Notes for Organisational Development of BBM II sem bangalore university

1. 14-1

2. 14-2
Organizational ChangeOrganizational Change
 Organizational change is the process by which
organization move from their present state to some
desired future state to increase effectiveness.
 When an organization system is disturbed by some
internal or external forces change frequently occur or any
alteration which occur in the overall work environment of
an organization.

3. 14-3
CHARACTERSTICS OF Organisational changeCHARACTERSTICS OF Organisational change
 It is vital to avoid stagnation
 It is a process not an event
 It is normal and constant
 Change may be reactive or proactive.
 It is fast and will become more fast due to technology
 It can be directive i.e Top to Bottom Or participative :
Involving all the employees
 It will be Interdependent

4. 14-4
The Evolution of StarbucksThe Evolution of Starbucks
Exploring Behavior in Action
In the beginning they had only just a shop that
sold some selected coffee beans.
As Starbucks growing, they realized that the
informal techniques were not sufficient and
needed to have a more formalized with people
and places.
Now Starbucks was the biggest coffee chain
network in the world with more than 15000
shops in over 44 countries. And they grown too
fast.
They adopting the Italian culture and make some
important changes in organization.
Howard Schultz
Dave Olsen
Dawn Pinaud

5. 14-5

6. 14-6
Change ForcesChange Forces
INTETRNAL
FORCES
Work force
Managerial
personnel
Management
structure
Avoid developing
inertia
ExTERNAL
FORCES
Political forces
Economic
condition
Social changes
Technology
Marketing
conditions
ChANgE
FORCES

7. 14-7
INTERNAL FORCESINTERNAL FORCES
1. Pressures for change that originate inside the organization are
generally recognizable in the form of signals indicating that
something needs to be altered, such are the internal forces.
2. Declining effectiveness is a pressure to change. A company that
experiences its third quarterly loss within a fiscal year is
undoubtedly motivated to do something about it. Some companies
react by instituting layoffs and massive cost – cutting programs,
whereas others look at the bigger picture, view the loss as
symptomatic of an underlying problem, and seek the cause of the
problem.
3. A crisis situation also may stimulate change in an organization.
Strikes or walkouts may lead management to change the wage
structure. The resignation of a key decision-maker is one crisis that
causes the company to rethink the composition of its management
team and its role in the organization.
A much-publicized crisis that led to change with Exxon was the oil
spill accident with Exxon’s Valdez oil tanker. The accident brought
about many changes in Exxon’s environmental policies.

8. 14-8
INTERNAL FORCESINTERNAL FORCES
4. Changes in employee expectations also can trigger change in
organizations. A company that hires a group of young newcomers
may be met with a set of expectations very different from those
expressed by older workers. The work force is more educated than
ever before.
Although this has its advantages, workers with more education
demand more of employers. Today’s workforce is also concerned
with career and family balance issues, such as dependent care.
The many sources of workforce diversity hold potential for a host
of differing expectations among employees.
5 Changes in the work climate at an organization can also stimulate
change. A workforce that seems lethargic, unmotivated, and
dissatisfied is a symptom that must be addressed. This symptom is
common in organizations that have experienced layoffs. Workers
who have escaped a layoff may grieve for those who have lost their
jobs and may find it hard to continue to be productive. They may
fear that they will be laid off as well, and many feel insecure in their
jobs.

9. 14-9
External Pressures for ChangeExternal Pressures for Change
1. Political : stability and types
2. Economic shocks: rise and fall of global housing market, financial sector
collapse, global recession.
3. Social trends don’t remain static. Companies must continually adjust product
and marketing strategies to be sensitive to changing social trends. The State Bank
of India did the same when it started a zero-balance bank account program for
villagers
4. Technology : is continually changing jobs and organization. Ex: faster, cheaper
and more mobile computers and handheld devices.
5. Marketing
6. Nature of the work :Almost every organization must adjust to a
multicultural environment, demographic changes, immigration and
outsourcing.
7. Competition is changing. Competitors are as likely to come from across
the ocean as from across town. Ex: increased government regulation of
commerce.

10. 14-10
Change AgentsChange Agents
• A Persons in organization responsible for
managing change activities.
• Can be managers or non managers, current
employees, newly hired employees or outside
consultants.

