Chapter 1: Introduction to organizational change

Organizational Change• “Organizational change can be defined as the adoption of a new idea or a behavior by an

organization” – Daft• “Organizational change can be defined as new ways of organizing and working” – Dawson

It is a way of altering an existing organization to increase organizational effectiveness for achieving its objectives.

Forces of ChangeExternal forces

• Globalization and govt. policies: With globalization and liberalization, any organization in any part of the world can manufacture, process and sell its products/services to other parts that is liberalized. The business implications of globalization are that a firm that had monopoly in a particular country will now have to compete with international or global firm in terms of quality and price.

• Political factors: International politics affects trade and business. The change agents ought to be sensitive and flexible to protect the interest of their country/organization with the changing world politics

• Technological change: Internet and web technologies, automation, computer based design and manufacturing systems affect the organization at both micro and macro level.

• Changing customer needs and preferences: With the availability of a variety of products there is perceived change in customer preferences. Greater customization demand also affects organizational production process.

• Economic factors: In view of the increased competition along with low margins organizations try to minimize cost by keeping the organization lean and outsource some of their functions.

Internal Forces of Change System Dynamics: Factors such as technology, internal politics, and dominant groups

ffect the relationship among the various subsystems. Thus demanding change in espective field or domain.

Technological change: In response to the technological change, organisation needs to change their system which affects their subsystem as well

Organisation design and structure: Organisations make structural changes to reduce costs and increase the productivity and efficiency.

.Individual and group expectations: To survive and grow successfully, organization needs to change their outlook to meet the needs and expectations of its members.

Managerial and administrative process: In the changing environment, organization needs to change their existing procedures, rules and regulations as well as revise the goals and objectives.

Types of change

Change as incremental and intrinsic: Certain changes take place continuously in a way that the stability seen in the organisation is only apparent. The process of change is considered here to be slow in nature.

Change as extrinsic and revolutionary: Certain changes radically transform many elements of a structure in an organisation. Here change is perceived as disruptive in nature.

Patterned and predictable vs. complex and unpredictable : Some scholars assume change as regular and predictable in nature with identifiable cause –effect relationship. On the other hand, change is thought to be complex and unpredictable in nature.

Duality or bipolarity of change: Change is bipolar in nature. It is continuous and discontinuous; it may be stable and instable; it may be predicted and unpredicted

Theoretical framework of organisational change:Theories on organisational change are numerous. In order to provide an integrated approach to the theories on organizational change Van de Ven and Poole (1995) clustered them into FOUR broad categories according tothe nature of change process.

Life cycle theory : An organisation follows a single sequence of stages, which is cumulative and conjunctive. Any organisation is like a living organism. As an organisation undergoes changes, it passes through stages in both its structure and function somehow, maintaining its identity throughout the process.

Teleological theory: This theory views organisational change as a result of change in its goals and purposes and considers this process as ongoing and iterative, with an organisation never attaining a permanent equilibrium.

Dialectical Theory: Organisation exist in a pluralistic world of ambiguous and contradictory forces and values that compete with each other to get control over the others. When the status quo is confronted by the opposite forces, change occurs

Evolutionary Theory: Organisational change is an ongoing and evolving process. This change proceeds according to a continuing cycle of variation, selection, and retention among organisations competing for resources in a specific environment.

Theory E : This theory views organisational change from the context of economic value of the organisation. It gives prime importance to the shareholder value and considering it to be the only legitimate measure of corporate success.

Theory O : The goal is often to develop organizational culture and human capability through individual and organisational learning. These include the process of change, Obtaining feedback, reflecting, and making further changes.

Theory E & O : Companies that can effectively combine both the hard and soft approaches to change can reap big payoffs in profitability and productivity. These companies are likely to achieve a sustainable competitive advantage.

Strategies for Change ManagementFOUR basic strategies –

Empirical-Rational : Change is based on the communication of information and the offering of incentives.

Normative-Re-educative: Change is based on redefining and reinterpreting existing norms and values, and developing peoples commitment to new one’s.

Power-Coercive: Change is based on the exercise of authority and the imposition of sanctions. Environmental-Adaptive: Change is based on building a new organization and gradually

transferring people from the old one to the new one.

Some shifts in trend

• Industrial era• National economy• Technology development• Stability and predictability• Long term• Centralization• Hierarchies• Emphasis on Continuity

• Information era• Global economy• Technology sophistication• Sudden changes• Short term• Decentralization• Networking• Emphasis on change

Comparison shown by Mathew J. Klemen

20th century 21st centuryStability, predictability Discontinuous changeSize and scale Speed and responsivenessLeadership from the top Leadership from everybodyOrganizational rigidity Permanent flexibilityControl by rules and hierarchy Control by vision and valuesInformation safely guarded Information sharedQuantitative analysis Creativity, intuitionNeed foe certainty Tolerance of ambiguityReactive ProactiveCorporate independence Corporate interdependenceVertical integration Virtual integrationFocus on internal organization Focus on competitive environmentSustainable competitive advantage Constant invention of advantageCompeting for today’s market Creating tomorrow’s market

Chapter 2: A Historical overview of change in management

Though management was recognized as a branch of knowledge in the mid part of 20th century, but the practice of management is evident in the beginning of ancient civilization. The construction of Pyramids and the Great wall of China are tangible evidences of the practices of managerial activities. Another example of early management practices can be seen during the 1400s in the city of Venice, Italy. The Venitians developed an early form of business enterprises and engaged in many activities common to today’s organizations. These examples demonstrate that organizations and managers have been around for thousands of years. However, two pre-twentieth-century events are particularly significant to the study of management:One is Adam Smith’s “Division of Labor” where he emphasized on breaking a job or task into its basic component parts and giving responsibilities of each part to those who have the ability/skill on that particular part which increased productivity of the organization. The other one is Industrial Revolution (during 18th century): The systems of production has been changed during that period, like-

From home to factoryFrom decentralization to centralization of productionFrom manual to machine based production

Some specific approaches to management developed in the 20th century also have significant contribution to overall understanding of management. That are:

Scientific managementAdministrative theoryBehavioral approachQuantitative approachSystem approachContingency approach

Scientific Management‘Scientific management’ concept developed by F. W. Taylor has brought a significant changes in the in the way to manage operations and to increase productivity.Taylor’s papers were:

‘A Piece Rate System’ – emphasized on new system of payment to worker.‘Shop Management’ – focused attention on his philosophy of management.

Taylor’s concept of managementTaylor’s major thesis was that the maximum good for all society can come only through the cooperation of management and labor in the application of scientific methods to all common endeavorsPrinciples of management

Develop a science for each element of a man’s work, which replaces old rule-of-thumb methodScientifically select and then train’ teach and develop the workman Heartily cooperate with the workers so that all work is done in accordance with the principles of scienceDivide work and responsibility almost equally between management and workers

Administrative Theory (Henry Fayol)Henry Fayol’s book ‘Administration industrielle et generale’ was first published in France in 1916. But it has become significant in the history of management after its publication as ‘General and Industrial Management’ in English in 1949.Fayol tried to find out the answer of a basic question – “though management is important in practice but why do schools and universities neglect management to focus on teaching?”The answer according to Fayol was the absence of theory on management Fayol defined theory as “a collection of principles, rules, and procedures tried and checked by general experiences”He noted that a lot of managers theorized but there were many contradictions and most those were localizedTo fulfill that need, he presented his own theory which started to serve as a model for instruction and management started to be considered as a branch of knowledge which can be taught in academic institution.Fayol’s Theory comprises of two parts:Principles of management:

Division of workAuthorityDisciplineUnity of commandUnity of directionSubordination of individual interest to generalRemunerationCentralization Scalar chainOrderEquityStability of tenure of personnelInitiativeEsprit de corps

Management processPlanning OrganizingCommandCoordinationControl

Behavioral approachIn the mid part of 20th century, the managers of different organizations started to realize that people is a distinctive type of resource in organization as they have emotion and feeling what other resources don’t have. They said that management must concentrate on workers and their interpersonal relationship. In this way a new group of managers have developed the behavioral school of management thought. The behaviorists concentrate on motivations, group dynamics, individual drives, group relations and so on. The early contributors of this approach are: H. Munsterberg, Elton Mayo, C.I. Barnard, H. L. Gantt, M. P. Follett etc.

Quantitative approachQuantitative approach consists of bringing knowledge of various discipline to bear on the study and effective solution of problems. The application of quantitative models in managerial decision making started first in war games by the Army organization.After the 2nd world war, some management consultants, specialists in quality control, time and motion experts, marketing analysts, design engineers of business organization started to apply different quantitative tools in business decision making

The system approachSystems researchers envisioned organization as being made up of interdependent factors, including individuals, group, formal structure, interaction, status and authority. The system approach also implies that decisions and actions taken in one part of the organization will affect others.Organization is also considered as a system open to the environment. When managers make plan, they have no choice but to take into account the external variables.

