Module 5 - Organizational Change & Organizational Development

Organizational Culture

Organization culture is the characteristic and the tangible personality originated inside every
organization. Even If we are not familiar with companies like Starbucks, Google, IBM, Wipro
and Infosys. Their names represent the taste of their workplaces, the attitude, the unwritten
protocol of interactions and the company values.
Brown (1998, p 9) defines organizational culture as “the pattern of beliefs, values and learned
ways of coping with experience that have developed during the course of an organization’s
history, and which tend to be manifested in its material arrangements and in the behaviors of its
members”.
Organization culture defined as the philosophies, ideologies, values, assumptions, beliefs,
expectations, attitudes and norms that knit an organization together and are shared by its
employees.
Corporate Culture:

Corporate culture has been defined as the personality of an organisation. It encompasses the
company's goals and dominant ideologies. It is a system of shared values that interact with a
company's people, organisational structure and control system to produce behavioural norms.
The organisation has to survive and thrive in an external environment which could be turbulent
or steady. Against this background, corporate culture is created by organisational members with
the values, philosophy, beliefs, assumptions and norms, with the top management playing a
dominant role.
Culture influences behavior in three areas:

 Corporate Values: Belief in what is best or good for the organization and what should or
ought to happen. They are expressed by reference to both ends (goals) and means (action
plans for achieving goals).
 Organisational Climate: The working atmosphere of the organisation as perceived and
experienced by its members. This will encompass how people feel about and react to the
characteristics and quality of the corporate culture and its values.
 Management Style: It is the way in which managers behave and exercise authority. They
may be autocratic or democratic, tough or easygoing, formal or informal. It also describes
the way in which managers behave.
Types of organizational culture:

Bureaucratic: In this type of culture the behavior of employees is governed by formal rules and
standard operating procedures. Such a culture perpetuates stability. Organizations with
bureaucratic culture tend to produce standardized goods and services, examples: Government
ministries
Clan: In a clan culture the behavior of individuals are shaped by tradition, loyalty, personal
commitment, extensive socialization and self-management. A clan culture achieves unity through
socialization. Long-term employees serve as mentors. Members are aware of the organization’s
history and have an understanding of the expected manner of conduct and organizational style.
Members share feelings of pride in membership. Peer pressure to adhere to important norms is
strong
Market: In a market culture, the values and norms reflect the significance of achieving
measurable and demanding goals mainly concerning those that are financial and market based.
Companies with a market culture tend to focus on: Sales growth, Profitability, Market share. In a
market culture the relationship between individuals and the organization is contractual
(previously agreed). Individuals are responsible for their performance; whereas the organization
promises specific rewards for levels of performance. Managers are not judge on their
effectiveness as role models or mentors; but on monthly, quarterly, and annual performance
goals based on profit.
Entrepreneurial: Organizations existing in the context of an entrepreneurial culture are
characterized by high levels of risk taking and creativity. There is a commitment to
experimentation, innovation, and being on the leading edge. Steve Jobs – Apple
How culture is Created?

a. Culture formation around critical incidents

b. Identification with the leaders
c. Property rights system
d. Organizational structure
e. Organizational ethics
f. Characteristics of employees
Organizational Change

Organisational change refers to any alteration that occurs in total work environment.
Organisational change is an important characteristic of most organisations. An organisation must
develop adaptability to change otherwise it will either be left behind or be swept away by the
forces of change. Organisational change is inevitable in a progressive culture. Modern
organizations are highly dynamic, versatile and adaptive to the multiplicity of changes.

Organisational change is the process by which organizations more from their present state to
some desired future state to increase their effectiveness.

Organizations survive, grow or decay depending upon the changing behaviour of the employees.
Most changes disturb the equilibrium of situation and environment in which the individuals or
groups exist. If a change is detrimental to the interests of individuals or groups, they will resist
the change.

Nature of Organizational Change

Change is characterized by the following features:

1. Movement from one state of balance to another: Change involves moving from the
existing state of balance to a new level of equilibrium. It disturbs the old equilibrium and
develops a new equilibrium where new ways of working become part of the system.
 2. In whole or parts: It may involve change in some parts of the organisation (technology,
structure or people) or the organisation as a whole. Even if change is introduced in part of
the organisation, it affects the entire organisation. Change in one part, for example,
technology requires change in learning of people and may be structure to adopt that
technology.
3. Responsive to environmental factors: Change is affected by factors external and
internal to the organizations.
4. Continuous process: Change is not a one-time process. Organisations keep changing
their policies to survive and grow in the competitive markets. While some changes are
minor and get absorbed in the system through internal adjustments, major changes are
introduced through change agents.
5. Essential activity: Change is not a force that organisations may or may not respond to. If
organisations want to survive, change has to be accepted by them. They can, however,
plan the change or react to change. The former approach to change is conducive to
organisational development and growth.
6. Change agents: Change is initiated by change agents. Change agents can be internal or
external to the organisation. Internal change agents can be top executives of the
organisation. External agents are outside experts or advisors appointed by executives to
initiate the change process.
Other features are:

 Vital if a company were to avoid stagnation

 Normal & constant
 ‘Directive’, that is implemented by top down management or participative.
 It is natural (evolutionary) and incremental (continuous)

Why Organizations Need to Change?

Organisation change is as old as the organizations are. Effectiveness and efficiency are the two
reasons for organisation change.

