Unit 17 Organisational Culture and Climate: Structure

UNIT 17 ORGANISATIONAL CULTURE AND CLIMATE
Structure
17.0 Objectives
17.1 Introduction
17.2 Concept of Organisational Culture
17.3 Basic Elements of Culture
17.4 Functions of Organisational Culture
17.5 Factors Influencing Organisational Culture
17.6 Impact of Organisational Culture
17.7 Culture-Person Compatibility
17.8 Developing Organisational Culture
17.9 Concept of Organisational Climate
17.10 Dimensions of Organisational Climate
17.11 Creating Favourable Organisational Climate
17.12 Let Us Sum Up
17.13 Key Words
17.14 Terminal Questions
17.0 OBJECTIVES
After studying this unit, you should be able to :
• explain the meaning of organisational culture;

• describe various factors influencing organisational culture;
• explain functions of organisational culture;
• identify various impact created by organisational culture;
• describe steps leading to building effective organisational culture;
• discuss the concept of organisational climate;
• describe the dimensions of organisational climate; and
• suggest the process of creating favourable organisational climate.
1.1 INTRODUCTION
Organisational culture refers to a system of shared meaning held by its members. It is expressed in terms of
norms, values, attitudes and beliefs shared by organisational members. The organisational culture must be
created and sustained in such a way that it develops the congenial environment in the organisation. On the
other hand, organisational climate consists of a set of characteristics and factors that are perceived by the
employees about their organisation. Organisation must create favourable organisational climate for
improving the organisational effectiveness. In this unit, you will learn the concept, basic elements,
functions, factors and impact of organisational culture. You will be acquainted with the concept of culture
person compatibility and the process of development of organisational culture. You will further learn the
concept and dimensions of organisational climate and the process of creation of the favourable
organisational climate.
17.2 CONCEPT OF ORGANISATIONAL CULTURE
Culture is the pivot of any group or society. It determines the way members interact with one another and
with outsiders. Stoner, Freeman and Gilbert have described culture, as the complex mixture of assumptions,
behaviours, stories, myths, metaphors, and other ideas that fit together to define what it means to be a
member of a particular society. However scope of this chapter is limited to the study of culture within the
organisation.
When an organisation takes on a life of its own, apart from any of its members, and acquires immortality, the
organisation is said to be institutionalised. When an organisation takes on institutional permanence,
acceptable modes of behaviour become largely self-evident to its members. So an understanding of what
makes up an organisation’s culture, and how is it created, sustained, and learnt will enhance our ability to
explain and predict the behaviour of people at work. Organisational culture is described as the set of
important understandings, such as norms, values, attitudes, and beliefs, shared by organisational members.
According to the recent understanding about organisational culture, ‘system of shared meaning among
members’, is the essential core of organisational culture.
According to Eliott Jacques, an organisational culture is the customary or traditional ways of thinking and
doing things, which are shared to a greater or lesser extent by all members of the organisation, which new
members must learn and at least partially accept in order to be accepted into the service of the firm.
According to various studies, following are the primary characteristics of an organisation’s culture:
Innovation and Risk Taking: The degree to which employees are encouraged to take innovative steps and
to take calculated risk;
Attention to Detail: The degree to which employees are expected to pay attention to detail;
Outcome Orientation: The degree to which management focuses outcome rather than on process to achieve
outcome;
People Orientation: The degree to which management gives attention to effect of decisions on people
working in the organisation and on its shareholders;
Team Orientation: The degree to which works are organised around team rather than individuals;
Aggressiveness: The degree to which people are aggressive or competitive rather than easygoing;
Stability: The degree to which maintaining status quo is emphasized in contrast to growth;
Individual Autonomy: The degree of responsibility, independence, and opportunities for exercising
initiative that individuals in an organisation have;
Structure: The degree of rules and regulations and the amount of direct supervision that is used to oversee
and control behaviour;
Support: The degree of assistance and warmth managers provide for their subordinates;
Identity: The degree to which members identify with the organisation as a whole rather than with their
particular work group or field of professional expertise;
Performance-Reward: The degree to which reward in the organisation are based on employee work
performance;
Conflict Tolerance: The degree of conflict present in relationships between peers and work groups as well
as the willingness to be honest and open about differences;
Attitude Towards Change: The response given to new methods, ways, and values;
Focus: the vision of the goals and objectives of an organisation’s operations as communicated by those in
control;
Standard and Values: The levels of performance and behaviour considered to be acceptable by formal and
informal criteria;
Rituals: Expressive events that support and reinforce organisational standards and values;
Openness, Communication, and Supervision: The amount and type of interchange permitted; the
communication flow can be downward, upward, across the organisation, and in other directions as spelled
out by the culture;
Market and Customer Orientation: The extent to which the organisation is responsive to its markets and
customers;
Excitement, Pride, and esprit de corps: A tangibly good feeling about the organisation and its activities;
Commitment: The willingness of the individuals to work toward goals on a continuing basis.
Activity A
Note down the 21 factors mentioned above, on three different sheets. Discuss with three executives working
in different organisations, about how do they feel about each of the 21 factors while working for the
organisation. You might find different pictures of organisational culture in different organisations.
…………
……………………
……………
…………
……………
……………
………………
………
… …
………
……
………………
…………
…………………
…………
……………
……………
………………
………………
…………………
… …
……………
………………
………
……………………
……………
……
……
……
……
……
…
…………
……………………
………………
………
……………………
………………
………
……………
………
………
………………
………………
… …
…………
……………
………………
……………
…………………………
……………………
………………
…………
……………
… …
………
…… …
……
……
……
……
……
…
17.3 BASIC ELEMENTS OF CULTURE

According to Schein there are three basic elements of organisational culture:
Artifacts: It is the first level of organisational culture. It is observable symbols and signs of the
organisations. It includes visible parts of organisation e.g., structures, processes etc. Artifacts are hard to
decipher.
Espoused Values: These are the reasons (e.g., strategies, goals, philosophies) given by an organisation for
the way things are done. It is the second level of organisational culture.
Basic Assumptions: Basic assumptions are the beliefs that are taken for granted by the members of an
organisation. These are ultimate source of values and action that include: unconscious, perceptions, taken-
for-granted beliefs, thoughts, feelings etc. It is the third level of organisational culture.
Organisational culture may be distinguished with respect to their core basic values. Core values are the
primary or dominant values that are accepted throughout the organisation. The dominant values determine
the dominant culture of an organisation. Thus, the dominant culture reflects the core values that are shared
by most of the members of the organisation. According to Martin there are four such core basic values:
• Sensitivity to needs of customers and employees;
• Freedom to initiate new ideas;
• Willingness to tolerate new risks;
• Openness to communication options.
However presence of dominant culture within the organisation does not mean that there may not be
subcultures within any given culture. Particularly in large organisations there may be subcultures within the
dominant culture. Subcultures are minicultures within an organisation, typically defined by department
designations and geographical separation.
Some organisations may have strong culture whereas others may have weak culture. In organisations having
strong cultures, core values are intensely held and widely shared. In weak cultures managerial styles may be
more person-centred. Strong cultures lead to more behavioural consistency and less employee turnover.
Strong cultures may also serve as substitute of formalisation.
Various studies suggest that national culture has a great impact on employees than does their organisation’s
culture. This factor should be taken into consideration while applying behavioural intervention in
multicultural organisation.
17.4 FUNCTIONS OF ORGANISATIONAL CULTURE

Culture is the social glue that helps hold the organisation together. There are three basic functions of
organisational culture:
• It provides a sense of identity for members;
• It enhances commitment to the organisation’s mission;
• It clarifies and reinforces standards of behaviour.
Child has explained that culture is one of strategic tools of control in organisations. According to him
cultural control helps in four areas:
• Development of strong identification with management goals;

• Development of semi-autonomous working with few formal controls;
• Having strong emphasis on selection, training and development of personnel;
• Having reward oriented climate towards security of tenure and career progression.
However there is another side of the coin. If organisational culture can be an asset, sometimes it may become
liability also. There are dysfunctional effects of culture, especially a strong one, on organisational
effectiveness. Some of the barriers created by especially a strong organisational culture are following:
Barrier to Change: Consistency of behaviour is an asset to an organisation when it faces a stable
environment. It may, however, burden the organisation and make it difficult to respond to changes in the
environment.
Barrier to Diversity: Especially in multicultural organisations, people from different cultural background
may bring diverse strength to the work place. Yet these diverse strengths and behaviours are likely to
diminish in strong organisational culture due to strong pressure for conformity. Again, organisational culture
may become liability if it creates institutional bias or perpetuates insensitive approach to people from
different cultural background.
Barrier to Acquisition and Merger: During acquisition and merger, high degree of cultural confluence
takes place. When two or more companies having different organisational culture are merging, all need to
evolve a unique culture for the newly emerged organisation. However if one or more partners are having
stubbornly strong culture, the culture may play negative role in the whole episode of acquisition and merger.
Check Your Progress A
1) How culture in an organisation gets established?

…
………
……
…………
… …
………………………
……………
………
……………………
…………
………………………
………………
………
… …
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
…
2) What purpose organisational culture serves in an organisation?

…
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
5.5 FACTORS INFLUENCING ORGANISATIONAL CULTURE

In an organisation culture begins through various forces. Once organisational culture is created, the culture is
sustained through various other forces. After this stage cultures are formed and then employees learn culture
by merely existing in a particular cultural environment. Let us now learn the beginning of culture, sustaining
the culture, formation of culture, and learning the culture by employees.
The process of culture creation occurs in three ways:
• Employers only hire and keep employees who think and feel the way they do;
• Employers indoctrinate and socialise these employees; and
• Top management own behaviour acts as a role model that encourages employees to identify with them.
Three forces play important part in sustaining a culture:
• Selection practices;
• Actions of top management; and
• Socialisation method.
An organisational culture is thus formed through interaction of various forces. Mainly these forces are:
philosophy of organisation; selection criteria; top management as role model; and, socialisation process.
Employees come to know about their organisation’s culture through various mechanisms. Some important
key mechanisms involved are discussed below:
Symbols: These are material objects that connote meanings and extend beyond their intrinsic content;
Stories: Stories illustrate key aspects of an organisation’s culture, and telling them can effectively introduce
or reaffirm those values to employees;
Jargon: It is the special language that defines a culture;
Ceremonies: These are repetitive sequences of activities that express and reinforce the key values of the
organisation, which are more important goals, which are important people, and which are expendable; such
special events commemorate Corporate values;
Statement of Principles: It is done to define culture in writing; some organisations have explicitly written
their principles for all to see.
17.6 IMPACT OF ORGANISATIONAL CULTURE

Various studies have suggested that there are some factors responsible for making the organisational cultures
more successful than others. One study by Kotter and Heskett indicate that culture has a strong impact on the
performance of organisations. The study has four main conclusions:
• Corporate culture can have a significant impact on a firm’s long-term economic performance;
• Corporate culture will probably be an even more important factor in determining the success or failure of
firms in future;
• Corporate cultures that inhibit strong long-term financial performance are not rare; they develop easily,
even in firms where there are full of reasonable and intelligent people;
• Although tough to change, corporate cultures can be made more performance enhancing.
In an organisation, combination of objective factors (innovation, risk taking, attention to detail, outcome
orientation, people orientation, team orientation, aggressiveness, stability) are perceived as organisational
culture, having either high strength or low strength or in between, which leads to performance and
satisfaction.
Impact of culture on organisation’s effectiveness is both functional as well as dysfunctional. On the positive
side, culture has impact on control, normative order, innovation, promotion, and employee’s performance
and satisfaction. On the negative side culture may lead to groupthink, collective blind spots, resistance to
change and innovation.
17.7 CULTURE-PERSON COMPATIBILITY
Culture is basically not a subject of evaluative study rather is basically a descriptive study. Every type of
culture has its functional as well as dysfunctional aspects. It would be interesting to see that different types
of culture suit to different types of person. Study of Goffee and Jones suggest that there are two factors,
which determine organisational culture. The first is sociability. It is consistent with a high people orientation,
high team orientation, and focus on processes rather than outcomes. The second is solidarity. It is a measure
of task orientation, and is consistent with high attention to detail and high aggressiveness. The two
dimensions may be either high or low in a particular culture.
These two dimensions yield four types of distinctive organisational culture which are discussed below:
• Networked culture (high on sociability; low on solidarity): Positive aspect of this culture is open
sharing of information; negative aspect includes tolerance for poor performance and creation of
political clique. You might fit into networked culture if you possess good social skills and empathy;
you like to develop close work-related friendships; you thrive in a relaxed and convivial
atmosphere; and you are not obsessed with efficiency and task performance.
• Mercenary culture (low on sociability; high on solidarity): Positive aspect is strong focus on goal
and objectivity; negative aspect includes inhuman treatment to people who are perceived as low
performers. You are likely to fit in well in mercenary culture if you are goal oriented; thrive on
competition, like clearly structured work tasks, enjoy risk taking, and are able to deal openly with
conflict.
• Fragmented culture (low on sociability; low on solidarity): Employees are judged solely on
individual’s productivity; negative aspect include excessive critiquing of others and absence of team
spirit. Perhaps you are made for fragmented culture if you are independent; have a low need to be
part of a group; are analytical rather than intuitive; and have a strong sense of self which is not
easily perturbed.
• Communal culture (high on sociability; high on solidarity): Positive aspect is a feeling of

belonging yet a ruthless focus on goal achievement; negative aspect includes hyper intervention of
the leader who tends to create disciples rather than followers. You may fit into communal culture if
you have a strong need to identify with something bigger than yourself, enjoy working in teams, and
are willing to give first priority to the organisation.
17.8 DEVELOPING ORGANISATIONAL CULTURE
In order to develop organisational culture, a starting point, of course, is knowing what an organisation’s
culture is supposed to look like. If the ideas of Robbins and Kilmann are pooled with the idealistic writings
of Rensis Likert, a perfected culture might develop. We could propose that an ideal culture for the
accomplishment of an organisation’s goals might be one in which:
• The organisation’s goals are established and reviewed periodically through the participation of all
individuals and groups in the organisation.
• Decisions are made at the appropriate level in the organisation by the people who must live with the
decision.
• Behaviour is supportive of the organisation’s goals and purposes.
• The organisation is supportive of the needs of the individual employees.
• Individuals and groups show high levels of trust and respect for other individual and groups.
• Superiors and subordinates have a high level of trust and confidence in each other.
• Cooperation and teamwork exist at all levels in the organisation.
• Methods of reinforcement used are primarily rewards and participation.
• Individuals are cost conscious.
• Messages move upward, downward, or across the organisation as needed to get information to the
appropriate places.
• Subordinates accept downward communication with an open mind.
• Upward communication is accurate and is received with an open mind.
• Changes are initiated to improve performance and goal attainment.
• Changes are received and accepted openly.
• Individuals speak with pride about themselves and their employer.
• The time individuals spend performing tasks is related to the contributions of the tasks toward the
achievement of the organisation’s goals.
• Individuals are motivated through enjoyment from achieving the organisation’s goals.
• Conflict is seen not as a destructive force but as a potentially constructive activity.
The idealistic culture may seem unrealistic, and in many situations it probably is. Management’s role,
however, is to achieve as much of this as is possible.
The usual starting place for the planning and designing of an organisation’s culture comes after mission
statements have been created. Mission statements identify the purposes and directions an organisation plans
to pursue. Typically mission statements will include the products or services to be offered, the customers
who will be targeted, the stakeholders with whom the organisations will interact, the organisation’s
responsibilities to its stakeholders, and other goals that will give direction to an organisation’s efforts. Value
declarations may also be included to reveal how an organisation’s commitments will be actualised.
When mission statements have been completed and accepted, management’s responsibilities for providing
the appropriate structure for goal achievement begin. The formal structure (as well as informal pattern of
interaction) contribute to the culture of an organisation by laying the foundations, establishing planned
relationships, and outlining the general boundaries in which organisational activity will take place.
Many a times only stating mission statement and providing suitable structure may not help in achieving
required organisational culture. Change in organisational culture may require one or all of the following
additional steps:
• Change reward systems.
• Add new members.
• Implement culture shock.
• Change the key personnel in top management.
• Involve people.
17.9 CONCEPT OF ORGANISATIONAL CLIMATE

