Manage ORGANISATIONAL CHANGE...pdf - LESSON 1 AN OVERVIEW OF ORGANISATIONAL CHANGE STRUCTURE 1.0 1.0 Objectives 1.1 Introduction 1.2 Concept of


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Unformatted text preview: LESSON 1 AN OVERVIEW OF ORGANISATIONAL CHANGE STRUCTURE 1.0 1.0 Objectives 1.1 Introduction 1.2 Concept of organisational change 1.3 forces for change 1.4 levels of change 1.5 Types of change 1.6 Steps in managed change 1.7 Resistance to change 1.8 Implementing change successfully 1.9 Methods of introducing change 1.10 Summary 1.11 Keywords 1.12 Self assessment questions 1.13 References/suggested readings OBJECTIVES After reading this lesson, you should be able to• Discuss the nature and process of change; • Make aware about the nature and process of change; • Understand different types of changes; • Know the reasons and causes of resistance to change; and • Understand how change can be introduced in an organisation. 1 1.1 INTRODUCTION Organisation is a social system. All parts of organisation affect all other parts. That is, there is so much of interrelationship of parts that anything happening at one end is transmitted to the other end. This interrelationship is not only between the elements and parts of organisation, but also with the environment around it. When organisation functions, these relationship and interrelationships get established and gradually organization obtains a systematised and orderly behaviour. The whole system is said to be in equilibrium. This becomes an established way of life and any disturbance to this established way of life naturally exercises pressure on some elements which are accustomed to that way of life. This event evokes a reaction which may suggest acceptance of it, lack of interest in it or there may be counterpressure opposed to the disturbance. In some cases, the impact of accepting or ignoring a disturbance may not be much different, but otherwise, the former connotes cooperation and the latter, lack of interest. The term ‘change’ refers to any alternation which occurs in the overall work environment of an organisation. It is to be emphasised that ‘change is the law of nature’. Nothing is permanent except change. Change has the following characteristics: (i) Change often results from the pressure of forces which are both outside and inside the organisation; (ii) The whole organisation tends to be affected by the change in any part of it; and (iii) Change takes place in all parts of the organisation, but at varying rates of speed and degrees of significance. An organisational is an open system which means that it is in a constant interactional and interdependent relationship with its environment. Any change in its external environment, such as changes in consumer tastes and preferences, competition, economic policies of the Government, etc., make it imperative for an organisation to make changes in its internal system. Further, organisation is composed of a number of subsystem, which are also in a dynamic relationship of interaction and interdependence 2 with one another. Any change in a subsystem creates a chain of changes throughout the entire system. 1.2 CONCEPT OF ORGANISATIONAL CHANGE The term ‘organisational change’ implies the creation of imbalances in the existing pattern of situation. When an organization operates and functions for a long time, an adjustment between its technical, human and structural set-up is established. It tends to approximate an equilibrium in relation to its environment. In other words, organisation members evolve a tentative set of relations with the environment. They have an adjustment with their job, working conditions, friends and colleagues etc. Change requires individuals to make new adjustments. Hence the fear of adjustment gives rise to the problem of change and resistance to change. Individual comes in to danger. On the other hand, groups resist change where their existence is in danger or a total change in overall work environment is contemplated. Management of change may be defined as a conscious and concerted initiative by those who are in-charge of the destiny of the business undertaking or firm to keep a constant and intelligent watch over the behaviour of uncontrollable forces, to assess their impact and influence of the controllable forces, and to evolve appropriate strategies and action programmes to maintain a dynamic equilibrium between the controllable and uncontrollable forces. The controllable forces are those forces about which sufficient information is available. Such forces can be managed easily. Uncontrollable forces are those about which not much is known. These forces exert a powerful influence on the behaviour of controllable forces and limit the scope of managerial action. 1.3 FORCES FOR CHANGE Organisations encounter many different forces for change. These forces come from external sources outside the organisation and from internal sources. Awareness of these forces can help managers determine when they should consider implementing an organisational change. The external and internal forces for change are as follows: 3 (a) External Forces External forces for change originate outside the organisation. Because these forces have global effects, they may cause an organisation to question the essence of what business it is in and the process by which products and services are produced. There are four key external forces for change: demographic characteristics, technological advances, market changes, and social and political pressures. (i) Demographic Characteristics Organisations need to effectively manage diversity if they are to receive maximum contribution and commitment from employees. (ii) Technological Advancements Both manufacturing and service organisations are increasingly using technology as a means to improve productivity and market competitiveness. Manufacturing companies, for instance, have automated their operations with robotics, computerized numerical control (CNC) which is used for metal cutting operations, and computer-aided design (CAD). CAD is a computerized process of drafting and designing engineering drawings of products. Companies have just begun to work on computer-integrated manufacturing (CIM). This highly technical process attempts to integrate product design with product planning, control, and operations. Office automation consists of a host of computerized technologies that are used to obtain, store, analyse, retrieve, and communicate information. (iii) Market Changes The emergence of a global economy is forcing Indian companies to change the way they do business. Companies are having to forge new partnerships with their suppliers in order to deliver higher quality products at lower prices. 