ORGANIZATIONAL CHANGE

INTRODUCTION & DEFINITION OF ORGANIZATIONAL CHANGE

The past was a good predictor of the future in the past ! Change is a constant phenomenon today Organizational Change : A concerted, planned effort to increase organizational effectiveness and health through changes in the organizations dynamics using behavioural science knowledge.

Grandfather of organizational change Kurt Lewin

THE BASIC CONTEXT FOR ORGANIZATIONAL CHANGE

1. What provokes Organizational Change? It can be provoked by some major driving force 2. Why is Organization wide change difficult to accomplish? o Notion of resistance to change 3. How is Organization wide Change best carried out? o Must involve top management o Team-wide effort necessary o Frequent communication to all members of the organization o Structures may need to be modified to sustain change, also strategies, plans and processes

THE NATURE OF ORGANIZATIONAL CHANGE

1. The pace of change is what differentiates organizational change today from the past. Present day changes have been more rapid, more complex, more unpredictable

2. Concept of the temporary society :: temporary jobs, housing, neighborhoods, friendships.

3. Societal values may come to reflect this absence of long term stability

NOTABLE CHANGES WITNESSES DURING THIS DECADE

1. 2. 3. 4. 5. 6.

Globalization of markets Technological Changes Political realignments Changing demographics Changing consumer preferences Organizational restructuring

PRINCIPLES OF ORGANIZATIONAL CHANGE

1. Honesty 2. Aims 3. Participation 4. Recognition 5. Team Working & Interpersonal Relationships 6. Vision of the change

DIMENSIONS OF ORGANIZATIONAL CHANGE

1. Organization-wide vs. subsystem change E.g State Bank of India vs. PSUs 2. Transformational vs. Incremental change Pepsi Corporation vs. Coca Cola 3. Remedial vs. Developmental change HCL Tech Vs Infosys 4. Unplanned vs. Planned change Kingfisher vs. Indigo ??

CHANGES IN A COMPANYS INTERNAL ENVIRONMENT

1. Strategic : e.g. Pepsi 2. Structural : e.g Infosys 3. Process oriented : Telecom industry ? 4. People centered: Silicon Valley?? All these happen continuously in dynamic businesses

HOW SHOULD MANAGEMENT APPROACH THE PROBLEM?

1. Managements should ALWAYS conduct scenario / strategic planning exercises, even if they have already decided on incremental change 2. Such techniques as benchmarking , industry analysis etc come in very handy 3. May point out the need for greater degree of change 4. Examples of IBM in the 1990s. Micrososft& Nokia today 5. Indian sunrise sectors such as IT and BPO ??

GOALS
Goals need to be SMART: Specific Measurable Attainable Realistic The Measurement System in place (e.g. Balanced Scorecard)

RESISTANCE TO CHANGE
Resistance is an inevitable response to any major change (Alvin Zander) resistance to change is behaviour which is intended to protect an individual from the effects of real or imagined change (Zaltman and Duncan) any conduct that serves to maintain the status quo in the face of pressure to alter the status quo (Folger & Skarlacki) employee behaviour that seeks to challenge, disrupt, or invert prevailing assumptions, discourses, and power relations

THE NATURE OF RESISTANCE TO CHANGE

Active Resistance : includes finding fault, ridiculing, appeal to fear and manipulating Passive resistance : including agreeing verbally but not following through, feigning ignorance and withholding information

LEVELS OF RESISTANCE
1. Individual Resistance: 2. Organizational resistance 3. Group resistance

INDIVIDUAL RESISTANCE
1. Habit 2. Security 3. Economic Factors 4. Fear of the unknown 5. Selective Information Processing

WHY PEOPLE RESIST CHANGE AT THE WORKPLACE

1. 2. 3. 4. 5. 6. 7. 8. 9. An individuals predisposition to change Surprise and fear of the unknown Climate of mistrust Fear of failure Loss of status and/or job security Disruption of cultural traditions and/or group relationships Personality conflicts Lack of tact and/or poor timing No reinforcing reward systems

