The Industry Analysis: TELECOMMUNICATION INDUSTRY

Introduction: The Telecommunications is the world's biggest machine. Strung together by complex networks, telephones, mobile phones and internet-linked PCs, the global system touches nearly all of us. It allows us to speak, share thoughts and do business with nearly anyone, regardless of where in the world they might be. Telecom operating companies make all this happen. Not long ago, the telecommunications industry was comprised of a club of big national and regional operators. Over the past decade, In the industry has countries been swept the up in

rapid deregulation and

innovation.

many

around

world,

government monopolies are now privatized and they face a plethora of new competitors. Traditional markets have been turned upside down, as the growth in mobile services out paces the fixed line and the internet starts to replace voice as the staple business. Plain old telephone calls continue to be the industry's biggest revenue generator, but thanks to advances in network technology, this is changing. Telecom is less about voice and increasingly about text and images. High-speed internet access, which delivers computer-based data applications such as broadband information services and interactive entertainment, is rapidly making its way into homes and businesses around the world. The main broadband telecom technology - Digital Subscriber Line (DSL) - ushers in the new era. The fastest growth comes from services delivered over mobile networks.

Of all the customer markets, residential and small business markets are arguably the toughest. With literally hundreds of players in the market, competitors rely heavily on price to slog it out for households' monthly checks; success rests largely on brand name strength and heavy investment in efficient billing systems. The corporate market, on the other hand, remains the industry's favorite. Big corporate customers - concerned mostly about the quality and reliability of their telephone calls and data delivery - are less price-sensitive than residential customers. Large multinationals, for instance, spend heavily on telecom infrastructure to support far-flung operations. They are also happy to pay for premium services like high-security private networks and videoconferencing.
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Telecom operators also make money by providing network connectivity to other telecom companies that need it, and by wholesaling circuits to heavy network users like internet service providers and large corporations. Interconnected and wholesale markets favor those players with far-reaching networks.

Feature Of Industry

Telecommunication awards from Frost & Sullivan Frost & Sullivan is the marketing consultant agency which always reviewing and giving awards to the telecommunication companies which have high achievement and keep always giving a great telecommunication ideas. This year, 2009, Frost & Sullivan again gives awards to several telecommunication companies in Indonesia such as Telkomsel, Telkom, Indosat, Bakrie Telecom and Indonesia Com.

Music and Telecommunication Industries in Indonesia Music industry in Indonesia has been getting better since 1-2 years ago compared to about 5 years ago. Telecommunication companies are really helping music industry to grow well especially by providing telecommunication service that called Ring Back Tone (RBT) which allow mobile telecommunication subscriber to change to ring back tone to the favorite song.

Huawei network platform in Indonesia Few years ago, at the first introduction of telecommunication industry, Europe network platform dominated almost the entire of telecommunication companies in Indonesia. Telecommunication infrastructure is the key point while telecommunication companies plan to launch telecommunication services. Europe network platform is the first choice while telecommunication companies decide to deploy telecommunication infrastructures.

Proporsion Of the industry:

1. Highlight the infrastructure backbone availability/survivability and scalability used to transport the services you offer. 2. Highlight service level agreement (SLA) offerings (even if not asked) and emphasize your ability to provide uninterrupted service. 3. Bundle in architecture/design and integration expertise.

Each of these provides the customer with insight into how you as a provider are much more than just a commodity-based store that competes on price. Each of these is discussed below in further detail. Highlight survivability. This is key in that you want the customer to know that you have engineered the best backbone infrastructure and that you can guarantee your network can scale to meet both current and future bandwidth needs. This approach highlights the fact that you have invested the time and capital into building a world-class network that can handle all of your customers needs. This can soften the blow of percentage points higher in transport costs because it provides the customer peace of mind. If you don't highlight and emphasize this in the response, the customer will lean toward the lowest-cost provider, regardless of whether or not they can actually deliver around failure and growth.

Highlight SLAs. If you don't have them, you need them. If potential customers don't ask for them in the RFP, tell them anyway. Most RFPs are tactical in nature and don't necessarily consider a three-to-five year window of requirements. Expanding the response in anticipation of the customer requiring SLAs in the future shows that you are a strategic partner, not just a supplier competing on cost.

Bundle in expertise. Whether this expertise is on front-end planning and design work or on back-end integration, most customers do not have the in-house expertise or resource pool to handle migrations to technologies requested in RFPs. The ability to provide this expertise and the ability for a customer to get these resources from one place is a strategic value proposition. It also means the customer will have fewer vendor contracts to manage. Touting your expertise as a mechanism for reducing deployment costs and minimizing migration risks can be a very powerful incentive for the customer.

These three areas represent value propositions that can differentiate one provider from another in the commodity service space. If you don't have the ability to respond in this fashion, you could still win on cost. But more and more, enterprises are looking for their carriers to bring more to the table and aligning your responses to these facts can help you win more than your fair share.

Company Profile: Portugal Telecom

Portugal Telecom (PT) is the largest telecommunications service provider in Portugal. Although it operates mainly in Portugal and Brazil, it has also a significant presence in GuineaBissau, Cape Verde, Mozambique, Timor-Leste, Angola, Kenya, the People's Republic of China, and So Tom and Prncipe. A global telecommunications operator, the Portugal Telecom Group is the leading company in all the sectors in which it operates nationally. It can justly boast of being the Portuguese organization with the best national and international projection, plus its possessing a diversified business portfolio, in which quality and innovation are decisive aspects. It also easily holds its own with other international cutting-edge companies in the sector. The companys business embraces the full range of segments of the sectors telecommunications activity: fixed, mobile, multimedia, data and corporate solutions.

Those telecommunications and multimedia services are available in Portugal, Brazil and in emerging international markets. Currently, Portugal Telecoms international presence extends to countries such as Morocco, Guinea Bissau, Cape Verde, Mozambique, Timor, Angola, Kenya, China, and So Tom & Principe. One place that plays a major role in Portugal Telecoms globalization strategy is Brazil, where today it has a stake in the largest mobile telecommunications company in South America Vivo. In Brazil, the companys presence extends to a stake in Primesys, a company supplying infocommunication solutions for the corporate market. In addition, the Group holds 18% of the capital of UOL, Brazils largest Internet portal, and controls Dedic and Mobitel, companies operating in the contact center and message transmission segments, respectively. The company has steadily consolidated its growth by developing new business in areas of rapid expansion, such as mobile voice and data, multimedia and Internet broadband-access services. And in so doing, Portugal Telecom has, at the same time, contributed to the development of the Information Society. In fact, a Group priority is to develop innovative solutions and successfully
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meet

any

challenges

created

by

companies

and

ordinary

citizens.

Partnerships and strategic agreements, signed with benchmark companies in various sectors, have likewise contributed to enhancing capacities and the wide range of products available.

The PT Group undertakes its social responsibility in relation to the community through the ongoing support it gives to diverse institutions, motivating its employees by generating a corporate volunteer spirit. Creating innovative solutions aimed at lessening the difficulties of customers with special needs, the company also plays an active role in areas such as education, the environment, culture and sports.

History The first telephone experiments in Portugal connected Carcavelos to the Central do Cabo in Lisbon, in 1877. In 1882, the Edison Gower-Bell Telephone Company was established in both Lisbon and Porto, to explore the respective telephone service concessions. In 1887, the concession was transferred to APT - The Anglo Portuguese Telephone Company, which was kept by the latter until 1968, the year in which the Public Company "Telefones de Lisboa e Porto" (TLP) was created. The Post Office, Telegraphs and Telephones (CTT) explored until this present day, the telephone service in the rest of the country. For the exploration of radiotelegraphy and wireless telephone, a contract with the Marconi's Wireless Telegraphy Company concession was confirmed in 1922. In 1925, the "Companhia Portuguesa Rdio Marconi" (CPRM) was set up and took on all responsibilities of the previous concession. In 1970, CTT became a Public Company and in 1989, the TLP was transformed into a Limited Company, and was completely controlled by the State. In 1992, the Portuguese government and the Public Service Television Corporation RTP agreed to separate the transmitter network from the rest of the corporation, transferring it to a recently created state-owned company named "Teledifuso de Portugal" (TDP). The purpose of this was to explore a nationwide TV broadcasting network available for any TV station in Portugal to request its services. At the time, RTP (a "native" client of TDP) was having competition for the first time since its creation in the 1950s. In 1992, CTT became a Limited Company with public
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capital and the Comunicaes Nacionais, SPGS, SA (CN) was created, a state holding company responsible for the managing of all state participation within the sector - CTT, TLP, CPRM e TDP. In this same year, the Telecommunications developed by CTT was automatized through the creation of Telecom Portugal, SA, giving CTT the possibility to dedicate itself exclusively to the Post Office. With this, Portugal had its own telecommunications network which was being explored by 3 operators: the TLP explored the telephone services in the Lisbon and Porto areas, Telecom Portugal was responsible for the remaining national, European and Mediterranean communications; and Marconi took hold of international traffic. In 1994, a unique national telecommunications operator was created with the fusion of companies within the CN State holding: Portugal Telecom, SA (PT), with the fusion of Telecom Portugal, TLP and TDP. Portugal Telecom was the only telephone operator in Portugal, being a monopoly, until 1994, when the government gradually retired its control over the corporation and, in 2000, Portugal Telecom became a publicly owned company. Since then, it has held a dominant position in the liberalized Portuguese market. In early 2007, the Portuguese conglomerate, Sonae's takeover offer for Portugal Telecom failed. PT's board rejected an initial bid, worth EUR 11.1 bn, in February 2006. Sonae.com's takeover bid opposed Belmiro de Azevedo (founder and historical chairman of Sonae holding company) and his son Paulo Azevedo (then the head officer of Sonae.com telecommunications operator) to the investor Jos Berardo and PT's administrators Zeinal Bava and Henrique Granadeiro. In April 2007 the European Commission gave an ultimatum to the Portuguese

government ordering it to give up on the 500 golden shares pack that it owned on the company and that enable special veto powers to the government on vital issues. This could give the government a decisive role in the bid by any company to buy Portugal Telecom. In November 2007, Portugal Telecom spun off its media assets (PT Multimdia), that included TV Cabo andLusomundo Cinemas. In January 2008, the European Commission began legal proceedings against the Portuguese government over its 'golden share' in incumbent telecoms operator Portugal Telecom. The 500
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golden shares with extended voting rights, allowing it to block potential takeover bids, were the reason for the Commission's legal action. Similarly, in November 2005, the Commission had forced the Spanish government to give up its golden share in the other telecommunications' major player in the Iberian Peninsula, the Spanish telecoms giant Telefnica. It involved 3 main activities:

Identification of active companies that operate in the Telecommunications (Terrestrial and Satellite) Industry.