Contingency approach

Management can be based on simplistic principles to be applied in all situations. Different and changing situations require managers to use different approaches and techniques. The contingency approach (sometime called situational approach) says that organizations are different, face different situations and require different ways of managing.

A management Theory JungleThe variety of approaches to management analysis, the welter of research, and the number of differing views have resulted in much confusion as to what management is, what management theories and sciences are, and how managerial events should be analyzed. Looking at the facts, some senior authors some year ago called this situation as ‘The management theory jungle’.

Chapter 3: Individual Change

Every individual in the world experiences change in their life which may be because of changes in the external world or may be because of the changes that take place in the internal world. The key point for managers of change is to understand the distinction between the changes being managed in the external world and the concurrent psychological transition that are experienced internally by people. The example of the statement given by Heraclitus, a great ancient Greek philosopher (You never step into the same river twice) can help us to realize the situation better.Moreover, to realize individual changes in organization we need to address:

• Learning and the process of change• Approaches to change• Personality and change

Learning and the change processBuchanan and Huczynoski (1985) define learning as “the process of acquiring knowledge through experience which leads to a change in behavior”A useful way of beginning to understand what happens when we go through change is to take a look at what happens when we first start to learn something new.For example: driving a new car for the first timeThough you can drive but this new situation can make you tempered and nervous. Because with a new car all the buttons and control panels might be in different positions. One can go through the process of locating them through trial and error, or perhaps reading through the manuals first. As you go through the process, an external assessment of your performance would no doubt confirm a reduction in your efficiency and effectiveness for a period of time. And if one were to map your internal state your confidence level would most likely dip as well. Obviously this anxiety falls off over time. This is based on your capacity to assimilate new information, the frequency and regularity with which you have changed cars, and how often you drive.

Conscious and unconscious competence and incompetenceAnother way of looking at what happens when individuals learn something new is to view it from a Gestalt perspective. The Gestalt psychologists suggested that people have a worldview that entails something being in the foreground and other things being in the background of their consciousness.

It is said that people learn new things using the following process:

Unconscious competence Conscious competence

Conscious incompetence

Conscious competence

Unconscious competence

For example: Assuming that I am an experienced driver, many of the aspects of driving for me are unconscious. All of these aspects I hopefully carry out competently. So perhaps I can drive for many miles on a motorway, safe in the knowledge that a lot of the activities I am performing I am actually doing unconsciously. We might say I am unconsciously competent. However, as soon as I am in the new situation of an unfamiliar car I realize that many of the things I can not now do as well as before. I have become conscious of my incompetence. Through some trail and error and some practice and some experience I manage – quite consciously – to become competent again. All these tasks have been in the forefront of my world and consciousness. It will only be after a further period of time that they recede to the background and I become unconsciously competent again.Sometime the cycle may start with unconscious incompetence (where I don’t know what I don’t know, and the only way of realizing is by making a mistake)

Kolb’s learning cycleDavid Klob (1984) developed a model of experimental learning, which shows how learning occurs, and what stages a typical individual goes through in order to learn. He explained the cycle as:The individual actually does something (activist), reflect upon his or her specific experience (Reflector), make some sense of the experience by drawing some general conclusions (Theorist), and plans to do things different in the future (Pragmatist)

For example: when a new piece of software arrives in the office or in your home, how do you go about learning it?:

Do you install it and start trying it out? (Activist) Do you watch as others show you how to use it? (Reflector) Do you learn about the background to it and the similarities with other programs? (Theorist) Do you not bother experimenting until you find a clear purpose for it? (Pragmatist)

The approaches to individual changeThere are four basic approaches to understand individual change, like:

The behavioral approach The cognitive approach The psychodynamic approach Humanistic approach

The behavioral approach to changeThe behavioral approach focuses on how one individual can change another individual’s behavior using reward and punishment, to achieve intended result.Using the notion of rewards and punishments, four possible situation arise, as demonstrated in the following tableActions Positive NegativeAddition Positive reinforcement:

Pleasurable and increases probability of repeat behavior

Punishment: Unpleasant leading to decrease in repeat behavior

Subtraction Extinction:Avoidance of an unpleasant stimulus increases the likelihood of repeat behavior

Negative reinforcement:Removal of a pleasant stimulus decreases the likelihood of repeat behavior

Reinforcement strategiesWhen generating reward strategies, the following should be borne in mind:

Financial reinforcement: It is the most explicit of the reinforcement mechanisms used in organizations today. The use of bonus payment, prizes, and other tangible rewards are common.

Non-financial reinforcement: It tends to take the form of feedback given to an individual about performance of specific tasks. The more specific the feedback is, the more impactful the reinforcement can be. For example, when a person achieve a challenging goal that can reinforce to set more challenging goal.

Social reinforcement: Social reinforcement takes the form of interpersonal actions, that is, communications of either a positive or negative nature. Praise, compliments, general recognition can all act as a positive reinforcement for particular behaviors and outcome

Motivation and behaviorThe pure behaviorist view of the world led to difficulties with motivating people to exhibit the right behaviors. So, they developed some approaches to motivate people in organization. One of the most popular theory based on behavior is ‘Theory X and Theory Y’ developed by Doglas Mcgregor. The assumption regarding the behavior of people in the two opposite theories are:

Theory X Theory Y People dislike work They need controlling and direction They avoid taking responsibilities They lack ambition They don’t use imagination They require security They are motivated by threats of

punishment

People regard work as natural as normal

They seek responsibilities They are creative and innovative They commit to the organization’s

objective They respond to recognition and

encouragement

Fedrick Herzberg also indicated what motivated people to give their best performance. He suggested that workers have two sets of drives:

Hygiene: The absence of which demotivate employees but the presence of those will not motivate, like: pay, company policy, working relation, working conditions etc.

Motivators: The absence of those will not demotivate people and the presence of those will motivate people, like; achievement, recognition, advancement etc.

The cognitive approach to changeCognitive psychologists were interested in things that happen within a person’s brain. Cognitive approach is founded on the premise that our emotions and our problems are a result of the way we think. Individuals react in the way that they do because of the way they appraise the situation they are in. By changing their thought processes, individual can change the way they respond to situations.The cognitive approach does not refer to the external stimuli and the responses to the stimuli. It is more concerned with what individual plan to achieve and how do they go about this:Achieving results: Key questions in achieving results in organizational context are:

Self concept and values: What are my core values and how do they dovetail with those of my organization?

Belief and attitude: What are my limiting beliefs and attitudes and with what do I replace them? Feelings: What is my most effective state of being to accomplish my goals and how do I access

it? Behavior: What specifically do I need to be doing to achieve my goals and what is my first step? Results: What specific outcome do I want and might get in the way?

Setting goals: The cognitive approach advocates the use of goals. The assumption is that the clear the goal, the greater the likelihood of achievement.

Making sense of the result: The cognitive approach suggests we pay attention to the way in which we talk to ourselves about results. For example, after a particular good performance one person might say things such as “I knew I could do it, I will be able to do that again.” Another person might say something like, “That was lucky, I doubt whether I will be able to repeat that.”

Techniques for change: The cognitive approach has generated numerous techniques for changing the beliefs of people and thereby improving their performance:

Positive listings: List all the positive qualities such as, good experience, good results, skills etc. of you. By accepting all those you can reinforce all these positive thoughts, feelings and perceptions, which then lead to enhanced beliefs.

Affirmation: Try writing your own affirmation. Put it on a card and read it out 10 times a day. As you do so, remember to imagine what you would feel, what you would see, what you would hear if it were true.

Visualization: It focuses on a positive, present mental image. Effective visualizations require you to enter a relaxed state where you imagine a specific example of the way you want to be.

Reframing: It’s a technique for reducing feelings and thoughts that impact negatively on performance

Pattern breaking: It’s a technique of physically and symbolically taking attention away from a negative state and focusing it on a positive.

Detachment: Imagine a time when you did not like who you were. Leave all the negativity behind and become quite calm and be more rational.

Anchoring and resource states: These are two techniques where you use a remembered positive experience from the past which has all the component of success. For example, you gave an excellent presentation once, before your next presentation, as you go into the room reconnected to the positive experience by pinching yourself and saying the word. Does it work? If does not, simply try something else.

Rational analysis: Rational analysis suggests you to write down all the reasons that is incorrect. You need to be specific not generalize. You need to set measurable criteria, objectively based, and you need to use your powers of logic.

The psychodynamic approach to change

The word ‘psychodynamic’ is based on the idea that when facing change in the external world, an individual can experience a variety of psychological states. It became evident due to research published by Elizabeth Kubler-Ross (1969).

