What Is the Meaning of Organizational Change?

• Organizational change is about reviewing and modifying management structures and business
processes. Small businesses must adapt to survive against bigger competitors and grow. To stay
a step ahead of the competition, companies need to look for ways to do things more efficiently
and cost effectively.

Factors forcing change in an organization

 A company's change drivers include the

 competitive environment

 new technologies

 consumer demand

 economic conditions

 government policy actions

 The entrance of a new competitor into a market can cause a business to change its marketing
strategy. For example, a small electronics store that was the only game in town might have to
change its image in the marketplace when a large chain store opens nearby. While the smaller
store might not be able to compete in price, it can use advertising to position itself as the
friendly, service-oriented local alternative

 New business models, such as outsourcing and virtual collaboration, would not be possible
without high-speed communications and the Internet.

 Government regulations also force businesses to adapt, as do changing consumer preferences.

 Recessions usually lead to layoffs, which may require restructuring, and mergers and
acquisitions lead to changes in organizational culture.

TYPES OF ORGANISATIONAL CHANGE

 Structural Changes: These types of changes typically impact how a company is run, from the
traditional top-down hierarchy. Some examples of these types of changes include the
implementation of a new, company-wide computer system or a company-wide non-smoking
policy. It can be also considered as transformational changes

 Strategic Changes
 When a company must drastically adapt to external factors, it may undergo a major strategic
change. Strategic organizational changes are usually quite transformative, as they typically
include major adjustments or complete upheavals of the current way the company operates

 People Changes

 People changes can be large-scale or incremental. Large-scale people changes include replacing
the top executives with new employees in order to change the entire company culture. Smaller-
scale or incremental people changes may include sending management personnel to team-
building workshops and classes.

 Process Changes

 Process changes are usually an attempt to improve overall workflow efficiency and productivity.
They may include implementing technology changes, such as robotics in manufacturing, or
requiring sales teams to begin documenting and reporting activities in a new way. Another
example of this type of change is when a grocery store chain implements self-scanning checkout
counters to improve customer processing times.

Levels of Organizational Change

 Organizational change is a term used to describe actions taken by a company in order to

improve efficiency or the quality of products or services. There are several levels of change from
which organizational change can be implemented depending on whether a business wants to
take minimum or maximum risks, according to Organized Change Consultancy

 Change management is an approach to transitioning individuals, teams, and organizations to a

desired future state.

ORGANIZATION CHAGE PROCESS

1. Asses need for change/Find source of the problem

2. Decide on the change/Identify obstacles

3. Implement change/Top-down or bottom-up

4. Evaluate the change/Is it successful?

Benchmark to others

Organizational Change Theory

Kurt Lewin developed a theory about organizational change called the force-field theory. George
and Jones describe the force-field theory as follows:

a "wide variety of forces arise from the way an organization operates, from its structure, culture

and control systems that make it resistant to change. At the same time, a wide variety of forces
arise from changing task and general environments that push organizations toward change.
These two sets of forces are always in opposition in an organization." For an organization to
change, managers must find ways to increase the forces for change, decrease the resistance of
change, or do both at same time

Evolutionary Change
 Evolutionary change is described by George and Jones as "gradual, incremental, and narrowly
focused." It is not drastic or sudden, but a constant attempt to improve. An example of
evolutionary change is total quality management that is consistently applied and shows
improvement over the long term

ORGANISATIONAL CHANGE THEORIES

There are many theories about organizational change, but this paper will examine only two
theories which are; system and complexity theories. Systems and complexity theories are two
valuable perspectives that can equip organizational leaders with the requisite knowledge and
understanding of how to respond and adapt to the uncertainties and demands of global change.
These two paradigms are particularly

Useful in the areas of organizational intelligence, organizational design, knowledge

management, and corporate strategy, to mention but a few.

SYSTEM THEORY

 Systems theory is a concept that originated from biology, economics, and engineering,
which explores principles and laws that can be generalized across various systems. A system is a
set of two or more elements where the behavior of each element has an effect on the behavior
of the whole, the behavior of the elements and their effects on the whole are interdependent,
and while subgroups of the elements all have an effect on the behavior of the whole, none has
an independent effect on it. In other words, a system comprises of subsystems whose inter-
relationships and interdependence move toward equilibrium within the larger system.

COMPLEXITY THEORY

Complexity is defined as the measure of heterogeneity or diversity in internal and

environmental factors such as departments, customers, suppliers, socio-politics and technology.

Complexity theory focuses on how parts at a micro-level in a complex system affect emergent
behavior and overall outcome at the macro-level. As the complexity of a system increases, the
ability to understand and use information to plan and predict becomes more difficult. Over time,
the increasing complexity leads to more change within the system. As the system becomes
more complex, making sense of it becomes more difficult and adaptation to the changing
environment becomes more problematic.

EVALUATING THE COMPARATIVE EFFECTIVENESS OF DIFFERENT APPROACHES TO CHANGE

Kotter and schlesinger set out the following six change approaches to deal with change.