ORGANIZATIONAL RESISTANCE
1. 2. 3. 4. 5. 6. 7. 8. 9. Power and conflict Functional orientation Mechanistic structure Structural inertia Limited focus of change Group inertia Threat to expertise Threat to established power relationships Threat to established resource allocations

GROUP RESISTANCE
1. Group Norms 2. Group Cohesiveness 3. Group Inertia 4. Groupthink

OVERCOMING RESISTANCE TO CHANGE

1. Education and Communication 2. Participation 3. Facilitation and Support 4. Negotiation 5. Manipulation and Cooptation 6. Coercion

FORCES OF ORGANIZATIONAL CHANGE

1. External Forces: o Demographic Characteristics o Technological Advancements o Market Changes o Social and Political Pressures

2. Internal Forces: o Human Resource Problems o Managerial Behaviour and Decisions

MODELS OF ORGANIZATIONAL CHANGE

Lewins View on Organizations: Two ideas:

1. One o A system is held in balance by two sets of opposing forces: Promoting Change : the driving forces Maintaining status quo : the restraining forces o System is in a state of dynamic equilibrium o When driving forces become stronger than the restraining forces, the equilibrium shifts
2. Two: Model of the Change Process

CHANGE MODEL 1: LEWINS THREE STAGE MODEL

REFREEZE

CHANGE

UNFREEZE

EDGAR SCHEINS EXTENSION TO LEWIN 3STAGE MODEL

1. Unfreezing : Disconfirmation Pain + Discomfort Guilt & Anxiety Motivation to change, but psychological safety is necessary 2. Change: Cognitive restructuring : Acquisition of information showing change is desirable and possible 3. Refreezing : Integration of new behaviours into the persons personality and attitudes. Significant relationships important in this process

CHANGE MODEL 2: KURT LEWINS FORCE FIELD ANALYSIS

Force Field Diagram Change Issue Driving Forces Restraining Forces --------------------------------------------------------------------------------------------Weak Weak Moderate Strong Force Equilibrium

No Change

Change

DRIVING FORCES & RESTRAINING FORCES

1. Driving forces are those that push organization towards a new state of affairs. Some of the driving forces from the External environment, include globalization, information technology and a changing workforce. Along with these external forces some corporate leaders create driving forces within the organization; they may increase competition across company departments and encourage new practices and values that the leader believes are inherently better, for instance. 2. The other side of the model represents the restraining forces that maintain status quo. These restraining forces are commonly called as resistance to change because they appear as employee behaviours that block the change process.

Stability occurs when the driving and restraining forces are roughly in equilibrium, that is, they are of approximately equal strength in opposite directions.

STEPS IN A FORCE FIELD ANALYSIS: PROCESS

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Describe current situation Describe desired situation Identify where current situation will go in case of No Action List all the driving forces List all the resisting forces Discuss and interrogate all of the forces: are they valid? Can they be changed? Which are the critical ones? Allocate a score to each of the forces using a numerical scale, e.g., 1 is extremely weak and 10 is extremely strong Chart the forces Determine if change is viable and if progress can occur Discuss how change can be affected through decrease in restraining forces and increase driving forces

CHANGE MODEL 3: SYSTEMS APPROACH

1. When management takes a decision of change, it must understand and anticipate its repercussions on the entire organization and its environment. It should be taken into account that the organization is a totally interrelated, inter dependent parts, put together for achieving certain objectives. 2. Rather than dealing separately with the various parts at an organization, the systems theory gives managers a way of looking at an organization as a whole and as a part of the activity of an organization affects the activity of every other part. 3. A systems view of management, for instance would recognize that, regardless of how efficient the production department might be, if the marketing department does not anticipate changes in consumer tastes and work with the product development department in creating what consumers want, the organizations overall performance will be hampered.