Characterization of each company profile. Recommendations for the definition of areas and forms of cooperation between the Industry and ESA for industrial activities (products and services) in the field of Telecommunications.

Porter's 5 Forces Analysis

1. Threat of New Entrants. It comes as no surprise that in the capital-intensive telecom industry the biggest barrier to entry is access to finance. To cover high fixed costs, serious contenders typically require a lot of cash. When capital markets are generous, the threat of competitive entrants escalates. When financing opportunities are less readily available, the pace of entry slows. Meanwhile, ownership of a telecom license can represent a huge barrier to entry. In the U.S., for instance, fledgling telecom operators must still apply to the Federal Communications Commission (FCC) to receive regulatory approval and licensing. There is also a finite amount of "good" radio spectrum that lends itself to mobile voice and data applications. In addition, it is important to remember that solid operating skills and management experience is fairly scarce, making entry even more difficult.

2. Power of Suppliers. At first glance, it might look like telecom equipment suppliers have considerable bargaining power over telecom operators. Indeed, without high-tech broadband switching equipment, fiber-optic cables, mobile handsets and billing software, telecom operators would not be able to do the job of transmitting voice and data from place to place. But there are actually a number of large equipment makers around. There are enough vendors, arguably, to dilute bargaining power. The limited pool of talented managers and engineers, especially those well versed in the latest technologies, places companies in a weak position in terms of hiring and salaries.

3. Power of Buyers. With increased choice of telecom products and services, the bargaining power of buyers is rising. Let's face it; telephone and data services do not vary much, regardless of which companies are selling them. For the most part, basic services are treated as a commodity. This translates into customers seeking low prices from companies that offer reliable service. At the same time, buyer power can vary somewhat between market segments. While switching costs are relatively low for residential telecom customers, they can get higher for larger business customers, especially those that rely more on customized products and services.
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4. Availability of Substitutes. Products and services from non-traditional telecom industries pose serious substitution threats. Cable TV and satellite operators now compete for buyers. The cable guys, with their own direct lines into homes, offer broadband internet services, and satellite links can substitute for high-speed business networking needs. Railways and energy utility companies are laying miles of high-capacity telecom network alongside their own track and pipeline assets. Just as worrying for telecom operators is the internet: it is becoming a viable vehicle for cut-rate voice calls. Delivered by ISPs - not telecom operators - "internet telephony" could take a big bite out of telecom companies' core voice revenues.

5. Competitive Rivalry. Competition is "cut throat". The wave of industry deregulation together with the receptive capital markets of the late 1990s paved the way for a rush of new entrants. New technology is prompting a raft of substitute services. Nearly everybody already pays for phone services, so all competitors now must lure customers with lower prices and more exciting services. This tends to drive industry profitability down. In addition to low profits, the telecom industry suffers from high exit barriers, mainly due to its specialized equipment. Networks and billing systems cannot really be used for much else, and their swift obsolescence makes liquidation pretty difficult.

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SWOT Analysis:
A SWOT analysis of a telecommunications company entails identifying and evaluating the strengths, weaknesses, opportunities and threats involved with the operation of the company. Telecommunications refers to how data and information are sent and received globally, and although that has remained constant over time, specifically how information is transmitted has changed due to technological advances. Telecommunications once referred to transistors and antennas, but currently refers more to fiber-optic cables and communication networks.

1. Strengths A telecommunications SWOT analysis should identify the internal structures within the industry or company that are performing well or better than expected. The internal structures could highlight human resources, physical capital or elements within the companys control. For example, the telecommunications strengths may highlight economies of scale, an engaged and active management team, high staff morale, a strong brand name, first-rate field equipment and sustainable business modeling. Huge Customer potential The broadband subscribers grew from 0.18 million in 2005 to6.2 million as on 30 April 2009 and about 7.98 million, at the end of the December 2009. High Growth Rate Wireless subscribers growing at a CAGR of 60 per cent per annum since2004. High return on Investment Easier to create economies of scale thereby increasing return on investment Liberalization efforts by Govt. The share of private sector in total telephone connections is now 82.33% as per the latest statistics available for December 2009 as against a meager 5% in 1999. Lower capital expenditure The Indian telecom market is a high density area, which means more population per tower. This means lower capital expenditure cost.

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2. Weaknesses The weaknesses of a telecommunications SWOT analysis would involve the internal structures within the industry or company that are performing poorly or worse than expected. The internal structures could highlight human resources, physical capital or elements within the companys control. For example, the telecommunications weaknesses may highlight an ineffective Board of Directors, low broadcast frequencies, poor customer service, low signal strengths or a high overhead cost structure.

Poor Telecommunication Infrastructure. Late adopters of New Technology India will be among the last countries in the world to get access to3G technology. Some estimates suggest that nearly 132 countries across the world already have 3G technology and mobile services in one form or the other.

Most competitive market 10 to 12 companies offer mobile services in most parts of India, globally, the average is 4. A market strongly regulated by Government. Difficult to enter because of requirement of huge financial resources. E.g Auction of 3G license has reached Rs 15814.15 crores.

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3. Opportunities The opportunities of a telecommunications SWOT analysis would involve the external structures outside the industry's or companys control that could potentially benefit the company or be an area for growth. For example, the telecommunications opportunities may highlight a decline in competitors, a decrease in the cost of broadcast signals, technological advances, an increase in communication networks and channels, or new tax incentives. 3G Telecom services and 4G services. More Quality Service Mobile Number Portability will force the Service provider to improve their quality to avoid losing subscribers and Value added Services (VAS) The mobile value added services include, text or SMS, menu based services, downloading of music or ringtones, mobile TV, videos, streaming, Sophisticated m-commerce application sects. Mobile banking, Mobile Ticketing etcBoost to Telecom Manufacturing Companies Production of telecom equipments in value terms has increased from Rs. 412700 million (2007-08) to Rs.488000 million during 2008-09 and expected to increase to Rs. 575840 million during2009-10. Telecom Equipment Exports The Indian telecom industry is expected to reach a size of Rs 344,921 crore by 2012 at a growth rate of over 26 per cent, and generate employment opportunities for about 10 million people during the same period. The sector would create direct employment for 2.8 million people and for7 million indirectly, according to a Frost and Sullivan report. Horizontal Integration Entry Into other consumer segments leveraging the present channels E.g. DTH service like Reliance BIG TV, Tata SKY, Airtel digital TV by telecom majors like Reliance, Tata and Airtel Respectively. Other examples : Airtel website builder Providing fibre Connectivity to 2,50,000 village panchayat by 2012.

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4. Threats The threats of a telecommunications SWOT analysis would involve the external structures outside the industry's or the companys control that could potentially hurt the company or cause harm in the short or long run. For example, the telecommunications threats may highlight a shrinking economy, less demand for telecommunications services, an increase in health care costs, increased regulation, a decrease in the number of radio frequencies or changes in the population. Telecommunication Policies E.g. Trai's 2G direction affecting new players most notably TataTeleservices, Norways Telenor and Essar-owned Loop Telecom Renewal of 2G license on the basis of market rates of 3G auctions TRAI intentions of rolling out 4G or the fourth-generation technology, known as the ultra-broadband in 2-3 years raising fears rendering 3Gservices somewhat obsolete. Declining ARPU (average Revenue per user) E.g. price wars like per-second billing which is deflating revenues and making sure the survival of the fittest Partiality on the part of the Govt. E.g. Allowing 3G service in a PSU (MTNL,BSNL) before auctioning to Private Sector . Content Piracy

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LITERATURE REVIEW
Authors: Pardo del Val, Manuela & Martnez Fuentes, Clara Title : RESISTANCE TO CHANGE: A LITERATURE REVIEW AND EMPIRICAL STUDY

Abstract:

This paper examines organizational change, focusing on the distinction of changes according to their scope and presenting a typology of evolutionary and strategic changes. We also offer an in depth study of resistance to change. Through empirical research, we have analyzed the importance of the sources of resistance to change defined theoretically, also considering both types of changes. We have shown which sources of resistance differ most, according to the scope of change, offering hints about where organizations should pay special attention when initiating a change process.

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Title: Reasons for Resistance to Change Author: Aaron Glassman

This paper will begin with a general discussion of four resistance to change categories. This will be followed by an analysis of the relevant literature and will conclude with the suggestion of a new resistance to change model along with recommendations for future research.

