SUBJECT: CHANGE MANAGEMEMT

SEMSETER: 5TH

TEACHER: DR FARWA SHAH

ORGANIZATIONAL CHANGE & CHANGE MANAGEMENT (CM)

Organizational change refers to the actions in which a company or business alters a major component
of its organization, such as its culture, the underlying technologies or infrastructure it uses to operate, or
its internal processes. Organizational change management is the method of leveraging change to bring
about a successful resolution, and it typically include three major phases: Preparation, implementation,
and follow through. (Harvard Business School).

Change management (CM) is a collective term for all approaches to prepare, support, and help
individuals, teams, and organizations in making organizational change. Drivers of change may include
the ongoing evolution technology, internal reviews of processes, crisis response, customer demand
changes, competitive pressures, acquisitions and mergers, and organizational restructuring. (Wikipedia)

Change management is a systematic approach that includes dealing with the transition or
transformation of organizational goals, core values, processes and technologies. The purpose of every
organizational Change Management initiative is to successfully implement strategies and methods for
effecting change and helping people to accept and adopt to the change.

THE IMPORTANCE OF CHANGE

“If you do not create change, change will create you” ~ unknown.

Change = knowledge = Innovation

Changing Global Economy

Change is important on so many levels. First, in business, we are living in a time we hear
described as the “fourth industrial revolution” and the “age of disruption.” The global economy
and increased level of competitiveness it brings, make change the norm. For that reason, we all
need to be able to be more nimble and open to experience in order to compete and win — and
to keep stress levels under control.

Individual Growth:
On an individual level, change is important because it is the precursor to all growth. We don’t
grow by keeping things “safe” - by preserving the status quo (even though that may seem more
comfortable). All personal growth comes from meeting the challenge of change. By dealing with
life challenges we learn that we can. Each change overcome builds self-efficacy — builds our
skills as well as our perception of our abilities to meet future challenges.
Business Improvement:
Change in business is absolutely essential for improvement. Think about it – the word
‘improvement’ implies a change in what you’re currently doing.
Every individual within an organization has strengths and weaknesses and it is important that
this is recognized and nurtured. Likewise, if you look critically at the business overall, you will
also identify strengths and weaknesses in different areas. When weaknesses are identified,
steps should be taken to make improvements, both with individuals and the business as a
whole.

Adopting to Changing Technologies:

The second reason why embracing change in business is so important is to keep up with
technological advancements. Innovative systems and software that make running a business
simpler are constantly being designed and improved. To take advantage of everything that
technology has to offer, you will need to accept that changes will need to be made to the day-
today running of your business and the systems you currently use. This will often require
training to make sure that each person in the business is proficient at using the technology.

Business Expansion:
Expansion is a further reason why change is important in business. Change is essential for
growth. You will need to adapt your practices to reach a wider customer base and develop the
range of products and services your business offers. To grow your business, you will need to
find new ways of managing the different areas of your business. This includes administration,
production, marketing and sales. The exact changes needed for expansion will differ from one
business to the next. Without change, your options in terms of expansion and growth are
extremely limited.

Changing Customer Needs and Demands:

Finally, customer needs are constantly changing and businesses must also change to reflect
these demands. Over time, the expectations of customers will differ and this is influenced by
different factors. Social trends, the economy, the options available to customers and personal
experiences will all affect what customers expect when the use they products or services of a
business. To meet these changing needs and demands, change is a necessity.

Taking each of these benefits of change into consideration, it is clear that embracing change in
business is essential to overall success. The changes needed to achieve each of these benefits
will differ considerably from one business to the next, but by making the necessary adaptations
your business will reap the rewards.

FACTORS OF ORGANIZATIONAL CHANGE

The Imperative of Change:
There are different organizational changes both internal and external. If we take an external
perspective, the average modern organization has to come to terms with number of issues,
which will create need for internal change. These changes include:
1. Globalization ( A Large Market Economy):
A large global market place made smaller by technologies, the birth of neo-liberalism, the
liberalization of economy, and establishment of new trade blocks and networks, and reduction
of transportations, information and communication cost means the word is different from past
and it raises the questions for organizations that how they will plan to respond to such
competitive pressures.
2. Environmental Influences:
Nowadays the worldwide acceptance of environmental influences in the form of climate
change, raising temperatures, Ozone depletion, wasting dumping, depletion of finite raw
materials and other environmental calamities is causing legal, cultural and socioeconomic
implications. More and more governments are taking decisions to minimize these influences
which are affecting industrial organization to change them sooner than later. How does the
industrial organization respond to the bigger picture?
3. Health Consciousness:
Today there is a wider awareness among all age groups about the type of food and other
commodities they consume. More and more people are become health-conscious as a result
there has been movement away from synthetic products towards natural products. How does
the individual organizations deal with the demands of a more health conscious population?
4. Changing lifestyles:
Changing life styles are affecting the way in which people now work, make purchases, spend
leisure time and move in society. A more affluent, educated and involved population is
challenging the way you do business and socialize.
5. Change in Nature of Work:
Emerging need for non-traditional employees. Many organization have downsized resulting in
skilled labor shortages. In order to make up for shortfall many organizations are currently
resorting to a core/periphery workforce, teleworking, multi-skilled workers and outsourcing.
6. Knowledge:
The k knowledge assets of a company – its people – is becoming increasingly crucial to its
competitive wellbeing. The increased use of technologies and internet in business is getting a
business a globalized reach without leaving the borders. However, marketing via internet,
communication by mails and other technology applications are still reliant on the way you
organize your human resource.
FORCES OF ORGANZATIONAL CHANGE
An organization is subject to two sets of forces: external forces (political, social, economic and
competitive) and those of internal.

