UNIT- II (continuation)

Centralization and Decentralization

Centralization denotes concentration of authority and decentralization dispersion
of authority. Physical or geographical decentralization refers to dispersion of
organizations operations throughout the country. The functional decentralization refers to
dispersion of organization functions into separate autonomous units, for example,
production, marketing, finance etc., Allen has defined both the terms as follows:
Centralization is the systematic and consistent reser!ation of authority at central points
within an organization. "ecentralization applies to the systematic delegation of authority
in an organization # wide context$. Thus, centralization refers to the reser!ation of
authority at the top le!el of the organization and decentralization refers to systematic
delegation of authority in the organization %owe!er, there can neither be absolute
centralization nor there can be absolute decentralization.
&ationale of Centralization ' (enefits of Centralization:
). Centralization pro!ides opportunity for personal leadership.
*. +t facilitates integration of efforts.
,. -uick decisions are possible. hence emergencies can be handled !ery easily.
/. +t makes communication and control easier in the organization.
0. +t helps in reducing wastage of efforts by a!oiding duplication.
1. There is uniformity in actions throughout the organization and thus, co ordination
can be achie!ed easily.
Centralization is 2uite suitable for smaller organizations, organizations producing
single or homogeneous products and operating in limited geographical areas.
Rationale of Decentralization
"ecentralization offers the following benefits:
). +t reduces burden of the top management so that it can focus more attention of
strategic management.
*. +t facilitates growth and di!ersification in the organization.
,. +t is good philosophy to moti!ate managers.
/. +t encourages de!elopment of managers by pro!iding them opportunities.
0. +t emphasizes on horizontal growth of the organization.
"ecentralization is useful basically to large organization with multiple
products or operating in different geographical locations.
3ome of the ma4or problems of decentralization are:
). +f not followed properly, decentralization will create chaos in the
organization in the absence of proper control.
*. +t tends to increase costs by making most units autonomous.
,. There is more need for good managers.
/. "ecentralization re2uires high degree of self # moti!ation and self5control.
Making Decentralization effective
6ollowing are some measures which make decentralization more effecti!e.
). Centralized Top policy and control: The concept of centralized policy formulation
and control in decentralized structure has been generated out of the management
practices of general motors of the 7.3.A. This system has been described as
8Centralized control with decentralized responsibilities9. This approach is
followed by many large and di!ersified +ndian organizations like ".C.: ;td.,
<walior &ayon ;imited and so on. The Centralized policy and control should be
limited to certain basic and important acti!ities affecting the functioning of entire
organization. 3uch areas may be functioning pattern, di!idend distribution etc.
=ach unit en4oys considerable autonomy within the context of o!erall
organizational policy. To make control effecti!e, there is a need for de!eloping
appropriate control and reporting techni2ues.
*. Appreciation of concept of "ecentralization: There is a need for de!eloping
proper climate in which decentralization is taken in right perspecti!e. +n this,
leadership role of top managers is 2uite important. unit managers should be gi!en
free hand in operational matters and must be held responsible for final results.
They should be gi!en ade2uate compensation in the form of security of 4ob,
promotion and other benefits based on their performance.
,. "e!elopment of :anagers: The success of decentralization depends on the 2uality
of managers who hold !arious positions. 3ince these managers cannot always be
recruited from outside, there is an urgent need for de!eloping managers within.
Therefore, transformation from centralization to decentralization should be a
gradual process so that there is no !acuum in the organization in respect of
managers.
/. Competition among units: 3ince !arious units of decentralized organization work
independently, there should be proper competition among units. The contribution
of each department is to be measured in terms of market price and 'or 2uality.
This will create consciousness among unit and department among unit and
department managers. Competition may be generated in terms of o!erall
contribution of the units to the department and suitable incenti!e package may be
adopted to reward highly efficient units.
Factors determining Degree of Decentralization
). 3ize of organization: The larger the size of an organization, the more urgent is the
need for decentralization. +n a large organization, more decisions are to be made
at more places. +n such cases, it becomes difficult to coordinate them and results
in slow decision making. 3low decision making may be 2uite costly to the
organization. Therefore, to minimize the cost, authority should be decentralized
where!er feasible.
*. %istory of the organization: "ecentralization of authority depends on the way the
organization has been built up o!er a period of time. >ormally, those
organizations which expand from within or expand under the direction of the
owner founder show a marked tendency to keep authority centralized. ?n the
other hand, organizations that represent amalgamations and consolidations are
likely to show a definite tendency retain decentralized authority.
,. :anagement philosophy: "ecentralization is a kind of management philosophy to
regulate organizational processes including decision making. +n many cases, top
managers may take ad!antages of the innate desire of people to create to be free
or to ha!e status. ?n the other hand, many top managers may keep authority with
them because they can not gi!e up acti!ities and authorities they en4oyed before.
/. A!ailability of managers: +f better 2uality managers are a!ailable, there is more
chance for decentralization, because @iA these managers can handle the problems
of decentralized units effecti!ely. @iiA such managers ha!e higher need for degree
of autonomy. :oreo!er, decentralization also works as training ground for a
manager which increases the ability of good managers.
0. Pattern of planning: Planning is the most crucial management function in thinking
about decentralization. +n the organization ha!ing carefully drawn standing plans,
the chance for decentralization is high. 3imilarly, if they ha!e been made party to
the planning process, other functions can be easily decentralized.
1. Control techni2ues: %igher the degree of de!elopment and use of control
techni2ues, better is the prospect for decentralization.
B. "ecentralization Acti!ities: +n many cases, decentralization of authority becomes
necessary because there is decentralization based on other factors like economics
of di!isions of labour, the opportunities for using physical facilities at !arious
locations, and the nature of work. 6or example, the acti!ities of banking,
insurance and transport organizations ha!e to be decentralized.
C. &ate of change in organization: +f the business of the organization is fast
de!eloping and it is facing the problems of expansion, there is more chance that
authority will be decentralized. As against this, in old well established, or slow
mo!ing organizations, there is a natural tendency to centralized authority.
D. =n!ironmental influences: The most important en!ironmental force is the
go!ernment regulations o!er the pri!ate business. 6or example, business co!ered
by administered prices like petroleum etc., re2uires less time of managers in
determining the price structure and sometimes e!en distribution pattern.
tandardization
3tandardization means creating routine patterns of beha!ior or output.
:any organizations try to impro!e the 2uality and consistency of a product or ser!ice by
standardizing work acti!ities through 4ob descriptions and procedures. 3tandardization
co ordinates work that is simple and routine, but is less effecti!e where tasks are complex
and conditions are ambiguous. +n these situations companies might co5ordinate work by
standardizing the indi!iduals9 or team9s goals and product or ser!ice output @e.g.,
customer satisfaction, production, efficiencyA 6or instance, to co5ordinate the work of
sales people companies assign sales targets rather than specific beha!iours.
Mec!anistic structure "s# $rganic structure
An organizational structure with a narrow span of control and high degree of
formalization and centralization is known as mechanistic structure. :echanistic
structures ha!e many rules and procedures, limited decision making at lower le!els, tall
hierarchies of people in specialized rules and !ertical communication flows. Tasks are
rigidly defined and are altered only when sanctioned by higher authorities.
The basic characteristics of an organization based on mechanistic structure are:
@iA "i!ision of labour by functional specialization
@iiA A well defined hierarchy of authority
@iiiA A system of rules co!ering the duties and rights of employees
@i!A A system of procedures for dealing with work situations.
@!A +mpersonal relations among people.
@!iA 3election and promotion based on technical competency and
excellence.
3teps in organizational structure ' process in designing structure
@iA "etermination, identification and enumeration of acti!ities :
+n designing the structure, managers must identify the necessary acti!ities that
must be performed in order to achie!e the organizational ob4ecti!es. Ehile
identifying the acti!ities, it should be borne in mind that no necessary acti!ity
is left and no unnecessary acti!ity is performed. The ma4or acti!ities are
further classified into a number of sub # acti!ities.
@iiA <rouping and assigning of acti!ities # Primary deri!ati!e
Closely related and similar acti!ities are grouped into departments or
di!ision. <rouping may be done or se!eral bases, such as functions,
geographical regions, types of customers, types of e2uipments etc.,
<rouped acti!ities in the form of departments, sections, etc., are assigned
to !arious positions. The assignment of acti!ities creates responsibility
and ensures certainty of work performance.
@iiiA "elegation of authority # authority F &esponsibility.
3ince the assignment of 4ob to an indi!idual creates responsibility on his
part, he must ha!e corresponding authority to discharge his obligations.
Authority and responsibility are correlated. Through the process of
delegation, authority structure in the organization is created, that is, who
will interact with whom in an official way.
An organizational structure with a wide span of control, little formalization and
decentralized decision making is known as organic structure or adhocracies$. Tasks
are fluid, ad4usting to new situations and organizational needs. The organic structure
!alues knowledge and takes the !iew that information may be located anywhere in
the organization. Thus, communication flows in all directions with little concern for
the formal hierarchy.
These organizational structures are characterized by the following:
@iA Tasks and roles are less rigidly defined
@iiA "ecision making is more centralized
@iiiA The employees are more friendly and respectful to each other so that there is
more information and suggestions.
@i!A "epartmental boundaries are flexible.
:echanistic structures operate best in stable en!ironments because they rely on
efficiency and routine beha!iours. %owe!er, most organizations operate in a world of
dramatic change. +nformation technology, globalization, a changing workforce and
other factors ha!e strengthened the need for highly organic structures that are flexible
and responsi!e to these changes.
Restructuring Interventions
Two restructuring inter!entions are: downsizing and re engineering.
"own sizing decreases the size of the organization through workforce reduction
or organizational redesign. +t generally is associated with layoffs where a certain
number or class of organization members are no longer employed by the organization
downsizing can contribute to organization de!elopment by focusing on the
organizations strategy, addressing the needs of all organizations members and
following through with growth plans.
&e engineering is the fundamental rethinking and radical redesign of business
processes to achie!e dramatic impro!ements in performance a typical reengineering
pro4ect prepares the organization, rethinks the way work gets done and restructures
the organization around the newly designed core processes.
GG
Unit % III $R&'NI'TI$N CU(TUR)
Meaning*
?rganization culture is the basic pattern of shared assumption,
!alues and beliefs considered to be the correct way of thinking about and acting on
problems and opportunities facing the organization. ?9 &eilly has defined organizational
culture as 8organizational culture is the set of assumptions, beliefs, !alues and norms that
are shared by an organization9s members$.
)lements of culture
Assumptions, beliefs !alues and norms are known as abstract elements of the
culture. =xternally oriented characteristics like products, buildings, and dresses etc.,
which are known as material elements of the culture.
Assumptions represent the deepest part of organizational culture because they are
unconscious and taken for granted. Assumptions are the shared mental models, the broad
world!iews or theories in use that people rely on to guide their perceptions and
beha!iours.
(eliefs represent the indi!idual9s perceptions or reality !alues are more stable long
lasting beliefs about what is important. They help us define what is right or wrong or
good or bad in the world.
>orms means informal rules and expectations norms guide the way in which people
beha!e
Hi4ay 3athe has exemplified some common things to demonstrate the compound of
organizational culture.
