1.Organisation Development and ChangeSession - 1

2. Unit I Nature of Change 3. Necessity of Change Any business in todays fast-moving environmentthat is looking for the pace of change to slow islikely to be sorely disappointed. In fact, businesses should embrace change andChange is important for any organizationbecause, without change, businesses would likelylose their competitive edge and fail to meet theneeds of what most hope to be a growing base ofloyal customers. 4. Factors Affecting OrganizationalChange Change is inevitable in the life of an Organisation. In todaysbusiness world, most of the organizations are facing a dynamicand changing business environment. Organizations that learn and cope with change will thrive andflourish and others who fail to do so will be wiped out. The major forces which make the changes not only desirable butinevitable are technological, economic, political, social, legal,international and labour market environments. The term change refers to any alterations which occurs in theoverall work environment of an organisation. When an organizational system is disturbed by some internal orexternal force, change frequently occurs. Change, as a process, issimply modification of the structure or process of a system. There are a number of factors both internal and external whichaffect organizational functioning. Any change in these factorsnecessitates changes in an organisation. 5. Factors Affecting OrganisationalChange External Forces 1. Technology 2. Customer needs 3. Economy 4. Political and Legal Changes 5. Growth Opportunities Internal Forces 1. Change in Managerial Personnel 2. Deficiency in Existing organization 3. Nature of the work force 4. To avoid developing inertia 6. External Forces1. Technology Change that results from the adoption of new technology iscommon in most organizations and while it can be disruptiveat first, ultimately the change tends to increase productivityand service Technology also has affected how wecommunicate. Todays burgeoning communication technology representschanges that allow organizations to learn more, more quickly,than ever before. When there is a change in technology in the organizationalenvironment and other organizations adopt the newtechnology, the organizations under focus become less costeffective and its competitive position weakens. Therefore, it has to adopt new technology, its work structure isaffected and a new equilibrium has to be established. 7. External Forces2. Customer Needs/ Market Needs As the world evolves, customer needs change and grow, creating newdemand for new types of products and services -- and opening up newareas of opportunity for companies to meet those needs. Since every organization exports its outputs to the environment, anorganization has to face competition in the market. There may be two types of forces which may affect the competitiveposition of an organization other organizations supplying the sameproducts and, buyers who are not buying the product. Any changes inthese forces may require suitable changes in the in the organization. For example, when Indian economy was liberalized, there were manyforeign organizations that entered the Indian market. This forced manyIndian organizations to realign themselves with the new situations. Theresult in that there have been many cases of divesting the business andconcentrating on the core business, acquiring core business, anddeveloping competitive competence to face competitive threats. Similarly, there may be changes in buyers in terms of their needs, likingdisliking and income disposal for a product. These changes from theorganizations to bring those products which meet buyers requirement. 8. External Forces3. The Economy The economy can impact organizations in both positive and negative ways and both can be stressful. A strong economy and increasing demand for products and services will mean that companies must consider expansion that might involve the addition of staff and new facilities. These changes offer opportunities for staff, but also represent new challenges. A weak economy can create even more problems as companies find themselves needing to make difficult decisions that can impact employees salaries and benefits and even threaten their jobs. The ability to manage both ends of the spectrum are critical for organizations that want to maintain a strong brand and strong relationships with customers as well as employees. Social changes reflect in terms of peoples aspirations, the needs, and their ways of working. Social changes have taken place because of the several forces like level of education, urbanization, feeling of autonomy, and international impact due to new information sources. These social changes affect the behavior of people in the organization. There, it is required to make adjustment in its working so that it matches with people. 9. External Forces4. Political and legal changes Political and legal factors broadly define the activities which anorganisation can undertake and the methods which will be followedby it in accomplishing those activities. Any changes in these political and legal factors may affect theorganization operation.5. Growth Opportunities Change is important in organizations to allow employees to learnnew skills, explore new opportunities and exercise their creativity inways that ultimately benefit the organization through new ideas andincreased commitment. Preparing employees to deal with these changes involves ananalysis of the tools and training required to help them learn newskills. Training can be provided through traditional classroom settings or,increasingly, through online learning opportunities. Importantly,organizations need to do a good job of evaluating employeescapabilities and then taking steps to fill the gaps between currentskills and the skills required to respond to growth. 