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Organizational Change and Leadership

Authors:
Studies on Interdisciplinary Economics and Business
OzerOzcelik (Ed.)
“Studies on Interdisciplinary
Economics and
Business– Volume I
Bengü Hırlak1 and Ergün Kara2
Organizational Change and Leadership
1 Introduction
In the face of the socio-cultural, economic, political and technological
developments that are taking place in today’s business world, the structures
of businesses are becoming more and more complicated and management
approaches are changing, and the changes in organizations are accelerating.
Businesses shall be able to achieve sustainable competitive advantage, shall
make their change plans that shall allow them to adapt to these changes and
developments, and they shall develop their change strategies, management and
leadership approach and style in order to survive. Because, while some changes
experienced may solve problems, sometimes they may cause new problems to
arise. Eective leaders shall be required in order to be able to initiate change and
to resume it in a successful manner, without ignoring the condition when the
elements that may aect the change of a business have emerged. Eective leaders
are leaders who do not use power to resist the change, but who may accelerate
the change with the strong personal qualities, inspire their followers and mani-
fest a vision. In short, the role of the leaders in managing change is too important
that it cannot be denied.
e aim of this study is to underline the importance of leadership in the pro-
cess of change by addressing the skills and roles that the leaders shall have in
order to manage organizational change by identifying the link between change,
organizational change, change management and leadership literature.
2 Conceptual Framework
2.1 Change, Organizational Change and Change Management
Change is a concept that aects every aspect of life. Change may happen on every-
thing and everywhere, as the philosopher Herakleitos says, the only thing that
does not change is change itself. Economic, socio-cultural, political, technological
1 Kilis 7 Aralık University, Faculty of Economics and Administrative Sciences,
Department of Business Administration, benguhirlak@hotmail.com.tr
2 Osmaniye Korkut Ata University, Faculty of Economics and Administrative Sciences,
Department of Business Administration, ergunkara@osmaniye.edu.tr
Hırlak and Kara256
and legal structures are constantly changing besides the individuals. In today’s
competitive business environment, businesses shall follow and even anticipate
these changes occurring around them and determine their plans and strate-
gies accordingly in order to achieve sustainable competitive advantage. While
experiencing change in such a rapid pace may sometimes lead to conicts in or-
ganizations, it may cause a great deal of stress for the individuals. erefore, or-
ganizations shall understand what factors aect change, how they shall respond
to change, how they shall initiate and manage the change in order to respond to
change eectively (Cornell, 1996, p.23).
Change is dened as the process by which individuals, groups and organi-
zations respond to the dynamic internal and external factors that change the
current facts, and process of dealing with the process of moving from the cur-
rent condition to the desired condition (Singh, 2009; cited by:Goswami, 2015,
p.136). Organizational change, on the other hand, is related to optimizing per-
formance standards of an organization, and this may usually arise depending on
the proactive capabilities of the managers of the organization or on the periph-
eral changes or in response to the presence of a crisis. Regardless of the situation,
organizations shall always need a very skilful, good management team to be able
to trigger a change and to ensure that this change will be successful (Ebongkeng,
2018, p.3). Organizational change management is expressed as the application of
new procedures or technologies aimed at reorganizing a business environment
with changing requirements or taking advantage of business opportunities that
emerge (Markovic, 2008, p.7; Cited by:Goswami, 2015, p.136).
Change may be caused by many factors, and these factors may be mainly col-
lected in two groups, namely internal and external. ese factors are shown in
Fig.1.
Change may be performed proactively and as planned for creating the future,
or reactively and adaptively, i.e. in an unplanned manner (Attah, Obera and
Isaac, 2017, p.39). Planned change may take place in two ways:gradual or rad-
ical change. In order to adapt to changing conditions, all businesses may make
gradual changes from time to time. ese changes may cover a wide variety
of decisions and actions. For example, roles of organization members may be
redened, new roles may be specied, activities may be re-grouped, organiza-
tional structure may be changed, existing systems or procedures may be changed,
abandoned, or new ones may be presented (Dawson, 1994, pp.14–15; Cited
by:Bubshait etal. 1998, p.5). e purpose of radical change is to transform the
organization radically into a dierent style. is type of change involves creating
change in values, attitudes and beliefs, which are the elements of organizational
Organizational Change and Leadership 257
culture. All attempts to realize a radical change may fail unless a cultural change
takes place (Roberts and Hunt, 1991, p.321; Cited by:Bubshait etal. 1998, p.5).
