Concept of organizational change

and development, the

organizational interventions.
Complex issues facing
organizational change and
development .
Chapter Six
Organization Change and
Development
 Concept of change
• Change is the law of nature. Similarly, change is a
necessary way of life in the most organization. The
term organizational change implies the creation of
imbalances in the existing pattern of situation.
When a business organization operates and
functions for a long times an adjustment between
its technical, human and structural setup is
established. Organizations change refers to the
alteration of structural relationships and role of the
people in the organizations. It means alteration of
the status quo of the organization
• In other words, organizational change means planned
change or alteration in the role and relationships of the
people, technology and environment in the organization
in order to improve its overall performance. People get
adjusted and get used to a set of working relationships,
social groups and a set pattern of organizations and
individual life. So as long as this equilibrium exists, it is
easier for the people to adjust in organizations. But when
a change is introduces, the existing equilibrium of
relationships is disturbed and the problem of new
adjustment is created.
• Organizational change is the international attempt by
management to improve the overall performance of
individuals, group, and the organization as a whole by
altering the organizations structure, behavior and
technology.
• Change refers to an alteration in a system whether
physical, biological and social. In other words,
organizational change is the alteration of work
environment in the organization. it implies a new
equilibrium between different components of the
organization like technology, structural arrangement, job
design and people.
 Process of change
• Organization must maintain a viable relationship
with a changing environment. To achieve long term
viability, an organization must turn out good
performance by managing changes in the
environment intelligently. Modern organizations are
learning to cope with changes. They are beginning
to realize the importance of managing change in a
planned way. Generally speaking, management of
change involves a series of following steps.
 Identifying the need for change:
there are many forces, many demands for change
but all changes may not be important and possible.
Therefore, management must try to analyze the
reasons of demand for change accurately. In this
connection, the help of external consultant or
unconnected internal staff may be required for
objective analysis of the causes demanding change.
In any way, management must come to know the
need for change and its true causes.
 Diagnosis the problem:
• diagnosis leads to locate the specific problem
areas and identifying of the source of problems.
A manager may use the various diagnosis
techniques such as interviews, questionnaires,
present observations, etc. Diagnosis helps the
change agent to see what changes are needed in
the structure, system or in people. Actually, the
initial diagnostic focus of a manager is on the
organizations variables rather than on the
psychology of individuals.
 Planning the change
• Change can be made from one of (or all of, or some of) the
four fonts change in structure, change in task, change in
people, change in technology. A change agent has to
consider the following points during the planning phase:
• He should be in a position to convince the members of the
benefits of payoffs form change and also alters them to the
negative consequences and adverse effect in the absence
of change.
• He should select the appropriate strategy whether to
change structure, or people or technology or task.
Normally all the changes includes the change in behavior of
people.
• He should try to involve the subordinates in decision
making.
 Implementation of change:
• the next step in the process of change is to
implement the change plan successfully. While
implementing change, the change agent
encounters resistance from members of
organization. Research supports the view that
creating and implementing change is more difficult
than planning the change. In addition to the
problem of resistance, manager also faces the
problem of control.
 Feedback
to ensure smooth implementation of change in
the given direction, it is necessary to make
review the progress made regarding
implementation of change. Without proper
feedback, management of change is incomplete
and useless. A manager or change agent must
compare the standards present during the re
change period with actual performance after
implementing the change and ensure whether
the change has been fruitful or wasteful.
 Forces of change
• There are many forces that influence change
in organizations. Despite costs and challenges
involved in such pressure for change, many
organizations attempt to adapt to the
changing circumstances by changing their
organizations. Some organizations are
relatively flexible in design, so they adapt to
change easily while others are more static and
may require radical changes.
 Globalization
• it results in extension of organizational
activities to other parts of the world and will
increase competition across the organization
and will have effects on organizational
behavior. Increasing global competition means
a need for organizational changes.
• Corporate change is required with increasing
globalization in order to increase the firm's
capacity to compete in local and global
markets. In order to adapt to the situation,
global competition mergers and acquisition
are the normal phenomena in the corporate
world.
 Information technology:
with the increasing use of information
technology by many firms, different forms of
organizational changes have been seen. The
use of email and internet systems has made
access to information easy through computer
networking throughout organizations..
The development in information technology has
opened up different business opportunities
globally. It has forced our executives to change
the prevailing configuration of organizations
 Demography
• in order to cope with the competitive
environment and work in changing information
technology, there is a need for attracting
qualified and competent workers in the
organization. The new generation workforces
have different beliefs and values form the old
one.
• They work not just to eat or survive. Thus the
new generation employees will force
organizations to change the prevailing HR
policies and practices such as compensation
systems and promotion practices.
 Resistance to change
• Resistance to change indicates any attitude or
behavior that hinders the change process. It is
imperative to overcome such hindrances to
introduce change in the organization.
Resistance to change may be covert or overt
in nature. Covert resistance to change refers
to the increase in absenteeism, request for
transfers, resignations and loss of motivation,
lower morale and a high rate of accidents.
• Whereas overt resistance to change is
expressed through strikes, deteriorating
quality of goods and services etc. there are
individual and organizational sources of
resistance to change. Each of these types is
briefly explained below.
 Individual resistance to change

