*Introduction to Organizational Change

Introduction Change in organizations is a continuous process. Once a change effort becomes successful, an organization will have to bring about further changes. Depending on its nature and scope, organizational change can be categorized into two typestransactional and transformational. Transactional changes are specific to some issues, such as change in performance management systems, change in a particular work process or system, and change in compensation policies. Transformational changes are more holistic as they may require considerable changes in the organization.Organizational change is divided into four major areascontent issues, contextual issues, process issues, and criterion issues.

*Content issues focus on the substance of contemporary organizational changes. Contextual issues centre on the forces or conditions present in the external and internal environments of organizations. Process issues concentrate on the actions undertaken during the establishment of intended change.

Criterion issues, on the other hand, tackle outcomes usually evaluated in organizational change.

To effect organizational change, it is important to go for OD.

*Sashkin and Burke (1987), while discussing the prospects of OD and organizational change, had identified five contemporary trends: High integration of task and process aspects of OD (as in networked organizations)Increased attention to develop OD theoryIncreased interest to manage conflict (particularly in cases of mergers and acquisitions)Increased thrust on OD research to identify improved methodology for organizational changeIncreased focus to design organizational culture to manage change

Contemporary trends in organizational change and development

*Similarly, Woodman (1989), after summarizing the recent developments in OD and organizational change, recommended seven such trends, four of which match the trends suggested by Sashkin and Burke. The other three trends of Woodman are as follows:

Increased interest in high-performance and high-commitment work systems

Application of change management research outcome to internal organizational processes

Application of change research outcome to social movements

*Theories of organizational changeContextual theory of organizational change emphasizes the identification of forces and conditions in organizational internal and external environments.

Process theories of organizational change deal with various process issues, addressing the actions taken by organizations in their change initiative. It focuses on the actions or organizational responses to implement changes within the organizations and the employees reactions to such organizational responses.

Content theory of organizational change deals with causes (conditions of organizations) and the resultant effect based on the change in individual and organizational performance data. Hence, it identifies inbuilt transformational and transactional dynamics of a successful organizational change.

*Needs for organizational changeTo set right situations

To fix things that are needed

To grab opportunities to grow

To emerge as different entities

*Philosophy of organizational changePhilosophies are the value systems and the guiding force for organizational change.

Being adaptable Being flexible Being strategic Focusing on behavioural issuesFollowing participative change processesBeing ethicalBalancing the stakeholders interests

*Steps to successful change (Kotters 8-step model)Each step relates the responses of people to the change process, where people see, feel, and then change. The following is a summary of the eight-step change model:

Developing sense of urgencyCreating team to manage organizational change Developing right vision Communicating vision Empowering peopleUsing incremental approachBuilding on change Reinforcing success

*Organizational transition process starts when organizations feel the need or desire for a new future. Such needs emerge from the following three important sources:

Changes in the external environment, which compels organizations to find faster, cheaper, and better ways to meet the changing needs of the customers and other stakeholders

Technological changes that requires introduction of new processes, which, in turn, requires skill renewal and competency development of existing manpower

Top-down change initiatives of managers and executives who prefer to emulate the best practices of the industry Organizational Transition

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Differences between organizational change, transformation, and renewal Organizational change alters the way an organization functions. Hence, change, transformation, and renewal encompass organizational change. Change introduces new ways of doing work in organizations and assigns new goals to the employees. If the change process continues, organizations can derive strategic advantages. Organizational transformation is called a metamorphosis, as the structure, functions, organizational activities, and attitudes of the people radically change with the process of transformation. The word transformation in organizational context is more appropriate in cases of mergers, acquisitions, corporate gobbling, and so on when cultural change in organizations becomes imminent. Organizational transformation results in employee rightsizing, hiving off businesses, redundancies, process changes, and so on. Hence, the term metamorphosis, or renewal which means change or transformation, is used in such instances.

*Change TriggersOrganizational change is necessary to enable organizations to remain competitive, productive, and profitable. The change process is initiated from the top and is then cascaded down through the workforce. It continues until it is integrated with the organization.Although there are many reasons for organizational change, the following are some of the common reasons:Mergers and acquisitions Management restructure Introduction of new technology Relocation of business premises

Business Development-driven Organizational ChangeChanges driven by business development encompass every factor in the organization that exerts potential influence in organizational business expansion. Change precedes a well-crafted business plan, which spells out the mission, goals, and objectives and framing of strategies and action plans. Some of the potential areas of organizational change driven by the business development are as follows: Sales development New product development New market development Organizational structure, systems, and processesTools, equipment, plant, logistics, and supply chain Attitude of peopleStyle of management Way of communications Training and development activities Strategic collaboration and partnerships Distribution network Market focusDisposal process

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Environment-driven Organizational Change

The environment of an organization has a wide canvas.