4 (iv) Social and Political Pressures These forces are created by social and political events. Personal values affect employees’ needs, priorities, and motivation; managers thus may need to adjust their managerial style or approach to fit changing employee values. Political events can create substantial change. For example, the collapse of both the Berlin Wall and communism in Russia created many new business opportunities. Although it is difficult for organisations to predict changes in political forces, many organisations hire lobbyists and consultants to help them detect and respond to social and political changes. (b) Internal Forces Internal forces for change come from inside the organisation. These forces may be subtle such as low morale, or can manifest in outward signs such as low productivity and conflict. Internal forces for change come from both human resource problems and managerial behaviour/decisions. (i) Human Resource Problems/Prospects These problems stem from employee perceptions about how they are treated at work and the match between individual and organisation needs and desires. Dissatisfaction is a symptom of an underlying employee problem that should be addressed. Unusual or high levels of absenteeism and turnover also represent forces for change. Organisations might respond to these problems by using the various approaches to job design by implementing realistic job previews, by reducing employees role conflict, overload, and ambiguity, and by removing the different stresses. Prospects for positive change stem from employee participation and suggestions. (ii) Managerial Behaviour/Decisions Excessive interpersonal conflict between managers and their subordinates is a sign that change is needed. Both the manager and the employee may need interpersonal skills training, or the two may simply need to be separated: for example, one of the parties might be transferred to a new department. Inappropriate leadership behaviours, 5 such as inadequate direction or support, may result in human resource problems requiring change. Leadership training is one potential solution for this problem. 1.4 LEVELS OF CHANGE Change can be at individual, group and organisational levels: (a) Individual Level Change At the individual level change is reflected in such developments as changes in a job assignment, physical move to a different location, or the change in maturity of a person which occurs overtime. It is said that changes at the individual level will seldom have significant implications for the total organisation. This is not true because a significance change at the individual level will have its repercussions on the group which, in turn, might influence the wider organisation. A manager who desires to implement a major change at the individual level, transferring an employee for instance, must understand that the change will have repercussions beyond the individual. (b) Group Level Changes Most organisational changes have their major effects at the group level. This is because most activities in organisations are organised on group basis. The groups could be departments, or informal work groups. Changes at the group level can affect work flows, job design, social organisation, influence and status systems, and communication patterns. Managers must consider group factors when implementing change. Informal groups can pose a major barrier to change because of the inherent strengths they contain. Formal groups can resist change, as exemplified by the resistance demonstrated by unions to the changes proposed by management. Because of the powerful influence that groups can have on individuals, effective implementation of change at the group level can frequently overcome resistance at the individual level. 6 (c) Organization Level Changes Change at this level involves major programmes that affect both individuals and groups. Decisions regarding these changes are generally made by senior management and are seldom implemented by only a single manager. Frequently they occur over long periods of time and require considerable planning for implementation. Example of these changes would be reorganisation of the organisation structure and responsibilities, revamping of employee remuneration system, or major shifts in an organisation’s objectives. Change at the organisational level is generally referred to as organization development. 1.5 TYPES OF CHANGE There are various areas within the organisational domain where changes can be brought about for operational enhancement of the organisation as well as desirable behaviour of members. The various types of changes that can have considerable impact on the organisational culture are: a) Strategic Change This is a change in the very mission of the organisation. A single mission may have to be changed to multiple missions. For example, when British Airways acquired a major part of U.S. Air, the culture of the entire organization had to be modified to accommodate various aspects of American organisational culture into the British organisational culture. b) Structural Change Decentralized operations and participative management style have seen more recent trends in the organisational structure. Since these structural changes shift the authority and responsibility to generally lower level management, it has a major impact on an organisation’s social climate and members have to be prepared to develop a team spirit as well as acquire skills to make on-the-spot decisions at points of operations. 7 c) Process-oriented Change These changes relate to technological developments, information processing, automation and use of robotics in the manufacturing operations. This means replacing or retraining personnel, heavy capital equipment investment and operational changes. This would affect the organisational culture and hence changes in the behaviour patterns of members. d) People-oriented Change Even though, any organisational change affects people in some form, it is important that the behaviour and attitudes of the members be predictable and in accordance with the expectations of the organization and be consistent with the mission and policies of the enterprise. These changes are directed towards performance improvement, group cohesion, dedication and loyalty to the organization as well as developing a sense of self-actualisation among the members. These can be developed by closer interaction with employees and by special behavioural training and modification sessions. 