1.
Organisation Development and
Change
Session - 1

2.
Unit I – Nature of Change

3.
Necessity of Change
 Any business in today's fast-moving environment
that is looking for the pace of change to slow is
likely to be sorely disappointed.
 In fact, businesses should embrace change and
Change is important for any organization
because, without change, businesses would likely
lose their competitive edge and fail to meet the
needs of what most hope to be a growing base of
loyal customers.

4.
Factors Affecting Organizational
Change
 Change is inevitable in the life of an Organisation. In today’s
business world, most of the organizations' are facing a dynamic
and changing business environment.
 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.
 “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.
 There are a number of factors both internal and external which
affect organizational functioning. Any change in these factors
necessitates changes in an organisation.

5.
Factors Affecting Organisational
Change
 External Forces
1. Technology
2. Customer needs
3. Economy
4. Political and Legal Changes
5. Growth Opportunities
 Internal Forces
1. Change in Managerial Personnel
2. Deficiency in Existing organization
3. Nature of the work force
4. To avoid developing inertia

6.
External Forces
1. Technology
 Change that results from the adoption of new technology is
common in most organizations and while it can be disruptive
at first, ultimately the change tends to increase productivity
and service Technology also has affected how we
communicate.
 Today's burgeoning communication technology represents
changes that allow organizations to learn more, more quickly,
than ever before.
 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.

7.
External Forces
2. Customer Needs/ Market Needs
 As the world evolves, customer needs change and grow, creating new
demand for new types of products and services -- and opening up new
areas of opportunity for companies to meet those needs.
 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.

8.
External Forces
3. The Economy
 The economy can impact organizations in both positive and negative ways and
both can be stressful.
 A strong economy and increasing demand for products and services will mean
that companies must consider expansion that might involve the addition of staff
and new facilities.
 These changes offer opportunities for staff, but also represent new challenges.
 A weak economy can create even more problems as companies find themselves
needing to make difficult decisions that can impact employees' salaries and
benefits and even threaten their jobs.
 The ability to manage both ends of the spectrum are critical for organizations
that want to maintain a strong brand and strong relationships with customers as
well as employees.
 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.

9.
External Forces
4. Political and legal changes
 Political and legal factors broadly define the activities which an
organisation 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.
5. Growth Opportunities
 Change is important in organizations to allow employees to learn
new skills, explore new opportunities and exercise their creativity in
ways that ultimately benefit the organization through new ideas and
increased commitment.
 Preparing employees to deal with these changes involves an
analysis of the tools and training required to help them learn new
skills.
 Training can be provided through traditional classroom settings or,
increasingly, through online learning opportunities. Importantly,
organizations need to do a good job of evaluating employees'
capabilities and then taking steps to fill the gaps between current
skills and the skills required to respond to growth.

10.
Internal Forces
 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 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.

11.
Internal Forces
 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.

12.
Internal Forces
 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.
 The profile of the workforce is also changing fast.
 The 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.

13.
Internal Forces
 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.

14.
The various types of
organizational changes
1. Individual Level
2. Group Level
3. Organisational Level

15.
Individual Level Change
 Individual level changes may take place due to
changes in job assignment, transfer of an employee
to a different location or the changes in the maturity
level of a person which occurs over a passage of
time.
 The general opinion is that change at the individual
will not have the significant implications for the
organization. But this is not correct because individual
level changes will have impact on the group which in
turn will influence the whole organization.
 Therefore, a manager should never treat the
employees in isolation but he must understand that
the individual level change will have repercussions
beyond the individual.

16.
Group Level Change
 Management must consider group factors while implementing
any change, because most of the organizational changes have
their major effects at the group level.
 The groups in the organization can be formal groups or
informal groups. Formal groups can always resist change for
example; the trade unions can very strongly resist the changes
proposed by the management. Informal groups can pose a
major barrier to change because of the inherent strength they
contain.
 Changes at the group level can affect the work flows, job
design, social organization, influence and status systems and
communication patterns.
 The groups, particularly the informal groups have a lot of
influence on the individual members of the group. As such by
effective implementing change at the group level, resistance at
the individual level can be frequently overcome.

17.
Organizational Level Change
 The organizational change involves major programmes
which affect both the individuals and the groups.
 Decisions regarding such changes are made by the
senior management. These changes occur over long
periods of time and require considerable planning for
implementation.
 A few different types of organization level changes are:
1. Strategic change. Strategic change is the change in the
very basic objectives or mission of the organization. A
simple objective may have to be changed to multiple
objectives. For example, a lot of Indian companies are
being modified to accommodate various aspects of
global culture brought in by the multinational or
transnational corporations.

