Organizational change

Meaning: Change refers to any alteration that occurs in total work environment. Generally people are accustomed to a well established way of life and any variation in or deviation from that life may be called change. In other words Change is any alteration occurring in the work environment that affects the ways in which employees must act. Definition: organizational Change may be defined as the adoption of a new idea or behavior by an organization. It is a way of modifying an existing organization. The purpose of undertaking such modification is to increase organizational effectiveness. (Daft) Change is concerned with making things different (Stephen P. Robbins) organizational change is the movement of an organization away from its present state and towards some desired future state to increase its effectiveness (J.M. George & G.R. Jones)

Factors in organizational change

Organizational change may be grouped into two categories: 1) Internal forces 2) External forces
External forces

Technological changes

Changes in marketing conditions

Social changes

Political and legal changes

Internal forces
Changes in managerial personnel Deficiency in existing organization Employee needs and values

Increased size

Technological change: The rapid change in the technology force the organization to change accordingly otherwise it will become weak and less competitive. When the organisation adopts a new technology its work structure is affected and a new equilibrium has to be established. Technological changes are responsible for changing the nature of the jobs performed at all levels in the organisation. Knowledge explosion, more particularly the computer technology and automation have made a remarkable impact on the functioning of organisation in the recent times.

 Changing market situation: Marketing conditions are no more static. The Market is flooded with new products and innovations everyday. Competition for the new products, designs, changes in quality is growing at an exponential pace. The needs, desires, expectations of customers, and income disposal for a product changes frequently. Due to the growing competition and rapid changes in buyers attitude force the organisations to bring those products which meet buyers requirements. All these factors put great pressure on the modern organisations to change their marketing strategies. If the organisations are to survive they have to realign themselves with the new situation.

 Social changes: Because of spread of education, knowledge explosion and governments efforts, social changes are taking place at a fast speed these social changes affect the behavior of people in the organisation. Therefore, it is required to make adjustment in its working so that it matches with people Political and legal changes: Political and legal factors broadly define the activities which an oganisation 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.

Internal factors
Increased size: Increased size is followed by major shifts in internal structure (increased specialization, growing complexity etc). As organisation prosper and grow in size, they generate more resources Change in Managerial Position: Besides environmental changes, there is a change in managerial personnel. Old managers are replaced by new managers which is necessitated because of retirement, promotion, transfer or dismissal. Each new manager brings his own ideas and way of working in the organisation, he usually begins by examining the structure below him to see whether it corresponds to his ideas . If it is not so, he indulges in making new changes. Deficiency in Existing Organisation: sometimes, changes are necessary because of deficiency in the present organisatioal arrangements and processes. These deficiencies may be in the form of unmanageable span of management, large number of managerial levels, lack in coordination between various departments, obstacles in communication, multiplicity of committees, lack of uniformity in policy decisions, lack of cooperation between line and staff and so on

Employee needs and values: Effective organisations have to tune their policies and procedures in line with employee needs and values. Attractive financial incentives, challenging assignments, vertical growth opportunities are all part of the change process. Performance gaps: when there is a gap between set targets and actual results in terms of market share, profits and employee productivity- its time to change, innovate and go ahead. If companies do not change, they may go off the track and reach a dead end too soon, like success, thus, disappointing performance can be a stimulus for change.

process for change

Unfreezing: Means that old ideas and practices needs to be cast aside which might be inappropriate, irrelevant or inadequate to the changing demands of the situation, so that new ones can be learned. Just as a farmer must clear a field before planting new seeds, so must a manager help employees clear their minds of old roles and old purposes. Schein has suggested some measures which are quite helpful in undertaking unfreezing process: 1) The physical removal of the individual being changed from their accustomed routines, sources of information, and social relationship. 2) Demeaning and humiliating experiences to help individuals to see their old attitude or behavior as unworthy and think to be motivated to change. 3) The consistent linking of reward with willingness to change and of punishment with unwilling to change. Changing: It is the step in which the new ideas and practices are learned. This process involves helping an employee think, reason, and perform in new ways. It can be a time of confusion, disorientation, overload. Smith has provided guidelines for effective change

Contd.
1) Recognize that the primary purpose of change is to improve performance level 2) Encourage improvisation, team performance, and coordinated initiatives. 3) Ensure that people see how they fit into the organisational picture. 4) Encourage learning by doing and provide training for performance. 5) Use positive energy, meaningful language, and courageous Refreezing: Refreezing means that what has been learned is integrated into actual practice. At this stage, the individuals internalize the new beliefs, feelings, and behavior learned during the changing phase. Often there is a tendency that individuals revert back gradually to their old behavior, which they were displaying before the change, in the absence of suitable reinforcement. Therefore, reinforcement is necessary for the internalization of new behavior

Resistance to change
In the management of change effectively, the managers face the problem of resistance to change. People tend to resist many types of change because new habits or sacrifices are required. Resistance to change involves employees behavior designed to discredit, delay or prevent the changes introduced for the development of an organisation. Employees resist because they are afraid of their job security, working conditions, status and many other factors. They complain about the ineffectiveness of changes which may harm them more than benefiting the organisation, because they establishes an equilibrium and try to maintain that. Any change disturbs this equilibrium and therefore there is a tendency to resist the change.