Furthermore, Kerber and Buono (2005, pp.29–30) state that each of these
change approaches are guided by two main factors:complexity of the task and the
socio-technical uncertainty. e complexity of the task indicates the complexity
of the system, the number of essentially dierent components and the degree of
dierentiation in the organizational system where the change shall be applied.
As you may see in Fig.2, the optimal situation for the managed change approach
is that both levels of the complexity of the task and the socio-technical uncer-
tainty are less. If it is possible to implement change in a relatively simple, rou-
tine environment, and if the change involves well-known and accepted actions,
managed change may ensure optimal use of limited organizational resources. In
this context, ethical and persuasive communication by the change expert/strat-
egist is essential for achieving integrity and credibility. Because the members of
the organization shall be less likely to accept the change if they do not trust the
person implementing the change and his/her messages. In planned change, the
bottom line is complexity of the task. When the complexity of a task is increased,
it shall be better to adopt a planned change approach. And for the guided change,
Change
Requirement
External Factors
-Economical
-Market
-Technological
-Political
Internal Factors
-Leadership Style
-Human Resources
Issues
-Management
Structure
-Products/Services
-Organizational
Culture
-Eciency
Gradual
(Continuous) Change
-Redening the Roles
-Regrouping
-Restructuring
-System Reset
Radical Change
-Redening the
Culture
-Change
•Mission
•Strategies
•Policies
•Systems
Planned
Change
Fig.1: Change Requirement. Source:Dawson, 1994, pp.14–15; Cited by:Bubshait,
Burney and Nadeem, 1998, p.5
Hırlak and Kara258
what matters is the socio-technical uncertainty. If the future condition or the
solution for the change is not known, managers may not be able to plan the
change process carefully and may be able to guide change in a meaningful way
even in simple conditions faced. It would be more appropriate to adopt a guided
change approach rather than a managed change in such a case.
e process of change in organizations consists of three stages. e rst stage
is being ready for change and indicates that the members of the organization
are ready for change and that they support change. e second stage is adop-
tion. At this stage, change has occurred and the employees have adopted the new
methods. However, this adoption process is a trial process and employees deny
the change at the end of this stage. e third stage is institutionalization, and
change is reinforced until employees internalize the change and consider it as a
norm, and required eorts are made to ensure that the adoption stage is resumed
(Armenakis and Harris, 2002, p.169). Organizations may receive four dierent
types of responses to change, change messages, or just to possibilities of change.
ese are as follows (Cornell, 1996, p.25):
Withdrawal:is behaviour is related with the thought that the change has
not occurred and that the things shall always continue as usual.
Resistance:is behaviour covers sabotaging of the change by opposing to
change directly, delaying the implementation of the change, and refusing to
cooperate, etc.
Complexity of
the Task
Socio-Technical
Uncertainty
Lo
wH
igh
Low
High
Planned
ManagedGuided
Fig.2: Complexity, Uncertainty and Approaches of Change. Source:Kerber and Buono,
2005, p.30
Organizational Change and Leadership 259
Acceptance: is means submitting to the change reluctantly considering
that change is inevitable.
Embracing/adoption:is means truly volunteering for change in order to
implement the new order of things by looking at new opportunities positively.
Organizations shall always respond to change in the face of change being expe-
rienced and adapt themselves to their environment. Businesses, which cannot
adapt to this change, shall have their existence under threat aer a while (Waddell
and Sohal 1998, p.543).
e management of the organization shall not focus on the requirements of
the organization only, and shall not neglect the requirements of its employees in
order to reduce the resistance to change and to ensure adoption of the change
by the members of the organization. Because, change programs are crucial for
the survival and success of the organizations. Neglecting the requirements of the
employees may be a serious mistake at this point. If employees are neglected in
the planning and implementation of organizational change, this process shall
probably very stressful for all employees and the negative impacts of this con-
dition shall be reected on the organizations as some kind of a cost (McHugh,
1997, pp.345–359).
As a result of many researches conducted, it has been shown that an impor-
tant variable for the success of the change is the human factor, and it has been
found that the change programs are not successfully implemented without the
support of the persons, no matter how well the change program was developed.
In this context, it is not required that persons are ready for organizational change
only, but they shall also participate in the change (Herscovitch and Meyer, 2002;
Cited by:Mangundjaya, Utoya, and Wulandari, 2015, p.472). In other words,
the success of the organizational change is related with the participation of the
employees in the change. What is essential is to determine the variables that may
increase the participation rate of employees to the change (Mangundjaya etal.
2015, pp.472–477).