18.
2. Structural change.
 Organizational structure is the pattern of relationships among various positions
and among various position holders. Structural change involves changing the
internal structure of the organization. This change may be in the whole set of
relationships, work assignments and authority structure. Change in
organization structure is required because old relationships and interactions
no longer remain valid and useful in the changed circumstances.
3. Process oriented change.
 These changes relate to the recent technological developments, information
processing and automation. This will involve replacing or retraining personnel,
heavy capital equipment investment and operational changes. All this will
affect the organizational culture and as a result the behaviour pattern of the
individuals.
4. People oriented change.
 People oriented changes are directed towards performance improvement,
group cohesion, dedication, and loyalty to the organizations as well as
developing a sense of self-actualisation among members. This can be made
possible by closer interaction with employees and by special behavioural
training and modification sessions.
To conclude, we can say that changes at any level affect the other
levels. The strength of the effect will depend on the level or source of
change.

19.
Role of the Change Agent In
Organizational Change
 Change agents are the persons who initiate change and manage
change in the organizations.
 They are specialized in theory and practice of managing changes.
 The change agent may be a member of organization or an
outsider such as a consultant. An internal agent very well knows
the organization and have ability, knowledge and experience of
directing people for changes.
 But, internal agent is removed from regular duties to concentrate
on the transition.
 However, external agents view the organization from the system
point of view and is much affected by the organization norms.
 Top managers also prefer hiring specialized consultant change
agents as they can offer more objective prospective than insiders.
 External experts are, however, not well aware of the desires and
attributes of the employees, therefore, the changes suggested by
them are generally resisted by the employees.

20.
Role of Change Agents
 Change agents have five set of powers as support of
managers is essential but not enough. Following are
the powers,
 High status given by the members of the client
organization, based on their perception that the change
agent is similar to them in behaviour, language etc.
 Trust based on his consistent handling of information
and maintaining proper role in the organization.
 Expertise in the practice of organizational change.
 Credibility based on experience with previous clients.
 Dissatisfied constitutions who see the change agents as
the best opportunity to change the organization to meet
their needs.

21.
The four subject matters which a
change agent can change
 Structure
 Technology
 People
 Physical Setting

22.
 Structure
 Structure is defined as how the tasks are formally
divided, grouped and coordinated.
 For instance, change in plant layout or new technique
can only succeed when the structure is changed
according to change in environment. He may also
change responsibility, authority, functions, performance
according to the need of the change. He might also
redesign jobs or work schedule.
 Technology
 The introduction of new equipment and work process is
technological change. Automation or computerization is
the common technological change.
 Major technological changes involve introduction of new
tools and equipment, automation, computerization.

23.
 People
 This involves changing attitudes and behaviour of members
through communication, decision making and problem solving.
 They help individuals to work more efficiently and effectively
together. The changes may only be possible in case the
members are positive. In case there is lack of agreement,
stress and tension occurs with the employees.
 Physical Setting
 It involves change in interior design, equipment placement,
plant layout, tool placement. These changes are helpful in
organizational development. Physical setting considers flow
process, information flow and outcome. The smoothness of
flow increases the effectiveness of changes.
 The basic objective of change agents is to increase
effectiveness, performance and satisfaction.

24.
Causes of Resistance to
Organizational Change
 The main reasons for resistance to change are both
individual and organization.
 The research document of individual and
organizational behavior has found that organization
groups and individuals resist change.
 Resistance to change provides a degree of stability
and predictability to behavior, as it does not allow
immediate change.
 Resistance to change can be categorised as
1. Individual Resistance.
2. Group Resistance.
3. Organizational Resistance.

25.
Individual Resistance
 Individual arise due to differing perceptions, personalities
and needs. Some of these reasons appear to be rational
and emotional. These reasons are listed below,
a) Economic Factors
a) The economic reasons for the resistance to change may
be the following:
b) In organization when the development or change on
technology takes place, employee resists the change.
c) Employee may fear that the change will lead to
technological unemployment.
d) Generally, new technology is associated with education of
labor intake and therefore they resist the change.
e) For example the introduction of computer in an
organization means that employee will have to learn the
certain package to work efficiently. They may not be liked
by some employees and they develop negative attitude
towards computer and resist them.