10. Internal Forces Changes in the managerial personnel Besides environmental changes there is a change inmanagerial personnel. Old managers are replaced bynew mangers, which necessitated because ofretirement, promotion, transfer or dismissal. Each new manager brings his own ideas and way ofworking in the organization. The relationships, more particularly informal ones,changes because of changes in managerial personnel. Moreover, attitude of the personnel change even thoughthere is no changes in them. The result in that anorganization has to change accordingly. 11. Internal Forces Deficiency in Existing organization Sometimes,changes are necessary because ofdeficiency in the present organizational arrangement adprocess. These deficiencies may be in the form of unmanageablespan of management, large number of manageriallevels, lack in co-ordination between variousdepartments, obstacles in communication, multiplicity ofcommittees, lack of uniformity in policy decisions, lack ofcooperation between the line and staff, and so on. Beside these internal factors, there are two more internalfactors that give rise to organizational changes. 12. Internal Forces Nature of the work force The nature of work force has changed over apassage of time. Different work values have beenexpressed by different generations. The profile of the workforce is also changing fast. The behavior has also become very complex andleading them towards organizational goals is achallenge for the managers. The employee turnover is also very high whichagain put strain on the management. 13. Internal Forces To avoid developing inertia In many cases, organizational changes take placejust to avoid developing inertia or inflexibility. Conscious manager take into account this view oforganization that organization should be dynamicbecause any single method is not the best tool ofmanagement every time. Thus, changes are incorporated so that the personnel develop liking for change and there is no unnecessary resistance when major change in the organization are brought about. 14. The various types oforganizational changes1. Individual Level2. Group Level3. Organisational Level 15. Individual Level Change Individual level changes may take place due tochanges in job assignment, transfer of an employeeto a different location or the changes in the maturitylevel of a person which occurs over a passage oftime. The general opinion is that change at the individualwill not have the significant implications for theorganization. But this is not correct because individuallevel changes will have impact on the group which inturn will influence the whole organization. Therefore, a manager should never treat theemployees in isolation but he must understand thatthe individual level change will have repercussionsbeyond the individual. 16. Group Level Change Management must consider group factors while implementingany change, because most of the organizational changes havetheir major effects at the group level. The groups in the organization can be formal groups orinformal groups. Formal groups can always resist change forexample; the trade unions can very strongly resist the changesproposed by the management. Informal groups can pose amajor barrier to change because of the inherent strength theycontain. Changes at the group level can affect the work flows, jobdesign, social organization, influence and status systems andcommunication patterns. The groups, particularly the informal groups have a lot ofinfluence on the individual members of the group. As such byeffective implementing change at the group level, resistance atthe individual level can be frequently overcome. 17. Organizational Level Change The organizational change involves major programmeswhich affect both the individuals and the groups. Decisions regarding such changes are made by thesenior management. These changes occur over longperiods of time and require considerable planning forimplementation. A few different types of organization level changes are:1. Strategic change. Strategic change is the change in the very basic objectives or mission of the organization. A simple objective may have to be changed to multiple objectives. For example, a lot of Indian companies are being modified to accommodate various aspects of global culture brought in by the multinational or transnational corporations. 18. 2. Structural change. Organizational structure is the pattern of relationships among various positions and among various position holders. Structural change involves changing the internal structure of the organization. This change may be in the whole set of relationships, work assignments and authority structure. Change in organization structure is required because old relationships and interactions no longer remain valid and useful in the changed circumstances.3. Process oriented change. These changes relate to the recent technological developments, information processing and automation. This will involve replacing or retraining personnel, heavy capital equipment investment and operational changes. All this will affect the organizational culture and as a result the behaviour pattern of the individuals.4. People oriented change. People oriented changes are directed towards performance improvement, group cohesion, dedication, and loyalty to the organizations as well as developing a sense of self-actualisation among members. This can be made possible by closer interaction with employees and by special behavioural training and modification sessions.To conclude, we can say that changes at any level affect the otherlevels. The strength of the effect will depend on the level or source ofchange. 