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Change Management

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Lesson # 39
In the previous we have discussed and debated the two approaches. In exploring the dramatic
versus incremental change positions, according to Miller and Friesen, successful firms generally
were found to have significantly higher percentage of extreme changes along structural variables
than were unsuccessful firms. Dramatic change seems to be more closely associated with success
than is incremental change. Successful firms are more likely than unsuccessful firms to evidence
both extreme changes and no changes in structure. These findings suggest that it may be useful for
structural variables to increase dramatically and quickly. Incremental structural change was less
likely to be undertaken by high performing firms. Thus in overall analysis, Miller postulates that
change should occur either in dramatic jumps or not at all. Such an approach will ensure that as
little time as possible is spent making turbulent, unsettling and costly transitions.
The strengths of radical change management are based upon the weaknesses of incrementalism. One
such limitation of incrementalism is related with the existence of deep structures in organization. Deep
structures initiate inertia and power commitments of organization members to existing conditions
preclude departure from change.
What Causes Revolutionary Change
Revolutionary changes can result from well-defined trigger events that can overcome organization
inertia or deep structure. Here we are going to discuss some organization triggers which can cause
revolutionary change. The following are the basic categories which trigger organization change:
New Strategy
Gestalt phenomenon
Prolonged lack of fit between organization and its environment
Technological innovations
Dramatic shift in governmental policies
1. New Leader or Leadership
For Bennis a scholar of leadership since the 1950s, "the quality of all our lives is dependent on the
quality of our leadership. It is the leadership or personality of the leader (or CEO) which plays decisive
role in shaping organizational outcome. Edgar Schein highlights the role of founder member (or top
leadership) in bringing organizational effectiveness. Moreover change in leadership is considered
discontinuous change. Therefore in practice replacement of CEO is considered to bring to bring in
radical change. Again it is the leadership which play decisive role in the formulation of either
incremental or radical type of strategy.
We are familiar with organizational researchers who attempt to identify the behaviors associated with
leadership using simple two-factor models of people-centered or task-centered leadership. Again,
confusion reigned because it appeared that situational moderators altered the nature of relations
between the leader behavior and outcomes. Contingency theories were thus developed (e.g., Fiedler
1967; House 1971); however, they too hit an impasse in their predictive ability because of difficulties in
testing the models in various contingencies and because the models focused on a limited set of
behaviors and almost wholly ignored traits.
Another problem with behavior and contingency theories was that oftentimes they operated under the
limited supposition that individuals are motivated to maximize the utility they obtain in social exchange
processes; followers are apparently only motivated by rewards (typically economic) or to avoid
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sanctions. Thus, leaders make implicit or explicit "deals" with followers and reward and punish them
contingent on outcomes. However, looking at leadership only from an economic-rational perspective is
very restricted and incomplete because individuals are not merely motivated to maximize their
economic utility but also to self-express, to reinforce an identity of who they are or who they are
aspiring to be, and to do what is ideally or morally correct. Oftentimes, and in particular in situations
that are equivocal, individuals might be motivated to act irrespective of apparent external (economic)
rewards linked to their actions (Shamir, 1991). The economic-rational perspective, however, looks at
leadership from the basis of transactions and exchanges--assuming that followers react only to "carrots
and sticks" in specific (i.e., "strong" or uniform) instances (see Bass, 1985; Burns, 1978). The nature of
the exchange (transaction) that occurs depends on the extent to which the players have lived up to their
side of a particular deal.
This form of transactional leadership works. However, it is less strongly related to outcomes measures
than is charisma or other emotional-based influencing processes. Furthermore, transactional leadership
is not theorized to work well in equivocal situations and one can differentiate between unequivocal (i.e.,
"strong") and equivocal (i.e., "weak") situations (see Mischel, 1977; also Shamir, 1995). The former
have uniform expectations that are evident to individuals and guide individuals in terms of the
normative action that has to be taken (thus, individual differences do not predict behavior very well in
these conditions because everyone pretty much will do the same thing in that situation). The latter are
characterized by their "fuzziness" in which decision processes are a function of individual differences
and interpretations.
Leadership research emerged from its 1970s and 1980s rut of pessimism. The study of leadership was
rejuvenated by theories that focused on the psychological impact of charismatic and visionary
leadership on followers (e.g., House, 1977; see also Bass, 1985; Bennis & Nanus, 1985; Burns, 1978).
