Using Internal Loss Data to Mitigate Operational Risks
The modern approaches to risk management are data-driven. There are four basic steps to this approach which we will study later in this module. The first step contains information about how data related to internal losses suffered by an organization needs to be collected and studied in order to better mitigate risks in the future. […]
Altman’s Z Score Model
Academicians and practitioners from all over the world have been tried very hard to come up with a model which would help them to predict bankruptcy in a firm before it occurred. In the previous article, we have already studied how the expected default frequency model was used and what its advantages and limitations were. […]
Importance of Communication in Change Management
For implementing a change program successfully, communication is the key and one of the most complex parameters as it involves an exchange of ideas and feelings with people in an organization through various mediums. It is one of the toughest issues which an organization is faced with during the entire process of implementation of change. […]
Credit Rating Terminology
Credit rating is an important and almost central part of the overall credit risk management function in any organization. Every major organization around the world has implemented credit rating in some form. In many companies, credit rating has been overtaken by credit scoring. Instead of providing a rough range about the creditworthiness of a prospective […]
On-Demand Insurance
The millennial consumers are remarkably different from their predecessors. This is true in the sense that whilst earlier generations preferred to own as many resources as possible, the current generation prefers to rent. This is the reason why apps supporting the on-demand economy have ended up disrupting multi-billion-dollar industries. Take the case of Uber, which […]
Change is an important and an indispensable part of the organizational life. It is all pervasive and hence comes the question of paying attention to the importance of building the coping and adaptive mechanisms of an organization for being current and competitive in the contemporary scenario.
The phrase “Resistance to Change” is discussed hand to hand along with the concept of Change Management. Resistance to Change may be organizational or individual in nature.
According to Agocs, 1997, organizational resistance involves all the organizational behavioural patterns which impede or undermines change.
A mild degree of resistance to change is considered to be positive as it provides a great extent of behavioural stability as well as predictability. It is believed to have a favourable influence on the decision making, evaluation of the available alternative critically and leads to a healthy brainstorming on the viability of various ideas and strategic alternatives. But, on the other hand, resistance to change hinders the progress of the work due to unnecessary chaos and creates adaptability issues.
Resistance to change can manifest in different ways. Resistance towards a change can be expressed in an overt manner, covertly, implicitly, can be immediate or may be deferred. Individual Resistance to Change can be classified into the following categories as below:
According to de Jager, 2001, Rational or Irrational Resistance to Change can be defined as merely a perceptual process. Irrational resistance to change does not find too much of a mention in the change literature. Hence the irrational resistance does not have a clearly defined definition. Irrational resistance can only be felt or usually expressed in various behavioural forms.
On the other hand, Rational Resistance to Change is backed by logical argument, justification or a reward which can bring about the change.
Rational Resistance to Change can be classified into Justified and Unjustified Resistance to Change. Unjustified Rational Change is usually psychological in nature and may involve conflicting commitments in a hidden form (Kegan & Lahey, 2002), might manifest as personal insecurities or fears (Powell & Posner, 1978; Yukl, 2006) or may be simply as a belief that a change may come against one’s very own ideals or culture (Lawson & Price, 2003; Recardo, 1995; Schein & NetLibrary, 2004; Yukl, 2006). Unjustified rational resistance may take the following forms with fear or threat being the major drivers:
According to Recardo (1995), an employee who is faced with the fear of unknown may require special efforts in communication from the change agent for managing that fear.
For dealing with the fear of failure or being considered as incompetent, the organization may temporarily introduce changes in the workflow or change the employee evaluation procedure so that the employees are reassured that they will not be penalized during the entire change process.
Atkinson (2005), a change specialist is of the view that various change programs fail to meet the intended objectives due to the lack of efforts devoted to effective internal public relations.
Though some fears and threats can be easily addressed with devoted efforts from the change management involving effective communication with the key stakeholders and the people who are directly affected by the change. However, unhealthy threats and fears cannot be easily addressed and are beyond the purview of the change agent or the management and may take a longer time for adaptation process.
Justified Resistance takes place when the real threat or fear exists and the change is manifested in a negative form. Several consultants explain that the Justified Resistance is believed to have a positive effect on the organization (de Jager, 2001; Atkinson, 2005).
According to Dent and Goldberg (as cited in Oreg, 2006 p. 73), the members of the organization resist adverse outcomes of the change and not the change itself. The negative outcomes of the change may take the following forms:
Research studies have proven that a negative consequence of change will lead to resistance from the employees which is obvious and cannot be avoided. For example, organizational downsizing or a reduction in the pay of employees will undoubtedly lead to a resistance from the employees, but this resistance may not essentially affect the possible effects or the outcomes of the change.
Resistance to change can be expressed in an overt or covert manner (de Jager, 2001). According to Atkinson (2005), identification of overt resistance is relatively easier, and the appropriate strategies can be used for mitigating its effects.
Overt resistance may manifest in various forms but is usually expressed in the form of either opposing vocally or in the form of strong agitation. On the other hand, it is very difficult to detect covert resistance to change. According to Recardo (1995), covert resistance to change may be expressed in the following ways:
Resistance to change is still a controversial area of research or study as still there is an absence of a proper consensus between different authors regarding the change outcomes, which is due to the lack of substantial empirical pieces of evidence or facts on the change literature.
Resistance to change is still a potential area of investigation or further research, and a lot of newer insights on this subject can be unveiled through effective research and investigation.
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