@iA shared things @e.g.A the way people dressA
@iiA shared saying @e.g.A let9s go to workA
@iiiA share actions@ e.g. a ser!ice oriented approachA
@i!A shared feelings @ e.g. hard work is not rewarded hereA
C!aracteristics of organizational culture
There are se!en primary characteristics that aggregately capture the essence of an
?rganization9s culture:
). +nno!ation and &isk taking 5 the degree to which employees are encouraged to be
inno!ati!e and risk taking
*. Attention to detail 5 the extent to which employees are expected to exhibit
precision, analysis and attention to detail.
,. ?utcome orientation 5 the degree to which management focuses on results or
outcomes rather than on techni2ues and process used on achie!ing those results or
outcomes.
/. People orientation 5 the degree to which management decisions take into
consideration the effects of outcomes on people of the organization.
0. Team orientation 5 the degree to which !arious organizational acti!ities are
organized on team basis rather then indi!idual basis.
1. Aggressi!eness 5 the extent to which people in the organization are aggressi!e and
competiti!e rather than easy going.
B. 3tability 5 the extent to which the organization emphasizes in maintaining status
2uo rather than change.
(evels of culture
According to =dger 3chein organization culture has three le!els. These are @iA
artifacts @iiA shared !alues and @iiiA common assumptions
'rtifacts (Met!od of socialization)
Artifacts are the obser!able symbols and signs of an organizations culture such
as the way !isitors are greeted the physical layout etc. The categories of artifacts are
@aA $rganizational !eroes* The beha!ior of top management and their leadership
styles ha!e the impact on the beha!ior of organizational members. These leaders
become the role models and they represent what the company stands for and
reinforce the !alues of the culture.
@bA Rituals and ceremonies: &ituals are the programmed routines of daily
organizational life that dramatize the organization9s culture &ituals include how
!isitors are greeted, how often senior executi!es !isit subordinate, how people
communicate with each other, and how much time employees take for lunch.
Ceremonies are planned acti!ities conducted specifically for the benefit of an
audience. This would include publicity rewarding or punishing employees or
celebrating the lunch of new product.
@cA. tories and (egends stories and legends about past corporate incidents ser!e as
powerful social prescriptions of the way things should be done. They con!ey
!aluable knowledge throughout the organization by pro!iding human relation to
corporate expectations, indi!idual performance standards and the like stories
create emotions in listeners, which tends to impro!e their money of the lesson
within the story.
@d#) +!,sical structures and s,m-ols: (uilding, "esks, Chairs, office space and
wall hangings are few of the items that might con!ey cultural meaning symbols
Communicate organizational culture inspection messages. Certain code of dress
or a company logo can reflect its !alues and orientations.
(e) $rganizational language* The language of the workplace species about the
company9s culture how employees address co workers describe customers
express angle are all !erbal symbols of cultural !alues.
.# !ared values
Halues are the second and deeper le!el of culture and the reflected in the way
indi!iduals actually beha!e !alues are those principles and 2ualities that shape our
thinking and beha!iour. Halues reflect a person9s underlying belief as to what should be
and what should not be.
Halues can be classified into +nstrumental$ !alues and Terminal$ !alues. +nstrumental
!alues define such enduring beliefs that certain beha!iour is appropriate at all times
irrespecti!e of the ob4ecti!es or outcomes. +n case of terminal !alues, the ob4ecti!es
become more important than the appropriateness of the beha!iour in achie!ing such
ob4ecti!es.
/# Common assum0tion*
Assumptions are at the deepest and most fundamental le!el of cultural
diagnosis. The common assumptions can be traced to larger social and cultural !alues
held by a particular society or country. 6or example in American the emphasis is mostly
on indi!idualized achie!ement while in Iapan, is more on collecti!e achie!ement.
T,0es of $rganizational culture
1# Dominant culture and su- culture
"ominant culture expresses the core !alues that are shared by ma4ority of
members of the organization. The term core !alues refer to the primary or the dominant
!alues that are accepted throughout the organization. +t is the macro !iew of the culture
that gi!es an organization its distinct personality.
3ub culture expresses a set of !alues that are shared by the members of a
di!ision or department. 3ub cultures typically are a result of problems or experiences
that are shared by members of a particular department these subcultures can form
!ertically or horizontally.
.# trong "s 2eak culture
A strong culture is charaterised by the organisation9s core !alues being
intensely held and widely share. :ore intensely the core !alues are shared, the
stronger the culture is. The degree of shared ness depends on two factors:
?rientation and rewards.
Ehen the organizations core !alues are not shared with high degree of
intensity it forms week culture weak culture is usually characterized by high turno!er
of employees.
3o4 culture forms*
The original culture is deri!ed from the founder9s philosophy.
This, in turn strongly influences the criteria use in hiring. The actions of the current
top management set the general climate of what is acceptable beha!iour and what is
not. %ow employees are to be socialized will depend both on the degree of success
achie!ed in matching the !alues of new employees with organizations !alue in the
selection process and top management preference for socialization methods.
Functions of culture
Culture performs a number of functions within an organization. They are
). 5oundar, defining role*
Culture helps to create distinction between one organization and others.
*. ense of Identit,*
Culture helps to create sense of +dentify for the members of organizations.
,. &eneration of commitment* Culture encourages the members of the
organization to gi!e priority to organizational interest o!er and abo!e their
personal interest.
/. ocial s,stem sta-ilit,: Culture enhances social stability culture is also known as
the social glue. +t pro!ides a list of social do9s and don9ts for the employees.
0. ense making and control mec!anism: Culture helps in making sense and
control mechanism that guides and shapes the attitudes and beha!iours of the
employees Thus culture is beneficial to the organization as well as to the
employees
D,sfunctions of culture
Culture can be pro!ed to the liability to the organization.
1# 5arrier to c!ange
Consistency of employee beha!iour is an asset to the organization, when it has
a stable en!ironment when the organization is dynamic it will pro!e to be liable
as the employees will try to resist in the en!ironment.
Philosophy of
?rganizations
founders
?rganis
ational
Culture
3election
Criteria
3ocialisation
Top
:anagem
ent
*. 5arrier to diversit,* 3trong cultures put a lot of pressure on the employees to
confirm to the accepted !alues and styles of the organization.
,. 5arrier to mergers and ac6uisition: Cultures can act as barriers to mergers and
ac2uisition. 6a!ourable financial statements or product li!es may be initial
alteration at the time of ac2uisition but another important factor to be considered
is how well the cultures of the two organization match with each other.
C!ange in organizational culture
The following conditions must be present then only a cultural change can taken
place.
). ' dramatic crisis: Any dramatic crisis in the organization like a ma4or
financial set back loss ma4or customer or technological break through by a
company may force the management to look into the rele!ance of the exercise.
*. Ne4 to0 leaders!i0: +f some top executi!es lea!e the organization and new
leadership takes o!er, they may pro!ide an alternati!e set of key !alues or a
new culture.
,. 7oung and small organization: when the organization is new and its size is
small it, will be easier for the management to change the culture.
/. 2eak culture: weak culture is more !ulnerable to change than strong ones.
3o4 to kee0 t!e culture alive
The following practices may used to sustain the culture in the organization.
1# election*
3tandardised procedures should be used to hire right people for right 4ob. At
the inter!iew, the candidates whose personal styles and !alues do not fit with the
organizations culture must be screened out. Thus selection helps in sustaining culture by
identifying the candidates who can culturally match the organization culture.
.# To0 Management*
The actions of top management ha!e ma4or impact on the organizations
culture. Through what they say and how they beha!e senior executi!es establish norms.
/# ocialisation*
The process that adapts employees to the organisations culture is
socialization. 3ocialisation can be conceptualized as a process made up of three stages.
Pre arri!al, encounter and metamorphosis.
(i) +re arrival*
This stage comprises all the learning that occurs before a new member 4oins the
organization.
@ii) )ncounter*
7pon entry into the organizations the new employees enters this state here the
indi!idual informs with the realities of the situation in terms of his 4ob and the 4ob
performance en!ironment such as superior peers subordinates and organizational culture.
+t the expectations are similar with realities he adapts the organization culture 2uickly
otherwise.
Matc!ing 0eo0le 4it! culture*
<offee and Iones pro!ide some interesting insights on different organizational
cultures and guidance to prospecti!e employees. They ha!e identified four distinct
cultural types.
The two dimensions underlying organizational cultural are:
(i) ocia-ilit,*
+t is a measure of friendliness. %igh sociability means people to kind things
for one another without expecting something in return. 3ociability is consistent with a
high people orientation high team orientation and focus on process rather than outcomes.
@ii) olidarit,#
+t is measure of task orientation. 3olidarity is consistent with high attention
and detail and high aggressi!eness.
)# Net 4orked culture (3ig! on socia-ilit, lo4 on solidarit,#
These organization !iews members as family and friends people know and like each
other. People willingly gi!e assistance to others and openly share information. The
negati!e aspect associated with this culture is the focus on friendship can lead to
tolerance for poor performance.
.# Mercenar, culture (lo4 on socia-ilit,8 3ig! on solidarit,)
These organisations are strictly goal focused. People are intense and determined to
meet goals. :ercenary cultures are not 4ust about winning. they are about destroying the
enemies the negati!e aspect of this culture is that it can lead to inhumane treatment on
low performers.
/# Fragmented culture ((o4 on socia-ilit, lo4 on solidarit,)
These organizations are made up of indi!idualists. Commitment is first and
foremost to indi!idual members and their 4ob tasks. +n fragmented cultures employees
are 4udged solely on their producti!ity and their and absence of collegiality are the ma4or
negati!es of these culture.
Communal Culture (3ig! on socia-ilit,8 !ig! on solidarit,)* This category !alues
both friendship and performance. ;eaders of these cultures tend to be inspirational and
charismatic, with a clear !ision of the organistion9s future. The negati!e aspect of this
culture is that it often consumes once total life. The charismatic leader fre2uently looks to
create disciples rather than followers.
Im0act of organizational culture*
?rganisational culture, being uni2ue and distincti!e prescribes some specific
modes of beha!iour for its members. Though such beha!ioural processes may ha!e
different dimensions, they ultimately create impact an ob4ecti!e setting, work ethic,
moti!ational pattern and organizational processes.
1# $-9ective setting* Culture moulds people and people are the basic building blocks of
the organization. Therefore it must reflect the ob4ecti!e of its member. Particularly those
who are the key decision makers.
.# 2ork )t!ic* =thic relates to conformity to the principles of human conduct. Eork
ethic in an organization is deri!ed from is culture. Thus organizational culture
determines the ethical standards for the organization as a whole and its indi!idual
members.
/# Motivational 0atterns*
Culture determines the way people approach their 4obs and e!en life in general. +f
organizational culture is geared towards achie!ement, people will find it 2uite moti!ating
and put their outmost energies for the work.
:# $rganisational 0rocesses*
Harious organizational processes like planning, decision making, controlling etc, are
determined by the organizational culture because these processes are carried out by the
people in the organization.

JJJJ
Unit I" % $rganisational c!ange
:eaning # 6orces for change # &esistance to change # Types and forms of change
# =!olutionary and &e!olutionary change # Change process # ?rganisation "e!elopment
# %& functions and 3trategic change management # +mplications for practicing
managers.
Meaning
The term change refers to an alteration in a system whether physical, biological or
social. Thus, organisational change is the alteration of work en!ironment in organisation.