CHANGE MODEL 3: SYSTEMS APPROACH

TRANSFORMATIO N Productivity Activities

Men Materials Machines Methods Money

INPUTS

Productivity Efficiency

OUTPUTS

CHANGE MODEL 4 : SEVEN STAGE MODEL (PROPOSED BY RONALD LIPPITT, JEANNE WATSON AND BRUCE WESTLEY )
1. Phase 1 : Developing a need for change (equivalent to Unfreezing)

2. Phase 2: Establishing a Change Relationship. In this phase a client system in need of help and a change agent from outside the system establish a working relationship
3. Phase 3 : Clarifying or diagnosing the client systems problem 4. Phase 4: Examining alternative routes and goals, establishing goals and intents of action 5. Phase 5: Transforming intentions into change efforts. Phases 3,4, and 5 correspond- Lewins Moving phase 6. Phase 6: Consolidating and Stabilizing Change- Lewins refreezing phase.

CHANGE MODEL 5: ADKAR MODEL

1. Awareness: of why the change is needed 2. Desire : to support and participate in the change 3. Knowledge: of how to change 4. Ability : to implement new skills and behaviour 5. Reinforcement: to sustain the change (first developed by Prosci in 1998, after research with more than 300 companies undergoing major change projects. This model is intended to be a coaching tool to help employees through the change process)

CHANGE MODEL 5: ADKAR MODEL

ADKAR

Reinforcement

Awareness

C H A N G E Ability Desire

Knowledge

CHANGE MODEL 5: ADKAR MODEL

Can be used to: 1. Diagnose employee resistance to change 2. Help employees transition through the change process 3. Create a successful action plan for personal and professional advancement during change 4. Develop a change management plan for your employees

CHANGE MODEL 5: ADKAR MODEL

PHASES OF CHANGE FOR PROJECT
Successf ul Change

Post
Implementation

Implementation

Concepts Designs

Business Needs

Awareness Desire

Knowledge Ability

Reinforcement

PHASES OF CHANGE FOR EMPLOYEES

CHANGE MODEL 5: ADKAR MODEL

In the Figure, change happens on two dimensions: the business dimension (vertical axis) and the people dimension (horizontal axis). Successful change happens when both dimensions of change occur simultaneously. Business Dimension Of Change: Business need or opportunity is identified Project is defined (scope and objective) Business solution is designed (new processes, systems and organizational structure) New process and systems are developed Solution is implemented into the organization

CHANGE MODEL 5: ADKAR MODEL

People Dimension of Change: Effective management of the people dimension of change requires managing five key goals that form the basis of the ADKAR model: Awareness Desire Knowledge Ability Reinforcement

CHANGE MODEL 5: ADKAR MODEL

Power of ADKAR for Managing Change: ADKAR can help one plan effectively for a new change or diagnose why a current change is failing. In some cases, corrective action can be taken and the change successfully implemented.

CHANGE MODEL 6: ACTION RESEARCH

Kurt Lewin: Meaningful change is a combination of action orientation (changing attitudes and behaviour), and research orientation ( testing theory) Change process involves collecting data to diagnose problems more effectively, and systematic evaluation of how well the theory works in practice.

CHANGE MODEL 6: ACTION RESEARCH

The process of action research consists of five steps: Diagnosis Analysis Feedback Action Evaluation The change agent, often an outside consultant in action research, begins by gathering information about problems, concerns, and needed changes from members of the organization. Diagnosis is followed by analysis. What problems do people key in on? Action research includes extensive involvement of the change targets. That is, the people who will be

CHANGE MODEL 6: ACTION RESEARCH

Involved in determining what the problem is and participating in creating the solution. So the third step- feedback requires sharing with employees what has been found from steps one and two. The employees, with the help of the change agent, develops action plans for bringing about any needed change. Now the action part of action research is set in motion. The employees and the change agent carry out the specific actions to correct the problems that have been identified. The final step is evaluation of the action plans effectiveness. Using the initial data gathered as benchmark, any subsequent changes can be

CHANGE MODEL 6: ACTION RESEARCH

Establish ClientConsultant Relationshi p

Diagnose the Change

Gather data, Analyze data Decide Intervention objectives

Introduce Interventio n
Implement desired Incremental or Quantum Change

Evaluate and stabilize change

Determine effectiveness of change and refreeze new direction

Disengage Consultant Services

MANAGERIAL OPTIONS FOR MANAGING CHANGE

1. Top Down Approach: In this approach, the solutions or decisions are arrived at by people at the top, and then are passed down the formal channels of communication and control in a unilateral manner.
2. Laissez faire Approach: It presupposes that systems can change only when its members change. People will change when they realize that it is advantageous for them to change. Thus, the most one can do to create change is to provide enough information for people to make rational choices.

