UNIT - V ORGANIZATIONAL CHANGE AND DEVELOPMENT

Meaning of organizational Change:

Organizational change can be defined as the alteration in structure, technology or people

in an organization or behavior by an organization. Here we need to note that change in
organizational culture is different from change in an organization. A new method or style or
new rule is implemented here.

An organizational change occurs due to two major factors namely −

 External factor − External factors are those factors that are present outside the firm but
force the firm to change or implement a new law, rule etc. For example, all banks are
bound to follow the rules laid down by the RBI.

 Internal factor − Internal factors are those factors that are caused or introduced inside
an organization that forces a change. For example, no smoking in the workplace.

Kurt Lewin, is a noted organizational theorist, who proposed the force field analysis for
organizational change. In this theory, he has prioritized two factors for change in an
organization, namely −

 Driving force − Driving force can be defined as an organizational force that makes a
change with respect to structure, people and technology. In short, it drives the
organization from one culture to another.

 Restoring force − Restoring force is the force which changes the culture from the
existing state to the old state. It indicates a backward motion while the driving force
indicates a forward motion.

Importance of Organizational Change

There is a need of change in an organization because there is always a hope for further
development, and in order to survive in a competitive market, the organization needs to be
updated with changes. However, we have listed some reasons to explain why changes are
deliberately made and carefully planned by the organization before implementation.
  It improves the means to satisfy the economic requirements of people.

 It enhances the profitability of organization.

 It promotes employee satisfaction and well-being.

Nature of work change:

Work is constantly reshaped by technological progress. Firms adopt new ways of production,
markets expand, and societies evolve. Overall, technology brings opportunity, paving the way to
create new jobs, increase productivity, and deliver effective public services.

In today's world, the structure, content, and process of work have changed. Work is now:

 More cognitively complex

 More team-based and collaborative
 More dependent on social skills
 More dependent on technological competence
 More time pressured
 More mobile and less dependent on geography.

In today's world, you will also be working for an organization that is likely to be very different due to
competitive pressures and technological breakthroughs. Organizations today are:

 Leaner and more agile

 More focused on identifying value from the customer perspective
 More tuned to dynamic competitive requirements and strategy
 Less hierarchical in structure and decision authority
 Less likely to provide lifelong careers and job security
 Continually reorganizing to maintain or gain competitive advantage.

This Resource Page explores the changing nature of organizations and work, the drivers behind the
changes, and the consequences for workers and the workplace .

Planned Change
 We can define planned change as any kind of alteration or modification which is done in
advance and differently for improvement.

The Need for Planned Change

Planned change takes places in an organization when there is a demand for change due to
two types of forces. These forces are grouped into internal sources and external sources.

Internal forces that lead to a planned change in an organization include obsolescence of

production and service, new market opportunities, new strategic direction, increasing workforce
diversity, and shift in socio-cultural values.

External forces that lead to a planned change in an organization include regulators,

competitors, market force, customers, and technology. Each of these forces can create pressing
demand for change in small or big, public or private, business or non-business organizations.

Pressure for change:

Pressures for change are created from both inside and outside the organization. Organization
must forge ahead on these forces to survive. Some of these are external, arising from outside the
company, whereas others are internal arising from sources within the organization.

Customers, competition, the economy, technology, political and social conditions, and
resources are common external factors that influence the organization. In order for managers to react to
the forces of internal and external environments, they rely on environmental scanning

External Environment
 External forces are those changes that are part of an organization's general and
business environment. There are several kinds of external forces an organization might face:
Demographic. A changing work demographic might require an organizational change in culture

The following section identifies the external influences that have an effect on organisational
culture:

 The political dimension.

 The economic dimension.
 The social dimension.
 The religious dimension.
 The educational dimension.
 The international dimension.
 The reigning ideologies.