Factors in resistance to change

1) a) b) c) 2) a) b) c) 3) a) b) c) Economic factors: Fear of economic loss Skill obsolescence Reduced opportunities for incentives Personal factors: Fear of unknown Ego defensive Status quo Organisational issues: Threat to power and influence Stability of system Resource Limitation

Economic factors
Fear of economic loss: people feel that new changes would bring some loss to their promotional avenues or salary. If computer science has become an essential qualification for promotion, the existing employees having no knowledge of computers will surely resist. Reduced opportunity for incentive: employees are generally offered incentives linked to their output in the form of incentive schemes. All these are well established in the old system. Whenever there is change, people may feel that in the new system, they will have lower opportunity to earn incentive as the new system requires additional skills. Skill obsolescence: change may render existing employee skills and knowledge obsolete, because a change is generally meant for better methods of working which may involve new techniques, technology etc. If employee feel that they do not possess a requisite skills that are currently in demand, the resist change.

Psychological factors
Fear of unknown: Change is resisted often because of its unknown consequences. Whenever people do not know exactly what will be in a change, happen they are likely to resist. For example, a bank employee may resist to posting to rural branch because of the anxiety of unknown area. Status quo: people like status quo because they have adjusted to the demand of a job over a period of time. Change would render all such experience, knowledge and learning somewhat useless. When introduced change would require people to learn new or difficult ways of doing things. Self interest and ego defensive: Employee typically resist a change as they believe it will take away something of value. A proposed change in job design, structure or technology may lead to a perceived loss of power, prestige or company benefits.

Threat to power and influence: some people consider change as a potential threat to their position and influence in the organisation. Every managerial cadre has a certain power. They enjoy power with the established hierarchy. Any reallocation of power disturbs the established norms. Snatching power of authority from them disturbs them. So, they resist change. Stability of system: The organisation may design a system through which it may derive many benefits. The system is stabilized and any change may be perceived a threat by the organisation itself. For example, a bureaucratic organisation has certain fixed rules, prescribes rigid authority relationships, and institutes reward and punishment system. If the changes required in these aspects, the organisation may not bring it easily because it is accustomed to a particular system. Resource Limitation: No, doubt, the organisation has to adopt to its environment but the adaptation has its own cost. If the organisation is not fully equipped for meeting such demands, it may not be possible for the organisation to bring necessary change. For example, if new technology is adopted, it will require resources to procure machine, building, training for its personnel, and commensurate expenses on other items also

Overcoming Resistance to Change

Education and Communication: One of the easy way to overcome resistance to change is to help employees understand the true need for a change as well as the logic behind it. Tell them clearly as to what is going on to occur and why to dispel their fears. To this end, a manger should specifically explain:i) What the change is about ii) When it is to be introduced iii) How it will be implemented iv) Why the change is required v) What is the basic purpose of change vi) How the change is going to help them when employees realize the need for change and understand the logic behind it, they tend to accept it easily. However, it is a time consuming process. Managers have to explain everything patiently in order to gain acceptance from employees.

Participation and involvement: Participation is another key concept in gaining acceptance. If people participate in what is happening, they will be more likely to go along. They get a chance to express their opinions freely, get their doubts clarified and understand the perspective of others. The fundamental idea in this process is to encourage the people to say something about any aspect of the change. As this process goes, the level of resistance to change tends to decrease, understanding of change increases, and the personal involvement in the change increases.

Facilitation and Support: The client system should be prepared to face the effects of the planned change. This can be done by facilitating, retraining and providing staff development programme which will help the teachers acquire new skills to cope with the change. Staff development programmes can be in the form of in-service workshops or seminars.

Negotiation: During negotiation, the change agent should democratically and in a friendly manner campaign for change. Discussion should be held with those opposed to change. The employees should realize that their rights, welfare and views are respected. The planned change is thus supported. Coercion: This method involves using force and threats on the resisters of change. These can be in the form of threats of transfers, negative performance appraisals, loss of promotion or a poor letter of recommendation. The advantage of this method is that change is implemented quickly.