ORGANISATIONAL

BEHAVIOUR
ORGANIZATIONAL
CHANGE

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 Definition & Meaning
Organizational Change
According to Cambridge Dictionary, organizational change
is:
“A process in which a large company or organization
changes its working methods or aims, for example in
order to develop and deal with new situations or
markets.”

Organizational change refers to the alteration of

structural relationships and roles of people in the
organization. It is largely structural in nature.

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 Forces for Change
Force Examples
Nature of the workforce More cultural diversity; Aging population;
Increased immigration and outsourcing
Technology Faster, cheaper and more mobile computers
and handheld devices; Emergence and
growth of social networking sites; Deciphering
of human genetic code
Economic shocks Rise and fall of global housing market;
Financial sector collapse; Global recession
Competition Global competitors; Mergers and
consolidations; Increased government
regulation of commerce
Social trends Increased environmental awareness;
Liberalization of attitudes towards gay, lesbian
and transgender employees; More
multitasking and connectivity
World politics Rising health care costs; Negative social
attitudes toward business and executives;
Opening of markets in China 3
 Planned Change
• Planned change – Change activities that are intentional and
goal oriented

• Goals of planned change –

(1) To improve the ability of organization to adapt to changes

in its environment

(2) To change employee behavior

• Change agents - Persons who act as catalysts and assume

the responsibility for managing change activities

• Change agents see a future for the organization that others

have not identified

• They are able to motivate, invent and implement the vision. 4

 Sources of Resistance to Change
Individual Sources –
1. Habit – To cope with life’s complexities, people rely on habits
or programmed responses. But when confronted with change,
this tendency to respond in accustomed ways becomes a
source of resistance.
2. Security – People with a high need for security are likely to
resist change because it threatens their feelings of safety.
3. Economic factors – Changes in job tasks or established work
routines can arouse economic fears if people are concerned
that they won’t be able to perform the new tasks or routines to
their previous standards, especially when pay is closely tied to
productivity.
4. Fear of the unknown – Change substitutes ambiguity and
uncertainty for the unknown.
5. Selective information processing – Individuals are guilty of
selectively processing information in order to keep their
perceptions intact. They hear what they want to hear, and
they ignore information that challenges the world they’ve
created.
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 Sources of Resistance to Change
Organizational Sources –
1. Structural inertia – Organizations have built-in
mechanisms such as their selection processes and
formalized regulations to produce stability. When an
organization is confronted with change, this structural
inertia acts as a counterbalance to sustain stability.
2. Limited focus of change – Organizations consist of a
number of interdependent subsystems. One can’t be
changed without affecting the others. So limited changes
in subsystems tend to be nullified by the larger system.
3. Group inertia – Even if individuals want to change their
behavior, group norms may act as a constraint.
4. Threat to expertise – Changes in organizational patterns
may threaten the expertise of specialized groups.
5. Threat to established power relationships – Any
redistribution of decision-making authority can threaten
long-established power relationships within the
organization.
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 Overcoming Resistance to Change
1. Education and Communication –
- it fights the effects of misinformation and poor
communication
- can help “sell” the need for change by packaging it
properly
2. Participation – involvement can reduce resistance,
obtain commitment and increase the quality of change
decision
- negatives – potential for a poor solution & great
consumption of time
3. Building support and commitment – employees accept
change when they are committed
4. Develop positive relationship – people are more willing to
accept changes if they trust the managers implementing
them
5. Implementing changes fairly – minimizes negative
impact
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 Overcoming Resistance to Change
6. Manipulation and Cooptation – Manipulation refers to
covert influence attempts.
- Cooptation combines manipulation and participation.
- relatively inexpensive ways to gain the support of all
concerned
- may backfire, if the targets become aware they are
being tricked and used.
7. Selecting people who accept change – people having
positive attitude about change are open to experience,
are willing to take risks and are flexible in their behavior
- it is possible to select teams that are more adaptable.
Such teams are strongly motivated by learning about
and mastering tasks are better able to adapt to changing
environments.
8. Coercion – application of direct threats or force on the
resisters
- e.g. – pay cut, threats of transfer, loss of promotions,
negative performance evaluations, poor letter of
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recommendation
 Approaches to managing Organizational Change
Lewin’s Three-Step Model –

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 Approaches to managing Organizational Change
Kotter’s Eight-Step Plan for Implementing Change –

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 Action Research
Action research is a change process based on the
systematic collection of data and selection of a change
action based on what the analyzed data indicate.

