CKM Module2 Notes

8/11/2019 CKM Module2 Notes

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Module-2Organizational Change

Module 2Organizational Change

Definition, nature, types, forces, models of organizational change Force Field, KurtLewis, Systems, 7 Stage and Contemporary Activities Research, Managerial approaches for implementing change, perspectives on change, understanding

the change process, Change management: leading the change process, facilitating change, Dealing with individual and group resistances, intervention strategies, develop learning

Organization.

Meaning of Organizational Change It could be defined as, a concerted, planned effort to increase organizational effectiveness

and health through changes in the organizations dynamics using behavioral scienceknowledge.

Organizational change management is the process of developing a planned approachto change in an organization

Nature of Organizational Change Change is continuous. Change is rapid in the present day Change is so frequent that there is no long-term stability.

Change has its source in the past and can be forecasted into the future. Change is complex in nature.

Notable changes witnessed in this decade Globalization of markets Technological changes Political realignment Changing demographics Changing customer preference Organizational restructuring

The principles of Change Honesty Aims


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Participation Recognition to people involved Team working and inter personal relationship Vision of Change

The Forces of Organizational Change External Forces

Demographic Characteristics Technological Advancements Market Changes Social & Political Pressure Increase Global Competition

Internal Forces

Resource System Dynamics

Individual/Group Expectations Managerial Behavior & Decision

External forces Demographic characteristics

The work force is more diverse and the org has to effectively manage thediversity if they are to receive maximum contribution and commitment formemployees

Technological advancements Manufacturing and service org are increasingly using technology as a means to

improve productivity and market competitiveness Manufacturing companies, have automated their operations with robotics, CNC,

CAD, CAE and service sector by using office automation.

Market changes The emergence of global economy is forcing companies to change the way they

do business. Companies go for new partnerships in order to deliver higher quality products at

lower prices Social and political pressures

political events can create substantial change


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Planned change or developmental change is undertaken to improve upon the current ways ofoperating.E.g. enhancing employees communication skills and technical expertise, building teams,restructuring the org, introducing new technology, introducing new products and services.I ncremental change

Change directed at micro level and focused on units, sub units and components within anorganization are termed as incremental changes.Ex: increase in productivity of a dept.Operational changesOperational changes include bringing in new technology, reengineering the work processes,quality management, better distribution and delivery of products to improve due to externalcompetition, customers changing requirements and demandsstr ategic changeChange that is addressed to organization as a whole or to most of the organizationscomponents, including strategy, may be called strategic change.E.g. managements organization style like less hierarchical, linear, flexible, decentralized and

allows considerable degree of autonomydir ectional changeA change in direction may become imperative for an organization due to severe competition orregulatory shifts in government policy and controlE.g. import/export restrictions will play a role on pricingF undamental changeThis entails a redefinition of the current purpose or mission of the organization.Total changeFor a total change, the organization is constrained to develop a new vision, and a strong link

between its strategy, employed and business performance.Transformational changeSuch a change involves the entire or a greater part of the organization. It could be a change inthe

Shape (size & complexity) Structure (system & ownership) Nature (basic assumptions and Culture) of the organization. Fundamental change in relationships A change in organization culture and norms Shift from product driven to technology driven

Revolutionary changeAbrupt changes in organizational strategy and design represent revolutionary change.

Recreational changeThis involves a significant or drastic change in an organizations strategy and design, or aradical departure from its current practices to achieve total transformation.Recreation is metamorphosis becoming not just best,but different.

Models of organizational change


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Change Model 1 :Kurt Lewins and Friends Three Steps Model

UnfreezingDisconfirmation of old ways of doing thingsQuestioning & challenging of established wisdom

MovingMaking the actual changes to move to the new state of existence.Includes the development of new strategies, structures, systems & responsibilities and theshedding of old ones.RefreezingStabilizing, institutionalising the changes.Making sure the organisation doesn't go backwards to the old state.Reinforcement of the changes through symbols, such as changed logos, dress, building design,structures.

Change Model 2 :Kurt Lewins Force Field Analysis Kurt lewins force field analysis The force field diagram is a model built on this idea that forces are both driving and restrainingchange.These forces include: persons, habits, customs, and attitudes.A force field can be used at any level: personal, project, org, network, to visualize the forces thatmay work in favor and against change initiatives.Use of the force field analysis method Investigate the balance of power involved in an issue Identify the most important players and target groups for an issue Identify the opponents and allies Identify how you can influence each target groupSteps in a force field analysis process Describe the current situation Describe the desired situation Identify where the current situation will go if no action is taken List all the forces driving change toward the desired situation List all the forces resisting change toward the desired situation 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.