The Kubler–Ross ModelKubler-Ross published her seminal work on ‘Death and Dying’ which described her work with terminally ill patients and the different psychological stages that they went through in coming to terms with their condition. Kubler-Ross realized that patients – given the necessary conditions – would typically go through five stages as they came to terms with their condition:

Denial: people faced with such potentially catastrophic change would often not be able to accept the communication. They would deny it to themselves. That is, they would not actually take it in, but would become emotionally numb and have a sense of disbelief.

Anger: When people allow themselves to acknowledge what is happeningthey enter the second stage, typically that of anger. They begin to ask themselves questions like, ‘why me?’, ‘How could such a thing happen to someone like me?’

Bargaining: When they have exhausted themselves by attacking others (or themselves) people may still want to wrest back some control of the situation or of their fate. This stage is identified as bargaining. For those who themselves are dying, and also for those facing the death of a loved one, this stage can be typified by a conversation with themselves. Or if they are religious, this may be a conversation with God, which ask for an extension of time.

Depression: When it becomes clear that no amount of bargaining is going to provide an escape from the situation people would enter a depression at this stage. For some, this depression can take the form of apathy or a sense of pointlessness. For others it can take the form of sadness, and for some a mixture of intense emotions and disassociated states.

Acceptance: At this stage people can in some ways come to terms with the reality of their situation and inevitability of what is happening to them.

The humanistic psychological approach to changeThe humanistic psychological approach to change combines some of the insights from the previous three approaches while at the same time developing its own. Humanistic psychology has a number of key areas of focus:

The importance of subjective awareness as experienced by the individual The importance of taking responsibility for one’s situation – or at least the assumption that

whatever the situation there will be element of choice in how you think, how you feel and how you act

The significance of the person as a whole entity in the sense that as humans we are not just what we think or what we feel, we are not just our behaviors. We exist within a social and cultural context

Maslow and the hierarchy of needs

Maslow researched what makes men and women creative, compassionate, spontaneous and able to live their lives to the full. He therefore studied the lives of men and women who had exhibited these traits during their lives, and in so doing came to his theory of motivation, calling it a hierarchy of needs

Self actualization needsSelf-esteem needs

Love and belonging needsSafety needs

Physiological needs

Maslow believed that human beings have an inbuilt desire to grow and develop and move towards something he called self actualization. However in order to develop self actualization an individual has to overcome or satisfy a number of other needs following the hierarchy given.

Rogers and the path to personal growthCarl Roger is one of the founders of the humanistic movement. He has written extensively on the stages through which people travel on their journey towards ‘becoming a person’. Rogers’ ‘client-centred approach’ to growth and development provide clues and cues as to how we as change agents might bring about growth and development with individuals within organizations. Rogers highlighted three crucial conditions for this to occur:

Genuineness and congruence: To be aware of your own feelings, to be real, to be authentic. The more genuine and congruent the change agent in the relationship, the greater the probability of change in the personality of the client.

Unconditional positive regard: acceptance of whatever feelings are going on inside the clients. Whatever feeling the client is experiencing, be it anger, fear, then that is all right.

Empathic understanding: Understand the feelings and thoughts of the clients which may seem to be horrible, weak, or sentimental and explore all the hidden roots.

Gestalt approach to individual and organizational changeGestalt therapy was originated from Fritz Perls. Gestalt use a cycle of experience to map how individuals and groups enact their desire:

Sensation Awareness Mobilization of energy action contact resolution

withdrawal of attention

Sensation: A favorite saying to Fritz Perls was to ‘get out of your mind and come to your sense’. Gestalt always begins with what one is experiencing. Experiencing has as its basis what one is sensing which determines the nature of awareness.

Awareness: What we sense outside of ourselves or within leads to awareness. Awareness comes when we alight or focus upon what we are experiencing. (data generation, sharing information etc.)

Mobilization of energy: It occurs as awareness is focused on a specific facet (Interest in an idea or proposal)

Action: The energy then need to be released typically by doing something, by taking action, by making contact in and with outside world

Contact: Joining in a common objective, common recognition of problem definition etc. Resolution: Making contact will then experience a reduction in energy, and will complete the

cycle by having come to a resolution (testing, checking for common understanding etc.) Withdrawal: After resolution the object of attention would fad in to the background. (tuning to

the other tasks or problems0

Personality and changeWe have looked at different approaches to change, and suggested that individuals do not always experience these changes in a consistent or uniform way. However, it has not been asked whether people are different, and if so, whether their differences affect the way they experience change. We have found in working with individuals and teams through change that it is useful to identify and openly discuss people’s personality types. The most effective tool for identifying personality type is the Myers Briggs Type Indicator (MBTI). The MBTI identifies eight different personality preferences that we all use at different times – but each individual will have a preference for one particular combination over others. The eight preferences can be paired as set out below:

Where individual draw their energyExtraversion is the preference for drawing energy from the external world, tasks and things, whereas Introversion is a preference for drawing energy from the internal world of one’s thought and feeling.

What individuals pay attention to and how they receive data and informationSensing is concerned with the five senses and what is and has been, whereas Intuition is concerned with possibilities and patterns and what might be.

How an individual makes decisionThinking is about making decisions in an objective, logical way based on concept of right and wrong, whereas Feeling is about making decisions in a more personal values-driven and empathic way.

What sort of life style an individual enjoysJudging is a preference for living in a more structured and organized world which is more orderly and predictable, whereas Perceiving is a preference for living in a more flexible or spontaneous world where options are kept open and decisions not made until absolutely necessary.

The MBTI research validated that if you are a particular type you have particular preferences and are different from other people of different types. This means that when it comes to change, people with different preferences react differently to change, both when they initiate it and when they are on the receiving end of it.

Chapter 4: Resistance to organizational change

Resistance: The conceptA review of the literature on resistance to change suggests that there is no commonly held definition for resistance to change as different approaches have been used by academicians and practitioners to conceptualize resistance to change. Some of the definitions given by researchers over the past decades fall within a wide spectrum and describe resistance to change as:“Resistance is any conduct that serves to maintain the status quo in the face of pressure to alter status quo.” – Zaltman & Duncan (1977)

“Resistance is an incomplete transition in response to change” – Bridges (1986)

Resistance to change is a multifaceted phenomenon, which introduces unanticipated delays, costs, and instabilities into the process of strategic change – Ansoff (1988)

“Resistance is the obstacle in the organization’s structure” – Kotter ((1995)

Nature of resistance: Positive or negative?Organizational change literature in the past has explored the notion of resistance to change as an annoying barrier which is needed to be overcome and also considered as a deviant behavior that needed to be cured. Ansoff’s definition of resistance also reflects the negativity in resistance to change.Recently an alternative to such a perspective has been observed as researchers are analyzing resistance as positive force. Waddell and Sohal (1988) point out that resistance could show change managers certain aspects that are not properly considered in the change process. Parren and Megginson (1996) said “ Resistance may be viewed as a ‘natural’ survival mechanism within organizations that tests, adapts and sometime stops decision by fallible and often ill informed senior management”.

Factors causing resistance to change Fear of the unknown: Such fear is due to uncertainty about the nature of change, feelings that

one does not know what is going on and what the future holds Loss of control: feeling that when the change is brought by another person an individual can loss

his/her control over the situation. Loss of face: Feeling of embarrassment as a result of change and discerning it in such a way that

the things that one has done in the past were wrong. Loss of competency: Feeling that the existing skills and competencies that the person has will

no longer be of any use after the change has been taken place. Need for security: Worry about one’s potential role after the change has taken place. Poor timing: Feeling surprised on how the change has been sprung on the person being asked to

change at a time when one already feels overworked. Force of habit: Feeling of comfort in the existing routines and habits and not liking to change

existing ways of doing things. Lack of support: Lacking the support of direct supervisor and/or organizations, not having the

correct resources to properly implement the change. Lack of confidence: Lack of confidence that once change has taken place, things will be better

than before.

Lingering resentment: feeling angry due to a lack of respect for the people involved and/or over the way one has been treated during past change efforts.

Resistance: The behavioral elementsThe behavioral elements that the resistance posses, if analyzed, provide information regarding the motivation of the resistors and help leaders decide their response towards them and the issues that may raise. O’ Connor (1993) while discussing the behavioral aspects of resistance gave forward a matrix that categories resistance on two dimensions:

Overt vs. Covert: Resistance in covert form occurs as the concealed and undefined and such resistance can completely avoid detection. In its overt forms, resistance appears in the form of open expression which may be accompanied by the reasons for such disagreement. Consequently, it is easier to manage overt resistance than covert.

Conscious vs. Unconscious: When resistance is unconsciously motivated, individuals are unaware that their behavior undermines change. Such kind of resistance is resulted due to previously set work routines based on wrong information. Unconscious resistance is difficult to detect by the management. Resistance with a conscious motive follows a consideration of the change, and may be based on misinformation or self serving motives. Such resistance may be tackled by debating as ignoring it may lead to increased resistance.