 Education and communication: when there is lack of information or inaccurate information and
analysis, one of the ways to overcome the resistance to change is to educate the people about
the change before hand, upfront information about the change helps employees see the logic in
the change effort. This reduces incorrect rumor concerning the effect of change in the
organization.

 Participation and involvement: when employee is involved in the change effort they are more
likely to buy into the change rather than resist it.

 Facilitation and support: when people are resisting change due to adjusted problems, managers
can reduce the resistance by being supportive; manager’s helps employees to deal with fear and
anxiety during a transition period.

 Negotiation and agreement: when someone or some group may lose out in a change or where
that individual or group has considerable power to resist, managers can combat resistant by
offering incentive to employees not to resist the change. This approach can be used when those
resisting change are in position of power.

 Manipulation and co-option: this approach involves patronizing gesture in bringing a person into
change. This often involves selecting leaders of the resisters to participate in the change effort.

 Explicit and implicit coercion: managers can explicitly or implicitly force the employees into
accepting change by making it clear that resisting to change can lead to losing of job, firing,
transferring or not promoting employees.

ORGANISATIONAL AGILITY AND MANAGING COMPLEX SYSTEM CHANGE

Implementing organizational agility requires managers to regard all areas of the business as
potentially subject to change. They must recognize change as coming from the external world of
customer demands, competitor

Influences, technical advances, legislative changes, macro-economic shifts and so on, and not
simply as an internal activity. They must also be able to use available resources in a timely,
flexible, affordable and relevant manner, in order to respond to those changes effectively.
Organizations who understand how to manage constant, integrated change are far more
effective and profitable / cost-efficient than those who treat change as a series of disconnected
projects.

CONTIGENCIES RELATED TO CHANGE SITUATION

 Readiness for change: Organizational readiness for change is a multi-level. Readiness for change
refers to organizational members' shared resolve to implement a change (change commitment)
and shared belief in their collective capability to do so (change efficacy).

 Capability to change: Change capability is the ability of an organization to plan, design, and
implement all types of change efficiently with committed stakeholders, causing minimal
negative impacts on people and operations, so that desired business and cultural results from
change are consistently achieved and integrated seamlessly into operations to deliver maximum
ROI.

 Cultural context: Cultural Context can be defined by our upbringing and cultural background.
This refers to thoughts, opinions and feelings that result from experiences.

 Capability of change agent: the capabilities of a change agent include: flexibility, tolerance of
ambiguity, enthusiasm, networking, sensitivity, political ability, and team building.

CONTIGENCIES RELATED TO THE TARGET OF CHANGE

Researchers have identified a number of contingencies present in the change situation

that can affect intervention success. These include individual differences among organization
members (for example, needs for autonomy), organizational factors (for example, management
style and technical uncertainty), and dimensions of the change process itself (for example,
degree of top-management support). Unless these factors are taken into account, designing an
intervention will have little impact on organizational functioning or, worse, it may produce
negative result.

CULTURAL DIFFERENCES IN APPROACH TO CHANGE

 Individuals are thought to belong to multiple cultures with various "currencies," which
intermingle to make up our "world view". These "world views" are thought to be influenced by
three "domains of culture": social and moral guidelines, practical knowledge, and transcendent
explanations. Thus, a person's world view is essentially the way they see the world through their
own "cultural lenses." Included in their world view is their "identity," which is essentially how
they see themselves in relation to the world. Identity is a construction based on both cultural
influence and personal characteristics.

THE ROLE OF LEADERSHIP IN CHANGE

Leadership Competences for Effective Change Management

 Cognitive Competences : Creativity, Self Reliance, Problem solving capabilities, Analytical Skills,
Divergent Thinking, Future Oriented, Good consultation, Critical Approach.

 Functional Competences: Communication Skills, Technological/Special knowledge and Skills,

Career planning Skills, Managerial abilities, Strong Decision Making abilities, Knowledge abilities.

 Social Competences: Interpersonal Skills, Team working abilities, Cross cultural abilities, Flexible
to others, Stress Management Capabilities, Motivational Role/ Skills, Ethical Skills, Integration
Skills, Mobilizing People
 Successful Change: Increase in Productivity, Increase in Relationship Quality, Strong
Cooperation, Strengthen Organizational Culture and Climate, Employees’ satisfaction, Reduce
number of Conflicts.

SUSTAINABILITY OF CHANGE

Because change is complex, Successful sustainability change Leaders must continually ask Two
key questions:

 “What are we trying to achieve?”

 “What is our theory of success?

Steps to Sustainability of change

 Educate employees

 Set attainable goals

 Recycle as much waste as possible Communicate.

 Celebrate an “Earth Day”

 Discuss and promote how they’ve impacted the bottom line and achieved goals

 Discuss the “beyond the business” implications

THE HISTORY OF THE FIELD OF ORGANISATION DEVELOPMENT

 In the late 1960s organizational development was implemented in organizations via

consultants, but was relatively unknown as a theory of practice and had no common definition
among its practitioners. Richard Beckhard, an authority on organizational development and
change management, defined organizational development as "an effort, planned, organization-
wide, and managed from the top, to increase organization effectiveness and health through
planned interventions in the organization's processes, using behavioral-science knowledge"
(Beckhard 1969).