1 is extremely weak and 10 extremely strong Chart the forces. List the driving forces on the left and the restraining forces on the right. Determine whether change is viable and progress can occur Discuss how the change can be affected by decreasing the strength of the restraining forces

or by increasing the strength of driving forces


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Action research provides 2 specific benefits for an org. It is problem focused It involves employee in the process, resistance to change is reduced.

The process of action research consists of five steps: diagnosis, analysis, feedback, action andevaluation.

DiagnosisThe change agent often an outside consultant in begins gathering information about problems,concerns, and needed changes from members of the org.The change agent asks questions, interviews emp, reviews records, and listens to the concernsof emp.

AnalysisIn this stage the change agent analyzesWhat problems do people key in on?What patterns do these problems seem to take?The change agent synthesizes this information into primary concerns, problem areas, and

possible actionsFeedbackAction research includes extensive involvement of the change targets.The people who will be involved in any change program must be actively involved indetermining what the problem is and participating in creating the solution.Feedback requires sharing with employees what has been found from the steps of diagnosisanalysisActionThe employees with the help of the change agent, develop action plans for bringing about thechange.The employees and the change agent carry out the specific actions to correct the problems thathave been identified.EvaluationThe final step is evaluation of the action plans effectiveness.Using the initial data gathered as a bench mark, any subsequent changes can be compared andevaluated.

Managerial approaches for implementing changeManagerial options for managing change

Org change management includes processes and tools for managing the people side of the changeat an org level.Managing change, is more than reacting to changes and doing damage control.3 approaches are used in the org and these approaches differ from each other in terms of theassumptions about people and system change, the specific strategies used for making the changesuccessful, and the kind of response they are more likely to stimulate.

1. Top-down approach


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The most common ways in which org attempt to introduce change is by pushing the changes downthe hierarchy.The solutions or decisions are arrived at by people at the top, and then are passed down the formalchannels of communication and control in a unilateral manner.E.g. changes in structure and reporting systems, replacement of executives, announcement of

plans and procedures2 assumptions underlying this approach to org change are: The reason for existing behaviors in an org ( low performance, high

absenteeism, low productivity rate) A coercion compliance phenomenon i.e., change consists of compliance of those

less powerful desire of those with more power. Assumption is that some peopleinitiate change and while others get changed.

This strategy of change can be quite effective, provided the change initiator has considerable power.The advantage of this strategy is that the resulting change is quick and speedy.When other strategies dont work this may be the only option left for the manager.

2. Laissez- faire approachIt is the reverse of the top-down approachIt presupposes that systems can change only when its members change.People change when they realize that it is advantageous for themTo create change is to provide enough information for people to make rational choices.The consequences of this approach is that it delegates much responsibility for defining andacting upon problems to the subordinates

The most common forms this approach takes in the organizations are communication meetingsand workshops, conferences, training programs etc.This approach can be quite effective if the hindrance to change is coming from lack ofadequate and accurate information, or lack of relevant skillsOrganizations do change when its people change.

3. Collaborative approachThis approach falls somewhere b/w the previous 2 approaches neither does it involve dictatingthe nature and steps of change from the top, Nor does it leave the change process entirely in thehands of the functionaries.It involves sharing of power b/w subordinates, in terms of jointly defining the problems anddeveloping solutionsThe assumption of this approach is that the org systems and structures, which need to be

changed, are not mechanical procedures rather they are defined by the patterns of behaviorsand practices which are rooted in socio cultural norms, values and attitudes of people.An effective change can come only when these the existing ineffective behaviors are discardedand replaced by new and more effective ones.This can be achieved only when people feel secured, motivated and empowered enough toreview and question the existing practices, and to experiment, evolve and developcommitment, with the new ones.


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perspective of organizational change

Perspectives of organizational changePerspectives of organizational change gives the individual an insight into the basic principlesthat drive change.

They also gain an understanding of the factors that impact on the readiness and ability ofindividual to change.

