Forces for Change & Recognizing Need for Change: Models, Drivers & Ethical Considerations

TAKEAWAYS:

• Forces for change are categorized into internal (e.g., poor performance, employee dissatisfaction) and external (e.g., technology disruption, regulatory changes)—both require data-driven diagnosis before intervention.
• Lewin’s 3-stage model (Unfreeze-Change-Refreeze) is foundational but Burke-Litwin’s causal model adds depth by linking vision, structure, and culture to transformational outcomes.
• Recognizing need for change uses SWOT analysis (internal) + PESTEL framework (external) to pinpoint gaps—e.g., NTC’s 5G rollout addressed technological lag (external) and internal process inefficiencies.
• Ethical considerations for change agents include transparency (e.g., disclosing Daraz’s layoff impacts), stakeholder equity (e.g., Nabil Bank’s farmer loan restructuring), and avoiding coercion (e.g., Pathao’s driver app updates with opt-in training).
• Contemporary issues like AI-driven change (e.g., eSewa’s chatbot) and remote work culture shifts (e.g., Himalayan Java’s hybrid model) demand adaptive OD strategies.
• Worked example: A Khalti merchant resisting digital payments → Diagnosis: Low digital literacy (internal) + cash dependency (external). Solution: Burke-Litwin’s “strategy” lever (train staff) + “culture” lever (incentivize digital transactions).

1. Forces for Change: Internal vs. External Drivers

Organizations change due to push (problems) or pull (opportunities). These forces are classified into two broad categories:

1.1 Internal Forces for Change

These originate within the organization and often signal performance gaps or misalignment. Examples:

• Poor financial performance: Declining profits (e.g., Nepal’s textile industry struggling with global competition).
• Employee dissatisfaction: High turnover (e.g., NTC employees protesting overwork).
• Inefficient processes: Bottlenecks in workflow (e.g., Daraz’s order fulfillment delays during Diwali).
• Leadership changes: New CEO vision (e.g., Nabil Bank’s digital transformation under new management).
• Workforce demographics: Aging workforce (e.g., Chaudhary Group needing succession planning).

1.2 External Forces for Change

These stem from the environment and are often uncontrollable. Examples:

• Technological advancements: AI, blockchain (e.g., eSewa integrating UPI).
• Economic shifts: Inflation, recession (e.g., Nepal’s fuel price hikes forcing cost-cutting).
• Legal/political changes: New labor laws (e.g., Nepal’s minimum wage hike).
• Social trends: Remote work demand (e.g., Himalayan Java’s WFH policies).
• Competitive pressure: New entrants (e.g., Daraz vs. Amazon Global).

WORKED EXAMPLE: NTC’s 5G Rollout

• Forces:
  • External: Global 5G adoption (competitive pressure), government push (political).
  • Internal: Legacy infrastructure, employee resistance to new tech.
• Diagnosis: Used PESTEL analysis to prioritize technology (external) and process (internal) changes.
• Outcome: Phased training + pilot projects in Kathmandu/Pokhara.

2. Recognizing the Need for Change: Diagnostic Tools

Change is only justified if the cost of inaction > cost of change. Tools to assess need:

2.1 SWOT Analysis (Internal Focus)

When to act?

• If Weaknesses > Opportunities (e.g., Daraz’s complaints > supplier growth), internal change is urgent.
• If Threats > Strengths (e.g., NTC’s budget vs. 5G costs), external adaptation is critical.

2.2 PESTEL Framework (External Focus)

MERMAID DIAGRAM: PESTEL Analysis Flowchart

flowchart TD
    A["PESTEL Analysis"] --> B["Political: Government policies"]
    A --> C["Economic: Inflation, GDP"]
    A --> D["Social: Demographics, trends"]
    A --> E["Technological: AI, automation"]
    A --> F["Environmental: Sustainability laws"]
    A --> G["Legal: Labor, data protection"]
    B --> H["Action: Lobby for FDI reforms"]
    C --> I["Action: Adjust pricing strategies"]
    D --> J["Action: Target Gen Z with ads"]
    E --> K["Action: Invest in AI chatbots"]
    F --> G --> L["Action: Comply with new regulations"]

3. Models of Change: Lewin vs. Burke-Litwin

Two classic models explain how change happens and what drives it.

3.1 Lewin’s 3-Stage Model

A simple, linear approach to change management:

1. Unfreeze: Prepare the organization for change (e.g., communicate vision).
2. Change: Implement new processes (e.g., train employees).
3. Refreeze: Stabilize the change (e.g., reward adoption).

MERMAID DIAGRAM: Lewin’s Model

stateDiagram-v2
    [*] --> Unfreeze: "Create urgency\n(Example: NTC announces 5G deadline)"
    Unfreeze --> Change: "Implement\n(Example: Pilot 5G in 3 districts)"
    Change --> Refreeze: "Stabilize\n(Example: Full rollout + incentives)"
    Refreeze --> [*]

Limitations:

• Assumes change is temporary (but continuous change is the norm today).
• Ignores culture/ethics (e.g., Pathao’s driver app updates without consultation).