• Economic insecurity: employees in any job

learn about how to perform satisfactory for
their career and organizational achievements.
They know the routine performance evaluation
system and how to interact with supervisors
and subordinates. In case the company plans to
change the work system of such employees, it
may pose a threat to their economic security.
Thus employees try to resist if they see
undesirable economic threat from such change.
 Fear of the unknown
employee resist change because they guess that
the new work method is difficult and thus it will
be difficult to work in the changing work
process and procedures. They have some sort
of fear of not being able to work in changing
circumstances. For example, some employees
resist transfers because of the problem to adapt
their family members to the changed situation,
new schooling, unfamiliar language etc.
 Threats to power and influence:
with the introduction of change in the
organization, some employees may see
threats to their power and influence. As we
know, information is a source of power and
executive may fear that they may lose access
to valuable information and suffers reduction
in power and influence to direct and control
their subordinates. Therefore, they resist
change in organizations.
 Habit
Habit refers to usual routine such as eating, sleeping,
watching television, and living with family members.
Such routine is also a source of satisfaction for
employees because it allows adjusting to and coping
with the family and society. If any change that affects
the usual routine of an employee, he or she may resist.
For example, a 20 percent increase in pay without any
condition may be good for the employee who works in
day shift to over his or her living expenses or to make a
surplus. However, if the pay increase is conditional and
requires him or her to work in the night shift, the
employee may resist because such decision poses a
threat to his or her habit.
• Personality: highly dogmatic/ rigid
employees will be close minded and resist any
sort of change in the organization. Similarly,
employees with a high degree of dependency
lack self esteem and challenges in the life,
thus they resist any change program.
 Organizational resistance to change
• Organizational design: organizations are
designed by structuring roles, people and
procedures. These elements ensure stability
and continuity of organizations in future. An
organization already develops its structural
inertia to work in a certain way and to resist
any other ways that may affect the current
roles, structure and people relations.
• Organizational culture: it refers to norms,
beliefs, and values commonly held by the
organizational members working individually
or in groups. They are difficult to change
overnight. Therefore, its members may resist
introduction of any sort of change in the
organization.
• Resource limitations: some organizations resist
change because of lack of capital to invest,
skilled people and time. Therefore, they like
just maintaining their status quo for fear of
increasing resource burden because of the
change program.
• Fixed investment: change requires a heavy
amount of fixed investment in physical assets.
Many organizations may not be able to invest
to introduce such change and thus they resist
it.
Inter organizational agreements
the agreement between labor union and
organization may force the organization not to
make any change without prior approval of the
former.
 Reducing resistance to organizational change

• Changes are inevitable in our organizations.