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Title: STRATEGIC MANAGEMENT OF CHANGE Author: Douglas Lautner, Assistant Chief, Department of the Air Force, Mercury, Nevada

Abstract:

Moving at the speed of change. This statement could be the buzz-phrase of the nineties, and into the new millennium. Those senior officers tasked with the responsibility of leading their organizations into the next millennium will not be able to do it alone. They will need the ideas, support, and participation of everyone in their organizations. The problem that prompted this project was that the Range Complex Fire Department has not always communicated and implemented change effectively. The purpose of this project was to evaluate the perceptions of both senior officers, and rank and file personnel on how effectively change is communicated and implemented. This study was also used to measure personnels resistance to change. The descriptive and evaluative research methods were used. The research questions were: 1. Do rank and file personnel feel that change is communicated effectively? 2. Do senior officers feel that they communicate change effectively? 3. Are fire department personnel resistant to change? A literature review and one interview were conducted to gain insight into communication during change management. Managing people during an organizational change is a key competency for all managers and change management practitioners. Should they focus on resistance to change or promote readiness to change among their employees? This paper explores both paradigms and examines four issues: 1. Should resistance to change be overcome? 2. How can one better understand individuals during times of change and which models are valid? 3. Which managerial actions are the most effective? 4. How can one determine if the transition is progressing toward the desired change? A practical conceptualization for understanding and helping employees adapt to the change is then proposed.
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Title : Managing Resistance to Change or Readiness to Change? Prepared by Professor Cline BAREIL, Cahier n 04-02 January 2004
o

Abstract:

International Review of Business Research Papers Vol. 7. No. 3. May 2011. Pp.112 - 121 Resistance to Organizational Change: Putting the Jigsaw Together Saima Ijaz and Antonios Vitalis It seems as if we once again rhyme to All the King's horses, and all the King's men couldn't put Humpty Dumpty together again in our organizations when one examines the change management literature in general and resistance to organizational change literature in particular. It can generally be proposed that most of the literature associated with organizational change takes the perspective that any form of resistance to change is an infuriating obstruction which needs to be overcome. This certainly appears to be the case with the frequent texts and Journal Publications which specifically address change management issues. These Publications seem to view resistance as a deviant behaviour that needs to be comprehended and squashed. However recently it has been proposed that the prevailing view of resistance to change might be questionable as dissent may actually play a positive role in organizations. In this paper we will expand the dialogue surrounding the understanding of resistance to change in organizations within the change literature. This paper follows the perceived understanding of the concept of resistance to change from its acknowledged first appearance in Coch and Frenchs classic study titled Overcoming Resistance to Change (1948). Our study takes into account the various gaps in the literature regarding the issues associated with attempts to delimit and ascribe meaning to organizational phenomena. Particular attention will be given to the idea of resistance to [organizational] change. Well cited historical and contemporary organization studies sources that attempt to describe the concept of resistance to change will be critically appraised. Based on this evaluation we propose that established classifications may serve to limit our understandings of resistance to change, a concept now studied for over half a century.

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Title : RESISTANCE TO CHANGE AND ERP IMPLEMENTATION SUCCESS: THE MODERATING ROLE OF CHANGE MANAGEMENT INITIATIVES

Author : Zafar U. Ahmed,1 Imad Zbib,2 Sawaridass Arokiasamy, T. Ramayah and Lo May Chiun

ABSTRACT Enterprise Resource Planning (ERP) is a useful tool that builds strong capabilities, improves performance, supports better decision making, and provides competitive advantage for businesses. ERP aims to help the management by setting better business practices and equipping them with the right information to take timely decision. In any new technology implementation, one of the issues that need to be addressed is the resistance to change. Many implementations have failed due to strong resistance from the end users. Thus, the main purpose of this paper is to test the impact of resistance to change on ERP's implementation success and how change management initiatives acts in the capacity of a moderating role. Using data collected from 69 manufacturing organizations through a mail survey, it was found that resistance to change is negatively related to achievement of predetermined goals (b = 0.930, p < 0.01) and user satisfaction (b = 0.952, p < 0.01). Further, change management initiatives did not moderate the relationship between resistance and predetermined goals but it moderated the relationship between resistance and user satisfaction. In addition, change management initiatives have a direct positive impact on user satisfaction. This research concludes that the human factor is very important in ERP's implementation.

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Title : A Different View on Resistance to Change Author : Kilian M. Bennebroek Gravenhorst , Universiteit van Amsterdam Faculty of Social and Behavioural Sciences , Amsterdam School of Communication Research (ASCoR) ,Kloveniersburgwal 48 ,1012 CX Amsterdam , The Netherlands

Abstract For half a century or more, organization scientists have been claiming that change has become the steady state of the contemporary organization. Organizations have to change to adapt to the new demands of their environments. At the same time, we are confronted with the widespread notion that people do not want to change. In general, psychological and management literature describe resistance as a standard or even natural psychological response to change. Resistance is supposed to result from individual and organizational forces that are directed at stability. Thus, it is explained to managers and consultants how they can deal with employees who resist change and how resistance can be overcome. In this paper, the general view on resistance is questioned. I propose an alternative view in which people want to contribute to change in their organization. This view is supported by six case studies in organizations involved in complex change processes. The first question in these studies focuses on the degree to which resistance or willingness to change is found in organizations. Resistance is commonly described as a response that has to be expected from all members of an organization. Here, I investigate how positive and negative responses to change are distributed within an organization. The second question focuses on the distribution of resistance over three different groups in organizations. The common idea is that managers want to change, and employees do not. Thus, the resistance of the latter group has to be overcome. This study compares how members of management teams, linemanagers, and employees evaluate change in their organizations and tries to understand their different views within the context of the change processes, instead of as individual psychological responses. Results show that willingness to change is the general response in the organizations. Only a very small percentage of the people resist the changes. The three groups differ in their willingness to change. Their positions and roles and the change process can explain these differences. The idea that employees are limited in their capacity to change is not supported.

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Title : Managing Resistance to Change Author : Marc Maltz , Originally published with Frank Basler in Hiam, Portable Conference on Change Management, HRD Press, 1997.

Introduction Change is necessary and inevitable. The quality movement, continuous improvement, action learning organizations, advanced technology, competition, new consumer media, new distribution methodologies, etc., all alter the landscape of the familiar. With each new day, customer and financial markets, the environment, and most everything else about our business is no longer the same. Managing in such tenuous landscapes is often confusing and managing any change initiative while the ground swells is sometimes overwhelming. Sustaining competitive advantage or parity is increasingly complex as is the effect organizational change has on its people. Managers must understand the escalating effects change (strategic, technological and/or structural) has on the organization and its many parts, including individuals. Unfortunately, as change is inevitable, so is the tendency for workers to feel the change as an indictment of their performance or an unnecessary whim of their management. Employees quickly move to blame management for the loss of comfortable roles and tasks, seniority, income and, sometimes, jobs rather than take up the challenge of change. As agents of change, we are held responsible by our employees and the other major stakeholders in our business to undertake these changes in as thoughtful and integrated way as possible. Managing any change process is never easy and is a continuous part of organizational life. William Bridges, in his book Transitions: Making Sense of Lifes Changes, addresses the individuals experience of change. According to Bridges, our personal and professional ability to handle change is affected by our cultures lack of attention to transitions. He writes: in the modern worldtransition is a kind of street-crossing procedure. One would be a fool to stay out there in the middle of the street any longer than necessary, so once you step off the curb, move on to the other side as fast as you can. And whatever you do, dont sit down on the center-line to think things over! No wonder we have so much difficulty with our transitions. This view makes no sense out of the pain of ending, for all that we can imagine is that our distress is a sign that we should not have

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crossed the street in the first place. It also makes no sense out of the feeling of lostness that we are likely to experience or the feeling that the emptiness seems to stretch on forever. (Wait a minute, we want to object. There is another side to this street, isnt there?) Change is far more complex than a street crossing. It is a challenging journey towards an uncertain destination. Transitions are journeys that we each need to come to terms with. By shoving people into traffic and simply pointing to an imagined other side, we can be sure of one thing -- we will increase a persons anxiety and their resistance. Managing Resistance to Change is a methodology that is designed to help people in organizations face resistance and cross the street - to actually manage the transitions experienced within organizational change.

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Title : Resistance to organizational change: the role of defence mechanisms Author : Wayne H. Bovey ,Bovey Management (Certified Consultants), Queensland, Australia Andrew Hede , University of the Sunshine Coast, Queensland, Australia

Abstract: Observes that the published literature on resistance to organisational change has focused more on organisational issues rather than individual psychological factors. The present study investigated the role of both adaptive and maladaptive defence mechanisms in individual resistance. Surveys were conducted in nine organisations undergoing major change and responses were obtained from 615 employees. The results indicate that five maladaptive defence mechanisms are positively correlated with behavioural intention to resist change, namely, projection, acting out, isolation of affect, dissociation and denial. The adaptive defence mechanism of humour was found to be negatively correlated with resistance intention. Identifies two intervention strategies which can be used by management to address the effects of defence mechanisms on resistance during periods of change in organisations.

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Title : The flair of resistance to change Author : Joseph S L Cheng ,Department of Management, Monash University

Introduction Charles Handy in the mid-1970s first predicted that the technological revolution, which had then just begun, would make its impact felt in the marketplace and would transform the lives of millions through a process he termed downsizing (Dening, 1996). People then paid only passing attention to what he said. However, the advent of information technology, the forces of globalization, increased international competition, enhanced consumer demands, government regulations, the rise of managerialism, and waves of economic downturn since then have all necessitated transformational change in strategy, structure, and process in both private and public organizations to survive and thrive. Restructuring, downsizing, and business process reengineering become a dominant trend in both private and public sector in the past two decades. Across-the-board cutbacks, organizational delayering, outsourcing, voluntary terminations, massive layoffs, and shutting down of entire divisions or departments are common. Despite the fact that recent recession in most developed countries has technically come to an end, these transformational changes have not. A recent issue of Newsweek reported that There is a growing camp of economists who believe todays brutally tough labor market is not a temporary American oddity. Falling wages, reduced benefits and rising job insecurity seem to be increasingly entrenched features of the job scene across most of Western Europe, the United States and other parts of the developed world (Foroohar & Emerson, 2004: 40). The quest for doing more with less becomes ritualistic in nowadays management, whilst the change towards less pay, harder work and fewer benefits for workers becomes structural (Groshen & Potter, 2003). Economists begin to term this trend as jobless recovery (Roach & Berner, 2004), i.e. economic recovery with no growth in jobs. This structural change manifests itself in mainly two features: the predominance of permanent job losses over temporary layoffs and the relocation of jobs from one industry to another (Groshen & Potter, 2003:1).