MANAGERIAL OPTIONS FOR MANAGING CHANGE

3. Collaborative Approach: The Collaboration between the superior and subordinates in creating change however does not necessarily mean that the superiors have no distinctive role to play in the process, or that subordinates completely take over the mantle of change.

PERSPECTIVES OF ORGANIZATIONAL CHANGE

Perspectives of Organizational Change gives the individual an insight into the basic principles that drive change. They also gain an understanding of the factors that impact on the readiness and ability of individual to change.

PERSPECTIVES OF ORGANIZATIONAL CHANGE

Contingency Perspective

Population Ecology Perspective

Perspectives Of Organizational Change

Institutional Perspective

Resource Dependence Perspective

CONTINGENCY PERSPECTIVE
Relates to the structure of the organization. Structures can be analyzed on two perspectives: 1. Specialization Horizontal division of workforce (departments) Vertical division of workforce (levels) 2. Integration, through: Direct supervision Rules, procedures and systems Goals, plans and targets 3. Appropriate structure of the organization depends on variables: Size of the organization Technology of an organization Strategy of an organization Environment of an organization

RESOURCE DEPENDENCE PERSPECTIVE

Premise : to survive in an industry, organizations need to acquire resources from the environment creating dependence The dependance of an organization on the external organizations for resources makes it vulnerable because it creates uncertainty. Therefore, it is very necessary for the organization to reduce the vulnerability and control by external organizations through a series of strategies: Internal Strategies: 1. Domain choice 2. Recruitment 3. Environmental scanning 4. Buffering 5. Smoothing

RESOURCE DEPENDENCE PERSPECTIVE

External Strategies: 1. 2. 3. 4. Advertising Contracting Co-opting Coalescing

POPULATION ECOLOGY PERSPECTIVE

Why do some organizations grow and flourish and others die? It is necessary for an organization to survive in the industry it has to develop distinctive skills and capabilities suited for the specific niches. In order to explain such a phenomenon, theorists have suggested three associated concepts that lead to change: 1. Variations 2. Selection 3. Retention

being in the right place at the right time !!

INSTITUTIONAL PERSPECTIVE
This perspective gives special importance to the social norms, values and culture of the environment (symbolic elements). Organizations gain legitimacy through conformance. Institutionalization process by which organizations adopt specific structures because of external legitimacy requirements. Isomorphism process of change by which organizations copy each other

1. Coercive isomorphism forces organizations to comply with government legislations and regulations 2. Mimetic isomorphism - imitative 3. Normative isomorphism through influence of professional managers & specialists

PERSPECTIVE, FOCUS AND ISSUES

Perspective Contingency Perspective Resource Dependence Perspective Focus Structure Issues Is the structure compatible with the external and internal environments? What strategies are required for: 1. Increased control? 2. Reduced dependence

Strategy

Population Ecology Perspective

Ecological niche

1. Organizational level of resistance 2. Sustainability of niche 3. What else can be done with the organizational capabilities? 1. Learnings from other organizations? 2. What changes are required for compliance? 3. Can hiring professionals help?

Institutional Perspective

Norms, standards, values

UNDERSTANDING THE CHANGE PROCESS

Preparation Phase: Contact Stage: The earliest encounter a person has with the fact that change may take place or has already taken place Awareness Stage: The person knows that a change is being contemplated Acceptance Phase: Understanding Stage: The person demonstrates some degree of comprehension of the nature and intent of the change Positive Perception Stage: The person develops a positive view toward the change

UNDERSTANDING THE CHANGE PROCESS

Commitment Phase Installation Stage: The change is implemented and becomes operational Adoption Stage: The change has been used long enough to demonstrate worth, and a visible positive impact Institutionalization stage: The change has a long history of worth, durability and continuity and has been formally incorporated into the routine operating procedures of the organization Internalization stage: People are highly committed to change because it is congruent with their personal interests, goals or value systems.