- Scientific methodology for managing planned change.

- Consists of five steps –
(i) Diagnosis – gathering information about problems,
concerns and needed changes from members of the
organizations.
- change agent asks questions, reviews records &
interviews employees and listens to their concerns.
(ii) Analysis – change agent synthesizes the information
into primary concerns, problem areas and possible
actions.
(iii) Feedback – sharing the findings of step 1 & 2 with
the employees.
- employees with the help of change agent develop
action plans for bringing about any needed change 11
 Action Research
(iv) Action – employees and change agent carry out the
specific actions they have identified to correct the
problem.
(v) Evaluation – of action plan’s effectiveness, using the
initial data as benchmark.

Benefits of Action Research –

1. It is problem focused.
2. Since action research engages employees thoroughly in
the process, it reduces resistance to change.

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 Organizational Development
Organizational Development (OD) is a collection of
change methods that try to improve organizational
effectiveness and employee well-being.

- OD methods value human & organizational growth,

collaborative & participative processes and a spirit of
inquiry.
- Values underlying OD efforts –
(1) Respect for people
(2) Trust and support
(3) Power equalization
(4) Confrontation
(5) Participation

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 OD Techniques / Interventions for facilitating
change
Sensitivity Training – also called laboratory training,
encounter groups and T-groups
- Changing behavior through unstructured group
interaction.
- Members brought together in free & open environment to
express ideas, beliefs & attitudes without taking any
leadership role.

Survey Feedback – Tool for assessing attitudes held by

organizational members, identifying discrepancies
among member perceptions and solving these
differences.

Process Consultation – A meeting in which a consultant

assists a client in understanding process events with
which he or she must deal and identifying processes that
need improvement.
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 OD Techniques / Interventions for facilitating
change
Team Building – uses high-interaction group activities to
increase trust and openness among team members,
improve coordinative efforts, and increase team
performance.

Intergroup Development – OD efforts to change the

attitudes, stereotypes, and perceptions that groups have
of each other.

Appreciative Inquiry – An approach that seeks to identify

the unique qualities and special strengths of an
organization, which can then be built on to improve
performance.
- AI focuses on an organization’s successes rather than
its problems.
- AI process consists of 4 steps – discovery, dreaming,
design and discovery
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 Creating a Culture for Change
I] Stimulating a Culture of Innovation –
Innovation is a new idea applied to initiating or improving a
product, process or service.

Sources of Innovation –
(1) Structural – Organic structures positively influence
innovation. Organic organizations facilitate the flexibility,
adaptation and cross-fertilization that make the adoption
of innovations easier.
- Long tenure in management is associated with
innovation.
- Abundance of resources allows an organization to
afford to purchase innovations, bear the cost of
instituting them and absorb failures.
- Interunit communication is high in innovative
organizations.

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 Creating a Culture for Change
(2) Cultural – Innovative organizations tend to have similar
cultures.
- They encourage experimentation.
- They reward both successes and failures.
- They celebrate mistakes.

(3) Human Resources – Innovative organizations actively

promote training and development of their members so
they keep current, offer high job security so employees
don’t fear getting fired for making mistakes, and
encourage individuals to become champions of change.

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 Creating a Culture for Change
II] Creating a Learning Organization –
Learning Organization – An organization that has
developed the continuous capacity to adapt and change.

Characteristics of Learning Organization –

(1) There exists a shared vision that everyone agrees on.
(2) People discard their old ways of thinking & the standard
routines they use for solving problems or doing their
jobs.
(3) Members think of all organizational processes,
activities, functions & interactions with the environment
as part of a system of interrelationships.
(4) People openly communicate with each other without
fear of criticism or punishment.
(5) People sublimate their personal self-interest &
fragmented departmental interests to work together to
achieve the organization’s shared vision.
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 Creating a Culture for Change
Learning organizations use double-loop learning.
- They correct errors by modifying objectives, policies &
standard routines.
- Double-loop learning challenges deeply rooted
assumptions & norms.
- It provides opportunities for radically different solutions to
problems and dramatic jumps in improvement.

