Organizational Behaviour

Lecture 7

Organizational Changes
and Development

Dr Kumar Organizational Changes and Development 1

 Learning Objectives

• To discuss the seven types of pressures;

• To assess the three causes of resistance to
change;
• To propose the approaches to overcome
resistance to change;
• To summarise five crucial types of
organizational development values

Organization Change and Development 2

 What is change?
• Shift from the current position to the
desired future position to increase
performance
Example:
Malaysia Airlines
•Shortage of experienced crew
•Intense competition
•Volatile fuel prices
• What can Malaysia Airlines do?
Organization Change and Development 3
 The Change Process

Management Diagnosis of
Forces for change recognition of problem and points
need for change of resistance

Selection of
Consideration
Evaluation methods &
implementation of alternatives

Organization Change and Development 4

 Forces Driving Change
Internal / External

Political & Legal Events

Workforce
-Unskilled employees
-Poor efficiency
-Lack of innovation
•Change of Govt
•Trade War
•Taxes Economic Shock
•Economic crisis
•Share market plunge
•Review on poverty level

Customer Demand
Social
•Entry of foreign labour

Competition
Technology
-Use of computers
-Management programs
• TQM
• PCM
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 Resistance to Change – Is Normal!
Why?

•Disruptive

•Stressful

•Worry that the proposed change has weaknesses

Consequence

•Slow achievement of organizational objectives

Organization Change and Development 6

 Resistance to Change - Individual
Self interest Habit –
Unable to
Selective Information adapt
Processing

INDIVIDUAL

Insecurity
Fear of the Unknown Misunderstanding
•Status
•Power/authority
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 Resistance to Change - Group
Group Norms
Threat to
Threat to Existing
Existing Allocations
Relationships

GROUP

Organization Change and Development 8

Resistance to Change-Organizational
Intro to New
Organizational culture Threat to
Existing
Decision-Making
Fear of Losing Process
Status quo
ORGANIZATIONAL

Organization Change and Development 9

 Overcoming Resistance to Change

• Education and communication - Training

• Negotiation – Achieve a Win-Win situation
• Facilitation and Support - Advice/Consultation
• Involvement – All levels in the organization
• Coercion – Force to accept change
• Manipulation – influence using inaccurate
information/limited information

Organization Change and Development 10

 Approaches in Managing
Organizational Change
Lewin’s Three-Step Process
Unfreeze
•Employees are aware of the
need for change
•Make employee understand
Change Refreeze
•Movement from old way of •Change accepted &
doing things to new way less / no resistance to
•Alters existing relationships further change
or activities Ex. Done through
•Ex.  role play
• Introduce new process  Involvement
• Restructure organization
• Introduce new
equipment
Organization Change and Development 11
 Lewin’s Force Field Analysis (FFA)
It provides an overview of
the balance between forces
driving change and forces
resisting change
4 2
Forces
Forces Driving
4 Resisting
Change 3
Change
2 1

Organization Change and Development 12

 Example FFA Model Change at
Malaysia Airlines

Forces Driving Forces Resisting

Change Change

 Shortage of experienced
crew
 Intense competition
 Volatile fuel prices
4 2
 Uncertainty
3 4  Insecurity
 Misunderstanding
2 1

Organization Change and Development 13

Evolutionary & Revolutionary
Changes in Organization
Evolutionary Changes – Gradual Change

How?
1.Socio-Technical System Theory
• Importance to roles, tasks & technology to increase
organizational performance

2.TQM
• Continuous improvement effort to develop
products/services – Quality Control Circle (QCC)

Organization Change and Development 14

 Evolutionary & Revolutionary
Changes in Organization

Revolutionary Changes – Rapid Change

How?
1.Re-engineering (BPR)
 Rethinking the business process to achieve
immediate progress– product design/cosmetic
change, inventory control
2.Restructuring
 Right-sizing the organization - reduction of
departments or hierarchy level
3.Innovation
 Creating new products/new ways to use product
 Changing production methods/suppliers
 Using Product Champions to lead teams

Spring 2007 Organization Change and Development 15

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How resistance to change is overcome?

Organizational Development (OD)

• What?
A complex transformational planned effort to evolve
an organization from the current situation to a new
situation.
• Who?
Everyone in the organization / Bottom-up
• Why?
So that everyone can adapt to the changes
• How?
Inculcate values

Organization Change and Development 16

 Values in OD
Respect people Everyone in the organization

Trust & Support Trust & delegate and give moral

support
Equality of Power Distribute power & not hold strict
hierarchy system

When problem arises discuss

Confrontation openly

Involvement Get everyone involved &

responsible

Organization Change and Development 17

Techniques in OD in Facing
Resistance to Change
How?

1.Counseling, Sensitivity Training & Negotiation

Process

2.Team Formation & Intergroup Training

3.Comprehensive Confrontational Meeting by the

Organization (Giving everyone chance to speak out)

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 Lecture Summary
Organizational Change
Organizational change is about the process
of changing an organization's strategies, processes, procedures,
technologies, and culture, to achieve performance as well as
identifying effect of such changes on the organization.

Organizational Development
Organizational development (OD) is a study on how
change affects organization and the individuals.
Effective OD can assist organizations and individuals to cope
with change or overcome resistance.

Organization Change and Development 19

Review Questions
1. Differentiate between the concepts of re-
engineering and restructuring.
2. What is meant by organizational change?
3. Explain the pressures for change?
4. Differentiate between evolutionary and
revolutionary change.
5. What is meant by organizational development and
what are the goals?

Organization Change and Development 20

 References
Anderson, D., & Anderson, L. A. (2010). Beyond change management: How
to achieve breakthrough results through conscious change
leadership(2nd ed.). San Francisco: Pfeiffer.

Ashkenas, R. (2015). We still don’t know the difference between change and
transformation. Harvard Business Review.

Cawsey, T. F., Deszca, G., & Ingols, C. (2016).Organizational change: An action-

oriented toolkit . Thousand Oaks, CA: SAGE Publications.

Dr Kumar Organization Change and Development 21