LEADING THE CHANGE PROCESS

1. Understand and clarify mutual expectations about the level of detail and cost that the project requires. 2. Reach agreement on expectations on a pragmatic basis 3. Always assume that the situation can be improved

4. Do new overview analysis through brainstorming sessions

5. Go down to the sub-task level while analyzing jobs 6. Be aware that people whose jobs are threatened are likely to be upset by change! Try and develop a way of anticipating and reducing damaging fallout.

FACILITATING THE CHANGE (A TENTATIVE LIST)

1. Analyze the organization and its need for change 2. Create a shared vision and common direction 3. Develop a non-threatening and preferably participative implementation process 4. Support a strong leader role 5. Line up political sponsorship 6. Craft an implementation plan 7. Develop enabling structures 8. Communicate, involve people and be honest 9. Reinforce and institutionalize change

CHANGE ROLES
1. Change Strategists

2. Change Implementers

3. Change recipients

COMMON PITFALLS OF CHANGE IMPLEMENTATION

1. Change took more time than allocated 2. Unforeseen problems surfaced 3. Ineffective coordination 4. Distractions caused by other crises 5. Insufficient capabilities and skills 6. Inadequate training 7. Uncontrollable external forces 8. Inadequate support for change 9. Failure to define expectations and goals clearly 10. Failure to involve all those who are affected by change

CHANGE AND STRESS THE PRINCIPLE OF ADAPTATION

Probability of stress depends on: 1. Our perception of our ability to cope 2. How important it is to us that we cope 3. What other factors do we think is involved

CHARACTERISTICS OF ORGANIZATIONAL DEVELOPMENT

Understanding Organizational Development: .. Is an applied field of study and practice is concerned with helping managers plan change in organizing and managing people that will develop requisite commitment, coordination, and competence. Its purpose is to enhance both the effectiveness of organizations and the well-being of their members through planned interventions in the organizations human processes, structures and systems, using knowledge of behavioural science and interventionist methods

INTERVENTION STRATEGIES FOR ORGANIZATIONAL CHANGE

1. 2. 3. 4. OD involves profound change OD is Value Loaded OD is a diagnosis / prescription cycle OD is process oriented

5. Underlying values: a. Respect for people b. Trust and support c. Power equalization d. Confrontation e. Participation

TYPES OF INTERVENTIONS
1. Structural Interventions 2. Task Technology Interventions 3. People focused interventions Structural Interventions: 1. Structural Reorganization 2. New Reward Systems 3. Changing organizational Culture

TASK TECHNOLOGY INTERVENTIONS

1. Appreciative Enquiry 2. Job Redesign 3. Socio-Technical Systems 4. Quality of Work Life

APPRECIATIVE ENQUIRY 4D MODEL

Delivering Design Dreaming

Discovering

QUALITY OF WORK LIFE

1. Adequate and fair compensation 2. A safe and healthy environment 3. Jobs that develop human capacities 4. A chance for personal growth and security 5. A social environment that provides personal identity, freedom from prejudice, a sense of community and upward mobility 6. Rights of personal privacy, dissent, and due process 7. A work role that minimizes infringements on personal leisure and family needs

PEOPLE FOCUSED INTERVENTIONS

1. Sensitivity Training

2. Process Consultation
3. Team Building

4. Intergroup Development
5. Grid OD

GRID OD
Based on Blake & Moutons & Likerts system 4 model

People orientation & task orientation evaluated on 9-point scales, resulting in 9x9 grid.
Objectives of Grid OD: 1. To improve planning by developing a strategy for organizational excellence based on clear logic. 2. To help managers gain the necessary knowledge and skills to supervise effectively.

PHASES OF GRID OD
Phase 1 : the Grid Seminar

Phase 2 : Team Work Development

Phase 3 : Intergroup Development

Phase 4 : Developing and ideal strategic organizational model

Phase 5: Implementing the ideal strategic model

Phase 6 : Systematic critique

DEVELOPING LEARNING ORGANIZATIONS

Culture Of Facilitating change

Characteristics Of Leading Organizations Presence of Tension

Systems Thinking