Chapter 1

ORGANIZATIONAL
CHANGE :
AN OVERVIEW
Unit 1
  Aim of organizational change

LEARNIN  Present business environment

G  Change levers : Forces pressurizing for

change

OUTCOM  Introduction to types of changes

 Theories of organizational change

ES  Organizational agility : A key to

organizational growth
 It is not the strongest of species that survives, nor the most
intelligent…but the one most responsive to change
(Charles Darwin)
 Change is concerned with making things different (Stephen
P Robbins)
 Change is a natural phenomenon. It is a part of us and will
always be there, whether we change or perish.
 To survive and thrive, we have to change with the changing
business environment.

In this world, there is only one thing which does not change, that
is, continuous change process…..
 t u m and
t h e quan hange
Both ness of c anifold
n
Due to rapid change in technology, change in business sudde creased m nation of
in agi
environment and the introduction of new boundaryless have he i m
nd t
business world have totally changed the conduct of beyo .
ne
business. anyo

In these circumstances, leaders need to identify the

substantial gap between present performance and
desired performance at all levels, that is through Change management is a process to ensure
understanding : these gaps are filled well in time to ensure
that significant changes are implemented in
a. Talent Gap
a controlled and systematic manner.
b. Technology Gap

c. Process Gap
AIM OF ORGANIZATIONAL CHANGE
 Any change process initiated by an organization is aimed at moving from
the present state to a desired state for mutual growth of people and the
organization.
 This can be achieved through upgrading the present technology, modifying
structure, changing existing system, and if required modifying the work
culture of an organization.

The change process involves managing resistance effectively

through a thoughtfully designed strategy to ensure that the
transition from the current state to the desired state is
achieved smoothly.
IMPORTANCE OF MANAGING CHANGE
 y
Berger and Sikora (1994) stated that, “change management is a n ec essar e
f o re , it is portanc
continuous process of aligning an organization with its marketplace and There ize the im cess for
l ro
doing it more responsively and effectively than its competitors” to rea change p
e y
of th wth of an
ro
Business leaders need to visualize the the g zation.
i
following aspects of change to prepare organ
themselves and their team to face and manage
change….

1. Change as a continuous process: With a changing business environment, organizations have to change
and frequently realign to meet the needs of the business.
2. Technological development: To remain competitive, it is important for organizations to acquire the right
kind of technology and integrate it with strategy, structure and process of the organization.
3. Impact of globalization: This totally new environment has made conduct of business more challenging, but
rewarding for those organizations which are quickest to meet the demands of the changing business
environment.
4. Changing of vision and mission: Successfully managing organization change means taking a holistic view
of the organization, obtaining top management support, encouraging participation by all those affected,
fostering open communication and rewarding those who contribute to this change efforts (Moorhead and
Griffin, 1999).
5. Growth through ethical means: Business leaders should never try to achieve quick growth by following
unethical means, which is like climbing of a fragile wall which may fall at any time.
PRESENT BUSINESS ENVIRONMENT
 for
ee d
N
the
i v ing nge
s Dr Cha
o rce
F Liberalization, Privatization, Globalization and Technological Innovations

+ -

More opportunities, bigger Threats due to international

markets and fewer competition and demand for best
barriers/constraints quality for the price

Challenges of Change
 Improving quality and cost-effectiveness
 Greater customer orientation and delightment
 New product development and technology upgradation
 Business development: Expansion, mergers and takeover
 Culture development

s
 CHANGE LEVERS : FORCES
PRESSURIZING FOR CHANGE
Change Levers : Internal and External Factors to be
considered Why and What to Change

 It is comparatively difficult to
manage external forces, which
may affect the business
environment all of a sudden.
 However, the performance of an
organization is influenced by a
combination of both external and
internal forces and demands, and
need to be analyzed before
finalizing a change process.
INTRODUCTION TO TYPES OF CHANGES
 The change can be either pre-planned or imposed due to
sudden changes in a business environment.
 A planned change can be divided into :

1. Short-term change – Dealing with incremental changes,

which may require immediate attention
2. Long-term change – Dealing with strategic changes,
which may include merger, takeover or even change in
the vision and mission of the organization.
 Planned change

1. Organization initiate planned change to move from

the present state to a desire state.
2. All planned change normally passes through 4
phases:
a. Diagnosis – Identifying the need for change by
analyzing problems, shortcomings, threats and
opportunities available for growth of the
organization.
b. Developing a solution – Developing plans to
achieve the desired state and fixing time frame
state of the organization.
c. Implementing the plan – Through selecting
appropriate interventions for achieving the desired
state of the organization.
d. Evaluation of the results – Achieved by the
actions taken and stabilizing the new improved
state.
Different Types of Change and Techniques to Be Used to Achieve the Same

