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ORGANIZATIONAL CHANGE AND DEVELOPMENT

MODULE 3

Submitted By:-

Nikita Sangal

Itashi Arora

Nimisha Agarwal

Organizational Change• In today’s business world, most of the organizations are facing a dynamic & changing

environment. They should either change or die, there is no third alternative.

Organizations that learn & cope with change will flourish&others who fail to do so will

be wiped out.

Features:

• Changes results from the pressure of both internal & external forces in the organization.

• Change can occur in any part of the organization.

• Change affects people & structure of the organization.

• Change may be reactive or proactive.

Factors:

1. External Factors

a. TECHNOLOGICAL CHANGES

b. SOCIAL CHANGES

c. POLITICAL CHANGES

d. CHANGE IN MARKETING CONDITIONS

2. Internal Factors

a. NATURE OF THE WORK FORCE

b. CHANGE IN MANAGEMENT

c. PESONNEL DEFICIENCIES IN EXISTING MANAGEMENT STRUCTURE

Challenges:

• Extent of planning

• Degree of change

• Degree of learning

• Target of change

• Organization Structure

Resistance to change:

• Extent of planning

• Degree of change

• Degree of learning

• Target of change

• Organization Structure

Overcoming Resistance:

• INDIVIDUAL LEVEL :

EFFORT AT THE INDIVIDUAL LEVEL PARTICPATION & INVOLVEMENT EFFECTIVE

COMMUNICATION LEADERSHIP FACILITATION & SUPPORT

• GROUP LEVEL :

EFFORTS AT GROUP LEVEL MANAGEMENT SHOULD CONSIDER THE& NOT THE

INDIVIDUAL AS THE BASIC UNIT OF CHANGE

Planned Change

Once managers and an organization commit to planned change, they need to create a

logical step-by step approach in order to accomplish the objectives.

Planned change requires managers to follow an eight-step process for successful

implementations

Process:

Recognize the need for change. Recognition of the need for change may occur at the top

management level or in peripheral parts of the organization. The change may be due to either

internal or external forces.

Develop the goals of the change. Remember that before any action is taken, it is necessary to

determine why the change is necessary. Both problems and opportunities must be evaluated.

Then it is important to define the needed changes in terms of products, technology, structure,

and culture.

Select a change agent. The change agent is the person who takes leadership responsibility to

implement planned change. The change agent must be alert to things that need revamping,

open to good ideas, and supportive of the implementation of those ideas into actual practice.

Diagnose the current climate. In this step, the change agent sets about gathering data about

the climate of the organization in order to help employees prepare for change. Preparing

people for change requires direct and forceful feedback about the negatives of the present

situation, as compared to the desired future state, and sensitizing people to the forces of

change that exist in their environment.

Select an implementation method. This step requires a decision on the best way to bring

about the change. Managers can make themselves more sensitive to pressures for change by

using networks of people and organizations with different perspectives and views, visiting other

organizations exposed to new ideas, and using external standards of performance, such as

competitor's progress.

Develop a plan. This step involves actually putting together the plan, or the “what”

information. This phase also determines the when, where, and how of the plan. The plan is like

a road map. It notes specific events and activities that must be timed and integrated to produce

the change. It also delegates responsibility for each of the goals and objectives.

Implement the plan. After all the questions have been answered, the plan is put into

operation. Once a change has begun, initial excitement can dissipate in the face of everyday

problems. Managers can maintain the momentum for change by providing resources,

developing new competencies and skills, reinforcing new behaviors, and building a support

system for those initiating the change.

Follow the plan and evaluate it. During this step, managers must compare the actual results

to the goals established in Step 4. It is important to determine whether the goals were met; a

complete follow-up and evaluation of the results aids this determination. Change should

produce positive results and not be undertaken for its own sake.

Keep in mind that a comprehensive model of planned change includes a set of activities that

managers must engage in to manage the change process effectively. They must recognize the

need for change, motivate change, create a vision, develop political support, manage the

transition, and sustain momentum during the change.

Organization Growth & Change Implications

Organizational growth, means different things to different organizations. Indeed, there

are many parameters a company can select to measure its growth. The most meaningful

yardstick is one that shows progress with respect to an organization's stated goals.