Though organisational culture and organisational climate are sometimes used interchangeably, some
important differences between these two concepts have been recognized. Whereas organisational culture is
concerned with the nature of beliefs and expectation about organisational life, climate is an indicator of
whether those beliefs and expectations are being fulfilled. Basically organisational climate reflects a person’s
perception of the organisation to which he/she belongs. Organisational climate is a set of characteristics and
factors that are perceived by the employees about their organisations, which serve as a major force in
influencing their behaviour. These factors include: job description, organisational structure, performance and
evaluation standards, leadership style, challenges and innovations, organisational values, decision making
processes, motivation, communication, goals, control processes and so on.
Organisational climate can be said to relate to the prevailing atmosphere surrounding the organisation, to the
level of morale, and to the strength of feelings of belonging, care and goodwill among members. According
to Tagiuri and Litwin, organisational climate is relatively enduring quality of the internal environment of an
organisation that:
• is experienced by its members;

• influences their behaviour;
• can be described in terms of the values of a particular set of characteristics of the organisation.
Hodgetts has classified organisational climate into two major categories. He has given an analogy with an
iceberg where there is a part of the iceberg that can be seen from the surface and another part that is under
water and is not visible. The visible part that can be observed or measured include the structure of hierarchy,
goals and objectives of the organisation, performance standards and evaluations, technological state of the
operations and so on. The second category contains factors that are not visible and quantifiable and include
such subjective areas as supportiveness, employees’ feelings and attitudes, values, morale, personal and
social interaction with peers, subordinates and superiors and a sense of satisfaction with the job.
17.10 DIMENSIONS OF ORGANISATIONAL CLIMATE

There have been many studies on dimensions of organisational climate. Such studies have helped us to
understand what do influence organisational climate:
Likert has proposed six dimensions of organisational climate: leadership, motivation, communication,
decisions, goals, and control.
Litwin and Stringer have proposed seven dimensions of organisational climate: conformity, responsibility,
standards, rewards, organisational clarity, warmth and support, and leadership. They have also emphasized
motivational framework of organisational climate. Motivational framework of climate include motives of:
Achievement: concern for excellence;
Expert Influence: concern for making impact on others;
Control: concern for power and orderliness;
Extension: concern for others, and for macro issues;
Dependency: concern for being in close touch with others in a significant way;
Affiliation: concern for building and maintaining close personal relationships.
On the basis of review of various studies and discussions with managers, Pareek has identified twelve
processes of organisational climate. Let us learn them briefly.
Orientation: Priority of members may range between concern to adhere to established rules, to concern for
excellence and achievement.
Interpersonal Relationships: Depending on the pattern of relationship it may lead to climate of clique
formation, or climate of control, or a climate of dependency etc.
Supervision: Depending on supervisory style, the climate may be of extension or it may be of affiliation, or
even lem Managealienation.
Problems : Problems may be taken as an opportunity or irritants; manager may solve problems alone or
jointly by the superior and the subordinates.
Management of Mistakes: Attitudes towards mistakes may be of tolerance or of annoyance; such attitudes
contribute to organisational climate.
Conflict Management: Conflict may be perceived as opportunity or as threat; such perceptions influence
Communication: Direction, dispersement, mode and type of communication influence climate of an
organisation.
Decision Making: Levels at which decisions are taken, degree of participation in decision making are the
issues, which influence organisational climate.
Trust: Degree of trust or its absence influence organisational climate.

Management of Rewards: Perception about what is rewarded in the organisation influences the
Risk Taking: It is an important determinant of climate.
Innovation and Change: Styles of managing change and innovations are critical in establishing climate.
Check Your Progress B
1) Do you have reasons to believe that different organisational climate may suit to different types of
persons?
……
……
………
………
……
… …
……
……
……
……
……
……………
……
………
……
……………
………
…………
………
…………
……
……………
…………
…….…
…
…
.…
.…
……
……
………
……
…………
…………
……
………
………………
……
……
………
………
……
……
………
………………
…………
…………
…………
……
……………
……
…………
…………
……
2) What are the main determinants of organisational climate?

…
……
……
……
……
……
……
……
…………
…………
……
………
……
……
………
………
………
………
……
……
……
……
…………
………
…………
………
……
……
…………
…………
……
……
………………
……
……
……
…………
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
17.11 CREATING FAVOURABLE ORGANISATIONAL CLIMATE

Organisational climate influences the level of morale and attitudes, which members of the organisation bring
to bear on their work performance and personal relationships. Thus, it is important to build a healthy
organisational climate. A healthy organisational climate might be expected to exhibit such characteristic
features as:
• the integration of organisational goal and personal goals;
• a flexible structure with a network of authority, control and communications, and with autonomy for
individual members;
• styles of leadership appropriate to particular work situations;
• mutual trust, consideration and support among different levels of the organisation;
• recognition of individual differences and attributes, and of people’s needs and expectations at work;
• attention to job design and the quality of working life;
• challenging and responsible jobs with high performance standards;
• equitable systems of rewards based on positive reinforcement;
• opportunities for personal development, career progression and advancement;
• justice in treatment, and fair personnel and industrial relations policies and practices;
• the open discussion of conflict with emphasis on the settlement of differences without delay or
confrontation;
• democratic functioning of the organisation with full opportunities for genuine consultation and
participation;
• a sense of identity with, and loyalty to, the organisation and a feeling of being a needed and important
member of the organisation.
In order to establish a functional organisational climate, various interventions have been identified which
lead to organisational development. One of such intervention is building organisational ethos through
OCTAPACE profile, developed by Pareek. It suggests to establish: Openness, Confrontation, Trust,
Authenticity, Proaction, Autonomy, Collaboration, and Experimentation. Once these eight factors are
established in the organisation it may lead to healthy organisational climate.
A healthy climate will not by itself guarantee improved organisational effectiveness. However, an
organisation is unlikely to attain optimal operational performance unless the climate evokes a spirit of
cooperation throughout the organisation, and is conducive to motivating members to work willingly and
effectively.
Activity B
Discuss about OCTAPACE profile in your group. Discuss where your group stands on each factor, and how
can they be improved in your group.
……
………………
………
………………
……
…………
……
………………
…………
……………
………
……………
………
……
……
………
……
……
…………
…………
……………
……
………
……………
………
………………
……
…………………
…………
…………
…………
……………
……………………
…………
………
……
……
………………
………
………………
……
…………
……
………………
…………
……………
………
……………
………
……
……
………
……
……
…………
…………
……………
……
………
……………
………
………………
……
…………………
…………
…………
…………
……………
……………………
…………
………
……
……………………… ………………
……………… ………………………………… …
……………
……………
……………………… ……
………… ……
……… ………………………………………… ………………………… ………………………
17.12 LET US SUM UP
Organisational culture determines the way members of an organisation interact with one another and with
outsiders. Culture provides system of shared meaning among members. The basic elements of culture are :
artifacts, espoused values and basic assumptions. The major functions of organisational culture include :
sense of identity, enhancement of commitment and reinforcement of behaviour. Moreover, strong
organisational culture may also create some barriers; like barriers to change, diversity and acquisition and
merger. Several factors influence organisational culture. These factors help in creation and sustaining of
culture in an organisation. Employees understand organisational culture through symbols, stories, Jargon,
ceremonies and statement of principles. Culture has a strong impact on the performance of the organisation.
The distinctive organisational culture may be classified into : networked culture, mercenary culture,
fragmented culture and communal culture. Organisational culture creates its impact on work place, hence,
we must develop ideal organisational culture for smooth functioning of all members of the organisation.
Organisational climate is a measure of how do members perceive the organisation. It can be explained in
terms of its dimensions. The process of organisational climate include : orientation, interpersonal
relationship, supervision, problems, management of mistakes, conflict management, communication,
decision making, trust, management of rewards and innovation and change. The favourable organisational
climate leads to perceived equality and more effectiveness.
17.13 KEY WORDS
Culture: That determines the way members interact with one another and with outsiders.
Mission Statement: Identifying the purposes and directions of an organisation and plans to pursue.
Organisational Climate: A set of characteristics and factors that are perceived by the employees about their
organisations.
Organisational Culture: System of shared meaning among members.
Subcultures: Minicultures within an organisation.
Strong Cultures: Cultures in which core values are intensely held and widely shared.
Sociability: Measure of high people orientation, high team orientation, and focus on processes rather than
outcomes.
Solidarity: Measure of task orientation, and is consistent with high attention to detail and high
aggressiveness.
17.14 TERMINAL QUESTIONS

1) What do you mean by Organisational Culture ? Discuss the main characteristics of organisational
culture?
2) What are the functions of organisational culture? Describe the basic elements and determinants of
organisational culture?
3) How does organisational culture create its impact on work place? Suggest measures for developing
organisational culture.
4) Explain dimensions of organisational climate. How favourable organisational climate can be
created?
Note : These questions will help you to understand the unit better. Try to write answers for them. Do
not submit your answers to the university for assessment. These are for your practice only.
UNIT 18 ORGANISATIONAL CHANGE
Structure
18.0 Objectives
18.1 Introduction
18.2 Forces of Change
18.3 The Process of Change
18.3.1 Lewin’s Model
18.3.2 Continuous Process Model
18.4 Resistance to Change
18.5 Overcoming Resistance to Change
18.6 Managing Change
18.7 Targets of Change
18.8 Strategies of Change
18.9 Building Effective Organisation
18.10 Let Us Sum Up
18.11 Key Words
18.0 OBJECTIVES
After reading this unit, you should be able to:
• discuss different forces which initiate change;

• analyse different models of change process;
• examine the process of resistance to change;
• describe the ways of overcoming the resistance to change;
• discuss the concept of the management of change;
• identify the targets of change;
• explain the strategies of change; and
• discuss how to build an effective organisation.
18.1 INTRODUCTION
The term change may be defined as the replacement of existing one with a new one. Change results in new
opportunities, challenges and also some hardships. Change is inevitable in the life of an individual or
organisation. A change in an organisation is known as organisational change, which refers to the setting up
new production methods; producing new products; restructuring of organisation; adoption of information
technology; change from public to private ownership or vice-versa etc. Organisations, which learn and cope
up with change, will flourish and others, which fail to do, so, will disappear. Modern organisations are
required to compete in a global market. Further technological developments resulted in changes in the
methods of producing goods and services. All these developments make changes inevitable, pervasive, and
persistent in organisational life. In this Unit, you will learn the forces and process of change, their
resistance and how to overcome resistance to change. You will further learn managing change, targets of
change and strategies of change. You will be acquainted with how to build an effective organisation.
18.2 FORCES OF CHANGE
Organisations today operate in a very dynamic and changing environment. They have to make suitable
changes from time to time to become competitive; to serve customers better; to be on par with latest
technology; to maintain or to improve upon existing level of profits.
All the forces, which initiate changes, can be broadly divided into two categories: Internal Forces and External
Forces. Let us learn them in detail.
Internal Forces
i) Change in Leadership: A change in leadership of an organisation may result in change in perceptions,

strategies, activities and results.
ii) Change in Employees Profile: Some changes in employees profile are inevitable because of death,
retirement, transfer, promotion, discharge or resignation. Women employment is on the increase.
Further in the context of present day globalisation, employees are recruited from different national
and cultural backgrounds. Human Resource policies and practices have to be reoriented to suit the
diverse workforce.
iii) Change in Employees Morale and Motivation: The changes in leadership, their policies and practices
may affect the morale and motivation of the employees resulting in declining productivity, production
and profits.
iv) Union Influence: The influence of the union on many organisations in respect of recruitment, service
conditions, wage rates etc. is still perceptible inspite of the implementation of policies of
liberalisation by many Governments. The management will have to make suitable changes in
response to demands of the union.
v) Implementation of New Technology: Technological developments result in change of job, production

process, and employee profile. More computers, automation; and reengineering programmes result in
substantial changes in most of the organisations. The Internet has its profound impact on the markets
of number of organisations. Biotechnology is another field where large number of products are likely
to be created.
External Forces
i) Competition: Global competition has come into existence. Mergers and acquisitions have been on the
increasing trend. Organisations have to make suitable changes in response to the demands from the
competition. They should acquire the capacity of developing new products rapidly and market them
quickly. Short production runs, and short product cycles by equally flexible and responsive systems
will be required to face these competitive challenges.
ii) Economic Fluctuations: The fluctuations in security markets, interest rates, exchange rates etc. have continued
to impose changes on organisations.
iii) Social Trends: Increase in college attendance; delayed marriages by young couple; economic upliftment
of women and backward communities etc. suggest changes, which are to be considered by organisations.
All these result in fluctuations in the demand for products used by these groups.
iv) Global Politics: Collapse of Soviet Union, the reunification of Germany, the policies of W.T.O., U.S
attack on Afganistan and Iraq etc. have their impact on the business of different organisations, whose
activities are related to such developments.
Look at Table 18.1 which shows all the internal and external forces initiating changes.
Table 18.1 : Forces of Change
Forces Examples
External
New technological development Development of bio-technologyIT revolution
Changes in government policies LiberalisationPrivatisation
Competition Global competitionMergers and acquisitions
Economic fluctuations Interest rate fluctuationsFluctuations in security
marketsExchange rate fluctuations
Social trends Increase in educated classEconomic upliftment of women and
reserved communitiesDelayed marriages
Global politics World Trade OrganisationCollapse of Soviet
UnionReunification of GermanyUS attack on Afganistan and Iraq
Internal
Change in leadership Democratic leadership
Changes in employee profile Increase in women employmentRecruitment from different
national and cultural backgrounds
Changes in employee morale and motivation Effect of changes in leadership
Implementation of new technology Computerization of production processBusiness process re-
engineering
Union influences Union demands include : recruitment, service conditions, wage
rates etc.
18.3 THE PROCESS OF CHANGE
A successful change process involves three steps :