Based on these dimensions, O’ Connor (1993) proposed the matrix that categorizes four extremes of behavior corresponding to the four readily identifiable kinds of resistance:

Covert and conscious - The Saboteur : Such resistors undermine change but at the same time pretend to support it. They may verbally support the change while doing nothing about it wishing that the change initiative goes away so that there is little or minimal disruption and discomfort. This group also includes people who intend to sabotage the company or individual’s plan for change in order to attain their personal gain.

Covert and unconscious - The Survivor: The people under this category fail to meet targets or fail to understand the implications of their behavior. They don’t realize that they are undermining the change initiative. Such resistance is often undetected and the resistors themselves think they are doing a good job. Since most of the time their efforts are wasted.

Overt and Unconscious – The Zombie: This is the extreme case of survivor and is unable to change most of the time as a result of high degree of getting accustomed to acting in a particular way. In spite of verbally agreeing to a prescribed change role, they neither have the will or the ability to create the change and gradually revert back to their former behavioral patterns.

Overt and Conscious – The Protester: The protesters in their refusal to change believe themselves to making positive contribution to the organization and criticize every failure brought about by the change. Such resistors are easy to detect and are easy to manage as their resistance is open and they discuss their position clearly and rationally.

Resistance: The cognitive and affective processes

Organizational change causes individuals to experience a reaction process. In the study on resistance to organizational change and the role of cognitive and affective processes, Bovey and Hede (2001) developed a Behavioral Intentions Matrix based on the overt-covert and active-passive dimensions that helped in measuring the individual’s intention of engaging in supportive and resistant behavior towards organizational change:

Active Covert

Overt active reactionCovert active reactionResistance oppose argue obstruct

Support Initiate EmbraceResistance Stall Dismantle

Support Support Co- operateOvert passive ReactionCovert active reaction Resistance Observe Refrain Wait

Support Agree AcceptResistance Ignore Withdraw Avoid

Support Give-in Comply

While empirically testing the role of cognition and affect in change processes, these researchers surveyed individuals during the resistance phase of the change process in order to measure the associations between an individual’s irrational ideas and their behavioral intentions toward resistance. They found that irrational ideas, especially blaming, being inert and passive, not controlling one’s destiny, and avoiding life difficulties, are associated with resistance to change and individuals who posses higher levels of irrational ideas are more likely to resist organizational change. These associations strengthen as a result of the emotions involved in the process.

Recognizing resistance: The management’s challengeIt is essential for management to discover precisely ‘who’ and the ‘why’ of resistance. In many cases, resistors themselves are unaware of their resistance. Such situations arise especially when there is poor and insufficient communication about the staffs’ expected role in the change process and change is mismanaged from the top. On the other hand, the manager responsible for implementing change may not have understood the requirements or has chosen to resist the change while verbally agreeing to it. O’ Connor (1993) has provided five diagnostic questions, each of which act as a tool for recognizing resistance:

Do those who are responsible for change implementation realize that it is based on a serious need?

Do those involved describe the need for change in the same way? Is there a common end goal for change to which everyone agrees? Does everyone believe the goal is attainable and helps the organization? Is there a unanimous confidence in the person selected to manage the change?

Managing resistance to changeOne of the most challenging and baffling problems faced by managers in handling change is employees’ resistance to change. The resistance may be in the form of two kinds of reactions:

a) Explicit in the form of: Voicing disagreement Strike Go slow Employee turnover etc.

b) Implicit in the form of: Loss of loyalty Lowering of morale Absence Low tolerance etc.

It is mostly assumed that resistance is only negative and bad. But the fact is that the bad and good of resistance to change depend on whether it is based on sound principles or not. Managers responsible for managing change need to look into that aspect and also the following sources when implementing change:

Sources of individual resistance

Limited knowledge/lack of knowledge: In situations when people do not have sufficient knowledge about the causes and effects of changes they feel anxious and stressed and consequently resist change,

Myopia perception: When change is introduced employees are more concerned about how it affects them personally rather than how it would affect the entire organization.

Fear of the unknown: Uncertainty about the effects of change personally and professionally is another reason for individual resistance. A number of fear like loss of status, power, income, and uncertainty about their ability to cope with work pressure come in the way of accepting the change.

Aversion to risk: Change threatens those who like comfort of the familiar. Change often requires personal transition wherein the familiar is destabilized and some do not like to take that risk.

Sources of organizational resistance Inertia of a structure: A number of built-in mechanisms provide stability to organizations.

Every organization has got its own systems, processes, policies and procedures, which ought to be followed for uniformity and formalization of the process. Consequently any change in the structural aspects has cascading effect on other related systems and processes.

Challenge to power dynamics: Structural change with ensuing changes in decision-making pattern can destabilize power relationships over a period of time.

Pressure for observing group norms: It is common observation that a single member of a group accepts change suggested by the management willingly, but his group affiliation with a union does not allow him to do so. Therefore, to conform with group norms he is likely to resist change.

Lopsided/blinkered view of change: An organization consists of four basic elements/subsystems namely task, structure, technology and people. Focus on any one of the subsystems will bring about corresponding change in other subsystems which may make the change difficult.

Types of resistance Emotional resistance: It occurs due to employee attitude and feelings about change. Feeling of

insecurity, loss of self e, fear of the unknown, desire for status quo and/or mistrust in management can make people emotional to resistance.

Rational resistance: It is based on reasoning, logic and disagreement with the fact. It may result from the actual time and effort required in adjusting to change and the time given to adjust.

Social resistance: Resistance occurs due to social values, labor values, community values or political coalition. It can put a lot of moral pressure to resist when the change will go against values.

Implications of resistance For any change to be accepted by the employees cooperatively, it is important for a manager to

anticipate and handle the employees Recognizing the effect on social factors is extremely important for the success of any change

efforts It also should be considered that as people are different; their response to change would also be

different and may range from moderate support to weak support or even opposition to change.

The managers responsible for change need to develop a climate of trust with positive feelings toward most changes.

It is observed that when its management is not able to win the support of employees they use authority but if it is not used carefully it will defeat the purpose.

Methods of handling resistanceKotter and Schlesinger have suggested six major methods to deal with the resistance to change realizing the causes, sources, types and implications of resistance to change:

Chapter 5: Models of change

Education and communication

Where people lack information or have inaccurate information and analysis of the situation

Participation and Involvement

Where all the information needed to design the change is not available, and where others have considerable power to resist

Facilitation and Support In situations where people are resisting because they have adjustment problems

Negotiation and Agreement

There are chances of someone or some group losing out in a change, and where that group has considerable power to resist

Manipulation and Co-optation

Situations where other tactics will not work, or are too expensive

Explicit and Implicit coercion

Where sped is essential and the change initiators possess considerable power

Several models of organizational change have been developed by researchers. Two contrasting models of change are the ‘trickle down’ model vs. ‘identity search’ model. According to trickle down model, organizational change occurs because top management takes a decision and adopts new ways (technology, systems, structure etc.) and others follow it. On the other hand, the identity search model urge to develop one’s own uniqueness and identity which will make the group or individual accept change. These two models correspond to the approaches that organizations adopt like, the top down (classical) approach and the bottom up (living systems) approach.Thus the approach to organizational change may broadly be classified into two categories:

The top down approach An organization comprises of functional areas. Directives from the top management drive these areas through defined paths of command and control. The underlying assumption here is that, management needs to push hard to sustain change. This approach broadly adopts the following steps (Binney and Williams, 1997):

Developing a vision Communicating the vision Top management determination Planning and programming Adopting the best practice

The bottom up approachIt views organizations as systems that get affected by environmental change. Organization is considered to be a “learning” organization, with multiple feed back systems. Here change is considered as an on going process that occurs naturally. The characteristics of the system approach are:

Organizations need to be studied in relation to the contextual environmental factors such as structure, size, technology and leadership patterns

Organizations are composed of several interdependent subsystems Organizations are purposeful and comprise individuals, groups, structure, system, policies Organizations are adaptive, dynamic, flexible and interdependent Leader is democratic Recognition of the need for both change and stability Focus on the current reality in addition to future orientation Understanding and respect for the distinctiveness of each organization and its own specialized

need for changeSuch system allow for individual learning as well as greater social interactions. Here, the leader is more than the provider of clear vision and aids in the change process by facilitating, identifying and directing the emerging pattern of behavior and thinking. For greater understanding about the change, some of the models that have hold relevance and existed over a span of time can be categorized into three groups on the basis of their nature, analysis and treatment:

a) Process based modelsb) Content based modelc) Integrated models

Process based models

Lewin’s model of changeThis model is one of the early models of planned change. According to Lewin change underlies the modification of those forces that keep a system’s behavior stable. The level of behavior at any point of time is the result of two vectors – one aiming towards maintaining the status quo, and the others striving for change. When these two forces balance each other equally, the current behavior is maintained. According to Lewin, change in a system can be induced by either increasing the forces for change or deceasing the forces maintaining the current state or by applying a combination of both.In this model organizational change affects three levels:

Individual level (change affecting individual’s attitude, beliefs, values, skills and behavior) Structure and systems level (change affecting incentive system, information systems etc.) Organizational climate (change affecting leadership style, interpersonal relationship, decision

making etc.)In order to provide a basis for change at all these levels, Lewin model consists of the following three critical steps:

Unfreezing: This involves reducing forces that maintain the organization’s present behavior. This may be accomplished at the individual level by disconfirming individual’s present behavior. The individual here may be given information that reveals incongruity between the behaviors desired by organizational members and his/her current behavior. At the system level, new and more effective design like matrix may be demonstrated to initiate change. At the climate level, survey feed back methods may be used to understand and feel about certain management practices.