The full-range leadership theory (Bass, 1985), is described in detail below, currently dominates
leadership research (Hunt, 1999; Lowe & Gardner, 2000).
Definition of Leadership
Bearing in mind the above discussion, leadership can be defined as "the nature of the influencing
process--and its resultant outcomes--that occurs between a leader and followers and how this
influencing process is explained by the leader's dispositional characteristics and behaviors, follower
perceptions and attributions of the leader, and the context in which the influencing process occurs. . . .
[A] necessary condition for effective and authentic leadership is the creation of empowered followers in
pursuit of a moral purpose, leading to moral outcomes that are guided by moral means" (Antonakis et
al., 2004, p. 5). The leadership process thus consists of leader traits and behaviors, and follower
perceptions in a particular context (for what is a leader without followers?). Context is important as a
moderator of the relation between leader characteristics and outcomes, because contextual factors (e.g.,
times of crisis/threat versus system stability) affect the types of traits or behaviors that might emerge
and how those traits or behaviors are related to leader outcomes.
Finally, leadership is not merely a top-down process. Because leadership is defined as an influencing
process it can also be exercised sideways, diagonally, and down-up throughout an organizational
hierarchy (Hunt, 2004). Thus, leaders and followers can change roles, depending on the direction of the
influencing process. Followers are not merely static bystanders but play an important role in the
leadership process by legitimizing and influencing leaders. In the above explications, the focus is on
what can be termed leadership "in" organizations, that is, direct or supervisory leadership (Hunt, 1991).
There is also leadership "of" organizations or what can be termed as indirect or strategic leadership
(Hunt, 1991). The nature of the influencing process varies as a function of leadership being "close" or
"distant" (Antonakis & Atwater, 2002). Political leaders, for example, are distant leaders, influencing
their subordinate leaders - who in turn influence others in the hierarchy and ultimately followers - as
well as organizational systems and followers
Important here is that leader individual differences (e.g., leader personality) are manifested in, and
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affect organizational structure. In other words the leader's way of doing things becomes bureaucratized
(Weber, 1924/1947). Thus, the influencing process is not confined to followers but also to
organizational and social structures.
From a strategic perspective, organizations must anticipate and react to outside opportunities and
threats by using and cultivating their organizational strengths while minimizing or eliminating their
weaknesses. This function does not and should not occur haphazardly; leaders, through their actions on
subordinate leaders and followers and on organizational systems allow for organizational adaptation to
occur. Leaders must understand the systems in which they are operating and how best to integrate
independent organizational functions towards the organization's strategic objectives. The "fit" between
the organization and the environment depends on several processes that occur at the top hierarchical
level. Leaders scan the external and internal environment; align discrete resources toward the vision;
project vision and provide meaning; determine values; energize and inspire action; carve visions into
operational plans; provide resources; show the way and role model; provide feedback, teach, correct,
reward, and punish.
Broadly speaking, the aforementioned processes refer to leader actions that can be termed
"transformational" and "instrumental." Transformational leadership is a visionary and value-based form
of leadership necessary to inspire action, and is predicated on the leader's symbolic (charismatic)
power. Instrumental leadership refers to strategic and operational actions that influence organizational
and follower performance based on the leader's expert power. Both forms of leadership are vital for
organizational effectiveness.
The typologies of leadership, as cited by Antonakis in his article, can be briefly described as follows:
1. Transformational leadership, which explains value-based, visionary, emotional, and charismatic
leader actions, predicated on the leader's symbolic power
2. Transactional leadership, a quid pro quo influencing process based on reward and coercive power
3. Instrumental leadership, centered on strategic organizational and follower work facilitation functions
based on expert power
4. Laissez-faire leadership, a form of non-leadership in which the leader abdicates his or her
responsibility and is high avoidant.
Understanding the importance of leadership, as broadly defined in the above typologies will become
evident as it is focused on why followers trust and identify with leaders and how vision is implicated in
the leadership process.
Vision, Trust and Identification
Antonakis and Atwater argued that trust in the leader depends on whether the leader:
1. has domain-relevant expertise (i.e., instrumental leadership).