• Identifying the need for change;
• Cultivating a new behaviour or substitute; and
• Feeling comfortable with the new situation.
Let us now consider two popular models of change process. The first one is Lewin’s three-step model. Which
is discussed below.
1.1.1 Lewin’s Model

According to Kurt Lewin, the change process consists of three steps: i) Unfreezing the status co; ii) Movement
to a new stage; and iii) Refreezing the new change to make it permanent. Look at Figure 18.1 which shows
Kurt Lewin’s change process.
Figure 18.1 : Lewin’s Model of Change Process

Unfreezing is the process by which people are made to realise the need for change. Environmental pressures,
declining performance, recognition of a problem or availability of a better way of doing things, may speed up
unfreezing. While the driving forces of change are to be encouraged and the forces of resistance are to be
discouraged. Changes introduced without undergoing this process of unfreezing are sure to fail due to
unawareness and resistance on the part of the employees.
The second stage is the changing or moving stage. This involves taking action to modify a situation by changing
things such as the people, tasks, structure and technology of the organisation.
The final stage in the change process is refreezing, which consists of making the new tasks, technologies, and
relations relatively permanent. The introduced changes are thus reinforced and stabilised. When this stage of
refreezing is not done, the changes introduced are likely to be abandoned within a short time or incompletely
implemented.
Activity A
Take one latest incident of change in your organisation and explain the change process in terms of Lewin’s
Model?
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
…………………………………………………………………………………………
18.3.2 Continuous Process Model
The Lewin’s model is very simple and straightforward. However it does not deal with several important
issues. Hence the second model of change process continuous change process model has come into
existence. This model treats the change from the perspective of top management. In this approach, the top
management perceives that certain forces or trends call for change and the issue is referred to organisation’s
usual problem solving and decision-making process. The top management defines the goals to be attained
after the change. Alternatives for change are also considered and evaluated, and an acceptable one is
selected.
The top management may seek the assistance of a change agent – a person responsible for managing the
change effort who may be a member of the organisation or an outsider. While an internal change agent is
likely to know the organisation, people, tasks, political situations etc. very well; an outsider is likely to view
the situation more objectively. As per the direction and management of the change agent, the organisation
implements the change through Lewin’s model.
The final step in this model is measurement, evaluation and control. Through this process, the top
management determines the effectiveness of the change process by evaluating various indicators of
organisational productivity or employee’s morale. Look at Figure 18.2 which shows change process model
of organisational change.
Figure 18.2 : Change Process Model of Organisational Change
It takes time for employees to absorb even small changes. Much more time and effort may be required for
employees to adapt to complex changes. Transition management is the process of systematically planning,
organising and implementing change. Once the change starts, the organisation is neither in the old state nor
in the new state. But the businesses will have to continue. Transition management ensures that business
continues while the change is occurring. The members of the regular management team assume the role of
transitional managers to co-ordinate organisational activities with the change agent. Communication about
the change is an important step in transition management.
18.4 RESISTANCE TO CHANGE

Resistance to change is an attitude or behaviour that shows unwillingness to approve a particular change.
This resistance is to be overcome for successful change. Sometimes resistance to change serves as a
feedback to reconsider the proposed change. Thus resistance to change can also be used for the benefit of the
organisation.
The essence of constructive approach to resistance is to consider objections raised and make suitable
amendments and educate the employees about the proposed change. Resistance can be overt, implicit,
immediate and differed. When it is overt and immediate, the management can take immediate remedial steps
to deal with such resistance. Implicit resistance may result in loss of loyalty, loss of motivation, increased
mistakes, increased absenteeism etc. In course of time, similarly differed resistance creates problem to the
management particularly when substantial amounts have already been invested in carrying out the change.
Resistance to change may be introduced by the organisation, the individual or both.
We shall now examine the different sources of resistance either from organisation or from individuals.
Organisational Resistance
The following six major sources of organisational resistance have been identified.
i) Structural Inertia: Every organisation has built in mechanisms or systems to maintain stability. It
may be training and other socialised techniques or formulation procedures. The people are recruited;
they are trained and they are shaped to behave in certain ways. When change is proposed in any of these
systems and procedures, the existing employees may not accept it.
ii) Limited Focus of Change: Organisations consist of interdependent sub-systems. We can’t change
one without effecting the other. If management desires to change the technological process without
simultaneously modifying the organisational structure, the change in technology is not likely to be
accepted.
iii) Group Inertia: Some times even if individuals want to change their behaviour, group norms may act
as a constraint.
iv) Threat to Expertise: A change in the organisation may threaten specialised expertise developed by
the individuals and groups over the years. Hence they are likely to oppose the change.
v) Threat to Established Power Relations: Any redistribution of decision-making authority may
threat individuals’ power relationship with others and leads to resentment.
vi) Resource Allocation: The groups in the organisation, which control resources often consider change
as a threat.
Individual Resistance
The reasons for resistance from individuals can be traced to basic human characteristics such as perceptions,
personalities and needs. The following are the six reasons for individual resistance to change.
i) Habit : The human beings prefer to carry out their daily jobs in the same way. Introduction of any new
steps in carrying out the job makes them feel that the job has become difficult. So they resist this change.
ii) Security : People with high need of job security are likely to resist the change which is likely to affect
their feelings of safety. Introduction of new technological changes in an organisation may make the employees
feel that their jobs are in jeopardy.
iii) Economic Factors : Employees may feel that the proposed changes may reduce their monthly pay.
Hence they oppose such changes.
iv) Fear of Unknown : When the change is proposed, a known situation is sought to be replaced by an
ambiguous and uncertain situation, which may not be liked by the employees. As a result, they develop a
negative attitude towards the proposed change.
v) Lack of Awareness : People may not be aware of the benefits of the proposed changes and consequently
they resist those changes due to ignorance.
vi) Social Factors : Individual employee may resist changes either because of the influence of the group
or the union to which they belong. They may feel that if those changes are accepted, they may be ridiculed
by their colleagues or the union officials.
Look at Figure 18.3 which shows sources of resistance to change.
Figure 18.3 Sources of Resistance to Change
Individual Organisational
RESISTANCE
Activity B
1) Interview some senior managers in the organisation and elicit the causes for organisational resistance
to change.
…
………
………
………
………
………
………
………
………
………
…… ………
………
… …
.…
………
………
………
………
………
………
………
………… …
………
…
……
.…
…
.…
.…
………
………
………
………
………
………
………
………
……
……
…
.…
…
.…
…
.…
…
.……
………
………
………
………
………
………
………
………
…
……
.…
…
.…
……
….
…
………
…………
…………
…………
…………
…………
……
.…
. .…
………
……
. .……
…………
…………
………
…………
…………
………
. .…
………
… ………
…………
…………
………
…………
…………
…………
… ………
………
…………
…………
.…
………
…………
…………
………………
…… …
.…
..
2) Interview some senior employees in the organisation and elicit the causes for individual resistance to
change.
…
………
………
………
………
….…
………
…… … … … … … … … … … … … … … … … … … … … … … … … … … . .
5.5 OVERCOMING RESISTANCE TO CHANGE

When there is a resistance to change, the management has to take appropriate steps to overcome the
resistance. The following six ways have been suggested for dealing with the resistance to the change:
i) Education and Communication: The first approach to overcome resistance is through education and
communication. Under this approach, the employees are educated about the change before it is implemented.
This helps them to understand the logic of the change and its benefits. This method is the best method when
resistance is based on inaccurate or incomplete information.
ii) Participation and Involvement: Resistance to change can be reduced significantly by inviting the
concerned employees to participate in its decision making process. They feel that it is their own proposal
and consequently they stand by its implementation.
iii) Facilitation and Support: This involves providing both emotional, training and financial assistance to
employees experiencing the hardships of change.
iv) Negotiation and Incentives: This approach Provides for negotiation with concerned employees and
offers incentives to make them agree to the change.
v) Manipulation and Co-optation: This method consists of attempts to influence the employees and
more especially, the opinion makers, through some special benefits or providing more attractive information
or by withholding undesirable information.
vi) Coercion: This is the application of direct threats or force upon the resisters. The threats may consist
of transfer, loss of promotion, retrenchment etc.
Look at Table 18.2 which shows methods of overcoming resistance to change.
Table 18.2 : Overcoming Resistance to Change
Method Use when Advantages Disadvantages

Education & communication People lack information or have inaccurate information
Creates willingness to help with the change Can be very time consuming
Participation & involvement Other people have important information and/or power to resist
Adds information to change planning; builds commitment to the change Can be very time
consuming
Facilitation & support Resistance traces to resource or adjustment problems Satisfies
directly specific resource or adjustment needs Can be time consuming; can be expensive
Negotiation & agreement A person or group will lose something because of the change
Helps avoid major resistance Can be expensive; can cause others to seek similar deals.
Manipulation & cooptation Other methods don’t work or too expensive Can be quick and
inexpensive Can create future problems if people sense manipulation
Explicit & implicit coercion Speed is important and change agent has power Quick;
overpowers resistance Risky if people become crazy
18.6 MANAGING CHANGE
Finally we consider the factors influencing successful management of organisational
change. The following six factors are to be considered in this context:
i) Environmental Influences: Environment is an important factor in bringing about organisational

change. The demands of the environment have to be considered in finalising the change. The
environmental complexities increase as the area of the organisation’s operations increase – local,
regional, national and international. Further acceptance of change varies widely from place to place and
from culture to culture. Moreover, the techniques to be adopted for managing change also differ from
country to country.
ii) Whole View of the Organisation : It is always necessary that managers should take whole view of
organisation while proposing change. A partial view can affect the change effort adversely.
iii) Support of Top Management: The success of any change effort depends to a large extent on the
support of top management. Complaints may be made against the change proposals of local/regional
managers to the top management. Therefore, unless the top management is informed in advance and
their support is ensured, problems may arise and the local/regional management may fail in
implementing the change.
iv) Employee’s Participation: Employees or their representatives may be invited to participate in

discussions relating to the proposed change. If they are given a role in designing the change, they are
likely to cooperate with the management in implementing the change.
v) Open Communication: Open communication between management and employees is an important
factor in managing the change. Employees are likely to have certain misapprehensions about the change
and unless correct information is provided through open communication system, the change efforts are
likely to fail.
v) Incentives and Rewards: Employees who are responsible for the successful implementation of the
change should be recognized and appropriately rewarded. Sometimes people who resist in the
beginning or oppose throughout are given more importance than employees who support the change
right from the beginning. Employees who support the change actively and help others adjust to
changes deserve special recognition by way of news release; special consideration in performance
appraisal; an increment in pay or a promotion etc. Look at Table 18.3 which shows the factors and
impact of managing change.
Table 18.3 : Managing Change
Key Impact
Environmental influences A major factor influencing the change

Whole view of organisation Comprehensive effect on the Organisation
Support of top management Minimises the problems while implementing the change
Employee’s participation Cooperate with the implementation of change
Open communication Minimises misapprehensions
Incentives and rewards Encourages employees to cooperate with management
Activity C
Select any Organisation where change has been successfully implemented and identify the causes for
successful implementation of that change?
……………………………………………………….…………………………………………
……………………………………………………….…………………………………………
……………………………………………………….…………………………………………
……………………………………………………….…………………………………………
……………………………………………………….…………………………………………
……………………………………………………….…………………………………………
……………………………………………………….…………………………………………
……………………………………………………….…………………………………………
…
……
……
……
………
……
………
……
……
……
….…
……
………
……
……
………
………
……
……
………
……
……
………
……
……
………
.…
……
……
……
………
……
………
……
……
………
……
………
……
………
……
……
.…
……
………
……
……
………
……
……
………
……
……
………
……
……
………
………
……
.…
……
……
………
……
……
…
…
…………
……………
……………
… ………
…………
…
.……
………………
……………
…………
…… …
…………
……………
……………
…
.……
……………
…………………
……………
……………
……………
…………
……
.…
……………………
…………
…
18.7 TARGETS OF CHANGE
The change is usually carried out with a view to improve the performance of one or more of the following
four elements:
i) Human Resources: Human Resources constitute the most important asset of an organisation. The
competencies and the overall success of an organisation depend on the quantity and quality of its
employees. Hence the organisations will have to find out most effective way of motivating human
resource. The efforts in this context, include:
• Additional investment in training and development activities to enable employees to acquire new
skills and abilities,
• Integrating employees with the organisational culture,
• Changing organisational norms and values to motivate multicultural and diverse work force, and
• Institution of promotion reward systems applicable to a diverse workforce.
ii) Functional Resources: Each organisational function needs to develop procedures, which will help
the organisation to manage the environment. As environment changes, organisations often transfer
resources to the functions where maximum value can be created. An organisation can improve the value
by changing its structure, culture and technology.
iii) Technological Capabilities: Technological capabilities provide a wonderful opportunity to change