Changing/moving: This refers to the shift in behavior to a new level resulting in the development of new behavior, values, attitudes in individual through change in the organizational structure and processes. The change initiated must be perceived as solutions to problems identified during the unfreezing stage.

Refreezing: This is the stage where the organization stabilizes and achieves a new state of equilibrium and a preferred behavior. It is often accomplished through the use of various support mechanism like, awards, recognition, demonstration of benefits etc. The new state is made relatively secure against change until the next cycle of change is planned

Model of the Change Management ProcessGalpin (1996) proposed the model of the change management process which provides guidance for successfully implementing change. In his view a successful organizational change effort must target two levels – the strategic level and the grassroots level.Strategic change refers to the up-front, initial effort involving executives, senior managers, a small cadre of employees and often consultant, who provide an outside view. This kind of change has two goals – a technical or analytical goal (involving generation of recommendations for change) and a soft-side goal (involving creation of momentum for change)Grassroots change is the effort to drives change deep into an organization by stressing implementation at the local level. The primary goal here is to implement and sustain desired change

Top Management 1. Leadership Local ManagementA select few 2. Infrastructure Management, employees

and the massesThe entire organization 3. Diagnostics Specific sitesComparison of external benchmarking and best practices to internal

4. Comparison points Implementation of the best practices

Introduction and application of data collection tools and technique to a select few

5. Tools Application of implementation tools to the masses

Assessment of needs, some design and delivery

6. Training Assessment of needs & extensive design and delivery

Recommendations for change and momentum building

7. Outcome goals Implementation of change

Change does not usually occur in one leap but often entails several key stages along the way. In this model nine stages are shown to create and implement change. The nine stages require management within an organization to understand and apply the characteristics of both strategic and grassroots changes:

Stage 1: Establishing the need for changeThis stage involves identifying and articulating the need to change so as to help people understand why changes are required. The rationale for change is thus included along with the consequences of not changing.

Stage 2: Developing and disseminating the vision of the changePeople at this stage require a clear vision of where the organization seeks to go and hence the vision needs to be expressed in a way that allows for all organizational members to understand and relate to it and see their roles in achieving it.

Stage 3: Diagnosing/analyzing the current situationThe current process of the organization are analyzed and diagnosed and the observations are compared with the desired change as per vision. The implication of change can be diagnosed by using some analytical tools or techniques (such as cost benefit analysis, break-even analysis etc.).

Stage 4: Generating change process recommendationAt this stage, ideas are raised to improve, eliminate, combine and develop new process. Foraying into creativity, best practice comparisons and benchmarking are often sources for operating in new ways.

Stage 5: Detailing recommendationsThis stage includes consideration of details such as costs, hardware and software availability, and training needs. The merits of the ideas are evaluated on the basis of their cost effectiveness, implementation time and technology availability.

Stage 6: Pilot testing

At this stage, grassroots changes become essential since improvements are tried out within the organization. Pilot testing might not encompass the entire process but is often useful in fine tuning improvements before making organization-wide change.

Stage 7: Preparing recommendations for roll outHere the feed back obtained during the previous stage is used to finalize recommendations for roll out.

Stage 8: Rolling out changesAt this stage, a roll out schedule must be developed, materials and equipments lined up as it would facilitate conducting training as grassroots change gains paramount importance.

Stage 9: Measuring, reinforcing and refining changesThis stage involves consolidating the grassroots changes through measurement, reinforcement and refinement in order to achieve the intended results. Refinements are based on obtained feed back and are essential for enhancing the effectiveness of implemented changes and achieving the desired results.

Content Based Models

The Dissipative Equilibrium Model of the OrganizationThis model was proposed by Hunt, who viewed organization as rational action system which is characterized by system variables and effectiveness variables. Thus according to this model each organizational system is designed to achieve certain objectives, whose attainment is measured in terms of effectiveness on certain parameters. It is also said in this model that the organization always seeks to attain equilibrium and these variables (the system and effectiveness) are two sets of parameters that are involved in determining such an equilibrium. Consequently any change process or resultant change involves these two sets:System variablesThese include the following variables:

Formal structure: It refers to the arrangement of resources in such a way that there is a coordination between the organizational member’s activities and their interpersonal relationships in order to pursue organizational objectives.

Informal structure: The formal structure usually imbues organizational members’ values, beliefs and attitudes collectively. In addition to such collective cognition, there are other values, beliefs and attitudes that give rise to an organization’s informal structure that is much loose and unstructured and define the relationship among members.

Technical system: In any organization there exists a relationship between the organizational members’ work and the organizational goals. Such a link is provided by a technical system which includes the tool and machine system and the physical work constraints and relate to the procurement, disposal and adaptation of resources.

External pressure: As organizations are open systems, these are often subjected to pressures generated from outside. Such pressures are experienced in the form of communications between the members and nonmembers. Examples include complaints, and customer services.

Individual variables: Though an organization is basically a collective of its members’ role performances but each member joins an organization to fulfill certain needs. These needs define the individual variable and its strength is manifested in the individual’s motivation in satisfying his needs

Effectiveness variablesThese include the followings:

Achievement: Achievement can be understood at two levels – organizational and individual levels, though these two levels are not mutually exclusive. At the organizational level, achievement may be understood in terms of its relationships with technical systems and cooperation. Organizational goal achievement also requires cooperation among the organizational members. At the individual level, need satisfaction drives individual’s level of motivation that in turn, fuels more effective performance thereby resulting in greater possibility of organizational goal fulfillment.

Cooperation: Achievement of goals often is a result of organizational members’ shared values and belief systems. Such kind of shared systems pave the way for cooperation between members. In other words, perceived goals’ interdependencies lead to cooperation.

Destructive conflict: Conflict arises as a result of perception of conflicting goals among the organizational members. Organizations are structured into departments. Departments may

experience conflict between their respective goals and dissection of goals provides a focus for conflict development.

Need satisfaction: It is in order to satisfy certain needs that an individual works in an organization. The effort the individual expends results the enhances of his/her role performance and thereby results in greater satisfaction of the needs that lead him to become a member of the organization.

Need dissatisfaction: Formal structural hierarchy in the organization causes its members to become aware of the disparities that exist within the organization with respect to their salary structure, status and the like.

Hunt carried out empirical studies to test the validity and utility of his model, to further identify the interactions between the specific variables and to assess the strength of such interactions. Such efforts aid selection of the intervention chosen by the change agent in a way that these most closely appropriate and precipitate the desired outcome in the organization.

Bruke-Litwin Model of Organizational Performance and ChangeThe Bruke-Litwin (1992) model adopts the open system approach towards an organization. In this model the external environment serves as the input dimension and the individual and the organizational performance serves as the output dimension. The other remaining components in the model refer to the primary throughput dimensions. The feedback loop links the input with the output; and the arrows are bi-directional (organizational outputs – products and services affect the external environment and the forces in the external environment affect performance directly). For example change in the government policies or market conditions will affect organizational outcome and vice versa.The model’s underlying assumption is that a company is an organic entity and is made up of many individual components, each of which potentially plays a role in change efforts. Factors such as leadership, organizational mission, strategy and culture shape and drive an organization’s life in broad ways thereby playing transformational roles in the life of an organization. At the same time there are variables like a company’s structure, management practices, systems that help people conduct their jobs and factors like employee motivation, needs, job fit and work unit climate- that influence how work gets done on an actual every day basis. These factors influence organizational and individual performance at a transactional level. Successful change requires keeping both transformational and transactional variables in mind, and using one (or a combination) of them to shape and sustain change.