11. 14-11
APPROACHES TO ORGANISATIONAL CHANGEAPPROACHES TO ORGANISATIONAL CHANGE::
A ;A ; Process of Planned ChangeProcess of Planned Change
Unfreezing RefreezingMoving
• Provide rationale for
change
• Create sense of
psychological safety
concerning change
• Change efforts to
overcome the
pressure,the
pressure of both
individual resistance
and group
conformity
• Provide information
that suspects
proposed changes
• Bring about actual
shifts in behavior
• A chnge process
that transforms the
organisation from
status quo to
desired end stage
• Stabilising the
change intervention
by balancing ,driving
and restraining
forces
• Implement new
evaluation systems
• Implement new
hiring and promotion
systems
Kurt Lewin

12. 14-12
APPROACHES TO ORGANISATIONAL CHANGE:APPROACHES TO ORGANISATIONAL CHANGE:
B : THE SIX STEPS CHANGE PROCESSB : THE SIX STEPS CHANGE PROCESS
1. Becoming aware of the pressure for change
2. Recognise the need for change eg Technology
3. Diagnosing the problem : eg Interview,Questionaire, Observation,
Secondary data/unobstructive measure
4. Planning the change; 1 Evolutionary,2 Revolutionary Top to
bottom or Participativ e i.e Bottom to top
5. Implementing the change : Resistance,Hostility,aggression,absentism
2 Group level ;strike,, Managing Resistance : Six steps 1 Edn and
Communication 2. Participative 3. Facilitation and support
4.Negotiatiation and agreemant 5. Manipulation and co-Operation
6. Selecting people who accept change –Coercion
6. Follow Up on Change

13. 14-13
APPROACHES TO MANAGING ORGANISATIONAL CHANGE:APPROACHES TO MANAGING ORGANISATIONAL CHANGE:
C :C : KOTTER’S EIGHT STEP MODELKOTTER’S EIGHT STEP MODEL

14. 14-14
There are primarily two types of Organisational Change;
A Total Quality management (TQM)
B Business Process Re Engineering ( BPRE)

15. 14-15
A Total Quality Management
TQM is an approach to improving the effectiveness and
flexibilities of business as a whole. It is essentially a way of
organizing and involving the whole organization, every
department, every activity and every single person at every
level.
TQM ensures that the management adopts a strategic overview of
the quality and focuses on prevention rather than
inspection.
The importance of TQM lies in the fact that it encourages
innovation, makes the organization adaptable to change,
motivates people for better quality, and integrates the business
arising out of a common purpose and all these provide the
organization with a valuable and distinctive competitive edge.

16. 14-16
Objectives of TQM
a. Meeting the customer's Expectation/requirements is the primary
objective and the key to organizational survival and growth.
b. The second objective of TQM is continuous improvement of
quality. The management should stimulate the employees in
becoming increasingly competent and creative.
c. Third, TQM aims at developing the relationship (among various
stakeholders) of openness and trust among the employees at all
levels in the organisation.
CHANGE THROUGH FOUR COMPONANTSCHANGE THROUGH FOUR COMPONANTS
1. People : Proper hiring, long life learning,, Institute suggestion
scheme ,establish quality circle
2. Process : Constant review process through project
improvement, waste elimination, Process chain Re-Engineering
3. System : change in system through statistical process control
and bench marking, , quality assurance and control.
4. Management : Management with Vision and mission

17. 14-17
Elements of TQM
1. Be customer focused
It requires the company to check customers' attitudes regularly and includes the idea of
internal customers as well as external ones.
2. Do it right the first time : This means avoiding rework, i.e., cutting the
amount of defective work.
3. Constantly improve : Continuous improvement allows the company
gradually to get better.
4. Quality is an attitude : Every one has to be committed to quality. That
means changing the attitude of the entire workforce, and altering the way
the company operates.
5. Telling staff what is going on : This involves improved
communication. Typically, it includes team briefing.
6. Educate and train people : It means educating staff in the principles of
TQM, which is a whole new style of working.

18. 14-18
7. Measure the work. : Measurement allows the company to make
decisions based on facts, not opinion. It helps to maintain standards and
keep processes within the agreed tolerances.
8. Top management must be involved : If senior management is not
involved, the programme will fail.
9. Make it a good place to work : Many companies are full of fear. Staffs
are afraid of the sack, their boss and making mistakes. There is no point in
running a TQM program unless the company drives out fear.
10 Introduce team work : Team work boosts employees' morale. It reduces
conflict and solves problem by hitting them with a wider range of skills. It
pushes authority and responsibility downwards and provides better, more
balanced solutions.
11. Organize by process, not by function : This element of TQM
seeks to reduce the barriers that exist between different
departments, and concentrates on getting the product to the
customer.
Elements of TQM (contd)

19. 14-19
1.Top management sees no reason for change.
2.Top management is not concerned for its staff.
3.Top management is not committed to the TQM programme.
4.The company loses interest in the programme after six
months.
5.The workforce and the management do not agree on what
needs to happen.
6.Urgent problems intervene.
7.TQM is imposed on the workforce, which does not
inwardly accept it.
8.No performance measure or targets are set, so progress
cannot be measured.
9.Processes are not analyzed, systems are weak and
procedures are not written down.
Reasons for FAILURE of TQM