Managers have to be prepared for the
changes and to cope with new challenges that
occur due to changes. There are six ways of
overcoming resistance to change. They are
 Communication
• this is one of the most important priorities and
strategies to introduce change in organizational
setting. It reduces the resisting forces by keeping
employees informed on the effects of changes on
their lives and work practices. It helps to reduce
the fear of the unknown about change programs.
• Training: it is useful to introduce change
initiatives in the organization after providing
training and education for providing special
skills to adapt to the change program. In many
organizations, restructuring for the
introduction of computerized work system can
be achieved by providing computer training to
employees prior to such change.
 Employee involvement
• it can be an effective way to reduce the effects
of restraining forces on the introduction of
change programs, because it creates a
psychological ownership of the change
decisions. When an individual employee is
involved early in the decision for introducing
change, commitment of that particular
employee will somehow be insures.
 Stress management:
• change is stressful for many employees
because they may threaten self esteem and
create uncertainty in their life. The
organizations effort to manage such stress
through sharing of information, counseling
and training can be useful to reduce resistance
to change.
 Negotiation:
• It offers incentives to actual or potential
change resistors. Negotiation is a kind of
political strategy used for persuading the
resistors not to resist the change program.
Such negotiations will generally be held
between labor unions and company
management to assure that no employee will
be laid off after the change takes place.
 Coercion:
as a last resort to introduce change in the
company, the management may force
employees to support the change program. In
such circumstances, organizations may dismiss
employees or use some sort of direct and
indirect coercion to introduce change in
future. However, they should first try other
measures than coercion.
 Organizational Development
• Business organizations seek growth and enhancement.
Organizations development briefly called OD is the most
significant, innovative and integrated process of achieving
operational efficiency and effectiveness in organizations.
OD is a planned and calculated attempt to change the
organization, typically to a more behavioral environment.
It places high priority on humanistic values and goals. It is
a way of looking the whole human side of organizational
life. Organizational Devolvement has been widely used in
recent years as an approach to introduction to planned
change in used in recent years as an approach to
introduction to planned change in organization.
Organizational development is a planned effort initiated
by process specialist to help an organization develop .
• OD is a practical and systematic approach to
launching and diffusing(communicate) change
in organizations. It is an attempt to improve
the overall organizational efficiency. It is
basically a long range program attempting to
change behavioral attitudes and performance
of total organizations.
• Organizational development reflects a broad
and comprehensive approach to individual
organization relationship. The word
organizational development was coined by
Richard Beckhard in the mid 1950s, as a
response to the need for integrating
organizational needs with individual needs.
 OD values

• OD programs are based on certain value

systems. The primary objective of OD is
change the total system of the organization.
The following briefly identifies the underlying
values in most OD efforts.
• Respect for people: individuals are perceived as being
responsible, and caring. They should be treated with
dignity and respect.
• Trust and support: the effective and healthily
organization is characterized by trust, authenticity,
openness, and a supportive climate.
• Power equalization: effective organizations
deemphasize hierarchical authority and control.
• Confrontation: problems shouldn’t be swept under
the rug. They should be openly confronted.
• Participation: the more the people who will be
affected by a change are involved in the decisions
surrounding that change, the more they will be
committed to implementing those decisions.
 Basics of OD

• Organizational development does not emerge

itself. There are some conditions which must
be accomplished as prerequisites to OD. They
are
 Top management's commitment
• for the success of OD programs top
management must be committed and provide
necessary support. It should be started form
the top because if there is no support from
the top, the programs die soon.
 Strong and influential managers:
to make the OD programs successful, there
should be a group of some strong and
influential managers who can lead the
organization towards success. Managers
should be ready to bring change and bear the
initial plan of the OD programs. They work as
internal change agent.
 Successful past experience
if the organization has successful past
experience in the similar kind of programs
there is the likelihood that present program
will also be successful and vice versa.
 Built in reward system:
• without having equitable reward systems for
the contribution of significant efforts OD
programs can't be successful. Organization
should reward the better performance
resultants duty.
 OD process / steps in OD