EXTERNAL FORCES OF CHANGE

1. Political Forces:

The rise of liberal capitalist economies and emergence of neo-liberalism, emergence of nation states
after world war 2, transition of east-European nations to democracy and a market economy and rise of
economy south-East Asia, the collapse of Soviet Union, the unification of east Germany, the Gulf War,
the Iraq War etc. are examples of political forces that have widespread repercussions around the world,
bring a plethora of changes.

2. Economic Forces:

The uncertainty about future trends in the economy due to unstable nature of capitalist markets is a
major cause of change. For example, fluctuating interests rates, declining productivity uncertainties
arising from inflation or deflation, low capital investments, the fluctuating prices of oil, recession, the
lowering of consumer confidence and financial crisis due to natural and human elements.

3. Technological Forces:

Technological advancements, particularly in communication and computer technology, have

revolutionized the workplace and have helped to create a whole new range of products/services.

4. Government Forces: (in the form of regulations lead to change)

 Deregulation: the lessening of governmental rules and increasing decentralization of economic
interventions and privatization of governmental sector services at the state level.
 Foreign Exchange: trading of one currency to another affects international trade transactions.
These transactions depend upon different factors such as country’s balance of payments,
interest rates, and supply and demand, making it difficult to forecast the exchange rates. Which
results in governmental impose restrictions on the import of selected items with measures to
deregulate their economies to attract foreign for investment purposes.
 Anti-trust laws: these laws are followed my most governments to restrict unfair trading
practices.
 Anti-dumping-duties: these are penalties imposed on a nation by its trading partners in case of
an unfair reduction in cost, duties etc., and the partner country’s products enjoy a price
advantages.
 Suspension agreements: these are agreements between governments to waive anti-dumping
duties.
 Protectionism: owing to intense competition governments put measures to protect some of
their threatened industries and business firms. Trade barriers, such as tariffs or import duties,
quantity quotas, anti-dumping laws and government subsidies are impose local industries.
5. Increased Global Competition:
In order to survive and grow, companies are increasingly making their presence felt globally. More and
more European companies are reallocating their manufacturing and assembling operations to South-
East Asia and South Asia due to cheap labor.

6. Changing Customer and Needs and Preferences:

Customer needs and preferences are always changing. Organizations are forces to adopt and constantly
innovate their products offering to meet these changing needs.

INTERNAL FORCES OF CHANGES

1. System Dynamics:

An organization is made up of subsystems which are in constant and dynamic interaction. Certain factors
such as technology, internal politics, dominant groups/cliques, and the formal and informal relationship
within influence the alignment and relationship among various subsystems in an organization.

2. Inadequacy of Administrative Process:

With changing times and revision of organizational goals and objectives, some of existing organizational
rules, procedures and regulations could be at variance with the demands of reality. To continue with
such functionally autonomous process can lead to organizational ineffectiveness. Realization of their
inadequacy is a force that induces change.

3. Individual/Group Speculations:

In an organization the needs and desires of individuals keep changing resulting in differing expectations
among individuals and groups as to the needs they intend satisfying in the organizational context.
Positive factors such as one’s ambitions, need to achieve, capabilities, career growth, and negative
aspects such as one’s fears, insecurities, and frustrations operate as complex inter-individual and
intergroup processes including change in an organization’s functioning and performance (which may or
may not be to the organization’s best interests).

4. Structured Focused Change:

It’s a change that alters any of the basic components of an organization’s structures or overall designs.
Organizations make structural changes to reduce costs and increase profitability. Structural change can
take the form of downsizing, decentralization, job-redesign, etc.

5. Technological Changes:

Changes that impact the actual process of transforming input into output are referred to as
technological changes. Examples include the change in equipment, work process, work sequence,
information-processing systems, and degree of automation.