Change as a process, is a simple modification of the structure or process of a system.
?rganisational change may ha!e following features:
). Change results from the pressure of both internal and external forces.
*. Ehen change occurs in any part of the organisation, it disturbs the old e2uilibrium
necessitating the de!elopment of a new e2uilibrium.
,. Any change may affect the whole organisation.
/. Change will affect the !arious parts of the organisation in !arying rates of speed
and degrees of significance.
0. ?rganisational change is a continuous process.
1. Change may be reacti!e or proacti!e.
Forces for C!ange ; Factors in $rganisational C!ange
The !arious factors that necessitate organisational change may be grouped into
two categories: =xternal and +nternal.
'# )<ternal Factors
=ach organisation has goals and responsibility related to others in its en!ironment.
Changes in social, political, economic, technological and legal en!ironment force
organisations to change themsel!es. The change in !arious en!ironmental factors
necessitating changes in the organisation are explained below:
1# Tec!nological C!ange* Ehen there is a change in technology in the
organisation9s en!ironment, the organisation has to adopt new technology.
?therwise it will become less cost # effecti!e and its competiti!e position
weakens. Ehen the organisation adopts a new technology, it has its impact on
organisation structure, organisational processes and beha!iour of people. 6or
example, computers and automation ha!e made significant impact on
organisational functioning.
.# C!anges in Marketing Conditions* There may be two types of forces which
may affect the competiti!e position of an organisation # other organisations
supplying the same products and buyers who are buying the product. Any change
in these forces may re2uire suitable changes in the organisation. 6or example,
liberalization forced many +ndian organisations to realign themsel!es with the
new situation. 3imilarly, there may be changes in buyers in terms of their needs,
liking # disliking and income disposal for a product. These changes force the
organisations to bring those products which meet buyer9s re2uirements.
/# ocial C!anges* 3ocial changes reflect in terms of people9s aspirations, their
needs and their way of working. 3ocial changes ha!e taken place because of the
se!eral forces like le!el of education, urbanization, feeling of autonomy and
international impact due to new information sources.
:# +olitical and (egal C!anges* political and legal factors broadly define the
acti!ities which an organisation can undertake and the methods which will be
followed by it in accomplishing those acti!ities. Any change in these political and
legal factors may affect the organisational operation.
5# Internal factors*
Any Change in organisation9s internal factors may also necessitate change. 3uch a
change is re2uired because of two reasons:
1# C!ange in Managerial +ersonnel* ?ld managers are replaced by a new manager
which is necessitated because of retirement, promotion, transfer or dismissal.
=ach new manager brings his own ideas and way of working in the organisation.
Attitudes of personnel change e!en though there is no change in them. The result
is that an organisation has to change accordingly.
.# Deficienc, in )<isting $rganisation* 3ometimes, changes are necessary because
of deficiency in the present organisational arrangements and processes. These
deficiencies may be in the form of unmanageable span of management, large
number of managerial le!els, and lack in co5ordination between !arious
departments, obstacles in communication, lack of uniformity in policy decision
and so on.
Resistance to C!ange is an attitude or beha!iour that shows unwillingness to make or
support a change. People tend to resist many types of changes because new habits or
sacrifices are re2uired. Ehen change is minor and within the scope of correcting
programme, ad4ustment is fairly routine, but when a change is ma4or or unusual, more
serious upsets may occur. This leads to general proposition that people and their social
systems will often resist change in organisations. There are two sides of resistance as a
cost and as a benefit.
Resistance as a Cost
+f people resist changing, the organisation may not be able to introduce new
phenomena in order to adopt en!ironmental re2uirement. ?ne example of (a4a4 auto ;td.
is rele!ant here. +n order to increase its manufacturing capacity, the company procured
land near its old plant site but later shifted the new plant site away from the old plant
because of resisting work culture of the old plant.
Resistance as a 5enefit
?n the other hand, it pro!ides a benefit to the organisation and its change agent:
resistance by some members of the organisation pro!ides an opportunity to the change
agents to weigh the pros and cons of introducing change more carefully. Ehile
introducing a change emphasises only its positi!e side. resistance to change emphasizes
on negati!e side. the reality lies in between. Thus, resistance to change pro!ides help in
managing change in two ways:
1# +t may signal the need for more effecti!e communication about the
meaning and purpose of a change.
.# +t also highlights real inade2uacies in the proposed change and suggests
better ways for de!eloping and introducing change.
Factors in Resistance to C!ange
People tend to e!aluate the effect of change indi!idually but they express it
through group in collecti!e form. Therefore, the reasons underlying resistance to change
may be identified at indi!idual and group le!el.
'# Individual Resistance
There are many factors operating at the indi!idual le!el which are responsible for
resistance. They are i.e., economic, psychological and social factors.
1# )conomic Factors* People feel attached to the organisation for satisfying their
economic needs # physiological, 4ob security, etc., o!er other needs. People may feel that
they will be affected in the following ways:
(i) kill $-solescence* A change is generally meant for better methods of working
which may in!ol!e new techni2ues, technology, etc., whene!er people feel that new
technology poses a threat of replacing or degrading them, they simply resist such a
change. Ehen computer was introduced, it attracted lot of resistance because of this
reason.
(ii) Fear of )conomic (oss* A change may reduce 4ob options and turn into
technological unemployment. This feeling is created because people feel that those
who can match the new re2uirements will be better off than those who cannot match.
(iii) Reduced $00ortunit, for Incentives* Ehene!er there is change, people
may feel that they will ha!e lower opportunity to earn incenti!es and bonus as the
new system re2uires additional skills.
.# +s,c!ological Factors* Psychological factors are based on people9s emotions,
sentiments and attitudes towards change. :a4or psychological factors responsible for
resistance are:
(i) )go Defensiveness* A change may affect the ego of the people and in order to
defend their ego, people resist change.
(ii) tatus =uo* People want status 2uo, that is, they do not want any disturbance
in their existing e2uilibrium of life and work pattern. The change will disturb
such e2uilibrium and people ha!e to obtain another e2uilibrium which is a
painful exercise. Therefore, e!eryone tries to a!oid it.
(iii) (o4 Tolerance for C!ange* 3ome people ha!e !ery low le!el of tolerance
for change and these people resist any new idea.
(iv) (ack of Trust in C!ange 'gent* +f people ha!e low degree of confidence in
the change agent @the person who initiates changeA, they show resistance to
change efforts. This is the reason why labour union resists change initiated by
management.
(v) Fear of Unkno4n* The change will bring results in future which are always
not certain. This lack of certainty creates anxiety and stress in the minds of
people and they want to a!oid it.
/# ocial Factors* People from their own social groups at the workplace for the
satisfaction of their social needs. To the extent the satisfaction of these needs is affected
by a change, people resist it. The ma4or factors causing resistance to change are:
(i) Desire to Maintain )<isting ocial Interaction* People desire to maintain
existing social interaction since it is a satisfying one. Ehen there is any
change, it is likely to be changed which people do not want. Therefore, they
resist change.
(ii) Feeling of $utside Interference* A change brought by the change agent is
considered to be interference in the working of people. This is heightened if
the change agent belongs to another social class e.g., change initiated by
managers affecting workers.
(. &rou0 Resistance* The effect of group as a source of resistance may be analysed in
terms of nature of group dynamics and !ested interests.
(1) Nature of &rou0 D,namics* <roup dynamics refers to the forces which operate in
a group determining beha!iour of its members. These forces determine how effecti!e a
group would be in accepting or re4ecting a change. The following nature of group
dynamic is important:
@iA +f both change agent and people belong to the same group, the role of group is
more effecti!e.
@iiA +f the members ha!e de!eloped strong belongingness to the group, the role of
group is more effecti!e.
@iiiA The degree of group attracti!eness to its members affects how effecti!e the
group is
@i!A <roup can exert more pressure on those factors which are responsible for group
being attracti!e to the members.
@!A The degree of prestige of a group, determines the degree of influence the group
has.
@!iA Any attempt to change the group norms by any outside force is resisted.
(.) "ested Interests* +n a group, some members become more influential than others.
These persons may be group leaders appointed formally or accepted by people as leader
in an informal group. These persons may use the group as a means for satisfying their
own needs. Thus, these !ested interests try to influence group beha!iour in the form of
a uniform response to a change. This phenomenon is more common in the case of
labour unions.
C# $rganizational Resistance to C!ange*
The organisation itself resists many changes because of certain reasons. The ma4or
reasons for organisational failure to change are:
(i) Counting +ast uccesses* A ma4or problem before the organisations which
ha!e past success stories is, how to face challenges of the changing
en!ironment. 3ince these organisations ha!e achie!ed success by following a
particular set of management practices, they become too rigid to change and
they hide their failure to change in the guise of past success.
(ii) ta-ilit, of ,stem* The organisation may design a system through which it
may deri!e many benefits. The system is stabilized and any change may be
percei!ed a threat by the organisation itself.
(iii) Resource (imitations* The organisation has to adapt to its en!ironment but
the adoption has its own cost. +f the organisation is not fully e2uipped for
meeting such demands, it may not be possible for the organisation to bring
necessary change.
(iv) unk Cost* :ost of the organisations ha!e sunk cost in!ol!ed in !arious
assets. 3unk cost can be in the form of people also. +f the change is re2uired,
organisation has to pay for those though they may not be as useful.
(v) Inter organisational agreement* The organisation may enter into agreement
with other organisations o!er certain aspects of working. +f any change is to
be incorporated, the organisation has to taken into account the wishes of other
organisations too.
+t does not mean that the organisation will always resist change. +t depends more on
the style of top management. +f it is risk # taking, forward # looking, inno!ati!e and has
Keal for progress, the organisation may take change programmes much more fre2uently.
(ased on aggressi!eness which !arious companies show in changing themsel!es,
:iles and 3now ha!e classified into four categories:
1# Defenders* These are the firms which penetrate in a narrow market ' product
domain and guard it. They emphasis more on cost5effecti!eness, centralized
control, intensi!e planning and put less emphasis on en!ironmental scanning.
.# +ros0ectors* These firms use broad planning approaches, broad en!ironmental
scanning, decentralized controls and reser!e some resources utilized for future
use. They go on searching new products ' markets on regular basis.
/# 'nal,sers* Abo!e two are the extreme cases of choice # making modes. +n
between lye analysers and reactors. Analysers act sometimes as defenders and
sometimes as prospectors.
:# Reactors* These organisations realize that their specific en!ironment is changing
but fail to relate themsel!es with the changing en!ironment. They ha!e to beha!e
in one of the abo!e three ways otherwise, they cannot sur!i!e
$vercoming Resistance to C!ange
Problem of o!ercoming resistance to change can be handled at two le!els. at the
le!el of indi!iduals and at the le!el of group.
'# )fforts at Individual (evel*
Ehen resistance to change comes from the people at indi!idual le!el, the problem
can be sol!ed at the same le!el. 6or this purpose, the following efforts can be made:
1# Involvement* +n!ol!ement is a process through which those who are affected by
the change are brought to understand the change. This is not a one time action. +t
includes finding out from the members how they interpret the proposed change
and what they think about it. <etting opinions out in the open, so that they are
looked at and e!aluated, is an important trust # building task. As this process
goes, the le!el of resistance to change tends to decrease, understanding of change
increases and the personal in!ol!ement in the change increases.