Those who are not being laid off and those who have found themselves landed on a different job have to face radical changes. These may come in the job nature, process, or workload; more often than not these changes pour in all at the same time. Such a rush of changes might indeed be
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timely and essential for corporate survival and success, but does it mean the employees are ready and willing to change even under the threat of losing their job? Does it mean they will perform their very best under duress for long? In this paper we develop theory concentrating on the nature of employees resistance to doing more with less organizational change and how to embed them into positive pursuit of organizational success. Here, resistance to change is defined as any employee actions attempting to stop, delay, or alter change (Bemmels & Reshef, 1991) and also any perceived behavior of organization members who seem unwilling to accept or help implement an organizational change (Coghlan, 1993). The scope of analysis is confined to the type of resistance to change which is largely an individual's spontaneous and informal response to major changes or transformation of organizational strategies, structure, and process brought forth by restructuring, downsizing business process reengineering, and similar management revamping. These individual responses are largely unorganized in the sense that rationally organized strategic planning and instrumental calculation (Collinson, 1994) is not involved. The focus is on the internal dynamics of the workplace, particularly on the conflict of interests and expectations between the employers and the employees, the gap between promises of effort and promises of reward, and the barriers resistance to change would pose to any transformational change when doing more with less is called for. The underlying thesis of this paper argues that the search for organizational excellence hinges equally on, if not more, specific management attention and effort in priming the positive side of employees resistance to change. To explicate this thesis, this paper examines and draws support from various contemporary studies on the positive side of resistance to change, and come up with propositions on its implications to management. It then argues with an outline of where the flair of resistance to change lies, what the overall policy implications for organizational management are, and how future research should be steered to optimize such flair.

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Title : RESISTANCE TO CHANGE: A LITERATURE REVIEW AND EMPIRICAL STUDY Authors: Pardo del Val, Manuela & Martnez Fuentes, Clara, Universitat de Valncia, Spain , Facultad de Economa , Avda. Los Naranjos, s/n ,46022 Valencia SPAIN

Abstract: This paper examines organizational change, focusing on the distinction of changes according to their scope and presenting a typology of evolutionary and strategic changes. We also offer an in depth study of resistance to change. Through empirical research, we have analyzed the importance of the sources of resistance to change defined theoretically, also considering both types of changes. We have shown which sources of resistance differ most, according to the scope of change, offering hints about where organizations should pay special attention when initiating a change process.

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EMPLOYEES RESISTANCE TO CHANGE

Introduction

Change is a way of life for those responsible for managing organizations and with change comes the discussion of resistance to change. The meaning of the phrase resistance to change is the spectrum appears to range from genuine resistance to managements mislabeling of employee behavior as resistive that is merely not in agreement with the proposed changes. Resistance to change can generally be categorized as organizational or individual. The idea of change has increasingly become a necessity for organizations rather than an alternative that they wish to choose. Although it is usually associated with crisis, even the most successful companies have to face necessity of change. Ability to shift direction and to improve functioning of an organization can be assumed as one of the key competencies of contemporary business organizations. As the complexity of business life markets gets intense, organizations have become much more sensitive to any occurrence that take places in their environment. While there have been various factors that force organizations to change, developments in technology, diminishing role of governments in business life and globalization are some of the main factors that necessitate organizations to revise the way they conduct businesses. Considering the fluctuations in external environment, the issue that concerns organizations most has been the scope of change. There are two basic paths for change. Firstly, some organizations tend to adopt themselves to ongoing changes through constantly improving their operations by small alterations. These changes usually focus on improving existing systems by keeping fundamental structure of business same. Secondly, organizations which conceive constant but small improvements as inadequate, tend to employ radical changes which refer to complete renewal of existing way of doing business. Parallel to the diversity in these approaches, methods to accomplish desired change plans vary in terms of their scope and impact.

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Definition of the Resist to change Resistance to change, it is necessary to look at existing definitions of resistance in the organizational context. According to Zander (1950), resistance is a behaviour which is intended to protect an individual from the effects of real or imagined change. Folger and Skarlicki define resistance as employee behaviour that seeks to challenge, disrupt, or invert prevailing assumptions, discourses, and power relations.

Piderit (2000) has classified the existing definitions in the literature by considering three main dimensions. Firstly she looks at descriptions which see resistance as a behavior. Ashforth and Mael (1998) define resistance as intentional acts of commission (defiance) or omission.. Secondly, some researchers pay attention to emotional factors as sources of resistance.

Coch and French (1948) associate resistance with the feelings of frustration and aggression. Based on their case study, they define resistance as a response to frustration and aggression caused by the change initiative. Thirdly, cognition, which refers to beliefs and attitudes, has also been used in the literature as a way to describe resistance.

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Resistance To Change: Reasons and Solutions

1) Force- Field Theory: Lewin (1951) had advanced a theory, called force-field theory, focusing on resistance during the process of organizational change. According to Lewin (1951), two different types of forces are embedded in an organization. While one group of them works in favor of change, the other group opposes it. When these two groups of forces are balanced, the organization experience inertia, and in order to change this equilibrium, forces for change need to be strengthened and resisting forces should be weakened. The responsibility of managers who plan to implement change is to work towards diminishing the impact of resistance forces while on the other hand reinforcing the forces for change. The following figure reveals the basis of Lewins (1951) force field theory in the organizational context. We will analyze the change in four categories, which represent its four different dimensions (Cameron & Green, 2004). Nature of change: The basic issue of this part is to understand different perspectives explaining the nature of change. We will focus on five different approaches; and these are survival, behavior, process, structure and system. Survival :As one of the fundamental approaches in natural sciences, Darwin (1876) described change as survival. He associated the idea of survival with the ability of responding changes that have been taking places in the environment (Darwin, 1876). This perspective can be assumed as the starting point of the researchers who describe the nature of change as survival. In survival perspective of change, organizations are seen as the species in nature; and the survival in business environment has been interpreted as the necessity to adopt or to die.

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Behavior Behavioral approach focuses on individual attitudes in explaining the nature of change. This approach conceives the change in organizations as highly dependent on members of organizations and their behaviors. As we will discuss in details in the following part, behavioral approach focuses on change in the basis of individual behaviors and their effects on other individuals behaviors in order to reach intended results.

Process

There has been a common tendency in the literature to describe the nature of change as an ongoing process. Process could be seen as a set of activities which are used to create outputs and results for organizations.

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Structure The other view has come from the structural approach and it has described the nature of change as structure and focuses on redesigning and restructuring organizations. Consultants or change agents should provide functioning mechanisms (structure) to managers in order to achieve successful change and decrease the anxiety in organization

Sources of change: The sources of change which refer to factors that force organizations to to change, will be examined by discussing the current perspectives in the literature. OutsideIn or Inside-Out perspectives will provide us with critical points for paradoxical views over the sources of change.

Internal Drivers : Improving operational efficiency Need to improve the quality of products and services Process improvement

External Drivers Customer requirements Demand from other stakeholders Government Regulatory demand Market competition Shareholders

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Scope of change: This part will contain the relations between the change drivers and the implementation strategies. We will discuss how the scope of change drivers leads different types of change implementations. Assumptions of evolutionary and revolutionary perspectives will be compared according to their effects on change strategies.

Tuning can be assumed as an incremental change that organizations have expected, which can improve the effectiveness, efficiency, introducing new policies and technologies. Adaptation can be assumed as incremental changes which organizations do not expect but need to adapt themselves by introducing new products with the aim of responding to their competitors or adapting their organizational structure. Reorientation refers to expected discontinuous change that is resulting from fundamental redefinition of key business elements of organizations, such as vision, strategy, identity or values. Organizational redesigning and reengineering can be put into this category and will be discussed in more detail in thesis. Recreation is used for both radical and unexpected changes. Crisis management can also be put in this category.

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Level of change: In the last dimension of the term change, we will approach the issue by emphasizing three different levels that change can be encountered. - Individual Level Change: We will mention four complementary approaches; behavioral, cognitive, psychodynamic and humanistic psychodynamic; by illustrating the variety of theories and models. - Team Level Change: The development of team and the relations with the other level of changes will be examined by clear explanations and useful methods. Organizational Level Change: We will discuss the issue by illustrating fundamental models in the literature of organizational change.

Change Process ( Newstrom & Davis, 1997)

Cognitive approach claims that in order to change people behaviors, feelings and reactions to the situations, the internal process of individuals should be analyzed carefully. The way of thinking and reactions are constructed through beliefs that are shaped by self- concepts and values. Those beliefs influence the feelings and attitudes; and eventually the final results. Therefore, individual change can be possible by changing the thinking process of individuals. By using change techniques and coaching activities, intended results can be obtained over individuals. It is also possible to relate cognitive theory to the management of resistance to change within the organizations. By changing the way of thinking and resulting of individuals, resistance within the organization could be managed or diminished.

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Psychodynamic Approach:

This approach has been constructed by Kubbler-Ross (1969) and explained by the following model. The model has been based on the idea of psychodynamic, which means when individuals confronts change from external world; some internal psychological stages can be experienced by individuals,- These are described as the five stages of change process and adjustment: denial, anger, bargaining, depression, and acceptance.

Confront unexpected and revolutionary change that has a big impact on their current situation, they begin to experience these stages of change process and adjustment consecutively.

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Organizational Change

Organizations are the places where change has a substantial impact. Therefore, the analysis of organizational level change has constituted the core part of change management analysis of researchers.

In this part, we will examine the theories about how organizations can be investigated as a starting point to understand organizational level change. Afterwards, we will give five organizational change models that we have chosen from literature. Those theories are essential to understand the basis of organizational change practically.

In general, organizational change efforts are classified into three different approach. The first approach comes from classical management theory that focuses on the empirical facts and practical results by describing organizations as the formal unit.