1. The Changing External Environment: The business environments are not only continuously
changing, but the pace of change has been accelerated. Environments can be truly described as
turbulent. Globalization, highly increasing international trade, telecommunications, internet,
satellite TV and mobile phones have triggered the change.
2. The Changing Internal Environment: An organisation may become unionised or de-
unionised, a new CEO taking charge, administrative structures revisited, group of jobs
redesigned, a new marketing strategy taking place, and so on. All of these developments trigger
change.
3. Human Capital is Critical: Rapid growth in scientific and technological knowledge is one
driver, information technology boom of 1990s, and the current talent shortage have been the
other drivers contributing to growing importance of human capital. Today the market value of
the firm lies in their human capital. Very recently, every employee in a Bangalore-based IT firm
has been valued at Rs. one crore.
4. The Knowledge being at the core of organizational effectiveness has changed the very essence
of organizations, what they do, and how they do it. Due to knowledge and its use the nature of
individual work has changed. Many of the tasks are being done by machines, or transferred to
low-wage economies.

5. Organisations Makes a Difference: The way companies are organised can provide a
competitive advantage.
6. Change is a necessary prerequisite for organizational survival.
7. Changing Government Agencies (the SEBI is getting stronger day by day)
8. Changing Higher Education Institutions and Non-profit Organizations.
9. be adaptive to environmental conditions,
10. Compete in the domestic and international markets,

11. Improve their performance, and

12. Enter into mergers and acquisitions.

Process of Organizational Change:

Unless the behavioural patterns of the employees change, the change will have a little impact on
the effectiveness of the organisation.

A commonly accepted model for bringing change in people was suggested by Kurt Lewin in
terms of three phase process:-

(1) Unfreezing:
The essence of unfreezing phase is that the individual is made to realize that his beliefs, feelings
and behaviour are no longer appropriate or relevant to the current situation in the organisation.
Once convinced, people may change their behaviour. Reward for those willing to change and
punishment for others may help in this matter.

(2) Changing:
Once convinced and ready to change, an individual, under this phase, learns to behave in new
ways. He is first provided with the model in which he is to identify himself. Gradually he will
accept that model and behave in the manner suggested by the model. In another process (known
as internalisation), the individual is placed in a situation where new behaviour is demanded of
him if he is to operate successfully.
(3) Refreezing:
During this phase, a person has to practice and experiment with the new method of behaviour
and see that it effectively blends with his other behavioural attitudes. Reinforcement, for creating
a permanent set in the individual, is provided through either continuous or intermittent schedules.

Managers should ensure that the organizational culture and reward systems encourage the new
behaviours and avoid the old ways of functioning.

Unfreezing, Changing and Refreezing underpin the change process which itself can be
summarized as consisting sis stages.

1. Becoming aware of the pressure for change: most organizational changes are carried
out in response to or in anticipation of pressure from inside or outside the organization.
These pressure demands changes in the structure, technology, tasks and people in the
organization.

2. Recognizing the Need for Change: Becoming aware of the need for change is important
for organizational survival (Refer: Why Organizations Need to Change?).

3. Diagnosing the Problem: Recognizing the need and diagnosing the pressure for change
is significant. For diagnosing the problem it is necessary for managers choose any model
such as Interviews, Questionnaires, Observing, and Secondary data for understanding the
problem for building imminent change programme.

4. Planning for Change: the organization must formulate a strategy based on evolutionary
or revolutionary change. A firm that adopts revolutionary change adopts a top-down
change strategy like winding up of divisions, downsizing, mergers or acquisitions. The
Evolutionary change depends on a bottom – up change strategy by involving managers
and employees at all levels in bringing the change.

5. Implementing the Change: in the implementing stage the firm generally comes across
resistance at different levels. Hostility or aggression is the immediate reaction of an
individual to change. The individual may develop apathy towards his work. Having lost
interest in the work, Absenteeism, strike, etc., are the several ways any which resistances
are identified.

These obstacles need to be managed through i) education and communication ii)

participation and involvement, iii) facilitation and support, iv) negotiation and agreement,
v) manipulation and co-operation and vi) explicit and implicit coercion.

6. Following up on the change: The final step in the change process is to evaluate the
effects of the change and to institute procedural modifications that will ensure that the
change continues to be implemented.