• Although every OD project is designed to

respond to the unique problems and issues
that exist in an organization, it is possible to
outline a series of steps, or phases, that
characterize the OD process in general. But in
practice the different phases often overlap,
each phase has some unique characteristics
and activities associated with it.
• OD is a complex process. It may take a year or
more to design and implement, and the
process may continue indefinitely. Although
there are many different approaches to OD, a
typical complete program includes most of the
following steps they are
• Initial diagnosis
• Data collection
• Data feedback and confrontation
• Action planning and problem solving
• Team building
• Inter group development
• Evaluation and follow up
 Initial diagnosis
An OD program starts with the initial
consultation and problem identification. The
consultant may be a professional consultant
from outside or may be internal service
personnel, expert in organizational
development programs. At this point, the
consultant may have consultation with
persons form various levels in the
organizations in order to gain the knowledge
of inputs.
 Data collection:
• the next step in the process is data collection.
The consultant meets various groups away
from the work place in order to determine the
organizational climate and behavioral
problems. They gather information through
surveys and develop information through
interviews. Etc. The consultant usually meets
with groups away from work to develop
information from questions.
 Data feedback and confrontation
After having an initial diagnosis and solution to
problems, data will be given back to
employees for collecting their viewpoints. The
situation of confrontation may arise at the
time of discussion on solutions of problems.
 Action planning and problem solving:

• Data are used by group to suggest specific

recommendations for change. They discuss
the problems faced by the organizations and
stretch specific plans including who is
responsible for problems and at what time.
 Team Building
Teams are formed to implement change in
organizations. In other words, during the whole
process, group meetings are conducted to discuss
the program, and the consultant in the whole
process encourages the groups to examine how
they should work together as a group or as a team.
The consultant helps them to see the value of open
communication and trust. These are essential pre
requisite for improved group functioning.
 Evaluation and follow up
the consultant helps the organization evaluate
the results of its OD efforts and develop
additional programs in areas where additional
results are needed.
 OD Interventions
(Approaches / Techniques of OD)

• There are number of OD approaches/techniques

available for the purpose of interventions to be
used by managers as per the organizational
requirement. The interventions differ in the range
and depth of their penetration into the
organizational system and the purposes they
serve. No two interventions are alike and there is
no single OD method capable of searching all the
likely objectives of organization. Sometimes
several methods of OD are used together.
• It can be said that, it is very difficult to classify
the OD interventions because of the
interrelated and overlapping nature. One way
of classifying these methods, for the
convenience and simplicity purpose, is by the
target of change. In practice they can be
• Individual interventions/ individual level
• Process interventions / group level
• Systematic interventions / organizational level
 Individual interventions

• Sometimes the diagnosis and feedback phases

of OD lead to the conclusion that
organizational problems have their roots in
certain shortcoming or inadequacies of
individual of organization members. In this
type of situation such intervention activities
need to be designed that will enable
organizational members to develop the
abilities or skills they currently lack. Such
activities can take a variety of forms.
 Counseling and coaching
Certain individuals may require support and
direction if they are to adjust to organizational
changes effectively. Some individuals may be
unaware of ways in which their own
performance is dysfunctional to the organization.
In addition, such individuals may not be
conscious of alternative ways of approaching and
carrying out their work. Counseling and coaching
by the consultant may stimulate self awareness
and lead to the development of new behavior
patterns of the job for these individuals.
 Sensitivity training:
• it is also called T group training, laboratory training
or encounter group training. It is a method of
changing behavior thorough unstructured group
interactions. It helps individual members
understand how their behavior affects others.
The primary focus is on reduction interpersonal
conflict. It helps to build better relations with
others. The ways of conduction sensitivity training
are
• Members are brought together in a free and open
environment in which participants discuss themselves.
• Discussion is loosely directed by a professional
behavioral scientist called facilitator.
• The facilitator intervenes only to help move the group
forward.
• The outcome of such training is to help employees
understand others better, become aware of their own
feelings and perceptions, and improve communication.
 Benefits of sensitivity training
• more supportive behavior, more open and self
understanding, improved communications,
development of leadership skills, increased
belongingness to the group, conflict reduction,
improved listening skills, increased tolerance
in individuals.
 Survey feedback:
• it is a well organized and systematic approach
with relatively a long history of good
performance. It is generally conducted by either
the organizations top management or by a
consultant to management. By providing
information about employee's belief and
attitudes, a survey can help management
diagnoses and solve organizations problems. A
consultant or change agent usually coordinates
the process and is responsible for data
gathering, analysis and summary.
 Group level interventions