The second is the sociological approach that analyzed the sociology of organizations by focusing on the different identities and classes within the organizations, which create conflicts with the basis of socio-economic differences. The third approach that we will also use for our description comes from the psychological approach, which focuses on the individuals and their psychological conditions in order to describe the organizations.

The image of organizations can be helpful for reaching a comprehensive understanding of change strategy. From this point of view, organizations have been classified into eight different metaphors as follows:

1) Organization as a machine; consists of different functioning part to common goal. 2) Organization as a biological organism; aims to adapt to change 3) Organization as a central brain; predicts and responds to change 4) Organization as a culture; consists of shared values and beliefs 5) Organization as a political system; consists of power relations and conflicts among the self-interested individuals.
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6) Organization as a physic prison; consists of sets of norms for the behaviors of individuals 7) Organization as flux and transformation; consists of complex systems, chaos and paradox. 8) Organization as an instrument for domination.

The metaphors do not only represent the abstract perception of organizations, but also explain the way how organizations function and perceive the things.

For example, Morgan (1968) explains the metaphor that views organization as machine and he defines it as rational enterprises designed and structured to achieve predetermined ends. Organizations in machine metaphor consist of operational parts, which functioning in a structure, with determined role and responsibility of employees in the light of intended target.

Efficiency, maximization, inputs and outputs, production, standardization can be the key words for machine metaphor used in the organization. This example can also be extended for the other metaphors. Therefore, the description of organization and functioning of it can be different according to the image of organization, that is, which metaphors the organization is described.

Organizational metaphor analysis gives us a broader view on how organizations can be described and, according to that description, how change can be managed. It is better to extend the description by using more metaphors, which will increase the rate of success in change implementation.

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Organizational Change Models

Variety of models and theories exist in the literature for implementing change in organizations. We have chosen these five theories that will demonstrate the fundamental approaches to understand the nature of change process and the basis for successful change implementation. Kurt Lewins Three Step Model and Force-Field Theory Force-Field theory was constructed by Lewin (1951) and became one of the most quoted theories in the field of organizational change. According to force-field theory, there are two sets of forces- drivers for change and resistance to change- in the organizations that are in opposition to each other. The situation in which drivers and resistance forces are in balance in the organization is called state of inertia. And during this process no change is possible to make. If the organization wants to change, forces for change should be more than resistance to change. Therefore, managers should concentrate on decreasing the resistance and increasing the forces for change (Lewin, 1951).

http://www.hollandresource.com/articles/80-leading-change/251-reasons-for-employee-resistance-tochange-.html

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In order to achieve organizational change and to break the state of inertia, there are three steps: unfreezing, move, refreezing (see Figure 7). Unfreezing step consists of describing current state, showing the resistance and change drivers to create awareness about the necessity for change, and setting intended end-state. The second step is move which refers to taking action and forcing people to participate and to involve in change process. The third step is refreezing that aims to stabilize the organization and to make change permanent after the process of implementation has ended. Force Model By Dr Jager While there have been various factors that force organizations to change, developments in technology, diminishing role of governments in business life and globalization are some of the main factors that necessitate organizations to revise the way they conduct businesses.

(Dr. Aaron Glassman)

Rational vs. Irrational Resistance Individual resistance to change is generally a perceptual process that can be defined as either irrational or rational (de Jager, 2001). Irrational resistance is not discussed in most of the resistance to change literature because it is generally felt that there is nothing that can be done to convince those with deep seated, psychologically irrational forms of resistance to modify their

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behavior (de Jager, 2001). The absence of a definition of irrational resistance raises concerns that resisters who are merely exceedingly vocal may be mislabeled irrational and ignored, or even terminated, when those resisters may be capable of change. In addition, without a definition, it is difficult for a manager to look for marker behaviors and respond accordingly. Although some managers may be able to say I know irrational resistance when I see it, it is difficult to study such a nebulous concept.

Justified vs. Unjustified Resistance Rational resistance to change appears to fall into one of two categories: justified or unjustified. Unjustified rational resistance is psychological and may involve hidden competing commitments These lists typically include the following:

Fear of the unknown Fear of personal failure Fear of being seen as incompetent Fear of losing control Threat to values and ideals Threat of change to status

This combined list from different authors encompasses many of the unjustified reasons to resist change. Although some of the items on the list may be sometimes justified, a category that will be discussed next, during the uncertainty phase, fears or threats are seen as unjustified because the issue either does not exist or has yet to be proven to exist so resistance shouldnt be necessary. Assuming these fears are unfounded, the individual resistance to change literature in the organizational setting only suggests that these fears and threats must be addressed.

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New Model of Change Resistance The literature on resistance to change is quite fragmented and a more complete, perceptual model appears to be missing. A new perceptual model (Figure 3) based on the initial question How will this change affect me? (Atkinson, 2005) and ones perception, either positive or negative, of the proposed change will be explored here. In addition, the perceived impact of the change is included in what I will call the Perceptual Resistance Model.

(Dr. Aaron Glassman) This model will build on the existing literature that discusses psychological resistance and include the possibility that resistance to change is often based on inadequate knowledge of the proposed change. Inadequate knowledge has many sources, but for simplicity, I will assume that either the change was ineffectively communicated or the individual affected does not understand the implications of the change.

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The model begins with ones perception of the proposed change. If the change is positive, such as a promotion, there are two possible outcomes; accept the promotion, a positive change, or resist the change. It is possible that the individual wants the proposed change, but psychological threats or fears prevent them from accepting the new position. Resistance, either overt or covert is presented. If the reasons for resisting change are shallow, additional information, coaching, or understanding will bring about change. If, after a few cycles (loop frequency) of resistance and learning, change does not occur and resistance is still present, the resistance is irrational. How many cycles must occur before the resistance is considered irrational is unknown and a topic for further study.

If the change is perceived as negative, there are two possible sub-categories: justified resistance and unjustified resistance. The definitions of justified and unjustified resistance are similar to those previously discussed. In this model, justified resistance and unjustified resistance are terms that indicate the response in proportion to consequence severity. Justified resistance occurs when consequences are perceived as severe and can take a covert of overt form. Justified resistance is often a normal response to severe negative consequences. As discussed previously, this form of resistance can be informative to the change agent since often; its a useful feedback loop on the quality of the change.

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Overcoming Employees Resistance to Chang

The hard facts Every year millions of dollars are spent by corporations to increase profits through the implementation of new processes, updated systems, and acquisition of companies. And every year corporations are readjusting their profit outlook due to lackluster results. Why is there such a gap between speculated profits and actual profits? It is being discovered that a large portion of this disparity is due to employees resistance to change. Whats making employees resist change? Even though history has shown that all business benefits sustained from a change will be derived through people, not through a network of business processes and technologies, corporations are still not addressing the impacts of change on their employees. In fact, a recent survey conducted with over 400 companies concluded that the top obstacle to a successful change program is employee resistance to change at all levels, including front-line personnel, middle management and senior management.

www.people-performancesolutions.com

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Employee resistance
Participants gave a variety of reasons for resistance by employees and managers. The top-five reasons for employee resistance were:

1. Lack of understanding around the vision and need for change. Participants indicated that the primary reason for employee resistance was that employees did not understand the vision of this particular change project. Employees did not clearlyunderstand why the change was happening, nor did they have adequate knowledge regarding the change itself. Employees did not have the answer to the question, whats in it for me? or WIIFM. This could include, "Will I have a job?," "How will it impact my daily work?," "How will I benefit from the change?".

2. Comfort with the status quo and fear of the unknown. Participants indicated that employees tended to be complacent, or that the current way of doing business had been in place for a long time. The current processes and systems seemed fine to the employees, and they were opposed to the change since it forced them out of their comfort zone. Uncertainty and fear of the new system compounded the desire of employees to continue with the old way to which they had grown accustom.

3. Corporate history and culture. The organizations past performance with change projects impacted the employees support of the current change project. Employees were desensitized to change initiatives, as many had been introduced and failed. The project was seen merely as the flavor of the month, and employees expected it go away like those in the past.

4. Opposition to the new technologies, requirements and processes introduced by the change. Many participants felt that some employees resisted the change because of opposition to the actual change itself. Employees were opposed to changes that increased the performance and process measurement of their work. The change was seen as adding unwanted work,

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responsibility and accountability. Lastly, some employees opposed the new processes, systems or technologies because they felt the change would not solve the problems.

5. Fear of job loss. Employees perceived the business change as a threat to their own job security. Some employees felt that the change would eliminate the need for their job, while others were unsure of their own abilities and skills in the new environment.

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Manager resistance
The top-six reasons for manager resistance to change were: 1. Loss of power and control. The leading reason for manager resistance to change was a fear of losing power. Changes often eliminated something the manager had control of or introduced something that the manager would not have control over. Managers perceived the changes as infringements on their autonomy, and some participants indicated that the change was even perceived as a personal attack on the managers. Managers reacted to the change initiative as a "battle for turf."

2. Overload of current tasks, pressures of daily activities and limited resources. Managers felt that the change was an additional burden. Limited resources compounded the problem. The change initiative seemed like extra work and resource strain at a time when the pressures of daily activities were already high. In many projects, managers were expected to continue all of their current duties in addition to the duties of implementing the change.

3. Lack of skills and experience needed to manage the change effectively. Managers were fearful of the new demands that would be placed on them by the business change. Several skill areas were identified as areas of concern. First, managers were uncomfortable with their role in managing the change. Some feared recrimination while others did not have the experience or tools to effectively manage their employees resistance. Managers also were concerned about the demands and responsibilities placed on them by the new business processes, systems or technologies.

4. Fear of job loss. Managers felt that the business change would ultimately impact their own job security. Middle management is often the victim of large-scale business change. One participant reaffirmed this fear: They were eliminated in the change, so no resistance was recorded.

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5. Disagreement with the new way. Some managers disagreed specifically with the change. They did not feel that the solution was the best approach to fixing the problem. Managers who did not play a role or provide input in the design and planning phases tended to resist the solution. Some participants felt that the resistance was due to the solution not being the idea of the manager ("not invented here").

