ORGANISATIONAL CHANGE - ORGANISATIONAL BEHAVIOUR

Notes 12 Pages

Bengaluru City University

Bachelor of Business Administration

Contributed by

Prajwal Hallale

MESIOM - GMP

1

ORGANISATIONAL BEHAVIOUR
UNIT - 5
ORGANISATIONAL CHANGE

Meaning and Definition

What is Change? Any alteration, as in the way things are done; or any
modification or alteration of status quo involves change. Organisationally,
change is important to affect necessary improvements, increase productivity and
enhance organisational effectiveness. Change is thus inevitable and/or
indispensable. Consequently, managers and supervisors have to learn to be
aware of it, recognize and cope with
or manage change effectively.

In simple words one can define change as "making things different". However
change doesn't always happen in Smooth way. The Change process should be
handled in a smooth way, and lot of thought process should have gone into it.

"The term change refers to any alteration which occurs in the overall work
environment of an organisation."

To quote another definition "When an organisational 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."

NATURE OF CHANGE
From the above definitions, we can conclude that change has the following
characteristics.
1. Change results from the pressure of both internal and external forces in the
organisation. It disturbs the existing equilibrium or status quo in the
organisation.
2. The change in any part of the organisation affects the whole of the
organisation.
3. Change will affect the various parts of the organisation in varying rates of
speed and degrees of significance.
4. Changes may affect people, structure, technology and other elements of the
organisation
5. Change may be reactive or proactive. When change is brought about due to
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the pressure of external forces, it is called reactive change. Proactive change is
initiated by the management on its own to increase organisational effectiveness.
Factors Influencing Change/ Forces of organisational change
There are a number of factors both internal and external which affect
organisational functioning Any change in these factors necessitates changes in
an organisation.

A. External Forces
External environment affects the organisations both directly and indirectly. The
organisations do not have any control over the variables in such an
environment. Accordingly, the organisation cannot change the environment but
must change themselves to align with the environment.
A few of these factors are:
1. Technology.
Factors Influencing change/ Forces of Change
External Forces
Internal Forces
Levels of Change
Technology
Market Condition
Social Changes
Political forces
To avoid developing
Inertia
D/F in existing
Organisational
Structure
Change in Managerial
Personnel
Nature of the Work
force
People oriented
change
Organisation
Level Change
Group Level
Change
Individual
Level Change
Process oriented
Change
Structural
Change
Strategic
change
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Technology is the major external force which calls for change. The adoption of
new technology such as computers, telecommunication systems and flexible
manufacturing operations have profound impact on the organisations that adopt
them.
The substitution of computer control for direct supervision, is resulting in wider
spans of control for managers and flatter organisations. Sophisticated
information technology is also making organisations more responsive : Both the
organisations and their employees will have to become more adaptable. Many
jobs will be reshaped. Individuals who do routine, specialised and narrow jobs
will be replaced by workers who can perform multiple tastes and actively
participate in decision making. Managements will have to increase their
investment in training and education of the employees because employees' skills
are becoming obsolete more quickly. Japanese firms have progressed rapidly
because they are very fast in adopting new technological innovations
2. Marketing Conditions.
Marketing conditions are no more static. They are in the process of
rapid change as the needs, desires and expectations of the customers change
rapidly and frequently.
Moreover, there is tough competition in the market as the market is flooded
with new products and innovations every day. New methods of advertising are
used to influence the customers. Today the concept of consumerism has gained
considerable importance and thus, the consumers are treated as the kings.
Moreover, the competition today has some significant new twists. Most markets
will soon be international because of decreasing transportation and
communication costs and the increasing export orientation of business. The
global economy will make sure that competitors are likely to come across the
ocean as well as from across town. Successful organisations will be those who
can change in response to the competition. Organisations that are not ready for
these new sources of competition in the next decade may not exist for long.
3. Social Changes.
Social and cultural environment also suggest some changes that the
organisations have to adjust for. There are a lot of social changes due to spread
of education, knowledge and a lot of government efforts. Social equality e.g.
equal opportunities to women, equal pay for equal work, has posed new
challenges for the management. The management has to follow certain social
norms in shaping its employment, marketing and other policies.
4. Political Forces.
Political environment within and outside the country have an important
impact on business especially the transnational corporations. The interference of
the government in business has increased tremendously in most of the countries.
The corporate sector is regulated by a lot of laws and regulations. The
organisations do not have any control over the political and legal forces, but
they have to adapt to meet the pressure of these forces.
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In our country, the new economic policy has liberalised the economy to a large
extent. Many of the regulatory laws have been amended to reduce the
interference of the Government in business
An organisation is also affected by the world politics. Some of the changes in
the world politics which have affected business all over the world are e.g. the
reunification of Germany, Iraq's invasion of Kuwait and the break of Soviet
Union.