2. exhibits values that are congruent to those of the stakeholders, challenges the status quo for the
better, demonstrates moral conviction (i.e., transformational leadership).
3. is honest and reliable in terms of fulfilling his or her transactional obligations (i.e., transactional
The key to effective leadership is the "trustability" of the leader and the extent to which the leader
expresses the sentiments of the collective in a vision--the glue that bounds the leader's and follower's
ideals. Vision is primordial for leader success and, in lay terms, can be thought of foresight or
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foretelling the future. In reality, leaders cannot predict the future. They can, however, articulate a vision
and then do whatever is necessary to make the vision happen. Thus, vision can be defined as the ability
to "construct the future first mentally and then behaviorally". In more specific terms, identification can
be explained in a through a three-step and not a necessarily sequential process which include active-
proactive elements of the full-range theory (i.e., transformational, instrumental, and transactional
1. Leaders assess the status quo, determine the needs of followers, evaluate organizational and human
capital resources (all instrumental leader processes), and arouse follower interest by articulating a
compelling and realistic argument for change (i.e., they use metaphor, symbolic actions, impression
management, all elements of transformational leader behavior).
2. Like prophets, leaders articulate a vision of the future that inspires follower action (transformational
leadership). The idealized vision creates follower identification and affection for the leader, because the
vision embodies a future state of affairs that is valued by followers (transformational leadership).
3. Leaders create an aura of confidence and competence by demonstrating conviction that the mission is
achievable (transformational leadership), leading by example (transformational leadership), carving the
vision into strategic and tactical plans (instrumental leadership), and by providing technical expertise
(instrumental leadership) and socio-emotional support (transformational leadership).
Antonakis explained the attributes of full-range theory of leadership as under:
What Is Transformational Leadership?
Transformational leadership is composed of five sub factors and mostly addresses actions centered on
vision, ideals, optimism, and so forth. Certain factors might be more important than others, depending
on the hierarchical level of the leader or the organizational context. For example, a high-level leader
cannot have individualized contact with far-removed followers. Thus, the relevant factor described
below (i.e., individualized consideration) can only be applicable to how direct followers of the leader
view the leader.
Idealized Influence (Attributes) and Idealized Influence (Behaviors)
Attributional idealized influence refers to attributions of the leader made by followers as a result of how
they perceive the leader. Behavioral idealized influence refers to specific behaviors of the leader that
followers can observe directly. Both factors essentially measure the leader's charismatic appeal with
respect to the leader's confidence and power, and the extent to which the leader is viewed as having
higher-order ideals and an ethical orientation. Idealized influence, or charisma, as Bass (1985)
originally defined it, is the emotional component of leadership, which is "used to describe leaders who
by the power of their person have profound and extraordinary effects on their followers". Theoretically,
followers revere these leaders and demonstrate loyalty and devotion to the leader's cause. Followers
shed their self-interest and care more about collective aspirations. As noted by Bass (1998),
"transformational leaders shift goals [of followers] away from personal, safety and security towards
achievement, self-actualization, and the greater good". Followers idealize these leaders who are role
models and provide them with a vision and purpose, and who consider the moral and ethical
implications of their decisions. These leaders communicate symbolically, use imagery, and are
persuasive in projecting a vision that promises a better future. In this way they create an intense
emotional attachment with their followers.
Inspirational Motivation
Inspirational motivation is leadership that inspires and motivates followers to reach ambitious goals that
may have previously seemed unreachable. Here, the leader raises followers' expectations and inspires
action by communicating confidence that they can achieve these ambitious goals. By predicting that
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followers are able to reach ambitious goals, and showing absolute confidence and resolve that the goals
will be reached, followers are inspired to reach the requisite level of performance beyond normal
expectations, and a self-fulfilling prophecy occurs
Intellectual Stimulation
This factor taps into the rational component of transformational leadership, distinct from the other
transformational components. Here, the leader appeals to follower's intellect by creating "problem
awareness and problem solving, of thought and imagination, and of beliefs and values" (Bass, 1985, p.