itself in order to exploit market opportunities. This will help the organisation either in developing new
products or improving the existing products or improving the production process.
iv) Organisational Abilities: The design of an organisation structure and culture helps an organisation
to harness its human and functional resources to exploit technological opportunities. The ability of
people and functions can be increased by making suitable changes in their relationships.
Thus, the proposed change should aim at improving the performance of either human resources,
functional resources or technological capabilities or organisational abilities.
Look at Figure 18.4 which shows the targets of change :
Figure 18.4 : Targets of Change
Activity D
1) Identify the organisations where the changes are initiated and find out the methods adopted for
bringing change in human resources.
…
………
………
………
………
………
………
………
………
………
………
……
……
…
.…
…
.…
………
………
………
………
………
………
………
………
………
………
……
…
…
.…
…
.…
………
………
………
………
………
………
………
………
………
………
……
…
…
.…
…
.…
………
………
………
………
………
……
……
…
.…
…
.
………………..………………………………………………..
2)
Identify the organisations where the changes are initiated and find out the methods adopted for
bringing change in functional resources.
……… . ……… … … … … …
bringing change in technological capabilities.
…
………
………
………
………
………
………
………
………
………
………
………
……
…
…
.…
…
.…
………
………
………
………
………
……………
………
………
……
…
…
.…
…
…
.…
.…
…
.…
………
………
………
………
………
………
………
………
……
…
…
.…
…
.…
…
……
.…
…
.…
………
………
………
………
………
………
………
……
…
……
…
.…
.…
…
..…
……
………………………………………………………………………… . ………………………………………………………………………………………………
bringing change in organisational abilities?
……
…
…
.…
….………
…………
… ……
……………………
…………
………………
……
….…
…
.…
……………
………
………
……………
…………
………
… …
………
……
.…
…
.…………………
……………
…………………
……………
… ………
…
……
.…
….……
………
………
………
………
………
………
… …
…… …
………
……
……
……
…
.……
.……
…………
… ……
……………………
…………
………………… …
………
…
……
.…
…
.…
………
………
……………
…………
………
…………… …
……
……
.…
…
.…………
……………
…………………
……………
… ………
………
…
.……
.…
………
………
………
………
………
………
… …
…… …
………
……
.……………………………………………………………………………………..………………………………………………
18.8 STRATEGIES OF CHANGE
An appropriate strategy for implementing the change is to be followed to get the best results from
proposed changes. The strategies of changes can be classified into two categories:
i) Evolutionary – which is gradual, incremental and specifically focused
ii) Revolutionary – which is sudden, drastic and organisation wide
Managers who choose an evolutionary strategy make incremental changes to organisational strategy
and structure. On the other hand, managers who choose the revolutionary strategies make drastic changes to
organisational strategy and structure. Instead of making changes one by one, they wait until change is really
necessary and then make all the changes simultaneously.
The revolutionary change, which is otherwise known as top down change calls for intervention of the
top management. This involves massive dislocation and the uncertainty. This approach is preferred because
it is the only way in which an organisation can overcome the inertia that threatens efforts to restructure the
company.
As against the revolutionary change, evolutionary change depends on bottom up change strategy. The
change is carried out through incremental steps in which all the employees may be involved in decision-
making and implementation. Top management also guides the actions and make sure that they are in
conformity with overall corporate objectives. However, this strategy requires longer period of
implementation than top down change.
The evolutionary change facilitates organisational learning and allows the organisation to respond to
changing environment. The revolutionary strategy can be implemented by employing one of the following
three approaches:
i) Re-engineering: Re-engineering involves the re-thinking and re-design of business process to
increase organisational effectiveness. The attention will be on the business processes rather than the
organisational functions.
ii) Re-structuring: Restructuring is a second form of revolutionary change. There are two basic steps
to re-structuring:
• An organisation reduces its level of differentiation and integration by eliminating divisions or
departments
• An organisation downsizes the number of its employees to reduce operating cost.
• Change in the relationships between divisions or functions are common in restructuring.
iii) Innovation: Innovation is the process by which organisations use their skills and resources to develop
new goods and services or to develop new production and operating system. The objective is to meet the
needs of customers in the best possible manner. However, innovation is also associated with high level
of risk because the results of research and development activities are often uncertain.
The other classification of change strategies is on the basis of methods usually used in making the
employees accept the changes. These methods are as follows:
i) Force Coersion Strategy: Under this strategy, rewards or punishments are applied to induce or to
force the employees to accept the change. The effects of this strategy continue as long as the
rewards or punishments are effective.
ii) Rational Persuasion Strategy: Under this strategy, an attempt is made to make the employees to
accept the change through the use of special knowledge, empirical support or rational arguments.
This strategy is also known as empirical-rational strategy. When this strategy succeeds, it results
in a longer and more internalised acceptance than the force coercion strategy.
iii) Shared Power Strategy: This involves inviting the employees to participate in decision-making
relating to the proposed change. This strategy is also known as normative re-educative approach, which
tries to develop directions and support for change through involvement and empowerment. This strategy
lasts long and internalises change. Look at Figure 18.5 which shows the strategies of change.
Figure 18.5 : Strategies of Change
(Source : Adopted from: Organisational Behaviour, Schermerhorn, Hunt & Osborn. Page: 399)
Activity E
Study the change process in an organisation and identify whether the change is evolutionary or revolutionary.
………
…………
… …
…………
……
.…
…
.…
………………
………
………
……… ………
…… …
………
………
…
….…
…
.…
………………
…………………………
………… …
………
……
……
…
.…
…
.…
…… …
………………
………
…………………… …
………
………
……
.…
…
.…
……………
…… …
……………
………………
……
………
………
…
…
.…
…
.……………………
………………
………
………
……… ………
……
……
.…
…
.…
…………
… ……
………………
…………………………
…………
……
.…
…
.…
………
…………
…… …
………………
………
……………………
……
.…
…
.…
…………………
……………
…… …
……………
………………
……
…
…
.…
.………
………………………………
… ……
………
…………
……… …
.…
.……
… ……
………… …
………………
………………………………
…
.….………
……………
…………………………
……………………………
.…
.……
……… …
………………
… ………
………………………
……
……………… ………… ………
…
….…
.………
…………… … ……………………… ………………… ……………
….…
.…
…… … ……
………………… ………………………… …… ……………
…
.…
.… ……
……… ……… ……
… …………………
18.9 BUILDING EFFECTIVE ORGANISATION
An effective organisation is the one, which utilises its resources in a way that maximizes the organisations
ability to create a value. In other words an organisation is effective if it can :
• Secure scarce and valued skills and resources from outside the organisation. (external resource effectiveness).
• Creatively co-ordinate resources with employees’ skills to innovate products and adopt to changing customer
needs. (internal systems effectiveness).
• Efficiently convert skills and resources into finished goods and services (technical effectiveness).
Let us now consider these three effectiveness in detail.

i) External Resource Effectiveness : The organisations control over the external environment. The
organisations ability to influence the stakeholders’ perceptions in its favour and to receive a positive
evaluation by external stakeholders are very important to the organisations survival. The effectiveness
of organisations control over the environment is measured with the help of indicators such as stock
price, profitability, return on investment etc. which the shareholders judge how well the management
is controlling its environment.
ii) Internal Systems Effectiveness : The effectiveness of an organisation also depends on how does
the organisation function effectively. It should have a structure and a culture, which permit
adoptability and quick responses to changing conditions in the environment. The organisation should
be flexible so that it can speed up decision-making and rapidly innovate production services. High
degree of employees co-ordination and motivation will have direct impact on organisations ability to
respond to its environment.
iii) Technical Effectiveness : This consists of how can an organisation convert its skills and resources
into finished goods and services effectively. Technical effectiveness is measured in terms of
productivity and efficiency. Increase in production without increase of cost or reduction per unit cost
are all examples of technical effectiveness. Productivity measures the effectiveness of the
organisations production operations. Employees attitude and motivation and their desire to co-operate
are also important in influencing productivity and efficiency.
An organisation may be effective in one area but not in others. The overall effectiveness of an organisation
is ensured with the existence of the effectiveness of all the three components – external resources, internal
systems and technical matters. Managers have to take steps in developing effectiveness in all these three
tasks. Failure in the part of the organisation in any one or more of these areas will result in ineffective
organisation.
Factors in Building Effective Organisation
The following are some of the factors to be considered for building effective organisation.
Sensitivity Training : This is a method of changing behaviour through unstructured group interaction. The
employees are brought together in free open environment. They discuss among themselves and thus they
learn through serving and participating.
Survey Feedback : This method consists of using questionnaires to identify discrepancies among member’s
perceptions; arranging discussion among the members on their perceptions and suggesting remedies.
Process Consultation: Under this method, an outside consultant is employed to assist the organisation to
perceive, understand and act upon process events. This helps the managers to take remedial steps to improve
the situation.
Team Building: Modern organisations are increasingly relying on team to accomplish work tasks. Team
building utilises high interaction in group activities to increase trust and openness among team members.
The objective is to improve efforts of members, which will result in increased teams’ performance.
Inter Group Development: This method aims at changing the attitudes and perceptions of different groups
towards each other. Each group meets independently to develop lists of its own perception and the
perception of other groups. The groups then exchange their lists, after which similarities and differences are
discussed. Thus, an attempt is made to sort out the differences and reach the stage of integration. In this
way, the relations among the groups are improved.
Innovation: Innovation is a new idea applied to initiating or improving a product, process or service. The
effectiveness of the organisation depends to a large extent on its innovativeness. Innovativeness can be
developed in all the functional areas of management.
Creating a Learning Organisation: A learning organisation is an organisation that has developed the
continuous capacity to adopt and change. Just as individuals learn organisations also learn. An organisation
can be a continuous learner by :
• Establishing a strategy for change, innovation and continuous improvement;
• Re-designing the organisation structure to facilitate the continuous learning by all the departments and
employees; by reshaping the organisations culture to suit the continuous learning.
Activity F
1) Observe the strategies adopted in any organisation in bringing change and give an example with
explanation where the Force Coersion strategy has been adopted to bring change in the organisation.
…
……
……
……
……
……
……
…
…
.…
…
.…
……
……
……
……
……
……
……
……
……
……
……
……
……
…
……
.…
…
.…
……
……
……
……
……
……
……
……
……
……
……
……
……
…
……
.…
…
.…
……
……
……
……
……
……
……
……
……
……
……
……
……
…
……
.…
…
.…
……
……
……
……
……
……
……
……
……
……
…
…………………..……………………
explanation where the Rational Persuasion strategy has been adopted to bring change in the
organisation.
……
…………
………………
……
…
.…
…
.…
… …
……
……………
………………
………
…………
……………
…
….…
…
.…
……
…………
…………
…………………
…………………
………
……
.…
…
.…
……
…………
………
………
……………
……………
…………
……
…
.…
…
.…
………
………
…………
… …
……
…………
……
…
…………………..……………………
explanation where the Shared power strategy has adopted to bring change in the organisation.
……
…………
…………
… …
…
……
.…
…
.…
……
… …
……………
………………
………
…………
……………
…
….…
…
.…
……
…………
…………
…………………
…………………
………
……
.…
…
.…
……
…………
………
………
……………
……………
…………
……
…
.…
…
.…
………
………
……
… …
……………
………
……
…
…………………..……………………
……
…………
………
…… …
…
……
.…
…
.…
……
… …
……………
………………
………
…………
……………
…
….…
…
.…
……
…………
…………
…………………
…………………
………
……
.…
…
.…
……
…………
………
………
……………
……………
…………
……
…
.…
…
.…
………
………
……
… …
……………
………
……
…
…………………..……………………
18.10 LET US SUM UP
Organisational change refers to the replacement of existing system to a new system. It may result in some
opportunities, challenges as well as hardships. Both internal and external forces influence the process of
change in an organisation. A successful change process involves three steps; i.e., identification of need for
change, cultivation of new behaviour and feeling comfortable with the new situation. Lewin’s model and
Continuous process model explain the process of the change.
As the change is introduced in an organisation, it may face the resistance by the organisational members.
Both individual and organisation may resist the change. Organisation may deal with the resistance to change
through : education and communication, participation and involvement, facilitation and support, negotiation
and incentives, manipulation and cooptation and coercion.
The process of change requires to be managed in a careful and systematic way. The factors influencing
successful management of organisational change should be considered for this purpose. The major targets of
change are : human resources functional resources, technological capabilities and organisational abilities.
An appropriate strategy for implementing the change should be devised considering both evolutionary and
revolutionary changes. An effective organisation is required for using its resources for creating the optimum
value. The organisation should focus on external resource effectiveness, internal system effectiveness and
technical effectiveness for this purpose . The factors to be considered for building effective organisation are
: sensitivity training, survey feedback, process consultation, team building, inter group development,
innovation and creating a learning organisation.
18.11 KEY WORDS
Change agent: A person responsible for managing a change effort.

Change: It is the movement from the old way to a new way of doing things.
Coercion: Application of direct threats or force upon the resistors.
Coercive power: The extent to which a person has the ability to punish physically or psychologically.
Decision-making: The process of choosing a course of action.
Empowerment: The process of enabling workers to set their work goals, make decisions and solve problems
within their sphere of responsibility and authority.
Evolutionary change: Change that is gradual, incremental and specifically focused.
Group: Two or more people who interact with one another such that each person influences and is influenced
by the other person.
Innovation: The process of creating and doing new things
Moving phase: It involves taking action to modify a situation by changing things such as the people, tasks,
structure, and technology of the organisation.
Organisation: A group of people working together to attain common goals.
Organisational change: It is the process by which organisations move from their present state to some desired
future state to increase their effectiveness.
Organisational structure: The system of task, reporting and authority relationships within which the organisation
does its work.
Planned change: It is the deliberate design and implementation of structural innovation, a new policy or goal,
or a change in operating philosophy, climate or style.
Process consultation: Helps groups improve on such things as norms, cohesiveness, communication, decision-
making methods, conflict, task, and maintenance activities.
Re-engineering: The radical redesign of organisational processes to achieve major gains in cost, time and
provision of services.
Refreezing: The process of making new behaviours relatively permanent and resistant to further change.
Resistance to change: An attitude or behavior that shows unwillingness to make or support a change.
Restructuring: Change in the relationships between divisions or functions in the organisation.
Revolutionary change: Sudden, drastic, and organisations wide change.
Unfreezing: The process by which people become aware of the need for change.

1) What are the major forces and resistance to change? How does organisations should manage the change
process?
2) What is organisational change? Discuss the forces influencing the organisational change?
3) Explain in detail the external and internal forces of organisational change. Which one do you think is
more prominent?
4) How do evolutionary change and revolutionary change differ, under what conditions managers choose
one approach or the other?
5) What suggestions do you offer for managing organisational change successfully?
6) What are the important elements to be targeted for change in an industrial organisation?
7) How does Lewin’s three-step model explain the process of change?
8) What are the steps to be initiated for building an effective organisation? Discuss with examples.
9) What is meant by effective organisation? Explain the factors influencing the effectiveness of an
organisation?
Note : These questions will help you to understand the unit better. Try to write answers for them. Do not
submit your answers to the university for assessment. These are for your practice only.
Reinforcing and making permanent the new tasks, technologies and relations
• Individual components
• Group components
• Task components
• Structural components
• Technology components
• Identifying the need for change
• Increasing the driving forces to change
• Reducing the resisting
• forces to change
Refreezing
Moving
Unfreezing
Change Agent
Transition Management
Implement the Change
Problem solving Process
Recognise and Define Problem
Forces for Change
Measure Evaluate Control
• Habit
• Security
• Economic Factors
• Fear of Unknown
• Lack of Awareness
• Social Factors
• Structural Inertia
• Limited Focus of Change
• Group Inertia
• Threat to Expertise
• Threat to established power relations
• Resource Allocation
Organisational
Individual
Human Resources
Functional Resources
Change Targets
Technical Capabilities
Organisational Abilities
Change agent behaviour
Unilateral action “command”
Rational persuasion; Expert testimony;

Demonstration projects
Empowerment;
Participative decisions
Change Strategy
Force coercion
Rational Persuasion
Shared power
Predicted Outcomes
Temporary compliance
Long-term internationalization
Long-term internationalization
Power Base
Rewards
Punishments
Legitimacy
Expertise
Reference
UNIT 19 ORGANISATIONAL DEVELOPMENT
Structure
19.0 Objectives
19.1 Introduction
19.2 Concept of Organisational Development
19.2.1 Objectives of OD
19.2.2 Underlying Values of OD
19.3 OD Process
19.4 OD Approaches
19.5 OD Strategies / Interventions
19.6 Managing the OD Process
19.7 Let Us Sum Up
19.8 Key Words
19.0 OBJECTIVES
After studying the unit, you should be able to:
• discuss the concept of OD;
• describe the characteristics, objectives and underlying values of OD;
• explain the process of OD;
• describe OD techniques or interventions for bringing change in

the organisation; and
• discuss the ways and means for personal growth and organisational development.
19.1 INTRODUCTION
Organisations face many challenges in terms of increasing competition, maintenance of higher quality of
goods and services, growing role of technology and high expectation of the customers; etc. These challenges
compel the organisations to equip themselves to deal with them. Organisational development is an
important mechanism of improving the organisation and people through planned and established system for
meeting these challenges. It aims at improving the organisation and people through planned systems. The
strategies of organisational development focus on solving the organisational problems, and enhancement of
its effectiveness.
In this unit, you will learn the concept, characteristics, objectives and underlying values of organisational
development. You will be acquainted with various processes and approaches of organisational development.
You will further learn the strategies/interventions used for overall improvement of the organisation. You
will be also familiarised with the management of organisational development process.
19.2 CONCEPT OF ORGANISATIONAL DEVELOPMENT
Organisational Development is a planned, managed and systematic process to change the culture, systems
and behaviour of an organisation in order to solve its problems and achieve its objectives. While OD
frequently includes structural and technological changes, its primary focus is on changing people and the
nature and quality of their working relationships. Thus, OD is the modern approach to management of
change for human resources development. It concentrates on people dimensions like norms, values,
attitudes, relationships, organisational culture etc. Dale S. Beach defined OD as a complex educational
strategy designed to increase organisational effectiveness and wealth through planned intervention by a
consultant using theory and techniques of applied behavioural service.
According to French and Bell, O.D. refers to a long range effort to improve an organisation’s problem
solving capabilities and its ability to cope with changes in its external environment with the help of external
or internal behavioural scientists, consultants, or change agents. OD is intended to create an internal
environment of openness, trust, mutual confidence and collaboration and to help the members of the
organisation to interact more effectively in the pursuit of organisational goals.
As a body of concepts, tools and methods Organisation Development (OD) can be referred as a new
discipline. Thus, OD is a top management supported long term effort to improve an organisation’s problem
solving and renewal processes particularly through a more effective and collaborative diagnosis and
management of organisational culture. It emphasizes on formal work team, temporary team and inter-group
culture.
The analysis of the above description indicates the following characteristics of OD :
• It is an educational strategy which attempts to bring about a planned change.

