MODULE I

ORGANIZATIONAL CHANGE
POINTS TO BE COVERED

• Def: Change Management

• Theories / Models of Planned Change
• Comparisons of Planned Change
• General Model of Planned Change
• Different types of Planned Change
• Critique of Planned Change
ORGANIZATIONAL CHANGE

 Organizational change is the movement of

an organization from one state of affairs to
another. A change in the environment often
requires change within
the organization operating within that
environment.

3
WHAT IS CHANGE MANAGEMENT?

Def: Change management is a structured approach

to transitioning individuals, teams, and
organizations from a current state to a desired
future state.
The field of change management grew from
the recognition that organizations are composed
of people. And the behaviors of people make up
the outputs of an organization.
ACTIVITIES INVOLVED IN IT

• Defining and instilling new values, attitudes,

norms, and behaviors within an organization that
support new ways of doing work and overcome
resistance to change.
• Building consensus among customers and
stakeholders on specific changes designed to
better meet their needs.
THEORIES OF PLANNED CHANGE

Theories/ Models of planned Change are :

 Lewin’s change Model

 Action Research Model
 The Positive Model
 The Burke-Litwin Model
LEWIN’S CHANGE MODEL

Unfreezing

Movement

Refreezing
ACTION RESEARCH MODEL

Problem Identification
Joint diagnosis

Consultation with a
behavioral scientist Joint action planning

Data gathering & Action

preliminary diagnosis

Data gathering after

Feedback to Client action
THE POSITIVE MODEL

Initiate the Inquiry

Inquire into Best Practices

Discover the themes

Envision a preferred Future

Design and Deliver

THE BURKE-LITWIN MODEL

The Model makes a distinction between the

following parameters:
 First-order [Transactional] change and
Second-order [Transformational] change
 Organizational Climate and Organizational
Culture
 Transactional leaders and Transformational
leaders
COMPARISONS OF PLANNED CHANGE

 Similarities
 Change preceded by diagnosis or preparation
 Apply behavioral science knowledge
 Stress involvement of organization members
 Recognize the role of a consultant
 Differences
 General vs. specific activities
 Centrality of consultant role
 Problem-solving vs. social constructionism
 General Model of Planned Change

Planning Evaluating
Entering and and
Diagnosing
and Implementing Institutionalizing
Contracting Change Change
TYPES OF PLANNED CHANGE

 Magnitude of Change
 Incremental
 Quantum
 Degree of Organization
 Over organized
 Under organized
 Domestic vs. International Settings
CRITIQUE OF PLANNED CHANGE

 Conceptualization of Planned Change

 Change is not linear
 Change is not rational
 The relationship between change and performance
is unclear
 Practice of Planned Change
 Limited consulting skills and focus
 Quick fixes vs. development approaches
ORGANIZATIONAL RENEWAL AND CHALLENGE OF CHANGE
POINTS TO BE COVERED
 Challenges of change
 Organizational Renewal
 The Systems Approach to change
 Socio technical System
 Future Shock and Change
 Organizational Transformation and Development
 OD: Planned change Process

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CHALLENGES OF CHANGE 
 Change is the name of the game in Management
today.
 Market, product, and competitive conditions are
rapidly changing.
 Under these pressures, organizations are changing.
 They are Downsizing, reengineering, flattening their
structures, and going global.

 The two aspects of challenges of change are

Renewal and Constant change
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Renewal:
 Organizational Renewal requires that managers
 Make adaptive changes to environment

 With focus on changing organizational systems, stressing the

situational nature of problems, and their system-wide impact.
 Must analyze the organization, its departmental subsystem
interrelationships, and the possible effects on the internal
environment.
Constant Change:
 Because of the rapid pace of technology, innovations today are often
quickly overtaken by competitors with technological improvements.
These problems are the result of
 Increasing rate of change and are made more difficult because of the
Impact of future shock
 Managers today face risk situations unlike those of the past
 Organizations need capacity to adapt to changing environment as
they exist in this environment.
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ORGANIZATIONAL RENEWAL: ADAPTING TO CHANGE

 Organizational renewal Defined as ongoing process of

building innovation and adaptation.
 Organizational Renewal is important

 For survival

 For maintaining excellence

 An author and consultant Robert Waterman has identified

eight key factors that typify leaders who generate excellence

and how they find ways to renew their organizations.
 He notes the renewal dilemma is that stability is necessary

but also a major obstruction to change.

