under the change agent teams to reduce employee system for guiding and facilitating
Carlos Ghosn where Nissan aimed pushback and recommend a the employees in
to get rid of its financial debt. At robust action plan in different enhancing workplace adaptability.
the same time, Renault wanted to functions. He developed a strong
expand its market share. change management strategy to
tackle various business challenges
and increased employee
involvement in the change journey
through effective communication
and positive reinforcement.
Lewin’s model Advantages and Disadvantages
Kotter's 8-step change 1. Highlights what needs
to be Changed.
•What didn’t work before.
2. Builds his own Team.
•He surrounds himself with
people he trusts.

model- Example
• This in one of the most common situations in which the
Kotter Model is used. When a new Manager takes office, 3. Defines his vision and 4. Shares his vision with
he (or she) generally: How things should be. his employees.
• This “guideline” is used not only by new Business •He was probably thinking
about it for a long time, before
•And Why things should work in
a different way.
Managers, but also by: becoming a Manager.
• Sport Coaches.
• University Rectors.
• Chief Researchers.
• etc. 5. Sets Productivity 6. Establishes new
rewards like a salary Checklists and Daily
• In short: Anyone who wants to make a Change in the Team increase. tasks.
he (or she) manages.
•It is a common way of •These tasks are usually easy to
encouraging people to change. develop.

7. Adopt new metrics 8. Assume that there

that must be reported could not be other way
weekly. of doing things.
•Defects per thousand, Claims •This new way or working is the
per day, etc. best possible for the Company.
Kotter's 8-step change model Advantages and
Disadvantages
 Awareness
•First of all, you could bring together all the employees involved in the Change..
•In that meeting, You explain that the Company is wasting hours per day in paperwork.

ADKAR- Example •You show your calculations on how much time is wasted.
•And How unproductive this wasted time is.
•You can show them what the company could do with this wasted (and paid) time:
•Hire more employees.
A company that still organizes its •Produce more.
•Lower the price of the product.
operations with paper. And now, it is •Remember:
considering modernizing. The •People only Understand things if you show proof with Numbers they can trust.

company is thinking about installing Desire

SAP •Once everybody know Why this Change is needed, why the Company has to modernize, you explain Why it will be good
for them.
•How things will be for them if the Change is introduced successfully:
•How much time they will save per day.
•What tasks they will no longer have to do.
•How much easier things will be for them.
•Remember:
•People only seek Change if they get something from it.

Knowledge
•Once everyone is convinced of the Change you establish what Knowledge will be needed to implement the Change
successfully.
•You prepare what each employee needs to know.
•Depending on each position, some knowledge or other will be needed.
•Remember:
•The better you prepare the Information necessary for Change the more chances of success.

Ability
•PTO

Reinforcement
•PTO
 Awareness

ADKAR- Example Desire

Knowledge

Ability
• Once everybody has the necessary knowledge for modernizing the Company, you ensure that they can
actually do what is expected of them.
A company that still organizes its • You check that:
operations with paper. And now, it is • They have perfectly Understood that Information.
• They know When to Apply that Information.
considering modernizing. The company • They perfectly know How to Apply that Information.
is thinking about installing SAP • They have the necessary Tools to do their Job.
• You could never learn to use a computer just by reading a book.
• You would need to use it.
• Remember:
• When implementing a Change, Tools are as Important as Knowledge.

Reinforcement
• Finally, once the Company has started modernizing its Operations, you design a procedure to audit and
improve the new Operative.
• A Continuous Improvement Process that seeks to improve the results obtained over time.
• This procedure may consist of:
• Weekly meetings where Employees share their doubts and suggestions.
• Monthly meetings that track the progress made.
• Tracking metrics that measure Time consumed and Costs saved.
• Remember:
• Changes need to be continuously monitored. People are reluctant to Change.
ADKAR Model Advantages and Disadvantages
Disadvantages
• Want deeper knowledge around change management. As mentioned
ADKAR comes ready-made. This can be beneficial if you want something you
can apply quickly. But it can be a drawback if your business wants to gain a
deeper understanding of the field.
Advantages
• Need to develop more sophisticated, complex change management
• It provides a practical – not a theoretical – approach to processes. There is nothing wrong with ADKAR, per se, but it may not be
change management. Some change frameworks merely useful for every enterprise. When a company wants or needs to design a
describe group psychology or organizational change. These
theoretical approaches can be useful, but they are difficult to different process for change, they will likely need to explore other options.
apply directly.
• Are innovating or creating an in-house change management
• It is an out-of-the-box solution. Businesses shouldn’t have to function. Prosci is certainly capable of assisting with the development of in-
reinvent the wheel. This makes ADKAR an excellent choice house change management capabilities. However, innovative
for companies that want ready-made recipes for change. companies may wish to hire their own change management expertise and
develop custom in-house processes.
• It has been extensively field-tested. ADKAR has been around
for a while. Also, it is one of the most popular and widely • Are making certain types of business changes. A company undergoing
used change models, a testament to its success. digital transformation, for instance, may be adopting multiple technologies
• It comes with lots of training and support. Prosci, the simultaneously. In such cases, companies may need to draw on expertise
company behind ADKAR, offers extensive training and from digital transformation agencies, digital adoption solutions, IT
support at reasonable prices. Businesses, therefore, always consultancies, and so on.
have coaches and trainers to help them as they change and
grow. • Have a different value system or culture. Finally, some businesses may
simply be a cultural mismatch with the Prosci system. In that case, it would
only make sense to look at different change models.
Crisis management
• Crisis management includes the development includes the
development of plans to reduce the risk of crisis occurring and to deal
with any crisis that do arise , and the implementation of these plans
so as minimize the impact of crisis and assist the organization to
recover from them.
• “Crisis is major, unpredictable event that threatens to harm an
operation, staff, customers, reputation or the legal and financial
status of an organization.”
• Crisis can strike any time and during this situation it tends to be
confusion , uncertainty, fear