Types of Changes

1. Reactive Change : Changes which take place in response to an event or a chain of

various events can be termed as Reactive Change. Most of the organizations indulge in
reactive change. This kind of change usually occurs when there is an increase or decrease
 in the demand for company’s products or services. It can also be a response to a
problematic situation or a crisis which an organization may be faced with. For example,
due to the advancements in technology or growing technological changes, an
organization may be forced to invest more in technology to stay ahead to face the stiff
competition.
2. Anticipatory Change (Proactive Change): If a change is implemented with prior
anticipation of the happening of an event or a chain of events, it is called as anticipatory
change. Organizations may either tune in or reorient themselves as an anticipatory
measure to face the environmental pressures. Tuning in essentially involves
implementing incremental changes which mean dealing with the subsystems individually
or just with the part of a system.
3. Revolutionary change: The revolutionary change is sudden, immediate, dramatic and
forced down –a high-pressure mandate from above coming from “upstairs” when senior
leadership says that it must be done. Once the decision is made, a room for discussion
may be accepted, but the change is going to take place one way or another. It can take a
day, a week, or a month, and sometimes even a quarter, but the change will occur.
An organization can employ re-engineering to implement revolutionary change to bring
about quick results.
Re-engineering- Popularly known as business process re-engineering, this type of change
involves rethinking and redesigning of business process to increase organizational
effectiveness.
4. Evolutionary Change: The evolutionary change is gradual, incremental and specifically
focused. The approach is built collaboratively. The senior management needs to be
engaged, but they are not driving the change. Leadership tends to empower people all
through the organization to take on the change. The change occurs in small chunks, and
every person is to understand the change and embrace it.
Total quality management (TQM) is types of change process through which
organizations attempts to manage incremental change. TQM is a technique developed by
Edward Demming to improve the efficiency of flexible work teams. The goal of TQM is
continuous improvement. TQM aims to impress upon workers the importance of
continuously improving the efficiency of the production process in order to reduce costs,
improve quality and reduce waste. Workers in a TQM system are expected to make
suggestions for improving all aspects of the work process and are expected to share their
specialized knowledge with management so that it can be communicated throughout the
organization.
TQM seeks to introduce change thorough four key components i) systems ii) process iii)
people and iv) management.
5. Planned Change: Planned change is also regarded as the developmental change which is
implemented with the objective of improving the present ways of operation and to
achieve the pre-defined goals. Planned change is calculated and is not threatening as in
this the future state is being chosen consciously. The introduction of employee welfare
measures, changes in the incentive system, introduction of new products and
technologies, organizational restructuring, team building, enhancing employee
communication as well as technical expertise fall under the category of Planned Change.
6. Incremental Change: Change which is implemented at the micro level, units or subunits
can be regarded as incremental change. Incremental changes are introduced or
implemented gradually and are adaptive in nature. It is based on the assumption that these
small changes will ultimately result in a large change and establish the basis for forming
a much healthier and a robust system. It even offers an opportunity to an organization to
learn from its very own experiences and create the adaptive mechanisms for meeting the
 ultimate organizational vision. The extent of damage due to a failed incremental change
effort is expected to be much lesser than the change which is implemented on a large
scale or introduced universally.

Factors influencing Organizational Change:

A. Forces of Change Stemming From External Environment

1. Globalization: Globalization has made organizations to rethink the boundaries of their

markets and to encourage their employees to think globally.
2. Workforce Diversity: Diversity among employees makes an organization to reposition its
strategy to create a new idea and develop a new plan.
3. Political Forces: The transition of the East-European nations to democracy and a market
economy, the opening up of the economy of South-East Asia, the collapse of the
erstwhile Soviet Union, the unification of Germany, the Gulf War, the Iraq war are some
examples of the political upheavals that have had widespread repercussion around the
world, bringing a plethora of changes in their wake.
4. Economic Forces: The uncertainty about future trends in the economy is a major cause
of change. For example, fluctuating interest rates, declining productivity, uncertainties
arising from inflation or deflation, low capital investments, the fluctuating prices of oil
(petrol), recession, and the lowering of consumer confidence have a marked impact on
different economies, and therefore, an organization. The national financial systems of
countries are so interrelated that a change in one produces a ripple effect on the others-
for example, the economic crisis in Thailand affecting markets across South-East Asia.
Changes in the capital markets arise out of change in the accessibility of many of the
banking systems of different economies.
5. Technological Forces: The world is presently characterized by dramatic technological
shifts. Technological advancements, particularly in communication and computer
technology, have revolutionized the workplace and have helped to create a whole new
range of products/services. Example- A case in point is Singapore, which, with almost no
natural resources, has created a powerful economic advantage by exploiting the use of
information technology in its overall planning. It is poised to become the world’s first
fully networked society– one in which all homes, schools, businesses and government
agencies will be electronically interconnected.
6. Government Forces: Governmental interventions in the form of regulation also lead to
change. A few examples for government regulated change are: Deregulation: This is
lessening of governmental rules and increasing decentralization of economic
interventions at the level of the state. What previously used to be essentially government
sector services and industries are now being handed over to private companies for
operation maintenance.
7. Increased Global Competition: In order to survive and grow, companies are
increasingly making their presence felt globally. The case of the global automobile
industry highlights this concept. Japanese automakers Toyota, Nissan, and Mitsubishi
have continuously been relocating their manufacturing and assembling operations to
South-East Asia where the cost of labour is much cheaper compared to that in Japan.
They have also established their plants all over Europe and America to get past import
 restrictions and in the process have been able to retain a competitive edge in catering to
the world automobile market.
8. Changing Customer Needs and Preferences: Customer needs and preferences are
always changing. Organisations are forced to adapt and constantly innovate their product
offerings to meet these changing needs. For example, Sony Corporation, Japan, known
throughout the world for its technological innovations in tune with changing customer
preferences, has developed a 2.5” hard disk drive for a laptop computer that could hold as
much as 1.5 billion bytes of data costs less than the current disk drive holding 80 mega
bytes.
9. Managing Ethical Behaviour

B. Internal Forces for Change A variety of forces inside an organization also cause changes
that relate to system dynamics, inadequacy of existing administrative process, individual/group
expectations, technology, structures, profitability issues and resources constraints.

1. Nature of the work force:

2. Change in managerial personnel
3. Deficiencies in Existing Management structure
4. To avoid developing Inertia
5. Organizational Silence
6. Falling Effectiveness
7. Crisis
8. Changing employee’s expectations
9. System Dynamics: An organization is made up of subsystems similar to that of the sub-
personalities in the human brain. The factors that influence the alignment and relationships
among the various subsystems in the context of an organization are, for example technology,
internal politics, dominant groups/cliques, and the formal and informal relationships within.