1. Contingency approach

This perspective relates with the structure of the org.Structure means, the way in which the org breaks its complex tasks.The 2 dimension of studying structure:

Specialization

integrationSpecializationIt means expertise, mastery.But in org perspective specialization means the variety and number of activities or tasks thatmake up a job of an individual in an org.Division of labour is also known as specialization.Usually in org there will be horizontal and vertical division of labour.

Horizontal division of labour in terms of functional activities such as HR,marketing, accounts, manufacturing

Vertical division of labour consists of managers, supervisors, white collar emp.

IntegrationIt refers to the various ways and means of coordinating the work of individuals in the org.The most common ways of integration are:

Direct supervision Rules, procedures and systems Goals, plans and targets

When org change is the important issue, the main activity which takes place in the org isrestructuring.The appropriate structure of the org is maintained by the contingency perspective depending uponthe various contingency variables such as:

Size of the org Technology of an org Strategy of an org Environment of the org

2. Resource dependence perspective


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This perspective is based on simple premise that, to survive in the industry the org should acquireresources from the environment.This makes them dependent on the groups and org in the environments which control the resourcesthat org require.Pfeffer and salancik have suggested few strategies to control external environment and to reduce

the dependency any org should implement some internal and some external strategies

Internal strategies Domain choice : refers to the strategy of entering into new market or industry so as to

reduce uncertainty. Recruitment : hiring of the people from the external org who can help in reducing the

dependence on these org Environmental scanning : monitoring the changes in the environment trends and patterns

so that the org can anticipate and respond to the environmental changes. Buffering, smoothing, rationing : strategies aimed at protecting the org production process

from fluctuations in demand. Maintaining inventory, using multiple suppliers suchactivities are been included. Geographical dispersions : relocating the business to other geographic locations such as

other part of country so that the location advantages can be possessed and also the marketshare can be increased.

External strategies Advertising : this strategy is used to enhance the visibility to maintain and enhance market

share. Contracting : aimed to reduce uncertainty by building long term relationships with the

suppliers

Coopting : involves inducting people from outside org into the board of directors so as toincrease the image/reputation and the expertise Coalescing : aims at possessing the various benefits through merging, acquiring, strategic

alliances and joint ventures of the competing companies in the industry or across theindustries.

lobbying : involves influencing regulatory agencies, particularly the government, toformulate policies and actions that benefit the org.

3. Population ecology perspectiveFor an org to survive in the industry it has to develop distinctive skills and capabilities suited forthe specific niches.For an org in order to change it needs an insight about the population of the org niche.Theorists have suggested 2 associated concepts that lead to change such as

Variations: the processes that leads to differences in the org in terms of strategy,structure, systems, skills and culture.

Selection: who have required features are selected and others are rejected. Retention: the process that help the org to retain the features that are needed by

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4. Institutional perspective

This perspective gives special relevance to the social norms values and culture of the environmentin which the org operate or thrive.Org often work on their strategies and structure so as to conform to the lawful norms and standards

constituting the institutional environment.Org resemble each other as a result of processes of isomorphism.Isomorphism is a state of organizational change as a result of copying one another, by complyingwith laws and regulations and through the influence of professional within the org.Isomorphism can be broadly classified under the terms of:

Coercive isomorphism : org change to comply with government legislationsand regulations; structural features adopted due to pressures from the state, otherorg or society at large

Mimetic isomorphism : org change by initiating other org and legitimizing andto obtain legitimacy.

Normative isomorphism : org change through influence of professionalmanagers/specialists; structural features adopted as a result of pressure from thestate to reinforce the power of professional bodies.

Perspectives of org changeUnderstanding the change process The following steps will help to understand change process:

Preparation phase Acceptance phase Commitment phase

Understanding the change process in organization:

Preparation phase Contact stage: the earliest encounter a person has with the fact that change may

take place Awareness stage : the person knows that a change is being contemplate

(considered) Acceptance phase

Understanding the stage: the person demonstrates some degree ofcomprehension of the nature and intent of the change

Positive perception stage: the person develops a positive view toward thechange.

Commitment phase

Installation stage: the change is implemented and becomes operational. Adoption stage: the change has been used long enough to demonstrate worth,


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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: persons are highly committed to change because it iscongruent with their personal interests, goals or value systems.