6. Skepticism about the need for change. Managers were not convinced of the need for change. They did not see the business issues driving the change, or they did not identify the same problems as the design team.

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Reasons for employees resist change:

1. Employees were not aware of the underlying business need for change. 2. Lay-offs were announced or feared as part of the change. 3. Employees were unsure if they had the needed skills for success in the future state. 4. Individuals were comfortable with the current state; they wanted to maintain the personal rewards and sense of accomplishment and fulfillment provided by the status quo. 5. Employees felt they were being required to do more with less, or do more for the same pay.

Proactive and reactive resistance management

Managing resistance during any business change should include both proactive planning and reactive interventions. All too often, teams rely exclusively on reactive measures resistance has already resulted in productivity loss and wasted time and resources. when

Proactive resistance management involves systematically identifying where resistance might come from and what it might look like. The team identifies critical gaps and possible points of resistance, and addresses them before they even emerge. Proactive resistance management requires planning by the team and intervention from sponsors, managers and supervisors.

Reactive resistance management is in response to specific points of resistance. In the reactive situation, the team must listen to employees and identify the source of the resistance. Specific action steps should be developed, communicated and implemented.

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Resistance management plan

A resistance management plan is a proactive approach to managing resistance. During the first phase of your change management plan it is important to identify potential resistance points. As your project implementation progresses, additional areas of resistance may surface. Below are the four action steps to creating your resistance management plan:

1. Define what resistance may look like for your change and how it may be identified. a. Brainstorm with the change management team and project team. b. Brainstorm with the stakeholders and sponsors.

2. For each level with the impacted organization, define a strategy for managing resistance to the change and prepare job aides. Refer to the resistance management process.

3. Prepare and review the resistance management approach with the primary sponsor.

4. Communicate this resistance management plan to managers and coaches in their change management training sessions.

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Management process evaluation of the resistance.

Step 1 Understand that any perceived resistance to proposed or actual change within business environment represents a response to or a symptom of a larger issue in the mind of the employee. Recognizing that the reluctance the employee exhibits should not be the primary focus of your evaluative effort is the first step to identifying the root cause of the resistance to the change.

Step 2 Explain the resistant behavior you have observed to the employee. An employee may not realize his behavior exhibits a resistance to the change. Illustrate how you and other managers perceive the behavior so that the employee has a clear understanding of what messages her behavior is sending to management, coworkers and customers.

Step 3 Ask the employee open-ended, probing questions regarding his feelings, impressions, and understanding of the change being proposed or already enacted, and why company leaders feel it is necessary. Offer additional information to clarify these areas for the employee, and then ask if he has additional issues regarding the change. Ascertain if the employees primary concern regarding the change focuses on his role with the company, how he or his coworkers might be affected, or any other root cause of the issue.

Step 4 Define the root cause as surmountable or insurmountable. Know that resistance based on an insurmountable root cause, like an employees refusal to work with a specific gender or ethnic group may require termination or relocation. Be creative when engaging surmountable causes of resistance, such as a valued employee being reluctant to relocate far from her hometown. In this case, you might want to investigate telecommuting options. Note that 90 percent to 95 percent of the times you encounter employee resistance to change, it will be based on concerns or issues that are surmountable, even if it takes effort on your part.

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CHARACTERISTICS OF THE INNOVATION Relative Advantage: Generally, innovations must be seen as producing a SIGNIFICANT IMPROVEMENT over current procedures and techniques in order to be adopted. The benefits must be perceived as so great as to be well worth the inevitable problems and costs associated with any change. Simplicity: The innovation, or at least the way it is presented, should be EASY TO UNDERSTAND. Even when users agree that the proposed change would be "good," they may not be enthusiastic if they think it's too complicated to understand or implement. Easy to Try: The new method or item must be easy to introduce, as well as easy to abandon if it doesn't seem to be working out. If an agency must make drastic changes in operating procedures in order to try something out, it will resist change, whatever its perceived merits. It helps if a technology can be tried in stages before the final decision to adopt is made. Easy to Measure: Once the new procedure or item is in place, it must be easy to measure the benefits, whether in money, time, efficiency or some other evaluation measure meaningful to the adopter. Inexpensive: The up-front cost of a new technology is often an obstacle, especially in rural areas and small agencies. If there is a large immediate increase in costs, it will be difficult to get the technology adopted, even if long-term savings are guaranteed.

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Characteristics of the Organization Risk Taking Climate: Are the managers of the organization willing to take risks? Both the size and age of an organization can affect this willingness. Younger firms are usually more willing to take risks and, for risk taking, small is better. The complicated structure of larger firms works against risk taking. The exception to this are large organizations whose success has been based on innovation. Attitude towards Failure: New ideas, procedures and technology involve risk and it is not be possible to always succeed. Good decisions can have bad outcomes. How an organization reacts to a failed attempt to implement a change is critical. If people are punished, belittled, or put down for trying something new that doesn't work, the will be seldom willing to do it again. If, on the other hand, efforts are made to learn from the failure and to make it work a more open process of change will occur. Compatible Procedures/Technology: The more a new idea is compatible with past procedures, techniques and values of an organization, the more likely the organization is to adopt it. Extent of Regulation: The extent to which outside organizations, particularly government, can control the behavior of an organization affects innovation. Such outside regulation can have either a positive or negative effect, depending on the regulation and/or its enforcement. Labor Reaction: The likely reaction of employee groups will also affect whether or not a new idea is tried. Any change likely to cause a loss of rights or job security will need to have significant benefits for an organization to be willing to risk trying it out.

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RESEARCH OBJECTIVES Objectives Of the Research: 1. To examine fundamental reasons why Employee resist change. 2. To find out the reasons why employee resistance to change. 3. To find out the effect of employee resistance to change on organization. 4. To find the factors for reduce the employee resistance to change. rrr Objective and Purpose of the Employees resist to change Our purpose is to understand the role of resistance in the process of change management. We believe that this can provide us with a deeper understanding of key factors in implementing change programs. By referring to resistance, we do not necessarily see it as a barrier that needs to be eliminated; instead, to understand the concept of resistance in a wider scope to identify crucial issues that can influence process of change in a positive way. In other words, the issue that is concerned in this thesis is to find an optimum way of managing resistance which takes all the aspects of resistance into consideration. We believe that such an approach can be influential in terms of minimizing failures or dissatisfactions in change programs. By studying the research question and issues related to it, we hope to bring a new perspective about resistant behaviors of employees during the change process. Understanding, describing and analyzing roots and symptoms of resistance can enable us to construct a framework to implement change programs more successfully. METHODOLOGY AND DATA COLLECTION

The ability to choose a convenient method to research on a social reality possesses great importance in terms of determining the sufficiency and reliability of outcomes. For this reason, the methodology which we will use in this thesis has been chosen carefully to meet the requirements of an advanced study which is capable of achieving our goals in conducting this research.

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Qualitative Research Qualitative methodology is a very broad discipline and basically refers to the research processes in which findings are obtained through non numerical or statistical techniques. Its purpose is to reach an in-depth understanding about social realities and patterns create them. First is the data which is obtained through interviews, observations, analysis of documents and materials, second is procedures which are employed by the researcher to evaluate collected data and third is the final reports, in written form or verbal, which states the findings and implications of a study. Parallel to the essential aim of qualitative approach, in terms of understanding why and how of social realities, conducting a qualitative research usually necessitates small but focused samples to search deeply a given social phenomenon.

Selection of case studies One of the case studies that we have selected from the literature explains the implementation ABC within a Portuguese telecommunications company. Context of the study has two important advantages concerning this thesis. First, it provides this study with a general understanding about the change process in terms of revisiting sources and scope of change. Secondly, it has a very rich content for describing, analyzing and understanding resistant behaviors of employees. Therefore, we have had the opportunity to test conventional approaches in this study.

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About Company

Abstract
The subject of the study is a Portuguese Telecommunications firm which initiates a new program, called activity-based costing (ABC). During the implementation process, the organization experienced various problems from employees in different departments concerning the change initiative. It provides us with comprehensive empirical evidence which shows most common causes and symptoms of resistance which we will describe and focus on next sections. In addition, the study also presents a general framework for understanding the change in terms of its nature and sources. By considering these positive aspects of the case study, we will first review the study by focusing main points that concerns us most, and then make an evaluation about its implications and its consistency.