• It relates to real organisational problems instead of hypothetical classroom cases.
• It uses sensitivity training methods and emphasizes the importance of experiment based training.
• Its change agents are almost external consultants outside of the organisation.
• External change agents and internal organisation executives establish a collaborative relationship
involving mutual trust, influence and jointly determined goals.
• External change agents are humanists seeking to establish a social and altruistic philosophy within an
organisation.
• The goals that the change agent seeks to accomplish through OD tend to reflect human approach and
aims for better conflict resolution, increased understanding and more considerable leadership.
• The organisational changes sought are usually the result of some immediate problems but it is a long
term approach covering three to five years.
• OD is used to describe a variety of change programmes. It intends to change the organisational
philosophies, skills and attitudes of people.
• OD is a dynamic process involving a considerable investment of time and money.
• It is based on open and adaptive system concepts and believes that organisational design and managerial
performance are mutually interdependent.
• OD is research based activity. It aims at conducting surveys, collection of data and evaluation of the
situations.
19.2.1 Objectives of OD
OD efforts broadly aim at improving the organisational effectiveness and job satisfaction of the employees.
These aims can be attained by humanising the organisations and encouraging the personal growth of
individual employees. Specifically the objectives of OD are:
• To increase openness of communication among people.

• To increase commitment, self-direction and self control.
• To encourage the people who are at the helm of affairs or close to the point of actual action to make the
decisions regarding their issues through collaborative efforts.
• To involve the members in the process of analysis and implementation.
• To encourage the confrontation regarding organisational problems with a view to arriving at effective
decisions.
• To enhance the personal enthusiasm and satisfaction levels.
• To increase the level of trust and mutual emotional support among employees.
• To develop strategic solutions to problems with higher frequency.
• To increase the level of individual and group responsibility in planning and execution.
The emphasis of OD on human dimensions of organisation is reflected in humanistic values by:
• Providing opportunities for people to work as human beings rather than as resources in the production
system.
• Providing opportunities for each member of the organisation as well as the organisation itself to develop
to the level of full potential.
• Seeking to increase the organisational effectiveness.
• Attempting to create congenial environment to feel excitement and challenge of work.
• Providing opportunities to influence the people, work, environment and organisation.
• Treating each human being as a person with a complex set of needs important for his work and life.
Thus, OD is a modern approach which is different from the traditional one and aims to bringing
organisational effectiveness through proper synchronization of human beings with task, structure and
technology in an organisation.
19.2.2 Underlying Values of OD
For success of the efforts of OD, there are underlying assumptions or values which
should be the basis of OD approach. There are a number of such values as given below:
• OD movement believes the assumptions of theory Y of McGregor. As such, it emphasizes supportive
and creative opportunities for growth. Self control and personal responsibility are to be provided to the
employees in an organisation rather than using controls and punishment. An individual should be more
independent and autonomous.
• When the new employee is appointed he is to be taken into confidence, invited to work place and into
association for discussion on his personal and work related issues in private meetings. Thus a new
employee needs confirmation and support of others.
• Organisation is benefited by the differences in background, personality and view points of employees.
Contrasts and conflicts of individual should be accepted as the reality.
• Full range of expression of feelings result in high motivation, commitment and creative ability.
• Honesty and directness enable people to put their energies into the real problems and improve
effectiveness.
• Executives should create and develop cooperation among employees for effectiveness and not for
wasting human and other resources.
• Giving attention to process activities not only at the time of assigning activities and bringing relations
among employees but also at the later stages will bring closeness among people.
• Suppressing the conflicts has long run effect on employee morale. Hence identifying the root causes of
the problem and working out a satisfactory solution rather than suppressing the conflict are needed.
• Participation of people throughout the progress of OD is essential to ensure their commitment.
• It is assumed that individual’s objective is personal growth. Organisational growth may be the off shoot
of individual growth.
• These underlying values form the basis of OD culture in an organisation. To be successful in OD
endeavours, efforts should be directed to implant their assumptions in an organisation.
1) What is O.D.?
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
2) Describe the characteristics of O.D.?

…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
3) Enumerate the underlying values of O.D.?

…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
…………………………………………………………………………………
19.3 OD PROCESS
The process of OD refers to the way OD efforts work for a given objective. The OD process is complicated
and it takes long time to complete the process. The process of OD is composed of: a) Data gathering and
organisational diagnosis, b) Action intervention, and c) Process maintenance.
Data collection and diagnosis are an extensive task in the OD process. It involves data collection pertaining
to a problem area. Action interventions are the techniques which are appropriately chosen for use in
implementation stage of the OD process. Process maintenance is a management component which ensures
the on going progress to avail the OD benefits in future.
There are various steps of OD process but the typical process consists of the following steps :
Initial Diagnosis : If it is recognized that there are some inadequacies within organisation which can be
corrected by OD activities, it is necessary to find out the professional and competent people within the
organisation to plan and execute OD activities. The services of the outside consultants can also be taken to
help in diagnosing the problems and developing OD activities. The consultants adopt various methods
including interviews, questionnaires, direct observation, analysis of documents and reports for diagnosing
the problem.
Data Collection : Survey method is used to collect the data for determining organisational climate and
identifying the behavioural problems creeping in the organisation.
Data Feedback : Data collected are analysed and reviewed by various work groups formed for this purpose
in order to mediate in the areas of disagreement or confrontation of ideas or opinions.
Selection of Interventions : The interventions are the planned activities that are introduced into the system
to accomplish desired changes and improvements. At this stage, the suitable interventions are to be selected
and designed.
Implementation of Interventions : The selected intervention should be implemented. Interventions are to

be implemented steadily as the process is not a one shot, quick cure for organisational malady. At the same
time, it achieves real and lasting change in the attitudes and behaviour of employees.
Action Planning and Problem Solving : Groups prepare recommendations and specific action planning to
solve the specific and identified problems by using the collected data .
Team Building : The consultants encourage the employees throughout the process to form into groups and
teams by explaining the advantages of the teams in the OD process.
Inter-group Development : The consultants encourage the intergroup meetings, interaction etc. after the
formation of groups/teams.
Evaluation and follow up : The organisation evaluates the OD programmes, find out their utility, develop
the programmes further for correcting the deviations. The consultants help the organisation in this respect.
All the steps in the OD processes should be followed by the organisation in order to derive full range of OD
benefits.
Activity A
Identify any one problem area of an organisation you know very well. Plot the OD process and prepare an
action plan to diagnose the problem and design an action plan for implementation.
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
19.4 OD APPROACHES
During the course of OD process the change agent or facilitator or consultant plans some activities for the
client organisation to collect data, initiate action and provide feedback. All these activities are planned and
carried out jointly between the change agent and the organisation. Collectively these activities can be
termed as interventions. Interventions are also called OD strategies for a period of time given in the
reference. An OD intervention can therefore be defined as the set of structured activities.
Intervention is the actual manipulation of various elements and may be viewed from several different
perspectives. It is useful to distinguish between intervening in the organisational system and intervention as a
strategic and planned action. In the first case, once the OD process has begun, modifications start taking
place within the organisation. The second type is aimed explicitly at resolving difficulties, removing blocks
and building on strengths to enhance the effectiveness of the organisation. The basic approaches are Techno-
structural Approach & Human Processual Approach which are discussed below.
A) Techno-structural Approach
It relates to theories of interventions into the technology (e.g. task method and processes) and the structure
(e.g., the relationships, roles, arrangements etc.) of the organisation. Techno-structural approaches are rooted
in the fields of engineering, sociology, psychology, economics and open system theory. Interventions in these
areas are intended to effect the work content and method and to effect the sets of relationships among
employees. The broad heading of techno-structural development includes :socio-technical system
perspectives, job design, job enlargement and job enrichment.
Socio-technical systems and job design in part, owe their emergence to two earlier and still current
perspective to change. Opponents of socio-technical systems criticise the physical approach for testing
social groups and individuals mechanistically and criticise the physiological approach for ignoring the
technology of the organisation.
B) Human Processual Approaches
Human Process or behavioural intervention focuses on the human participants and the organisational
processes (e.g.; communication, problem solving, decision making etc.) through which they accomplish
their goal as well as the organisations goals. This orientation to OD is rooted in the academic fields of
psychology, social psychology and anthropology, and in the applied disciplines of group dynamics and
human relations. Human process orientation tend to value human fulfilment and expect improved
organisational performance. Some of these are vertical dimensions of a hierarchy.
It continues to grow along with the belief that the technology of the behavioural sciences can be applied to
help to cope with a society in which change, and also maximum utilisation of human resources, are desirable.
19.5 OD STRATEGIES/INTERVENTIONS
An OD intervention can be defined as the set of structured activities in which selected organisational units
(target groups or individuals ) engage with a task or sequence of tasks that are directly or indirectly related
to organisational development. The OD strategy can be defined as an overall plan for integrating different
organisational improvement activities over a period of time to accomplish objectives. The OD interventions
are interrelated and overlapping in nature. No two interventions are alike and there is no single OD method
capable of serving all the possible objectives of an organisation. Primarily the OD interventions can be
classified in the context of components of our organisation like structure related, task-technology related and
people related interventions.
According to French and Bell the interventions can be clubbed into twelve groups. They are :
• Diagnostic
• Team building
• Intergroup activities
• Survey feedback methods
• Education and training programmes
• Techno-structural activities
• Process consultation
• The management grid
• Mediation and negotiation activities
• Coaching and counselling
• Career planning, and
• Planning and goal setting activities.
OD interventions are used according to the nature of units of change (targets) in the client organisation. The
targets of change are the individual, group, intergroup and the organisation in the specific context of task,
structure and technology. The interventions include many exercises and activities which depend on
conceptual material and actual experience with the subject under study. Loot at Table 19.1 which clearly
explains the nature of target areas (problems) and the type of OD interventions suitable in the given
situation:
Table 19.1 : Problem Areas and Types of OD Interventions

____________________________________________________________________
Problems Identified Possible Interventions
____________________________________________________________________
Alienation of employees Work redesign, Job-enrichment,
Role efficacy labs
Non-collaboration among Team building workshops
functionaries.
Erosion of authority Leadership, Sensitivity Training, training,
Role efficacy labs
Negative attitude of staff Survey feedback, task forces
towards customer service
Productivity loss of workers Personal growth labs, goal setting,

and management team building.
Restrictive practices Union-management interface

Under-utilisation of man power MBO, Work-redesign
Executive’s rivalry Power labs
Low opinion about subordinates Transactional analysis, Team building,
Policy of appeasement Conflict management
Failure of participation Union-management interface,

Sensitivity training
Distrust between union and Union management interface

management
Planning operations Interface labs
Linkage problems Role negotiations
Outdated systems and procedures Brainstorming, Creative Problem
solving, Task force
Team related problems Team building exercises, Role

analysis, Role negotiation technique
organisational mirroring,
Structural problems Job design, MBO, Socio-technical

systems.
Education & Training Coaching and Counselling activities
Based on the above description, important interventions focussing upon different aspects can be discussed in
the following paragraphs:
1) Survey Feedback : It consists of an attitude survey through well designed questionnaires or

interviews or observations and giving feedback to the client organisation. It has much appeal and
application in real life situation. The attitude survey may have an objective of measuring the process; for
instance, communication, decision making and leadership at different levels. The data generated are
perceptual and attitudinal in nature. A summary of results is prepared in group discussion. Generally
feedback of results is given to the group which generated the data. Subsequently devices are designed to
resolution of organisational problems. Thus, the process of survey feed back includes : collection of
data, feedback, development of action plan and follow-up. For authentic results, it should be ensured that
the questionnaire is valid and reliable, employees support investigators and people have mutual trust and
so on.
2) Management Grid : The most publicised technique developed by Robert Blake and Jane S. Mouton
is a step by step approach. The Grid connotes an intellectual framework of how do people manage. This
approach uses a six-phase Grid OD programme which identifies the five basic managerial styles in
numerical combinations which are 1-9, 9-1; 5-5; 9-9; and 1-1. It is depicted in Figure 19.1
Figure 19.1 : Management Grid
High 1-9 (Country Club) 9-9(Team)
5-5(Middle road)
1-1 (Impoverished) 9-1(Task)