6. Person Focused Change:

It is concerned with human resources planning and with enhancing employee competence and
performance. Different changes such as redefining strategy and goods; structural change in terms of
expansion, contracting technological inputs have implications on human resource management. Such as
change in current skills, training and development of employees due to introduction of new technology.
7. Profitability Issues:

Significant changes number of organizations such as (downsizing, resizing) and reengineering relates to
profitability issues such as loss of revenues, market share, and low productivity.

8. Resource Constraints:

Resources refers to money, material, machinery, personnel, information and technology. Depletion,
inadequacy or non-availability of these can be a powerful change force for any organization.

PLANNED INTERNAL CHANGE

 Changes in Products or Services:

A Planned decision to change the company’s line of services necessitates organizational change. This
decision to give company a new direction to the business, to add a new, specialized service, will require
a fair amount of organizational change. Such as requirement of new equipment and supplies, hiring and
training of new personnel, purchasing of new insurance and new amount will have to be secured.

 Changes in Administrative System:

An organization may be forced to change its policies, reward structure, goals, and management style in
response to outside competition, government regulation and economic changes. It is quite common for
change in administrative systems to be strategically planned in advance. Such change may stem from a
desire to improve efficiency, to change the company’s image, or to gain political power advantage within
the organization.

Typically, the pressure to bring about changes the administration of an organization (e.g., to coordinate
activities, set goals and priorities) comes from upper management – that is from the top down. In
contrast, pressure to change the central work of an organization (i.e. , the production of goods and
services) comes from the technical side of the organization: from the bottom upward. This is the idea
about dual core model of the organization.

 Changes in Organizational Size and Structure:

Just like changing products and services and administrative systems organizations also alter the size and
basic configurations of their organizational charts – that is, they restructure to stay competitive. Often
this meant reducing the number of employees needed to operate effectively – a process known as
downsizing. It is also directed at adjusting number of employees needed to work in a newly designed
organization, also known as rightsizing.

Another method involves restructuring by completely eliminating parts of organizations that focus on
non-core sectors of the business, and hiring from outside firms to perform these functions instead – a
practice known as outsourcing.
PLANNED EXTERNAL CHNAGES
 Introduction of New Technologies – From Slide Rules to Computers:

Advances in technology have completely changed the way business operate. The use of computer
technology has been touted as one of the major revolutions occurring in the business world today.

Results: Increased productivity, more efficient and effective working, Global reach etc.

 Advances in Information Processing and Communication:

Today’s sophisticated satellite systems, fiber optic cables crisscrossing the planet, fax machines, mobile
telephones, teleconferencing facilities etc. have made it is easier for business to communicate with each
other and with their clients. One main point is that as such communication systems improve,
opportunities for organizational growth and improvement follow.

One key success is to selectively incorporate advances in technology that allow organizations to share
vast amount of information. I.T is reducing the need for expensive investments in physical assets such as
factories and warehouses. Today almost all companies are investing more money in equipment to
manage information (e.g. , computers and telecommunication hardware) than on such traditional
capital expenses as industrial equipment.

UNPLANNED INTERNAL CHANGES

Organizations are often responsive to changes that are unplanned – especially those derived from
factors internal to the organization.

 Changing Employees Demographics:

The composition of workforce has changed in our lifetimes. The percentage of women in the workforce
is greater than ever before. More and more women with professional qualification are joining the
organizations at the junior, middle and upper levels of management. The workforce is also getting older.
Many retired government employees are joining the private sector therefore changing the employee
demographics. With the open up of economy and globalization, the workforce is continually becoming
more diverse. These are not just simply curious sociological trends, but shifting conditions will force
organizations to change.

 Performance Gaps:

Performance gaps like a product line that isn’t moving, a vanishing profit margin, a level of sales that is
not up to corporate expectations – are examples of gaps between real life and expected levels of
organizational performance. Few things force change more than sudden unexpected information about
poor performance. Organizations usually stay with a winning course of action and change in response to
failure; in other words, they follow a win-stay / lose-change rule.
UNPLANNED EXTERNAL CHANGES:
One of the greatest challenges faced by an organization that its ability to respond to changes from
outside, something over which it has little no control. Research has shown organizations that can best
adopt to changing conditions tend to survive.

 Governmental Regulations:

One of the most commonly witnessed unplanned organizational change results from governmental
regulations. With the opening up of economy and various laws passed by the government about
delicensing, full or partial convertibility of currency, etc. the ways in which the organizations need to
operate change swiftly. These activities greatly influence the way business is to be conducted in
organizations.

 Economic Competition in the Global Arena:

Globalization of economy has resulted in increased competition at home and abroad which forced
companies to maintain their share market, advertise more effectively, and produce more products
inexpensively. This type of economic competition not only forced organization to change, but also
demands that they change effectively if they have to survive.

Extensive globalization presents a formidable challenge to all organizations wishing to compete in the
world economy. The primary challenge is to meet the ever-present need for change, to be innovative.

