What is Organisation ?
• “… a consciously coordinated social unit, composed of two or more people, that functions on
a relatively continuous basis to achieve a common goal or set of goals.”
Common Factors in Organisations
Interactions and efforts of PEOPLE in order to achieve OBJECTIVES channelled and coordinated
through STRUCTURE directed and controlled via M
The Formal Organisation
• “… the planned co-ordination of the activities of a number of people for the achievement of
purpose or goal, through division of labour and function, and through a hierarchy of
authority and responsibility.”
The Informal Organisation
• “… arises from the interaction of people working in the organisation, their psychological and
social needs, and the development of groups with their own relationships and norms of
behaviour, irrespective of those defined within the formal structure.”
Organizations
Effective
• clearly defined goals
• structure fit goals
• flexible forward plan
• procedures+ purpose
• rich work, learning
• planned skills devel.
• power+mutual influence
• participation
Ineffective
• ill-defined/unknown goals
• no goals – structure link
• focus: pressing problems
• unconscious change
• narrow work, no learn
• no consern for persons
• politicking, cliques
• what boss says goes
What is Change ?
• In general it means an act of making something different or changing status quo
• It is a coping process of moving from the present state to desired state which individuals ,
group & organisation undertake in response to dynamic business forces ( Internal as well as
External )
Factors responsible for change
• Competition
• Business has become Global
• Technical Change
• Economic change
• Social Change
• Political change
People
• Diverse work Force
• Challenge to manage multicultural work force
• Expectations of customers are on increase
• New skills are necessary
Technology
• Revolution in IT industry
• Change in Logistics
• Use of robots
• Fast transmission of Information
• Fast pace in change in technology
Competition
• WTO agreement
• International acquisitions & mergers
• Availability of quality products at reasonable price
• Innovations
• Change in habits & taste
Today’s Dynamic World
• The Knowledge Explosion
• The Technical Explosion
• The Communication Explosion
• The Economic Explosion
Why change?
• External environment is dynamic
• Change has become inevitable in business
• The survival of organisation depends upon how it predicts, prepare itself & adapts these
changes
• This calls for major structural & behavioural changes in the organisation
Types of Changes
• Unplanned Changes – Changes which occur suddenly without any significant effort or
involvement of employees or management
• Planned Changes –Changes which are intentional &goal oriented
• These changes organisation initiates deliberately to face changes in business .
Goals of Planned Changes
• To enhance the ability of organisation to adapt to changes in external environment
• To change the behaviour of the employees –
Change attitudes & ability
Types of Planned Changes
They are of two types
• First order or incremental change – minor adjustment,
• Second Order Change – This change involves major structural & behavioural change – a
revolutionary change. Irreversible & multileavel change
First Order Change
• It is simple & continuous
• There is no fundamental change
• Only minor adjustments are made to a few products & processes of organisation.
• Change is easily reversible.
• New machine
• Limited automation
Second Order Change
• A revolutionary change.
• It is multilevel, multidimensional & radical change.
• Change Process at Boeing
• Slashing cost by 30%
• Reduce production time by 13 months to 6 months
• Design new aircraft
Responsibility of managing Change
• Change Agents are responsible for managing change activities.
• They can be Managers or responsible employees or outside consultants
• Outside consultants are preferred because they take objective approach to change
What Change Agents change
Change of Structure
Change of Technology
Change of Physical Setting
Change of People
Changing people refers to
Change in attitude ,skills, expectations ,perceptions & behaviour
Stages in Change Process
• Problem Recognition
• Identifying the causes of the Problem
• Implementing the change
• Generating motivation for change
• Managing the transition stage
• Supporting the change
• Evaluating the Change
Problem Recognition
Types of problems
1) Productivity
2) Absenteeism
3) Attrition
4) High cost of Production
5) Declining profits
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• Through observation
• Through Survey - Data collection
• Interviewing key personnel
• Gap Analysis – difference between present state & desired state
Identifying the causes of the Problem
1) Productivity
2) Absenteeism
3) Attrition
4) High cost of Production
5) Declining profits
6) Old technology
Implementing the Change
• After identification of the problem the Mgt. designs a change plan to improve the situation
& solve the problems
• Plan should contain
Clear vision
Expected outcome &
Benefits to org.
Success of Change Plan
• Employees are motivated to participate in change process
• Employees do not resist the change
• Continuous Reinforcement
Strategies to motivate employees
David A Nadler proposes 3 strategies
1) Management should always highlight shortcomings of existing system
2) Encourage participation of employees in Change
3) Employees adopting desired behaviour should be rewarded
Managing Transition stage
• Critical stage
• Change disturbs the status quo. It may
change job profile, reporting relationship, rules &procedures etc.
• employee gets disturbed during this transition
• Therefore skill lies with Change Agent how he tackles the situation
• Change programme be properly designed
• Proper training for new role
• Changes to be properly communicated
• Change agent should always follow up this process
Supporting the Change
• Support of employees is necessary. This can be achieved through
• Co operation
• Compromise
• Negotiation
Evaluating the Change
• Whether desired state has been reached
• Whether new system solved the identified problems
• Whether new problems are created
• Whether change benefited the organisation
Sources of Resistance to Change
• Individual Sources
• Organisational Sources
Why people resist change ?
• Fear of uncertainity or unknown
• Fear of Economic Loss
• Fear of the unknown
• Perceived inconvinience
• Fear of loss of power
• Social Pressure
Why Organisation resist change ?
• Structural Inertia
• Impact on other systems
• Group Inertia
• Threat to expertise
• Disturbance to established Power
• Change in resource allocation
How to overcome resistance to change
• Educate employees
• Improve communication
• Encourage participation
• Facilitation & support
• Negotiation
• Coercion
Lewins 3 Step Model
• Unfreeze
• Movement to new state
• Refreeze
How does OD Work?
Lewin’s 3 Phase OD Model
