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ORGANISATIONALCHANGE AND DEVELOPMENT

Mohd Haris Roll no: PM/2014/407

NIPER, HYDERABAD

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Organizational Change

Organizational change is the process by which

organization move from their present state to some desired future state to increase effectiveness.

When an organization system is disturbed by some internal or external forces change frequently occur or any alteration which occur in the overall work environment of an organization.

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Types of changes:

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CHARACTERSTICS OF O.C.

Change happen for the pressure of both internal and external forces in the organization.

Change in any part of the organization affect the whole organization.

Change may affect people , structure, technology, and other element of the organization.

Change also affect the rate of speed and degree of significance of the organization.

Change may be reactive or proactive.

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The Evolution of Starbucks

Exploring Behavior in Action

In the beginning they had only just a shop that sold some selected coffee beans.

As Starbucks grew, they realized that the informal techniques were not sufficient and needed to have a more formalized approach with people and places.

Now Starbucks is the biggest coffee chain network in the world with more than 15000 shops in over 44 countries.

They adopted the Italian culture and made some important changes in organization.

Howard Schultz

Dave Olsen

Dawn Pinaud

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Change Forces

INTETRNAL FORCES

Work force Managerial

personnel Management

structure Avoid developing

inertia

External Forces

Technology Marketing

conditions Social changes Political forces

Change forces

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Internal Pressures for Change

Work force

Managerial personnel

Avoid developing inertia

Management structure

These come from inside the organization

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External Pressures for Change

Technological advances

Marketingconditions

Socialchanges

PoliticalForces

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ManagerialAdvice

Companies’ Responses to Pressures for “Green” Policies and Practices

Taking as it positive way:

It create a healthy image in customers.It help in cost cutting.Energy saving in the office.Help in reducing carbon in environment.

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Change Agents

• Persons in organization responsible for managing change activities.

• Can be managers or non managers, current employees, newly hired employees or outside consultants.

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Characteristics of successful change agent:

• Homophily• Empathy• Linkage• Proximity• Structuring• Capacity• Openness• Reward• Energy• Synergy

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Process of Planned Change

Unfreezing RefreezingChanging

• focus of this stage is to create the motivation to change.

• individuals are encouraged to replace old behaviours and attitudes with those desired by management.

• change involves learning and doing things differently, this stage involves providing employees with new info., new behavioural models, new processes or procedures, new technology, or new ways of getting the job done.

• goal of this stage is to support and reinforce the change

Kurt Lewin

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ExperiencingStrategic OB

Coca-Cola Is Finding a New Fizz

Neville Isdell Sandy Douglas

Coca-Cola is changing its culture, and also enhance its product line to better satisfy the demand of customers.

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Speed of Change

Criteria toConsider

Urgency

Degree of support

Amount and complexity of change

Competitive environment

Knowledge and skills available

Financial and other resources

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Resistance to Change

Factors

Organizational Resistance

Group Resistance

Effort to block new ways of doing things

Individual Resistance

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Individual Resistance

• Below are stated some reasons why people resists changes. Some of these appear to be rational or emotional. These reasons are:-

• Economic factors• Habits• Insecurity• Lack of communication• Extent of change• Psychological factors• Social factors

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Group Resistance

Most organizational changes have impact on formal groups in the organization the main reason why the groups resists change is that they fear that their cohesiveness or existence is threatened by it.

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Organizational Resistance

Organizational resistance means the change is resisted at the level of the organization itself. Some organization are so designed that they resist new ideas, this is specifically true in case of organization which are conservative in nature. The major reason for organizational resistance are:-

• Threat to power• Group inertia• Organizational structure • Threat to specialization• Resource constraints• Sunk costs

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Communication • Highest priority and first strategy for change

• Improves urgency to change

• Reduces uncertainty (fear of unknown)

• Problems -- time consuming and costly

Minimizing Resistance to Change

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Communication • Provides new knowledge and skills

• Includes coaching and action learning

• Helps break old routines and adopt new roles

• Problems -- potentially time consuming and costly

Minimizing Resistance to Change

Training

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Communication • Increases ownership of change

• Helps saving face and reducing fear of unknown

• Includes task forces, search conferences

• Problems -- time-consuming, potential conflict

Minimizing Resistance to Change

Training

Employee Involvement

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Communication • When communication, training, and involvement do not resolve stress

• Potential benefits• More motivation to

change• Less fear of unknown• Fewer direct costs

• Problems -- time-consuming, expensive, doesn’t help everyone

Minimizing Resistance to Change

Training

Employee Involvement

Stress Management

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Communication

• When people clearly lose something and won’t otherwise support change

• Influence by exchange- reduces direct costs

• Problems• Expensive• Increases compliance,

not commitment

Minimizing Resistance to Change

Training

Employee Involvement

Stress Management

Negotiation

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Communication

• When all else fails• Assertive influence• Firing people -- radical

form of “unlearning”• Problems

• Reduces trust• May create more subtle

resistance

Minimizing Resistance to Change

Training

Employee Involvement

Stress Management

Negotiation

Coercion

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Steps in managing change:

• Develop new goals and objectives• Select an agenda for change• Diagnose the problem• Select methodology • Develop a plan• Strategy for implementation of pan• Implementation of plan• Receive and evaluate the feedback

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Organization Development (OD)OD can be defined as a technique for bringing change in the entire organization.OD is a general strategy or approach to organizational change that is employed to analyse and diagnose the sources of organizational problems and to develop and implement action plans for their solution

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Managing the OD ProcessThree basic of OD programs:

Diagnosis Continuous collection of data about total system, its subunits, its processes, and its culture

Action All activities and interventions designed to improve the organization’s functioning

Program management

All activities designed to ensure success of the program

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Diagnosis – The Six-Box Model

Leadership

Purposes

Relationships

HelpfulMechanisms

Rewards

Structure

Environment

Weisbord identifies six critical areas where things must go right if organization is to be successful. According to him, the consultant must attend to both formal and informal aspects of each box.

This model is still widely used by OD practitioners

Marvin Weisbord

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Actions….

Interventions are the actions taken to produce desired changes.

Four conditions that give rise to the need for OD interventions:

1. The organisation has a problem (corrective action – to fix it)

2. Organization sees an unrealized opportunity (enabling action – to seize the opportunity)

3. Features of organization are out of alignment (alignment action – to get things back ‘in sync’)

4. Yesterday’s vision is no longer good enough(action for new vision – actions to build necessary structures, processes and culture to make new vision a reality)

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Program Management

Motivating Change

Creating a Vision

Developing Political Support

Managing the Transition

Sustaining Momentum

Effective Change Management

Cummings and Worley identified 5 sets of activities required for effective change management:

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Program Management Contd..

John P. Kotter

Kotter’s 8-stage process for managing organizational change:

Establishing a sense of urgency Creating a guiding coalition Developing a vision and strategy Communicating the changed vision

Empowering a broad base of people to take action

Generating short term wins

Consolidating gains and producing even more change

Anchoring (institutionalizing) the new approaches into the culture

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Team development:

• underlying aim of team development is to increase trust among team members because people work better together when there is open and honest sharing about the problems and difficulties that they have with one another. As such, at the initial level, the attempt should be to develop such an environment where such trust can be developed among the team members

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Grid Organization Development:• It developed by Blake and Mouton, is a

comprehensive and systematic OD Program. The Program aims at individuals, groups and the organization as a whole. It utilizes a considerable number of instruments, enabling individuals and groups to assess their own strength and weaknesses. It also focuses on skills, knowledge and processes necessary for effectiveness at the individual, group and inter-group and total organization levels.

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The change approaches:

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1.Education and CommunicationWhere there is a lack of information or inaccurate information and analysis. One of the best ways to overcome resistance to change is to educate people about the change effort beforehand. Up-front communication and education helps employees see the logic in the change effort. this reduces unfounded and incorrect rumors concerning the effects of change in the organization

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2.Participation and Involvement

Where the initiators do not have all the information they need to design the change and where others have considerable power to resist. When employees are involved in the change effort they are more likely to buy into change rather than resist it. This approach is likely to lower resistance and those who merely acquiesce to change

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3.Facilitation and Support

Where people are resisting change due to adjustment problems. Managers can head-off potential resistance by being supportive of employees during difficult times. Managerial support helps employees deal with fear and anxiety during a transition period. The basis of resistance to change is likely to be the perception that there some form of detrimental effect occasioned by the change in the organization. This approach is concerned with provision of special training, counseling, time off work

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4.Negotiation and Agreement Where someone or some group may lose out in a change and where that individual or group has considerable power to resist. Managers can combat resistance by offering incentives to employees not to resist change. This can be done by allowing change resistors to veto elements of change that are threatening, or change resistors can be offered incentives to leave the company through early buyouts or retirements in order to avoid having to experience the change effort. This approach will be appropriate where those resisting change are in a position of power.

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5.Manipulation and Co-option

Where other tactics will not work or are too expensive. Kotter and Schlesinger suggest that an effective manipulation technique is to co-opt with resisters. Co-option involves the patronizing gesture in bringing a person into a change management planning group for the sake of appearances rather than their substantive contribution. This often involves selecting leaders of the resisters to participate in the change effort. These leaders can be given a symbolic role in decision making without threatening the change effort. Still, if these leaders feel they are being tricked they are likely to push resistance even further than if they were never included in the change effort leadership.

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6.Explicit and Implicit Coercion

• Where speed is essential and to be used only as last resort. Managers can explicitly or implicitly force employees into accepting change by making clear that resisting to change can lead to losing jobs, firing, transferring or not promoting employees.

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