TYPES OF CHANGES
To change is to move from the present to the future, from a known state to a relatively unknown state.

1. Happened Change:

It is unpredictable in nature which occurs due to external causes over which one may have no control.
This type of change has profound and traumatic effect on the organizations. (i.e. Currency devaluation,
political and social changes etc.).

2. Reactive Change:

It is change in the form of response to an event or series of events. The changes are attempted when
demand for a company’s products and services registers increase or decrease, or a problem/crisis occurs
or develops. (E.g. technological changes force the organizations to invest in modern technologies).

3. Anticipatory Change:

Changes carried out in expectation of an event. In anticipation of such changes, the organization may
tune-in (incremental changes: dealing with subsystems as part of system) in anticipation of external
events or reorient itself to future demands.

4. Planned Change or development change:

It is undertaken to improve upon the current ways of operating. It is calculated change, initiated to
achieve a certain desirable output/performance and to make the organization more responsive to
internal and external demands. (I.e. enhancing employees’ communication skills and technical expertise
building teams, restricting the organization, introducing new technologies and products and services,
improving employee’s welfare measure etc.)

5. Incremental Changes:

It is directed at the micro level and focused on units/subunits/components within the organization.
These changes are brought in gradually and are usually adaptive in nature. It is assumed that small
changes will set in process the large change and lead the system slowly in a healthier direction.

6. Operational Change:

It is change aimed at improvement of quality, quantity, timeliness and unit cost of operation in
developing products/services due to external competition, consumers changing requirements and
demands or organizational dynamics. (I.e. bringing in new technology, reengineering the work
processes, quality management, better distribution and delivery of products and interdepartmental
coordination)

7. Strategic Change:

It is a change that is addressed to the organization as a whole or to most of the organization’s

components including strategy. For example: change in company’s management style.

8. Directional Change:

Change that occurs under condition of severe competition, regulatory shifts in government policy and
control (for example, on pricing, import/export, restrictions etc.) , and unsuccessful business strategy.

9. Fundamental Change:

This change a redefinition of the current purpose or mission of the organization. It may be necessitated
by drastic changes in the business environment, the failure of the current corporate leadership,
problems with employee morale, or a sharp fall in turnover.

10. Total Change:

A change related to developing a new vision, achieving a turnaround. A drastic surgery of the existing
system.

11. Transformational Change:

It is a change involving the entire or a greater part of the organization due to severe threat to its
survival. The threat may occur from industrial discontinuities, shifts to the product lifestyles or internal
changes. It could be change in the shape (size and complexity), structure (systems, ownership, and the
like), or nature (basic assumption, culture, technology, etc.) of the organization.

12. Revolutionary Change:

Abrupt changes in organizational strategy and design represent revolutionary change.

 Envisioning: to articulate a clear and credible vision and a new strategy to realize the vision.
  Energizing: mobilizing the employees, individually and collectively and demonstrating and
inculcating the excitement for change.
 Enabling: to provide necessary resources, support structure and process.

13. Recreation:

This involves a significant and drastic change in an organization’s strategy and design, or a departure
from its current practices to achieve a total transformation.it is tearing down the old structure and
building a new one. A metamorphosis – becoming not just better. But different. A benevolent mutation.
Chapter 3

CHANGING THE CULTURE

WHAT IS CORPORATE CULTURE?

A corporate culture is a system of shared values and beliefs that interact with an organization’s people,
structure, and systems to produce behavioral norms. Corporate culture is defined as an “an interdepend
set of beliefs, values, ways of behaving, and tools for living that are so common in a community that
they tend to be perpetuate themselves, sometimes, over long periods of time. This continuity is product
of a variety of social forces that are frequently subtle, bordering on invisible, through which people learn
a group norms and values, are rewarded when they accept them, and are ostracized when they do not.

Every organization has a culture and may also have subcultures with differing or even conflicting
corporate cultures.

Culture is derived from both the management and the organization itself. Managers through their
actions and words, define a philosophy of how employees are treated. Values and ways of behaving are
defined – and a vision is usually articulated by top management. All of these factors coming from
management help define the culture. Simultaneously, factors brought in by the organization also help
define culture. The technology a company utilizes will influence the culture. A company in a fast
changing industry will probably develop a different culture than a company in a slower-changing
industry.

Management style and corporate culture are central factors in the success of a company. Managerial
style and culture constitute one of the most critical factors in organizational Strategy. They set the tone
for the whole organization and influence the Communication, decision-making, and leadership patterns
of the entire system. There is No basic culture that works best for all organizations. The managerial style
and the set of norms, values, and beliefs of the organization’s members combine to form the corporate
Culture.