Continued …
Different Types of Change and Techniques to Be Used to Achieve the Same

 Change management theories can effectively deal with developmental and

transitional change.
 However, implementing transformational change is comparatively difficult and
needs a much higher degree of leadership skills to swim through the troubled water.
THEORIES OF ORGANIZATIONAL CHANGE
 During last 4 decades, a number of theories have been propagated by
academicians and OD practitioners.
 However, due to difference in perception and practical exposure to the
change management, there has been a “great divide” between academics
and practitioners due to the difference in their exposure to the planning,
leading and managing change.
 However, for developing a sound theory, understanding of both academic
and practitioner contributions is crucial.
 Van de Ven and Poole (1995), based on their wide study, have grouped these
theories into 4 types of categories and named them as under :
1. Life cycle theory
2. Teleological theory
3. Dialectical theory
4. Evolutionary theory
1. Life cycle Theory
1. One of the most popular explanation on theories of change
management.
2. This theory envisions that an organization passes through a sequence
of stages (the life cycle) like any human beings. These stages are –
a. Birth Stage – During this stage, the management aims at setting the
direction of organization for achieving pre-planned desired state.
b. Survival Stage – This stage leads to the strong organizational learning,
increased production, new recruitment and the developing markets. For
this, organization has to depend on its innovation, and focus has to be
on how to manage customers by fulfilling their expectations.
c. Success Stage – This stage witnesses improved financial performance,
while some organizations get involved in their expansion plans to
increase their domination in the market.
d. Decline Stage – Overconfidence due to success results in complacency,
leading to decline in organizational learning abilities and innovations
and thereby leading to loss of market share and profit margin.
e. Renewal Stage – To achieve this, an organization has to break from the
past success formula and commit itself to change and effective
organizational learning. This can be achieved by learning to do the
right things faster, at lower costs and more productively than its
competitors.
The Model of Organizational Growth Life Cycle Theory of Change
2. Teleological Motor Theory
1. Believes that the change is goal driven.
2. This includes various stages related to change process such as
formation of goals, implementation of change, evaluating the
progress and modification of plan if required.
3. Most of the time change is planned and driven by the
organization.
4. If the majority of the people feel that with the present
performance they cannot achieve the organizational objective,
they will create a situation which will enable purposeful
activity towards the goals.
3. Dialectic Theory
1. Based on the assumption that the organizational change is the
result of contradictory values which compete with each other for
domination.
2. The changes take place when these ideas and values of people
directly confront the status quo.
3. Seo, Putnam and Bartunek (2011) supported the view that
contradictions disturb the status quo which leads to change.
4. The contradiction and conflicts may even lead to some
resolutions, but that may also lead to change with a view to find
some solution or attempt to embrace the differing perspective.
4. Evolutionary Theory
1. Based on the assumptions that change is a continuous process
for all organizations.
2. This theory is based on the biological evolution process; hence
it is named as the evolutionary theory which is guided by the
changing business environment and thus creating pressures
on organizations to change.
3. Changing environment puts pressure on organizations to
change their technology, systems and even current routines.
4. Organizations respond to these changes and adapt to these
powerful external forces.
 ORGANIZATIONAL AGILITY :
A KEY TO THE ORGANIZATIONAL GROWTH
 The organizations that can quickly meet the
needs of the changing environment can only
survive and thrive in turbulent times.
 The ability of an organization to adjust to a
changing environment quickly is termed as
“organizational agility”.
 To achieve agility, organizations need to :

1. find innovative ways on how to respond

quickly to the changing environment.
2. be more flexible and should have visionary
leaders who could help the organizations
to maintain their growth during
challenging and turbulent environment.
 What makes an organization agile?

1. Leadership with an open mind and ready to accept change has the ability to convert
threats into opportunity.
2. An organizational work culture which supports repeated change for the growth of the
organization.
3. An organizational structure which supports dynamic decision making system.
4. An agile enterprise is fast to implement even a small change or a new idea to gain
competitive advantage.
5. An organization that allows employees to try out-of-the-box solutions to improve
performance of the organization.
6. Learning organizations populated with knowledge workers who drive the organization to
change and take full advantage of the changing business environment rather than just
adjusting to it.
7. Rapid decision making and its immediate implementation.
8. Proactive approach to implement change.
9. Flexible approach of the management of the organization.
10. Decentralization and empowerment.
11. Flat structure.
12. Free and Fast flow of communication.