.# $-taining Commitment* Commitment is an agreement to take an acti!e part in
the actual mechanics of the change. Commitment to take part in the change
programme can be obtained in pri!ate from each indi!idual.
/# (eaders!i0* The role of leadership in getting acceptance for a change is !ery
important as a capable leader reinforces a climate of psychological support for
change.
:# Training and +s,c!ological Counseling* People should be educated to become
familiar with change, its process and working. They must be taught new skills,
helped to change attitudes and indoctrinated in new relationships. 3uch
educational process can be aided by training classes, meetings and conferences.
5# )fforts at &rou0 (evel*
The managers can form strategies for o!ercoming resistance in the following
manner:
1# &rou0 Contact* Though the group contact, many things about change can be
made clear # such aspects as the reasons for change, benefits of change and how
the benefits of the change will be shared among organizations and its members.
Ad!antages of group contacts are @iA Through group one can communicate with
more people per unit of time. @iiA +n group, there may be some person who may
support the idea for change. @iiiA <roup can get at the basic problem !ery rapidly.
.# +artici0ation* Those people who are directly affected by the change should be
gi!en opportunity to participate in that change before the final decisions are
reached. The organisation must regard the participation as meaningful and share
the results of the change with its members.
/# &rou0 D,namics Training for C!ange* <roup dynamics also helps in pro!iding
!arious training programme for accepting and implementing change. 3uch
training techni2ues include role playing, psychodrama, and sensiti!ity or t5group
training.
T,0es of C!ange
I# $n t!e 5asis of u-9ect Matter of C!ange
1# trategic C!ange* This is a change in the !ery mission of the organisation.
.# tructural C!ange* "ecentralised operations and participati!e management style
ha!e been more recent trends in the organisational structure. 3ince these structural
changes shift the authority and responsibility to lower le!el management, the members
ha!e to be prepared to de!elop a team spirit as well as ac2uire skills to make on5the5spot
decisions.
/# +rocess % $riented C!ange* These changes relate to technological de!elopments,
information processing, automation and use of robotics in the manufacturing operations.
:# +eo0le %$riented C!ange* any organisational change affects people in some form.
These changes are directed towards performance impro!ement, group cohesion,
dedication and loyalty to the organisation as well as de!eloping a sense of self #
actualization among the members.
II# $n t!e 5asis of $rigin
1# )volutionar, C!ange* 3uch changes do not greatly !iolate the traditions and
states -7? exceptions. They are usually piecemeal, take place one by one.
.# Revolutionar, C!ange* Changes sometimes may be cataclysmic. The
re!olutionary changes result in o!erturning the status 2uo arrangements, cause
!iolations, re4ections or suppression of old exceptions. These changes are rarely
introduced except where situations become highly intolerable ha!ing no other
acceptable options.
III# $n t!e -asis of +lanning
+lanned C!ange* is intentional and occurs with a change agent9s direction. :ost
planned changes may be regarded as efforts intended to deal with performance gaps in
ways that benefit on organisation and its members.
Un0lanned C!ange* ?ccurs spontaneously and without a change agent9s direction. They
may be disrupti!e such as a wildcat strike that ends in a plant closure, or beneficial.
I"# $n t!e -asis of reaction
+roactive C!ange* is brought out of the anticipation of the likely beha!iour of the
forces ha!ing impact on the organisation. 3uch organisations are known as prospectors
which constantly interact with their en!ironment to identify new opportunities and
threats.
Reactive C!ange*
+t occurs when external or internal forces make it necessary for a change to be
implemented. :ost of the organisations which belie!e in traditional pattern of working
often go for reacti!e change.
T,0es of C!ange '00roac!
+. )conomic '00roac!* refers to creating change for the purpose of creating
shareholder !alue. 3uch change is dri!en by top management with financial incenti!e for
employees to perform. Change is planned and focused. Change agents focus on decision
that affects the strategy, structure and systems of their organisation.
II# $rganisational Develo0ment '00roac!* The goal of this approach is to de!elop
employee9s competencies to sol!e problems by ha!ing them identify and become
emotionally committed to impro!ing the performance of the firm. This approach re2uires
management to engage people emotionally in examining why the existing structure and
systems are not meeting the new challenges facing the organisation.
III# 'ction Researc! '00roac!*
This approach takes the !iew that meaningful change is a combination of action
orientation and research orientation. An action orientation in!ol!es diagnosing current
problems and applying inter!entions that resol!e those problems. &esearch orientation
in!ol!es application of conceptual framework to real situation. +n other words, action
research embraces the notion of organisational learning and knowledge management.
This approach adopts an open systems !iew. Action research is also a highly participati!e
process. ?!erall, action research is a data # based, problem # oriented process that
diagnoses the need for change, introduces the inter!ention, and then e!aluates and
stabilizes the desired changes. 3teps.
(1) )sta-lis! Client % Consultant Relations!i0* The process begins by forming the
client # consultant relationship. Consultants need to determine the client9s
readiness for change. :any change management consultants prefer to adopt the
role of process consultant. Process consultation is a method of helping people
within the system sol!e their own problems by making them aware of
organisational processes, the conse2uences of those processes, and the means by
which they can be changed
(.) Diagnose t!e used for C!ange* ?rganisational diagnosis identifies the
appropriate direction for the change effort by gathering and analyzing data about
an on5going system.
(/) Introduce Intervention* This stage applies one or more actions to correct the
problem.
(:) )valuate and ta-lise C!ange* &ewards, information systems, team norms and
other conditions are redesigned so that they support the new !alues and
beha!iours.
I"# '00reciative In6uir, '00roac!
A change process that directs attention away from the group9s own problems and
focuses participants on the group9s potential and positi!e elements. The following
diagram outlines the 6our 5 "$ :odel of Appreciati!e +n2uiry.
"# +arallel (earning structure '00roac!
Parallel learning structures are highly participati!e arrangements, composed of
people from most le!els of the organisation who follow the action research model to
produce meaningful organisational change. They are social structures de!eloped
alongside the formal hierarchy with the purpose of increasing the organisation9s learning
and producing meaningful organisational change.
"isco!ery
+dentifying
the best of
what is$
"reaming
=n!isioning
what might
be$
"esigning
=ngaging in
dialogue
about what
should be$
"eli!ering
"e!eloping
ob4ecti!es
about what
will be$
T!e C!ange +rocess ; +rocess of +lanned C!ange*
The change is successful if it is taken in a planned way which proceeds in a
se2uential form as shown in the following figure
1# Identif,ing Need for C!ange* The first basic step is to identify when change in the
organisation is re2uired. The most information for identifying need for change comes
from the organisation9s feedback and control data. +dentification of need for change
depends on gap analysis and this gap analysis should be seen on progression basis.
.# )lements to -e C!anged* Ehat elements of the organisation should be changed will
largely be di!ided by need and ob4ecti!es of change. 7sually change is re2uired in three
ma4or elements of the organisation. ?rganisation structure, technology and people.
3tructural change may include 4ob design, 4ob definitions, basis of departmentation, span
of control, organisational policies and procedures, co5ordination, power structure etc.
Technological changes include changes in plant F e2uipment. techni2ues for doing work,
production methods etc., and changes in people include changes in their beha!iour,
interaction pattern, informal grouping, skills, attitudes etc.
+dentifying need
for change
=lements to
be changed
Planning for
change
Assessing
change
forces
Action for
change
7nfreezing
Changing
&efreezing
6eed back
/# +lanning for C!ange* At this stage, managers should plan about how the change can
be brought. Planning for change includes who will bring change, when to bring change
and how to bring change.
:# 'ssessing C!ange Forces* Lurt ;ewin assumes that in any situation, there are both
dri!ing and restraining forces which influence any change that may occur. =2uilibrium is
reached when sum of dri!ing forces e2uals the sum of restraining forces. The
management has to push dri!ing forces and ' or con!erting or immobilizing restraining
forces so that people accept the change.
># 'ctions for C!ange* Actions for change comprise three stages unfreezing, changing
refreezing:
@)A 7nfreezing: +t simply makes the indi!iduals or organisations aware and prepares them
for the change. According to 3chein, unfreezing is the process of breaking down the old
attitudes and beha!iours so that they start with a clean slate. %e also suggested some
measures which are helpful in undertaking unfreezing process. These are
@iA The physical remo!al of the indi!iduals from their accustomed routines,
sources of information and social relationships.
@iiA The undermining and destruction of social support.
@iiiA "emeaning and humiliating experience to help indi!iduals to see their old
attitudes as unworthy and think to be moti!ated to change.
@i!A The consistent linking of reward with willingness to change and to
punishment with unwilling to change.
@*A Changing @Acceptance to changeA : ?nce the unfreezing process has been completed,
their beha!iour patterns ha!e to be redefined. %.C.Lellman has proposed three methods
of reassigning new patterns of beha!iour. These are:
aA Com0liance* +t is achie!ed by strictly enforcing the reward and punishment
strategy for good or bad beha!iour.
bA Identification* +dentification occurs when members are psychologically
impressed upon to identify themsel!es with some gi!en role models whose
beha!iour they would like to adopt and try to become like them.
cA Internalisation* +t in!ol!es some internal changing of the indi!iduals thought
processes in order to ad4ust to a new en!ironment.
@,A&efreezing: &efreezing occurs when the new beha!iour becomes a normal way of life.
The new beha!iour must replace the former beha!iour completely for successful change
to take place.
?# Feed-ack* :anagement of change re2uires feedback and follow5up actions to ensure
that change programme is progressing in right direction. 6eed back recei!ed from the
initial attempt of change programme may be used to modify the subse2uent programme.
$rganisational Develo0ment
+n the )D1Ms, a new and integrated type of method known as organisation
de!elopment @?"A originated to bring change in the entire organisational aspect.
%arold &ush has defined organisational de!elopment as a planned, managed and
systematic process to change the culture, systems and beha!iour of an organisation in
order to impro!e the organisations effecti!eness in sol!ing its problems and achie!ing its
ob4ecti!es$.
Features of $D
1# +lanned C!ange* ?" is a strategy of planned change for organisational
impro!ement.
.# Com0re!ensive C!ange* ?" efforts focus on comprehensi!e change in the
organisation. ?" efforts take an organisation as an interrelated whole and no part of it
can be changed meaningfully without making corresponding changes in other parts.
/# (ong % range C!ange* ?" focuses on the ele!ation of an organisation to a higher
le!el of functioning by impro!ing the performance and satisfaction of organisational
members on long # term basis.
:# D,namic +rocess* ?" is a dynamic process and includes the efforts to guide and
direct changes as well as to cope with or adopt changes imposed. Thus ?" efforts are
ongoing, interacti!e and cyclic process.
># +artici0ation of C!ange 'gent* :ost ?" experts emphasize the need for an
outside, third party change agent. They discourage 8do it yourself9 approach.
?# )m0!asis on Intervention and 'ction Researc!* ?" approach results into an
acti!e inter!ention in the ongoing acti!ities of the organisation. Action research is the
basis for such inter!ention.
@# Normative )ducational +rocess* ?" is based on the principle that 8norms form the
basis for beha!iour and change and is a re5educati!e process of replacing old norms by
new ones9.