Add Picture

A corporate culture must achieve goals as well as satisfy the needs of members if the organization is to
be effective. Culture influences how managers and employees approach Problems, serve customers,
react to competitors, and carry out activities.
A strong, widely internalized corporate culture is frequently cited as a reason for the success of
companies. Members. In a study of 24 organizations, Henry Millipore identified a set of 20 cultural
factors, termed the Corporate Culture Index, that Can be used to measure an organizational culture.
These factors include the following
Characteristics:
• Member Identity: employees identify with the organization as a whole on their Type of job or field of
professional expertise.
• Team Emphasis: the degree to which work activities are organized around teams Rather than
individuals.
• People Focus: the degree to which management empowers the employees within the organization.
• Autonomy: the degree to which departments within the organization are encouraged to operate in a
coordinated or interdependent manner.
• Control: the degree to which rules, regulations, and direct supervision are used to Control employee
behavior.
• Risk Tolerance: the degree to which employees are encouraged to be aggressive, Innovative, and risk-
seeking.

CORPORATE CULTURE AND SUCCESS

A corporate culture gives the whole organization a sense of how to behave, what to do, and where to
set the priorities in getting the job done. Culture helps members fill in the blanks between formal
directives and how the work actually is done. Because of this, culture is of critical importance in the
implementation of strategy. A great majority of outstanding companies trace their culture back to an
influential founder who personified a value system and relentlessly hammered in a few basic values that
become the cultural core of the company. However, in today’s rapidly changing environment, many
corporate cultures fail to adapt to change and therefore fail as economic entities. For some
organizations, especially those in the service sector, the company’s culture is what helps set it apart
from its competition.
Cultures often clash following corporate mergers, downsizings, or other restructurings. Both mergers
and internal restructurings involve bringing groups together that may have very different goals,
operating methods, and cultures.
Following a merger, differences in corporate beliefs, goals, policies, management style, values, norms,
gender, race, religion, and nationalism can manifest a nonproductive “we” versus “they” situation if the
parties involved are not made aware of, and sensitive to, the cultural differences. Here are some
important guidelines:

1. Do everything possible to accelerate, to create a culture of quicker reflexes.

2. Cool-headed thinking, a clear focus, and well-aimed action are required.
3. Self-directed behavior is essential in today’s world of accelerating change.
4. Redirect conflict, anger, or worry into the passionate pursuit of results.
5. A culture unwilling to experiment has little chance to innovate.

What makes for excellence in the management of an organization? Today’s key words are flexibility and
innovation. Organizations are being forced to make dramatic changes just to remain competitive. These
changes, such as improving product quality, increasing speed of responsiveness, and expanding
customer orientation, are so basic and fundamental that managers must alter the corporate culture.
However, cultural change implies a change in the basic values, in the hearts and minds of the individual
employee. “
Reengineering”—the radical redesigning of how businesses are organized and operate—requires
starting from scratch with a clean sheet of paper. A complete redesign of the core processes of a
business inevitably requires significant changes in the organization’s culture.

KEY FACTORS TO IMPROVE CULTURE (The Impact of Key Factors)

In order to create a winning culture, managers need to adapt their managerial style, values, and goals to
fit the changing demands of the environment. Problems. Tomorrow’s leaders will be those who are the
most flexible and innovative.
There are several key factors that organizations need to be aware of to improve their effectiveness:

• Create a Vision for the Future: A shared vision produces direction, focus, and commitment. It is terms
as “path finding” and it involves the dreamer, the innovator, the creator, and the entrepreneur. Some
very successful organizations begins with a vision (Steve Jobs at Apple Computer, dreamed of computers
for everyone, “one person, one computer,” as a way toward a better world). Vision provides meaning...

• Develop a Model for Change: total organization change often starts in one unit or subculture of an
organization. For example Steve jobs started with a group of young dedicated designers he called pirates
while developing Macintosh at Apple. Similarly one department manager Peter Durker instituted a
management by objectives MBO program even though most of other corporate managers said it won’t
work. This change led to increased performance of this department, and ultimately the whole
organization was motivated to use this system.

• Reward Changes. One of the basic underlying concepts of motivation is that people tend to behave in
ways that provide rewards or reinforcement. If the system still rewards the old culture, then it won’t
make sense for people to change. This, of course, includes pay and promotion, but other incentives as
well.

Change does not take place quickly in a strongly established culture. Some of the key factors in changing
an ingrained culture. Any changes to the organization’s culture must focus on what people value and
what they do. Cultural changes becomes possible if the OD practitioner can get members to behave in
new ways.

Key Factors in Cultural Change

• Understand the old culture. Managers can’t change their course until they know where they are.
• Encourage change in employees. Reinforce people to change the old culture and to develop new ideas.
• Follow outstanding units. Recognize outstanding units in the organization, and use them as a model
for change.
• Don’t impose cultural change. Let employees be involved in finding their own approaches to change
and an improved culture will emerge.
• Lead with a vision. The vision provides a guiding principle for change, but must be bought into by
employees.
• Large-scale change takes time. It may take three to five years for significant, organization- wide
cultural change to take effect.
• Live the new culture. Top management values, behaviors, and actions speak louder than words.
Corporate cultures are the very essence of organizations. Whether effective or ineffective,
organizational cultures exist—usually reflecting the personality of the top executive. Corporate cultures
often affect the success or failure of the organization and are shaped in various ways by the employees.

