Chapter 11 - Organizational Change & Development

Forces for Change

Forces of Organizational Change: (Planned/Unplanned and Internal/External Change)

In the fast-changing business environment, organizations must learn to be more adaptable and flexible in facing
environmental challenges. Most organizational changes are implemented in a planned manner for realizing specific
objectives or goals. However, organizational change can be implemented in any one of four ways as described below:

a) Planned Internal Change

Planned internal change can be regarded as a strategic move by the organization, implemented with the objective of
changing the nature of the business itself or the way in which an organization is doing its business. This can be
administered in one of three ways:
 Changes in the Services or the Products : An organization usually goes ahead with the decision of a Planned
Internal Change, if the management decides to diversify its range of business, or a need is felt by the management
for providing a new direction to the business or reviving the business by adding new service or product lines. Such
a planned internal change will require a fair amount of pre-planning, effective coordination, and resource distribution
as well for meeting the objectives of change.
 Changing the Administrative Systems: Changes in the administrative systems are implemented or enforced by an
organization for enhancing administrative efficiencies, or for improving the company’s image or for gaining the
advantage of being a political power within an organization. The pressure to change the administrative systems
comes from the top level of the management (top-down approach). On the other hand, if there is a requirement for
changing the very nature of work itself in an organization (changing the technical core), bottom-upward approach
for the change is usually adopted. Previous studies have identified that organizations which are more mechanistic
instead of being organic in its approach, in other words, which are more centralized and formal in nature, tend to
achieve a greater degree of success in implementing administrative change.
 Changes in the organizational structure and size : Organizational restructuring or changes in the hierarchical
framework is introduced in an organization for the realization of pre-defined objectives or goals.

b) Planned External Change

Organizations as a system is governed by both internal factors as well as external factors of change. Various factors like
technological innovation and advancements in the communication and information processing field come under this
category. These factors are external in nature but somehow are introduced in an organization in a planned manner with the
objective of enhancing work efficiencies and improving the overall productivity.
 Technological Innovation: Rapid changes in technology have made it necessary for contemporary organizations to
alter the way they function. Technological development has altered the ways in which people handle their jobs. For
example, in the automobile industry, a large part of the design and manufacturing process is automated & depends
on Information Technology. Siemens (Germany) holds the credit for being the world’s first paperless office.
 Advancements in Communication and Information Processing : With the advancement in communication and
information processing technologies like satellite communication, fiber optic cables, wireless technology, networking
and other technologies, it has become easier and convenient for businesses to communicate with partners as well
as clients.

c) Unplanned Internal Change

Unplanned internal change can be regarded as a change which takes place within an organization not in a planned manner
or as a strategic intervention, but are introduced in an unplanned manner in response to either a change in the demographic
composition of an organization or due to performance gaps.
 Change in the Demographic Composition : With increasing number of women workforces joining the organization
and in addition to this older employee joining private sector jobs after completing their tenure in public sector or
government sector and also increasing composition of diverse workforce in organization’s as a result of
 globalization of worldwide economies, the demographic compositions of the workforce has undergone a sea of
change in the present scenario. The rapid change in the demographics will compel organizations to change.
 Performance Gaps: Performance gaps in an organization in the form of depleting profit margins or non-performance
of a product line or service in the market or slowdown in sales due to unexpected reasons, can compel an
organization to change. Research studies have proven that performance gaps act as propellants for organizational
innovations.

d) Unplanned External Changes

Two crucial factors like economic uncertainties and changes in the government regulations, play a crucial role in compelling
organizations to change.
 Governmental Regulation: Changes in government regulations influence the environment in which organizations
conduct and operate their businesses. Due to economic globalization and liberalization, governments enact laws
and regulations such as de-licensing and currency conversion, to help domestic organizations stay competitive and
achieve their expected profit margins.
 Global Economic Competition: Global economic conditions create competitive pressure on organizations and force
them to change their strategies for capturing a decent market share, achieving a winning edge in the international
marketplace and expanding customer base thru aggressive advertisement and communication campaigns. In the
era of globalization, the formidable challenge for organizations to stay ahead in the competitive race is to remain
innovative and to position itself as a unique brand.
It can be interpreted that managing organizational change is one of the most essential pre-requisites for adapting to
competitive challenges and transitioning from the present state of business to a desired futuristic course of action. It is vital
to develop and implement a plan of action for managing change successfully.