19. Role of the Change Agent InOrganizational Change Change agents are the persons who initiate change and managechange in the organizations. They are specialized in theory and practice of managing changes.The change agent may be a member of organization or anoutsider such as a consultant. An internal agent very well knowsthe organization and have ability, knowledge and experience ofdirecting people for changes. But, internal agent is removed from regular duties to concentrateon the transition. However, external agents view the organization from the systempoint of view and is much affected by the organization norms. Top managers also prefer hiring specialized consultant changeagents as they can offer more objective prospective than insiders. External experts are, however, not well aware of the desires andattributes of the employees, therefore, the changes suggested bythem are generally resisted by the employees. 20. Role of Change Agents Change agents have five set of powers as support of managers is essential but not enough. Following are the powers, High status given by the members of the clientorganization, based on their perception that the changeagent is similar to them in behaviour, language etc. Trust based on his consistent handling of informationand maintaining proper role in the organization. Expertise in the practice of organizational change. Credibility based on experience with previous clients. Dissatisfied constitutions who see the change agents asthe best opportunity to change the organization to meettheir needs. 21. The four subject matters which achange agent can change Structure Technology People Physical Setting 22. Structure Structure is defined as how the tasks are formallydivided, grouped and coordinated. For instance, change in plant layout or new techniquecan only succeed when the structure is changedaccording to change in environment. He may alsochange responsibility, authority, functions, performanceaccording to the need of the change. He might alsoredesign jobs or work schedule. Technology The introduction of new equipment and work process istechnological change. Automation or computerization isthe common technological change. Major technological changes involve introduction of newtools and equipment, automation, computerization. 23. People This involves changing attitudes and behaviour of membersthrough communication, decision making and problem solving. They help individuals to work more efficiently and effectivelytogether. The changes may only be possible in case themembers are positive. In case there is lack of agreement,stress and tension occurs with the employees. Physical Setting It involves change in interior design, equipment placement,plant layout, tool placement. These changes are helpful inorganizational development. Physical setting considers flowprocess, information flow and outcome. The smoothness offlow increases the effectiveness of changes. The basic objective of change agents is to increaseeffectiveness, performance and satisfaction. 24. Causes of Resistance toOrganizational Change The main reasons for resistance to change are bothindividual and organization. The research document of individual andorganizational behavior has found that organizationgroups and individuals resist change. Resistance to change provides a degree of stabilityand predictability to behavior, as it does not allowimmediate change. Resistance to change can be categorised as1. Individual Resistance.2. Group Resistance.3. Organizational Resistance. 25. Individual Resistance Individual arise due to differing perceptions, personalitiesand needs. Some of these reasons appear to be rationaland emotional. These reasons are listed below,a) Economic Factorsa) The economic reasons for the resistance to change may be the following:b) In organization when the development or change on technology takes place, employee resists the change.c) Employee may fear that the change will lead to technological unemployment.d) Generally, new technology is associated with education of labor intake and therefore they resist the change.e) For example the introduction of computer in an organization means that employee will have to learn the certain package to work efficiently. They may not be liked by some employees and they develop negative attitude towards computer and resist them. 26. Economic Factors In organization where pay is tied to productivity individuals usually resists change as they fear that they will not be able to perform new task effectively, thus causing a decline in productivity and a decrease in their income. Workers may fear that they will be demoted if they do not acquire the skills required for the new jobs. Workers resist the changes which lead to high standards which in turn may reduce the opportunities for bonus or incentive pay. 27. Economic Factors Habit All human being are creatures of habit. Individual generallyfeel comfortable in the environment that they are habituated to.The modern life is very complex and no one likes to considerthe full range of option for the hundreds of decision which hasto be made everyday. Instead we rely on habit or programmed responses. Whenconfronted with change, the thought if moving away from theenvironment they are accustomed to become a source ofresistance. Insecurity Safety and security are high priority for every individual. One of the major reasons for resistance to change is uncertainty about the impact of change, especially on the job security. When employees feel that the security of the job is threatened by change, they resist it. The fear unknown always has a major impact on the decision of the individual. 