CULTURAL RESISTENCE TO CHANGE

Changing a corporate culture is not easy. Culture emerges out of shared behaviors and the working
relationship of organization members that have developed over time. Consequently, it takes time for a
cultural transformation to take effect. Many firms, confronted with international competition and
technological change, have no choice but to slim down. Firms through “reengineering”, “downsizing” or
“delayering” eliminates layers of middle management in order to delegate responsibility to those
actually making products or dealing with customers.
A culture can also prevent a company from remaining competitive or adopting to a changing
environment
The need for devising and executing better strategies is becoming readily apparent. Recession,
deregulation, technological upheavals, social factors, global competition, outsourcing, and markets that
seem to suddenly emerge and then vanish just as quickly have increased the pressure on companies to
be flexible and adaptable. An inappropriate culture is often one of the biggest stumbling blocks on the
path to adoption.

TOOLS FOR CHANGE

Management changes to improve strategy are more likely to succeed if the factors that shapes the
culture can be identified and managed. Three organizational tools are required in the adaptive
organization: information, support, and resources.

Information: the first tool provide people with information or the ability to gather information. People
feel free to go outside their own department to gather information and open communication patterns
across departments. Some companies have rules prohibiting closed meetings. Other organizations have
information-exchange meetings that cut across employees’ levels. Making information available at every
level increases employee motivation and permits faster decision-making. This helps employees to
identify with organizational goals.

Support: The second tool provides the corporate entrepreneur with the support and necessary “go
ahead” from higher management as well as the cooperation of peers and subordinates. If the project
will cut across organizational lines, support and collaboration from other departments is needed. For
example, interdepartmental meetings and training sessions that bring people together can provide the
opportunity to build support for projects. Organizations can remove the fear to fail and provide a
climate that supports people in taking risks.
Resources: The third tool provides the resources, including funds, staff, equipment, and materials, to
carry out the project. Budgetary channels are the normal vehicle of funding innovation, but in most
instances this process is too time-consuming to respond to a project in a timely manner. Some
organizations support projects from bootlegged funds budgeted for other projects. Venture Capital and
“innovation banks” also provide support for innovative projects.

THE GOALS AND VALUES OF OD

The ultimate purpose of increasing an organization’s ability to adapt to a changing environment is to
make it more effective. From an organization’s perspective, effectiveness is the degree of goal
achievement—or, to put it another way, the amount of resources the organization uses in order to
produce units of output.

In general, OD programs are aimed at three basic organizational dimensions that affect performance:
managerial effectiveness, managerial efficiency, and motivational climate.

Managerial effectiveness refers to the accomplishment of specific organizational goals and objectives,
or “doing the right thing.” If organizations are using their resources to attain long-term goals, the
managers are being effective. The closer an organization comes to achieving its strategic goals, the more
effective the organization.
Managerial efficiency refers to the ratio of output (results) to input (resources), or “doing the things
right. “The higher this proportion, the more efficient the manager. When managers are able to minimize
the cost of the resources used to attain performance, they are managing efficiently. An organization may
be efficient but not effective, or vice versa.
Motivational climate consists of the set of employee attitudes and morale that influence the level of
performance.
The goal of OD is to improve and maximize all three dimensions: effectiveness, efficiency, and
motivational climate. The organization is not only doing the “right thing,” but doing it well.

Three other criteria that serve as indicators of organizational effectiveness and health are adaptability,
vision, and reality testing.
• Adaptability is the ability to solve problems and to react with flexibility to changing environmental
demands.
• A sense of identity and vision is the organization’s knowledge and insight about what its goals are and
what it has to do.
• Capacity to test reality is the ability to search out and accurately and correctly interpret the real
properties of the environment, especially those that have relevance for the functioning of the
organization.

OD PROFESSIONAL VALUES AND ETHICS

Almost every organizational decision involves an ethical question, such as how people should treat
others, conflicts of interest, and so on. In attempting to change organizations, OD practitioners must
consider the ethical consequences of various actions and develop a set of ethical standards to guide
them when competing interests collide.
OD is emerging discipline and its practitioners tend to describe themselves as professionals. By
professionalism we refer to the internalization of a value system that is part of the concept of the
profession.