Processes for Planned Organizational Change

Planned Organizational Change

A planned change is a change planned by the organization; it does not happen by itself. It is affected by the organization
with the purpose of achieving something that might otherwise be unattainable or attainable with great difficulty. Through
planned change, an organization can achieve its goals rapidly. The basic reasons for planned change are:
 To improve the means for satisfying economic needs of members
 To increase profitability
 To promote human work for human beings
 To contribute to individual satisfaction and social well being

Organizational Change Process

The planned organizational change process may comprise, basically the three following steps:

1. Planning for Change - The first step in the process of change is to identify the need for change and the area of changes
as to whether it is strategic, process oriented or employee oriented change. This need for change can be identified either
through internal or external factors. Once this need is identified the following general steps can be taken:
a) Develop new goals and objectives. The manager must identify what new outcomes they wish to achieve. This may
be a modification of previous goals due to changed internal and external environment or it may be a new set of goals
and objectives.
b) Select an agent of change. The next step is to decide who will initiate and oversee this change. One of the existing
managers may be assigned or even sometimes specialists and consultants can be brought in from outside to
suggest the various methods to bring in the change and monitor the change process.
c) Diagnose the problem. The person appointed as agent of change will then gather all relevant data regarding the
problem or issue needing change. This data should be critically analyzed to pinpoint the key issues. The solutions
should address those key issues.
 d) Select Methodology. The next important step is to select a methodology for change; employee’s emotion must be
taken into consideration when devising such methodology.
e) Develop a plan. After devising the methodology, the next step will be to put together a plan as to what is to be done.
For example, if the management wants to change the promotion policy, it must decide as to what type of employees
will be affected by it, whether to change the policy for all the departments at once or to try it on a few selected
departments first.
f) Strategy for the implementation of the plan. In this stage, the management must decide on the ‘when’, ‘where’ and
‘how’ of the plan. This includes the right time of putting the plan to work, how the plan will be communicated to the
employees to have the least resistance and how the implementation will be monitored.

2. Assessing Change Forces - The planned change does not come automatically. There are many forces in individuals,
groups and organization which resist such change. The change process will never be successful unless the cooperation
of employees is ensured. Therefore, the management will have to create an environment in which change will be
amicably accepted by people. If the management can overcome the resistance, change process will succeed. In a group
process, there are always some forces who favor the change and some forces that are against the change. Thus, an
equilibrium is established is maintained. Kurt Lewin calls in the “field of forces”. Lewin assumes that in every situation
there are both driving and restraining forces which influence any change that may occur. Driving forces are those forces
which affect a situation by pushing in a particular direction. These forces tend to initiate the change and keep it going.
Restraining forces act to restrain or decrease the driving forces. Equilibrium is reached when sum of the driving forces
equals the sum of the restraining forces. There may be three types of situations, as both driving and restraining forces
are operating:
a) If the driving forces far out weight the restraining forces, management can push driving forces and overpower
restraining forces.
b) If restraining forces are stronger than driving forces, management either gives up the change program or it can
pursue it by concentrating on driving forces and changing restraining forces into driving ones or immobilizing them.
c) If driving and restraining forces are fairly equal, management can push up driving forces and at the same time can
convert or immobilize restraining forces. Thus, to make the people accept the changes, the management must push
driving forces and convert or immobilize the restraining forces.

3. Implementing the Change - Once the management is able to establish favorable conditions, the right timing and right
channels of communication have been established the plan will be 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
specify those who are going to be directly affected by the change. After the plan has been implemented there should be
evaluation of the plan which comprises of comparing actual results to the objectives. Feedback will confirm if these goals
are being met so that if there is any deviation between the goals and actual performance, corrective actions can be
taken.