 Organizational Renewal is an approach to preventing

corporate entropy.
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EIGHT KEY FACTORS IN RENEWAL
 Informed opportunism
 Direction and empowerment
 Friendly facts
 A different mirror
 Teamwork and trust
 Stability in motion
 Attitudes and attention
 Causes and commitment
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APPROACHES TO CHANGE
 Every organization must have enough stability to continue to
function satisfactorily and adapt to changing conditions.
 Both stability and adaptation are essential for survival and
growth.
 There are two types of environment in which an organization
can operate:
Stable: Hyper turbulent:
 unchanging basic products  rapidly changing product
and services lines
 a static level of competition  an increasing and changing
 a low level of technological set of competitors
innovation  rapid and continual
 a formalized and centralized technological innovation
structure  decentralized structure
 a slow, steady rate of growth  rapid market growth

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CONT……..
 The message is very clear for today’s organizations.
 A static organization can no longer survive.

 To survive, organizations must devise methods of

continuous self-renewal.
 They must recognize when it is necessary to change, and
they must develop the ability to implement change when it
is needed.
 A model of adaptive orientation has been developed to find
out how organizations vary greatly on two dimensions:
 Adaptive orientation

 Environmental stability

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 A Model of Adaptive Orientation
Hyper turbulent

Renewing Transformational Reactive

Environmental
Stability

Satisficing Sluggish Thermostat

Stable

High Adaptive Orientation

Low
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Sluggish-Thermostat Management
 Stable Environment, Low Adaptation

 Low risk, formalized procedures, high degree of structure and

control
 Stable goals and highly centralized structure

 More managerial levels, high ratio of superiors to subordinates

 Value tradition as well as seniority more than performance

Satisficing Management 
 Stable environment, high adaptation
 Management is adequate and average

 More centralized decision-making structure with problems referred

to the top
 More levels of management with coordination done by formal
committees
 Planning and decision-making concentrated at top, high clarity of
procedures and roles
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Reactive Management 
 Dynamic environment, low adaptation

 Reacting after conditions change

 Short-term, crisis type of adaptation, often involving

replacement of key people, hasty reorganization, and drastic
cutting of personnel and product lines

Renewing/Transformation Management 
 Dynamic environment, high adaptation

 Proactively takes advantage of new opportunity and

innovation.
 Deal with future conditions before conditions occur

 Faster developing new ideas , more responsive to competitive

changes and more participative in getting the commitment and
involvement of organization members. 26
THE SYSTEMS APPROACH
 This approach views the organization as a unified
system composed of interrelated units.
 To look at the organization as a whole and as a part of a
large external environment.
 One approach “Horizontal corporation” breaks company
into key processes and creates teams from different
departments to run them.
 Its about managing across, rather up and down.
 Helps manager to maintain a balance between the needs
of various units of the enterprise as well as total system
goals and objectives.
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ORGANIZATION AS A SYSTEM 
 System is set of interrelated parts
 Unified by design to achieve purpose or goal

 The systems Approach is one of the most important concepts in

OD because it deals with change and interrelationships in
complex organizations.
Basic Qualities of Systems:
 Designed to accomplish objectives

 Elements of a system must have an established arrangement

 Interrelationships exist among elements

 Process more vital than basic elements

 Organization more important than elements

 System consists of inputs, processes, outputs

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OPEN SYSTEMS

There exists two basic types of systems:

1. Closed System: self-contained and isolated from
the environment. Generally exist only in theory.
2. Open system:
 In continual interaction with environment and
therefore achieves a steady state of dynamic
equilibrium.
 Continually receives feedback from environment,
which helps it adjust.
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The Transformation
Resource Inputs Outputs
Organization Process
as an Information
Open System Organization
Equipment
Human Resource
Facilities Products
Materials Goods
Workplace
Money Services
Actions
People
Technology
Physical
Resource

Feedback from
Environment

Employees
Departments &
Managers
Customers
Investors
Government
Regulation
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THE SOCIOTECHNICAL SYSTEM 
Coordinated human and technical activities consists of:
 Goals and values subsystem

 Basic vision and mission of the organization

 Technical subsystem

 Primary functions, operations, and activities

 Structural subsystem

 Formal design, policies, and procedures

 Psychosocial subsystem (culture)

 Network of social relationships and behavioral patterns of members

 Managerial subsystem

 Spans the entire organization by directing, organizing, and

coordinating
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 The Sociotechnical System uses the following
approaches:
 Organize around process, not task
 Flatten the Hierarchy
 Use teams to manage everything
 Let customers drive performance
 Reward team performance