The process of change

John P Kotter's 'eight steps to successful change' Increase urgency - inspire people to move, make objectives real and relevant. Build the guiding team - get the right people in place with the right emotional

commitment, and the right mix of skills and levels. Get the vision right - get the team to establish a simple vision and strategy focus on

emotional and creative aspects necessary to drive service and efficiency. Communicate for buy-in - Involve as many people as possible, communicate the

essentials, simply, and to appeal and respond to people's needs. De-clutter communications- make technology work for you rather than against.

Empower actions - Remove obstacles, enable constructive feedback and lots of supportfrom leaders - reward and recognize progress and achievements.

Create short-term wins - Set aims that are easy to achieve - in bite-size chunks.Manageable numbers of initiatives. Finish current stages before starting new ones.

Don't let up - Foster and encourage determination and persistence - ongoing change -encourage ongoing progress reporting - highlight achieved and future milestones.

Make change stick - Reinforce the value of successful change via recruitment, promotion,new change leaders. Weave change into culture.

Facilitating changeThere is no one best way to implement change; yet we can learn from the experiences ofothers.

Jick suggests a list of suggestions for facilitating change

Analyze the organization and its need for change Create a shared vision and common direction Develop a non-threatening and preferably participative implementation process: Separate from the past Create a sense of urgency Support a strong leader role


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Line up political sponsorship Craft an implementation plan Develop enabling structure Communicate, involve people and be honest Reinforce and institutionalize change

Analyze the organization and its need for change : look at the companies history of changes( success and failures), patterns of resistance, analyze the forces for and against change ( forcefield analysis)Create a shared vision and common direction: this should reflect the values of thecompany; the vision should include the rationale, the benefits, personal ramifications.

Develop a non-threatening and preferably participative implementation process: skillfully present plans, make information readily available; explain the benefits for end users;start small and simple; go for quick wins; publicize.

Separate from the pastCreate a sense of urgency

Support a strong leader role: the change advocate role is critical to create a vision, motivateemployees to embrace that vision and craft a structure to reward those who strive towardrealization of the vision.Line up political sponsorship: broad based support is important ( formal and informal)Craft an implementation plan: this plan maps out the effort

Develop enabling structure: include pilot tests, off-site workshops, training programs, new

reward systems, symbolic changes like redesigned work spaces.Communicate, involve people and be honest:Reinforce and institutionalize change: it is important to reinforce change, reward those whotake risks and incorporate the new behaviors

Resistance to change Resistance to change in org is found at 3 levels1. Individual resistance2. Organizational resistance3. Group resistance

Individual Resistance Individual sources of resistance to change reside in basic human characteristics such as

perceptions, personalities, and needs. Foll summarizes reasons why individuals resist change

Habit


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Security Economic factors Fear of Unknown Selective Information Processing

HabitAs human beings we are creature of habits.Life is complex enough; we dont need to consider the full range of options for the hundreds ofdecisions we have to make everyday.To cope with this complexity, we all rely on habits or programmed responses.When confronted with change, this tendency to respond in our accustomed ways become oursource of resistanceSecurityPeople with a high need for security are likely to resist change because it threatens their feelings of

safety.When companies introduce technology, many emp at these firms may fear that their jobs are inthreat.Economic factorsAnother source of individual resistance is concern that changes will lower ones income. Changes in jobs tasks or established work routines also can arouse economic fears if people areconcerned that they wont be able to perform the new tasks or routines to their previous standards,especially whey pay is closely tied up to productivity.Fear of unknownChanges substitute ambiguity and uncertainty for the known. The transition from high school tocoll is typically such an exp.

Emp in org hold the same dislike for uncertainty. E.g. the introduction of quality managementmeans production workers will have to learn statistical process control techniques, some may feartheyll be unable to do. They may therefore develop a negative attitude toward the change.

Selective information processing Individuals shape their world through their perceptions. Once they have created this world, it resists change. So individuals are guilty of selectively processing information in order to keep their

perceptions intact. They hear what they want to hear.

They ignore information that challenges the world theyve created

Organizational resistance

Organizational level resistance includes resistance to change due to power and conflict, Differences in functional orientation


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Limited focus to change Group inertia & threat to expertise Org culture

Power and conflict Resistance to change due to power and conflict occurs when a change may benefit one

department within the org while harming another department within the orgFunctional orientation Resistance to change due to differences in functional orientation occurs because employees

or departments with different functions will see problems and issues differently, thusmaking it harder to come to an agreement regarding change.

