introduction - module 1

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Copyright © 2011, Oxford University Press, India

Chapter-2Introduction to Organizational Change




ORGANIZATIONAL CHANGE : AN

OVERVIEWChange is one reality with which individuals,groups and organizations must constantly copein order to survive. Change is one of the most

critical aspects of effective management.Change is the coping process of moving fromthe present state to a desired state thatindividuals, groups and organizationsundertake in response to dynamic internaland external factors that alter current realities




All organizations exist in a changing environment andare themselves constantly changing. For example theworld of business is thought to be changing in the

following ways (Kiechel, 1993):The average company will become smaller, employing fewerpeople.The traditional hierarchical organization will give way to avariety of organizational forms, such as networks of specialists.Technicians ranging from computer repairers to radiationtherapists will replace manufacturing operatives as theworker elite.

ORGANIZATIONAL CHANGE : AN

OVERVIEW




INTRODUCTION´ O rganizational change is divided into four major areas like;

content issues, contextual issues, process issues andcriterion issues.

´ Content issues focus on the substance of contemporary

organizational changes.´ Contextual issues centre on forces or conditions present in

organizations· external and internal environments.´ Pr ocess issues concentrate on the actions undertaken

during the establishment of intended change.´ C r ite r ion issues , on the other hand tackle outcomes usually

evaluated in organizational change.




Contextual theory of organizational change emphasise onidentification of forces and conditions in organizational internaland external environments.

P rocess theories deal with various process issues, addressingto the actions taken by organizations in their change initiative.Such organizational actions may be taken to tackle the externalenvironment, internal environment and even at the individual level.

Content theory of organizational change deals with causes(conditions of organizations) and the resultant effect based on thechange in individual and organizational performance data. Hence itidentifies in-built transformational and transactional dynamics of successful organizational change.

THEO

RIES ON ORGANIZATIONAL

CHANGES




Organizational transition is a distinct phase or organizationalchange, which precedes the other two distinct conditions like;the present state and the future state.

Organizational transition process starts when theorganizations feel the need or desire for a new future. Suchneeds emerge from three important sources as under:

Change in external environment, which compels organization tofind faster, cheaper and better way to meet the changing needsof the customers and other stakeholders.Technological change, which requires introduction of newprocess and which in turn, requires skill renewal andcompetency development of existing manpower.Top down change initiatives of managers and executives, whoprefer to emulate the best practice.

ORGANIZATIONAL TRANSITION




Differences between organizational change,transformation, and renewal

Organizational change alters the way the organizationfunctions. Hence change, transformation and renewalare encompassing organizational change.

Organizational transformation is called ametamorphosis, as structure, function, organizationalactivities, and attitude of the people radically changewith the process of transformation.

Organizational change and transformation processrenew the organization.




Organizational change is necessary to enableorganizations to remain competitive, productiveand profitable. The change process is initiatedfrom the top and then cascaded down through theworkforce.

Although there are many reasons for organizational change, some of the commonreasons are:

M ergers and acquisitionsM anagement restructureIntroduction of new technologyRelocation of business premises

CHANGE TRIGGERS




FORCES OF CHANGE

´ E xternal Forces of Change

P olitical Forces

E conomics Forces

Technological Forces

Government ForcesIncreased global competition

Changing Customer Needs and P references




´ Internal Forces of Change

System Dynamics

Inadequacy of administrative process

Individual/Group Speculations

Structure Focused Change

Technological Changes

P ersons focused changeP rofitability Issues

Resource constraints

FORCES OF CHANGE




1. Plan long-term2. Establish forums to communicate methods to review and implement

change3. Empower people to make decisions at the operation level4. Make the strategic change process free from autocracy and

interference5. Encourage, enable and develop people to be active in the changeprocess.

6. Make effective use of information systems for effective managementof change related information with real-time sharing.

7. Use workshops for all cross-sections of employees to reviewpriorities, agree on broad medium-to-long-term vision and aims, andto agree on short term action plans and implementation method andaccountabilities.

8. Make adjustment in recruitment, training and development toaccelerate the pace of development of people, to enable them to

contribute positively to a culture of empowerment.