Introduction Many actors in business life, such as consultants, managers and academicians, have recently tended to emphasize efficiency of ABC in providing more accurate product costs and in enabling managers to conceive the cost causation. However, Major and Hopper (2005) stress that definition of ABC varies significantly depending on the viewpoint of implementer. In addition to methodological and technical problems of ABC implementation, behavioral issues regarding change management have also become visible in the implementation process. According Major and Hopper (2005), ABC can become a central point for conflict for individuals from different departments and, employees may tend to resist implementation of ABC with various reasons. From this point of view; this case study of a Portuguese telecommunications company investigates ABC implementation and usage. The belief is that open-ended, intensive field-based methods can identify and explore issues from the perspective of actors involved, cast light on previous findings, and aid theory development (Major & Hopper, 2005, p.206). In addition, what makes the study worth to re-evaluate in this research is its context which enables us to analyze a change initiative, which directly influences the daily routine of employees, and to understand the patterns of behaviors which individuals rely on when reacting to change. Before looking at the setting and implications of the study, it seems necessary to describe what is meant
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by activity-based costing (ABC) and to look at its functions. Starting from mid 1980s, pioneered by Kaplan and Cooper, ABC applications became an important topic for academic researches and papers and, various American companies have implemented it (Jones & Dugdale, 2002). Experience and lessons learnt from these firms led to the conclusion that ABC provides companies with more accurate costs and it is much more efficient than conventional accounting systems which have been attacked because of their incapability of integrating new information technologies into accounting (Major & Hopper 2005). Proponents of ABC usually associate it with more accurate product costs, elimination of waste and therefore with cost reduction, and improvements at operational level. It is claimed that ABC helps managers to understand cost hierarchies, identify relevant revenues and costs, and hence make better decisions (Major & Hopper, 2005, p.207). In its most basic sense, ABC aims to allocate resources to activities and then activities to cost objects by relying on a causal relations formed through considering volume of activities (Major & Hopper, 2005). However, ABC has been subjected to different criticisms from different perspectives. One of the negative comments about ABC implementation, made by Noreen (1991), is the characteristic that permits it to work efficiently under stringent conditions. These conditions refer to situations where there are linear cost functions, zero fixed costs at the cost pool level and no joint processes. Additionally, employees usually experience troubles in understanding and implementing ABC mechanisms (Major & Hopper, 2005). Since they can not make sense of these practices, they tend to describe ABC as a costly and disruptive tool (Innes & Mitchell, 2000). One of the methods involved in ABC system is the categorization of the time individuals spend on certain tasks during the day. While some find this as useless because it consumes time and at the end it is not a value adding activity. Others claim that it is problematic because the efficacy of ABC implementation is heavily dependent on accurate information that is given by employees. Biased reports about their activity lead inaccurate cost estimations and resource allocation which destroy the ultimate goal of implementation. Independently from positive and negative aspects of ABC, introduction of ABC is a very convenient change initiative to study resistance in organizational context. During the study, one of the most noteworthy issues has been the contrast between reactions of employees from different departments towards the same change. This has helped us to enlarge our approach to resistance by directing us to pay attention to the issue of perception which refers to individuals patterns of conceiving a new idea at their work place and to the criteria they use in evaluating
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these change initiatives. Under the light of these factors that motivates us to select this specific case, we will analyze the companys history, their need for change, implementation process, employee reaction to ABC and finally implications of the study in terms of resistance to change.

Marconi The Portuguese telecommunication company, Marconi, was established in 1925. Initially, it provided long distance telecommunication services between Portugal and its colonies in Africa. In this sphere, which constituted the core part of their business, Marconi had a monopolistic position until liberalization of Portuguese telecommunication sector in 2000. Despite decolonization movements in mid 1970s which reduced the business potential of Marconi, it was still profitable. Starting from 1980s Marconi decided to enter new business areas by using developing technologies. Information systems, electronics and financial services became new arenas for Marconi to compete not only in Portugal but also internationally. The company became a symbol of innovation and production thanks to the expertise of engineers who then became the most prestigious and powerful group within the organization. In 1990, telecommunication sector was reshaped with the aim of satisfying the rules and regulations of European Commission concerning the idea of full competition. Eventually Marconi had become a part of Portugal Telecom which was privatized later. Marconi, whose core competence had been providing long distance telecommunication services, transferred its new businesses to the parent company and, in return Portugal Telecom gave Marconi to its telecommunication services between Europe and North Africa. These changes, at both industry and organizational level, have led Marconi to decrease the number of people working for it and, as a result of this, its workforce dropped from 1482 to 300 between 1999 and 2002. Such a downsizing in Marconi brought about a new organizational structure. 46

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Organizational Structure of Marconi Before analyzing the market conditions and appropriateness of Marconis organizational structure to the changing circumstances, it has to be stated that Marconi, since its establishment, has been a production oriented company whose board of directors has been dominated by engineers. However this tradition, dominance of production within the organization, started to be challenged by the escalation of competition in the market which increased the importance of commercial departments. Parallel to the spread of idea of full competition in the market, technological innovation and cost plus pricing system became insufficient for Marconi to maintain its position. All these newly arising needs for better financial information about costs, pricing, and investment appraisal made Marconi to replace its traditional management accounting system with ABC in order to match the necessities of contemporary market conditions and to comply with the demands of local regulators which periodically receive information from each firm in the market about costs and pricing.

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The need for change Production and service costs were not significant issues for management accountants in Marconi, until 1990s. State, as their biggest customer, was willing to pay high prices which make Marconi to ignore cost of production. The following statement of a management accounting coordinator of Anacom, which is the regulatory organization for telecommunication industry in Portugal, summarizes the understanding of Marconi at that time towards management accounting systems and towards changing conditions in the market; Telecommunications companies didnt have a proper cost accounting system for decades . . . they didnt need one. . . . Nowadays, with so many operators in the market, it is impossible to survive without identifying and controlling costs. (Major & Hopper, 2005, p.213) Despite the attempts to improve existing management accounting system of Marconi, they were far from producing satisfactory results and therefore, the company had decided to replace existing system with ABC in 1997. Marconis Experience with ABC In order to reach a comprehensive understanding about the responses of employees towards ABC, the implementation process and the activities that were conducted need to be analyzed. ABC is an accounting system that is quite detailed. Therefore, it seemed more appropriate for the purpose of our study to locate specific features of ABC which constitutes the breaking points from previous system of Marconi. As a change initiative, ABC implementation obtained strong support from top management, in terms of financial resource, time and personnel. The needs of commercial department in terms of cost data were prioritized and therefore engineers who were the most influential group previously seemed to lose their privileged position. External consultants were hired and they had a substantial role in implementing ABC. They had defined six main steps; selection of teams, training, defining activities, conceptualization of model, data collection, and defining the ABC software. For a certain period of time, the old system and ABC were used simultaneously. With the aim of facilitating implementation of ABC, two committees were formed. First one involved the directors of each department and second one consisted of individuals who were directly responsible for executing the change process, namely, consultants, management accountants, and representatives of commercial and production departments. The underlying goal in making production department engage in the process was to obtain commitment of operation department for the change initiative. Consultants intended to create an
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atmosphere where the actual users of the program could easily espouse the shifts in the ways they conduct their business. Contrary to initial aims of external consultants, engineers never seemed to be motivated towards ABC implementation. Despite the attempts to make engineers participate in the development and the implementation processes, their core capabilities which are characterized by technical knowhow became secondary due to the changing conditions in the market which necessitates being more competitive. These shifts in the environment have placed commercial departments and their needs to a central position in the eyes of top management. Non financial figures which express quality of services produced by engineers replaced with the financial data such as cost and prices in the hierarchy of priorities. Regulations in the telecommunication industry combined with the competitive pressure coming from the market made it imperative for Marconi to revise its existing way of doing business which made engineers felt themselves ignored. With the aim of accelerating implementation, setting objectives and evaluating the progress, different training programs and seminars were organized. Although ABC is a system which necessitated the participation of all members in the organization, these training activities limited to the certain change agents and, workers were excluded. Having provided key persons with necessary information via training sessions, the next step involved definition of main activities. First consultants determined main functions and processes within the organization and then each member were asked to express their essential activities and consequently employees job descriptions were obtained, analysed, and compared to identify activities regardless of departmental boundaries. With the help of consultants, cost objectives identified and commercial departments managed to ascertain cost of Marconis products and services and to determine competitive prices for them. One of the most influential shift that was brought by the ABC was about the PMOs (Ponto de Mao de Obrain English labour time disclosure). PMOs refer to time sheets in excel explaining how much time was allocated by an employee to do certain activities. Although PMOs have been existed in Marconi since 1992, very few people were responsible for filling these documents. Under the new system, every employee was supposed to complete and to send it to the managers and the directors who were going to use this data in developing ABC system. In the next step, consultants focused on determining cost drivers. Contrary to the Marconis old system, resource and activity cost drivers were separated. In accordance with the information obtained through PMOs, the amount of labor spent on each
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activity is calculated. By relating these figures to the cost of resources, reliable information, which is based on causality, is intended to be reached. Having defined activities and cost drivers, consultants started to the conceptualization of Marconis new management accounting system by taking commercial departments needs into consideration. From this point of view, the consultants and management accountants defined the direct costs of Marconi in the following way; operator costs (costs of using telecommunication capacity of international operators); leased capacities (basic transport infrastructure for wholesale and retail services costs); rent (sub-concession contract rentals payable to PT); transmission costs (costs of submarine cables, satellites, terrestrial cables and networks); switching costs (costs of managing the network); and costs of activities (costs oriented to customers and the network.

After completing the data collection, Marconi was able to produce its first report about costs through ABC in March 1998. Before ABC, direct costs of Marconis was about 70% of total costs whereas with ABC implementation this had increased to 74% in 1998. The figure obtained through ABC had showed that 23% of total cost is related to commons costs that are not directly related to cost objects. By evaluating these figures, management accountants intended to decrease the percentage of common costs by allocating depreciation of equipment not in use to cost objectives and by establishing some superficial causality between some common cost and cost objects. Despite these attempts at the end of 1999, figures did not changed significantly, and common costs remained at 22.5% and joint costs dropped to 2.5% which was still very high. Marconis top management had been very willing to implement ABC despite its high costs and it seemed to be far from producing satisfactory results for the company. More interestingly, contrary to initial aims of consultants who continuously stated the importance of participation, learning and commitment, internal resistance became a significant barrier to successful implementation. In the following section we will focus on the issue of resistance in Marconis ABC implementation process.