Internal Environment

The following section identifies the internal influences that have an effect on organisational
culture:

 The types of people employed in terms of age, male/female, language and community,
religious beliefs, race, composition.
 The workplace environment in which the employees work.
 The types of labour policies that are in place within the organization, for example a
highly unionized labour force.
 The rate at which technology in the form of computers and automation has or is being
deployed.
 The types of resources and resource policies that are employed.
 The history and ownership of the organization.
 The values and beliefs, in particular the rituals of the organization.
 The management style in place, such as bureaucratic and structured, to malleable and
change orientated.
 The perception of people of a product or a company and even a country’s industrial and
technological competency is dependant almost entirely on the leaders of industries and their
ability to direct restructure and mould the kind of organisational culture that will promote the
following:

 Excellence in all that it does.

 The creation of a benchmarking culture, whereby good practice is taken from other
industries and installed into their own.
 The ability to build on the existing capability of the organisations that they control, thus
increasing the capacity building capability.
 The quality of both the product and services that they provide to both to external and
internal customers.
 The development and enhancement of the employees within the organisation.
 The ability to intervene in the capacity building process, evaluation, productivity
assessments, company audits, data cleansing and staff development, without damaging
both the external and internal reputation of the organisation.
Change process process

The Change Process: Kurt Lewin’s Model

Kurt Lewin’s model of planned change outlines three stages that organisations go through
when implementing change. Stages are explained below:

1. Unfreezing

The first stage is known as “unfreezing,” which involves breaking away from established
practices and preparing individuals to embrace new alternatives. During this stage, outdated
beliefs, processes, and behaviours are discarded in favour of more suitable approaches for the
current situation. The goal is to help organisational members understand that the status quo is
no longer viable given the evolving demands of the environment.
Unfreezing involves several steps:

1. Recognising the Driving Forces: Managers must develop a keen awareness of major
environmental changes and internal issues that necessitate change. By understanding the
pressures for change, they can effectively identify the need for transformation.
2. Increasing the Driving Forces: Once the need for change is recognised, it is essential to
communicate this need to the people involved. By explaining the reasons behind the change,
individuals are more likely to embrace it willingly.
3. Managing the Resisting Forces: Resistance to change often arises when individuals
perceive potential harm or negative impact on their interests. It is crucial to address these
concerns and fears by highlighting the benefits of the proposed changes and alleviating any
misconceptions.
To achieve unfreezing, various techniques can be employed, such as:

 Education: Providing information and knowledge regarding the need for change and its
advantages.
 Communication: Engaging in open discussions to clarify the rationale behind the change
and address any uncertainties.
 Participation in decision-making: Involving employees in the change process by
encouraging their input and ideas.
 Negotiation through the exchange of rewards: Offering incentives or rewards to motivate
acceptance of the change.
 Persuasion: Shaping perceptions and attitudes through effective communication and
influence strategies.
 Encouragement and Support: Providing the necessary resources and assistance to
facilitate the transition.
These techniques aim to either strengthen the driving forces that propel behaviour away from
the status quo or weaken the restraining forces that hinder progress. By unfreezing existing
mindsets and behaviours, organisations can create a receptive environment for change and lay
the foundation for subsequent stages of the change process.

2. Changing or Moving

Once individuals embrace the need for change, the proposed changes are introduced
systematically, fostering new learning and the adoption of new behaviours. This moving phase
encompasses key elements that facilitate a successful transition:
 Encouraging Compliance: In some cases, change may be enforced through incentives or
consequences. However, true transformation requires more than compliance; it requires
internalisation and identification.
 Internalisation: Change becomes meaningful when individuals experience situations that
call for new behaviours. Through firsthand encounters, they begin to understand the
importance of change and gradually internalise new ways of behaving.
 Identification: Individuals also identify suitable behavioural models within their
environment. They recognise role models whose actions align with the desired change and
choose to emulate them.
During the implementation of change, unexpected challenges may arise, requiring effective
problem-solving. This period is marked by experimentation, ambiguity, and the need for
careful guidance.