The ultimate goal of most companies is profit, so net profit, revenue, and other financial

data are often utilized as "bottom-line" indications of growth.

Others may use sales figures, number of employees, physical expansion, or other criteria to

judge organizational growth.

Growth Cycle:

Factors for change:

Technology

Customer Needs

Economy

Growth Opportunities

Work Process

Product Innovation

Coping with change in Order to Grow:

Joint Venture

Alliances

Subcontracting

Licensing

Divestment

New Markets

New Product Development

Outside Financing

Challenges

Dramatic or Incremental

Dilution of Hands-On Capability

Complexity of Tasks

Accretion of Numbers

Relation to Members & Environment Change

Transformational effect

Healthy Communication

HR Practices

KURT LEWIN THREE PHASES CHANGE THEORY

Kurt Lewin proposed a three stage theory of change commonly referred to as Unfreeze,

Change, Freeze (or Refreeze). It is possible to take these stages to quite complicated levels.

A lot has changed since the theory was originally presented in 1947, but the Kurt Lewin model

is still extremely relevant. Many other more modern change models are actually based on the

Kurt Lewin model. So, three stages. Unfreezing, Change, Freezing. Let's look at each of these.

Stage 1: Unfreezing

The Unfreezing stage is probably one of the more important stages to understand in the world

of change we live in today. This stage is about getting ready to change. It involves getting to a

point of understanding that change is necessary, and getting ready to move away from our

current comfort zone.

This first stage is about preparing ourselves, or others, before the change (and ideally creating a

situation in which we want the change).

Unfreezing and getting motivated for the change is all about weighing up the 'pro's' and 'con's'

and deciding if the 'pro's' outnumber the 'con's' before you take any action. This is the basis of

what Kurt Lewin called the Force Field Analysis.

Force Field Analysis is a fancy way of saying that there are lots of different factors (forces) for

and against making change that we need to be aware of (analysis). If the factors for change

outweigh the factors against change we'll make the change. If not, then there's low motivation

to change - and if we feel pushed to change we're likely to get grumpy and dig in our heels.

This first 'Unfreezing' stage involves moving ourselves, or a department, or an entire business

towards motivation for change. The Kurt Lewin Force Field Analysis is a useful way to

understand this process and there are plenty of ideas of how this can be done.

Stage 2: Change - or Transition

Kurt Lewin was aware that change is not an event, but rather a process. He called that process a

transition. Transition is the inner movement or journey we make in reaction to a change. This

second stage occurs as we make the changes that are needed.

People are 'unfrozen' and moving towards a new way of being.

That said this stage is often the hardest as people are unsure or even fearful. Imagine bungey

jumping or parachuting. You may have convinced yourself that there is a great benefit for you

to make the jump, but now you find yourself on the edge looking down. Scary stuff! But when

you do it you may learn a lot about yourself.

This is not an easy time as people are learning about the changes and need to be given time to

understand and work with them. Support is really important here and can be in the form of

training, coaching, and expecting mistakes as part of the process.

Using role models and allowing people to develop their own solutions also help to make the

changes. It's also really useful to keep communicating a clear picture of the desired change and

the benefits to people so they don't lose sight of where they are heading.

Stage 3: Freezing (or Refreezing)

Kurt Lewin refers to this stage as freezing although a lot of people refer to it as 'refreezing'. This

stage is about establishing stability once the changes have been made. The changes are

accepted and become the new norm. People form new relationships and become comfortable

with their routines. This can take time.

It's often at this point that people laugh and tell me that practically there is never time for this

'freezing' stage. And it's just this that's drawn criticism to the Kurt Lewin model.

In todays world of change the next new change could happen in weeks or less. There is just no

time to settle into comfortable routines. This rigidity of freezing does not fit with modern

thinking about change being a continuous, sometimes chaotic process in which great flexibility

is demanded.

So popular thought has moved away from the concept of freezing. Instead, we should think

about this final stage as being more flexible, something like a milkshake or soft serv icecream, in

the current favourite flavour, rather than a rigid frozen block. This way 'Unfreezing' for the next

change might be easier.