32
 Environmental suprasystem
The
Sociotechnical
Goals and Values Technical subsystem
subsystem System

Managerial
subsystem

Input, Output flow

of Material,
Energy, and
Psychosocial subsystem Information
Structural subsystem

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HIGH PERFORMANCE SYSTEMS 

 David P. Hanna argues that High-Performance

organizations do not occur by chance or by
policy: rather they are designed.
 Hanna’s model focuses on five key variables: 
 Business situation (forces in the environment)
 Strategy (goals and values)
 Design elements (technology, structure, etc.)
 Culture
 Results ( the output produced)

34
THE CONTINGENCY APPROACH- NO ONE BEST WAY 

 This theory recognizes that there are differences between

organizations
 Considers organization and environment
 Identifies “if-then” relationships
 Suggests general directions for change depending on the
situation
 Relies on certain conceptual skills such as diagnosing and
understanding various types of situations
 The view suggests that managers in different departments
may face situations that may be very difficult on a number of
dimensions including degree of structure, level of motivation,
potential of conflict.
35
FUTURE SHOCK AND CHANGE 
 Alvin Toffler suggests that most people are unprepared to cope
with the accelerated rate of change.
 Future Shock, a time phenomenon, a product of greatly
accelerated rate of change in the society.
 Too much change in too short a time affects managers and
organizations as well.
 Inability to adapt to accelerating rates of change
 Management reaction to change strained when it occurs too
rapidly
 Managers must be adaptable and flexible than ever before.

36
ORGANIZATIONAL TRANSFORMATION AND DEVELOPMENT

 OT and OD are both approaches to managing change in

organizations.
 OT may be defined as changing organization’s form, shape
or appearance or changing its energy from one form to
another.
 OT a revolution
 Transforms framework of organization
 Focus on Unplanned changes in response to crisis
 Change occurs in short time frame
 The difference between OT and OD centers on the
magnitude and speed of the change--- a difference between
revolution and evolution. 37
OD - THE PLANNED CHANGE PROCESS 
 OD like an evolution
 Planned changes on large scale
 Longer time frame
 Gradual implementation
 Modifies total organization or major parts

OD Focuses On: 
 Individual effectiveness

 Team effectiveness

 Organization effectiveness
38
FOCUS ON INDIVIDUAL EFFECTIVENESS 

The goals are improved:

 Managerial skills

 Technical skills

 Interpersonal competence

39
FOCUS ON TEAM EFFECTIVENESS  
 Improving problem-solving
 Working through conflicts
 Group effectiveness

Focus on task activities and team process:

 Task activities—what the team does

 Team process—how the team works

Process observations examine:

 Content—the task of the group

 Process—the way the group functions

40
FOCUS ON ORGANIZATION
EFFECTIVENESS 

 Focus on total organization system.

 Improve effectiveness by changes in:
 Structure
 Technology
 Management

41
CHANGE OF ORGANIZATIONAL CULTURE
POINTS TO BE COVERED

 Creating a concept for change

 Understanding Corporate Culture
 Cultural Resistance to change
 Tools for change
 Goals and values of OD

43
CREATING  A CONCEPT FOR CHANGE 

 Change- a massive one is having a great impact on all facets of

society, creating new dimensions and great uncertainty. The issue
today is how to manage change.
 Challenge of  managers is:
 Create renewing rather than reactive managerial system
 Develop long-term efforts to prepare for future organizational
requirements
 To deal proactively with shifting forces and also take advantage of the
opportunities that arise
 An effective organization climate and a realistic vision of the
future are both essential to future success.
 Cultural change does not just happen; it is usually a
result of complex strategy implemented by the management.
44
UNDERSTANDING  CORPORATE CULTURE 

 Change leaders are seeking to make a more

fundamental shift in the capabilities of their
organizations.
 Not looking for marginal improvements but the
goal is to reinvent themselves.
 Reinventing lies in creating totally new
approaches, new technologies, and new markets.
 Given an environment  of rapid change, a static
organizational  culture can no longer be effective.