K EY ELE M ENTS FOR SUCCESS INORGANIZATIONAL CHANGE




P lanned versus emergent change

Episodic versus continuous change

Developmental, transitional andtransformational change

Systems thinking and change

TYP ES OF CHANGE




ORGANIZATIONAL CH ANG E: S OMEDE TERMINING F ACTOR S

´ The large variety of determinants of organizational change ² forces dictating

change ² can be organized into 4 major categories. These categories are

created by combining two key distinctions: (1) whether the organizational

change is planned or unplanned by the organization, and (2) whether itderives from factors internal or external to the organisation.

Organizational Change: Some Determining Factors

P lanned Unplanned

Internal Internal planned change Internal unplanned change

External External planned change External unplanned change




CONT D«..P lanned Internal Change´ A great deal of organizational change comes from the strategic decision

to alter the way one does business or the very nature of the businessitself. Three examples of planned internal organisational change can beidentified ±

Change in Products or ServicesChanges in Administration SystemChanges in Organisational Size and Structure

P lanned External Change´ In addition to planning changes in the ways organizations are run, it is

often possible to plan which change variables originating outside theorganisation will be incorporated into it.

Introduction of new Technologies: From Slide Rules to ComputersAdvances in Information Processing and Communication




CONT D..

Unplanned Internal Changes´ Not all the forces for change are the results of strategic planning. Indeed

organisations often are responsive to changes that are unplanned ²especially those derived from factors internal to the organisation. Two suchforces are:

Changing E mployee Demographic, P erformance Gaps

Unplanned External Changes´ O ne of the greatest challenges faced by an organisation is its ability to

respond to change from outside work over which it has little or no control.

As the environment changes, organisations must follow the suit. Researchhas shown that organisations that can best adapt to changing conditionstend to survive (Singh, House & Tucker, 1986). Two of the most importantunplanned external factors are:

Government Regulation; E conomic Competition in the Global Arena




´ Variations of organisational change: A summary organisationalchanges may be either planned or unplanned, and based oneither internal or external forces. Some examples of changeswithin each of the four categories are listed here.

Is the change based oninternal or external

factors

Is the change planned or Unplanned change

P lanned Unplanned

Int r na l ange y Changes in r ts r se r i ey Changes in adm inis tr a ti e sys temsy Change in r gan i a ti n s i e r

s tr t r e (e .g. downs i ing , ou tsou r ing e t .)

y Chang ing emp loyee demog r aph i s

y Pe rf or mance gaps

Exte r na l changes y Intr oduc tion and new techno logyy dvances in inf or ma tion pr ocess ing

and commun ica tion .

y Gove r nmen t r egu la tiony Exte r na l compe titiony H anagemen t in

Recess ion




TYP ES OF CHANGE

Anticipatory Change

P lanned Changed

Happened Change

Reactive Change

Incremental Change

Operational change

Strategic change

Directional Change




Change management strategies

Normative-re-educative strategy - This strategy believes that changing thenorms, attitudes and values of individuals will lead to changes in their behaviours.

Rational-empirical strategy - This strategy believes in rationality of peopleto embrace change for their own self-interest.

P ower-coercive strategy ± This strategy requires application of power toachieve the change intents by the organisation.

Action-centred strategy ± These strategies are developed focussing onproblem solving. It can effectively manage the change implications,

particularly during the post-change phase.




Role of Organizational Change ConsultantsConsultants specialising in organizational change can fill a number of needs.

First, they can acquire useful information from customers, suppliers,employees and managers.

Second, they can provide and generate insight into organizationalchange issues not previously known, or understood, by senior management.

Third, they can facilitate organizational change decision-makingsessions that lead to clear change management action.

Fourth, they can provide specialised organizational change expertisein a new procedure, technique or way of thinking that is unknown tothe organization.




Common drawbacks in implementing organizational change

In-appropriate approach of management, not suitable for organizationalchange requirements

In-appropriate and often unrealistic expectations from organizationalchange.

Absence of sustained efforts over a period of time to introduceorganizational change.

Incompatibility between declared change objectives and actualbehaviour and actions.

Poor understanding of the organizational change. Often manyorganizations construe systematic training is part of organizationalchange.

Lack of support and systems.

Lack of commitment to organizational change plans.

introduction - module 1

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