To navigate this phase successfully, we should consider the following approaches:

1. Transparent Communication: Communicate the purpose, benefits, and expected outcomes

of the change to all members. This ensures a shared understanding and aligns efforts toward
a common goal.
2. Supportive Training and Resources: Provide comprehensive training programs and
resources to help individuals acquire the skills and competencies needed for new behaviours.
Offer guidance and assistance to address any challenges that emerge along the way.
3. Continuous Feedback and Improvement: Establish feedback channels to gather insights
and suggestions from employees. This enables ongoing refinement of the change
implementation strategy based on real-time input, fostering a sense of ownership and
engagement.
4. Foster Adaptability: Cultivate a culture of adaptability and openness to change. Encourage
individuals to embrace new alternatives and behaviours, creating an environment that
supports growth and development.
5. Leadership Guidance: Effective leadership plays a vital role in guiding organisational
members through the change process. Leaders should provide clear direction, and support,
and serve as role models for the desired behaviours, inspiring others to embrace the change.
By providing careful guidance and support, organisations can navigate the implementation of
change effectively. This enables individuals to successfully transition and adopt the new
 behaviours and alternatives introduced, ultimately driving positive outcomes for the
organisation.

3. Refreezing

The final phase of the change process is refreezing, where the changes implemented during the
moving phase become ingrained as a permanent part of the organisation’s culture. During this
phase, members of the organisation internalise the new beliefs, attitudes, and behaviours they
have learned. It is the responsibility of the manager, acting as the change agent, to ensure the
effective integration of these new behaviours with existing patterns. Without proper
internalisation, there is a risk of individuals reverting to old ways of doing things.

To solidify the changes and prevent regression, organisations must strive for a state of dynamic
equilibrium. This entails maintaining a balance among various components that support the
desired behaviours. Continuous reinforcement is essential to ensure the sustainability of the
acquired behaviours. Acceptance of new practices and stabilisation of change occurs when
sufficient positive outcomes and reinforcements are provided.

We should consider the following approaches during the refreezing phase:

1. Integration and Alignment: Ensure that the new behaviours, beliefs, and attitudes align
with the overall organisational goals and values. Seamlessly integrate them into existing
systems and processes to foster consistency and coherence.
2. Ongoing Support: Provide continuous support and resources to reinforce newly acquired
behaviours. This may include training, coaching, and mentoring to assist individuals in
adapting to the changes. Supportive leadership and a positive organisational climate are
critical in maintaining the desired behaviours.
3. Celebrate Success: Recognise and celebrate accomplishments related to the change
implementation. This helps reinforce positive outcomes and motivates individuals to
continue embracing new behaviours.
4. Feedback and Evaluation: Establish feedback mechanisms to monitor the effectiveness of
the change and gather insights for improvement. Regular evaluation ensures the sustained
adoption of desired behaviours and allows for further refinement, if necessary.
5. Foster an Organisational Culture: Cultivate a culture that values and supports the desired
behaviours. This involves aligning performance management systems, rewards, and
recognition programs to reinforce the change and encourage its continuation.

Steps involved in organization change/Process:

1. Identify the Need for Organizational:

The firt step is to find whether organization need change.Though they are external forces
fascinating change.

2.Determing the Elements to be changed:

What elements of the organization should be changed will largely based on need &
objectives.The process of change will give clue why change should take place.
3. Planning for effective change:

AT this stage managers should plan about how change can be brought in the light.Planning
for change includes who will bring change,When to bring change and how to bring change.

4.Assessing the changing process:

There are two forces that influence change.Driving force and restraining force

Driving forces are those seeking change. Resisting (restraining) forces are those seeking to
maintain the status quo.

5.Action for change:

a.Unfreezing:

This first stage of change involves preparing the organization to accept that change is
necessary, which involves breaking down the existing status quo before you can build up a
new way of operating.

b. Change

The change stage is where people begin to resolve their uncertainty and look for new
ways to do things. People start to believe and act in ways that support the new direction.

C. Refreeze

The refreeze stage also needs to help people and the organization to internalize or
institutionalize the changes. This means making sure that the changes are used all the time,
and that they are incorporated into everyday business.