• OD interventions at the group level are

designed to improve group effectiveness. The
major interventions at this level are team
building, process consultation and inter group
team building.
 Team building
it involves a manager or consultant engaging the
members of a group in a series of activities
designed to help them examine how the group
functions and how it may function better. Change
can be properly managed when teams are
encouraged to participate in the change process.
Team building enhances interactions, trustfulness
and openness among the team members. All
team members have to work around their team
objectives and tasks to mange change in the
organization.
 Process consultation
• Process consultation is a technique designed to help
organizational members better perceive, understand, and
act on the process in a group / organization. in this
technique OD consultant makes an observation on group
process or activities such as communication, decision
making etc and provides feedback to the group. The aim of
such feedback is to give the organization members some
insight what is going around them in the group process.
• the consultant or trainer observes the interactions between
members of the organization in the normal flow of work and
in the conduct of meetings. The trainer or consultant then
provides feedback to members of the organization or group
to help them learn to identify the attitudes and behaviors
that help or hinder the group's success, and to take steps to
improve the way the group functions.
 Inter group development:
it is a special form of team building designed to
help two or more groups improve their
working relationships with one another and, it
is hoped, the experience improved group
effectiveness as a result. Change in the
organization can be managed with the help of
intergroup development..
• Inter group development helps groups to
improve their working relationships with one
another rand experience improve group
effectiveness. This increases the degree or co
ordination among the groups in decision
making
 Organizational level intervention

The techniques used are

• Organizational restructuring
• Task and technological changes
• Goal setting MBO
• Quality of work life QWL
 Organizational restructuring:
the most comprehensive type of organization
change/ development involves a major
reorganization, usually referred to as a structural
change- a system wide rearrangement of the
task division and authority and reporting
relationships. A structural change affects
performance appraisal and rewards, decision
making, and communication and information
processing systems.
 Importance aspects of structural change are

• Changing group's jobs into departments and

divisions.
• It may move from functional departmentalization
to a system based on products or geography.
• Dividing larger groups into smaller ones or
merging small groups into larger ones.
• Supervisors may become coach or facilitators in a
team based organization.
 Task and technological changes:
• this is another way to bring OD at
organizational (macro) level. It may try to
change task or the technology or both of them
as per necessary.
• Changing jobs directly is task redesign.
Changing how inputs are transformed into
outputs is called technological changes. It also
usually results in task changes. Strictly
speaking, changing the technology is typically
not part of OD, whereas task redesign usually
is.
 Goal setting MBO:
• Management by objectives (popularly known
as MBO) is an extremely popular tool of OD. It
was first described and advocated by Peter
Ducker in 1954. He stressed that business
performance requires that each job be
directed towards the objective of the whole
business.
• MBO also refers to as management by results
is based on the assumption in that
involvement leads to commitment and if an
employee participates, in setting goals, such
employees will be motivated to perform
better. It ultimately leads to the achievement
of objectives. As an OD technique it involves
the following steps.
• People who are involved in the program must educate
about t basic principles and procedures of MBO.
• Employees and managers meet formally and agree upon
clear cut objectives.
• Progress towards the chosen objectives is reviewed after
some internal feedback is provided to employees.
• An overall evaluation is made to assess the current
progress for the next cycle of objective setting and
planning.
 Quality of work life (QWL)

• It is one of the most popular and widely used

system wide intervention techniques. It refers to
the favorableness or unfavorable of a job
environment for people. The basic purpose is to
develop work environment that are excellent for
people as well as for the economical health of the
organization. The elements in typical QWL program
include many items like open commutation,
equitable reward systems, a concern for employee
job security, and participation in job design.
Quality of work life
• The benefits gained form QWL programs differ
substantially but generally they are of three types.
They are
• A more positive attitudes towards the work and
the organization or increase job satisfaction.
• Increased productivity
• Increased effectiveness of the organization.
• Benefits and limitations of organization
development
 Benefits

• Change throughout organization

• Great innovation
• Increased productivity
• Better quality of work
• Higher job satisfaction
• Improved teamwork
• Better resolution of conflict
• Commitment to objectives
• Increased willingness to change
• Reduced absences
• Lower turnover
 Limitation

• Major time requirements

• Substantial expense
• Delayed payoff period
• Possible failure
• Possible invasion of privacy
• Possible psychological harm
• Potential conformity
• Emphasis on group processes rather than
performance
• Possible conceptual ambiguity
• Difficulty in evaluation