Lewin’s 3 Stage Organizational Change Model

Any organizational change whether introduced through new structural design, technology or training program, basically
attempts to make employees change their behavior. Unless the behavioral patterns of the members change, the change will
have little impact on the effectiveness of the organization. Behavioral changes are not expected to happen overnight. A
commonly accepted model for bringing about changes in people was suggested by KURT LEWIN in terms of a three
phase’s process namely:

1. Unfreezing - Unfreezing means that old ideas and attitudes are set aside to allow new ideas. It refers to making people
aware that the present behavior is inappropriate, irrelevant, inadequate and hence, unsuitable for the changing demands
of the current situation. According to EDGAR SCHIEN the following 4 elements are necessary during this phase:
a) The physical removal of the individuals, being changed from their accustomed routines, sources of information and
social relationships.
b) The undermining and destruction of social support.
c) Demeaning and humiliating experience to help individuals, being changed, to see their old attitudes or behavior as
unworthy and think to be motivated to change.
 d) The consistent linking of reward with willingness to change and of punishment with willingness to change.
Unfreezing thus involves discarding the orthodox and conventional methods and introducing dynamic behavior,
most appropriate to the situation. People are made to accept new alternatives.

2. Changing - Unlike unfreezing changing is not uprooting of the old ideas, rather the old ideas are gradually replaced by
the new ideas and practices. In changing phase new learning occurs. The necessary requirement is that various
alternatives of behavior must be made available in order to fill the vacuum created by unfreezing phase. During the
phase of changing, individuals learn to behave in new ways, the individuals are provided with alternatives to choose the
best one. KELMAN explains changing phase in terms of the following elements:
a) Compliance: it occurs when individuals are forced to change either by reward or by punishment.
b) Internalization: it occurs when individuals are forced to encounter a situation and calls for new behavior.
c) Identification: it occurs when individuals recognize one among various models provided in the environment that is
most suitable to their personality.

3. Refreezing - Refreezing is on the job practice. The old ideas are totally discarded and new ideas are totally accepted.
Refreezing reinforces attitudes, skills and knowledge. The individual practices and experiments with the new method of
behavior and sees that it effectively blends with his other behavioral attitudes. FERSTER and SKINNER have in this
connection, introduced the main reinforcement schedules namely: Continuous and Intermittent reinforcements. Under
continuous reinforcement individuals learn the new behavior within no time. And intermittent reinforcement on the other
hand, consumes a long time but it has the greatest advantage of ensuring a long lasting change.

Organization Development

What Is Organization Development?

Organization development (OD) is an effort that focuses on improving an organization’s capability through the alignment of
strategy, structure, people, rewards, metrics, and management processes. It is a science-backed, interdisciplinary field
rooted in psychology, culture, innovation, social sciences, adult education, human resource management, change
management, organization behavior, and research analysis and design, among others. Organization development involves
an ongoing, systematic, long-range process of driving organizational effectiveness, solving problems, and improving
organizational performance. It is also one of the capabilities identified in the Talent Development Capability Model.

What Is the Difference Between OD and Human Resources (HR)?

Many OD interventions relate to human resource management and talent management. While HR initiatives focus on
people practices, organization development zooms out to consider multiple inputs and tools that cut across the breadth and
depth of the organization. OD is more holistic and strategic whereas HR is operational. Like talent development, sometimes
OD functions are under the HR umbrella.

OD Strategy: Five Phases

Talent Development (TD) professionals should integrate OD skills with performance improvement, and talent management
solutions focused on increasing organizational effectiveness. The process used by OD practitioners to design and
implement organizational development strategies is structured in five phases:
1. Entry - represents the initial contact between consultant and client in which they present, explore, and identify the
problem, opportunities, or situation. The output of this phase is an engagement contract or project plan that establishes
mutual expectations and preliminary agreements about project scope (such as time, money, and resources).
2. Diagnosis (assessment) - represents the fact-finding phase. It is a collaborative data gathering process between
organizational stakeholders and the consultant in which relevant information about the problem is gathered, analyzed,
and reviewed.
3. Feedback - represents the return of analyzed information to the client or client system; exploration of the information for
understanding, clarity, and accuracy; review of preliminary agreements about scope and resource requirements; and
the beginning of ownership of data by the client. The output of this phase is typically an action plan that outlines the
change solutions to be developed, along with defined success indicators based on the information and data analysis.
4. Solution - represents the design, development, and implementation of the solution or set of solutions meant to correct
the problems, close gaps, improve or enhance organizational performance and effectiveness, or seize opportunities.
Outputs may include a communication plan, a role-and-responsibility matrix, a training plan, a training curriculum, an
implementation plan, a risk management plan, an evaluation plan, or a change management plan.
5. Evaluation - represents the continuous process of collecting formative and summative evaluation data to determine
whether the initiative is meeting the intended goals and achieving defined success indicators. Outputs generally include
an evaluation report with recommendations for continuous improvement.

