PART FOUR – ORGANIZATIONAL CHANGE

INTRODUCTION

Organizational change is the movement of an organization from one state of affairs to

another. Organizational change can take many forms. It may involve a change in a company’s
structure, strategy, policies, procedures, technology, or culture. The change may be planned
years in advance or may be forced upon an organization because of a shift in the environment.
Organizational change can be radical and alter the way an organization operates, or it may be
incremental and slowly change the way things are done. In any case, regardless of the type,
change involves letting go of the old ways in which work is done and adjusting to the new ways.
Therefore, fundamentally, it is a process that involves effective people management.

LEARNING OUTCOMES: After successful completion of this unit, you should be able to:

2 Exhibit an understanding of the nature, methods, applications, and general principles

governing Organizational Behavior;

3 Demonstrate knowledge in applying the general principles governing Organizational

Behavior; from the fundamental concepts to the complex dynamics of organizations;

4 Relate the principles of Organizational Behavior to real-life situations;

5 Explain the rationale of applying the principles and concepts of Organizational Behavior in
relation to real-life situations;

6 Evaluate the effectiveness of applying the principles and concepts of Organizational

Behavior.

COURSE MATERIALS

LESSON 9 – ORGANIZATIONAL CHANGE

Organizational Behavior - Change

 Organizational change can be defined as the alteration in structure, technology or

people in an organization or behavior by an organization. Here we need to note that
change in organizational culture is different from change in an organization. A new
method or style or new rule is implemented here.

An organizational change occurs due to two major factors namely −

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  External factor − External factors are those factors that are present outside the firm but
force the firm to change or implement a new law, rule etc. For example, all banks are
bound to follow the rules laid down by the RBI.
 Internal factor − Internal factors are those factors that are caused or introduced inside
an organization that forces a change. For example, no smoking in the workplace

Kurt Lewin’s Force Field Analysis

Kurt Lewin, is a noted organizational theorist, who proposed the force field analysis for
organizational change. In this theory, he has prioritized two factors for change in an
organization, namely −

 Driving force − Driving force can be defined as an organizational force that makes a
change with respect to structure, people and technology. In short, it drives the
organization from one culture to another.
 Restoring force − Restoring force is the force which changes the culture from the
existing state to the old state. It indicates a backward motion while the driving force
indicates a forward motion.

Importance of Organizational Change

There is a need of change in an organization because there is always a hope for further
development, and in order to survive in a competitive market, the organization needs to be
updated with changes. However, we have listed some reasons to explain why changes are
deliberately made and carefully planned by the organization before implementation.

 It improves the means to satisfy the economic requirements of people.

 It enhances the profitability of organization.
 It promotes employee satisfaction and well-being.

Planned Change

 We can define planned change as any kind of alteration or modification which is done in
advance and differently for improvement.

The Need for Planned Change

 Planned change takes places in an organization when there is a demand for change due
to two types of forces. These forces are grouped into internal sources and external
sources.
 Internal forces that lead to a planned change in an organization include obsolescence of
production and service, new market opportunities, new strategic direction, increasing
workforce diversity, and shift in socio-cultural values.
 External forces that lead to a planned change in an organization include regulators,
competitors, market force, customers, and technology. Each of these forces can create

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 pressing demand for change in small or big, public or private, business or non-business
organizations.

Process of Planned Change

Once the management decides to implement some changes in the organization, it needs to
be done carefully as it is a very sensitive issue. It is very important for all the employees to
adapt to change. According to Kurt Lewin, the planned organizational change is
implemented in three different stages. They are −

 Unfreezing − In this stage, the organization studies if the change is required or not,
what and why is the change necessary. Considering the entire situation, the organization
decides for appropriate change. Thus, a plan and strategy is formulated as required.
 Changing − In this stage, the organization executes the plan and program for change.
For this purpose, proper precautions are taken in order to maintain cooperation and
coordination between the employees and management, avoiding miscommunication or
disputes. Adequate supervision and control is arranged as needed.
 Refreezing − This is the final stage, in order to bring organizational change. By way of
supervision, the organization tries to evaluate the effectiveness of change. Collecting all
this information, the management interprets whether to continue or replace change by
some other alternatives or to make further minor changes.