Force Field AnalysisForce field analysis is a management technique developed by Kurt Lewin, a pioneer in the field

of social sciences, for diagnosing situations. It will be useful when looking at the variables

involved in planning and implementing a change program and will undoubtedly be of use in

team building projects, when attempting to overcome resistance to change.

Lewin assumes that in any situation there are both driving and restraining forces that influence

any change that may occur.

Driving Forces

Driving forces are those forces affecting a situation that are pushing in a particular direction;

they tend to initiate a change and keep it going. In terms of improving productivity in a work

group, pressure from a supervisor, incentive earnings, and competition may be examples of

driving forces.

Restraining Forces

Restraining forces are forces acting to restrain or decrease the driving forces. Apathy, hostility,

and poor maintenance of equipment may be examples of restraining forces against increased

production. Equilibrium is reached when the sum of the driving forces equals the sum of the

restraining forces. In our example, equilibrium represents the present level of productivity, as

shown below.

Equilibrium

This equilibrium, or present level of productivity, can be raised or lowered by changes in the

relationship between the driving and the restraining forces.

For illustration, consider the dilemma of the new manager who takes over a work group in

which productivity is high but whose predecessor drained the human resources.

The former manager had upset the equilibrium by increasing the driving forces (that is, being

autocratic and keeping continual pressure on subordinates) and thus achieving increases in

output in the short run.

By doing this, however, new restraining forces developed, such as increased hostility and

antagonism, and at the time of the former manager's departure the restraining forces were

beginning to increase and the results manifested themselves in turnover, absenteeism, and

other restraining forces, which lowered productivity shortly after the new manager arrived.

Now a new equilibrium at a significantly lower productivity is faced by the new manager.

Now just assume that our new manager decides not to increase the driving forces but to reduce

the restraining forces. The manager may do this by taking time away from the usual production

operation and engaging in problem solving and training and development.

In the short run, output will tend to be lowered still further. However, if commitment to

objectives and technical know-how of the group are increased in the long run, they may

become new driving forces, and that, along with the elimination of the hostility and the apathy

that were restraining forces, will now tend to move the balance to a higher level of output.

Managers are often in a position in which they must consider not only output but also

intervening variables and not only short-term but also long-term goals. It can be seen that force

field analysis provides framework that is useful in diagnosing these interrelationships.

The Change Cycle Model

Change has always been a necessary aspect of life and work, and our world is changing more

rapidly than ever. It is likely that you will have to cope with a variety of changes in the near

future. Your success and fulfillment - your emotional, mental, spiritual and physical well-being -

depend on how well you adapt to change.

People react, respond and adjust to change in a sequence of six predictable stages. The Change

Cycle model identifies the thoughts, feelings and behaviors associated with each stage of

change. There is no better map to assist you in navigating through the changes in your life.

Stage 1 – Loss to Safety.

In Stage 1 you admit to yourself that regardless of whether or not you perceive the change to

be good or 'bad" there will be a sense of loss of what "was."

Stage 2 – Doubt to Reality.

In this stage, you doubt the facts, doubt your doubts and struggle to find information about the

change that you believe is valid. Resentment, skepticism and blame cloud your thinking.

Stage 3 – Discomfort to Motivation.

You will recognize Stage 3 by the discomfort it brings. The change and all it means has now

become clear and starts to settle in. Frustration and lethargy rule until possibility takes over.

The Danger Zone.

The Danger Zone represents the pivotal place where you make the choice either to move on to

Stage 4 and discover the possibilities the change has presented or to choose fear and return to

Stage 1.

Stage 4 – Discovery to Perspective.

Stage 4 represents the "light at the end of the tunnel." Perspective, anticipation, and a

willingness to make decisions give a new sense of control and hope. You are optimistic about a

good outcome because you have choices.

Stage 5 – Understanding.

In Stage 5, you understand the change and are more confident, think pragmatically, and your

behavior is much more productive. Good thing.

Stage 6 – Integration.

By this time, you have regained your ability and willingness to be flexible. You have insight into

the ramifications, consequences and rewards of the change -- past, present, and future.