99). Bass noted further that as a result of intellectual stimulation, "followers' conceptualization,
comprehension, and discernment of the nature of the problems they face, and their solutions" is
radically altered. Because individuals are included in the problem-solving process, they are motivated
and committed to achieving the goals at hand. Intellectual stimulation involves challenging follower
assumptions, generalizations and stereotypes, and stimulating followers to seek ways of improving
current performance
Individualized Consideration
Bass (1985) stated that a leader using individualized consideration provides socio-emotional support to
followers, is concerned with developing followers to their highest level of potential and with
empowering them. The leader in this instance provides "a developmental or mentoring orientation
toward [followers]" This outcome is achieved by coaching and counseling followers, maintaining
frequent contact with them, and helping them to self-actualize.
What Is Transactional Leadership?
Transactional leadership is composed of three sub-factors. The first two (contingent rewards and
management by exception active) are active forms of leadership. The last is a passive reactive form of
leadership. Again, how leaders enact these components and what followers can perceive the leader
doing depends on leader-follower distance and other contextual constraints. For instance, at a distance
(e.g., political-level leadership, where followers lack information on the leader), followers evaluate
leaders on broad obligations that were communicated to the collective. That is, the "deal" that is made
was not with specific individuals but with the collective in general.
Contingent Rewards
Bass (1985) argued that contingent reward leadership is based on economic and emotional exchanges
between followers and their leader based on the clarification of role requirements and the rewarding of
desired outcomes. Here, the leader praises and recognizes followers for goal-achievement (Bass &
Avolio, 1997). Contingent reward is a constructive transaction (Bass, 1998). It is reasonably effective in
motivating followers, but to a lesser degree than is transformational leadership.
Management-By-Exception (Active) And Management-By-Exception (Passive)
Management-by-exception is by definition a negative transaction, because the leader monitors follower
deviations from the explicated performance norms (Bass, 1998). It is similar to contingent reward in
terms of focusing on outcomes, but here, the leader acts on mistakes or errors (i.e., the leader is
providing contingent aversive reinforcement). Leaders can demonstrate management-by-exception in
an active or passive manner (Hater & Bass, 1988). A leader employing active management-by-
exception actively watches for deviations from norms, whereas a leader employing passive
management-by-exception waits until deviations occur before intervening .
What Is Instrumental Leadership?
Following the review and theoretically derived integration of transformational leader approaches
recently undertaken by Antonakis and House (2002), instrumental leadership can be defined as a class
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of leader behaviors concerning the enactment of leader expert knowledge toward the fulfillment of
organizational-level and follower task performance (see also Nadler & Tushman, 1990). Instrumental
leadership is distinct from transformational (i.e., ideals, inspirationally based, etc.) and transactional
(i.e., exchange-based) leadership and encompasses two subclasses of leader behaviors. Each of these
subclasses, in turn, consists of two factors: (a) strategic leadership--leader actions centered on
environmental scanning and strategy formulation and (b) follower work facilitation--leader actions
focused on assisting followers to reach their performance goals, as described below. Again, leader-
follower distance as well as other situational factors will impose differential effects of these
components on followers and organizations. For example, work facilitation would be more pertinent in
"close" situations whereas strategic leadership would be more pertinent to top-level hierarchical
Strategic Leadership
Strategic leadership can be conceptualized in terms of two distinct factors evident in the theories
reviewed by Antonakis and House (2002): (a) environmental monitoring, and (b) strategy formulation
and implementation, as proposed by Mintzberg (1988). Theoretically, strategic leadership directly
(through structures and systems) and indirectly (though followers) influences and enhances
organizational effectiveness. Strategic leadership might also facilitate the charismatic effect because the
identification of a deficiency in the status quo and the articulation of a vision that can project a better
future is a function of a leader's ability to use strategic leadership skills.
Follower Work Facilitation
Following Bowers and Seashore (1966), follower work facilitation can be viewed as the type of
leadership that facilitates follower performance directly. Work facilitation includes elements of path-
goal theory (i.e., providing direction and support to followers to facilitate the path to the goal, House,
1971) - not addressed in contingent reward leadership (although Bass, 1985, suggested otherwise).
Work facilitation also includes an active-constructive outcome monitoring form of leadership that has a
development outlook that is not merely mistakes focused (as is management-by-exception, see
Antonakis & House, 2002). Thus, follower work facilitation leadership entails monitoring performance
outcomes and providing feedback that is instrumental for goal attainment, compensating for followers'
abilities and environmental conditions to ensure that followers reach their goals, and thereby increasing
the probability that follower performance goals are maximized. Leadership behavior that facilitates
followers in these ways enhances followers' self-efficacy and motivation (cf. Bandura, 1977).