In a global economy, even recessionary trend in one country (with whom one may not have business relations) may require an organization to prepare for change.

Environment-driven change requires an organization to review its structure, relationships with its stakeholders, organizational dependence on environment linked with its important activities, such as buying and selling, that is, customers and suppliers, and compliance with the changing government policies and programmes.

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Culture-driven Organizational Change

Many organizations undergo cultural change to make their organizational change process successful.

Developing the desired culture enables organizations to focus on their changing goals and objectives, which, among others, may require people to take a re-look at their attitudes and revisit their perceptions about the customers and market situation.

Corporate culture also develops shared values and beliefs, addressing diversity issues, which become more important in cases of mergers and acquisitions.

Strategy-driven Organizational Change

When goals and objectives change, strategy also needs to change. A strategy to achieve the objective of increased sales in the domestic market will not hold good for achieving the objective of increased sales in the international market. A change in strategy requires organizational change; similarly, organizational change may require change in strategy. For example, a product differentiation strategy through a value-added approach, which is often adopted by organizations to remain competitive in the market, necessarily requires organizational change. Similarly, organizational change enforced through organizational restructuring requires change in organizational strategy.

Business Plan-driven Organizational Change

Strategic organizational change plans for an organization are usually drawn at the strategic, corporate, or top level of an organization.

A business plan, usually drawn at the business or middle level of an organization, translates strategies into specific tactics to facilitate the process of achieving the desired results through desired change in the organizations.

A strategy to achieve increased market share through customer retention can be translated into tactics of ensuring customer retention through increased level of discounts on successive buying or through visiting the customers from time to time to ensure that the company is with them.

Process-driven Organizational Change

Organizations are often required to undergo process redesign to optimize resource utilization.

Process redesign may also be essential for achieving increased level of productivity and performance.

Any technological change may lead to process redesign.

Competency-driven Organizational Change

Competencies are the aggregation of knowledge, skills, and abilities of the people that together build the capabilities for the organization to stay competitive in the market.

A systematic competency mapping identifies the competency gap, and accordingly, organizations initiate training and development activities to reduce the gap and to extend support for organizational change.

Performance-driven Organizational ChangeWith the changing market requirements, organizations need to review their objectives and accordingly alter the performance standards, changing the key result areas (KRAs) or key performance areas (KPAs) for the employees.

Such change in the performance levels requires organizational change.

Alignment of performance management systems with organizational change initiatives yields better results.

Innovation-driven Organizational Change Creating value for the customers in the true sense is the innovation and not just creating new things.

Key elements for success in organizational changeOrganizational change requires sustainable efforts from all members of the organizations, with strategic focus on people-related issues. Drawing a road map for successful organizational change requires adherence to following elements:Planning long-term Establishing forums to communicate methods to review and implement change Empowering people to make decisions at operation level Making strategic change process free from autocracy and interference Encouraging, enabling, and developing people to be active in change process Making effective use of information systems Using workshops Making adjustment in recruitment, training, and development

Resistance to Organizational Change: Why and Why NotResistance to organizational change is one of the inevitable problems faced by managements. Rosabeth Kanter believes that there are 10 basic reasons why employees are averse to change, which are as follows:

Fear of loss of controlUncertainty associated with changeInherent surprise factor in changeDifference change brings in schemes of thingsFear of being unsuccessfulRise in anxiety regarding ones competenceFear of increased work pressureRipple effects associated with changeBad experiences from the pastFear that anxiety over change may actually come true

TYPES OF CHANGE

Depending on the nature of the change trigger, organizations adopt their change initiatives, which can be classified into various types of change.Planned vs. Emergent ChangePlanned change Unplanned changeEpisodic vs. Continuous ChangeDevelopmental, Transitional, and Transformational Change

CHANGE MANAGEMENT STRATEGIESDifferent strategies and procedures are used to categorize the change environment. In organizations, change strategies are adopted on the basic premise or assumption that people will volunteer to engage themselves in the change process.

Normally, four types of change strategies are adopted by any organization.

Normative-reeducative strategy

Rational-empirical strategy

Power-coercive strategy

Action-centred strategy

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