Low
Concern for Production
1-1 (Improverished Style) = Minimal concern for people and

production.
1-9 (Country club Style) = Maximum concern for people but
minimal for production
9-1 (Task Style) = Maximum concern for production but minimal for
people.
9-9 (Team Style) = Maximum concern for people and
production.
5-5 (Middle Road Style) = Middle of the road status for
production people.
Development of leadership skills through grid programme involves wide variety of integrated and
instrumented activities which are conducted in experimental and structured conditions. The participants are
assisted to understand the approaches for integrating people and production. The six phase programme
covers three to five years. The first two phases cover management development so that the remaining phases
can help managers towards excellence in organisational performance (9-9 style). The six phase programme
consists of the following:
Laboratory, team development, inter-group development, organisational goal setting, goal achievement and
stabilisation.
3) Team Building : Team building is an attempt to assist the work group to identify, diagnose and solve
its own problems. In fact, groups develop their own norms of behaviour which influence individual and
group behaviour. Organisation is perceived as a system of interlocking groups. OD considers work
groups as teams which are turning points of introducing change. Team building attempts to effect
improvements in various teams operating in an organisation like permanent work teams, task forces,
committees etc. Team building activities focus on diagnosis, task achievement, team relationships and
organisational process. The constituent parties in team building activity are: the external consultant, the
group leader and the members of the group.
In team building activity, members gather and discuss problems relating to their task performance. It
takes frank and fearless discussion. In the team building exercises, the members contribute information
concerning their individual perception of issues, problems and task relationship. Subsequently there is
agreement for overcoming these problems. Normally the goal of the meeting is to transform the team into
a better and effective team.
4) Sensitivity Training : It is also called laboratory training as it is conducted by creating an
experimental laboratory situation in which employees are brought together to interact in an unstructured
environment. Sensitivity training helps to understand people better, to develop an understanding of
others, to develop specific behavioural skills and to gain insights into the group processes. It also aims
on reducing interpersonal friction.
The primary objective of sensitivity training is to break through the barrier of silence and facilitate
verbalisation of participant to emphasize on the process of dialogue rather than the contents of the
training. It is not a hidden and manipulation process but aims at brain washing of individuals.
This training is carried out by unstructured groups without an agenda, leader and predetermined goals.
The group is given complete autonomy in developing their own devices, interactions and on going
process for interaction. Sometimes some planned activities may also be introduced in the Training Group
(T.Group) Laboratory training may involve role playing, intergroup competitive exercises, self-insight
questionnaires, lectures and audio visual aids. Sensitivity training provides a mechanism for personal
learning and development.
5) Four System Management : Rensis Likert’s four System Management is a four level model of
organisation effectiveness incorporating the basic categories of task orientation and people orientation.
According to Likert management philosophy can be classified into four convenient systems such as:
i) Exploitative-Autocratic System
ii) Benevolent Autocratic System
iii) Consultative Democratic System and
iv) Participative Democratic System.
This theory propounds that three basic concepts of system four management will make the organisation
effective. These are:
a) Use of the principle of supportive relationship in the organisation
b) Use of group decision making and group methods of supervision in the organisation, and
c) High performance goals.
Likert’s conclusion is that most effective organisation have system four characteristics i.e., Participative
Democratic System and the least effective Exploitative Autocratic System’s features. Under system four
management, the causal variables like supportive relationships, groups decision making and high
performance influence the end result variables (such as high productivity and low absenteeism ) through
the intervening variables (such as favourable attitudes towards superiors, high confidence and excellent
communication). It is realised that system four is the ideal management where goals are set by the group
members and not by the superiors. This system motivates subordinates.
6) Management by Objectives (MBO) : MBO is yet another popular tool of O.D. MBO process
involves the process of educating the concerned people about MBO, agreement upon clear cut
quantifiable objectives, evaluation of objectives and feed back for deviation and corrective action. It is a
comprehensive overall managerial philosophy which focuses upon joint goal setting. It synthesises the
individual’s goal to organisational goals. Since all levels of an organisation are involved in goal setting,
the entire organisation will have feeling of unity. MBO programmes can be effective if properly
implemented. It needs support of top management.
7) Process Consultation : Process consultation is the set of activities on the part of consultant which
help the client to perceive, understand and act upon the process events which occur in the client’s
environment. It concentrates on the analysis of process of some activities like communication, leadership
etc. It attempts to develop initial contacts, define relationships, select the method of work, collection of
data and diagnosis. Process consultation is designed to change attitudes, values, interpersonal skills,
group norms, and cohesiveness and other process variables. Basically it is a method of intervening in an
on going system.
8) Contingency Approach : Propounded by P. Lawsence and J. Lorseh this approach is based on the
premise that an organisation is a complex social system. Its activities must be integrated into a unified
effort to enable it to cope with the environment. Conceptually people in different departments have
different orientations related to the tasks they perform. In actual practice, the organisational units in their
routine operations are differentiated along their orientation. It appears that with the task differentiation
coordination is not possible. According to contingency approach both differentiation and integration are
possible for total organisation’s effectiveness with the help of integrative devices. To summarise, high
organisational performance is compatible with the existence of both differentiation as well as integration
which are required as per the demands of their immediate environment. The contingency approach can
be applied as an OD intervention in industrial organisations in the form of inter group confrontation
meetings of concerned departmental individuals.
9) Role Analysis : In the performance of their respective roles individuals manifest certain behaviour
which may thwart team effectiveness. Many a times it is found that the individuals are not clear about
their own expected behaviour from the view point of other members of the team. In such situation the
role analysis technique is used for clarifying the role expectations and obligations of the members of a
team. The resultant role requirements and the expected behavioural components of each other help the
member enjoy a mutually satisfactory behaviour in the work team. In the role analysis technique, the
respective role players analyse the focal role of the individuals. These are discussed openly in a
classroom situation by the entire team. Finally a role profile is prepared as a written summary on the
basis of role clarifications and expected behaviour. This paves the way for collaborative efforts without
any confusion about the respective roles.
10) Inter-group Activity : Poor interpersonal relationships are not uncommon features in organisational
functioning . In these situations inter-group activity focuses on improving the relationships between
groups. It facilitates interaction and communication between the work groups which ultimately avoids
dysfunctional inimical competitiveness among them. Inter-group team building involves the process of
differentiation and integration.
11) Organisation Mirroring :It involves activities where one group of members gets feedback from the
members of several other groups about how is it being perceived. Organisational mirroring is used when
there is difficulty with other department in the organisation. A meeting is called and feedback is sought
from other department. During the meeting the exact picture emerges which will resolve many
misunderstandings between two groups of people.
12) Third Party Peace Making Intervention :This intervention is based on the thoughts on
understanding conflicts and their resolutions at the interpersonal level. It facilitates confrontation as a
method of resolving the conflicts arising between two parties who are aware of the existence of the
conflicts and want to confront the issues. The consultant as a third party must be skilled in the art of
diagnosing the conflicts and use confrontation as technique. This process focusses on four basic elements
of conflicts namely : (i) the conflict issues, (ii) the contributory circumstances, (iii) the conflict related
behaviour, and (iv) the results of the conflict. The actual form that the peace making process takes
depends upon the nature and source of the conflict.
13) Job Design/Redesign : It is task -technology related approach aiming at making changes in the
work process of the groups of employees. Job design involves a well planned reorganisation of a job.
Basically it focusses to improve employee motivation, commitment, performance, job satisfaction etc..
There are different approaches to job design which are discussed below:
i) Job Enrichment: It is termed as vertical enrichment or addition of tasks to make the job richer. It
includes giving additional responsibilities and expecting more accountability from the employees.
ii) Job Engineering: It relates to the tasks, methods, performance standards, inter dependence of man
and machine, work flows etc. It may also include replacement of human workers for computers.
iii) Job Rotation: It involves shifting of a person from one job to another for variety of tasks to be done.
It reduces boredom and monotony.
iv) Job Enlargement: It includes expansion of tasks to be carried out. It focuses on horizontal
expansion of related tasks without additional responsibility and accountability.
v) Socio-technical System : It aims to strike a balance between the technical and social aspects of an
organisation with the aim to optimise the relationships and augment organisational effectiveness.
The socio-technical system normally involves a major redesign of the whole gamut of the way the
jobs are being carried out involving technological and social issues.
14) Quality Circles : Quality Circles are semi-autonomous work groups having about six persons who
volunteer to discuss and solve quality related problems in duty hours. It has impact on working
conditions, employees commitment and self development of employees.
15) Counselling : Counselling is the process of help extended by a Manager to his subordinate to
enhance his potential. It aims at sympathesizing and empathizing with the employees. It helps to bring
about self awareness in the employee about his own competence. The manager as counsellor assists the
employees in setting new goals and evaluate his own performance in a non threatening manner. It helps
towards self realization of one’s own strengths and weaknesses.
The above description is not exhaustive enumeration of OD interventions but as per need of the situations a
single or group of interventions may be used to resolve the issues. The focus may be a task or structure or
people. The intention of OD intervention is to enhance the performance.
Activity B
Identify the problems pertaining to task, structure, technology and people in any organisation familiar to you
and choose the most appropriate OD intervention to resolve them.
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
………………………………………………………………………………………
19.6 MANAGING THE OD PROCESS
Basically there are three factors that influence the choice of an OD intervention. Applicability, Feasibility
and Acceptability. Applicability means the potential of an intervention to yield the desired results. Feasibility
means the practicality of an intervention in a given situation. Acceptability means the chances of acceptance
of an intervention in the client organisation. It must be clear that the actual choice of an intervention is based
upon the intuitive decision of the OD consultant.
A pragmatic approach is inevitable to ensure successful implementation of OD efforts in an organisation. If

it is not planned systematically, it may also create turmoil in an organisation. Therefore, the following tips
are elaborated to manage the OD process effectively.
i) Choosing receptive points : The areas or departments of the organisation should be undertaken for
OD experiment, where the people want change for improvement. The OD efforts should be
concentrated on them. Subsequently it can be moved to other units of the organisation.
ii) Focussing on the linkpins : The departments having interlinks should be identified to select the
people. The confidence of these linkpins will help to form a team for OD experimentation.
iii) Working with autonomous parts : Normally independent units/departments having least linkage
with other departments should be chosen so that cost of disturbances can be minimum.
iv) Using and developing internal resources : This will help to sustain and continue the OD efforts.
v) Starting at the top : Since there is need of support from top management, it is desired to start the OD
efforts at the top. This would ensure commitment and support.
vi) Working with supportive force : The consultant must identify the roles of individuals in the
organisation who are enthusiastic about effecting a change.
vii) Achieving minimum critical concentration : It should not hamper the culture of the unit to a great
extent and with the minimum efforts OD activity should be continued.
viii) Working on perception of problems: The client should be encouraged and helped to identify the real
problems.
ix) Having multiple points of entry : After initiating at the receptive point, OD efforts should be
gradually extended to interrelated points where related problems can be solved altogether.
x) Using proactive attitude: The proactive attitude of the consultant will bring openness to resolve the
issues.
These tips on effectiveness of OD process will help the OD endeavours to get success. For success of an OD
effort, the prerequisite conditions should be understood and established for organisational improvement.
They are :
• The key persons should have clear perception about organisational problems.
• The external behavioural science OD consultant should be hired to initiate OD efforts.
• The top level management should always own whole heartedly any effort meant for OD efforts.
• For successful intervention the complete work team alongwith the group leader and the manager must
participate in the OD exercises.
• There should be full support for entire diagnostic activities to collect data about organisational activities.
• OD efforts should be made known to all the concerned in the organisation for sustaining the changes.
• There must be link to all the sub-systems of an organisation like potential appraisal, career planning,
reward system etc.
• OD efforts should focus on the organisation in totality.
• In addition, there must be long range perspectives of the organisation for its improvement.

1) How is sensitivity training useful for organisational development interventions.
……
…………
………
………
…………………
………………………………………
…………
……………
…………………………
…………
…………………
………
…… …
………
……………
……
………
……………………
…………
……………
……… …
……
………
……
………
……
………
……
………
……
……
2) How is team building useful for organisational development interventions.
…
…………
………
………
…………………
…………………
…………………………
………
……………
…………………
………………
………
……………………
……
………………
…………
………
……
……
………………………
………
……………
………………
……
………
……
……
………
……
………
……
………
……
.…
.…
.
…………………………………………………………….
3) How does the third party peace making intervention resolve the conflict of the organisation.
……
……
……
……
……
……
………
…………
… …
……………
………………
………
………………
………
…………
……
……
…………
……………
……………
……
……………
……………
…………
………………
…………
……
………………………
………………
……………
……
……………
… …
………
… …
……
……
……
……
…
……………………………………………………………
4) Enumerate the approaches of job design.

……
……
……
……
………
……
……
……………
… …
…………
………
………
………
………
……………
……………
…………
……………
…………
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……………………………………………………………
……………………………………………………………………………………
…………………………………………………………………………………
19.7 LET US SUM UP

Organisational development refers to the systematic process to change the culture, systems and behaviour of
an Organisation for solving its problems and achieving the organisational objectives. The basic objectives of
organisational development are : to improve the organisational effectiveness and job satisfaction of the
employees. The basic underlying values of organisational development involves; emphasis on supportive
and creative opportunities for growth, developing the commitment, cooperation and enhancing the
participation of employees.
The steps involved in the process of organisational development include : initial diagnosis, data collection,
data feedback, selection of interventions, implementation of interventions, action planning and problem
solving, team building, intergroup development and evaluation and follow up.
Organisational Development approaches consist of techno-structure approach and human processual
approach. The organisational development strategies or interventions refer to an overall plan for integrating
different organisational improvement activities over a period of time to accomplish organisational objectives.
It can be classified into structure related, task-technology related and people related interventions. The
major organisational development interventions are : diagnostic, team building, inter group activities, survey
feedback methods, education and training programmes, techno-structural activities, process consultation, the
management grid, mediation and negotiating activities, coaching and counselling, career planning and
planning and goal setting activities.
OD process must be planned and managed systematically to get the successful result. The effective
managing process involves : choosing receptive points, focusing on link pins, working with autonomous
parts, using and developing internal resources.
19.8 KEY WORDS

Counselling : Process of help extended by a manager to his subordinate to enhance his potential.
Job Design/Redesign : Task technology related approach aiming at making changes in the work process of
the group of employees.
Organisational Development : A planned, managed and systematic process to change the culture, systems
and behaviour of an organisation to solve its problems and achieve its objectives.
Organisation Mirroring : Involves activities where one group of members gets feedback from the members
of several other groups about how is it perceived.
OD Process : The way OD efforts work for a given objective.
OD Strategy : Overall plan for integrating different organisational improvement activities over a period of
time to accomplish objectives.
Process Consultation : Set of activities on the part of consultant which help the client to perceive,
understand and act upon the process events which occurs in the client’s environment.
Quality Circles : Semi- autonomous work groups to discuss and solve quality related problems in duty
hours.
Sensitivity Training : Creation of an experimental laboratory situation in which employees are brought
together to interact in an unstructured environment.
Team Building : An attempt to assist the work group to identify, diagnose and solve its own problems.