26.
Economic Factors
 In organization where pay is tied to productivity
individuals usually resists change as they fear that
they will not be able to perform new task effectively,
thus causing a decline in productivity and a
decrease in their income.
 Workers may fear that they will be demoted if they
do not acquire the skills required for the new jobs.
 Workers resist the changes which lead to high
standards which in turn may reduce the
opportunities for bonus or incentive pay.

27.
Economic Factors
 Habit
 All human being are creatures of habit. Individual generally
feel comfortable in the environment that they are habituated to.
The modern life is very complex and no one likes to consider
the full range of option for the hundreds of decision which has
to be made everyday.
 Instead we rely on habit or programmed responses. When
confronted with change, the thought if moving away from the
environment they are accustomed to become a source of
resistance.
 Insecurity
 Safety and security are high priority for every individual.
 One of the major reasons for resistance to change is
uncertainty about the impact of change, especially on the job
security. When employees feel that the security of the job is
threatened by change, they resist it. The fear unknown always
has a major impact on the decision of the individual.

28.
Economic Factors
 Lack of Communication
 If the workers are given an opportunity to participate
in the process of change, the resistance is likely to be
less.
 But if the change is not properly communicated that to
in an acceptable manner to the employees, it is likely
to cause resistance.
 Extent of Change
 If there is a minor change and the change involves only
the routine operations the resistance will be minimum or
no resistance.
 But incase of major changes like reshuffling of staff will
lead to major visible resistance. Similarly the process of
change is slow, the resistance will be less as compared
to rapid or sudden change.

29.
b) Psychological Factors
 One of the major reasons for resistance can be emotional turmoil that a
change may cause especially if the past experiences with the change
have not been positive. The psychological reasons for the resistance to
change are:
 Workers may have the fear that the new job will bring boredom and
monotony as a result of specialization brought by the new technology.
 Change in technology brings new method of doing the job and it must
be learnt and adopt the new ideas of doing the job. To learn these ideas
they need work hard and they do not want to take the trouble in learning
new things.
 The workers may be incapable of understanding the implications of new
ideas and method.
 Workers may not like criticism implied in a change that the present
method is inadequate and unsuitable.
 New changes may lead to reduction of the personal pride of the workers
because they fear that new work changes will do away with the need for
much manual work.

30.
c) Social Factors
 Every individual have social needs like friends,
belongingness, etc. In organization, while working
employee develop social relationship with the
other employees. They become members of
certain informal group. The change will bring a
fear in mind of people because generally people
dislike with for new adjustment, breaking present
social relationship reduce social relationship,
feeling of outside interference in the form change
agent etc.

31.
2. Group Resistance
 While working in an organization the employee form
informal group in the organization.
 The most organizational change has impact in
informal group in the organization. Breaking up a
close knit work group or changing social relationship
can provoke a great deal of resistance.
 The main reason why the groups resist change is
that they fear that their cohesiveness or existence is
threatened by it.
 This is particularly true in case of group which are
very cohesive where people have a strong case of
belongingness to group and where member consider
the group as superior to the other groups.

32.
3. Organizational Resistance
 Organizational resistance means that the change is resisted at
the level of the organizational itself. Some organizations are so
designed that they resist new ideas, this is specifically true in
case of organizations which are conservative in nature.
 Government agencies want to continue doing what they have
been doing for a number of years even though there is need for
the change in their services. Majority of the business firms are
also resistant to changes.
 The major reasons for organizational resistance are:
 Threat to Power
 Top management generally considers change as a threat to their
power and influence in the organization due to which the change
will be resisted by them. The introduction of participative decision
making or self-managed work teams is the kind of change which
is often seen as threatening by the middle and top level
management.

33.
3. Organizational Resistance
 Group inertia
 Sometimes, the individuals resist change because the group to which they
belong resists it. The degree and force of resistance will depend upon how
loyal one is to the group and how effectively the group resists the change.
 Organizational structure
 Change is often resisted by the bureaucratic structures where jobs are
narrowly defined, lines of authority clearly spelled and flow of i9nformation is
stressed from top to bottom. Moreover, organizations are made up of a number
of interdependent subsystems, one system cannot be changed without
affecting the others.
 Threat to specialization
 Change in organization may threaten the expertise of specialized groups. For
example, giving computer training to all the employees in the organization and
giving personal computers was perceived as a threat by the experts in
computer department of the organization.
 Resource constraints
 Organizations need adequate financial resource for training change agents
and for offering rewards to those who support change. An organization who
does not have resources for implementing the change resists it.