Resistance to Change

What Is Resistance to Change?

Resistance to change is the act of opposing or struggling with modifications or transformations that alter the status quo. This
resistance can manifest itself in one employee, or in the workplace as a whole. It is the unwillingness to adapt to altered
circumstances. It can be covert or overt, organized, or individual. Employees may realize they don't like or want a change
and resist publicly, and that can be very disruptive. Employees can also feel uncomfortable with the changes introduced and
resist, sometimes unknowingly, through their actions, their language, and in the stories and conversations, they share in the
workplace. In a worst-case scenario, employees can be forceful in their refusal to adopt any changes, bringing confrontation
and conflict to your organization.

How Resistance to Change Works

Resistance to change is evident in actions such as: Criticism, Nitpicking, Snide comments or sarcastic remarks, Missed
meetings, Failed commitments, Endless arguments and Sabotage. When employees are poorly introduced to changes that
affect how they work, especially when they don't see the need for the changes, they may be resistant. They may also
experience resistance when they haven't been involved in the decision-making process. Resistance to change can intensify
if employees feel they have been involved in a series of changes that have had insufficient support to gain the anticipated
results. They also become weary when changes happen too frequently, becoming a flavor-of-the-month instead of strategic
action. Whatever causes the resistance to change can be a big threat to the success of your business and can affect the
speed at which your organization adopts an innovation. It affects the feelings and opinions of employees at all stages of the
adoption process. Employee resistance also affects productivity, quality, interpersonal communication, employee
commitment to contribute, and the relationships in your workplace.

Spotting Resistance
Note whether employees are missing meetings related to the change. Late assignments, forgotten commitments, and
absenteeism can all be signs of resistance to change. Some employees will publicly challenge the change, its purpose, or
how it is unfolding. An employee who has a higher position and more seniority may be more resolute in their resistance.
Less well-positioned employees may resist collectively in ways such as a work slowdown, staying home from work,
deliberately misunderstanding directions, and, in rarer cases, organizing to bring in a labor union. Employees also resist
change by failing to take action to move in the new direction, quietly going about their familiar and accustomed business in
the same ways as always, withdrawing their interest and attention, and failing to add to conversations, discussions, and
requests for input. Covert resistance to change can damage the progress of your desired changes seriously as it is more
difficult to deal with the resistance that isn't visible, demonstrated, or expressed publicly.

Minimizing Employee Resistance to Change

Managing resistance to change can be a challenge. Be mindful that you aren't the reason behind the resistance. You can
cause serious resistance when you repeatedly introduce change to your organization. Organizations are constantly
evolving, which means change is inevitable. But introducing changes without consulting the people they affect, explaining
the need for change, and providing support through the process will alienate your employees and drag down morale.
Something as simple as listening to how employees talk about the change in meetings and hall conversations can tell you a
lot about any resistance they are experiencing. Some employees may come directly to you for help navigating the changes.
That's a great opportunity to listen to their concerns. When employees believe their input is considered, they are less likely
to experience resistance to change. Smart employers recognize this and collect input before employees are asked to make
any changes. In an organization that has a culture of trust, transparent communication, employee involvement and
engagement, and positive interpersonal relationships, resistance to change is easy to see—and also much less likely to
occur. In such a work environment, employees feel free to tell their boss what they think and have open exchanges with
managers about how they think the changes are going. They are also more likely to share their feelings and ideas for
improvement. In a trusting environment, employees think about how to make the change process go more smoothly. They
are likely to ask their managers what they can do to help. When a change is introduced in this environment, with a lot of
discussions and employee involvement, resistance to change is minimized. Resistance is also minimized if there is a
widespread belief that the changes are needed and will have a positive effect. It helps to present your reasoning for why a
change is necessary instead of withholding that information. Taking employee feedback into account can help improve the
chances of success for your change.