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Employee Resistance to ABC Implementation at Marconi When the employee reactions toward this change initiative are analyzed, the most visible thing is the polarization of perceptions and thoughts about change on two opposite sides. People from the commercial departments and the production departments viewed the issue from quite different perspectives. Engineers from the production department found the new system as being too detailed and time consuming without really producing anything valuable for them. Individuals in production departments who are responsible from feeding the system with relevant information naturally expected something in return for their additional efforts. Production engineers are also firm believers of technological innovation and technical know-how in providing Marconi with survival mechanism and they were proud of themselves as being central part of the organization. Based on their past experiences in the company, engineers can not see the necessity of such a change and perceive ABC as a system that serves only to individuals in commercial departments. Following statement of a production engineer contains important messages in terms of expalining their views towards individuals in commercial departments; There are plenty of customer managers, market managers and managers of this and that. . . The commercial reports have acquired vital importance. . . . Some activities of engineers have became undervalued and considered banal. . . . This is because the power of the commercial managers has been consolidated within Marconi. They analyze the market and then leave the company at 6 p.m. [production engineers leave later] and they make their personal phone calls and so on. They are considered more important than engineers often dealing with a large number of problems in the operational centers. It isnt only in companies that these things are occurring. . . .This is related to the country we live in, with the politicians we have. . . . This is a terrible cultural problem. . . . The information flows between departments are not good. . . . People protect themselves. . . . Before all these changes the participation and interaction between Marconis departments was higher. Another issue that was criticized by production engineers is the type of data that could be obtained through ABC system. They claimed that information produced via ABC was not reliable and did not help them in decision making. The Director of Production Department explained; I know the ABC system provides information on how much system X or system Y costs but this is not the sort of information we need to manage in the production department. . . . We need to know the incremental cost of each unit of equipments capacity. (Major & Hopper, 2005, p.219). Based on this view, engineers argued that since they
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did not have the information that was needed; their decisions were shaped and made from a technical point of view. Therefore they did not want to work with a system whose functioning depends on engineers but never satisfy their demands. Transition to market economy with a fully competitive approach deepened the discrepancy between commercial departments and production departments. Engineers have always used non financial data from the technical data bases for making decisions. However, their focus on technical information became secondary under these new circumstances. To deal with the challenge of market economy, cost and prices which are the central issues of commercial departments have gained priority in the eyes of decision makers of Marconi. Therefore, engineers simply resisted using ABC which represents this new approach of the organization. While engineers theoretically confirm their arguments by complaining about ABCs irrelevancy with their needs, it is important for us to look at how they manifest their resistance. Unsurprisingly, engineers do not submit necessary data to the ABC on time. They raised their voice and claimed that they had insufficient time to feed the system with required data because they deal, in most of their time, with operational and technical issues which they conceive as their fundamental tasks. Discontent of engineers is not only stemming from uselessness of ABC but also from the intensification of their workload. From this point of view, employees tended to establish links between new competitive approach of Marconi and its reflection on their daily routines. Unsurprisingly, with the impact of decreasing number of employees, workload of every individual increased. Having experienced the pressure of extra work, employees directly associated ABC with additional work which they could not tolerate at that time. The Director of operational department explains this situation with the following statement; Three years ago we had more than 70 people working in this centre. . . .Now we have 34 or 35. . . . People are overloaded. . . . We used to leave the company at 6 p.m. but now we leave at 9 p.m. or 10 p.m. . . . so our motivation to do things not directly related to our job cant be very high (Major & Hopper, 2005, p.220). In addition to the engineers, workers in production also showed resistant behaviors towards ABC implementation. Central issue concerning the ABC, in the eyes of workers, was PMOs and they were quite unwilling to fill these excel reports which show how they allocate their time for each specific activity at workplace. One reason for employees to behave in such a manner is that they found PMOs, similar to engineers, as irrelevant to their tasks. However, more importantly, they think that revealing their daily activities in a time
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schedule can damage their autonomy and job tenure at work. Apart from the fears related to their status quo at the workplace, increasing workload with ABC is another factor that makes the new system unacceptable for workers. Since there has not been a recruitment of new workers after the downsizing, workers, like all individuals in production departments, have to work longer time. Combined with the lack of understanding the need of ABC, workers preferred to spending their time on their operational tasks rather than fulfilling the needs of commercial departments. When we consider the reaction of workers towards ABC implementation, conditions which made them to manifest such resistant behaviors have to be described. First of all, job definitions, which workers are expected to use in filling PMOs, do not make sense for them. Workers found these labor time definitions as hazy and puzzling. As a result, the information they submitted had always been incomplete and far from producing reliable cost data. In addition to problems concerning PMOs and inconsistency between workers actual tasks and preset job definitions, exclusion of workers from the training sessions of new system also reinforced their negative attitudes. Managers in production departments have never shown sufficient authority over workers to make them comply with the necessities of ABC. Combined with the hostility of production managers, workers never felt any pressure on themselves to fill PMOs properly in a timely manner. The following statement of the Director of Telecommunications and Infrastructure Department summarizes the perception of individuals in his department about ABC implementation; ABC depends on the inputs inserted. . . . Probably [the production department] dont load the system as we should. . . .We cannot take care with PMO as the management accountants would like. . . .PMO doesnt make sense. . . . Its an illusion to think that people are watching their activities and taking notes about the time they spend on each operation. . . . The system should be not so demanding. . . . Ive got a senior manager spending hours preparing data for insertion into ABC. . . . For production it gives too much work and very little useful information. Having faced with the inefficiency of ABC implementation process, management accountants in Marconi tried to improve process by focusing on communication within the organization. They perceive worker resistance as a result of poor communication. However their solution is not more than appointment of two people, what they called facilitators, from the commercial and the production departments. However, the mindset of the facilitator from production department is similar to workers, in terms of ABC implementation and when we consider this together with the inadequate number of people from commercial
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departments (only one person), it is not surprising that they failed to improve ABC implementation via enrichment of communication within the organization. Approaches of external consultants and the role they played during implementation also worth to notice concerning inefficacy of ABC. Although the consultants were able to define employee resistance at a very early phase, their approach worsened the situation by ignoring the concerns of employees. Consultants expectations, which see PMOs as an instrument to improve worker cooperation by increasing transparency, failed because employees had never really understood the need for filling PMOs. As a result, PMO data has never been submitted to ABC system accurately and on time, and eventually it caused delays and mistakes in ABC implementation. Implementation of ABC has created two different camps in Marconi. It is noted that while employees in the production departments are so hostile that they resist ABC implementation, individuals from the commercial departments, despite the poor performance of the program, seemed to be satisfied. Factors that create such a diversity in the behaviors and the attitudes of employees, who belong to different departments, are important in terms of managing resistance at workplace. Marconi had presented a fertile ground to test existing approaches about resistance, its causes and possible methods to cope with it. As the ultimate aim of this study, we will look these issues in the next sections by referring to the case of Marconi.

Evaluating the study and its implications Implementing change programs has never been an easy task because the process has always been full of with uncertainties. One reason for this difficulty of estimating potential barriers to implement change has been the unique place of individuals in organizational change efforts. Since each member of an organization has different personal traits, managers should be prepared to handle these various responses in an appropriate manner to maintain momentum concerning the change implementation. When we analyze the implications of this case study under the light of the two mainstream approaches (positive and negative resistance) that we located during the literature review, we can reveal the strengths and weaknesses of these opposing views. Concerning the negative approach that advocates total elimination of resistance, we have determined some problematic issues. First of all, it seemed very useless to approach resistance as something that can be eliminated through following specific prescriptions. Existence of these types of pre set formulas to cope with
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resistance also creates an unrealistic optimism in the minds of individuals who plan to start a change initiative. Most of these prescriptions, which focus on training sessions and communication activities prior to implementation, are not only ineffective in eliminating resistance but also they sometimes contribute resistance by providing additional sources for resistant behaviors. Secondly, although we do not deny the importance of training, communication and participation whereas they may become ineffective when employed in a manner that is rigid and insensitive to specific demands and concerns of employees. Also, it should be noted that activities focused on training, communication and participation can be viewed as supportive elements of change implementation because many of the roots of resistant behaviors have pointed a different problem about change; lack of meaning. We have interpreted the assumptions of Marconis employees in production departments under the light of their responses to the change initiative. We found that what the employees in Marconi was really needed during implementation is a rational explanation that would tell them needs of the organization and how these demands are supposed to be met. Contrary to argument which propose total elimination of resistance to change, implications of the Marconi case have revealed that resistant behaviors can be and should be analyzed. This is necessary not only because resistant behaviors may have valuable criticism about the change initiative but also understanding these behaviors enables managers to control them in manner that keep implementation process continuing. Complaints of engineers from production department about the ABC had focused on the mismatch between their needs and what the ABC provided them. When we consider the cost figures obtained after implementing it in Marconi, complaints of engineers may have some valid arguments. It is detailed structure which consumes most of the time of individuals in production department and did not produce any thing valuable in return, combined with unexpected results may lead to a conclusion that implementation of ABC may not be the best solution for Marconi to be competitive under the changing conditions of the market. Consequently, what we found through analysis of ABC implementation at Marconi has been the necessity of understanding resistant behavior of employees. It contains two fundamental advantages, first it enables managers to choose correct path in responding resistant behavior, secondly gives the opportunity to benefit from valuable criticism inherited in resistant actions.

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CONCLUSION

This study aims to understand, describe, and analyze the factors that lead employees resist organizational change efforts. More specifically, by locating various types of roots and symptoms of resistance, we have developed a framework which managers or individuals, who plan to initiate a change program, can use to manage resistance and to benefit, if exist, from the constructive value of resistant behaviors of employees.

Individual resistance to change appears to begin as a self-preservation mechanism when a real or perceived threat exists and often ends with some form of resistance.

It must be emphasized that many threats in the organizational setting are real, e.g., a potential job loss, and therefore resistance is not only expected, but could be classified as normal. Its when the threat is only perceived, and doesnt actually exist, and resistance is offered, that a deeper psychological answer may exist. In these instances, many organizations do not have the time or resources to change those who resist. Resistance to change is an emerging body of knowledge with many viewpoints. It is recommended that anyone who manages people should at least understand the basics of change and the associated resistance to change in an effort to bring harmony to difficult situations or eliminate those who simply refuse to change and who are sabotaging the efforts of others.

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FINDINGS AND SUGGESTION

Based on the data collected and case analysis with the Secondary research, the following recommendations is made for consideration: The organization may utilize both subjective and objective approach for the employee behavior and their motivation for change management. The organization may consider deputing each employee behavior to change during the resistance in the organization. There are many models that consideration or the Employees Resistance to change in their behavior, motivation and also changing part of the management. And these activities help the HR manager to avoid the negative Activity during the resistance of the employees.

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