Managing Learning –
• Establish a strategy – make explicit its commitment to
change, innovation & continuous improvement.
• Redesign the organization’s structure – Flattening the
structure, eliminating/combing departments & increasing
the use of cross-functional teams reinforces
interdependence & reduces boundaries.
• Reshape the organization’s culture – rewarding people
who take chances & make mistakes.
- Management needs to encourage functional conflict. 19
 Stress Management
• Stress is a physical, mental or emotional factor that
causes bodily or mental tension.

• According to Holyrord and Lazarus, Psychological stress

requires a judgement that environmental factors and/or
internal demands exceed the individual resources that
managing them.

• A reaction of a particular individual to a stimulus event

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Factors causing Stress in Organization
• Life Stressors
• Organizational Stressors:
i. Physical demand
ii. Task Demand
iii. Role Demand
iv. Interpersonal Demand

• Environmental Stressors
i. Political Uncertainties
ii. Economic Uncertainties
iii. Technological Uncertainties
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 Impact of Stress
• Chronic Stress leads to physical ailments

• Extreme mental problems such as depression, anxiety,

Sleep problem etc.

• Emotional Problems like frustration, irritability, anger,

loneliness moodiness etc.

• Behavioral Problems of nervousness as well as habitual

problems of smoking, alcohol or drug consumption.

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 Components of Stress
• Biological Component: The bodily reaction that occurs
due to stress. The various hormonal changes that occur
within the body.
• Learned Component: This component is related to
behavioral changes that are learned by the person in
dealing with stress. Learning to predict when a stressor
will come, allows the individual to relax, when the
stressor is absent.
• Cognitive Component: Richard Lazarus developed the
theory about the role of cognitive factors in stress.
• The individual appraises the situation in two stages to
determine the magnitude of the stress response as well
as the coping strategies to be employed.
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 Signs of Stress
• Continued signs of stress leads to the stage of
exhaustion, in which the body’s resources are drained
and the stress hormones are depleted.
• Emotional Signs: Anxiety, Apathy, irritability, mental
fatigue.
• Behavioral Signs: Avoidance of responsibility, extreme or
self destructive behaviour, self neglect, poor judgement.
• Physical Signs: Excessive worry about illness, frequent
illness, exhaustion. Over use of medicines, physical
ailments.

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 Organizational Approaches to manage
Stress
• Wellness Programs and Institutional Programs
• Redesigning Stressful Jobs
• Goal Settings
• Training
• Removal of Rotational Shifts
• Increasing Employee Involvement
• Organizational Communication
• Health Promotional Programmes
• Sabbatical Leaves

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Individual Approaches to manage Stress
• Exercise
• Relaxation
• Time Management
• Development of support groups

• Stress management encompasses a variety of

techniques that can be use like Arousal Reduction,
Cognitive Restructuring and behavioural-skill training.

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 Developing a learning Organization
• A learning organization is the term given to a company
that facilitates the learning of members and continuously
transforms itself.
• The learning organization concept was coined through
the work of Peter Senge and his colleagues. It
encourages organizations to shift to a more
interconnected way of thinking. Organizations should
become more like communities that an employee can
feel a commitment towards, which will make them work
harder.

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 Features of learning Organization

• Systems Thinking
• Personal Mastery
• Mental Models
• Shared Vision
• Team Learning

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 Subsystems of learning Organization
• Organization: There is an inspiring vision for learning and
the organizational learning strategy that clearly
communicates that learning is critical to organizational
success.
• People: All employees make frequent use of a range of
tools, methods and approaches for learning and
collaborating with others.
• Knowledge: Important knowledge is easily accessible to
people who need and use it.
• Technology: Information and communication technologies
facilitate bit do not drive or constrain knowledge
management and learning in the organization.

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