1. Expertise. The professional requires some expertise. This includes specialized knowledge and skills
that can be obtained only through training (usually through academic study and experience).
2. Autonomy. The professional claims autonomy. Professionals reserve the right to decide how their
function is to be performed and to be free from restrictions.
3. Commitment. Professionals feel a commitment to the discipline. They are more likely to identify with
members of their profession in other organizations than with their own organization.
4. Code of ethics. Finally, there is a responsibility to society for the maintenance of professional
standards of work. They adhere to professional self-discipline and a code of ethics.
Chapter 4

ROLE AND STYLE OF THE OD PRACTITIONER

HAPHAZRD VS. PLANNED CHANGE
There are two types of change that may take place in an organization.

Random or Haphazard change: change that is forced on the organization by the external environment.
This type of change is prepared for; it simply occurs and is dealt with as it happens, a practice sometimes
called firefighting. This type of change includes downsizing, where sizable number of employees are laid
off. When large organizations like Ford and Kodak implement a downsizing program, the change can be
extremely difficult, because it involves a major cultural transformation.

Planned or Deliberate Change: this change results from deliberate attempts to modify organizational
operation in order to promote improvement. One example of this type of program is total quality
management (TQM), which focuses on continuous improvement.

EXTERNAL AND INTERNAL PRACTITIONERS

In every large scale organization planned change program some person or group is usually designated to
lead the change; sometimes it is OD practitioner. The practitioner, then, is the change leader, the person
leading or guiding the process of change in an organization.

The External Practitioner: it is someone not previously associated with the client system. Coming from
the outside, the external practitioner sees things from a different view-point and from a position of
objectivity.

Advantages:

Because external practitioner are invited into the organization, they have increased leverage (the degree
of influence and status within the client system) and greater freedom of operation than internal
practitioners. Research evidence suggest that top management view external practitioners as having a
more positive role in large scale change programs than internal practitioners.

Since external practitioners are not a part of the organization, they are less in awe or the power wielded
by various organizations members. Unlike internal practitioners, they do not depend upon the
organization for raises, approval, or promotions. Because they usually have a very broad career base and
other clients fall back on, they tend to have a more independent attitude about risk-taking and
confrontations with the client system.

Disadvantages:

The disadvantages of external practitioners result from the same factors as the advantage.
Outsiders are generally unfamiliar with the organization system and may have sufficient knowledge of its
technology, such as aerospace or chemistry. They are unfamiliar with the culture, communication
networks, and formal or informal power systems. In some situations, practitioners may have difficulty
gathering pertinent information simply because they are outsiders.

The Internal Practitioner:

The internal practitioner is already a member of the organization: either a top executive, an
organization member who initiates change in his or her work group, or a member of the human
resources or organization development department. Many large organizations have established offices
with the specific responsibility of helping the organization implement change programs.

Advantages:

Internal practitioners have certain advantages inherent in their relationship with the organization. They
are familiar with the organization’s culture and norms and probably accept and behave in accordance
with the norms. This means that they need not waste time becoming familiar with the system and
winning acceptance. Internal practitioners know the power structure, who are the strategic people, and
how to apply leverage. They are already known to the employees, and have a personal interest in seeing
the organization succeed.

Disadvantages:

The position of an internal practitioner also has disadvantages. One of these may be a lack of the
specialized skills needed for organization development.
Another disadvantage relates to lack of objectivity. Internal practitioners may be more likely to accept
the organizational system as a given and accommodate their change tactics to the needs of
management. Being known to the workforce has advantages, but it can also work against the internal
practitioner. Other employees may not understand the practitioner’s role and will certainly be
influenced by his or her previous work and relationships in the organization, particularly if the work and
relationships have in any way been questionable. Finally, the internal practitioner may not have the
necessary power and authority; internal practitioners are sometimes in a remote staff position and
report to a mid-level manager.

THE EXTERNAL-INTERNAL PRACTITIONER TEAM

The implementation of a large-scale change program is almost impossible without the involvement of all
levels and elements of the organization. One approach to creating a climate of change uses a team
formed of an external practitioner working directly with an internal practitioner to initiate and facilitate
change programs (known as the external- internal practitioner team).

The partners bring complementary resources to the team; each has advantages and strengths that offset
the disadvantages and weaknesses of the other. The external practitioner brings expertise, objectivity,
and new insights to organization problems. The internal practitioner, on the other hand, brings detailed
knowledge of organization issues and norms, a long-time acquaintance with members, and an
awareness of system strengths and weaknesses.
For change programs in large organizations, the team will likely consist of more than two practitioners.
The collaborative relationship between internal and external practitioners provides an integration of
abilities, skills, and resources. The relationship serves as a model for the rest of the organization—a
model that members can observe and see in operation, one that embodies such qualities as trust,
respect, honesty, confrontation, and collaboration. The team approach makes it possible to divide the
change program’s workload and share in the diagnosis, planning, and strategy. The external-internal
practitioner team is less likely to accept watered-down or compromised change programs, because each
team member provides support to the other.

