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HR strategies for reducing the impact of change & resistance to change

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  • Unit 2 - HRM/
  • 2.1 Introduction to HRM/
  • HR strategies for reducing the impact of change & resistance to change

Human resource strategies for reducing the impact of change and resistance to change (AO3)

Change management refers to processes and techniques used to plan, implement and evaluate changes in business operations. Business organizations are dynamic in nature and are always subject to the forces of change.

Greater international trade and cooperation, as well as developments in e-commerce, for example, have meant that businesses have had to adapt their operations in order to compete and survive. One of the most difficult tasks for any leader is to manage change in order to reduce the impact of change and resistance to change.

Change is also a key concept in Business Management, so can be examined across all topic in the course. Examples of change include:

  • Unit 1.3 - new business objectives

  • Unit 1.5 - mergers, acquisitions, and takeovers

  • Unit 2.1 - demographic changes

  • Unit 2.2 - organizational restructuring

  • Unit 2.6 - industrial unrest and pay settlements

  • Unit 3.9 - budgetary changes

  • Unit 4.3 - sales forecasting

  • Unit 4.4 - market research updates

  • Unit 5.4 - business re-location decisions

  • Unit 5.7 - crisis management and contingency planning

  • Unit 5.8 - Research and development

  • BMT 3 - changes in the external business environment (STEEPLE analysis)

  • BMT 4 - changes in product portfolios (BCG matrix)

Change can be unsettling and disruptive, so the change process must be managed carefully and effectively. For example, concerns over climate change have forced some governments to announce the banning of diesel fuels in the not-too-distant future. This has meant that car manufacturers need to explore a range of alternative and sustainable technologies. This has led to manufacturers such as Tesla investing in electric car technologies.

Trying to force change is likely to cause problems, as people can be resistant to change and uncooperative if change is simply made compulsory. Yet, without change, firms can become complacent, uncompetitive or even irrelevant.

Strategies for dealing with resistance to change include the following six methods, as advocated by John Paul Kotter and Leonard Schlesinger of Harvard Business School (1979).

Kotter and Schlesinger's model for overcoming resistance to change

1.  Education and communication

This approach to change management aims to inform and educate staff (and other stakeholders) about the change beforehand. Early communication and clarification can help stakeholders to see the rationale for change and establish trust. Perhaps more importantly, this approach reduces any unsubstantiated claims and rumours about the proposed change. Hence, this helps to limit misinformation and misunderstanding (one category of Kotter and Schlesinger's reasons for resistance to change).

2.  Participation and involvement

This approach links with several motivation theorists, such as Frederick Herzberg, who argue that employee involvement in decision-making can motivate and improve morale amongst the workforce. Kotter and Schlesinger argued that involving employees in the change process, perhaps through a series of consultations, means they are more likely to accept change instead of resisting it.

Allowing workers to be involved in decision-making gives them ownership in the process and a greater incentive to ensure change is successfully implemented. It can also help to prevent misunderstandings and misinterpretations of the purpose of change. However, this approach is likely to be rather time consuming.

3.  Facilitation and support

This approach to change management is about providing authentic support so that people have the skills and resources they need to cope with change. This approach is paternalistic in style as managers become supportive of staff during difficult times, thereby averting potential resistance to change and helping people to accept change instead.

Facilitation and support can come in numerous forms, such as retraining of staff to enable them to cope with the new changes or counselling workers to deal with their fears and anxieties.

4.  Negotiation and agreement

This is the ‘carrot’ approach whereby managers use bargaining incentives to remove or limit resistance to change (unlike the ‘stick’ approach, below). This can be done for example by ‘inviting’ workers to accept amendments in their employment contracts to accommodate the new changes. Alternatively, staff who resist change might be offered early retirement or redundancy incentives to leave the organization.

At other times, managers may be willing to compromise to provide incentives for employees to settle for the change. Negotiations with workers could mean slightly different and possibly better changes than originally intended.

5.  Manipulation and co-option

This approach involves bringing a representative of those resisting change into the change process. The purpose is to give these key influential people representation in the negotiations process, but the underlying reason is to convert the representative’s thinking so that the advantages of change can be communicated to those resisting change.