3.2 Burke-Litwin’s Causal Model

A complex, systems-based model linking 12 organizational elements to change. Key components:

graph LR
    A["Vision & Strategy"] --> B["Leadership"]
    B --> C["Culture"]
    C --> D["Structure"]
    D --> E["Work Unit Climate"]
    E --> F["Individual Behavior"]
    F --> G["Organizational Performance"]
    G --> H["External Environment"]
    H --> A
    I["Transformational Forces"] --> A
    I --> C
    I --> D

Key Levers for Change:

Advantages over Lewin:

• Holistic: Addresses multiple layers (not just steps).
• Ethical: Explicitly includes leadership and culture.
• Adaptive: Works for incremental (1st order) or radical (2nd order) change.

4. Types of Change: First vs. Second Order

WORKED EXAMPLE: Daraz’s Supply Chain

• First-Order: Optimizing warehouse layouts (incremental).
• Second-Order: Switching to AI-driven demand forecasting (transformational).

5. Ethical Considerations for Change Agents

Change agents (consultants, managers) must adhere to ethical guidelines to avoid exploitation or coercion.

5.1 Key Ethical Principles

1. Transparency: Disclose impacts of change (e.g., "This layoff affects 50 employees").
2. Stakeholder Equity: Ensure fair distribution of benefits (e.g., Nabil Bank’s farmer loan restructuring).
3. Avoid Coercion: No forced compliance (e.g., Pathao’s driver app updates must include training opt-ins).
4. Confidentiality: Protect sensitive data (e.g., eSewa’s customer transaction records).
5. Sustainability: Changes should not harm long-term viability (e.g., Chaudhary Group’s plastic ban).

CASE STUDY: Nabil Bank’s Farmer Loan Restructuring

• Ethical Issue: Farmers defaulting due to crop failures.
• Change Agent’s Role:
  • Diagnosis: Used SWOT to identify external (drought) vs. internal (high interest) issues.
  • Solution: Burke-Litwin’s “structure” lever → Lowered interest rates + “culture” lever → Farmer education programs.
  • Ethical Outcome: No coercion (farmers could opt for rescheduling), transparent communication.

6. Contemporary Issues in Change Management

Modern organizations face new challenges requiring adaptive OD strategies:

In the Real World

1. eSewa’s Digital Transformation

   • Force for Change: External (tech disruption) + Internal (high cash transaction costs).
   • Model Used: Burke-Litwin’s “vision” lever ("Become Nepal’s #1 fintech") + “structure” lever (hiring blockchain experts).
   • Ethical Consideration: Transparency in communicating data privacy policies to users.

2. Daraz’s Supply Chain Overhaul

   • Force for Change: External (competition from Amazon Global) + Internal (high order delays).
   • Model Used: Lewin’s 3-stage for first-order changes (warehouse optimization) + Burke-Litwin’s “work unit climate” for second-order (AI integration).
   • Real-World Trace:
     • Unfreeze: Announced "Daraz Express" with 24-hour delivery.
     • Change: Partnered with local logistics firms (e.g., Gorkha Online) for last-mile delivery.
     • Refreeze: Incentivized drivers with performance bonuses.

3. NTC’s 5G Rollout

   • Force for Change: External (global 5G race) + Internal (legacy infrastructure).
   • Diagnostic Tool: PESTEL identified political (government support) and technological (5G spectrum) as critical.
   • Ethical Dilemma: Balancing speed vs. affordability—NTC had to ensure subsidized plans for rural areas.

Exam Tip

How to Score Full Marks

1. Define + Explain + Example (DEE) Formula

   • Question: "Explain Burke-Litwin’s model."
   • Answer:

     Burke-Litwin’s causal model is a systems-based approach linking 12 organizational elements (e.g., vision, culture, structure) to transformational change. Unlike Lewin’s linear stages, it recognizes interdependencies—e.g., a new vision (external force) requires leadership alignment (internal) to succeed. Example: Nabil Bank’s digital shift used Burke-Litwin’s “vision” and “structure” levers to flatten hierarchies and hire tech experts, resulting in a 20% increase in mobile banking users.

2. Diagrams = Easy Marks

   • Always draw:
     • Lewin’s 3-stage model (state diagram).
     • Burke-Litwin’s causal map (graph LR).
     • SWOT/PESTEL tables (Markdown tables).
   • Label clearly (e.g., "NTC’s 5G: Political → Government subsidy").

3. Link Theory to Real Cases

   • Question: "How would you apply Lewin’s model to Pathao’s driver app updates?"
   • Answer:

     Unfreeze: Pathao could announce a “Driver Empowerment Program” to create urgency (e.g., "App updates will double earnings"). Change: Pilot the update in Kathmandu with mandatory training (not forced adoption). Refreeze: Incentivize feedback (e.g., bonuses for top-rated drivers using the new app).

4. Ethics = High-Value Points

   • Question: "What ethical considerations would a change agent face in Daraz’s layoffs?"
   • Answer:

     1. Transparency: Disclose which departments are affected (e.g., "Logistics team of 50").
     2. Stakeholder Equity: Offer retraining programs for laid-off staff.
     3. Avoid Coercion: No forced layoffs—provide voluntary separation packages.

5. Avoid Common Mistakes

   • ❌ Describing Lewin’s model without an example (e.g., NTC, Daraz).
   • ❌ Confusing 1st vs. 2nd order change (e.g., calling NTC’s hotline expansion "second-order").
   • ❌ Ignoring ethics—always tie change strategies to fairness/sustainability.