B. Internal Forces

Internal forces are too many and it is very difficult to list them
comprehensively.
However, major internal causes are explained as follows:
1. 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 mid forties are loyal to themselves only. The youngest generation of
workers is loyal to their careers.
The profile of the workforce is also changing fast. The new generation of
workers have better educational qualifications, they place greater emphasis on
human values and question authority of managers. Their behaviour has also
become very complex and leading them towards organisational goals is a
challenge for the managers. The employee turnover is also very high which
again puts strain on the management. The work force is changing, with a rapid
increase in the percentage of women employees, which in turn means, more
dual career couples. Organisations have to modify transfer and promotion
policies as well as make child care and elder care available, in order to respond
to the needs of two career couple.
2. Change in Managerial Personnel.
Change in managerial personnel is another force which brings about change in
organisation. Old managers are replaced by new managers which is necessitated
because of promotion, retirement, transfer or dismissal. Each manager brings
his own ideas and way of working in the organisation. The informal
relationships change because of changes in managerial personnel. Sometimes,
even though there is no change in personnel, but their attitudes change. As a
result, the organisation has to change accordingly.
Changes in the organisation are more fast when top executives change. Change
in top executives will lead to important changes in the organisation in terms of
organisation design, allocation of work to individuals, delegation of authority,
installation of controls etc. All these changes will be necessitated because every
top executive will have his own style and he will like to use his own ideas
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and philosophies.
3. Deficiencies in Existing Management Structure.
Sometimes changes are necessary because of some deficiencies in the existing
organisational structure, arrangement and processes. These deficiencies may be
in the form of unmanageable span of management, larger number of managerial
levels, lack of coordination among various departments, obstacles in
communication, multiplicity of committees, lack of uniformity in policy
decisions, lack of cooperation between line and staff and so on. However, the
need for Change in such cases goes unrecognised until some major crisis
occurs.
4.To Avoid Developing Inertia.
In many cases, organisational changes take place just to avoid developing
inertia or inflexibility. Conscious managers take into account this view that
organisation 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
changes in the organisation are brought about.

C. 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 maturity level
of a person which occurs over a passage of time. The general opinion is that
change at the individual level will not have significant implications for the
organisation. But this is not correct because individual level changes will have
impact on the group which in turn will influence the whole organisation.
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.
D. Group Level Change
Management must consider group factors while implementing any change,
because most of the organisational changes have their major effects at the group
level. The groups in the organisation 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
organisation, 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 effectively implementing change
at the group level, resistance at the individual level can be frequently overcome.
E. Organisation Level Change
The organisational level change involves major programmes which affect both
the individuals and the groups. Decisions regarding such changes are made by
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the senior management. These changes occur over long periods of time and
require considerable planning for implementation.
A few different types of organisation level changes are :
1. Strategic Change.
Strategic change is the change in the very basic objectives or missions of the
organisation. A single objective may have to be changed to multiple objectives.
For example, a lot of Indian companies are being modified to accommodate
various aspect of global culture brought in by the multinational or transnational
corporations
2. Structural Change.
Organisational structure is the pattern of relationships among various
positions and among various position holders. Structural change involves
changing the internal structure of the organisation. This change may be in the
whole set of relationships, work assignment and authority structure. Change in
organisation 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 organisational 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 organisation 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.

Resistance to Change
Whenever a person thinks that the effects of change are likely to be
unfavourable to him, even if they are really not so, he will try to protect himself
by resisting the change. Resistance means opposition to Change.

Individual Resistance
Below are stated some reasons why people resist changes. Some of these appear
to be and emotional. These reasons are:
1. Economic Factors. The economic reasons for the resistance to change may be
the follow
(i) Workers may fear that the change will lead to technological unemployment.
Generally, new technology is associated with the education of labour intake and
therefore, people will resist a change that will affect their employment.
(ii) Workers fear that they will be idle most of the time due to the increased
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efficiently the new technology, which in turn may lead to retrenchment of
labour force.
(iii) Workers may fear that they will be demoted if they do not acquire the skills
required for the new jobs.
(iv) Workers resist the change which leads to setting high job standards, which
in turn may reduce opportunities for bonus or incentive pay.

2.Habits:
All human beings are creatures of habit. The modern life is so complex that
nobody wants to consider the full range of options for the hundreds of decisions
we have to make every day. Instead all of us rely on habits or programmed
responses. For example whenever we decide to go out for dinner, we generally
try to go to our tried and tested restaurant instead of trying a new one every
time.
Due to this nature of human beings whenever a person is confronted with a
change, his basic tendency will be to resist the change. For example, whenever a
person is transferred. his first reaction, most of the time, is to resist the change
because it will lead to a lot more complexities like shifting the house, change of
schools of the children, making adjustments in the new place, finding new
friends, joining new group etc. Thus, every person will try to take the easy way
Resistance to organisational change
Individual Resistance
Group Resistance
Organisational resistance
Economic Factors
Social Factors
Lack of Communication
Insecurity
Habits
Extent of Change
Psychological Factors
Threat to power
Group inertia
Organisational Structure
Threat to specialisation