External Environment(1)

Leadership(3)

Management Practices(6)

Work Unit Climate(8)

Motivation(10)

Individual and Organisation Performance (A)

Mission and Strategy(2)

Organizational Culture

(4)

Structure(5)

Systems (Policies & Procedure) (7)

Task Requirements & Individual

Skills/Abilities(9)

Individual Need and Values (11)

In figure, boxes of the top half (1-4) represent the transformational factors. The changes occurring here are caused by direct interaction with external environmental forces and as a consequence require significantly new behavior from the organizational members. Changes in any of these boxes bring about discontinuous and revolutionary changes in the organization and affect the entire organization – the deep structure of the system and require a visionary leadership. According to the Bruke-Litwin model of change, planned change flows from top (External environment) to bottom (performance). The arrows that point downwards are given more causal weight. Thus, with respect to organizational change, external environment has the greatest impact. Inside the organization, the transformational factors have the greatest impact. According to the model, the external environment first affects the leadership. These are the senior executives and key decision makers who determine the mission and strategy, or bring about change in these; and in part shape the organization’s culture.

Integrated Models

The Nadler-Tushman Congruence ModelNadler and Thushman gave this model based on the following assumptions:

Existence of organizations as open systems Being open system organizations are influenced by the environment around and influence the

environment by their outputsHence, the model can be understood as having three parts: inputs, throughput or the transformational process, and outputs.

THROUGHPUTS

INPUTS Informal

Organisation

TaskFormal

Organisationarrangements

People

Environment; Available resources; Organizational history

Organisatio al functioning; Group behaviour, Inter-group relations; Individual behaviour

Strategy

InputsAssuming that inputs to an organizational system are relatively stable, Nadler and Thushman described four inputs to the organization:

Environment Resources within the reach of the organization Organization’s past (history) Strategies that were initially developed and have got refined over time

These inputs to the organization explain the behavior of members of the organization and also act as constraints as well as opportunities for action.OutputsNadler and Thushman have classified outputs into four categories – system functioning, group behavior, inter group relationships and individual behavior and effects. Systems functioning may be assessed through the organization’s attainment of its desired goal, utilization of its resources and coping with environment over time. The other outputs are behavioral in nature and are related to:

Performance of groups/units within the organization Extent of communication, differences/conflict resolution and collaboration among these units Behavior of the individuals in terms of turnover, absenteeism and good performance.

ThroughputsThe four major interactive components that constitute throughput or transformational process, wherein inputs are change into outputs include people, jobs or tasks, managerial structure and all relations of individuals, groups and subsystems.The concept of congruenceNadler and Thushman have gone beyond the description of the model’s components and relationship to give the concept of ‘fit’. As defined by Bruke “fit is the measure of the congruence between pairs of inputs and especially between the components of the transformational process”. Further Nadler and Thushman went on to contend that inconsistent fits between any pair would lead to less than optimal performance with respect to both the organization and the individual. They hypothesized that the better the fit, the more effective the organization will be. They also tried to diagnose:

The state of fit: It involves two related activities – determining fits between components, and the links between the fits and organizational outputs. To determine the fits between components, sufficient gathering of data and analysis is imperative. In order to diagnose the latter, change agents must concentrate on the outcome of diagnosis of the fits between different components and their behavioral consequences on the set of behaviors associated with outputs. This helps in identifying certain critical organizational problems and the addressing of these problems induces change in the system, following which the system is monitored and evaluated using the feedback loop.

The Managing Change ModelThe managing change model (Burke and Spencer-1990) offers an integrated perspective. This framework combines the strengths of various theoretical perspectives and incorporates important issues involved in evaluating the overall effectiveness of the change process. The model consists of the following dimensions:

Individual response to change: Concerning the nature, prevalence, and utility of resistance to change.

The general nature of change: concerning whether effective large system change is evolutionary or revolutionary in nature.

Planning change: concerning the causes of change in organizations, articulation of the vision, how to get from the present to the future, and barriers to effective transitions.

Managing the people side of change: concerning how, when, and how much to communicate about change within the organization, and psychological issues related to transitions.

Managing the organizational side of change: Concerning the design and structural issues of systemic and long term change efforts.

Evaluating the change efforts: concerning indicators of change effort’s effectiveness.

Knowledge of the change Process

Evaluating change

Managing “people” side of change”

Managing “Organizational

” side of change

Planning change

Individual response to change

General nature of change

Knowledge of fundamental aspects of change

Chapter 6: Organization structure and change

The term organizational structure refers to the formal configuration between individuals and groups with respect to the allocation of tasks, responsibilities and authority within the organization. In an era of globalization, rapid technological changes, and intense competition, new forms of organizational designs and networks have replaced traditional forms of organizational structure. Structure has been considered as the most important and powerful influence within the organization. If we do not deal with structure, we would not be able to change the organization fundamentally. With an understanding of structural principles we can redesign our organization so that change will finally succeed. To do so we need to realize the perspective and forms of existing organizational structures.

Perspectives of organizational structureTwo major perspectives are:Classical universal approach to structure: This is a universal set of principles, which can be used in the design of the structure of any organization. A number of structural principles were advanced which were believed to be applicable in all organizations. The publication of these principles in the 1980s led to the advancement of this theory. Organizations that performed well, both in terms of growth and profitability, were declared as excellent. The attributes for measuring their success were also chosen. The inference was that if other organizations applied the principles derived from such organizations, they would also benefit (Thornhill 2000). Out of the eight attributes, three are related to structure:

Adopting leanness in relation to the design of the organization and its staffing. Model of accountability based on developing responsibility through decentralization while

ensuring centralized control over core values and through financial targets. Creation of small empowered teams on a flexible basis, whose sole task would be to find a

relatively rapid solution to a significant business problem, rather than working through a bureaucratic or formal route to solve the issue.

Contingency approach to organizational structure: It suggests that an organization’s strategy and structure are contingent on the circumstances confronting the organization. Contingent theorists believe that if an organization’s structure has not been designed to take account of the demands created by the environment and the characteristics of the organization, this will adversely affect its effectiveness and performance.

Forms of organization structurePositions in the organization can be figured and explained in terms of their authority and responsibility which make the design of an organization. There are three common organizational designs found in use:The simple structure: A structure characterized by:

• low degree of departmentalization• wide span of control• authority centralized in a single person• little formalization.

The bureaucracy: A structure with:• Highly routine operating tasks achieved through specialization• Very formalized rules and regulations

• Tasks that are grouped into functional departments• Centralized authority• Narrow span of control• Decision making follows the chain of command.

The matrix structure: The matrix structure combines a functional, and market or project centred arrangement. This type of structure is designed to combine the efficiency of a functional approach with the responsiveness implied by a product or market centred approach. A person has to report to essentially two heads: one is project leader and the other is functional leader. Organizations which are operating with a functional structure, might form a matrix structure for a part of the company for special projects.

New design optionsThe team structure: The primary characteristics of the team structure are that it breaks down departmental barriers and decentralizes decision making to the level of work team. This type of structure somewhere treated as SMT (Self Managed Team).The virtual organization: It is also called as Network or Modular organization. It’s typically a small, core organization that outsources major business functions. This structural form allows each project to be staffed with the talent most suited to its demand.

Futuristic organizational modelAbacus organization: The Abacus structure can be a sort of a matrix organization where there are product (product) areas and geography (countries). Networks transfer knowledge, provide support and open communications. There is a lot of possibility here to escalate globally through information sharing.EcoNet organization: The EcoNet structure looks like concentric circle (small circle represent businesses). Here the emphasis is not only on the concept of ‘small is beautiful’, but also on speed and boldness in decision making, culture and remuneration, therefore, access to talent.Spaghetti organization: This is a kind of boundary-less organization. There are no titles, no department, and no personal office space. This structure is physically and organizationally informal. Small management teams sponsor and lead projects and the key is the information system and knowledge base.

Purposes of organizational design To support the organization’s strategy and vice versa To reorganize resources in the most efficient and effective way To provide the effective division of task and accountabilities among individuals and groups To ensure effective coordination of the organization’s activities To enhance and clarify the lines of communication To allow for the effective monitoring and review of the organization’s activities To provide mechanisms for coping with change

RestructuringWe trained hard. But it is seemed that every time we were beginning to form into teams, we would be reorganized. I was to learn later in the life that we tend to meet any new situation by reorganizing. And what a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency, and demoralization – Gaius Petronius Arbiter.

Restructuring as a theme for change might seem a little strange because it might not be meaningful unless the reasons behind the change are justified.

Reasons for restructuring Downsizing or rightsizing (market conditions or competitiveness) Rationalization or cost cutting (market conditions or competitiveness) Efficiency or effectiveness (drive towards internal improvement) Decentralization or centralization (drive towards internal improvement) Flattening the hierarchy (drive towards internal improvement) Change in strategy (strategy implementation) Merger or acquisition (strategy implementation) New product or service (strategy implementation) Cultural change (strategy implementation) Internal or external crisis (unforeseen/unplanned change)

The restructuring process Strategic review and reasons for change: Any attempt to restructure needs to have a clear

communicable rationale. This will typically come from a review of strategy that highlights the need to address a specific issue relating to the internal or external business environment. Example: restructuring is often done to improve customer responsiveness, gain market share or improve organizational efficiency.