10. Inadequacy of Administrative Processes: An organization functions through a set of

procedures, rules and regulations. With changing times and the revision of organizational goals
and objectives, some of the existing rules, procedures and regulations could be at variance with
the demands of reality. To continue with such functionally autonomous processes can lead to
organizational ineffectiveness. Realisation of their inadequacy is a force that induces change.

11. Individual/Group Speculations: The organization as an entity is a confluence of people,

each one raring to satisfy his/her needs and aspirations. In an anthropological context, man is a
social animal whose needs and desires keep changing. This creates differing expectations among
individuals and groups as to the needs they intend satisfying in the organizational context.
Positive factors such as one’s ambitions, need to achieve, capabilities, career growth, and
negative aspects such as one’s fears, insecurities, and frustrations operate as complex inter-
individual and inter-group processes inducing change in an organisation’s functioning and
performance (which may or may not be to the organisation’s best interests).

12. Structure Focused Change: It’s a change that alters any of the basic components of an
organisation’s structures or overall designs. Organisations make structural changes to reduce
costs and increase profitability. Structural change can take the form of downsizing,
decentralization, job-redesign, etc. For example, IBM, the global computer conglomerate has
been trying to downsize. While many people were asked to leave, IBM is now very selective
about hiring new personnel. In the process of downsizing, IBM has also changed the firm’s

13. Resource Constraints: Resources refer to money, material, machinery, personnel,

information and technology. Depletion, inadequacy or non-availability of these can be a
powerful change force for any organization.

Resistance To Change
Whenever a person thinks that the effects of change are likely to unfavorable to employees or
organization. Resistance means opposition to change. Human resistance to change may be in any
of the following forms:
1. Hostility or aggression is the immediate reaction of an individual to change.
2. The individual may develop apathy towards his work. He loses interest in his work. There is
more spoilage of materials, excessive idling of time, and decline in performance.
3. Absenteeism and tardiness are often signs of resistance.
4. The development of anxiety and tension is a sure sign that resistance exists. The individual
finds himself uncomfortable, shaky, and tensed up on his job.
5. At the group level additional signs of resistance are exhibited. Slow downs and strikes are the
usual symptoms of group resistance. Another strategy adopted by a group to resist change is
“restriction of output”.

Causes of Resistance to Change

All changes are not resisted. Some are wanted by the workers. For instance, if the workers have
to stand before a machine throughout the shift, they will like the introduction of a new machine
which will allow them to sit while working. Thus, resistance to change is offset by their desire to
have better working conditions. Sometimes, people themselves want change and new experience
as they are fed up with the old practices and procedures.
There are many sources of resistance to change in organizations. The forces which resist changes
are:
A. Organizational Level Resistance To Change:
1. Organizational Structure: An organizational structure can be an obstacle change as it
creates a stable pattern of task relationships which affect the way people behave.
2. Organizational Culture: The values and norms in an organizational culture cause
people to behave in predictable ways. If the organizational change disrupts the values it
may force people to change. Hence organizational culture cause resistance to change
3. Organizational Strategy: An organizational strategy can be an obstacle for change.
Managers are often biased to previous commitments and they stick to a course of action
even it is not working.
4. Threat to Power: Top management generally considers change as a threat to their power
and influence in organization due to which the change will be resisted by them.
 5. Sunk Costs: The change requires additional investment on fixed assets and training
hence top management generally resist because it often leads to the problem of sunk
costs.
6. Overdetermination: Organization have several systems designed to maintain stability.
These constant practices can become Overdetermination to cause a resistance to change.
Change.
B. Individual Level Resistance To Change:

Resistance to change is caused by individual’s attitudes which are influenced by many

factors such as economic, psychological and social factors.

1. Economic Factors: These factors relate to the basic economic needs of the workers like
necessities of life, job security and safety. These factors are: (i) Workers apprehend
technological unemployment. General new technology is expected to reduce the proportion of
labour input and, therefore, people resist such change as it will affect their jobs security; (ii)
Workers fear that they will be idle for most of the time due to increased efficiency by new
technology; (iii) Workers may fear that they will be demoted if they do not possess the new skills
required for the new jobs; and (iv) Workers resist the change of getting higher job standards
which may reduce opportunity for bonus or pay incentive.

2. Psychological Factors: These factors arise when workers perceive that factors relating to
their psychological needs will be affected adversely by the proposed changes. These needs are
sense of pride, achievement, self-fulfilment, etc. These factors are (i) Workers may not like
criticism implied in a change that the present method is inadequate and unsuitable; (ii) Workers
may fear that there will be fewer opportunities for developing their personal skills because new
work changes will do away with the need for much manual work. This will lead to reduction of
their personal pride; (iii) Workers may apprehend boredom and monotony in the new jobs as a
result of specialisation brought by the new technology; (iv) They may fear that harder work will
be required to learn and adapt to new ideas; (v) Workers may resist a change because they do not
want to take trouble in learning the new things; and (vi) Workers may not have the knowledge of
entire change or they may be incapable of the implications of new ideas or methods.

3. Social Factors: Individual do have certain social needs like friendship, belongingness, etc. for
the fulfilment of which they develop informal relations in the organisation. They become
members of certain informal groups and act as members of the group to resist change. The social
reasons for resistance to change are: (i) New organisational set up requires new social
adjustments which are not liked by people because these involve stresses and strains. This also
means discarding old social ties which is not tolerable to the workers. (ii) Workers are carried by
the fear that the new social set-up arising out of the change will be less satisfying than the
present set up. (iii) Workers also resist the changes which are brought abruptly and without
consulting them.