$-9ectives ; Role of $D +rogrammes
?" can be utilized for the following results in the organisation:
). To build and enhance interpersonal trust, communication, co5operation and
support among all indi!iduals and groups throughout the organisation at all le!els.
*. To encourage an analytical approach to problem sol!ing in a team spirit and open
manner.
,. To increase the sense of belonging to the organisation so that the organisational
goal becomes the goals of the members of the organisation.
/. To assign decision5making and problem sol!ing responsibilities to skilled and
knowledgeable persons who are closer to the sources of information.
0. To increase personal responsibility for planning, implementing the plans and be
aware and responsible for the conse2uences.
1. To help managers to manage according to the rele!ant ob4ecti!es, rather than
depending upon past particles$.
B. To increase the openess of communications in all directions.
5asic $D 'ssum0tions
). :ost indi!iduals ha!e dri!es towards personal growth and de!elopment.
*. %ighest producti!ity can be achie!ed when the indi!idual goals are integrated
with organisational goals.
,. Co5operation is always more effecti!e than conflict.
/. The suppression of feelings ad!ersely affects problem sol!ing, personal growth
and satisfaction.
0. The growth of indi!idual members is facilitated by relationships which are open,
supporti!e and trusting.
1. The difference between commitment and agreement must be fully understood.
B. ?" programs, if they are to succeed, must be reinforced by the organisations total
human # resources system.
+rocess of $D
+n ?" programmes, !arious steps are
1# +ro-lem Identification and Diagnosis* The problems may be a gap between desired
path of action and actual path of action. ?" programme starts with the identification of
the problems in the organisation. "iagnosis gi!es correct identification of a problem and
its causes and determines the scope of future course of action. ?nce a problem is
identified, the analysis will show why the problem exists.
.# +lanning trateg, for C!ange* Attempts are made to transform diagnosis of the
problem into proper action plan in!ol!ing the o!erall goals for change, determination of
the basic approach for attaining these goals, and the se2uence of detailed scheme for
implementing the approach.
/# Intervening in t!e ,stem* +t refers to implementation of the planned acti!ities.
There may be !arious methods through which external consultant inter!ene in the system,
such as education and laboratory training, process consultation, team de!elopment etc.
:# )valuation* This step relates to e!aluate the results of ?" programme so that
suitable actions may be followed up. This step again in!ol!es data gathering because
such data will pro!ide the basis for ?" efforts e!aluation and suggest suitable
modification or continuation of ?" efforts in similar direction.
'ction Researc! Model of $D
The ?" process can be presented in the form of Action &esearch :odel. The
cyclical process of using research to guide action, which generates new data as the basis
for new actions, is known as action research. 6rench and (ell ha!e defined action
research as follows:
Action research is the process of systematically collecting research data about an
ongoing system relati!e to some ob4ecti!e, goal, or need of that system. feeding these
data back into the system. taking actions by altering selected !ariables within the system
based both on the data and on hypothesis. and e!aluating the results of actions by
collecting more data$.
The action research model is gi!en in the following figure:
'ction Researc! Model of $D
$D Interventions*
?" inter!entions refer to !arious acti!ities for impro!ing organisational
performance. ?" inter!entions are also referred as ?" techni2ues or ?" strategies.
6rench and (ell ha!e defined ?" inter!ention as:
3ets of structures acti!ities in which selected organisational units @target groups
or indi!idualA engage with a task or a se2uence of tasks where the task goals are related
directly or indirectly to organisational impro!ement. +nter!entions constitute the action
thrust of organisation de!elopment. they make things happen$.
Classification of $D Interventions
There are !arious ?" inter!entions and they are classified indifferent ways. ?"
inter!entions can be classified on two bases: @iA approach adopted and @iiA target on the
basis of approach adopted, ?" inter!entions are classified into two categories: @iA Process
inter!ention and @iiA 3tructural inter!entions.
?rganisational Perceptions
of Problem
"ata Collection and
diagnosis by consultant on
the problems
6eed back to the client about
the nature and causes of the
problems
6urther data collection by
consultant
6eed back and discussion
with client to work on the
problems
"etermination of
ob4ecti!es and plan of
action
"etermination of action
beha!iour for achie!ing
these ob4ecti!es
&eassessment of
situation through
further data collection
6eed back to client and
discussion to work on
the feed back
>ew Plan of action
Action beha!iour
Ioint action planning for
sol!ing the problems
Though there are many ?" inter!entions, more commonly used inter!entions are:
3ensiti!ity training, grid ?", 3ur!ey feed back, Process consultation, team building and
management by ?b4ecti!es.
1# ensitivit, Training
3ensiti!ity training @also known as T 5 <roupA approach e!ol!ed from group
dynamics concept of Lurt ;ewin and the first sensiti!ity training session was held in
)D/1 in state teachers College, >ew (ritain, 73A. 3ensiti!ity training is a small # group
interaction process in the unstructured form which re2uires people to become sensiti!e to
others feelings in order to de!elop reasonable group acti!ity.
+rocess
3ensiti!ity training focuses on small group with number of members ranging from
ten to twel!e. (ased on the sources from where these members are drawn, there may be
three types of T # group. 3tranger # lab, Cousin # lab and 6amily # lab. +n 3tranger # lab,
all participants are from different organisations and they are strangers to each other. +n
cousin # lab all participants are from the same organisation but from different units. +n
6amily # lab, all participants are from the same unit and know each other 2uite well. The
e!ents run as follows:
@iA +n the beginning, there is an intentional lack of directi!e leadership, formal
agenda.
@iiA +n the second phase, the trainer becomes open, non5defensi!e and expresses
his or her own feelings in a minimally e!aluati!e way.
@iiiA +n the third phase, inter personal relationships de!elop. The members ser!e as
resources to one another.
@i!A The last phase attempts to explore the rele!ance of the experience in terms of
back home$ situations.
+ositive Conse6uence
@iA 3ensiti!ity training results into more supporti!e beha!iour, more sensiti!e
people and more considerate managers.
@iiA Participants become more open and self # understanding.
@iiiA Communication is impro!ed a lot and leadership skills are well de!eloped.
@i!A Participants become aware of group norms and sense of belongingness.
Negative Conse6uences
:any participants ha!e reported a feeling of humiliation and frustrated. Problems
in sensiti!ity training emerge because of two reasons. 6irst, some problems emerge in the
training process itself especially if it is not conducted properly. 3econd, problems may
emerge because of the mismatch between the person so trained and the nature of work
en!ironment.
.# &rid $rganisation Develo0ment
+t was de!eloped by (lake and :outon. +t utilizes or number of instruments,
enabling indi!iduals and groups to assess their own strengths and weaknesses. The basic
content of grid ?" is managerial grid. The whole orientation is to de!elop D,D managerial
style through the application of beha!ioural science knowledge. +t consists of six phases.
(1) Managerial grid* +t co!ers !arious aspects of assessing managerial styles,
problem sol!ing, communication skills and team work. The indi!iduals try to
learn to become D,D managers by practice.
(.) Team4ork Develo0ment* the focus in this stage is to de!elop teamwork by
analyzing team culture, traditions and the like.
(/) Inter grou0 develo0ment* At this stage, the focus is on inter5group beha!iour
and relations. =ach group separately analyses the ideal inter5group relationship.
(:) Develo0ing Ideal strategic Cor0orate Model* At this stage, the focus shifts to
the total organisation and to de!elop skills necessary for organisational
excellence.
(>) Im0lementing t!e Ideal trategic Model* This includes building of the
organisation on the model of ideal organisation on the basis of concepts
de!eloped under stage /.
(?) ,stematic Criti6ue* Critical analysis is made at this stage which will bring out
the short comings that may be there.
Criticism* +t lacks contingency approach, therefore, it discounts reality. 6urther <rid ?"
is a non # rigorous method.
/# urve, Feed 5ack
The basic ob4ecti!es of sur!ey feed back are
5 To assist the organisation is diagnosing its problems and de!eloping action
plan for problem sol!ing.
5 To assist the group members to impro!e the relationships.
+rocess
(1) Data Collection* The first step is data collection with the help of a structural
2uestionnaire. The 2uestionnaire may include different aspects of organisational
functioning. After the 2uestionnaires are completed, data are classified, tabulated and
analysis is made to arri!e at some meaningful conclusions.
(.) Feed -ack of information* The feed back is gi!en either orally or in a written
form to the persons who ha!e participated in the filling up of 2uestionnaires. +t should
be constructi!e and suggesti!e.
(/) Follo4 % u0 'ction* 6ollow # up action is taken based on the data collected. ?ne
such follow # up action may be to ad!ise the participants to de!elop their own action
plans to o!ercome the problems or in the form of de!eloping some specific ?"
inter!entions particularly process consultation and team building.
)valuation
+ositive*
@iA +t is cost # effecti!e means of implementing a comprehending ?"
programme.
@iiA +t generates great amount of information efficiently and 2uickly.
@iiiA "ecision # making and problem # sol!ing abilities of organisation can be
impro!ed tremendously.
Negative*
+t is not a techni2ue in itself. it pro!ides base for actions for change. The
effecti!es of this method depend on two factors:
@iA -uestionnaire used and method adopted for its administration should be
reliable and !alid.
@iiA +t is of no use unless follow # up action is taken.
:# +rocess Consultation*
+t is a techni2ue for inter!ening in an ongoing system. The consultant works with
indi!iduals and groups in the organisation to help them learn about human and social
processes to sol!e problems
te0s* 3chein has suggested the following steps:
(i) Initiate Contact* +n this stage, the client makes initial contact with the
consultant with a !iew to sol!e problems faced by the organisation.
(ii) Define t!e Relations!i0* At this stage, client and consultant enter into
agreement co!ering !arious aspects of consultancy ser!ices like fees and
spelling out ser!ices, time etc.
(iii) elect t!e etting and t!e Met!od* +t in!ol!es a clear # cut understanding of
where and how the consultant will do the 4ob that is re2uired.
(iv) &at!er Data and make a Diagnosis* +nformation is collected from !arious
sources through the use of 2uestionnaires, obser!ations and inter!iews about
the problems spelled out at the initial stage. This data gathering occurs
simultaneously with the entire consultati!e process. +nformation collected is
processed to diagnose the problems.
(v) Intervene* At this stage, the consultant inter!enes by using different
inter!entions like coaching, structural change etc.
(vi) Reduce involvement and Terminate* Ehen the P.C work is completed, the
consultant disengages from the client organisation by mutual agreement.
)valuation
Process consultant plays a ma4or role. %e suggests the !arious changes in the
processes and assists the organisational members to incorporate those changes. %ence it
is a !ery effecti!e inter!ention.
%owe!er, problem may emerge due to consultant9s inability to steer the
organisation out of troubles. Another problem may emerge at the le!el of organisation
and its members in terms of how they inculcate the new processes and culture as
suggested by the consultant. %owe!er, both these problem may be o!ercome by engaging
suitable consultant.
># Team 5uilding
Team building is the most important, widely accepted, and applied ?"
inter!ention. Harious steps of team # building process are repetiti!e and cyclical as
indicated by the following figure.
+rocess of Team 5uilding
(i) +ro-lem ensing* There are a number of ways in which problems of a team can
be identified. This problem can better be identified in terms of what is hindering team
effecti!eness. +n problem identification, the emphasis should be on consensus.