6.Feedback & Review :

Feedback allows you to listen to how people feel and assess what type of communication
different parts of the organization need to keep moving along.
Types of Change:

1. Individual change management is about supporting and enabling a person through the
transition, so they can successfully engage, adopt and use a change.
2. Organizational Change:
Organizational changes are those that have a significant impact on the organization as a
whole. Major shifts to personnel, company goals, service offerings, and operations are all
considered different forms of organizational change

3. Strategic Change
a. Strategic change refers to a change made to important features of an
organization’s business to mitigate new threats or leverage new opportunities in
the market. This type of change affects the organization’s strategy and various
other components.

4. Structural Change
Structural change refers to a change in organizational hierarchy, chain of command,
management systems, job structure, or administrative procedures. A merger is the most
common cause of a structural change in an organization.
4. Technological or Process-Oriented Change
These types of organizational change are related to changes in technologies that the
business uses or the processes it follows. This could be the introduction of
new software or system. Organizations may re-engineer processes to optimize workflow
and increase productivity.
Technology or process-oriented change relates to how an organization runs its operations
and the technology and processes, assembles its products, or delivers its services.
5. People-Oriented Change
Employees are the main propagators of change, and they are involved in every step of the
process. However, people-oriented processes refer to changes in the skills or performance
of employees or the process of hiring new employees.
People‐oriented change requires transparency, communication, and effective leadership. It may
involve changing how problems are solved in the workplace, training employees to acquire new
skills or knowledge, or bringing new hires to the organization.
6. Adaptive changes: These are small, incremental adjustments that organizations and
managers make to adapt to daily, weekly, and monthly business challenges. These
changes are often related to fine-tuning existing processes, products, and company
culture

Factors influencing change:

Change is inevitable in the life of an organisation. In today’s business world, most of the
organisations are facing a dynamic and changing business environment. They should either
change or die, there is no third alternative. Organizations that learn and cope with change will
thrive and flourish and others who fail to do so will be wiped out. The major forces which make
the changes not only desirable but inevitable are technological, economic, political, social, legal,
international and labour market environments.

In very simple words, we can say that change means the alteration of status quo or
making things different. “The term change refers to any alterations which occurs in the overall
work environment of an organisation.”

“When an organizational system is disturbed by some internal or external force, change

frequently occurs. Change, as a process, is simply modification of the structure or process of a
system. It may be good or bad, the concept is descriptive only.”

There are a number of factors both internal and external which affect organizational
functioning. Any change in these factors necessitates changes in an organisation. The more
important factors are as follows:
 External Forces

Every organization exists in some context; no organization is an island in itself. Each

must continually interact with other organizations and individuals- the consumers, suppliers,
unions, shareholders, government and many more. Each organization has goals and
responsibilities related to each other in the environment. The present day environment is
dynamic and will continue to be dynamic. Changes in social, political, economic, technology,
and legal environment force organizations to change themselves. Such changes may result in
organizational changes like major functions production process, labour-management relations,
nature of competitions, economic constraints, organizational methods etc. In order to survive in
the changing environment, organization must change. How the change in various environmental,
organizations, must change. How the changes in various environmental factors necessitate
change in the organization may be seen in following context:-

 Technology: When there is a change in technology in the organizational environment and other
organizations adopt the new technology, the organizations under focus become less cost effective
and its competitive position weakens. Therefore, it has to adopt new technology, its work
structure is affected and a new equilibrium has to be established.
 Marketing conditions: Since every organization exports its outputs to the environment, an
organization has to face competition in the market. There may be two types of forces which may
 affect the competitive position of an organization —other organizations supplying the same
products and, buyers who are not buying the product. Any changes in these forces may require
suitable changes in the in the organization. For example, when Indian economy was liberalized,
there were many foreign organizations that entered the Indian market. This forced many Indian
organizations to realign themselves with the new situations. The result in that there have been
many cases of divesting the business and concentrating on the core business, acquiring core
business, and developing competitive competence to face competitive threats. Similarly, there
may be changes in buyers in terms of their needs, liking —disliking and income disposal for a
product. These changes from the organizations to bring those products which meet buyer’s
requirement.
 Social changes: Social changes reflect in terms of people’s aspirations, the needs, and their ways
of working. Social changes have taken place because of the several forces like level of education,
urbanization, feeling of autonomy, and international impact due to new information sources.
These social changes affect the behavior of people in the organization. There, it is required to
make adjustment in its working so that it matches with people.
 Political and legal changes: Political and legal factors broadly define the activities which an
oganisation can undertake and the methods which will be followed by it in accomplishing those
activities. Any changes in these political and legal factors may affect the organization operation.