In change the key individual is the leader; the key group is the staff; the key process is

teamwork; the key feeling is ownership. The two basic types of organizational change are :

Participative

Directive

Participative: Participative change is “bottom up” change made by educating the staff members

and letting them share in the ownership of the change. This type of change seems to work best

with a staff that is relatively high in ability and willingness. Participative change tends to be long

lasting and to have the strongest support of the staff after all, it's their idea. The major

disadvantage is that it is slow to occur.

Directive: Directive change is “top down” change imposed on the staff from the leader or other

higher external force. For example, the leader, without warning, may say to the staff, “All

expenditures, without exception, will be cleared through me until further notice.” This type of

change works best with a staff that is relatively low on the ability and willingness

subdimensions. Exceptions may be in emergency situations where rapid change is needed. For

directive change to be effective, the leader must have sufficient position power (coercive,

connection, reward and legitimate power) to enforce the change. A disadvantage of this type of

change is that it requires the presence of the leader to maintain it and often results in

dissension among the staff.

Before the leader begins to make any changes, he should be aware that there will probably be a

resistance to the change, especially if the staff's perception of its current state is “good.” The

larger the staff, the greater the difficulty in bringing about the change. There are various

reasons for resistance to change, but the most common is that change is disruptive to the

established patterns of operation. A great deal of security is obtained when an individual learns

the rules of operating in a particular structured system. When the rules change and personal

security is reduced, fear develops. An extra effort is required on the part of the individual to

learn the new rules.

The staff members may have strong vested interests in the current method of staff operation.

Quite often, changes are perceived as being made just for the sake of change. Staffs, like

individuals experiencing traumatic life changes (terminal illness, etc.), go through the stages of

(1) denial that the change is necessary

(2) turmoil or anger

(3) bargaining

(4) depression

(5) acceptance.

Each of these stages results in a degradation of productivity.

To overcome resistance to change, the leader should consider the following:

Recognize that the peer group will provide the major influence on willingness to change.

Involvement of the members of staff sections in planning (participative change) and

implementing the developmental plan will help insure that staff members can see the

vision and the payoffs for changing as well as providing ownership in the change.

Change must be slow, incremental, sequential and progressive (previous exceptions have

been mentioned.)

The changes should appear positive and produce some immediately recognizable payoff.

The changes should appear positive and produce some immediately recognizable payoff.

Provide rewards and incentives for successes during the change period.

Maintain a healthy leadership climate.

Abandon a particular change that is not working after a reasonable amount of time.

Organizational renewal refers to a continuous, knowledge-oriented process as opposed to

episodic change. Organizational renewal should encompass a continuous process because of

the changes that organizations face on a daily basis, and many of those changes have the

potential for major strategic and tactical impact on an organizations operations. Such a

continuous process adds a stability factor even in the midst of episodic renewal. As depicted in

Figure 1, the triggers or root causes of changes may be internal and/or external, and

organizational leaders may have limited or no control over some changes once they occur.

However, awareness of a potential change (or being the innovator who causes the change)

would help mitigate the extent to which there is leadership control or a lack of control.

Renewal is driven by a variety of forces. That process usually unfolds within the context of a

model we call the “Renewal Cycle.” This cycle spells out a simple four-step explanation of

change.

The process starts with two axes.

The horizontal axis details the focus of change—internal or

external. When companies increase their focus on internal

changes, they often can’t focus as well on external concerns,

such as customer satisfaction. Vice versa, when focus is trained

outside in the search for new markets, internal processes tend to

get lost in the shuffle.

Meanwhile, the vertical axis relates to the size of change. An organization with large-scale

change taking place would be at the top; one with no changes would be at the bottom.

The axes combine to create four quadrants, which we have named Gaming, Framing, Claiming,

andTaming. Most of the time will be spent in the fourth quadrant, Taming—that’s where

improvements are made to the “bottom-line,” cost cutting, and performance improvement.

That’s also where most of the money is made—thus people are usually loathe to move out of it.

It usually takes something out-of-the-ordinary to force renewal. We like to call this

the “catalytic event.” In practice, the catalytic event is usually traumatic, or at least

threatening. A takeover, a new competitor, an economic slowdown, even the death of a CEO—

all change your universe so sharply that you can’t go back to the old way no matter what. But

having been forced to make the leap, the company will then move through the remaining three

quadrants in a logical sequence, ultimately settling in a new Taming environment…until the

cycle starts again.