Critical success factor: Planning a structure requires the generation and understanding of critical success factors. Because if they are met, they will ensure success for the new structure. For example, the new structure will facilitate a performance and feed back culture across the organization.

Design options: Design options are the different ways in which the particular organization can be structured. It is important to demonstrate that the success factors will be better achieved this structure rather than any other one.

Risk assessment: As each options have some limitations, organization will need to identify the specific risks associated with moving from one structure to another. The management needs to understand fully the nature of these risks. For example, risk may be associated with consistency, corporate identity, cost effectiveness etc.

Learning from previous projects and best practices: Clearly we don’t have to reinvent when it comes to restructuring. The most organizations have a reservoir of knowledge as to what has worked before and what has not worked. Now is the time to check back to see what the learning are from previous change projects. We also sometime rely on the best practices. In terms of best practice there are many resources like, a wide range of literature, professional bodies and consultancy firms. It is important to get the right balance between what has worked elsewhere and what will work in our organization.

Project planning: Now it’s the time to make a complete plan to operate the new structure. At this stage the change agents will make a communication plan, selection/recruitment plan and contingency plan.

Implementation: The complexity of the restructuring task is often underestimated. Timescales are often not met. Staff directly affected by the change and potentially facing redundancy are subjected to undue stress because the whole process takes too long to complete. So, in order to

make the restructuring smooth the management needs to provide visible support, continued communication of the purpose, and constructive consultation.

Monitoring and review: monitoring and review is not something just to be done at the end of the process and written up for the next time. The restructuring plans need to be monitored constantly to see how both the task and people aspects of the plan are progressing. Feed back loops need to be built into the plan so the senior managers and the those responsible for implementation have their fingers on the pulse of the organization

Chapter 7: Organizational Culture and Change

If a manager of an organization is asked to give a new recruit some words of encouragement on how to be successful within the organization, what would he say? He might give some formal advice about carrying his ID at all times, but he might also make some of the following suggestions:

Keep your head down It’s OK to make mistakes here, as long as you don’t repeat them The boss likes to see you working really hard at all times It does not pay to ask too many questions You will find everyone pulls together here and will want to see you as part of the team

With this helpful advice, he begins to educate the person about the way things get done around the organization. He also reveals what some of the required behaviors are, and thus he actively reinforces the prevailing culture.As Schein (1990) says, culture is the ‘pattern of basic assumptions that a given group has invented, discovered or developed in learning to cope with its problems of external adaptation and internal integration’.Culture is not just about induction programs, it is everywhere in organizational life. Molenaar (2002) says, ‘the characteristics of the culture must be understood for truly understanding the corporate culture’. The following is a compilation of the most cultural characteristics:

Corporate culture represents behaviors that new employees are encouraged to follow (Kotter and Heskett)

It creates norms for acceptable behavior (Hai) Corporate culture reinforces ideas and feelings that are consistent with the corporation’s

beliefs (Hampden – Turner) It affects worker motivation and goals (Hai)

If we want to learn about how to change culture, we need to understand how it is created. Schein suggests that there are six different ways in which culture evolves. Some of these can be influenced by leaders and some can not:

A general evolution in which the organization naturally adapts to its environment A specific evolution of teams or subgroups within the organization to their different

environments A guided evolution resulting from cultural ‘insights’ on the part of leaders A guided evolution through encouraging teams to learn from each other, and empowering

selected hybrids from sub-cultures that are better adapted to current realities A planned and managed culture change through creation of parallel systems of steering

committees and project oriented task forces A partial or total cultural destruction through new leadership that eliminates the carriers of the

former culture (turnarounds, bankruptcies etc.)

Nature of organizational cultureThe culture of an organization may reflect in various forms and norms adopted by the organization:

The physical infrastructure Routine behavior, language, ceremony Gender equality, equity in payment Dominant values like quality and efficiency

Philosophy that guides the organization’s policies toward its employees and customers like ‘customer first’ and ‘customer is king’ and the manner in which employees deal with a customer.

Levels of organizational cultureOne comes across a number of elements in the organization, which depict its culture. Organizational culture can be viewed at three levels based on manifestation of the culture in tangible and intangible form:

Level 1: Organizational culture can be observed in the form of physical objects, technology and other visible forms of behavior like ceremonies and rituals. Though the culture would be visible in various forms, it would be only at the superficial level. For example, people may interact with one another but what the underlying feelings are or whether there is understanding among them would require a further probe.

Level 2: At this level, there is a greater awareness and internalization of cultural values. People in the organization try solutions of a problem in a typical way, which has been the method tried earlier. If the group is successful there will be shared perception of that success. Through perception there is a cognitive change, which turns this perception into values and beliefs.

Level 3: When the group repeatedly observes that the method that was tried once works most of the time, it will be taken as the ‘preferred solution’ and will covert the values into underlying assumptions or dominant value orientation. An organization’s current traditions, customs and the ways of doing things are largely due to the success it had with those endeavors. We have examples of this in WIPRO, culture and NIIT culture where quality, competitiveness, customer satisfactions and leadership are greatly emphasized.

Functions of organizational culture and changeCulture being the genetic code of an organization has significance from various perspectives. It is observed that small organizations draw on organizational culture and achieve competitive advantage in a niche market because these are able to change and adapt themselves to changing market needs. One can find example of this in Southwest Airlines in the USA, which provided cheap air transportation for a number of years. However, big firms like IBM and Sony have penetrated the world market through various business strategies and culture of effective managerial practices. Thus organizational culture can contribute in the following ways:

Culture supplements rational management: Creation of appropriate work culture is a time-consuming process. Therefore, organizational culture can not suddenly change the behavior of people in an organization, a number of management tools are used to channelize the behavior of people in a desired way. No change can effectively brought about without involving people. Culture communicates to people through symbols, values, physical settings, language and thereby supplements the rational management tool such as technology and structure.

Culture facilitates induction and socialization: Induction is a process through which new entrants to an organization are socialized and indoctrinated in the expectations of the organization, its cultural norms and undefined conduct. The new comer takes the culture of the organization that may involve changing his/her attitudes and beliefs for achieving an internalized commitment to the organization.

Culture promotes code of conduct and customer focus: Strong culture in an organization explicitly communicates accepted modes of behavior so that people are conscious that certain behaviors are expected and others would never be visible. While on the one hand promotion of culture of quality, customer focus, responsiveness can help achieve good business results and

customer satisfaction and retention; on the other hand, inappropriate culture can be detrimental to organizational interests and act as an obstacle in transforming the culture of the organization.

Subculture contributes to organizational diversity: Sub-cultures, subsystems of values and assumptions, which may be based on departmentalization, activity centre, or geographical location, provide meaning to interests of localized specific group of people within the macro organization. Subculture can affect the organization in one of the following ways: 1) These may strengthen the existing culture; 2) Promote something different from the present; 3) Promote totally opposite subculture or counter culture in a difficult situation (care needed to exercised when promoting a counter culture as it may be detrimental to larger organizational interest).

Change in Culture: Cross Cultural ResearchHofstede’s framework for assessing culturesOne of the most widely referenced approaches for analyzing variations among cultures was done in the late 1970s by Geert Hofstede. He surveyed more than 116000 IBM employees in 40 countries about their work related values. He found that managers and employees vary on five value dimensions of national culture. They are listed and defined as follows:

Power distance: The degree to which people in a country accept that power in institutions and organizations is distributed unequally.

Individualism vs. collectivism: Individualism is the degree to which people prefer to act as individuals rather than as members of group. Collectivism emphasizes a tight social framework in which people expect other in groups of which they are a part to look after them and protect them.

Masculinity vs. femininity: Masculinity describes the extent to which the culture favors traditional masculine work roles of achievement, power and control. Femininity is characterized by the culture attribute that has little differentiation between male and female roles, where women are treated as the equals of men in all aspects of the society.

Uncertainty avoidance: A national culture attribute describing the extent to which a society feels threatened by uncertain and ambiguous situations and tries to avoid them.

Long term vs. short term orientation: It focuses on the degree of a society’s long term devotion to traditional values.

Guideline for achieving successful cultural changeEsther Cameron & Mike Green draw together some of the key themes arising from their experience, which they think will help the managers to address the issues of cultural change in their organizations:

Always link to organizational vision, mission and objectives: Culture change as an isolated objective is meaningless. Organizations should only involve themselves in culture change if the current culture does not adequately support the achievement of strategic objectives. Ensure that there is a clear vision and a real need to change. People need to be convinced by a compelling vision rather than compelled in a coercive way. They need to see the overwhelming logic of the proposed change. The more people are drawn towards the vision the better.

