Change in Organizations

Organizational Change
Organizational change is the adoption of a new idea or
behavior by an organization

Is both- The process

-The outcome

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 Need of Organizational Change

Dr. Anjali Bansal (MICA): All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Need and Strategic Role of Change in
Organizations
Organizations operate in complex and rapidly changing environments,
thus, organizations are designed with the ability to change constantly to
create the best sustainable source of competitive advantage.
Organizations must run fast to keep up with changes taking place all around
them.

Todays organizations must keep themselves open to continuous innovation to

survive.
Change has become the norm today.
E.g. World bank
E.g. IKEA

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 Forces for Change in Organizations
Competitive
Ethical and
Pressures
Moral Reasons Life-Cycle
Life-
Coincidental
Forces
Changes
Growing
Technological
International
Advances
Interdependence
Pressure for
Change
Introduction
or Removal of Changes in
Government Demographics
Regulations
Shifting
Changes in
Political
Societal Values
Dynamics Performance
Trend/ Fashion
Pressures pressures
Internal and External Pressures for Organizational Change
 Integrative Life-Cycle Model
Entrepreneurial Need for leadership
Stage

Need for stability

Collectivity and structure
Need for Stage
delegation
and additional
people Formalization and
Control Stage
Need for
innovation
Elaboration
Stage

Adapted from Exhibit 14-2: Integrative Life-Cycle Model

 Speed of Change

Urgency

Degree of support

Amount and complexity of change

Criteria to
Consider Competitive environment

Knowledge and skills available

Financial and other resources

 Style of Change
Non-participatory top down, leaders design the change
and plan its implementation

Participatory change leaders seek the ideas and advice

of associates and then use many of those ideas.
Criteria for evaluating the degree to which the participatory
style should be used:

Referent and
Degree of
Urgency Expert Power
Support
of Leaders
 Process of Planned Change
Kurt Lewin

Unfreezing Moving/ Changing Refreezing

Provide rationale Provide information Implement new

for change that suspects evaluation systems
Create minor proposed changes Implement new
levels of Bring about actual hiring and promotion
guilt/anxiety about shifts in behavior systems
not changing Reinforcement
Create sense of
psychological
safety concerning
change
Process of Planned Change
Resistance to Change: 5 Monkeys and a Ladder Experiment
 Resistance to Change
Effort to block new ways of
doing things

Four Factors

Lack of Different
understanding assessments

Self--interest
Self Low tolerance
for change
Resistance to Change by Employees
1. The DADA syndrome
Denial ignore the occurrence of change

Anger individuals facing unwanted change

become angry about the change

Depression individuals experience

emotional lows

Acceptance individuals embrace the

reality of the situation and make the best of it
 2. Transition Curve (by Elizabeth Kubler Ross)

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 Organizational Development
OD refers to a long-range effort to improve
an organizations problem-solving
capabilities and its ability to cope with
changes in its external environment with the
help of external or internal behavioral-
scientists and consultants.

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 Organizational Development Change
Interventions
Technological Interventions
Structural Interventions
Cultural Interventions
Human Resources Management Interventions
Strategic Interventions

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 Technological Interventions
Innovative organizations
Introduction of ERP
Advanced means of communication
Developments in machines , tools and techniques
Incorporating eBusiness
Total Quality Management (Six Sigma)
Changing work design

Key Challenges
Choice of technology
The IT team
Communication of technology
Handling flexibility
Contingency planning

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 Structural Interventions
Changing organizations overall structures (L&T)
Creating new departments (Nikon)
Delayering (Shift toward horizontal structures)
Virtual network strategies
Outsourcing
Downsizing (retrenchment, downscaling, downscoping)
Chain of command (Centralized vs. Decentralized decision making)
Mechanistic structures vs. organic structures
Job Structures shift
Short term staffing vs. Long term staffing
Key Challenges
Employee retention
Survivor syndrome
Choice of restructuring technique
Communication
Training
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 Cultural Interventions
Empowerment
Flexi workgroups
Key Challenges
Bottom up approach
Cross-cultural training
Communication

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 HR Management Interventions

Interdepartmental activities
Large group interventions (whole system in room)
Change in Leadership
Flexi work hours and work place/ work from home
Key Challenges
Needed third-party interventions (Conflict Resolution)
Team building
Psychological distress
Lack of motivation

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 Strategic Interventions
Strategic Alliances
Mergers and Acquisitions
Joint ventures
Takeovers
Vertical integration
Key Challenges
Cost savings
Cultural adjustments
Due diligence
Employee retention
Power structure
Communication

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 Techniques To Overcome Change Resistance

1. Alignment with needs and goals of users

(favorable HR practices)
2. Communication in all stages
3. Training at all levels
4. Participation and involvement
5. Forcing and coercion

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