(ii) )<amining Differences* The perception of people on an issue differs and it may
be brought to conformity through the process of exercise on perception. The role of
communication is important in this context.
(iii) &iving and Receiving Feed -ack* The feed back should be gi!en to
the members about their feelings, about the issue, the way people talk about the issue
etc., 3uch feed back generally pro!ides members to e!aluate the !alues but at the
same time, also pro!ides opportunity to understand themsel!es.
(iv)Develo0ing Interactive kills* The basic ob4ecti!e of this process is to increase
the ability among the people as to how they should interact with others and engage in
constructi!e beha!iour. 6ollowing are examples of constructi!e and negati!e
beha!iours.
Constructive 5e!aviours* (uilding, (ringing in, clarifying, inno!ating.
Problem
sensing
=xamining
Perceptual
differences
<i!ing and
&ecei!ing
feed back
"e!eloping
interacti!e
skills
6ollow # up
action
Negative 5e!aviours* ?!er talk, Attacking, >egati!e.
At the time of discussion of feedback, people themsel!es take assignments to
increase specific constructi!e beha!iours and decrease specific negati!e beha!iours.
(v) Follo4 % u0 'ction* At this stage, the total team is con!ened to re!iew what has
been learned and to identify what the next step should be. These attempts bring co5
operati!e and supporti!e feelings among people in!ol!ed in the team functioning.
)valuation
+ositive
iA +t impro!es the organisation9s problem sol!ing and decision # making ability.
iiA +t helps in de!eloping effecti!e inter personal relationships.
iiiA +t helps de!eloping communication within the group and inter5group.
%owe!er it suffers from the following limitations:
iA +t focuses only on work teams.
iiA Team building becomes a complicated exercise when there is fre2uent change
in team members.
Management 5, $-9ectives (M5$)
:(? is not only an ?" inter!ention but also is a techni2ue and system which
helps in impro!ing organisational performance. The term :(? was coined by "rucker in
)D1/. +t has been defined as :(? is a comprehensi!e managerial system that integrates
many key managerial acti!ities in a systematic manner, consciously directed towards the
effecti!e and efficient achie!ement of organisational ob4ecti!es$. Features
). :(? is an approach and philosophy to management
*. :(? is bound to ha!e some relationship with e!ery management
techni2ue.
,. The basic emphasis of :(? is an ob4ecti!e.
/. The :(? is characterized by the participation of concerned managers in
ob4ecti!e setting and performance re!iews.
0. Periodic re!iew of performance is an important feature of :(?.
1. ?b4ecti!es in :(? pro!ide guidelines for appropriate system and
procedures.
:(? is a system for achie!ing organisational ob4ecti!es, enhancement of
employee commitment and participation. The process of :(? is shown in the following
figure:
M5$ +rocess
?rganisational
Purpose F ?b4ecti!es
Planning Premises
Ley result areas
3uperior9s ob4ecti!es
3uperior9s recommendation
for subordinate ob4ecti!es
3ubordinate9s statement of his
ob4ecti!e
3ubordinate9s agreed
ob4ecti!es
:atching resources
3ubordinate9s
performance
Performance re!iew and
Appraisal
1# etting of $rganisational +ur0ose and $-9ectives* The first basic step in :(? is
the definition of organisational purpose and ob4ecti!es. 7sually, the ob4ecti!e setting
starts at the top le!el of the organisation and mo!es downward to the lowest management
le!el. This will go in a se2uence like this
@iA "efining the purpose of the organisation.
@iiA ;ong # range and strategic ob4ecti!es
@iiiA 3hort # term organisational ob4ecti!es
@i!A "i!isional ' departmental ' sectional ob4ecti!es
@!A +ndi!idual manger9s ob4ecti!es.
1# Ae, Result 'rea* ?rganisational ob4ecti!es and planning premises together pro!ide
the basis for the identification of Ley &esult Areas @L&AA # =xamples of L&As are :
@iA Profitability, @iiA :arket standing @iiiA +nno!ation, @i!A Producti!ity etc.
.# etting u- % ordinateBs $-9ectives* The process of ob4ecti!e setting begins with
superior9s proposed recommendations for his sub5ordinate9s ob4ecti!es. +n turn, the
subordinate state his own ob4ecti!es as percei!ed by him. Thereafter, the final ob4ecti!es
for the subordinate are set by the mutual negotiation between superior and subordinate.
/# Matc!ing Resources 4it! $-9ectives* &esource a!ailability becomes an important
aspect of ob4ecti!e setting because it is the proper application of resources which ensures
ob4ecti!e achie!ement. Therefore, there should be matching between ob4ecti!es and
resources.
:# '00raisal* Appraisal is undertaken as an on5going process with a !iew to find out
deficiency in the working and also to remo!e it promptly.
># Rec,cling* The three aspects in!ol!ed in recycling process include setting of
ob4ecti!es at !arious le!els, action planning in the context of those ob4ecti!es and
performance re!iew. =ach of these aspects gi!es base for others
Rec,cling as0ect of M5$
5enefits of M5$
1# 5etter Managing* :(? helps in better managing the organisational resources and
acti!ities. &esources and acti!ities are put in such a way that they result into better
performance.
.# Clarit, in $rganisational 'ction* :(? tends to pro!ide the key result areas
@L&AsA where organisational efforts are needed. 3ince organisational ob4ecti!es are
defined !ery clearly, they help in relating the organisation with its en!ironment.
/# +ersonnel atisfaction* :(? pro!ides greatest opportunity for personnel
satisfaction. This is possible because of two closely # related phenomena participation in
ob4ecti!e setting and rational performance appraisal.
:# 5asis for organisational C!ange* :(? stimulates organisational change and
pro!ides a framework and guidelines for planned change, enabling top management to
initiate, plan, direct and control the direction and speed of change
+ro-lems and (imitations of M5$
3ome of the problems are inherent in :(? system itself while others emerge
because of wrong implementation. They are
1# Time and Cost* +t is a process which re2uires large amount of time of the senior
managers. 6urther, :(? generates paper work because large number of forms is to be
?b4ecti!e setting
Action Planning
Performance &e!iew
designed and put into practice. %owe!er, such problems are transitory aid emerge only at
the initial stages.
.# Failure to Teac! M5$ +!iloso0!,* :(? is a philosophy of managing an
organisation in a new way. %owe!er, managers fail to understand and appreciate this new
approach.
/# +ro-lems in $-9ective etting* :(? re2uires !erifiable ob4ecti!es against which
performance can be measures. %owe!er, setting such ob4ecti!es is difficult at least in
some areas.
:# )m0!asis on !ort %term $-9ectives* There is always a danger in emphasizing
short # term ob4ecti!es at the cost of long # term ob4ecti!es.
># Infle<i-ilit,* :(? represents the danger of inflexibility in the organisation,
particularly when the ob4ecti!es need to be changed.
?# Frustration* 3ometimes, :(? creates frustration among managers because, many
organisations could not implement :(? properly and introduction of :(? tends to
arouse high exception for rapid change, particularly among young and 4unior managers.
+re % re6uisites for Installing M5$ +rogramme
1# +ur0ose of M5$* :(? is a means rather than an end. %ence, the organisation
should be !ery clear about the purpose for which it is being implemented.
.# To0 Management u00ort* The presence of top management support is a critical
factor in determining the success of :(? programme. :anagement support for using
ob4ecti!es to plan and to control, working on a continuous basis, increase the probability
of success of a programme.
/# Training for M5$* 3ystematic training is re2uires in the organisation for
disseminating the concepts and philosophy underlying :(?. Another type of training
should be in the area of inter group and inter personal relationships because :(? entails
a lot of such elements.
:# +artici0ation* success with :(? re2uires a commitment on the part of each
indi!idual in!ol!ed in this type of system.
># Feed-ack for elf % direction and elf % control* 6eedback under :(? should take
two forms, first, the indi!idual should get periodic reports on where he stands on an
o!erall performance basis. 3econd, feedback is necessary in the form of periodic
counseling and appraisal inter!iew.
?# $t!er factors*
iA +f the full benefits of :(? are to be realized, it must be carried all the way
down to the first line of the organisation.
iiA ?rganisation9s compensation system should be tied with :(? programme.
iiiA The person responsible for introducing :(? must be certain that competing
ob4ecti!es are not set.
C!ange 'gent is anyone who possesses enough knowledge and power to guide and
facilitate the change effort. Transformational leaders are the primary agents of change
because they form a !ision of the desired future state, communicate that !ision in ways
that are meaningful to others, beha!e in ways that are consistent with the !ision and build
consistent to the !ision.
C!aracteristics of uccessful C!ange 'gents %=;P 3C?&=3$.
1# 3omo0!il,* it is the degree of closeness and similarly between change agent and the
client. The closer the relationship, the easier and more successful the change.
.# )m0at!,* it in!ol!es understanding of feelings and emotions of others.
7nderstanding is !ery helpful in bringing about the desired change.
/# (inkage* +t refers to the degree of collaboration between the change agent and the
client. The tighter the linkage, the more likely is the success.
:# +ro<imit,* The closer the proximity the better the relationship between the two.
># tructuring* +t in!ol!es proper and clear planning of all acti!ities that are related to
change.
?# Ca0acit,* +t refers to the organisation9s capacity to pro!ide the resources that are
needed for successful organisational de!elopment.
@# $0enness* The degree of openness between the change agent and the client would
considerably affect the outcome of the program.
C# Re4ard* All members expect that the change will bring potential benefits. The
greater the potential for rewards, the more determined the effort would be in making the
re2uired change.
D# )nerg,* +t refers to the amount of effort put into the change process.
1E# ,nerg,* +t means that the whole is more than the sum of its parts. This means that
the abo!e nine factors support success mutually as well as indi!idually, they are
fa!ourable to the programme.
Role of C!ange 'gents
The ob4ecti!e of the change agents is to bring desired change in the organisation.
%owe!er, for this purpose, a specific role is re2uired to be performed by the change
agents, both external and internal.
Role of )<ternal C!ange 'gent*
The external change agent is in a position to !iew the organisation meant for
change from a system !iew point. The role of consultant may include diagnosis of the
situation, planning strategy for change, inter!ening in the system and e!aluation of the
change efforts in the context of !arious out comes. The change programme will be
successful only when the consultant is gi!en the role of process consultation and the rest
of the programme is implemented by the organisation itself.
Role of Internal C!ange 'gents
The internal change agents are likely to accept the system as gi!en and try to
accommodate their change tactics to the needs of the organisation. There may be two
categories of persons who may act as internal change agents:
@iA Chief =xecuti!e and
@iiA Change Ad!isors
(i) C!ief )<ecutive* The chief executi!e sponsors the change programme and pro!ides
support and leadership for its success. Change programme has a greater chance of success
if it is sponsored by the chief executi!e when the change process proceeds smoothly, the
role of the chief executi!e may gradually reduce and other key members also act as
change agents in their respecti!e domain.
(ii) C!ange 'dvisors* These are the internal personnel initially selected to work in
close harmony with external consultant. They are trained by the consultant for
implementing the change. The change ad!isor9s role concerns primarily with the
organisation to accept the change programme and is essentially educational. %e helps the
manager to de!elop appropriate beha!iour and skills for the change process.