4. Cognitive Biases: The cognitive biases can influence an individual mangers perception of a
given situation and make them interpret the situation in ways that benefit themselves.

5. Uncertainty (Insecurity): Uncertainty about the outcome of change makes people resistance
to change.
6. Fear of loss: If employees may fear losing their jobs and the fear becomes acute when
advance technology is introduced.

7. Selective Perception: Perception plays a significant role in shaping employees attitudes and
behaviors. There is tendency for people to selectively perceive information that is consistent with
their existing views of their organization.

8. Habits: Employees preferences for familiar actions and events are also an important source is
resistance to change.

9. Logical reasons: Employees have their own justifiable reasons for their resistance to change.

10. Lack of communication: If the change is not properly communicated to workers can
become reason for resistance to change.

Thus, it is obvious that resistance to change tends to focus on human relations problem, although
it may appear to be related to the technological aspect of change. Workers resist the changes
which will affect their social relationships, upset their status and threaten their security. A change
may give them a feeling of insecurity, since it challenges their way of doing things and may
bring less labour oriented processes. 13 Moreover, it is difficult for the workers to give up their
old habits and customs. They also resist the change if they do not know it well. (b) Symptoms of
Resistance How does resistance to change manifest itself? There are several ways. But it does
not mean that these symptoms always indicate resistance. Sometimes they may be indicators of
other difficulties in the organisation.

C. Group Level Resistance To Change

1. Group Norms: As members in the group confirm to the group norms in order to knit the
group together can become reason for resistance to change.
2. Group Cohesiveness: A highly cohesive group may resist for protecting the group
interests.
3. Groupthink: In a cohesive group groupthink can be reason for resistance.
D. Subunit Level Resistance To Change
1. Differences in Subunit Orientation
2. Differences in Resource allocation
3. Task Interdependence
4. Power and Conflict`
Overcoming Resistance to Change

Managers need not abandon planned change in the face of resistance. Before recommending
specific approaches to overcome resistance, there are three key conclusions that should be kept
in mind. First, an organization must be ready for change. Second, the top management should
inform the employees about the process of change. Third, the employees’ perceptions or
interpretations of a change should be considered. The following methods of overcoming
resistance to change are as follows:
 Participation and Involvement: Participation is generally considered the most effective
technique for overcoming resistance to change. Employees who take part in planning and
implementing change are better able to understand the reasons for the change than those
who are not involved. They become committed to the change and make it work.
Employees who have the opportunity to express their own ideas and to understand the
perspectives of others are likely to accept change gracefully. It is a time consuming
process.

 Education and Communication: Educating employees about the need for and the
expected results of an impending change help reduce their resistance. Managers should
maintain an open channel of communication while planning and implementing change.
Hence an appropriate effective communication programme can help in overcoming
resistance.

 Facilitation of change: Knowing ahead of time that employees are likely to resist change
then the manager should do as much as possible to help them cope with uncertainty and
feeling of loss. Introducing change gradually, making only necessary changes,
announcing changes in advance and allowing time for people to adjust to new ways of
doing things can help reduce resistance.

 Force-field analysis: In almost any situation where a change is being planned, there are
forces acting for and against the change. In force-field analysis, the managers list each set
of forces and then try to remove or minimize some of the forces acting against the
change.

 Negotiation and Agreement: Where someone or some group will clearly lose out in a
change and where that group has considerable power to resist, there negotiation is
required. Sometimes it is a relatively easy way to avoid major resistance.

 Manipulation and Co-optation: This is followed when other tactics will not work or are
too expensive. It can be quick and inexpensive. However, it can lead to further problems
if people feel manipulated.

 Explicit and implicit Coercion: This is adopted where speed is essential and where the
change initiators possess considerable power. It is speedy and can overcome resistance.
Each of the above methods has its advantages and disadvantages. There is no universal
strategy for overcoming resistance to change. Hence, an organization that plans to
introduce certain changes must be prepared to face resistance from its employees. An
organization should also have a planned approach to overcome such resistances.

 Leadership: A capable leader can reinforce a climate of psychological support for

change.
 Organizational Development

According to Koonz et. al, “OD is a systematic integrated and planned approach to improve the
effectiveness of the enterprise. It is designed to solve problems that adversely affect the
operational efficiency at all levels”.

Burke’ has defined OD as “a planned process of change in an organisation’s culture through the
utilization of behavioural science technology, research and theory”.

“Organization Development is an effort planned, organization-wide, and managed from the top,
to increase organization effectiveness and health through planned interventions in the
organization's 'processes,' using behavioral-science knowledge.” – Beckhard

