Unit-Seven

Organizational Change and

Development
 Concept and Nature of Organizational Change
Concept: it refers to a modification or transformation of the organization; it
is the process of growth, decline or alteration within the organization; it is the
movement of an organization from one state of affairs to another
Nature:
• Inevitable: fact of universe and unavoidable; necessary to cope with changing
environment
• Alteration: brings alteration in resources, process, procedures and system
• Transition Stage: transition stage between current state and desired future state
• Affected by Environment: change is always affected by environmental forces
• Essential for Survival: directly associated with the existence of the organization
• Planned: should be intentional and goal oriented; management needs to develop
the practice of planned change in the organizational affairs
 Paradigm Shifts and Areas of Organizational Change
Paradigm shift refers to fundamental change in basic concepts or approach
or underlying assumptions and pattern of organizational change are in following
areas:
• Structure: changing environment needs structural change; it involves changing
formal division, grouping and coordinating task; it makes alteration in authority
relation, change in span of control etc.
• Technology: change in technology involves introducing new procedures,
equipments, tools and methods for doing jobs to enhance efficiency
• Change in People/Behavior: change in people/ behavior involves changing
attitude, skill, perception, knowledge and behavior of people working in the
organization: people are the most important change agent
• Change in Physical Setting(Business Process): physical setting refers to proper
layout of workplace for convenience to work; business process redesigning is
making change in process focusing on task to improve quality and minimizing cost
 Forces of Change
A number of factors are attacking the organization making the change inevitable as a modern
organization has to face a dynamic and changing environment
External Forces:
• These are all the factors and events from outside the organization
• competitors, suppliers, customers, pressure groups and other institutions are major forces of
organizational change from task environment
• Technological changes, political instability, legal conditions, social and cultural factors are
major forces of change from general environment
Internal Forces:
• These are all factors within the organization
• owners, board of directors(BOD), organizational goals, organizational structure, organizational
resources and organizational culture are major internal forces
All the above forces are responsible for organizational change
 Resistance to Change
Individual Resistance: It is created by some basic human characteristics such as
perception, expectation, personality etc.; major reasons are as follows-
• Habit: people feel comfortable with their established habit, they resist change if it needs
change in habit, because habits can be source of security, satisfaction and comfort
• Security: people think that change brings challenge in security and they afraid with
change because they find security in the existing job process, technology and machines
• Economic Factors: people perceive they will lose existing earning due to organizational
change; they may be afraid of reduced working hours or days and consequently less pay
and so on
• Fear of Uncertainty : change brings uncertainty and unknown fear which causes anxiety;
organizational change may demands new places, people, procedures, tools etc.
• Selective information Processing(Perception): people do not want to change their
perception; it means they hear what they want to hear and ignore other information
that threaten the world they have created
 Resistance to Change
Organizational Resistance: it is created by some organizational matters such as
organizational structure, policies, priorities etc.; following are the major causes-
• Structural Inertia: businesses may have their own stable structure and system; they may
be stable; when an organization is confronted with change, this structural inertia acts as
resistance to change
• Limited Focus on Change: an organization’s total system is composed of various sub-
systems; changing one system is impossible without changing the others; focusing only
some systems for changing acts as resistance to change
• Group Inertia: individual member’s behavior is controlled by group norms; they may be
ready to accept change personally, but group norms bind them to resist it
• Threat to Expertise: OC may offer opportunity to one type of expertise and a threat to
other type of expertise; the group may have fear of loss of job, pay cut
• Threat to Established Power Relationship: OC re-establish the power relationship within
the organization; managers who want to remain in power and status reject change
• Threat to Established Resource Allocation: departments or groups getting sufficient
resources often reject the change as it re-allocate the resources
 Overcoming Resistance to Change
• Education and Communication: EC enhance the depth knowledge about impact
of change in professional life of the people and make them ready for change
• Participation: genuine participation of employees would guarantee commitment
to the implementation of change; a person who is involved in the process of
change promptly accept the change
• Facilitation and Support: employees may have fear and anxiety about change so
managers should provide proper guidance and counseling to them
• Negotiation: when resistance comes from a powerful group, negotiation and
agreement are helpful
• Manipulation and Cooptation: manipulation is twisting and distorting facts to
make them appear more attractive while cooptation is giving a key role to the
leader of resistance group: when other techniques fail, these can be used
• Coercion: it is application of direct threats/force upon people creating resistance
 Organizational Development(OD)
• OD is a critical process that helps organizations build their capacity to change and
achieve greater effectiveness by developing, improving and reinforcing strategies,
structure and processes
• It is a systematic and practical approach to adopt and spread change in organization
• It is along range program attempting to change behavioral attitudes and performance
of whole organization
Characteristics:
• Long Term Plan
• Comprehensive
• Dynamic
• Behavior Focused
• Research Based
• Empowerment Process
 OD Intervention
OD interventions are techniques implemented for organizational development and
presented into following three levels:
A. Individual Level Intervention: targeted to improve individual’s efficiency
• Counseling and Coaching: it is concerned to discussing problems with concerned
staff and providing guidance, encouragement, and supporting them for better
performance
• Sensitivity Training: technique for changing individual behavior through
unstructured group interaction dealing with interpersonal problems among
individual
• Survey Feedback: questionnaires are distributed among target individuals to
identify discrepancies in their perceptions
 OD Intervention
B. Group Level Interventions: applied to improve group performance
• Team building: work teams are built for achievement of organizational efficiency
with members come in interaction with teams while performing jobs. Mutual
interaction increase trust and understanding among team members and supports
for work efficiency.
• Process consultation: concerned with consulting about the best process for doing
jobs with hiring outside consultant for proper suggestions and guidance.
• Intergroup Development: concerned with developing work efficiency of the
groups through maintaining harmony between the groups. There is inter-relation
over the performance of all groups of organization.
C. Organizational Level Interventions: concerned with performance and system
of whole organization
 OD Intervention
• Organizational Restructuring: process of redesigning organizational structure
involving re-division of work, amendments in rules and regulations, refining
authority-responsibility relationship, etc. by adopting with changing environment
of business
• Technological Changes: requires change in technological factors as per
requirement concerning with modification in procedures and process
modernization of technologies
• Management By Objective(MBO): believes in participative culture with both the
top and operational manager jointly developing the common goals that define
each individuals major responsibilities in terms of result expected
• Quality of work life programs: concerned to creating a favorable working
environment for employees to satisfy them to enhance employees satisfaction
and morale with components such as, harmonious relation, healthy and safe
work place, supportive leadership, two-way communication, etc.
 Work Force Diversity
• Involvement of heterogeneous manpower within one workplace
• Employing diversified workforce is a big challenge for management due to
employee’s different age, physical and mental ability, gender, religion and so on
• It could also be regarded as source of cost advantage, acquisition, marketing and
creativity
• Also source of conflict within organization
• Managing workforce diversity is essential to create a good working place in which
such a heterogeneous manpower respect each other, coexist and work together
with full cooperation of each other
• Encouragement to fulfill full potential, eliminate discrimination, achieve
organizational goals efficiently