45
WHAT  IS CORPORATE CULTURE? 

 A Corporate Culture is  a system of:

 Shared values and beliefs
 That interact with an organization’s people,
structure, and systems
 To produce behavioral norms
 Culture is derived both from the management and
the organization itself.
 Culture formation takes place through managerial
and organizational subsystems
46
Ph
ilo
so
The Culture Formation
ph
y
Va
lu
es
Ac
tio
ns
Vi Shared
Or
sio Sayings
Jargon Corporate
ga
n
Actions Culture
ni
zat Feelings
io
na
l
Ro
les
Str
uc
tur 47
CULTURE FORMATION
Managerial Subsystem 
 Through actions 
and words, managers define philosophy of 
how employees are treated
 Vision articulated  by top management

Organizational  Subsystem 
 Outside factors  define culture

 Technology influences  culture

 Job descriptions 
and structure influence culture’s development
48
CONT….
 A strong, widely internalized corporate culture is frequently
cited as a reason for the success of companies.
 Henry Migliore, identified a set of 20 cultural factors, termed
the Corporate Culture Index, that can be used to measure an
organizational culture. These factors include the following
characteristics:
 Member Identity
 Team Emphasis
 People Focus

 Autonomy
 Control

 Risk Tolerance
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CORPORATE  CULTURE AND SUCCESS
 A corporate culture gives the whole organization a sense of
- how to behave, what to do, and where to set the priorities to get the job done.
 Culture is of critical importance in the implementation of
strategy.
 High-performing  companies have strong cultures.
 However, in today’s rapidly changing environment
many cultures  fail to adapt to change.
 Following corporate  mergers, cultures often clash
 International mergers can be even more complex because
they entail bringing national cultures together and perhaps
language differences.
50
CONT….

 Following a merger, differences in corporate

beliefs, goals, policies, management styles,
values, norms, gender, race, religion, and
nationalism can manifest a non-productive “we
versus they” situation if the parties involved are
not made aware of , and sensitive, to the
cultural differences.

51
KEY  FACTORS TO IMPROVE CULTURE 
 In order to create a winning culture, managers
need to adapt their managerial style, values and
goals to fit the changing demands of the
environment.
 There are several key factors that organizations

need to be aware of to improve their

effectiveness:
 Create a vision for the future

 Develop a model for change

 Reward changes
52
CULTURAL  RESISTANCE TO CHANGE 

 Changing culture  is not easy
 Emerges out of shared behaviors and working
relationships
 Requires time
 Culture can  prevent company from remaining
competitive and adapting to a changing
environment.
 An inappropriate culture is often one of the biggest
stumbling blocks on the path to adaptation.
53
ORGANIZATIONAL  ADAPTABILITY 
 Following strategies have put pressures on the
companies to become flexible and adaptive
 Recession

 Deregulation

 Technological upheavals 

 Social  factors

 Global competition

 Outsourcing

 Markets

54
TOOLS  FOR CHANGE

 Three organizational tools are required in the adaptive

organization:
 Information

 Support

 Resources

Information:
 Provide information or ability to gather information
to people
 One method  is open-book management
55
Support:
 Support and  collaboration from other departments

 Management supports to provide climate of risk taking

Resources:
 Funds

 Staff

 Equipment

 Materials

 Innovative programs  for providing resources including: 
 Innovation  Banks

 Skunk  works

 Venture capital 56
KEY FACTORS IN CULTURAL CHANGE
 Understand the old culture
 Encourage change in employees
 Follow outstanding units
 Don’t impose cultural change
 Lead with a vision
 Large-scale change takes time
 Live the new culture

57
THE GOALS AND VALUES OF OD

 The micro issues to organizational change are:

 Underlying goals

 Assumptions and

 Values

 In general, OD programs are aimed at three basic

Organizational  Dimensions that affect Performance 
 Managerial  effectiveness

 Managerial efficiency

 Motivational climate

58
CONT….
 Managerial  effectiveness refers to accomplishment of specific
organizational goals and objectives, or “doing the right things”
 Managerial efficiency refers to the ratio of output to input, or
“doing the things right”
 Motivational climate consists of the set of employee attitudes
and morale that influence the performance

Three Other  Criteria for Organizational Effectiveness 

 Adaptability

 Sense of identity

 Capacity to test reality

59
OD  PROFESSIONAL VALUES AND ETHICS 
 Expertise
 Autonomy 
 Commitment
 Code of ethics

OD  Implementation Issues 
 Success dependent 
upon fit between OD values and organization’s  values
 Key issue is  value orientations of each party; these include
beliefs about people, the methods used to reach change
goals, and the purpose of the change program.
60
COMPATIBILITY OF VALUES