20. 14-20
B. Business Process Re-Engineering (BPRE)B. Business Process Re-Engineering (BPRE)
Definition:The fundamental rethinking and radical redesign of core
business processes to achieve dramatic improvements in critical
performance measures such as quality, cost, and cycle time.
Components :
1.Business process : The business delivery process negates organisational
boundaries thereby reducing administrative overheads
2.Management and Measurement : Mapping existing process and need
Benchmarking worldwide best practices, Appointing process owners for each
process
3. Job and Structure : flat structure, wide span control, checking and auditing
4. Values and Belief : for Mangers : Lead by Example, for Employees :Every
job is important, Customer service and relationship

21. 14-21
The Reengineering Diamond
Business
Processes &
Functions
Business
Processes &
Functions
Management &
Measurement
Systems
Management &
Measurement
Systems
Jobs , Skills, &
Organizational
Structures
Jobs , Skills, &
Organizational
Structures
Values and
Beliefs
Values and
Beliefs
Enlighten
Entail Demand
Foster
Culture
Components' of
BPRE
Competitors
Markets
Customers &
Suppliers

22. 14-22
3 Basic key to BPRE
1. Identify competitive strength
2. Assess Core process
3. Re-Organising

23. 14-23
Resistance to ChangeResistance to Change
Three Factors
OrganizationalOrganizational
ResistanceResistance
GroupGroup
ResistanceResistance
Effort to block new
ways of doing things
IndividualIndividual
ResistanceResistance

24. 14-24
Individual Resistance
Why people resists changes. Some of these appear to be
rational or emotional.
1.Cognitive bias : Dissonance 9disagreement)
2.Selective perception : hear and see what I want to see
3.Economic factors
4.Habits
5.Uncertainty and Insecurity
6.Lack of communication
7.Extend of change
8.Psychological factors
9.Social factors
Group Resistance
Most organizational changes have impact on formal
groups in the organization the main reason
why the groups resists change is that they fear that their
cohesiveness or existence is threatened by it.

25. 14-25
Organizational Resistance
Organizational resistance means the change is
resisted at the level of the organization itself.
Some organization/ business firm are so designed
that they resist new ideas, this is specifically true
in case of organization which are conservative in
nature.The major reason for organizational
resistance are:-
•Threat to power
•Group inertia
•Organizational structure
•Organisational culture
•Organisational strategy
•Threat to specialization
•Resource constants
•Sunk costs

26. 14-26
CommunicationCommunication • Highest priority and first
strategy for change
• Improves urgency to
change
• Reduces uncertainty
(fear of unknown)
• Problems -- time
consuming and costly
Minimizing Resistance to Change

27. 14-27
CommunicationCommunication • Provides new knowledge
and skills
• Includes coaching and
action learning
• Helps break old routines
and adopt new roles
• Problems -- potentially
time consuming and
costly
Minimizing Resistance to ChangeMinimizing Resistance to Change
TrainingTraining

28. 14-28
CommunicationCommunication • Increases ownership of
change
• Helps saving face and
reducing fear of
unknown
• Includes task forces,
search conferences
• Problems -- time-
consuming, potential
conflict
Minimizing Resistance to ChangeMinimizing Resistance to Change
TrainingTraining
EmployeeEmployee
InvolvementInvolvement

29. 14-29
CommunicationCommunication • When communication,
training, and
involvement do not
resolve stress
• Potential benefits
• More motivation to
change
• Less fear of unknown
• Fewer direct costs
• Problems -- time-
consuming, expensive,
doesn’t help everyone
Minimizing Resistance to ChangeMinimizing Resistance to Change
TrainingTraining
EmployeeEmployee
InvolvementInvolvement
StressStress
ManagementManagement

30. 14-30
CommunicationCommunication
• When people clearly
lose something and
won’t otherwise support
change
• Influence by exchange--
reduces direct costs
• Problems
• Expensive
• Increases compliance,
not commitment
Minimising Resistance to Change
TrainingTraining
EmployeeEmployee
InvolvementInvolvement
StressStress
ManagementManagement
Negotiation

31. 14-31
CommunicationCommunication
• When all else fails
• Assertive influence
• Firing people -- radical form
of “unlearning”
• Problems
• Reduces trust
• May create more subtle
resistance
Minimising Resistance to Change
TrainingTraining
EmployeeEmployee
InvolvementInvolvement
StressStress
ManagementManagement
Negotiation
Coercion

32. 14-32