Business and the Business Environment 15

Types of Crisis
• Facilities Crisis.
• This includes damage such as that caused by an explosion, fire, leakage, or natural disaster.
• Community Crisis.
• This is an adverse condition created by the organization or outside organizations hostile to
the agency or its mission.
• Employee Crisis.
• This includes loss of life, sabotage, or a reduction in force.
• Consumer Crisis.
• This includes defective products, contracts that can't be met, or an allegation against your
agency.
• Image Crisis.
• This includes unlawful or ill-perceived activities, such as sexual misconduct, drug use, or the
indictment or arrest of a senior agency official. This is the most difficult crisis to counteract.

Business and the Business Environment 16

 Phases of a crisis
Phase I - The person has an increase in anxiety in response to a traumatic event à if the coping mechanisms
work, there’s no crisis à if coping mechanisms do not work (are ineffective) a crisis occurs.

Phase II – In the second phase anxiety continues to increase.

Phase III – Anxiety continues to increase & the person asks for help. (If the person has been emotionally
isolated before the trauma they probably will not have adequate support & a crisis will surely occur).

Phase IV – Is the active crisis – here the persons inner resources & supports are inadequate. • The person
has a short attention span, ruminates (goes on about it), & wonders what they did or how they could
have avoided the trauma. • Their behavior is impulsive & unproductive. • Relationships with others suffer
à they view others in terms of how can they help to solve the problem.

Business and the Business Environment 17

 Crisis Management
• An organized effort to identify , assess and reduce the risk of patients, visitors, staff and
organizational asset. Another definition : the optimal achievement of therapeutics benefit
and avoidance of risk and minimization harm
• Importance of Crisis Management:
• Attempt to control liability
• Prevent financial loss
• Protect the financial assets of the organization
• It reduction or elimination of financial loss due to damage, misplacement of property or patient injury
• It’s the main goal to create and maintain a safe and effective healthcare environment for patient ,
visitor and employee
• Crisis Manager should be Aware of All of the following: –
• Clinical area:-
• He must review care and provide guidance to clinical providers of care.
• Insurance industry:-
• Since the risk manager help in making decisions regarding various insurance covering as hospital professional
liability and workers compensation

Business and the Business Environment 18

Overcoming resistance to
change

Business and the Business Environment 19

1.Education and Communication
• Where there is a lack of information or inaccurate information and
analysis.
• One of the best ways to overcome resistance to change is to educate
people about the change effort beforehand.
• Up-front communication and education helps employees see the logic
in the change effort.
This reduces unfounded and incorrect rumors concerning the effects of
change in the organization
2.Participation and Involvement
• Where people are resisting change due to adjustment problems.
• Managers can head-off potential resistance by being supportive of
employees during difficult times.
• Managerial support helps employees deal with fear and anxiety
during a transition period.
• The basis of resistance to change is likely to be the perception that
there some form of harmful effect occasioned by the change in the
organization.
• This approach is concerned with provision of special training,
counseling, time off work
3.Facilitation and Support
• Where people are resisting change due to adjustment problems.
• Managers can head-off potential resistance by being supportive of
employees during difficult times.
• Managerial support helps employees deal with fear and anxiety
during a transition period.
• The basis of resistance to change is likely to be the perception that
there some form of detrimental effect occasioned by the change in
the organization.
• This approach is concerned with provision of special training,
counseling, time off work
4.Negotiation and Agreement
• Where someone or some group may lose out in a change and where
that individual or group has considerable power to resist.
• Managers can combat resistance by offering incentives to employees
not to resist change.
• This can be done by allowing change resistors to rule out elements of
change that are threatening, or change resistors can be offered
incentives to leave the company through early buyouts or retirements
in order to avoid having to experience the change effort.
• This approach will be appropriate where those resisting change are in
a position of power.
 5.Manipulation and Co-option
• Where other tactics will not work or are too expensive. Kotter and
Schlesinger suggest that an effective manipulation technique is to co-opt
with resisters.
• Co-option involves the patronizing gesture in bringing a person into a change
management planning group for the sake of appearances rather than their
substantive contribution.
• This often involves selecting leaders of the resisters to participate in the
change effort.
• These leaders can be given a symbolic role in decision making without
threatening the change effort.
• Still, if these leaders feel they are being tricked they are likely to push
resistance even further than if they were never included in the change effort
leadership.
6.Explicit and Implicit Coercion
• Where speed is essential and to be used only as last resort.
• Managers can explicitly or implicitly force employees into accepting
change by making clear that resisting to change can lead to losing
jobs, firing, transferring or not promoting employees.