Characteristics of Organizational Development

1. Planned Change: Organizational development (OD) is an educational strategy for

bringing about planned change. Planned change concept makes it different from other
approaches for change in organizations.
2. Encompasses the Whole Organization: This change covers the entire organization.
Organisational Development is the development of the whole organisation so that it can
respond to change effectively. OD tends to ensure that all parts of the organisation are
well coordinated in order to solve the problems and opportunities that are brought by
change.
3. Long Range Change: OD is a long term process. It may take months or years to
implement it. OD is never intended to be a stopgap arrangement or measure.
4. Systems Orientation: OD is concerned with the various groups in the organisation and
their interactions with each other. It is concerned with formal as well as informal or social
relationships. It is concerned with group structures, processes and attitudes. OD
emphasizes on the relationships among the groups not on the groups themselves.
5. Change Agent: The services of outside experts are obtained, generally, to implement the
OD process. In OD, “Do it yourself” programmes are discouraged. When the primary
change agent is a consultant from outside the organisation, he can operate independently
without ties to the organisational hierarchy and politics of the organisation. The personnel
director is the internal agent of the organisation who coordinates the programme with the
management and the external agent.
As the external agent also works with the management, there is a three way relationship
of the personnel director, management and the outside consultant as they develop the OD
programme. Very rarely, an internal change agent is used by the organisation, who
usually is a specialist on the personnel staff.
6. Problem Solving: OD emphasizes on problem solving rather than just theoretical
discussion of the problems. The focus on real, ongoing problems rather than the theoretical or
artificial ones is called actions research. Action research is a very important feature of OD.
Sometimes, OD is called organisational improvement through action research.
7. Experiential Learning: In the traditional approaches, training was provided to the people
by lecture and discussion method, in which people talk about only abstract ideas. But in OD,
 particularly learn by experiencing in the training environment the kind of human problems
they face on the job. This approach tends to produce more changed behaviour than the
traditional approach. Theory is also necessary and desirable, but the ultimate test is how it
applies in real practice. These answers are provided by OD.
8. Collaborative Management: In contrast to the traditional management structure where
orders are issued at upper levels and simply carried out by low levels, OD stresses
collaboration among levels. In OD, organisations are viewed in a systems perspective.
9. Group Process: In OD, an effort is made to improve interpersonal relations, open
communication channels, build trust and encourage responsiveness to others. For this OD
relies on group processes like group discussions, inter group conflicts, confrontations and
procedures for co-operations.
10. Organisational Culture: OD assumes that the culture of every organisation is different
from the culture of the other organisations. The assumption that a particular solution can be
applied to the problems of all the organisations is generally not made in OD. Instead the
culture of each organisation must be understood and relations consistent with culture be
developed.
11. Feedback: In OD, feedback is given to all the participants about themselves, which
provides them a basis for their next activities. They generally base their decisions on this
concrete data. With the help of feedback of information, employees will be encouraged to
understand a situation and take self corrective action before somebody else tells them what to
do.
12. Situational and Contingency Oriented: OD is flexible and pragmatic, adapting the
actions to fit particular needs. Although some occasional OD change agent may have to
impose a single best way on the group, there is, usually, open discussion of several better
alternatives rather than a single best way.
13. Team Building: The basic objective of OD is to build better team work throughout the
organisation. OD tries to tie all the groups, small and large, working in the organisation,
together to make one integrated and cooperative group. If any groups have some differences,
OD will help them to find out the ways for solving the differences. The result of effective
team work will be improved organisational performance.

The main objectives of OD are to:

1. Improve organisational performance as measured by profitability, market share,
innovativeness, etc.
2. Make organisations better adaptive to its environment which always keeps on changing.
3. Make the members willing face organisational problems and contribute creative solutions
to the organisational problems.
4. Improve internal behaviour patterns such as interpersonal relations, intergroup relations,
level of trust and support among the role players.
5. Understand own self and others, openness and meaningful communication and
involvement in planning for organisational development.
6. To apply behavioral science theories: To improve organizational performance
7. To ensure proper use of individual efforts
 8. To encourage people to solve problems
9. To establish and maintain interpersonal relations
10. To create & maintain work environment
11. To increase knowledge & skills
12. To minimize resistance to change
13. To create job satisfaction
14. To increase motivation level
15. To create supportive values

Douglas McGregor, who was working in the Union Carbide, is considered one of the first
behavioural scientists to systematically talking about and advocating for the implementation of
OD for organisational improvement. OD as a subject is relatively new. Notwithstanding, it is
becoming increasingly popular and visible in USA, UK, Japan, Norway, Sweden and even in
India.
In India, OD is in scene since 1968. Since then, many public and private sector organisations like
HAL, HMT, IDPL, LIC, SAIL, TELCO and TISCO have been applying the interventions of OD
to solve the organisational problems.

Values of Organization Development

Three types of OD Values

A. Humanistic Values:
 They proclaim the importance of the individual.
 Respect the whole person.
 Treat people with respect and dignity. Assume that every one has intrinsic worth.
 View all people as having the potential for growth and development.
 Providing opportunities for people to function as human beings rather than as
resources in the productive process.
 Providing opportunities for each organization member, as well as for the
organization itself, to develop to his full potential.

B. Optimistic Values:
 They post that people are basically good.
 Progress is possible and desirable
 Rationality, reason, and goodwill are the tools for making progress.
 Attempting to create an environment in which it is possible to find exciting and
challenging work.

C. Democratic Values:
 They assert the sanctity of the individual.
 The right of people to be free from misuse of power.
 Use of fair and equitable treatment for all.
 Need for justice through rule of law
  Providing opportunities for people in organizations to influence the way in
which they relate to work, the organization, and the environment.
 Treating each human being as a person with a complex set of needs, all of which
are important in his work and in his life.”