 Throughout the 1970s and 1980s organizational development became a more

established field with courses and programs being offered in business, education, and
administration curricula. In the 1990s and 2000s organizational development continued to grow
and evolve and its influences could be seen in theories and strategies such as total quality
management (TQM), team building, job enrichment, and reengineering.

ORGANIZATIONAL DEVELOPMENT

 Organizational development deals with improving a company’s performance and individual

development of its employees. Each organization should be viewed as a coherent system
composed of separate parts. Organizational development as a process includes methodologies
and achievements in strategic planning, organizational design, leadership development,
coaching, diversity and balance between work and life

Why Do We Need Organizational Development?

 Human resources - employees are usually a large proportion of organization operating costs.
How employees are lead and managed and the environment in which they operate can make
the difference between organizational success and failure. It is critical the organization
understands how to manage them.

 Changing nature of the workplace. Workers today want feedback on their performance, a sense
of accomplishment, feelings of value and worth, and commitment to social responsibility. They
must also be more efficient, to improve their time management. And, of course, if we continue
doing more work with reduced employee numbers, we need to make our processes more
efficient.

 Global markets. Our environments are changing, and our organizations must also change to
survive these challenges. Organizations need to be more responsible and develop closer
partnerships with our customers. In order to survive, it is critical to attack the problems, not the
symptoms, in a systematic, planned, socially responsible manner.

 Accelerated rate of change. Competition exists on an international scale for people, capital,
physical resources, and information.

 For success to happen, we must cooperate and work ethically with core values and purpose.

WHO DOES OD
 Organizational development consultants act as a catalyst that helps an organization to solve its
own problems by improving its capabilities. The consultation process is defined as a set of
activities by the consultant who helps the client to perceive and understand the problems in the
organization and to learn to act on solve them.

 Pattern of organizational consulting “doctor-patient”: 

In this model, the consultant makes the
decision, but has additional power to diagnose the problem. In this model, the consultant
assumes responsibility for the decision.

The word for management and organizational
development used in Denmark is ledelse og organisationsudvikling.

WHEN IS AN ORGANIZATION READY FOR OD

 Dissatisfaction x Vision x First Steps > Resistance to Change

 This means that three components must all be present to overcome the resistance to change in
an organization: Dissatisfaction with the present situation, a vision of what is possible in the
future, and achievable first steps towards reaching this vision. If any of the three is zero or near
zero, the product will also be zero or near zero and the resistance to change will dominate.

This model is used as an easy, quick diagnostic aid to decide if change is possible

PROCESS
TYPE OF OD INTERVENTIONS

 Information-based Intervention: Interventions that define Activities that specify or clarify the
vision, mission, purpose, process, products, services, market position, roles, relationships,
responsibilities, outcomes, expectations, and so on. Examples: mutually setting performance
goals. This intervention is delivered when people are unclear, disagree, or have different
expectations; there are conflicting objectives; or people do not have a shared understanding.

 Interventions that inform: Activities that communicate goals, objectives, expectations, results,
discrepancies, and so on. Examples: producing internal newsletters; holding debriefing sessions;
giving feedback. This intervention is delivered when information has changed, the people have
changed, or the people are uninformed, and the consequence is poor performance; or people
don't get the information they need.
 Interventions that document: Activities that codify information (to preserve it and make it
accessible. Examples: setting up libraries; creating manuals, expert systems, job aids, and
decision guides. This intervention is delivered when information is not accessible over time or is
too complex; job aids, manuals, help screens, and so forth are lacking or inadequate, inaccurate,
or hard to access.

 Consequences-based Intervention

 Interventions that reward: Activities and programs that induce and maintain desired behaviors,
eliminate undesirable behaviors, and reward desired outcomes. Examples: holding public
ceremonies and annual recognition events; paying for performance. This intervention is
delivered when current incentives either reinforce the wrong behaviors or ignore the desired
behaviors; or there are few incentives for people to-do beater, more, or differently.

OVERVIEW OF INTERVENTIONS HUMAN PROCESS, TECHNOSTRUCTURE, HUMAN RESOURCES

MANAGEMENT STRATEGIC

 Interventions human process: Human process interventions include interpersonal and group
process approaches such as process consultation, third-party interventions, and team building.
These interventions are the most notable human process OD interventions which focus on
improving working relationships and maximize productivity.

 Techno structure: Techno structure is the group of analysts, administrators, and scientists in
an organization who are concerned with the adaptation and changing of the
organizational structure and how to affect stabilization and standardization among
the organizations parts.

HUMAN RESOURCES MANAGEMENT

 Human resource management-is the management of an organization's workforce, or human

resources. It is responsible for the attraction, selection, training, assessment, and rewarding of
employees, while also overseeing organizational leadership and culture, and ensuring
compliance with employment and labor law