Laissez-Faire Leadership
To fully account for all potential full-range leadership behaviors, a scale of non-leadership was
added to indicate an absence of leadership (i.e. a non-transaction). This factor is negatively
correlated with the active forms of leadership and positively correlated with passive
management-by-exception. These types of leaders avoid taking positions or making decisions,
and abdicate their authority. After management-by-exception passive, this factor is the most
inactive form of leadership.
2. New Strategy
This is another important variable which can act as a trigger for organizational transformation.
Earlier we have thoroughly discussed tautological approach of change management which is
quite similar and relevant to explain this variable. For example, change in objectives or
strategy impacts decisively the organization transformation. Going for expansion through
diversification is one such strategy bringing in transformation. Hence new strategy formulated
will impact organization's structure, process and culture as well. If an organization pursues
growth and expansionism through internal development strategy (equity based) ­ most of the
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time this will be occurring incrementally while if it is pursuant of the same through alliances,
acquisition and joint ventures (externally based) ­ means radical organizational transformation.
Similarly divestment and other strategies have revolutionizing impact. Such strategies like new
product line and market development have transformational impact on organization structure
and culture
3. Gestalt phenomenon
The phenomenon can be defined as:
"Gestalt phenomenon is based on the belief that persons function as whole, total organisms.
And each person possesses positive and negative characteristics that must be owned up to
and permitted expression."
Three variables stand critical here:
1. positive and negative forces
2. ownership and recognition of negative features or attributes
3. integrated and totality of view
Another definition of gestalt is
"People get into trouble when they do not accept their total selves, and when they are
trying to live up to the demands (should) of others rather than being themselves."
This leads to a kind of debate between self vs. other, and is quite relevant even in context of
organization. For instance whether a firm should learn from other organization in the same
industry by copying other or retain its own unique competencies. Similarly gestalt has
imperatives for individual manager in organization whether or not to use its authority and
Robert Herman lists the goals of gestalt:
Awareness - knowing one's strengths and weaknesses
Integration - amongst the different functional specialist department at horizontal and
vertical level too.
Maturation -
Authenticity - reliable and valid information and its evaluation
Self regulation - for behavioural change.
Self-evaluation technique that is to know one's strengths and weaknesses has quite utility both
at individual and organizational levels. This technique is used in corporate training for
management development and team building. Gestalt training or phenomenon will lead to
trigger from within.
Basically one must come to terms with oneself, must accept responsibility for one`s action; must
experience and live in the here and now, and must stop blocking off awareness, authenticity and other
dysfunctional behaviour
4. Prolonged lack of fit between organization and its environment
We have already discussed much this issue earlier in our lecture related to organizational adaptation and
evolutionary theory.
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5. Technological innovations
In today's world perhaps the most frequent and common trigger for organizational transformation is
technology. This transformation occurs on account of revolutionizing production process, informational
and communication technologies or other processes such as demand management, order fulfillment. It
is the technological innovation perceptibly lead to increased efficiency in value chain activities,
especially in primary and support activities of the value chain.
6. Dramatic shift in governmental policies
It is the government which has decisive and dramatic impact on industry. The governments especially
in developing countries have the ability to initiate policies diametrically opposed to its previous
policies, in order to set standards or to regulate industry.
7. Re-Engineering
This remained a popular paradigm of business process re-engineering in mid-1990 - a related theme to
radical or revolutionary change. Its leading proponent is Hammer who says
"marginal improvements, as a rule, complicate the current process, making it more difficult to
figure out how things really work. Even worse making additional investment of time or capital
into an existing process only discourage management from dumping that process down the
road. Most perniciously, taking incremental steps further reinforces a culture of
incrementalism, creating a company with no valor or courage"
(Hammer & Champy 1993)
Therefore we see from the above that incrementalism leads to the followings:
·  Complicates the existing process
·  Difficult to know what is going and what really works
·  Not good for making investment of time, money & efforts
·  Organization cease to be courageous / risk taking & creative
Fundamental concepts of Re-engineering
1. A clean slate approach to organization design and change (out of box thinking)
This corresponds to zero-based budgeting which was very popular in America back in
1960s, which means a fresh and dialectic approach to problem solving and decision
making. This negates the impact of history or continuity with the past and hence
encourages discontinuity. Nonetheless the fresh beginning is not an easy thing, and at times
becomes impractical; therefore the concept becomes a controversial.