1.6 STEPS IN MANAGED CHANGE The first step in the change process is to identify the need for change and the area of change as to whether it is strategic change, process-oriented change or employeeoriented change. This need for change can be identified either through internal factors or through external forces that may be in place. Once this need is identified, the following steps can be taken to implement such change: 1. Develop new goals and objectives The managers must identify as to what new outcomes they wish to achieve. This may be a modification of previous goals due to changed internal and external environmental or it may be a new set of goals and objectives. 8 2. Select an agent for change The management must decide as to who will initiate and oversee this change. A manager may be assigned this duty or even outside specialists and consultants can be brought in to suggest the various methods to bring in the change and monitor the change process. 3. Diagnose the problem It is important to gather all pertinent data regarding the area or the problem where the change is needed. This data should be critically analysed to pinpoint the key issues. Then the solutions can be focused on those key issues. 4. Select methodology Because of natural resistance to change, it is very important to chart out a methodology for change which would be correct and acceptable to all. Member’s emotions must be taken into consideration when devising such methodology. 5. Develop a plan This step involves putting together a plan as to what is to be done. For example, if the company wants to develop and implement a flexitime policy, it must decide as to what type of workers will be affected by it or whether flexitime should be given to all members or only to some designated workers. 6. Strategy for implementation of the plan In this stage, the management must decide on the “when”, “where” and “how” of the plan. This includes the right timing of putting the plan to work, how the plan will be communicated to workers in order to have the least resistance and how the implementation will be monitored. 9 7. Implementation of the plan Once the right timing and right channels of communications have been established, the plan is put into action. It may be in the form of simple announcement or it may require briefing sessions or in-house seminars so as to gain acceptance of all the members and specially those who are going to be directly affected by the change. 8. Receive and evaluate feedback Evaluation consists of comparing actual results to the set goals. Feedback will confirm if these gaols are being met so that if there is any deviation between the goals and the actual performance outcomes, then corrective measures can be taken. 1.7 RESISTANCE TO CHANGE Resistance to change is understood to be a natural phenomenon. But not all change is resisted. In fact, if we look at any organisation closely we would probably find that more changes are accepted than resisted. Accepting the fact that people have a natural instinct to adapt to their environment is the first step towards effective management of change. It has the advantage of placing people in a more positive light, but also suggests that resistance to change is unnatural behaviour. If managers accept this principle, then they can proceed to analyse the situation to find the (unnatural) cause of resistance. Failure to understand this characteristic of resistance can cause many managers to attempt to run through changes rather than try to understand the sources of the resistance. Sources of resistance to change may be rational or emotional. Rational resistance occurs when people do not have the proper knowledge or information to evaluate the change. Providing information (in the form of data, facts, or other types of concrete information) reduces the resistance. Emotional resistance involves the psychological problems of fear, anxiety, suspicion, insecurity, and the like. These feelings are evoked because of people’s perception of how the change will affect them. 10 (a) Causes of Resistance All changes are not resisted. Some are wanted by the workers. For instance, if the workers have to stand before a machine throughout the shift, they will like the introduction of a new machine which will allow them to sit while working. Thus, resistance to change is offset by their desire to have better working conditions. Sometimes, people themselves want change and new experience as they are fed up with the old practices and procedures. Resistance to change is caused by individual’s attitudes which are influenced by many economic, psychological and social factors. 1. Economic Factors These factors relate to the basic economic needs of the workers like necessities of life, job security and safety. These factors are: (i) Workers apprehend technological unemployment. General new technology is expected to reduce the proportion of labour input and, therefore, people resist such change as it will affect their jobs security; (ii) Workers fear that they will be idle for most of the time due to increased efficiency by new technology; (iii) Workers may fear that they will be demoted if they do not possess the new skills required for the new jobs; and (iv) Workers resist the change of getting higher job standards which may reduce opportunity for bonus or pay incentive. 2. Psychological Factors These factors arise when workers perceive that factors relating to their psychological needs will be affected adversely by the proposed changes. These needs are sense of pride, achievement, self-fulfilment, etc. These factors are (i) Workers may not like criticism implied in a change that the present method is inadequate and unsuitable; 11 (ii) Workers may fear that there will be fewer opportunities for developing their personal skills because new work changes will do away with the need for much manual work. This will lead to reduction of their personal pride; (iii) Workers may apprehend boredom and monotony in the new jobs as a result of specialisation brought by the new technology; (iv) They may fear that harder work will be required to learn and adapt to new ideas; (v) Workers may resist a change because they do not want to take trouble in learning the new things; and (vi) Workers may not have the knowledge of entire change or they may be incapable of the implications of new ideas or methods. 3. Social Factors Individual do have certain social needs like friendship, belongingness, etc. for the fulfilment of which they develop informal relations in the organisation. They become members of certain informal groups and act as members of the group to resist change. The social reasons for resistance to change are: (i) New organisational set up requires new social adjustments which are not liked by people because these involve stresses and strains. This also means discarding old social ties which is not tolerable to the workers...
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