These representatives, such as labour union leaders, are usually given a symbolic role but the reality is that their view will not affect the desire of management to push for the change. This approach is, of course, seen as unethical and can backfire if those resisting change discover what the management are really trying to do.

6.  Explicit and implicit coercion

This is the ‘stick’ approach to dealing with resistance to change and is typically used as a last resort. Managers can use coercion (bullying tactics) to force staff into accepting change, by threatening disciplinary action, dismissals, job losses, redeployment (transferring employees to other jobs), or not promoting employees. In other words, they force the change through even if employees may not agree with the change.

Explicit and implicit coercion mean that workers "accept" change simply because they have to, not because they want to or feel it is in their best interest. Quite often, over time, people may come to accept the change and their perspectives and behaviour change too, especially if the change proves to be successful. However, due to employment legislation that exists to protect employees, coercion may be carried out implicitly by senior managers.

Ultimately, senior managers need to deal with change in a way that is purposeful, positive, and promising. Essentially, this will help to gain the support from their employees.

 Top tip!

Kotter and Schlesinger's model of change can be useful when discussing any form of change and how to introduce it in an organization. Change is commonly featured in all assessment papers.

So, when considering how to introduce new procedures and approaches in a business, managers may need to consider the reasons for resistance to change as well as how best to overcome them. Consider Kotter and Schlesinger's six approaches to dealing with resistance to change in the context of the business. This could include consideration of its available resources, the market(s) in which it operates, and the importance of the change to various stakeholder groups.

 Business Management Toolkit - SWOT analysis

Examine how knowledge of SWOT analysis can help managers to reduce the impact of change and resistance to change in business organizations. Use real-world examples to support your answers.

You might find it useful to refer to SWOT analysis prior to answering the above task.

 Business Management Toolkit - Force field analysis

Explain the benefits of force field analysis for reducing the impact of change and resistance to change in corporate organizations.

 Business Management Toolkit - Hofstede's cultural dimensions

Discuss how different dimensions of culture impact the various strategies for reducing the impact of change and resistance to change in the workplace.

You may find it useful to refer to Hofstede's cultural dimensions (HL only) prior to answering the above question.

 Teacher only box

Possible areas for discussion could include:

  • Firms with high rates of labour turnover may suffer from poor human resource management and a weak or fragmented corporate culture.

  • The culture of some firms is such that human resources are viewed as a long term investment so training and development become integral to their business strategy.

  • Although 360-degree feedback (appraisal) is used in some countries, the act of subordinates appraising their senior colleagues in an organization is unacceptable in other countries and cultures.

Extended reading task

Read this article from the Harvard Business Review that provides an alternative set of strategies for reducing the impact of change and resistance to change in organizations.

To read the article, click the link here.

Exam Practice Question

 Exam Practice Question - Alverez Corporation (AC)

Alverez Corporation (AC) is a large manufacturer of microchips and computer accessories, established in 1990 in Mendoza, Argentina. The company has recently decided to implement a new capital-intensive production process that would increase efficiency and reduce average costs of production. However, many employees have resisted the change, making it difficult for the management team to fully implement the new production process.

Many of AC's employees are afraid of losing their jobs or being forced to learn new skills. Some of the employees also claim that the management team has not clearly communicated the reasons for the change, leading to a lack of transparency and trust in the decision-making process. These employees are not aware of the benefits of the new production process.

To address these issues, the management team at AC has taken several steps to mitigate resistance to change. The senior managers have offered additional training sessions to support employees to help them learn the new production process. They have also run meetings with employees where they provide regular updates on the progress of the change and address any questions or concerns that the employees may have. Many of the employees feel burdened with the extra time involved to attend training sessions and meetings. Some workers still have anxieties and are afraid to ask about job security.

(a)Define the term resistance to change.[2 marks]
(b)Explain two reasons for resistance to change at Alverez Corporation (AC).[4 marks]
(c)Explain the impact of resistance to change for AC.[4 marks]
(d)Evaluate the effectiveness of AC's approach to mitigate resistance to change.[10 marks]
 Teacher only box

(a)  Define the term resistance to change.  [2 marks]

Resistance to change refers to the opposition or reluctance of employees in an organization to accept and adapt to new ideas or developments in the workplace.