 Both OD practitioner and organization’s values

may not be compatible with each other.
 The OD practitioner would be considered as
unethical if he or she tries to make the client
system effective when the goals are
unacceptable.
 A related issue is concerned which client
systems the practitioner chooses to help or not
to help.
61
IMPOSED CHANGE
 OD ideally  implemented voluntarily
 Top management  may impose program
 OD  practitioners may become an instrument for
imposing change

62
DETERMINE  PRIORITY OF GOALS

 Which of the Goals of an OD program is likely

to be given precedence?
 How can the OD practitioner help improve the
productive efficiency of the organization and at
the same time the quality of work for its
members?
 A challenge is to develop a balanced
intervention

63
OD  VALUES ABOUT NATURE OF HUMAN BEINGS 

 Respect for  people
 Trust and support
 Power equalization 
 Confrontation
 Participation

64
THANK YOU

65
RESISTANCE TO CHANGE
POINTS TO BE COVERED
 Change and Reinvent
 The Life Cycle of Resistance to Change
 Leading Change
 A Change Model
 Driving Forces
 Restraining Forces
 Strategies to lessen Resistance

67
CHANGE AND REINVENT
Organizations today face a major challenge in managing
change effectively. The costs are often high when an
Organization fails to change in the ways necessary for success.
The most serious challenges to improving programs all have
the same focus: “PEOPLE”. Managers have to deal with
resistance to change.
Solving Organizational problems usually involves
introduction of change.
On a personal level, change represents the alteration of set
patterns of behavior, defined relationships with others, work
procedures, and Job skills.

68
THE LIFE CYCLE OF RESISTANCE TO
CHANGE
Organization Programs such as Downsizing,
Reengineering, and TQM involve innovations
ad changes that will probably encounter some
degree of resistance.
This resistance will be evident in individuals
as well as groups in such forms as controversy,
hostility, and conflict.
The response to change tends to move
through the five phases of Life Cycle.
69
PHASE I

 Only few people see the need for change and take
reform seriously.
 The Resistance looks massive.
 At this point, the change program may die or continue
to grow.
 Large Organizations seem to have more difficulty
than smaller Organizations.

70
PHASE II

 The movement for change begins to grow.

 The forces ‘for’ and ‘against’ it become identifiable.
 The change is discussed and more thoroughly
understood by more of the organization’s members.
 Greater understanding may lessen the perceived
threat of change.

71
PHASE III

 There is a direct conflict and showdown between the

forces ‘for’ and ‘against’ the change.
 This change will probably mean ‘life’ or ‘death’ to the
change effort.
 People who see change as a good will find it difficult
to believe how far the opposition will go to put a stop
to the change.
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PHASE
IV

 If the supporters in power change after the decisive

battles, the remaining resistance will be seen as a
nuisance.
 A possibility that the resisters will mobilize enough
support to shift the balance of power.
 Wisdom is necessary to deal with the overt opposition
and also with the sizable element who are still not
convinced with it’s benefits.
73
PHASE V

 The resisters to the change are as few as

advocates in the phase I.
 It means, the change program is towards the path
of successful implementation.

74
 LEADING CHANGE
Evaluation Advocates
of change of change
Change Factors

Success of
Impact Degree of
change
on change
Culture

Time Frame

75
 A Change Model
Major
2 4
SOME HIGH RESISTANCE
RESISTANCE Low chance of Success
Moderate chance
Impact on culture

of Success

1 3
SOME RESISTANCE
LOW RESISTANCE
Moderate to High chance
High chance of Success
of Success

Minor
Minor Degree of change Major
76
DRIVING FORCES

 Dissatisfaction with the Present Situation

 External Pressures toward Change
 Momentum toward Change
 Motivation by Management

77
RESTRAINING FORCES

 Uncertainty Regarding Change: “The Comfort Zone”

 Fear of the Unknown
 Disruption of Routine
 Loss of Existing Benefits: “What’s in it for Me?”
 Threat to Security
 Threat to Position Power
 Redistribution of Power
 Disturb Existing Social Networks
 Conformity to Norms and Culture
78
STRATEGIES TO LESSEN RESISTANCE
 Education and Communication
 Create a Vision
 Participation of Members in the Change Program
 Facilitation and Support
 Negotiation, Agreement, and Politics
 Leadership
 Reward Systems
 Explicit and Implicit Coercion
 Climate Conducive to Communications
 Power Strategies
79