Internal Forces

It is not only the changes in external factors, which may necessitate organizational changes; any
change in organization’s internal factors may also necessitate changes. Such a change is required
because of two reasons: changes in managerial personnel and deficiency in existing
organizational practices.

 Changes in the managerial personnel: Besides environmental changes there is a change in

managerial personnel. Old managers are replaced by new mangers, which necessitated because
of retirement, promotion, transfer or dismissal. Each new manager brings his own ideas and way
of working in the organization. The relationships, more in the organization. The relationships,
more particularly informal ones, changes because of changes in managerial personnel. Moreover,
 attitude of the personnel change even though there is no changes in them. The result in that an
organization has to change accordingly.
 Deficiency in Existing organization: Sometimes, changes are necessary because of deficiency
in the present organizational arrangement ad process. These deficiencies may be in the form of
unmanageable span of management, large number of managerial levels, lack in co-ordination
between various departments, obstacles in communication, multiplicity of committees, lack of
uniformity in policy decisions, lack of cooperation between the line and staff, and so on. Beside
these internal factors, there are two more internal factors that give rise to organizational changes.
 Nature of the work force: The nature of work force has changed over a passage of time.
Different work values have been expressed by different generations. Workers who are in the age
group of 50 plus value loyalty to their employers. Workers in their mid thirties to forties are loyal
to themselves only. The youngest generation of workers is loyal to their career. The profile of the
workforce is also changing fast. The new generation of workers has better educational; they
place greater emphasis on human values and questions authority of managers. Their behavior has
also become very complex and leading them towards organizational goals is a challenge for the
managers. The employee turnover is also very high which again put strain on the management.
 To avoid developing inertia: In many cases, organizational changes take place just to avoid
developing inertia or inflexibility. Conscious manager take into account this view of organization
that organization should be dynamic because any single method is not the best tool of
management every time. Thus, changes are incorporated so that the personnel develop liking for
change and there is no unnecessary resistance when major change in the organization are brought
about.

Organization development Process:

1. Entry represents the initial contact between consultant and client in which they present, explore,
and identify the problem, opportunities, or situation. The output of this phase is an engagement
contract or project plan that establishes mutual expectations and preliminary agreements about
project scope (such as time, money, and resources).
2. Diagnosis (assessment) represents the fact-finding phase. It is a collaborative data gathering
process between organizational stakeholders and the consultant in which relevant information
about the presenting problem is gathered, analyzed, and reviewed.
3. Feedback represents the return of analyzed information to the client or client system; exploration
of the information for understanding, clarity, and accuracy; review of preliminary agreements
about scope and resource requirements; and the beginning of ownership of data by the client. The
output of this phase is typically an action plan that outlines the change solutions to be developed,
along with defined success indicators based on the information and data analysis.
4. Solution represents the design, development, and implementation of the solution or set of
solutions meant to correct the problems, close gaps, improve or enhance organizational
performance and effectiveness, or seize opportunities. Outputs may include a communication
plan, a role-and-responsibility matrix, a training plan, a training curriculum, an implementation
plan, a risk management plan, an evaluation plan, or a change management plan.<.li>
5. Evaluation represents the continuous process of collecting formative and summative evaluation
data to determine whether the initiative is meeting the intended goals and achieving defined
success indicators. Outputs generally include an evaluation report with recommendations for
continuous improvement.
Organizational Development Interventions/Techniques:

1) Survey Feedback : It consists of an attitude survey through well designed questionnaires or

interviews or observations and giving feedback to the client organisation. 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

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.

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

5.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.

6. 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, and
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 ongoing system.

7. 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

8. 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 reorganization of a
job. Basically it focusses to improve employee motivation, commitment, performance, job
satisfaction etc.
9.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.

10) 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.