However, although we know that there are many studies related to organi-
zational change in the literature, the studies investigating the eects of change
on the individual level and its eects on the behaviour of employees are less
in number unfortunately (Raerty and Grin, 2006, p.1154). Yet, perceptions
and attitudes of employees against change have a great eect in the implemen-
tation of change successfully (Eby, Adams, Russel and Gaby, 2000, p. 420).
ese perceptions may facilitate or weaken the eectiveness of an intervention
aimed for change (Armenakis, Harris and Mossholder, 1993, Lewin, 1951, Cited
by:Susanto, 2008, p.51).
Hırlak and Kara260
ere are many studies that address the importance of the leader in initiating
of the change in the literature. Transformational leadership style, which is closely
bound up with change, draws more attention in the execution of the change in
these studies. is style of leadership is discussed under the next heading, “lead-
ership, in this study.
2.2 Leadership
Leadership term is of English origin, and “Lead” as a verb is described to guide,
to direct; and “Leader” is described as chief, guide, head, commander, captain,
pioneer (Redhouse, 2005). Leadership has been the subject of many studies in
popular and academic literature as a concept and a whole body of applications. It
is stated that leadership may be dened innitely under eleven main categories,
namely “focal point of the group process, art of assuring obedience, inuencing,
behaviour, form of persuasion, relation of power, means of achieving goals,
result of interaction, dierentiation of roles, activator of a structure and combi-
nation of dierent elements” (Bass, 1990a, pp.19–20). Leadership is the ability to
instil support and condence in people who need to achieve organizational goals
(Dubrin, 2012, p.346). Leadership is guiding the persons in the organization in
a proactive work for ensuring motivational process, inspiration, and following
up of organizational goals (Hill and McShane, 2008, p. 404). e main task of
the leaders consists of the realization of the organizational goals. us, leader-
ship means directing a group of people toward the accomplishment of a task or
the reaching of an endpoint through various ethically based means (Rowe and
Guerrero, 2011, p.2).
Leadership is being capable of inuencing others in order to achieve the spec-
ied goals, leading the organization to become more consistent and harmonious
(Sharma and Jain, 2013, p. 310), Management is also a process used to reach
organizational goals successfully just as leadership (Bohoris and Vorria, http://
www.ep.liu.se/ecp/026/076/ecp0726076.pdf, p. 2). However, while there are
similarities between the leaders and the managers in terms of the goals to be
achieved, it may be said that there are dierences in terms of the means they use.
Some of these dierences are provided in Tab. 1.
Developments and changes experienced have revealed new leadership
approaches such as transformational, charismatic and interactional leader-
ship, etc. One of the most comprehensive leadership theories for organizational
transformation is transformational and transactional leadership theories. While
Burns (1978) has brought forth initial ideas about transformative and transac-
tional leadership in political terms, Bass (1985) has improved these leadership
Organizational Change and Leadership 261
approaches and dened them in organizational terms (Eisenbach, Watson and
Pillai, 1999, pp.83–85). ese approaches may be described as follows:
Transformational Leadership: Transformational leadership is a style of
leadership that emerges as a result of the transformation process between
the leaders and their followers. Leaders oer awards for their followers’
performances. Transformational leaders shall apply the change aer devel-
oping a vision rst. is may only be achieved with intellectual stimulation,
i.e. leaders set challenging targets for their employees and encourage them to
rethink about their old ways of doing business. Leader may render the change
attractive and achieve the change successfully by ensuring that it addresses
the achievement and improvement requirements of the employees only. If the
leader may provide support, coaching and guidance for his/her employees
with an individualized approach in this process, this may facilitate the change.
ese coaching and guidance actions are particularly important for achieving
large-scale transformations and ensuring the creation of self-managing
teams. And many of the modern businesses are adopting teamwork for the
construction of an organization, which is an important cultural transforma-
tion in itself. (Eisenbach etal. 1999, pp.83–85). Transformational leadership
Tab. 1: Comparison of a Leader and a Manager. Source:Bennis, 1989, p.7; Lunenburg,
2011, p.2
Leader Manager
Is innovative Manages
Is genuine Is a copy
Improves, provide strength, creates the
future
Protects, supervises, develop the current
condition
Has a long-term perspective Has a short-term perspective
Asks what and why Asks how and when
Challenges status quo Accepts status quo
Focuses on persons Focus on the job, system and structure
Looks at external environment Looks at internal environment
Creates a vision Applies plans
Sees the whole forest Sees trees
Considers employees as colleagues Considers employees as subordinates
Trusts and improves employees Directs and controls employees
Does the right things Does things in the right way
Creates change Manages change
Serves his/her subordinates Serves his/her superiors
Hırlak and Kara262
has some key qualities that allow it to be distinguished from other types of
leadership. ese features are listed as follows (Bass, 1990b, p.22):
Charisma: Determination of mission, vision and culture, taking pride,
gaining respect and condence.