The following are the values in OD efforts:

1. Respect People: People are the raison d’etre of organisation and they are responsible for
creating opportunities for growth. They must, therefore, be treated with respect and dignified
manners.
2. Confidence and Support: Organisations are made up of people and they are to be believed
and supported in order to have effective organisation. The healthy environment prevails when
people are trusted and taken into confidence and a necessary support is extended to them as and
when needed.
3. Confrontation: Any conflict on any issue should not be suppressed. It should be dealt with
openness. Suppression leads to dampening of morale. Identifying the problem and its causes,
discussing it openly and finding out feasible solution leads to boosting up morale of the
employees and creating good environment.
4. Employee Participation: The participation of employees who will be affected by the OD
should be sought in decision-making.
5. Expression: Human beings differ in experience, maturity, ideas, opinions, and outlook. The
organisation is at the receiving end. It gains from the differences in quality, ideas, opinions and
experiences of its people. Human beings are social animals; they have feelings, emotions, anger
and sentiments etc. They should be allowed to express their feelings and sentiments. This will
result in building up high morale and the people will be motivated towards hard work ultimately
resulting in increased efficiency.
6. Seeking Cooperation: Managers should learn to seek cooperation from each of the employees
working under him in his department. This will develop in creating the atmosphere of
cooperation leading to organisational effectiveness and willingness to accept change in the event
of organisation development process.

Organization Development Interventions

A. Human Process Interventions

Human Process Interventions aim at improving employees interpersonal skills. The purpose is to
provide insight and skills needed to analyses effectively their own and others behavior so that
they can intelligently solve interpersonal and inter group problems.
1. Sensitivity Training:

Sensitivity training is also known as laboratory training, encounter groups, and T-groups. It is a
method of changing behaviour through unstructured group interaction. If individuals lack
awareness of how others perceive them, then the successful T-group can affect more realistic
self-perceptions, greater group cohesiveness, and a reduction in dysfunctional interpersonal
conflicts.
Under this technique Ten to fifteen employees in groups are brought together in a free and open
environment, away from workplaces, in which participants are asked to interact freely, aided by
a facilitator. No formal agenda is provided. The facilitator is no teacher. His role is to create an
opportunity for participants to express their ideas, beliefs and attitudes.

The aim of sensitivity training is to help people understand each other and gain insight so that
they feel free and become fearless. They learn the reflection of their behaviour and try to
improve it.

Sensitivity training provides maximum possible opportunity for the individuals to expose their
behaviour, give and receive feedback, experiment with new behaviour and develop awareness of
self and of others. The employees through this technique know others feelings and behaviour and
the impact of their behaviour on others. It builds up openness, improves listening skills, tolerate
individual differences and the art of resolving conflicts. It helps in reducing interpersonal
conflicts in the organisation.

However there is every likelihood that some culprits will exploit the opportunity to fulfill their
vested goals at the cost of organisation’s interests. There is one more serious drawback of the
method that it may give rise to groupism in the organisation which will defeat the purpose of
OD. To make this technique effective and fulfill the purpose of OD, the selection of trainer must
be cautiously made. He must be a man of integrity and responsibility and must command respect
from the participating groups.

2. Team Building
Team building is a process of diagnosing and improving the effectiveness of a workgroup with
particular attention to work procedures and interpersonal relationship within it.
This method is specifically designed to make improvement in the ability of employees and
motivating them to work together. It is the organisation development technique which
emphasizes on team building or forming work groups in order to improve organisational
effectiveness.

This method of team building is used because people in general do not open up their mind and
not honest to their fellows. As they does not mix up openly and fail to express their views to the
peers and superiors. This technique helps them express their views and see how others interpret
their views. It increases the sensitivity to others’ behaviour. They become aware of group
functioning. They get exposed to the creative thinking of others and socio-psychological
behaviour at the workplace. They learn many aspects of interpersonal behaviour and interactions.

3. Managerial Grid:
This technique is developed by industrial psychologists duo Robert Blake and Jane Mouton. The
concept of managerial grid identifies two major dimensions of management behaviour. They are
people oriented and production oriented behaviours. Attempts are made to pay increased
attention to both the variables.
In the diagram given below, production oriented behaviour is shown on X axis and people
oriented behaviour is shown on Y axis. The point A having coordinates 1.1 managerial style
shows low people oriented and low production oriented behaviour.

It is impoverished management. There are many managers come under this category. Such
managers do not face any trouble and they do not carry any risk too. The point B having
coordinates 1.9 represents a managerial style which is highly people oriented and low production
oriented. This is a Country Club pattern of management. This type of management style keeps
the employees happy without much concern for production.

The next point C or 9.1 represents a managerial style which shows high concern for production
and low in people orientation. The managers who come under this category who usually fix high
targets of production for their subordinates and employees and do not pay any attention to the
needs and wants of their people.

The point D having coordinates 9.9 represent a managerial style which is highly production
oriented and highly people oriented. Robert Blake and Jane Mouton say that this is the most
effective managerial style. Under this category of management style managers put their best
efforts and have commitment to the people and organisation. This is the most favoured style and
efforts must be made to develop the style accordingly.

There is however a middle way which is represented by the point E or 5.5 a management style
having moderate production orientation and moderate people orientation. This is known as
middle of the road managerial style. But the style represented by the point D or 9.9 is the most
effective and most favoured one for accomplishment of organisational objectives. To achieve D
or 9.9 type of managerial style to strengthen organisational effectiveness Blake and Mouton have
prescribed Grid programme which is a structured laboratory training containing six phases.

Phases of Managerial Grid:

The following are the six phases of managerial grid training programme:
1. Phase or step one consists of seminar training. The seminars usually conducted up to a week.
Through seminars the participants learn about their own grid concept and style. This can help
them assess their management style. It also helps them to improve their skill within their group.
They develop problem solving techniques and develop their own grid programme.