1) What do you understand by O.D.? Explain the objectives and underlying values of OD.
2) Discuss the process of OD?
3) Elaborate the desired OD interventions focussing upon people?
4) Identify task-structure related OD interventions?
5) Identify the organisational problems and suggest suitable OD intervention to resolve them.
6) Discuss the prerequisite conditions for effective OD programme.
7) Give the tips for managing OD process effectively.
8) Describe the process of OD.
UNIT 20 EMERGING TRENDS IN OB
Structure
0.0 Objectives
0.1 Introduction
0.2 Emerging Trends
20.3 Culture and Organisational Behaviour
20.4 Cross-Cultural Management
20.5 Managing Multinational Organisation
20.6 Let Us Sum Up
20.7 Key Words
20.0 OBJECTIVES
After studying this unit, you should be able to:
• describe emerging issues in the field of organisational behaviour;

• explain the changing nature of human management in organisations;
• discuss issues relating to cross-cultural aspect of modern organisation; and
• design behavioural intervention for managing multinational organisations.
20.1 INTRODUCTION
Organisations are witnessing several changes in its structure, operations and people. The emergence of
cross-cultural environment, the influence of multinational corporations, the growing technological oriented
operations, and the increasing concern for total quality management provides different environment to the
organisations. These developments influence the whole range of social, political and cultural environment
of the organisation. People from different cultural backgrounds have been working together for the
achievement of the organisational goal. The different cultural norms and values have led to the emergence of
multiculturalism in the organisation. The study of cross-cultural management may provide good insight for
understanding the behaviour of the people. Moreover, proper understanding of multicultural behaviour may
help the managers to channelise the employee’s energy for the attainment of the organisational goal. The
employees may also coexist and prosper together. In this unit, you will learn the emerging trends in
organisational behaviour and the influence of culture on the organisational behaviour. You will further learn
the cross cultural management and the management of the multinational corporations.
20.2 EMERGING TRENDS

In this century organisations are undergoing rapid changes and many other changes are expected. Such
changes are keeping top management as well as functional managers, constantly busy in making strategies
for having compatibility with internal and external environment.
From the angle of Organisational Behaviour and Human Resource Management, Organisations are
witnessing many changes. Some of them are:
• Emergence of Multinational Corporations;

• Cross-cultural environment at work place;
• More technically skilled workforce;
• Managing through higher degree of participation;
• Smaller size of workforce;
• Subdued role of seniority, dominant role of specialised skills;
• Flexitime and flexiplace;
• Difficult to maintain jobs for long without constant high-level training;
• Instability in job, making prospect of job security dim;
• Executives may be less committed to job but highly committed to profession;
• More commitment to quality; just “OK” quality won’t do;
• OB scientists are more busy in updating themselves;
• Training on Self-efficacy more in demand; it helps people to get employment and redeployment through
imparting interview skills and exposing participants to models of people who searched for and found a
good job;
• Some hottest career of this century; Information Technology, Education and Training (e.g. cross-cultural
trainers, employee trainers, school administrators), Environmental Consultants, Health Care, Diversity
Managers, Human Resource Managers, Employee Leasing Agents, etc.;
• Computerized Performance Evaluation may open another issue related to employees performance; it was
proved by Aiello & Svec (1993), that performance on a complex task is highest, when it is not monitored,
moderate when it is monitored in person, and still low when performance is monitored by computer;
• Communication in this century through electronic publishing, CD-ROM, wireless;
• Changing faces of managerial power and empowerment schemes; bosses are using more of expert power
than coercive power, bosses are sharing information instead of holding it, bosses are working as internal
consultant in stead of simply telling what to do;
• Workflow automation has saved lot of time wasted on gathering and transferring paper;
• Flat hierarchy and horizontal structure:
• Organisations are being structured around processes instead of tasks;
• Executive positions are being defined in terms of processes, instead of in terms of collection of
people;
• Organisational charts are changing from a collection of boxes, in stead, looking more like a process
map;
• In many cases cost-cut to the extent of one-third reported due to implementation of horizontal design;
• Contingency workforce (Permanent Temporary Employees)
Though permanent employees would remain in demand in future, organisations would be more like
apartments than a home for life; at present about half of the work force in U.S.A. is working on part-time/
freelance basis.
Due to multiple changes taking place simultaneously, Organisations are in search of getting reinvented. The
most widely accepted approach in the last decade, to reinventing organisations is the practice of
reengineering the corporation, designed by Michael Hammer and James Champy. Reengineering means
radically rethinking and redesigning those processes by which we create value (for customers) and do work.
Reengineering involves redefining processes as patterns of relationships connecting organisational members
with people outside the organisation. Hammer and Champy list speed, quality of service, and overhead costs
as important competitive issues that reengineering can address. They argue that the hallmark of a really
successful company is its willingness to abandon what has been successful in the past. There is no such thing
as permanent winning formula.
Increasing Concern for Quality
In the era of competition, survival and excellence are possible only through maintaining high quality of
products and services. Quality in the work place has gone beyond creating a better-than average product at a
good price, and now refers to achieving increasingly better products and services at progressively more
competitive prices. This includes doing the things right at the first time, rather than making and correcting
mistakes.
Concern for quality has brought following changes in the managerial scenario:
• More emphasis on training;
• Autonomy emerging as strong factor of motivation;
• Organisations emphasizing on sound system of indoctrination;
• New recruits are seeking more information about technical issues, performance feedback, referent issues
(what one is expected to do), normative issues, social feedback; such information seeking is a good sign,
as it helps, to build ability to perform jobs, to know expectations about what to do, and to feel fit into
various social groups;
• Effective teams are being built through designing strategies to interact with external environment; in a
study Ancona & Caldwell (1992) identified four such strategies in ascending order of effectiveness; i)
Isolationist, ii) Technical Scouting (searching for ideas about market, competition, technology, and
coordinating this information with team members), iii) Ambassadorial (protecting team from outside
pressure, persuading others to support team and lobbying for resources), iv) Comprehensive
(ambassadorial plus coordinating technical information with non-team members);
• Survey Feedback to improve upward communication;
• Electronic brainstorming as a device for generating ideas; research suggests that electronic brainstorming
produces more number of quality ideas than face-to-face brainstorming;
• Team leaders are shifting their focus according to following comparative chart:
From to
Directing people Inspiring teamwork and building trust
Training individuals Expanding team capabilities
Managing one-on-one Creating team identity
Preventing conflict Making most of team differences
Reacting to change Foresee and influence change
• Criteria of quality becoming more comprehensive; e.g. Malcom Baldridge Quality Award in U.S.A. is
given early to three types of organisations: manufacturing, small business, and, service; - the award is
given on the basis of following seven criteria (total points: - 1000):
Senior executive leadership : 90 points
Information and analysis : 80 points
Strategic quality planning : 60 points
Human resource development & management : 150 points
Management of process quality : 140 points
Quality and operational results : 180 points
Customer focus and satisfaction : 300 points
The issue of quality is being addressed through an approach known as Total Quality Management (TQM).
TQM is an organisational cultural commitment to satisfying customers through the use of an integral system
of tools, techniques, and training. TQM involves the continuous improvement of organisational processes,
resulting in high- quality products and services. This meaning attempts to capture the essence of W. E.
Deming’s philosophy of quality. It would be appropriate here to introduce the approach of Deming (one of
pioneers of quality movement) towards quality management.
Deming’s fourteen steps of quality management are:
• Create constancy of purpose for improvement of product and service;

• Adopt the new philosophy;
• Cease dependence on mass inspection;
• End the practice of awarding business on price tag alone;
• Constantly and forever improve the system of production and service;
• Institute modern methods of training on the job;
• Institute leadership;
• Drive out fear;
• Break down barriers between staff areas;
• Eliminate slogans, exhortations, and targets for the workforce;
• Eliminate numerical quotas;
• Remove barriers to pride of workmanship;
• Institute a vigorous programme of education and training;
• Take action to accomplish the transformation.
Another approach called “Six Sigma” became very popular and effective in the area of quality management.
Six Sigma defines the concept of achieving approximately zero defects (more precisely, 3.4 defects per
million or 99.999% defect-free manufacturing).
Six steps to Six Sigma are:
• Determine the product you make;
• Determine who are your customers ;
• Determine the suppliers you need to make the product;
• Workers map out the process to fulfill mission;
• Evaluating the process and eliminating the non-value-added steps or the sources of error;
• Establishment of measurement criteria and the drive for continuous improvement.
Quality movement is here to stay. However Tom Peters talks in terms of going even beyond quality. He
argues that the only way to survive today is through creativity and imagination, and managers need to go
beyond current thinking. He claims that crazy times call for crazy organisations. Peters asks to go beyond
change through abandonment of everything. His following prescriptions are interesting:
• Beyond Decentralisation: Disorganising to unleash imagination;
• Beyond Empowerment: Turning every job into a business;
• Beyond Loyalty: Learning to think like an independent contractor;
• Beyond Reengineering: Creating a corporate talk show;
• Beyond Learning: Creating the curious corporation;
• Beyond TQM: Toward WOW
• Beyond Change: Toward Perpetual Revolution.
Activity A
Till now you have noted various changes, which are taking place in modern organisations. The issues
discussed above in this unit are not exhaustive. Through searching current business-magazines list five other
important changes (according to your view) those are taking place in modern organisations. What are the
reasons behind selecting these five issues? How these issues are influencing human side of management?
………
…… …
………
……
…………
…………
………………
…………………
……………………
…………
… …
………
…………
……………
……………
…………
………
…………
……………
………………
……………
…………
…………
………
…………
…………
……
………………
……
…………………………………
…………
…
……… …………
…………………… ………………… …………… ………………… ……
………… ……………………………………………………… …………………………………………………………………………… ……… ……………………
20.3 CULTURE AND ORGANISATIONAL BEHAVIOUR

Various studies suggest that values differ across culture. In this field Geert Hofstede has done one of the
prominent studies. Though the study is more than thirty years old, it is still treated as an authentic study to
find influence of culture on values. After doing survey in fifty countries - India is one of them - he found that
managers and employees vary on five value dimensions of national culture. These five dimensions are
following:
• Power Distance: It is a national culture attribute describing the extent to which a society accepts that
power in institutions and organisations are distributed unequally. This variable may range between
relatively equal (low power distance) to extremely unequal (high power distance). Countries found to be
having low power distance are: Austria, U.S.A., Germany, Netherlands, Denmark, Israel, and New
Zealand etc. Countries having high power distance are : Malaysia, France, Indonesia, Pakistan, Columbia
Venezuela, China, Russia, Hong Kong, Philippines etc. Japan was found to be having moderate power
distance. When fifty countries were ranked along with continuum, from low to high power distance,
India ranked 42nd, meaning India is high on power distance.
• Individualism versus Collectivism: Individualism is a national culture attribute describing the degree to
which people prefer to act as individuals rather than a member of groups. Collectivism is a national
culture attribute that describes a tight social framework in which people expect others in groups of which
they are a part to look after them and protect them. Countries found to be high on individualism are:
U.S.A., U.K., France, Germany, Netherlands, and New Zealand etc. It has been found that Mexico is also
moving towards more degree of individualism. Countries found to be high on collectivism are :
Guatemala, Columbia, Pakistan, China, Hong Kong, Indonesia etc. Japan and Russia have been found to
be mid-way between individualism and collectivism. When fifty countries were ranked along with
continuum, from individualism to collectivism, India ranked 30th, meaning India is slightly tilted towards
collectivism, in comparison to other countries studied by Hofstede.
• Masculinity versus Femininity: Masculinity is concerned with quantity of life, and femininity is
concerned with quality of life. Masculinity is a national culture attribute describing the extent to which
societal values are characterised by assertiveness and materialism. Femininity is a national culture
attribute that emphasizes relationships and concern for others. Countries high on masculinity are Japan,
Germany, Hong Kong, U.S.A., Austria, Ireland, New Zealand, and South Africa etc. However, in recent
years U.S.A. has reported to be moving a bit towards femininity. Countries high on femininity are :
Sweden, Norway, Denmark, Finland, Netherlands, Chile, Portugal, and Russia etc. Countries mid-way
between masculinity and femininity are China, France, and Indonesia etc. When fifty countries were
ranked along with continuum, from masculinity to femininity, India ranked 30th, meaning India is slightly
tilted towards femininity.
• Uncertainty Avoidance: It is a national culture attribute describing the extent to which a society feels
threatened by uncertain and ambiguous situations and tries to avoid them. Where uncertainty avoidance
is high, society prefers structured to unstructured situations, and people have an increased level of
anxiety, stress, and aggressiveness. Countries high on uncertainty avoidance are : Greece, Portugal,
Japan, Chile, France, and Russia etc. Countries low on uncertainty avoidance : are Singapore, Denmark,
Switzerland, Ireland, New Zealand, South Africa, Hong Kong, Indonesia, and U.S.A. etc. Countries
moderate on uncertainty avoidance are : China, Germany, Japan, Netherlands etc. When fifty countries
were ranked along with continuum, from low to high on uncertainty avoidance, India ranked 9th, meaning
India is low on uncertainty avoidance.
• Long-term versus Short-term Orientation: Long-term orientation is a national culture attribute that
emphasizes the future, thrift, and persistence. Short-term orientation is a national culture attribute that
emphasizes the past and present, respect for tradition, and fulfilling social obligation. Countries high on
long-term orientation are : China, Hong Kong etc. Countries high on short-term orientation are: France,
Indonesia, Russia, and U.S.A. etc. The countries on mid-way between the two orientations are Germany,
Netherlands etc.
Kluckhohn and Strodtbeck have given their own framework to categorize the culture of various societies.
They have considered six dimensions, and have analysed the tendencies of various societies on the six
dimensions, which are :
• Relationship to Environment
• Subjugation (e.g., Middle-East)
• Harmony (e.g., Far-East)
• Domination (e.g., Canada, U.S.A.)
• Time Orientation
• Past (e.g. , Italy, Greece)
• Present (e.g., U.S.A.)
• Future (e.g., Japan)
• Nature of People
• Basically good (e.g., Developing Countries)
• Basically evil (e.g., N. Korea)
• Mixed (e.g., U.S.A.)
• Activity Orientation
• Doing (e.g., U.S.A.)
• Being (e.g., Mexico)
• Controlling (e.g., France)
• Focus of Responsibility
• Individualistic (e.g., U.S.A.)
• Group (e.g. , Malaysia, Israel)
• Hierarchical (e.g., U.K., France)
• Conception of Space
• Public (e.g., Japan)
• Private (e.g., U.S.A.)
• Mixed (Most of the societies).
1) Whether emerging trends have made a work place more interesting or more tense?
…
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
……
…
2) How far do you agree with the findings of Hofstede about work place related culture of India?
…
………
………
………… …………………………………………… …………… ………………………… ……
……… ……………………………………………………… ………………… ………………… …………………… …
………
…
20.4 CROSS-CULTURAL MANAGEMENT

The last decade has witnessed emergence of multiculturalism at organisations. Multiculturalism, as applied
to the workplace, is the view that there are many different cultural backgrounds and factors that are
important in organisations, and that people from different backgrounds can coexist and flourish within an
organisation. As far as findings of cross-cultural studies are concerned, they are more indicative than
deterministic, at a particular point of time.
Following issues are worth considering for comprehensive understanding of managing in a cross-cultural
environment:
Cross-Cultural Differences in Sex Role Stereotyping
• Schein & Muller (1992) did a study to find sex role stereotyping in three countries, Germany, U.K., and,
U.S.A. Correlation was computed between successful managers and men, and between successful
managers and women. In all three countries, both men and women perceived higher correlation between
successful managers and men than that between successful managers and women. However in U.S.A.,
women perceived women as more similar to successful managers than in U.K., and in U.K. women
perceived women as more similar to successful managers than in Germany (please note that number of
women managers are more in U.S.A. than in U.K., and number of women managers are more in U.K.
than in Germany). It indicates that opportunity of men coming in contact with women managers is not
significantly reducing the stereotyping against women managers, but opportunity for women managers
coming in contact with more number of women managers is improving the perception of women
managers about women managers.
Cross-Cultural Differences in Achievement Motivation
• McClelland (1925 & 1950) found that there is high degree of correlation between need for achievement
and degree of industrialisation (based on criteria of per capita income and per capita electricity
generation);
• Kizen (ongoing improvement for everyone in the organisation; - originated in Japan by an American
W.E.Deming who was responsible for development of Japan after World War II) which is a substitute of
need for achievement as resulted in total quality improvement in Japan;
• Following tips have been identified for achievement orientation/Kaizen:
Set moderately difficult goal;