Award [1 mark] for a definition that shows partial understanding.

Award [2 marks] for a clear and accurate definition that shows good understanding, similar to the example above.

(b)  Explain two reasons for resistance to change at Alverez Corporation (AC).  [4 marks]

Possible reasons include an explanation of:

  • Fear of the unknown

  • Lack of trust in AC's management team

  • A lack of understanding of the reasons or urgency for the change

  • Poor communication about the benefits of change for employees

  • Accept any other relevant reason that is explained in the context of the case study.

Mark as a 2+2

For each reason, award [1 mark] for a valid reason, plus [1 mark] for an accurate explanation, written in the context of the case study.

(c)  Explain the impact of resistance to change for AC.  [4 marks]

Resistance to change can have a negative impact on an organization if not managed effectively and in a time efficient manner. Possible reasons for this could include an explanation of:

  • Slowing down or even preventing the implementation of the proposed change. This would then mean that AC would not benefit from making progress, despite the need to grow and evolve to remain relevant in the marketplace.

  • It can lead to decreased efficiency, increased average costs, and a lack of competitiveness for AC.

  • It can also cause low staff morale and employee dissatisfaction, which could escalate into conflict and industrial action.

  • Accept any other relevant impact that is explained in the context of the case study.

Award [1 - 2 marks] for an answer that shows some understanding of the demands of the question.

Award [3 - 4 marks] for an answer that shows good understanding of the demands of the question, using relevant terminology and application throughout the response.

(d)  Evaluate the effectiveness of AC's approach to mitigate resistance to change.  [10 marks]

Points that could be considered for discussion include the following:

  • AC's management team has tried to address the resistance to change by providing additional training sessions and meeting to help employees learn about the new production process. The increased communication and transparency may gain some support from employees.

  • Providing regular updates on the progress of the change and addressing any questions and concerns that employees may have help to (re)build trust with the workforce.

  • Informing workers about the benefits of the new production process (emphasizing the positive impacts it will have on the company's competitiveness and profits) can help to alleviate the employees' concerns about job security.

  • By providing support to employees throughout the change process can help them feel valued and engaged, and more likely to embrace the change. However, the management team at AC do not seem to have engaged with getting feedback from their employees, so this is likely to be a cause of the lack of trust and resistance to embrace the proposed change.

  • Furthermore, attempts thus far have failed to convince all workers of the need for or benefits of change, i.e., employees cannot see the value in the change especially as there has not been any reassurances from AC's management team about job security.

  • In addition, there does not seem to be any communication about the timeframe of the proposed implementation of the new production process. The company's approach has not taken into account the time it is likely to take the employees to adapt to the change, and there is no indication about whether the process has been rushed.

  • Nevertheless, providing additional training and running additional meetings, with increased communications and transparency can work as effective ways for AC to minimize or mitigate the resistance to change.

  • Accept any other relevant factor written in the context of the case study.

Award 1 – 2 marks for a response that shows limited understanding of the demands of the question. There is limited use of appropriate terminology and little, if any, reference to the stimulus material.

Award 3 – 4 marks for a response that shows some understanding of the demands of the question. Some relevant business management tools, techniques, and theories are explained or applied, and some appropriate terminology is used. There is some reference to the stimulus material.

Award 5 – 6 marks for a response that shows understanding of most of the demands of the question. There is relevant use of business management tools, techniques, and theories which are explained and applied, and appropriate terminology is used throughout most of the answer. There is some reference to the stimulus material that goes beyond the name of the organization. There is some evidence of a balanced response.

Award 7 – 8 marks for a response that shows a good understanding of the demands of the question. There is relevant use of business management tools, techniques, and theories which are explained and applied well, and appropriate terminology is used. There is good reference to the stimulus material, and good evidence of a balanced response. There are judgements that are relevant but not always well substantiated.

Award 9 – 10 marks for an answer that shows a good understanding of the demands of the question, including the impacts on the organization. There is relevant use of business management tools, techniques, and theories which are explained clearly and applied skilfully, with appropriate terminology used throughout the response. There is effective use of the stimulus material in a way that significantly strengthens the response. There is evidence of balance, which is consistent throughout the response. The judgements made are relevant and well substantiated.

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