Another reason for using an external-internal practitioner team is to achieve greater continuity over the
entire OD program. Because external practitioners are involved in other outside activities, they generally
are available to the organization only a few days a month, with two- or three-week intervals between
visits. The internal practitioner, on the other hand, provides a continuing point of contact for
organization members whenever problems or questions arise. Because many OD programs are long-
term efforts,
Often lasting three to five years, the external-internal combination may provide the stimulation and
motivation needed to keep the change program moving during periods of resistance. The team effort is
probably the most effective approach because it combines the advantages of both external and internal
practitioners while minimizing the disadvantages.

OD PRACTITIONER STYLES
The OD practitioner is a person who initiates, stimulates, or facilitate a change program and may come
from inside or outside the organization. Practitioners, be they internal or external, have a variety of
practitioner styles or approaches. One way to view the style is based on the degree of emphasis upon
goal accomplishment that is effectiveness. The other goal is morale, the degree of emphasis upon
relationships and participant satisfaction. Based on these two dimensions, five different types of
practitioner styles or roles can be identified.

The Stabilizer Style:

The goal of the stabilizer style is neither effectiveness nor participant satisfaction. Rather, the
practitioner is trying to keep from rocking the boat and to maintain a low profile. The underlying
motivation is often survival, or merely following the directives of top management. Such a role is
typically found in large organizations where development programs may be part of the staff function
and are not highly regarded by top management.

The Cheerleader Style:

The cheerleader style places emphasis on the satisfaction of organization members and is chiefly
concerned with employee motivation and morale. The cheerleader practitioner seeks warm working
relationships and in general is more comfortable in noncon-frontational situations. Effectiveness per se
is not emphasized, the assumption being that if member satisfaction is high, effectiveness will also be
high. Unfortunately, there is a great deal of evidence that contradicts these assumptions. The
cheerleader style strongly minimizes differences and maintains harmony.
The Analyzer Style:
The analyzer style places great emphasis on efficiency, and gives little emphasis to member satisfaction.
The analyzer feels most comfortable with a rational assessment of problems and assumes that the facts
will lead to a solution. Practitioners of this type may be quite confrontational, usually relying on
authority to resolve conflicts and on rational problem-solving processes. This style is based on the belief
that the client does not need to know or cannot learn the skills to solve its problems. The success
of the practitioner is largely dependent on the client’s having properly diagnosed its problem and called
in the right kind of practitioner.

The Persuader Style:

The persuader style focuses on both dimensions, effectiveness and morale, yet optimizes neither. Such
a style provides a relatively low-risk strategy, yet avoids direct confrontation with other forces. This
approach may be used when the practitioner has little power or leverage relative to other participants.

The Pathfinder Style:

The pathfinder style seeks both a high degree of effectiveness and a high degree of member
satisfaction, believing that greater effectiveness is possible when all members are involved and problem-
solving is done through teamwork members. The pathfinder practitioner focuses on six processes
essential for effective organization performance: (1) communication, (2) member roles and functions in
groups, (3) group problem-solving and decision-making, (4) group norms and growth, (5) leadership and
authority, and (6) intergroup cooperation and competition.

In summary, these five practitioner styles are not mutually exclusive. All the styles can be effective, and
they are interrelated. A practitioner may transition from one style to another to meet changing client
system needs and deal with diverse situations. Frequently, some combination of the styles may be
applied.

OD PRACTITIONER SKILLS AND ACTIVITIES

The role of the OD practitioner is changing and becoming more complex. The OD practitioners of today
are no longer just process facilitators, but are expected to know something about strategy, structure,
reward systems, corporate culture, leadership, human resource development, and the client
organization’s business. As a result, the role of the OD practitioner today is more challenging and more
in the mainstream of the client organization than in the past.

Susan Gebelein lists six key skill areas that are critical to the success of the internal practitioner. The
relative emphasis on each type of skill will depend upon the situation, but all are vital in achieving OD
program goals. The skills that focus on the people-oriented nature of the OD practitioner include:

• Leadership. Leaders keep members focused on key company values and on opportunities and need for
improvement. A leader’s job is to recognize when a company is headed in the wrong direction and to get
it back on the right track.
• Project Management. This means involving all the right people and departments to keep the change
program on track.
• Communication. It is vital to communicate the key values to everyone in the organization.
• Problem-Solving. The real challenge is to implement a solution to an organizational problem. Forget
about today’s problems: focus constantly on the next set of problems.
• Interpersonal. The number-one priority is to give everybody in the organization the tools and the
confidence to be involved in the change process. This includes facilitating, building relationships, and
process skills.
• Personal. The confidence to help the organization make tough decisions, introduce new techniques,
try something new, and see if it works.

The OD practitioner’s role is to help employees create their own solutions, systems, and concepts. When
the practitioner uses the above-listed skills to accomplish these goals, the employees will work hard to
make them succeed, because they are the owners of the change programs.