3uman Res0onse to C!ange
1# 'cce0tance* +f an employee percei!es that a change is likely to affect him
fa!ourably, he accepts it.
.# Resistance* &esistance means opposition to change. The resistance to change may be
in any of the following forms: aggression, apathy towards work, absenteeism and
tardiness, strikes etc.
/# Indifference* 3ometimes, the employees fail to realize the impact of change or some
people feel that they will not be affected by change. +f so, they will remain indifferent to
change.
:# Forced 'cce0tance* e!en if there is resistance to change in the initial stages but if
change forces are stronger than resistance forces, people ha!e to accept the change.
+erformance &a0 is a discrepancy between the desired and actual state of affairs.
6orce # Coercion strategy # uses authority, rewards and punishments to create
change.
&ational persuasion strategy uses facts, special knowledge, and rational argument
to create change.
A shared power strategy uses participatory methods and emphasizes common
!alues to create change.
Resistance to C!ange is an attitude or beha!iour that shows unwillingness to make or
support a change.
+nno!ation is the process of creating new ideas and putting them into practice.
$rganisational Diagnosis is the process of assessing the functioning of the organisation,
department, team or 4ob to disco!er the sources of problems and areas of impro!ement.
An accurate diagnosis of organisational problems and functioning is absolutely essential
as a starting point for planned organisational change
UNIT % "
$R&'NI'TI$N )"$(UTI$N 'ND UT)N'NC)
?rganisational life cycle5 :odels of transformation # :odels of organizational "ecision
making # organizational learning # +nno!ation, +ntrapreneurship and creati!ity # %&
implications.
$R&'NI'TI$N'( (IF) C7C()
?rganizations progress through a life cycle. The !arious stages in!ol!ed in life cycle are
se2uential in nature and follow a natural progression. -uinn and Cameron ha!e proposed
four ma4or stages to describe an organizations life cycle.
1# )ntre0reneurial stage* =!ery organization starts with the entrepreneurial stage. The
entrepreneur de!otes his'her whole energy in producing and marketing the product. At
this stage, the size of the organization is small. This stage is also known as 8one man
show9. %e'3he being the owner of the organization controls it. The organization at this
stage adopts organic structure. The organization re2uired to introduce management
techni2ues to mo!e to the next stage.
.# Collectivit, stage* %a!ing with the managerial direction and control organization
tends to take formal shape. "epartmentalization starts based on di!ision of labor
following hierocracy of authority. A strong leadership moti!ates employees to contribute
their maximum mite for accomplishing the organizational goals. This makes the structure
a highly organic one. >ow the organization needs delegation of authority to mo!e form
stage * to state , i.e. formalization stage.
/# Formalization stage* This is the middle stage of an organization. +n this stage, the
bureaucratic characteristics emerge in the organization. >ow, Policies, Procedures, and
rules are finalized to formalize the whole organization. +t is clarified who will report to
whom. These help managers exercise control o!er system and coordinate the
organizational acti!ities effecti!ely. Ehen bureaucratization and formalization assume
excessi!e proportions, these need to be curbed to ad!ance to the next stage, namely
elaboration stage.
:# )la-oration stage: The elaboration stage is marked by extensi!e control systems,
rules and procedures. +nno!ation is for formally institutionalized and assigned to the
research and de!elopment @&F "A department of the organization. +ndi!idual employees
often focus on maintaining the organizational acti!ities. +n order not to allow
organization to decline or die, this stage needs periodically to be re!italized. 6or
introducing re!italizing changes the old top managers are often replaced by new
managers with fresh ideas.
The organization that fails to re!italize itself trends to decline and ultimately dies.
(earning in organization*
;earning is a relati!ely permanent change in beha!ior that occurs as a result of a
person9s interaction with the en!ironment. ;earning occurs when interaction with the
en!ironment leads to beha!ior change. This means that we learn through our senses,
such as through study, obser!ation and experience ;earning is essential because the
organization9s sur!i!al and success depend on employees learning about external
en!ironment learning also influences indi!idual beha!ior and performance through three
elements of the :A&3 model. 6irst people ac2uire skills and knowledge through
learning opportunities which gi!es them the competencies to takes more effecti!ely.
3econd learning understanding of their tasks and relati!e importance of work acti!ities.
Third, learning moti!ates employees. =mployees are more moti!ated to perform certain
tasks because they learn that their effort will result in desire performance.
(earning )<0licit and Tacit kno4ledge
Ehen employees learn, they ac2uire both explicit and tacit knowledge. =xplicit
knowledge is organized and can be communicated from one person to another. The
information we recei!e in a lecture is mainly explicit knowledge. =xplicit knowledge can
written down and gi!en to others
Tacit knowledge is not documented, rather it is action oriented and known
bellows the le!el of consciousness. Tacit knowledge is ac2uired through obser!ation and
direct experience.
Nature of learning
). ;earning in!ol!es a change in beha!ior
*. The beha!ioral change must be relati!ely permanent
,. The beha!ioral change must be based on some form of practice or experience
/. The practice or experience must be reinforced in order for learning to occur.
Com0onents of (earning +rocess
1# Drive* ;earning fre2uently occurs in the presence of dri!e any strong stimulus
that impels action. Eithout dri!e, learning does not take place. "ri!es are basically of
two types5 primary or physiological and secondary or psychological dri!es. +ndi!iduals
operate under many dri!es at the same time. To predict beha!iour it is necessary to
establish which dri!es or stimulating the most.
.# Cue timuli are any ob4ects existing in the en!ironment as percei!ed by the
indi!idual. There may be two types of stimuli so for as their results in terms of response
are concerned: <eneralization and discrimination.
). <eneralisation occurs when a response is elicited by a similar but new
stimulus. The principle of generalization has important implication for human learning.
(ecause of generalization a person does not ha!e to completely relearn each of the new
tasks or ob4ects which constantly control him. +t allows the organizational members to
adapt to o!erall changing conditions and specific new or modified 4ob assignments. .
*. "iscrimination is opposite of generalization. This is a process whereby there is
a response to a stimulus but not same response to a similar but some that different
stimulus.
,. &esponses the stimulus results into responses. &esponses may in the physical
form or may be in terms of attitudes perception etc.
/. &einforcement may be defined as en!ironmental e!ents affecting the
probability of occurrence of responses with which they are associated. The role of
reinforcement in learning is !ery important.
0. &etention: The stability of learned beha!iour o!er time is defined as retention.
3ome of the learning is retained o!er a period of time, while others may be forgotten.
Factors affecting learning
1# Motivation: ;earner9s moti!ation is one of the ma4or conditions for learning.
The degree of learner9s moti!ation is positi!ely associated with his learning.
.# Mental set: :ental set refers to the preparation for an action +f a person is
prepared to act the can do the things 2uickly.
/# Nature of learning materials: >ature of learning materials affects learning by
pro!iding clue for understanding. @iA if the learning material is of easy nature it is learned
2uickly @iiA +f the learn is familiar with the learning material the can learn more 2uickly
@iiiA +f serial position shape and meaningful users of learning materials are positi!e
learning taken place at faster rate.
:# +ractice* The more a person practices more he absorbs learning contents.
:ost of the motor skills @like typing, swimming dri!ing etc.,A are learned based on this
principle.
># )nvironment* =n!ironment in which process occurs affects learning.
=n!ironment with high pressure and high rate of change increases the likelihood of stress
and has negati!e impact of learning en!ironment with features of support cohesion and
affiliation has positi!e impact of learning.
+ers0ectives of (earning:
). &einforcement *. 3ocial learning and ,. "irect experience
=ach perspecti!e offers a different angle for understanding the dynamics of learning.
5e!aviour Modification*
;earning through &einforcement: ?ne of the oldest perspecti!es on learning,
called beha!iour modification @also known as operant conditioning and reinforcement
theoryA takes the extreme !iew that learning is completely dependent on the en!ironment.
&einforcement is !ery important for learning because beha!ioural response in
conditioned by reinforcement. &einforcement can be defined as anything that increases
the strength of response and trends to induce repetitions of the beha!iour that precede the
reinforcement.
'-5-CBs 5e!aviour modification*
(eha!iour modification recognizes that beha!iour is influenced by two
en!ironmental contingencies: the antecedents and the conse2uences. The central
ob4ecti!e of beha!iour modification is to change beha!iour @(A by managing its
antecedents @AA and conse2uences @cA.
Antecedents are e!ents preceding the beha!iour informing employees that certain
beha!iours will ha!e particular conse2uences.
Conse2uences are e!ents following a particular beha!iour that influences its
future occurrence. People tend to repeat beha!iour that are followed by pleasant
conse2uences and are less likely to repeat beha!iour that are followed by unpleasant
conse2uences. This can be explained by the following figure.
Contingencies of Reinforcement*
(eha!iour modification identifies four types of conse2uences, collecti!ely known
as the contingencies of reinforcement that strengthen, maintain or weaken beha!iour.
). Positi!e reinforcement: Positi!e reinforcement occurs when the introduction of
a conse2uence increases or maintains the fre2uency or future probability of a beha!iour.
&ecei!ing a bonus after successfully completing an important pro4ect usually creates a
positi!e reinforcement.
(eha!iour
what person
says or does
Antecedents
what happens
before beha!iour
Conse2uences
what happens
after beha!iour
*. >egati!e reinforcement: >egati!e reinforcement occurs when the remo!al or
a!oidance of a conse2uence increases or maintains the fre2uency or future probability of
beha!iors. 3uperiors apply negati!e reinforcement when they stop criticizing employees
whose substandard performance has impro!ed negati!e reinforcement is sometimes
called a!oidance learning.
,. Punishment: Punishment occurs when a conse2uence decreases the fre2uency
or future probability of a beha!ior. +t may occur by the super!isor9s introducing an
unpleasant conse2uences or remo!ing a pleasant conse2uence. =xample # =mployee is
threatened with a demotion or discharge after treating client badly.
/. =xtinction: =xtinction occurs when the target beha!iour decreases because no
conse2uence follows it. (eha!iour that is no longer reinforced tends to disappear, it
becomes extinct. +n this respect extinction is a do5nothing strategy. The following figure
illustrates the types of contingencies.
Ehat contingency of reinforcement should be used in the learning processN +n
most situations, positi!e reinforcement should follow desired beha!iour and extinction
should follow undesirable beha!iours. This is because there are fe!er ad!erse
conse2uences when applying these contingencies compared with punishment and
negati!e reinforcement. %owe!er, some form of punishment may be necessary for
extreme beha!iour such as stealing in!entory and punishment maintains a sense of e2uity,
%owe!er, Punishment and negati!e reinforcement should be applied cautiously because
they generate negati!e emotions and attitudes towards the punisher and organization.
1# c!edules of Reinforcement
The most effecti!e schedule of reinforcement for learning new tasks is continuous
reinforcement. =mployees learn desire beha!iours 2uickly and when the reinforcement is
remo!ed, extinction also occurs !ery 2uickly.
A !ariable inter!al schedule is common for promotions.