Give lots of feedback;
Let people take responsibility for their work;
Encourage an action orientation.
Cross-Cultural Differences in Work Values / Motivating factors
• In a study, Elizur, Borg, Hunt & Beck (1991) surveyed people in eight countries (U.S.A., Netherlands,
Hungary, Israel, Germany, Taiwan, China, and S. Korea). They were asked to rank 24 work values e.g.,
Achievement, Interesting Job, Advancement, Meaningful Work, Use of Ability, Esteem, Security,
Supervisor, Co-workers, Pay, etc. According to the study, Achievement and Interesting Job are two most
highly rated work values across various cultures. In all the countries Pay is not highly rated. The study
indicates that basic work values are not very different across culture.
• However various motivation theories (mostly developed in U.S.A.) may be interpreted differently in
different cultures. Maslow suggests that people start with physiological need, and then move to security
need, social need, esteem need, and self-actualized need. However in countries where uncertainty
avoidance is high (e.g. Japan, Greece, Mexico), security need may be more dominant than other needs. In
other culture where femininity is high (e.g. Scandinavian Countries), social needs may be on top priority.
In countries having tendency to take moderate risk (e.g. U.S.A., U.K., Canada), achievement motivation
may be high, whereas in countries having high degree of uncertainty avoidance (e.g., Chile, Portugal),
achievement motivation may be low.
Cross-Cultural Differences in Social Loafing
• A study by Early (1993) suggests that there is less degree of social loafing in collectivistic culture
(e.g. in China, Israel) and more in individualistic culture (e.g. in U.S.A.). It implies that in collectivistic
culture performance improves in group, whereas it goes down in group activities in individualistic culture.
Cross-Cultural Differences in Decision Making
• In individualistic culture (e.g. U.S.A.) quick decision by individual is emphasized, and a situation is
perceived as problem earlier. In Thailand, Malaysia, Indonesia, a situation is not quickly perceived as
a problem, hence decision is relatively delayed. In Japan decision is taken through gaining
acceptance of immediate colleagues. In Sweden, decision is taken involving all that may be affected,
whereas in India, consulting subordinate is a sign of weakness. In Egypt, more time is expected to be
taken on deciding over important issues. Throughout Middle East, quick decision is perceived as an
action in haste.
Cross-Cultural Differences in Conflict Handling
• A study by Ting Toomey suggests that in individualistic culture (e.g. U.S.A), there is more use of
dominating style and less of avoiding style. In such culture desire to be obliging is low. In China there is
preference for obliging (accommodating) style. In Taiwan, preference is for avoiding style.
Cross-Cultural Differences in Leadership Behaviour
• In all the cultures the two basic ingredients of leadership behaviour are: concern for people and
concern for work;
• People in different cultures show concern for people differently

U.K.: showing employees how to use new equipment and helping to accept change;
U.S.A.: not sending written memos, not talking about work-related problems;
Hong Kong: spending social time together;
Japan: speaking about subordinates’ problems with others in their absence, and by teaching new job
skills;
• People in different cultures show concern for work differently

U.K.: voicing dissatisfaction;
U.S.A.: addressing superiors using formal language;
Hong Kong: meeting with subordinates and encouraging communication;

Japan: checking work quality and helping people complete their work.
Cross-Cultural Differences in Managing Change
• In cultures where people believe that they can dominate their environment, individuals will take a
proactive view of change e.g. in U.S.A., Canada etc.; where people see themselves as subjugated to their
environment, there would be passive approach towards change e.g. in Iran, Saudi Arabia etc.;
• In culture having long-term orientation of time, people would wait patiently for change to occur e.g. in
Japan; in culture having short-term orientation, people would expect fast result e.g. in U.S.A. and
Canada;
• Culture emphasizing more on past, and on tradition, would put more resistance to change e.g. Italy;
culture emphasizing on present would put less resistance to change e.g. U.S.A.;
• In high-power-distance cultures, such as the Philippines or Venezuela, change efforts will tend to be
autocratically implemented. In contras in low-power-distance cultures such as Denmark and Israel,
change efforts will be implemented through greater use of participation.
Cross-Cultural Differences in Personality
• The prevalence of Type A personalities (high intensity for goal orientation) may be more in capitalistic
countries (e.g. North America), where achievement and material success are highly valued. Such
countries have high emphasis on time management and efficiency. On the other hand, in cultures such as
Sweden and France, where materialism is less revered, we would predict a smaller proportion of Type A
personalities.
While communicating with people from different cultures, you can take certain measures to minimize
misperceptions, misinterpretations, and misevaluation. These measures are:
• Try to assess the cultural context;

• Assume differences until similarity is proven;
• Emphasize description rather than interpretation or evaluation;
• Practice empathy;
• Treat your interpretations as a working hypothesis.
Managing Cultural Diversity
The whole world is shrinking into a single global village and hence multi-national business and social
interactions require the integration of various diverse cultures into organisational philosophy and operations.
Managing cultural diversity can improve organisational performance.
Taylor Cox and Stacy Blake have suggested six arguments for managing cultural diversity. These are:
• Cost Argument: Managing cost would lead to more advantages in diverse environment;
• Resource-Acquisition Argument: Those with the best reputations of managing diversity will win the
competition for the best personnel;
• Marketing Argument: The insight and cultural sensitivity that members with roots in other countries
bring to the marketing effort should improve these efforts in important ways;
• Creativity Argument: Diversity of perspectives and less emphasis on conformity to norms of the past
should improve the level of creativity;
• Problem-solving Argument: Wider range of perspectives lead to potentially better decisions and critical
analysis of issues;
• System Flexibility Argument: Multicultural model suggest that system will become less determinant, less
standardized, and therefore more fluid; the increased fluidity should create greater flexibility to react to
environmental changes.
Cox and Blake have suggested following spheres of activities for managing cultural diversity:
• Organisation Culture: Valuing differences and cultural inclusion;

• Mind-set about Diversity: Creating supportive environment;
• Cultural Differences: Promoting acceptance and reaping benefits of diversity;
• Education Problems: Educate management on valuing differences;
• Human Resource Management Systems: Have bias free approach in the areas of recruitment, training
and development, performance appraisal, compensation and benefits, promotion etc.;
• Impartiality: Promote impartiality on the issues of gender, race, ethnicity, and nationality.
Thomas suggests that there are several guidelines for managing diversity, but he proposes one test
emphatically that he calls Special Consideration Test. The test consists of one question: Does this
programme, policy, or principle gives special consideration to one group? Will it contribute to everyone’s
success, or will it only produce an advantage for selected group? Is it designed for them as opposed to us?
Whenever the answer is yes, the management is not yet on the road to manage diversity.
1) What are those work values, which have shown consistency across cultures?
…
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
……
……………………………………………………………………………………
……………………………………………………………………………………
2) How can cultural diversity be managed more effectively?
……
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
………
…
…………………………………………………………………………………………………………………………………………………………………………
20.5 MANAGING MULTINATIONAL ORGANISATION
Multinational organisation or multinational corporation (MNC) is a large corporation with operations and
divisions spread over several countries but controlled by a central headquarters.
Following are the features of MNCs from perspective of human resource management:
• They have to work in a different legal, political, and economic system;
• They have to face more tough competitions from other MNCs and local industries;
• They need to be flexible people should be able to stretch their potential;
• Their organisational structure need to be less tall and more flat;
• People selected should have global view;
• Recruitment and selection need to be hauled up to meet international challenges;
• People need training in multi-skilling;
• People selected need special training in cross-cultural values, socialization, languages etc.;
• There is need to strike balance between autonomy and control;
• There is need to strike balance within and between countries, for working as a single system.
Rhinesmith has suggested six guidelines that assist in creating a global culture within organisations. These
are:
• Create a clear and simple mission statement. A shared mission could unite individuals from diverse
cultural backgrounds.
• Create systems that ensure an effective flow of information. Information flow should be consistent
throughout the geographically dispersed organisation.
• Broaden managers’ minds to allow them to think globally.
• Develop global career paths.
• Use cultural differences as a major asset.
• Implement worldwide education and team development programmes. Unified training efforts that
emphasize corporate values can help establish a shared identity among employees.
Activity B
Meet a manager working in a multinational with headquarters outside India and having an unit in India.
Discuss the challenges in managing diversified work force coming from various cultures and working at one
place.
……
…………
…… …
……
……………
………
………………
………
…… …
………
………
………
…………
…………
…………
……………………
………
………
………………
……………
……
………
………………
………
…………
……………
…………
……………
………………
……
…………………………
…………
… …
……
……
……
…………
…… …
……
……………
………
………………
………
…… …
………
………
………
…………
…………
…………
……………………
………
………
………………
……………
……
………
………………
………
…………
……………
…………
…………
…………………
……
…………………………
…………
… …
……
……
……
………
……
…………
……
……
……
…………
……
………
………
……
……
…………
………
……
……
……
……
………
……
………
………
………
……
………
……………
……
……
……
……
………
…………
……
………
………
……
……
……
……
………
………
………
……
………
………
………
……
………
……
………
……
………
…………
……
……
……………
………
………
……
……………
……
……
…
……………………………………………………………………………………….
20.6 LET US SUM UP
Organisations are witnessing constant changes in modern era. The emergence of cross-cultural environment,
technological oriented work place, increasing participation of employees, continuous upgradation and
increasing role of multinational corporation requires new ways of managing them. Moreover, in an era of the
competitive environment, survival and excellence are possible through maintaining high quality of products
and services. The total quality management which involves the continuous improvement of organisational
process and operations has become very important for the organisation . The six sigma approach of quality
management has been also gaining importance which focuses on zero defects. These changes influence the
behaviour of the organisation. The behaviour requires to be dealt in a cross-cultural environment as well.
The multiculturalism has been emerging in the organisation. The issues related to comprehensive
understanding of managing in a cross cultural environment include : cross-cultural differences in sex role
stereotyping, achievement motivation, work values or motivating factors, social loafing, decision-making,
conflict handling, leadership behavior, managing change and personality. Managing cultural diversity may
improve the organisational performance. Therefore, the operations of multinational corporations must be
managed to suit the requirements of cultural diversity.
20.7 KEY WORDS

Collectivism: A national culture attribute that describes a tight social framework in which people expect
others in groups of which they are a part to look after them and protect them.
Femininity: A national culture attribute that emphasizes relationships and concern for others.
Individualism: A national culture attribute describing the degree to which people prefer to act as individuals
rather than a member of groups.
Kizen: Ongoing improvement for everyone in the organisation.
Masculinity: A national culture attribute describing the extent to which societal values are characterised by
assertiveness and materialism.
Multinational Corporation (MNC): A large corporation with operations and divisions spread over several
countries but controlled by a central headquarters.
Power Distance: A national culture attribute describing the extent to which a society accepts that power in
institutions and organisations which are distributed unequally.
Reengineering: Radically rethinking and redesigning those processes by which we create value (for
customers) and do work.
Six Sigma: Defines the concept of achieving approximately zero defects.
Total Quality Management (TQM): An organisational cultural commitment to satisfying customers

through the use of an integral system of tools, techniques, and training.
Uncertainty Avoidance: It is a national culture attribute describing the extent to which a society feels
threatened by uncertain and ambiguous situations and tries to avoid them.
1) Explain some of the emerging trends in the fields of organisations and Organisational Behaviour.
How these changes influence the organisation ?
2) Describe Total Quality Management and Business Process Reengineering. How are they important
for the organisation ?
3) What are dimensions of cross-cultural study done by Hofstede? How national culture influence work
culture in organisations?
4) Suggest measures for managing cultural diversity. How multinational organisations can be managed
more effectively.
Concern for People

Unit 17 Organisational Culture and Climate: Structure

Uploaded by

Copyright:

Available Formats

You might also like

Unit 17 Organisational Culture and Climate: Structure

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Unit 17 Organisational Culture and Climate: Structure

Uploaded by

Copyright:

Available Formats

UNIT 17 ORGANISATIONAL CULTURE AND CLIMATE

• explain the meaning of organisational culture;

17.3 BASIC ELEMENTS OF CULTURE

17.4 FUNCTIONS OF ORGANISATIONAL CULTURE

• Development of strong identification with management goals;

Check Your Progress A

1) How culture in an organisation gets established?

2) What purpose organisational culture serves in an organisation?

5.5 FACTORS INFLUENCING ORGANISATIONAL CULTURE

17.6 IMPACT OF ORGANISATIONAL CULTURE

17.7 CULTURE-PERSON COMPATIBILITY

• Communal culture (high on sociability; high on solidarity): Positive aspect is a feeling of

17.8 DEVELOPING ORGANISATIONAL CULTURE

17.9 CONCEPT OF ORGANISATIONAL CLIMATE

• is experienced by its members;

17.10 DIMENSIONS OF ORGANISATIONAL CLIMATE

Trust: Degree of trust or its absence influence organisational climate.

Risk Taking: It is an important determinant of climate.

Check Your Progress B

2) What are the main determinants of organisational climate?

17.11 CREATING FAVOURABLE ORGANISATIONAL CLIMATE

17.12 LET US SUM UP

17.13 KEY WORDS

Organisational Culture: System of shared meaning among members.

Subcultures: Minicultures within an organisation.

17.14 TERMINAL QUESTIONS

• discuss different forces which initiate change;

i) Change in Leadership: A change in leadership of an organisation may result in change in perceptions,

v) Implementation of New Technology: Technological developments result in change of job, production

Table 18.1 : Forces of Change

18.3 THE PROCESS OF CHANGE

A successful change process involves three steps :

1.1.1 Lewin’s Model

Figure 18.1 : Lewin’s Model of Change Process

Figure 18.2 : Change Process Model of Organisational Change

18.4 RESISTANCE TO CHANGE

Look at Figure 18.3 which shows sources of resistance to change.

Figure 18.3 Sources of Resistance to Change

5.5 OVERCOMING RESISTANCE TO CHANGE

Table 18.2 : Overcoming Resistance to Change

Method Use when Advantages Disadvantages

i) Environmental Influences: Environment is an important factor in bringing about organisational

iv) Employee’s Participation: Employees or their representatives may be invited to participate in

Table 18.3 : Managing Change

Environmental influences A major factor influencing the change

18.7 TARGETS OF CHANGE

iii) Technological Capabilities: Technological capabilities provide a wonderful opportunity to change

Figure 18.4 : Targets of Change

i) Evolutionary – which is gradual, incremental and specifically focused

ii) Revolutionary – which is sudden, drastic and organisation wide

Figure 18.5 : Strategies of Change

18.9 BUILDING EFFECTIVE ORGANISATION

Let us now consider these three effectiveness in detail.

Factors in Building Effective Organisation

• Establishing a strategy for change, innovation and continuous improvement;

18.11 KEY WORDS

Change agent: A person responsible for managing a change effort.