Resource Constraints
Sunk cost
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out by resisting this change.
3. Insecurity.
One of the major reasons for resistance to change is uncertainty about the
impact of change, specially on job security. The fear of the unknown always has
a major impact on the decision of the individuals. Not knowing what the change
would bring about makes the employees anxious and apprehensive about the
change.
4. 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.
5. Extent of Change.
If there is a minor change and the change involves only the routine
operations, the resistance, if any, will be minimum. But the 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
changes.
6. Psychological Factors.
One of the major reasons for resistance can be the emotional turmoil what a
change may cause, especially if the past experience with the changes have not
been positive
The psychological reasons for resistance to change are:
(i) Workers may not like criticism implied in a change that the present method
is inadequate and unsuitable.
(ii) 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.
(iii) Workers may have the fear that the new jobs will bring boredom and
monotony as a result of specialisation brought by the new technology
(iv) They may resist the change because harder work will be required to learn
and adapt to new ideas and they do not want to take the trouble in learning new
things.
(v) The workers may be incapable of understanding the implications of new
ideas and methods.
7. Social Factors.
Individuals have social needs like friendship, belongingness etc. for the
fulfilment of which they develop social relations in the organisation. They
become members of certain informal groups. The change will bring a fear in the
mind of people because there is generally dislike for new adjustments, breaking
present social relationships, reduced social satisfaction, feeling of outside
interference in the form of change agent etc.
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Group Resistance
Most organisational changes have impact on informal groups in the
organisation. 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 groups which are very
cohesive, where people have a very strong sense of belongingness to the group
and where the group members consider their group as superior to the other
groups.
Organisational Resistance
Organisational resistance means that the change is resisted at the level of the
organisation itself. Some organisations are so designed that they resist new
ideas, this is specifically true in case of organisations 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 a need for the change in their
services. Most of the educational institutions are using essentially the same
teaching technologies which they were using fifty years ago. Majority of the
business firms are also resistant to changes.

The major reasons for organisational resistance are :
1. Threat to Power.
Top management generally consider change as a threat to their power and
influence in the organisation 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 manager addition they will never like to take the steps which will
strengthen the position of unions.
2. Group Inertia.
Sometimes, the individuals resist change because the group to which belong
resists it. The degree and force of resistance will depend upon how loyal one
the group and how effectively group resists the change. Generally, the members
of are influenced by the codes, patterns and attitudes of the group. Resistance
rationalisation collectively by labour in India is an example of group resistance.
3. Organisational Structure.
Change is often resisted by the bureaucratic structures where jobs are narrowly
defined, lines of authority clearly spelled and flow of information stressed from
top to bottom. Moreover, organisations are made up of a number interdependent
subsystems, one system cannot be changed without affecting the others.
4. Threat to Specialisation.
Changes in organisation may threaten the expertise of specialised groups. For
example, giving computer training to all the employees in the organisation and
giving personal computers was perceived as a threat by the experts in computer
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department of the organisation.
5. Resource Constraints.
Organisations need adequate financial resources for training change agents and
for offering rewards to those who support change. An organisation who does
not have resources for implementing the change often resists it.
6. Sunk Costs.
The change is generally resisted by the top management, because it often leads
to the problem of sunk costs. The heavy capital which is already invested in the
fixed assets or the amount which has already been spent on the training of the
employees will go waste if the change is introduced

OVERCOMING RESISTANCE TO CHANGE
Problem of overcoming resistance to change can be handled at two levels
(i) At the individual level,
(ii) At the group level through group dynamics.
Both these attempts are complementary and sometimes these efforts may be
overlapping because every individual is a member of some group, both at the
formal and at the informal levels.
(i)Efforts At The Individual Level
The management can use the following strategies to overcome resistance by the
people and to introduce changes successfully:
1. Participation and Involvement.
Individuals will find it difficult to resist the changes in which they participated.
Prior to making a change, all those persons who are going to be affected by the
change, can be brought into the decision making process. Their doubts and
objections should be removed to win their cooperation. Getting opinions out in
the open, so that they are looked at and evaluated is an important trust building
task. This involvement of the workers can overcome resistance, obtain personal
commitment and increase the quality of the change decisions. But this method
may lead to a lot of time consumption as well as it may be a potential for poor
solutions.
2.Effective Communication.
Inadequate or inaccurate information can be a reason for the resistance to
change. An appropriate communication programme can help in overcoming
this resistance. Workers can be given necessary education about the change, its
process and its working through training classes, meetings and conferences. The
reasons about the change must be communicated very clearly and without
ambiguity. Communication can help dissipate some fear of unknown elements.
Management should also see that there is a two way communication between
the management and the workers so that the former comes to know about the
reactions of the latter directly without delay. All this will help persuade
employees about the necessity of change and once persuaded they may actively
want to have the change.
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