Types of Planned Change

On the basis of a company’s requirement planned change is classified into these types.
They are −

 Change in structure
 Change in technology
 Change in people
 Change in Structure

We say that the planned change required is change in structure when development is
required in these following areas −

 Change in management
 New management
 Change in position or location
 Change in objective, rules, regulations etc.
 Launching new branches
 Change in Technology

We say that the planned change required is change in technology when development is
required in these following areas −

 Need of office automation

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  Installing new hardware and software
 Executing new working procedures
 New methods in production function
 Producing new products and devices
 New training, research and development program
 Change in People

We say that the planned change required is change in people when development is required
in these following areas −

 New candidate requirement

 Promotion or demotion
 Transfer to other location
 Suspension or dismissal
 Deputation
 Training and development

Organizational Development is a field of research, theory, as well as practice devoted to

expanding the knowledge and effectiveness of how people accomplish successful
organizational change and performance.

Organizational development is not an overnight transformation that can be done in an

organization, rather it is a gradual process that has to be executed systematically and by
taking care of the external environment.

Organization Development Techniques

Companies adopt organizational development technique to modify the behavior of people

who are resisting change. It is a program to bring a change in the values, norms, attitudes,
perception, and behavior of people and improve the quality of inter-personal relations. Some
of the major organizational development techniques are −

 Sensitivity technique
 Survey feedback
 Process consultation
 Team building
 Intergroup development

Now let us have a look at all these techniques.

Sensitivity Technique

 Here sensitivity refers to the psychological aspect of human mind that has to be shaped
to act as expected by the group. In this technique, one’s own weakness is exposed and
members understand how others react towards them. Stress is on group dynamics and
tackling inter-relationship disputes.
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  The idea is to improve the behavior of people in order to maintain smooth inter-personal
relationship without any power or influence. Members are motivated to have an open,
heart-to-heart talk to develop mature relationship. Sensitivity training borders on
psychotherapy where the emotions as well as body language are considered.

Survey Feedback

 In this technique, the discrepancies among a group are weeded out using
questionnaires, which identify the difference in perception amongst the same working
family, group or department. The collected data is then tabulated and distributed for
further deliberations. This acts as the basis for further discussions and the discrepancies
if any can be sorted out by open discussions with all concerned, defending and opposing
till a consensus is reached. This technique mainly focuses on ideas and not on persons
who put up those ideas.

Process Consultation

 In this technique, a firm may either seek the support of experts from within the firm or
from outside. The firm must check that process consultation is done through an external
expert with the needed support provided by the authorities from within the organization.

Team Building

 In this technique, attempts are made at the group or inter-group level. The main
objective is to improve co-ordination thereby improving the performance as a group. This
can be done by goal setting, development of inter-personal relations, role analysis to
identify roles and responsibilities and team process analysis.

Intergroup Development

 Inter group development technique attempts to change the perceptions of groups about
themselves or about other groups. This can be done by organizing independent group
meeting, developing a list consisting of perception of itself, views about other
departments and how others view them, trying to understand and resolve the actual
cause of conflicts, or sub grouping the groups to remove difference in perceptions and
impressions that groups have about each other.

Resistance to Change

“There’s no chance that the iPhone is going to get any significant market share.”

— Steve Ballmer, Microsoft CEO, 2007

 Contemplate that quote for a moment, and then decide for yourself how much resistance
to change can cost an organization.
 There are similar examples that are equally as hilarious. Henry Ford’s lawyer told him
that the automobile was a fad but the horse was here to stay. Movie mogul Darryl

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 Zanuck tossed aside the idea of television, sharing his opinion that the world would tire
of “staring at a plywood box.” Their resistance to change may have proven a bit short-
sighted.
 Ultimately, change is stressful, and people avoid it because they want to avoid the pain,
anguish, frustration and lack of confidence that goes along with it. Even a positive
change, like a promotion, can be met with stress as the employee marches into their
own new and uncharted territory. Even minor changes can require a brief adjustment
period, but large-scale changes can take a long time to adjust to.
 Resistance to change is as much an organizational and group issue as it is an individual
issue.

Organizational Resistance

 Organizational inertia is the tendency for an organization as a whole to resist change

and want to maintain the status quo. Companies that suffer from inertia become
inflexible and can’t adapt to environmental or internal demands for change. Some of the
signs that organizational inertia is in play are through internal power struggles, poor
decision-making processes and bureaucratic organizational structures.
 Organizational cultures and reward systems can foster resistance or acceptance of
change. A culture that promotes high levels of trust and cooperation lays the foundation
for employees and their acceptance and instigation of change. If employees are
punished for honest mistakes, if new ideas aren’t rewarded, and managers aren’t
prepared for daily issues with proper training, then that organization is ripe for change
resistance.
 Timing of change can also play a role in organizational inertia. If the organization is still
recovering from a large-scale change in organizational structure, that would not be the
time to introduce a new information management system. Employees will be likely to
resist the change and turmoil that goes along with a second change. Thinking about the
order and timing of a planned change can help managers avoid employee resistance.