Mechanistic structure Resistance to change due to mechanistic structure occurs because emp working within a

mechanistic structure are expected to act in certain ways and do not develop the initiate toadjust their behavior to changing conditions

Structural inertia Org have built in mechanisms to produce stability. The people who are hired into an org are chosen for fit, they are then shaped and directed to

behave in certain ways by training and other specialization techniques When an org is confronted with change, this structural inertia acts as a counterbalance to

sustain stability

Limited focus of change: org are made up of interdependent subsystems. You cant changeone without affecting the others. Limited changes in subsystems tend to get nullified by thelarger systems.

Group inertia: even if individuals want to change their behaviors, group norm may act asa constraint.

Threat of expertise: changes in org patterns may threaten the expertise of specializedgroups.

Threat of established power relationships: any redistribution of decision makingauthority can threaten long established power relationships within the org. e.g.

participative decision making and self managed teams Threat of established resource allocations: groups of org that control sizable resources

often see change as a threat. E.g. reduction in budget or a cut in their staff size

group resistance Group norms Group cohesiveness (members like to keep things same) Group inertia Groupthink and appreciation of commitment

group resistance Group norms: resistance due to group norms occurs when change alters interactions b/w


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group members due to changes in task and role relationships within a group Group cohesiveness: resistances due to group cohesiveness occurs because member of a

cohesive group wish to keep things, such as members or tasks, the same within the group Group inertia: even if individuals want to change their behaviors, group norm may act as a

constraint.

Groupthink and escalation of commitment: resistance due to groupthink and escalationof commitment occurs because members ignore negative information, even when theyrealize that their decisions are wrong, in order to agree with each other, thus making achange in group behavior incredibly difficult.

Overcoming resistance to changeSix tactics have been suggested for use by change agents in dealing with resistance to change.Kotter and Schlesinger set out the following six (6) change approaches to deal with thisresistance to change:

Education and communication Participation and involvement Facilitation and support Negotiation and agreement Manipulation and cooptation (buy off leader) Explicit and implicit Coercion (direct threats)

Education and Communication Where 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. thisreduces unfounded and incorrect rumors concerning the effects of change in the organization.

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 ratherthan resist it. This approach is likely to lower resistance and those who merely agree to change.

Facilitation and Support Where people are resisting change due to adjustment problems. Managers can head-off potentialresistance 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 detrimentaleffect occasioned by the change in the organization.This approach is concerned with provision of special training, counseling, time off work.


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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 rejection elements of change that are threatening,

or change resistors can be offered incentives to leave the company through early buyouts orretirements 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.

Manipulation and Cooption Where other tactics will not work or are too expensive. Kotter and Schlesinger suggest that aneffective 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 ofteninvolves 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 evenfurther than if they were never included in the change effort leadership.

Explicit and Implicit Coercion Where speed is essential and to be used only as last resort. Managers can explicitly or implicitlyforce employees into accepting change by making clear that resisting to change can lead to losing

jobs, firing, transferring or not promoting employees.

Intervention Strategies for Organizational ChangeThree types of intervention strategies

Structural Interventions

Task Technology Interventions

People Focused InterventionsStructural Interventions

Structural ReorganizationStructure of org. which was followed in 80s or 90s is a competitive disadvantagetoday. Recent trend is

o Flatter organization (benefits is economical, it widen span of control,improves communication etc)

o Decentralized decision making

New Reward SystemsLinking reward with employee performance which was not earlier.


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Phase 5: Implement the Ideal Strategic Model Phase 6: Systematic Critique

Developing Learning Organizations

Learning Organization

Any organization that has a culture and structure that promotes learning at all levels toenhance its capabilities to produce, adapt and shape its future.

Developing Learning Organizations

Learning Organizationso Why Learning Organizations?

To cope with a changing environment and uncertainty To be more flexible and take advantage of opportunities To be more innovative In commercial businesses this need is driven by competition

o How do Organizations Learn?

The golden rules for Learning Organizationso Thrive on Changeo Encourage Experimentationo Communicate Success and Failureo Facilitate Learning from the Surrounding Environmento Facilitate Learning from Employeeso Reward Learningo A Proper Selfishnesso A sense of Caring

The learning organizationAccording to Peter Senge learning organizations are:organizations where people continually expand their capacity to create the results they truly desire,where new and expansive patterns of thinking are nurtured, where collective aspiration is set free,and where people are continually learning to see the whole together.

End of Module-2Thank You

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