2. The second phase gives more stress on team development. The teams consisting of managers
make necessary efforts to prepare plans to attain point D or 9.9 managerial styles. Through this
they learn how to develop smooth relationship with their subordinates and to develop
communication skill with other members of the organisation.

3. The third phase is intergroup development for improving coordination between different
departments of the organisation. Participants learn to develop problem solving methods.

4. The fourth phase deals with the creation of ideal models organisation. Managers and their
immediate subordinates sit together, set the goals, test and evaluate them. Superiors acquired
knowledge through reading of books. They prepare ideal strategy for the organisation.

5. The fifth phase deals with goal accomplishment. The teams of various departments make
survey of the resources available in the departments or which can be procured to accomplish the
goals of the organisation.

6. The sixth deals with evaluation of the programmes and to see if necessary alteration or
adjustment can be made for execution. The managerial grid technique is quite complicated and
its benefits cannot be visualized immediately, hence its evaluation can be done after pretty long
time.

B. Technostructural Interventions

Efforts are made to change the structures, methods and job designs of organization.
1. Total Quality Management
2. Quality of Work Life Programmes: designed to enhance employee’s motivation,
satisfaction and commitment.
3. Quality Circles:
Under this system a group of 5 to 12 come together at their own free will during working hours
once in a week and discuss out the problems and suggests solution to the management for
implementation. The supervisors remain present during the meeting. Quality Circles have their
origin in Japan in nineteen sixties which improved the quality, reduced cost and heightened the
morale of the workers. The success was due to workers’ participation.

C.Human Resource Management Interventions

Human Resources Management Interventions used to develop, integrate, and support people in
organizations. These practices include career planning, reward systems, goal setting, and
performance appraisal— change methods that traditionally have been associated with the human
resources function in organizations. In recent years, interest has grown in integrating human
resources management with OD. Human resources management interventions are rooted in labor
relations and in the applied practices of compensation and benefits, employee selection and
placement, performance appraisal, and career development. Practitioners in this area typically
focus on the people in organizations, believing that organizational effectiveness results from
improved practices for integrating employees into organizations.
 D. Strategic Interventions

This approach helps organization to analyse current strategy, designing a new strategy
and implementing a strategic change plan.

E. The other major techniques of organization developments are:

1. Survey Feedback:
Information is collected through survey method. This is the most popular and widely used
method of data collection. The managers use this information collected through survey for
making decisions. The wide range of data is collected regarding working conditions, quality of
work, working hours, wages and salaries, attitude of employees relating to above. After this
plans are prepared for making necessary changes. This procedure is followed at all levels of
management involving all the employees of the organisation.

2. Management by Objectives (MBO):

MBO is a technique of management development which was put forward for the first time by
Peter Drucker in 1954. It is a method of achieving organisational objectives and a technique of
evaluation and review of performance. Under this method objectives of the organisation are fixed
and responsibility to achieve them lie on the managers and results are expected from them.

Achievement of organisational objectives is considered as the joint and individual responsibility

of all managers. It also provides a perfect appraisal system. Performance of the managers is
measured against the specific objectives. It is result oriented technique.

George Odiorne observed that MBO is, “a system wherein superior and subordinate managers of
an organisation jointly identify its common aims, define each individual’s major areas of
responsibility in terms of the results expected of him and use these measures as guides for
operating the unit, assessing the contribution benefits of its members.”

According to D D White and D A Bednar, “MBO is a technique designed to (1) increase the
precision of the planning process at the organisational level and (2) reduce the gap between
employee and organisational goals.”

MBO process: MBO process involves four major steps:

(1) Goal Setting by Top Management:
For effective planning the organisational goals are set by the top management. These goals
provide an outline or base for different departments to set their goals after making certain
modifications etc. if at all necessary.

(2) Individual Goals:

Organisational goals cannot be fulfilled by a single individual but all the members’ cooperative
and active participation is necessary. It is therefore pertinent to assign a target to every individual
and he must attain it.

(3) Freedom for Selection of Means:

A considerable amount of freedom or autonomy is given for the accomplishment of goals to the
managers and subordinates.

(4) Making Appraisal:

The performance is to be reviewed and appraised in relation to the goals. This will help the
subordinates and employees to make the corrections if any and make further improvements.

MBO is an effective technique of organisational development and improving performance. It

promotes coordination among superiors and subordinates at all levels and is an effective tool of
planning and control. It helps to learn problem solving techniques.

3. Brain Storming:
It is a technique where a group of five to eight managers come together and find a solution to a
problem. As the name suggests it involves storming of the brain to develop creativity in thinking.
It gives rise to new ideas. The principle involves in it is that any idea, thought or plan put
forward in a meeting must be critically evaluated. The participants are asked to come forward
with novel ideas generated in their mind. It works on a premise that everyone has a creative mind
and capability to generate new ideas.

4. Process Consultation:
Under this technique the consultant or expert provides necessary guidance or advice as to how
the participant can solve his own problem. Here the consultant makes correct diagnosis of the
problem and then guides the participants.

5. Transactional Analysis:
Transactional analysis helps people to understand each other better. It is a useful tool for
organisational development but it has diverse applications in training, counselling, interpersonal
communication and making analysis of group dynamics. Nowadays, it is widely used as OD
technique. It helps in developing more adult ego states among people of the organisation. It is
also used in process consultation and team building.