Managing Successful Organization Change and Development

The ultimate goal of organizational change and development is to provide a consistent method to follow when change that
have significant impact in the business are required to maintain and improve the production environment on a daily basis .
The approach helps to identify groups and personnel that must be involved in the change process as well as their
responsibilities. Effective management helps to define the artifacts to be used and establishes policies on how change in
question is to be implemented. The management also takes into account, the consideration and essence of effective
communication of the change to the targeted employee working within the company.

Change happens when an organization changes its overall strategy with hope that the new approach will help steer the
organization up the ladder of success. Change can also occur when an organization decides to remove a major section or
practice of its business culture or completely change the nature of its operation. CEOs, Managers and top leaders in the
organization are always at the forefront to make the necessary efforts to implement successful and significant changes.
Some of these top-level leaders are good at identifying and implementing changes, while others always try, struggle, face
employee resistance to change and new developments and fail eventually.

Resistance to change can be the ultimate reason why change can never happen. More often than not, top-level leaders do
not make employees understand the need for change hence the high level of resistance. Resistance to change can come
from almost every employee, including the most loyal ones in your organization. If they are not comfortable with the
proposed developments and change, they will definitely resist and there are good reasons why. Most leaders fail to bring
out the essence of change, its importance and its effect to the general lifeblood of the business hence the resistance from
even the most loyal employee the business may have had for years.

Change and development should be undertaken with the purpose of improving the whole or part of the organization, not to
instill job insecurities and uncertainties among employees. The main goal should be to improve the work environment, train
employees to adapt to the new work environment and focus on training them effectively so that they remain productive in
the organization and make the business a success not only within its surrounding but also around and beyond its settings.
The change and development must be communicated beforehand so that employees are aware of the developments that
are schedule to take place, making them ready to prepare for the transition.

CEOs and top level management should understand that change and development is about the entire organization and that
includes every person related to the organization. For instance, if employees are left out in the decision making process
regarding the change and the new development that is to happen soon, it is highly likely that the majority will pose
resistance because they are uncertain of the unknown. Understanding that employees are part of the change is the first
step to managing disappointments, failure and resistance to the change. When employees take part in the change and
development process, they become aware of the situation and will be willing to offer their support if the new development is
for the good of the organization.
5 Elements for Managing Organizational Change and Development
There are five different elements for managing organizational change and development. These elements include motivating
change, creating vision, developing political support, managing the transition and sustaining the momentum. The five
elements play the major role in change and development management within an organization. They should therefore be
observed for successful implementation of change and new developments.
1. Motivating change - This can be considered the topmost process in the entire lifecycle of change and development. This
element considers two processes and they include creating readiness for change and development and overcoming
employee resistance to the same. Creating readiness for change involves sensitizing the organization to pressure for
change for the good reason of improving the productivity of the organization and making it a better workplace for the
employees. Creating a readiness for change helps to identify the gaps between desires and actual state. It should
therefore convey positive expectation of the change. The next part of this element is managing the resistance to change
and development. To manage resistance effectively, the CEOs and top-level management group should involve all the
members within the organization in planning and decision making, communicate about the change and provide empathy
and the required support that will help every member to adapt to the change with ease.
2. Creating a vision - The best way to start creating a vision is to discover and describe the core ideologies of the
organization. The values should provide information to members on what is important in the organization and the
reason for the existence of the organization. The next step is to construct the envisioned future; the bold and value
outcomes and the desired future state.
3. Developing political support - You have to assess the power of the change when it comes to developing political
support. Proceed to identifying the key stakeholders and then understand how you are going to influence the event of
change.
4. Managing the transition - Change and development Management must include a section that will help in managing the
transition. There must be a structure that outlines activity planning, commitment planning and general management to
the transition. It must be a slow process because change and development can never be implemented overnight.
Therefore, identify the roadmaps for change and state the reason why prefer following that path. You should also know
whose support you need and where the people whose support is required stand. Come up with an effective strategy
that will influence their behavior in a positive manner, so that they support change instead of showing resistance to the
change. When it comes to management structure, identify the most suitable arrangement of people and the power that
will help to drive change.
5. Sustaining the momentum - Provide resources for change build a suitable support system for change agents. Develop
new competencies and skills that can help to reinforce new behavior in the organization. Sustaining the momentum is
the last thing you need to consider when it comes to Managing Organizational Change and Development.