2. An orientation to broad cross-functional business process
As referred to this concern earlier that organization especially the larger ones owing to
specialization lacks a well-coordinated, coherent and holistic policies and decision making
hence needed to promote cross-functional perspectives. Such techniques like that of
internal customer, and job rotation are considered quite effective to have holistic level
organizational performance for organization to become HPO.
3. The need for radical change in business processes
Technological changes (having radical impact) in multiple on-going business processes of
organizations such as demand management, order fulfilling, and other production process
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are needed to be revised significantly over a period of time besides improvement in general
managerial processes like decision making, controlling and communicating.
4. IT as change-enabler
The role of information and communication technologies in production processes, how
work is done and in other work processes is tremendous to act as change catalyst in the
4. Changes in organizational and human arrangement that accompany change in
Changes in technology are never considered to be implemented in isolation and irrespective
of human, organizational and social interpretations. Technology ought not to be considered
value-free. The values are laden by the technology producer's, originator's and introducer's
values. Hence organizations need to take caution of this note.
Table of Contents:
  1. COURSE ORIENTATION:Course objectives, Reading material, Scope of the subject
  4. IMPLICATIONS OF KURT LEWIN MODEL:Sequence of event also matters, A Critical Look
  5. SOME BASIC CONCEPTS AND DEFINITIONS:Strategic change, Logical incrementalism
  6. TRANSACTIONAL VS. TRANSFORMATIONAL LEADERSHIP:Micro-changes, Organisation Development
  8. LIFE CYCLE THEORY:Unit of Change, Mode of change, Organisation death
  9. TELEOLOGICAL THEORIES OF CHANGE:Unit of change, Mode of Change, Limitations
  10. DIALECTICAL THEORIES OF CHANGE:Unit of Change, Strategic planning
  12. LIMITATION OF DIALECTICS; DA AND DI:Overview of application of dialectics
  19. ORGANISATION ECOLOGY:Structural Inertia, Internal Structural Arrangements, External Factors
  20. CLASSIFICATION OF ORGANIZATIONAL SPECIES:Extent of Environmental Selection, Determinants of Vital Rates,
  21. FOOTNOTES TO ORGANISATIONAL CHANGE:Stable Processes of Change, Rule Following, Conflict
  22. SOME COMPLEXITIES OF CHANGE:Superstitious Learning, Solution Driven Problems
  23. ORGANIZATIONAL ADAPTATION:The Entrepreneurial problem, The Administrative Problem
  24. PROSPECTORS:Analyzer, Reactors, Adaptation and Strategic Management
  25. SKELETAL MODEL OF ADAPTATION:Determinants of Adaptive ability, The Process of Adaptation
  26. STRATEGIC CHANGE:Nature of Change, The Importance of Context, Force field Analysis
  27. Management Styles and Roles:Change Agent Roles, Levers for managing strategic Change
  28. SYMBOLIC PROCESSES:Political Processes, COMMUNICATING CHANGE, Change Tactics
  29. STRATEGIC CHANGE:Pettigrew & Whipp’s Typology, Context on X-axis (Why of change)
  30. STRATEGIC CHANGE:Attributes of SOC Model, Implications for Management
  31. STRATEGIC CHANGE:Flow of Information, Recruitment, SOC Process
  32. Determinants of a Successful Change Management:Environmental, Management Orientation, Management Orientation
  33. Higgins 08 S Model – An Adaptation from Waterman’s Seven S model:Strategy, Systems and Processes, Resources
  37. IMPLEMENTATION APPROACHES:Attributes of incremental change,
  39. IMPLEMENTATION: RADICAL OR TRANSFORMATIVE CHANGE:Definition of Leadership, Follower Work Facilitation
  42. IMPLEMENTATION: PUNCTUATED EQUILIBRIUM MODEL:Features of Radical Change, Theory of P-E model
  43. CHANGE IMPLEMENTATION: OD MODELS:The Transactional Factors
  44. CULTURE, VALUES AND ORGANIZATIONAL CHANGE:Significance and Role of Values, Values Compete