6ixed ratio schedule #reinforcement after a fixed number of beha!iour
Companies often use a !ariable ratio schedule in which employee beha!iour is reinforced
after a !ariable number of times. 3ales people experience showed that !ariable ratio
reinforcement is good because they make a successful sale after a !arying number of
client calls. The !ariable ratio schedule is a low cost way to reinforce beha!iour because
employees are rewarded infre2uently.
ocial (earning T!eor,* (earning -, o-serving
3ocial learning theory states that much learning occurs by obser!ing others and
then modeling the beha!iours that lead to fa!ourable outcomes ad outstanding beha!iours
that lead to punishing conse2uences. Three related features of social learning theory are:
beha!ioural modeling, learning beha!iour conse2uences and self reinforcement.
(1) 5e!aviour modeling*
People learn by obser!ing the beha!iour of a role model on the critical tasks,
remembering the important elements of the obser!ed beha!iour and then practicing those
respected and the model9s action are followed by fa!ourable conse2uences. +t is !aluable
form learning because tacit knowledge and skills are mainly ac2uired from other in this
way.
(.) (earning -e!aviour conse6uences
This element learning theory says that we learn by logically thinking through the
conse2uences of our actions.
@iiiA 3elf &einforcement: 3elf &einforcement occurs whene!er an employee has control
o!er a reinforcement but does not take the reinforcement until completing a self #set
goal. &einforcement has become increasingly important because employees are gi!en
more control o!er their working li!es and are less dependent on super!isors.
(earning T!eor, )<0erience
Lolb9s experiential learning model illustrates experiential learning as a cyclical
four #stage process.
Concrete experience in!ol!es sensory and emotional engagement in some acti!ity.
+t is followed by reflecti!e obser!ation, which in!ol!es listening, watching recording and
elaborating on the experience. The next stage in the learning cycle is abstract
conceptualization. This is the stage in which we de!elop concepts and integrate are
obser!ations in to logically sound theories. The fourth stage, acti!e experimentation,
occurs when we test our pre!ious experience reflection and conceptualization in a
particular context.
;earning through experience works best where there is a strong learning
orientation. The fastest growing form of experiential learning in the workplace is called
action learning. Action learning is considered one of the most important ways to de!elop
executi!e competencies.
(earning T!eories
Acti!e
experimentation
Concrete
experience
&eflecti!e
obser!ation
Abstract
conceptualisa
tion
;earning theories can be grouped in to three categories.
@iA Conditioning theory 'connectionist'beha!iouristic theory.
@iiA Cogniti!e learning theory and
@iiiA 3ocial learning theory.
I conditioning t!eor,
Conditioning is the process in which an ineffecti!e ob4ect or situation becomes so
much effecti!e that it mach the hidden response apparent. This is based on the premise
that learning is establishing association between response and stimulus conditioning has
two theories @aA classical conditioning and @bA operant conditioning.
(a) Classical conditioning* Classical conditioning states that beha!iour is learned by
repetiti!e association between a stimulus and a response @3 #& associationA four elements
are always present in classical conditioning @iA unconditioned stimulus @73A @iiA
7nconditioned response @7&A @iiiA conditioned stimulus @C3A @i!A Conditioned &esponse
@C&A. The work of the famous &ussian physiologist and >obel Prize winner, +!an Pa!lo!
demonstrated the classical conditioning process. Classical conditioning theory
experimented with a dog is presented in the follow figure.
I 5efore conditioning
:eat @73A 3ali!ation @7&A
(ell @>eutral stimulusA >o response
++ During conditioning
:eat @73A O (ell @C3A 3ali!ation @7&A
+++ 'fter conditioning
(ell @C3A 3ali!ation @C&A
Classical conditioning has some important implications for understanding
human beha!ior. Another implication of higher5order conditioning is that reinforcement
can be ac2uired. A conditioned stimulus becomes reinforcing under higher order
conditioning. This shows the importance of secondary rewards @higher order
conditioningA in organization. %owe!er, this theory fails to explain total beha!ior of
human being.
(-) $0erant conditioning*
?perant is defined as beha!iour that produces effects. ?perant conditioning
suggests that people emit responses that are rewarded and will not emit responses that are
either not rewarded or punished. ?perant conditioning implies that beha!ior is !oluntary
and it is determined maintained and controlled by its conse2uences. The basic principle
of learning new beha!ior in!ol!es the relationship between three elements.
). 3timulus situation
*. (eha!iour response to the person.
,. Conse2uence of the response to the person.
=xample 5 application of brake by !ehicle dri!er to a!oid accident.
6ear of accident @without application brakeA # stimulus situation
Application of brake # beha!ioural response
A!oidance of accident # conse2uence of response
:anagement can use the operant conditioning process successfully to control and
influence the beha!iour of employees by designing the suitable reward system. ?perant
conditioning leads to a !ery comprehensi!e approach to reinforcement and beha!iour
modification.
@ii) Cognitive (earning t!eor,
Cognition refers to an indi!idual9s ideas, thoughts, knowledge, interpretations
and understanding about himself and his en!ironment. The cogniti!e approach
emphasizes the positi!e and free #will aspects of human beha!iour. This model was
de!eloped from the work done by Tolman. According to this theory of learning,
@iA 3timulus @sA leads to another stimulus or 353 rather than the classical 35& or the
operant @&53A explanation and
@iiA ;earning consists of a relationship between cogniti!e en!ironmental cues and
expectation and beha!iour is goal5directed.
This theory has rele!ance in the field of moti!ation. Harious expectancy theories of
moti!ation deri!e clues from cogniti!e theory of learning.
III ocial (earning t!eor,*
3ocial learning theory combines and integrates both beha!iouristic cogniti!e
concepts and emphasizes the integrati!e nature of cogniti!e, beha!ioural and
en!ironmental determinants. According to social learning theory, learning occurs in two
steps.
@iA The person obser!es how others act and then ac2uires a mental picture of the act and
its conse2uences @reward F PunishmentA
@iiA The person acts out the ac2uired image and if the conse2uences are positi!e he will
tend to do it again +f the conse2uences are negati!e the person will not do it again
A simple example of this phenomenon is that people learn that fire burns the body is
learned from others and not necessarily by touching the fire.
Integrating various (earning T!eories
Though the !arious learning theories differ in their orientation, all theories try
to explain the logic behind learning process. =ach theory focuses on a specific feature of
learning and does not fully explain the phenomena of learning in all situations.
Therefore, to understand how learning takes place, we ha!e to take all these theories in an
integrated way.
(earning $rganisationF
?rganisation learning is process a set actions when learning organization is an entity.
<ar!in has defined a learning organization as A learning organization is one which is
skilled at creating, ac2uiring and transferring knowledge and modifying its beha!iour t
reflect new knowledge and insights$.
Decision % making models
There are three decision making models. They are @iA &ational @iiA (ounded &ationality
and @iiiA Political
(i) Rational Model*
The rational model in!ol!es a process for choosing among alternati!es to
maximize benefits to an organization. +t includes comprehensi!e problem definition
throughout data collection and analysis and a careful assessment of alternati!es.
+ndi!idual preferences and organizational choices are a function of the best alternati!e for
the entire organization. The rational model of decision making is based on the explicit
assumptions that @)A all a!ailable information concerning alternati!es has been obtained
@*A These alternati!es can be ranked according to explicit criteria and @,A the alternati!e
selected will pro!ide the maximum gain possible for the organization.
Perox six stages process: Perox de!eloped a companywide six stages rational process for
guiding decision making that is presented in the following table.
+n terms of the indi!idual the rational model puts a premium on logical thinking. +t
encourages more deliberation including the search for critical pieces of information one
ob!ious limitation of the rational model is that is full use can take considerable amount of
time. The resources re2uired to use the rational model may exceed the benefit from it.
This approach re2uires considerable data and information, which may be hard to obtain.
:oreo!er, if the situation keeps 2uickly become obsolete e!en when the rational process
is used decision makers may simply change the stated goals, criteria or weights if a
fa!oured alternati!e doesn9t come out on top.
Intra0reneurs!i0
=ntrepreneurship within an existing organization or business structure is said to be
the intrapreneurship.
+n the present era of hyper competition the need for new products of hyper competition,
need for new products and the intrapreneurial spirit ha!e become so great that more and
more companies are de!eloping an intrapreneurial en!ironment.
Intra0reneurs*
The entrepreneurs emerging from within the organization are called
intrapreneurs.
The intrapreneurs are top executi!es encouraged to catch hold of new ideas to
con!ert them into product.
)sta-lis!ing Intra0reneurs!i0 in t!e organization*
An organization desiring to establish an intrapreneurial en!ironment must
implement a procedure for its creation. This is particularly true when the organization
en!ironment is !ery traditional and has a record of little change and few new products
being introduced.
@iA To0 Management commitment
The first step in this process is to secure a commitment to intrapreneurship in the
organization by top upper and middle management le!els.
?nce the top management of the organization has been committed to intrapreneurship
for sufficient period of time @at least , yrsA the concept is introduced throughout the
organization.
This is accomplished most effecti!ely through seminars, where the aspects of
intrapreneurship are introduced and strategies are de!eloped to transform the
organizational culture into a intrapereneurial one.
?nce the initial framework is established and the concept embraced, intrapreneurial
leaders need to be identified selected and trained. This training needs to focus on
identifying !iable opportunities and their markets and de!eloping the appropriate
business plan.
II Ideas and &eneral areas s!ould -e identified
3econd ideas and general areas that top management is interested in
supporting should be identified along with the amount of risk money
that is a!ailable to de!elop the concept further.
?!er all program expectations and the target results of each
imtrapreneurial !enture should be established.
As much as possible these should specify the time frame, !olume and
profitability re2uirement for the new !enture, and the impact of the
organization.
(iii) Using of Tec!nolog,*
Third a company needs to use technology to make it more flexible.
Technology has been used successfully for the past decade by small companies that
beha!e like big ones.
3imilarly large companies can use technology to make themsel!es
responsi!e and flexible like smaller firms.
(iv) +rovide training to em0lo,ees*
6ourth the organization should be a grap of interested managers who will train
employees as well as share their train employees as well as share their experience.
The training session should be conducted on day per month for a specified period
of time.
(v) Develo0ing t!e 4a,s to get closer to it customer*

6ifth the organization needs to de!elop ways to get closer to its customer.
This can done by
Tapping the database
%iring from smaller ri!als.
%elping the retailer
(iv) (earn to -e more 0roductive 4it! fe4er resources*

3ixth an organization that wants to become more entrepreneurial must learn to
be more producti!e with fewer resources. Top hea!y organiations are out of data in
today9s hyper competiti!e en!ironment. To accommodate the large cutbacks in middle
management, much more control has to be gi!en to subordinates at all le!els in the
organization. The span of control may become as high as ,M to ,1 indi!iduals of such
companies.
(viii) )sta-lis! strong su00ort structure*
3e!enth the organisation needs to establish a strong support structure for
intrapreneurship.This is particularly important because intrapreneruship is usually a
secondary acti!ity in the organization. To be successful these !enture re2uires flexible
inno!ati!e beha!iour with the intrapreneurs ha!ing total authority o!er expenditure and
access to sufficient funds.
("iii) Re4ard t!e entre0reneurial unit
=ighth support must also in!ol!e tying the reward to the performance of the
intrapreneurial unit. This encourages the team members to work harder and compete
more effecti!ely since they will benefit directly from their effort.
6inally the organization needs to implement an e!aluation system that allows
successful intrapreneurial units to expand and unsuccessful ones eliminated.

JJJJ