Inspiration:Using symbols that direct eorts, expressing important goals
with simple methods.
Intellectual stimulation:Providing support for resolution of problems in
intelligent, rational, and careful manner.
Individualised consideration: Oering personal interest, coaching and
counselling for each individual.
Transactional Leadership: Transactional leadership is a model based on
mutual exchange. In this type of exchange, the followers are awarded with a
prize when they full their duties and face a punishment when they do not.
e leader uses organizational resources to ensure his/her followers are obe-
dient and willing to work (Grundstein, 1999, p. 150). Transactional leaders
have certain features. ese are listed as follows (Bass, 1990b, p.22):
Contingent reward:Promising prizes for good performances and recogni-
tion of the successes.
Management by exception (active):Investigation of deviations from rules
and standards, taking corrective measures.
Management by exception (passive):Intervening when standards are not
met only.
Laissez-faire:Not taking responsibility, avoiding making decisions.
According to Burns (1978), transactional leadership occurs when a person
or a leader makes an attempt to make changes and communicate by going
making a deal on some issues and taking decisions together (Kuhnert
and Lewis, 1987, p.648). According to Bass (1990b, pp. 19–21), trans-
formational leaders inspire and provide energy to their employees, are
charismatic, cause intellectual stimulation, and may meet the emotional
requirements of their employees. Bass also suggests that leaders may learn
the skills they need to become a transformational leader trough training
and that they may learn the techniques required. Atransformational leader
is dened as a source of vision, creativity and inspiration that drives the
change (Al-Qura’an, 2015, p.1).
Charismatic Leadership:Max Weber described charisma as an eect that is
not based on authority of an oce, or the condition of followers ascribing
extraordinary qualities to their leaders. Charismatic leaders usually emerge
during transition periods of organizations and under stressful conditions
(Edwards 2012, p.14). Charismatic leadership is related to values that the
Organizational Change and Leadership 263
followers attribute to their leaders and the personal characteristics of leaders
(Pawar and Eastman, 1997, p.84).
2.3 e Role of Leadership in Organizational Change
Organizational change is dened as a deliberate eort by the leader or manager
of the organization aimed at improving the organization. While it is possible that
internal and external factors such as technological, social or economic or moti-
vational factors may lie behind the change process, it is also possible that visions
and innovative ideas of organization leaders may lie behind it, too (Abbas and
Asghar, 2010, p.18).
Curry (1992, pp.23–25) has cited many dierent authors to identify various
roles that the leaders may play to facilitate the change. ese are (Cited by:Gray,
1997, pp.8–9):
Leaders play an important role in the institutionalization of organizations, cre-
ating an environment where change can take place or aecting the perceptions
and attitudes of members of the organization.
• Leaders help to identify and to shape the issues that lead to innovation, to
dene the organization as an environment, to facilitate discussions, and to
encourage more participation in innovative activities. ey ensure participa-
tion of other members of the organization to the decision making process.
• Leaders create coalitions to support change, and they follow the important
processes.
• Leaders may provide nance and other incentives for participation in the
change process.
• Leaders are the sponsors of change sponsors, and they attempt to create a
synergy.
Leaders perform tasks that may facilitate change such as collecting informa-
tion, communicating with other members of the organization, developing new
coalitions, and identifying existing coalitions that perceive their members as
stakeholders within this process.
Leaders shall have a vision so that they may initiate the change. Moreover, de-
cision-making and communication processes shall be mutual. Otherwise, the
culture that was created as a result of the change shall not be shared.
According to Pagon etal. (2008, p.4), competencies that shall be found in the
leaders for a successful and eective change management are given in Fig.3.
According to Gill (2002, pp. 307–309), if we consider change as taking an
organization to a journey from its current condition to the future, dealing with
Hırlak and Kara264
problems that occur in course of the journey shall be related with leadership
besides being related with management. Change shall be well managed, planned,
organized and inspected. Eective leadership is required to be able to accomplish
the change successfully, i.e. it is the leader that makes the dierence. In order to
manage change successfully, an eective leader shall meet some dierent aspects
and requirements. ese are as follows (Gill, 2002, p.311):
e intellectual/cognitive aspects and requirements of leadership
(thinking): Eective leaders shall understand the information using their
intellectual and cognitive skills, and they shall reason with knowledge, imagine
the possibilities, make judgements, solve problems and make decisions.