Create a sense of urgency and continually reinforce the need to change: The introduction of a foreign element into the organizational system is a good way of making change happen. This can come from external or internal source. Whatever it is, it needs to have the force to kick start the culture change process. And there need to be plans and processes in place which keep the momentum going.

Attend to stakeholder issues: When you want culture to change you have to put yourself into the shoes of stakeholders. Address the issue of the people who need to change by involving them as much as possible. Whether change is being proposed for positive or negative reasons the organization’s future success is dependent on engaging staff to enter into the new way of doing things.

Remember that the how is as important as the what: Culture is about the way do things around the organization. So if your organization has a set of core values, then you need to manage the cultural change in line with these values. If you say one thing but do another then you might as well give up now. For instance, a stated value of ‘integrity’ is rather hollow if senior managers do not keep their promises, or fail to explain why the plan has been changed.

Build on the old, and step into the new: You will need to retain and build on the current strengths and ensure that you do not throw the baby out with the bathwater. You also need to start in modeling aspects of the new culture – if you want a coaching culture then start coaching; if you want people to be empowered then start empowering.

Generating enabling mechanisms: It is important to generate enabling mechanisms such as reward systems and planning and performance management systems that support the objectives and preferred behaviors of the new culture. For example, this means ensuring that teams have clear objectives that are closely aligned to organizational objectives.

Act as role models: Managers need to act as role models. They will need to model the new values but also support individuals and teams through a period of upheaval. This can be done through using some of the strategies like, working with teams through the stages of forming and storming, and working with individuals as they adjust to the new ways of doing things.

Insist on collective ownership of the change: One common trap is to make the HR department the owners of cultural change, while the CEO and the senior management team own the changes in business strategy. This type of functional decomposition of a change initiative is doomed to failure. When people will be treated as the owner of the change they will be enforced to make it effective.

Chapter 8: Roles of Change Agents and Leadership

Persons who act as catalysts and assume the responsibility for managing change are called change agents. Change can be brought about by managers, non-managers, employees or an outside consultant. So the change agents may play one of the following roles:

Internal consultant: One of the important roles played by the change agent is that of an internal consultant. When the change is initiated by the management of the organization that is treated as internal consultant. The management needs to have extensive understanding of the environment surrounding their organization and have a fairly good idea about threats and opportunities. Therefore, as an internal consultant he/she needs to monitor and scan external drivers of change.

External consultant: It is often observed that organizations engage external consultant as expert who has a fairly good knowledge about comparative business situation and has the experience of handling change in a variety of organizations. In such a situation, the consultant needs an internal resource person/s who would act as facilitator in implementing change.

Task force: With a view to bring about transformation in the organization, the management creates a task force or a group of like-minded people who share commitment to renewal programs. Such a task force needs to strong and powerful in terms of expertise, reputation, communication skill and relationships.

The role of organizational management in the change processFor a successful management of change, the organizational management as change agent needs to follow the following steps that would serve as building blocks:

Freeze change (Providing support to sustain in embedded change)Implementing change

Managing transition (Incremental changes for improvement)Communicating effectively (Developing awareness/winning confidence)

Challenging the status quo (Stirring the environment of psychological discomfort)Developing visionary leadership (Creating shared vision)

Predicting and managing resistance (Mobilizing commitment)Developing process of change/culture

Role of leaderThe change agent needs to play the following role as leader:

They need to inspire a shared vision, a clear image of the future to take the people along They need to inspire trust and make people believe that they have their interest at their heart In order to unite people they need to forge unity of purpose, by expressing enthusiasm for the

compelling vision of the organization They need to challenge the status quo, which is ineffective and search for options and

opportunities to innovate, grow and improve They need to develop collaboration by promoting cooperative goals and developing trust among

people They need to recognize and appreciate individual contributions and excellence and encourage

people to share and celebrate common success

Level 5 Leadership: Good to GreatCollins (2001) has given alternate model of organizational change based on his team’s research of financial performance of 1435 firms, which appeared in the list of ‘Fortune 500 Companies’ during 1965 to 1995. The list included only those companies that had sustained performance for at least 15 years. Out of these firms only 11 made a leap from being a good to a truly great company. All these companies were led by modest and capable men who were reserved and had a strong determination to make the firm great. They had personal humility and professional will; Collins levels them as Level 5 leaders. He found that every good to great company had Level 5 leaders during critical transition and journey to greatness had six common steps:

First who then what: These leaders focused on choosing their team before developing vision and goals. This shows their focus on person based on their talent and skills.

Confront the brutal facts: These leaders confronted the reality squarely and did not evade the situation. They also had faith in the capability of their organization to meet the challenges.

The Hedgehog concept: These companies aimed at being the best in the world; and nothing short of it. They were consistent and passionate about applying the fundamental principles and key economic denominator that made them great.

A culture of discipline: The great companies hired disciplined people and had a culture of self discipline in thought and action. The firms had a consistent system and gave freedom and autonomy to people.

Technology accelerators: These companies used technology to enhance business results and did not focus on pioneering a technology; in fact these became pioneers in application of some of the technologies.

The Flywheel and the Doom loop: In these companies transformation from good to great happened through relentless hard work and sustained efforts in one direction for a long period of time building momentum till the company reached the point of break-through and crossed it. It is evident that organization transformation is neither simple nor one off effort. Sustainable efforts and momentum in a specified direction bring about this change.

Transformational and transactional leadershipThese two styles are not mutually exclusive but have difference in approach and focus. These are followings:

Transformational leadership Transactional leadership Promotes change Shares vision, values, and emotional

bonding Provides intellectual stimulation Develops pride, gains, trust and respect Provide personal attention

Maintains stability Goes into contractual arrangement

Provide guidance & role clarification Promises reward for performance Interactions mostly formal and officious

Key competencies of the transformational leaders in managing changeAn effective change leader should have the following skills:

Clarity of goals: Goals clarity implies the strategic intent. As a change agent the role of a leader is to be a part of the process by which the implicate order unfolds. Learning about the process he/she needs to clarify it to the implementing body clearly.

Clarity about role: It’s important for a leader as a change agent to identify a viable and effective role in nurturing the future where everything appears to be a roadblock. It is to be understood by the leader that the course of change can not directly be affected by the leader himself but at times it may be desirable to wait and watch to mentally reflect on the process of change.

Professionalism and knowledge of subject: The leader is required to have personal and professional competence. Through understanding about various dimensions of change, the nature of change, its impact on various elements of the organization will facilitate execution of change. Without a thorough knowledge of the subject, he is likely to be misled.

Creativity and innovativeness: For leading the change it is important for the leader to develop new ideas, models, and application of technology that differentiate from the run of the mill and help it stand apart.

Collaborative and networking skills: Change requires collaborative efforts, therefore, skills to work with people, making connections within and outside the organization are important to extend an organization’s reach, promote its offerings and energizing people.

Leading changeThe role of leader is to facilitate change that helps in improving organizational performance. But the challenge before a leader is how to be effective in the face of dissatisfaction, discomfort, dislocation and increased stress among people. Various organizations adopt various strategies. The management can take action in favor of change in the form of behavior modification and providing training opportunities. Alongside, management needs to knock down or eliminate barriers that prevent people from resisting change. But the management as change leader requires a bit different actions to perform, like:

Establishing relevance: It is not enough for the change leader to create a sense of urgency but in order to get a high level of commitment from the employees they need to see the relevance of change. In other words, the change leaders need to get into the shoes of the employees and see from the employees perspective about the impact of change.

Asking right questions: The starting point of any change process is enquiry, which means asking relevant and strategic questions. People are also required to visualize the future and identify various possible scenarios. One of the methods to take initiative could be benchmarking against the best practices or to set up internal benchmark to improve performance.

Changing the mindset: Transforming individuals can bring about organizational transformation. The process starts with changing oneself. The change master requires a candid self appraisal and see if he has the qualities – flexibility and understanding. It is important because every word spoken or every action taken by the change leader either reinforce or undermines the change efforts.

Declaring every victory: As the process of change may take years before providing any significant return, people may lose patience and therefore, the leader needs to make an effort to do things that produce results. This implies that opportunities for early victories have to be identified while pursuing the change efforts.

Becoming your own competitors: Leadership results from competing against one’s own achievement than against competitors only. This spirit promotes learning, experimenting and evolving.

Leading change involves coalition: Coalitions are highly beneficial in brining about change. Firstly, they help in having a broad base of ideas and a broader perspective. Secondly, by involving a large number of people the likelihood of support for change increases.

Creating a learning organization: The concept of learning organization has now been considered as a prerequisite for developing competencies, having a competitive advantage and enhancing productivity. Organizations, like individuals, need to learn overcoming their learning disabilities and blind spots. Learning involves listening, questioning, reflecting, challenging or experimenting.