28. Economic Factors Lack of Communication If the workers are given an opportunity to participate in the process of change, the resistance is likely to be less. But if the change is not properly communicated that to in an acceptable manner to the employees, it is likely to cause resistance. Extent of Change If there is a minor change and the change involves onlythe routine operations the resistance will be minimum orno resistance. But incase of major changes like reshuffling of staff willlead to major visible resistance. Similarly the process ofchange is slow, the resistance will be less as comparedto rapid or sudden change. 29. b) Psychological Factors One of the major reasons for resistance can be emotional turmoil that achange may cause especially if the past experiences with the changehave not been positive. The psychological reasons for the resistance tochange are: Workers may have the fear that the new job will bring boredom andmonotony as a result of specialization brought by the new technology. Change in technology brings new method of doing the job and it mustbe learnt and adopt the new ideas of doing the job. To learn these ideasthey need work hard and they do not want to take the trouble in learningnew things. The workers may be incapable of understanding the implications of newideas and method. Workers may not like criticism implied in a change that the presentmethod is inadequate and unsuitable. New changes may lead to reduction of the personal pride of the workersbecause they fear that new work changes will do away with the need formuch manual work. 30. c) Social Factors Every individual have social needs like friends, belongingness, etc. In organization, while working employee develop social relationship with the other employees. They become members of certain informal group. The change will bring a fear in mind of people because generally people dislike with for new adjustment, breaking present social relationship reduce social relationship, feeling of outside interference in the form change agent etc. 31. 2. Group Resistance While working in an organization the employee forminformal group in the organization. The most organizational change has impact ininformal group in the organization. Breaking up aclose knit work group or changing social relationshipcan provoke a great deal of resistance. The main reason why the groups resist change isthat they fear that their cohesiveness or existence isthreatened by it. This is particularly true in case of group which arevery cohesive where people have a strong case ofbelongingness to group and where member considerthe group as superior to the other groups. 32. 3. Organizational Resistance Organizational resistance means that the change is resisted atthe level of the organizational itself. Some organizations are sodesigned that they resist new ideas, this is specifically true incase of organizations which are conservative in nature. Government agencies want to continue doing what they havebeen doing for a number of years even though there is need forthe change in their services. Majority of the business firms arealso resistant to changes. The major reasons for organizational resistance are: Threat to Power Top management generally considers change as a threat to theirpower and influence in the organization due to which the changewill be resisted by them. The introduction of participative decisionmaking or self-managed work teams is the kind of change whichis often seen as threatening by the middle and top levelmanagement. 33. 3. Organizational Resistance Group inertiaSometimes, the individuals resist change because the group to which theybelong resists it. The degree and force of resistance will depend upon howloyal one is to the group and how effectively the group resists the change. Organizational structureChange is often resisted by the bureaucratic structures where jobs arenarrowly defined, lines of authority clearly spelled and flow of i9nformation isstressed from top to bottom. Moreover, organizations are made up of a numberof interdependent subsystems, one system cannot be changed withoutaffecting the others. Threat to specialization Change in organization may threaten the expertise of specialized groups. Forexample, giving computer training to all the employees in the organization andgiving personal computers was perceived as a threat by the experts incomputer department of the organization. Resource constraints Organizations need adequate financial resource for training change agentsand for offering rewards to those who support change. An organization whodoes not have resources for implementing the change resists it.