e spiritual/moral aspects and requirements of leadership (meaning):e
spiritual aspect of leadership is about the desire to have a meaning and to
feeling of being esteemed that motivate people on what they are doing and
searching for. is feeling of having a meaning and being esteemed depends
on the vision and values shared. For example; Xerox PARC’s guru John Seely
Brown described the purpose of leader today as creating meaning and win-
ning people’s souls, not just to make money (Dess and Picken, 2000).
e emotional aspects and requirements of leadership (emotions):Eective
leadership also requires a well-developed emotional intelligence. Emotional
Cognitive
Competence
-Creativity
-Problem solving
skills
-Analytical skills
-Alternative and
strategic thinking
-Focusing on the
future
-A good guide
-Critical approach
and thinking
Functional
Competence
-Communication
skills
-Technical skills
-Personal
development
-Carrier planning
skills
-Managerial and
decision-making
skills
-Learning skill
Personal/Social
Competence
-Team work skills
-Self-management
-Inter-cultural
skills
-Stress
management skills
-Honesty, acting
ethically,
compassion
-Integration skills
-Motivation skills
-Skills for making
people move
Leadership Competencies Required for Successful and Eective Change Management
Successful
Change and
Change
Management
-Increase in
eciency
-Increase in the
quality of
relationships
-Lesser conicts
-Increased
cooperation
-Strong
organizational
culture and
climate etc.
Fig.3: Competencies Required in Leaders for Successful and Eective Change
Management. Source:Pagon etal. 2008, p.4
Organizational Change and Leadership 265
intelligence is expressed as the ability to understand oneself and other people,
to ensure self-control and self-condence, and to respond to others in appro-
priate forms. Leaders with high emotional intelligence use their personal
power instead of their ocial power or authority.
e behavioural aspects and requirements of leadership (actions):
Behavioural skills required for leadership covers, for example, both using
emotions and responding to emotions using body language, as well as com-
municating by writing, speaking, listening and physical behaviour using
personal power.
3 Conclusion and Discussion
Change is an essential concept, which never goes out of date and always continues
to be discussed, in the eld of management. Today, we experience continuous
change in all kinds of structures as an inevitable condition due to vital reasons.
e developments in the eld of science and technology, which have an impor-
tant role in satisfaction of human requirements in particular, force organizations
to undergo a serious structural change. erefore, it is only possible for organi-
zations to sustain their existence in line with their missions, only by keeping up
with current developments and changes. Organizations are trying to meet the
demands that arise as a result of all developments that are experienced, and to
adapt to change. Leaders shall have a signicant eect on achieving this adap-
tation. However, it is almost impossible that these continuous organizational
changes may be succeeded by managers with lesser visions. us, managers with
leadership qualities are required in order to ensure a successful transformation
in the organizations. Managers with dierent leadership qualities are employed
in today’s organizations. It is not enough for a leader just to motivate his or her
employees on work, to take steps to improve their performance or to motivate
them. e leader shall also have the knowledge and technique to ensure that the
organizational change is carried out successfully.
Many researches on the role of leaders in organizational change show that
leaders who attach importance to participation in organizational decisions, who
are agreeable with a democratic approach, and who keep their communication
channels always open are more successful in the works for achieving change. is
leadership style, which may keep up with the changes that may occur around the
business while keeping its organizations at the top level in terms of eciency,
is named as the “Transformational Leadership Model” within the literature.
us, transformational leadership has become the most preferred and accepted
leadership model for organizational change. Transformational leaders work to
Hırlak and Kara266
determine the most appropriate vision for the organization and to realize radical
changes that shall be performed in economic, social and technological terms to
reach their goals in line with this vision. Atransformational leader shall create
a detailed plan of change and manage the process in the best way to bring the
organization to the future in the most appropriate way for its current condi-
tion. Failure shall be inevitable if the organizational change process can not be
planned and managed properly.
When the need for change arises, it shall be ensured that the necessary infra-
structure conditions are met and that the change is perceived positively in both per-
sonal and organizational contexts in order to realize the change. In such a condition,
it would also be possible to remove any resistance that may cause the change to fail.
At this point, leaders shall ensure the harmony and consistency of the change pro-
cess with the strategies, policies, visions, goals, objectives, values, and beliefs of the
business in order to manage the change well. ey shall take necessary precautions
to prevent resistance against change, to keep communication channels open,
and to support the development of the skills and knowledge required for change.
Dierences in organizational structure shall also be considered in the change.
Because the structure of each organization is dierent and the change made in one
organization may not be suitable for another organization. All dierences shall be
considered when you are managing a change. Changes applied regularly and prop-
erly by considering organizational culture and structure will be successful.
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