Group Resistance

 We talked about groups in an earlier module, and we learned that when groups start to
work well together, it’s because they’ve established norms and cohesion. Central norms
in a group can be difficult to change, because they involve the group’s identity. Any
change to them is likely to be resisted, as group members will work to protect each other
and preserve the group. If a group is used to practicing centralized decision making and
suddenly, they’ve been told to use a decentralized style of decision making, they’re likely
to resist, because it goes against their norm.
 Group cohesion can affect the acceptance of change. If a cohesive group has been
disbanded in favor of a different kind of team structure, the group’s desire to stick
together may make them resistant to change. But just as group cohesion can work
against change, it can also work for change. A cohesive group looking to implement
change can typically overcome any one individual member’s resistance to it.

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Individual Resistance

 People resist change because they fear the consequences. Change means learning new
habits and facing new situations. Learning new skills comes with the uncertainty of being
able to master those skills. It’s easy to see why change can seem threatening.
Furthermore, if individuals’ sense that there will be economic insecurity or risk regarding
the change, or if they don’t trust management, this could further add to the resistance.
 Sometimes, individual traits can make one change resistant. Culture, personality and
prior experiences can contribute to one’s level of acceptance where change is
concerned.

How to Encourage Change

 That’s a lot of resistance to change. If organizational inertia, group resistance and

individual resistance can get in the way of initiating positive or necessary change, how
can managers make sure that they minimize change resistance and do the right thing for
the organization?

Here are some ideas and tactics that can help:

 Education and communication. If there is fear of the unknown, organizations shouldn’t

compound that with a lack of information. Face-to-face meetings, newsletters, and
updates can often help reduce those fears. A disadvantage of this, though, is the ability
to communicate to manage change effectively to large numbers of people.
 Participation and involvement. People who participate in change are less likely to
resist it. Managers can involve employees in the change process, creating an ownership
around it that minimizes resistance. The disadvantage of this approach is that it’s
somewhat time consuming and managers do have to relinquish some control over
change implementation.
 Facilitation and support. Facilitation and support require active listening and
counseling. These methods can be highly effective when dealing with individual
resistance, but are time consuming and run a high risk of failure.
 Negotiation and agreement. This approach recognizes the role and power of others in
the success of the change effort. Trade-offs and incentives are offered in exchange for
acceptance. This is a relatively easy way to deal with resistance but can be expensive
and lead to more negotiation.
 Manipulation and cooperation. Changing employees focus and attention to other
issues can be a quick and easy way to minimize resistance to change, but it can lead to
mistrust and resentment on behalf of those manipulated.
 Explicit and implicit coercion. If there’s no time and no choice, managers can rely on
force to push past change. This method is quick and effective, but it doesn’t build
commitment.

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  Managers can implement change successfully by using a combination of these methods.
Understanding the source of resistance is helpful. But none of the solutions above deal
with organizational inertia, which requires a broader set of organizational activities. We’ll
talk about that, but first, let’s focus on models and processes for introducing planned
change.

SUPPLEMENTAL READINGS/REFERENCES:

• Bauer, T. & Berrin, E. 2012. An Introduction to Organizational Behavior. Creative

Commons by-nc-sa 3.0 (http://creativecommons.org/licenses/by-nc-sa/
3.0/) license.

• Ditan, Carol D. 2016. Understanding and Managing Organizational Behavior. Anvil

Publishing, Inc.

• Inc. (n.d.). Employee Reward and Recognition Systems.

https://www.inc.com/encyclopedia/employee-reward-and-recognition-
systems.html
• Lumen. (n.d.) Resistance to Change.
https://courses.lumenlearning.com/wm-organizationalbehavior/chapter/resistance-to-
change/

• Newstrom, John W. 2011. Organizational Behavior: Human Behavior at Work 13th

Edition. Boston, McGraw-Hill

ACTIVITIES/ASSESSMENTS: (Group Work)

Question for Discussion:

Think of an organizational change you have experienced. Was there resistance to the
change? Discuss. What could have been done to prevent or diminish resistance?

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