ORGANIZATION

AL CHANGE &
DEVELOPMENT

Organizational Behavior
CASE STUDY ABOUT
SUCCESSFUL CHANGE
MANAGEMENT
  In the aftermath of World War II, the Japanese auto market
was nearing destruction. On the other hand, American car
manufacturers like Ford and General Motors were crushing it.

 Understanding that something major had to be done in order

to keep pace with their Western rivals, Taiichi Ohno, an
engineer at Toyota, convinced his managers to implement
Toyota the Just-In-Time approach to manufacturing.

 Instead of having to order and store an insane amount of

heavy equipment and machinery, Ohno thought it made a
whole lot more sense to receive supplies the moment they
were ready to be used.
 This way, Toyota wouldn’t have to waste any space, time,
money, or energies dealing with supplies that would just
collect dust until they were needed.

 Additionally, Toyota would have more cash on hand to pursue

other opportunities; it wouldn’t be tied up in inventory.

 Toyota implemented Ohno’s suggestions, opting to take the

just-in-time approach to manufacturing. Though it didn’t
happen overnight, Ohno’s recommended changes
ended up transforming the Japanese automaker for
the better.

 Ohno ended up becoming an executive.

 Organizational Organizational
change development
• Nature • Features
• Levels • Techniques
• Types • Process
• Forces
• Resistance
• Process
 “Organizational Change refers to a
modification or transformation of the
DEFINITION organization’s structure, processes or
goods”.
 Adaptive Directive

Nature of
Natural Participative
change

Inter
Essential depend
ent
 Change of whatever form interfaces
CHANGE with 3 organizational components
MANAGEMENT which effectively constitute the
corporate culture.

HISTORICAL
& POLITICAL
EVOLUTION

CHANGE

MANAGEMENT
PEOPLE &
ORGANISATION

CORPORATE CULTURE
  In the structure of an organization.
 In organizational operation and size of a
workforce.
Organization  In working hours or practices .
changes can  In the way roles are carried out.
be :  In the scope of a role that results in a change in
the working situation, structure, terms and
conditions or environment.
Levels of
change

Individual Group Organization

Individual-
At the individual level change is reflected in
level such developments as changes in a job
assignment, physical move to a different
location, or the change in maturity of a
person which occur overtime.
 Most organizational changes have their major
Group-level effects at the group level.

Changes at group level effect :

• Work flow
• Job design
• Social organization
• Influence & status system
• Communication patterns
Organization-
level
• Changes that involve major programs that affect
both individuals and groups.

• Changes at the organizational level is generally

referred to as “organization development”
  There are two forces which foster the
organization to change:

Forces for
org
change in External Internal Change
organization forces forces
EXTERNAL FORCES INTERNAL FORCES
 Technological  Changes in managerial
change personnel
 Globalization  Declining effectiveness
 Social & political  Changes in work climate
changes  Deficiencies in existing
 Government policies system
 competition  Crisis
 Workforce diversity  Employee expectation
  TOTAL QUALITY MANAGEMENT is a technique
developed by Edward Demming to improve efficiency
of flexible work teams
 The broad goal of TQM is continuous improvement.

TQM  TQM aims to impress upon workers the importance of

continuously improving the efficiency of the production
process in order to
 Reduce costs,
 Improve quality
 Reduce waste
 SYSTEMS

CHANGE
MANAGEMENT BY PROCESSES
TQM

PEOPLE
 Re-engineering is the term used for radical
change processes in the organization.
Sometimes the concept of BPR (Business
Process Reengineering) is used.

Re-engineering
 TQM and Re-engineering differ in their
approach to change.
 Change through TQM is effected through
continuous improvement, incremental or
evolutionary change and it is a bottom-up
approach for invoking change.
 Re-engineering effects change through radical
reinvention, revolutionary and it is a top-down
approach to change.
 Unplanned Planned

FORMS/
TYPES OF
.
CHANGES
. .
Planned Planned change is a change resulting from a
change deliberate decision to alter the organization.

It is :-
• Intentional
• goal – oriented activity.
Unplanned • Unplanned change is imposed on the
change organization & is often unforeseen.

Example : change in government regulation,

change in the economy
RESISTANCE
TO CHANGE
 • Organizational • Sub-unit
forces
forces

Forces resist . .
organization
al
change . .
• Group forces • Individua
l forces
 Individual sources of resistance to change reside in
INDIVIDUAL basic human characteristics such as perceptions,
RESISTANCE personalities & needs.
Reasons of individual resistance.
1.Economic Reason –The economic reason of
resistance to change usually focus on:
• Fear of technological unemployment.
• Fear of reduced work hours & consequently less
pay.
• Fear of demotion & thus reduced pay.
2. Fear of Loss: When a change is impending, some
employees may fear losing their jobs, status
particularly when an advanced technology is
introduced.
3.Security: people with a high need for security are
likely to resist change because it threatens their
feeling of safety.
4.Status quo: change may pose disturbance to the
existing comforts of status quo.
5.Peer Pressure: individual employees may be
prepared to accept change but refuse to accept it
for the sake of the group.
  Organizations, by their very nature are
ORGANIZATIONAL conservative. They actively resist change.
RESISTANCE
Reason of organizational resistance
1.Resource constraint: resources are major
constraints for many organizations. The necessary
financial , material & human resources may not be
available to the organization to make the needed
changes
2.Structural inertia : some organizational structures
have in-built mechanism for resistance to change.
E.g. In bureaucratic structure where jobs are
narrowly defined & lines of authority are clearly
spelled out, change would be difficult.
3.Organisational culture: The values and norms
in an organizational culture .if organizational
change disrupts values and force people to
change their behavior.
4.Organisational strategy: Some managers are
often biased by previous commitments and they
stick to a course of action even if it is not
working.
  Obstacles to change even at the organizational
& department level.
Sub-unit  Different functions and divisions of an
Resistance organization often see the source of a problem
differently primarily from their own view point.
  Group norms: Group Norms give rise to acceptable
and stable behavioral patterns and influence how
members perceive and interact with one another,
approach decisions and solve problems .
 Group cohesiveness: Group cohesiveness can be
Group defined as a bond that pulls people toward
membership in a particular group and resists
resistance separation from that group.
 Groupthink: Groupthink is a phenomenon when a
group of people get together and start to think
collectively with one mind. The group is more
concerned with maintaining unity than with
objectively evaluating their situation, alternatives and
options.
Implementing
change
  Lewin's Force Field Model is an important
Lewin's contribution to the theory of change
Force Field management - the part of strategic
management that tries to ensure that a
Model business responds to the environment in which
(Change it operates.
Managemen  Many factors drive change in a business. In his
t) model Lewin identified four forces which are
described below.
In Lewin's model there are forces driving change and
forces restraining it. Where there is equilibrium
between the two sets of forces there will be no
change. In order for change to occur the driving force
must exceed the restraining force.

Lewin's analysis can be used to:

 Investigate the balance of power involved in an
issue
 Identify the key stakeholders on the issue
 Identify opponents and allies
 Identify how to influence the target groups
 Becoming aware of pressure for change

Recognizing the need for change

The 6 stage Diagnosing the problem

change
process Planning the change

Implementing the change

Following up on the change

 Some tactics are used to resist the change:
 Education & Communication: Communication
about impending change is essential if employees
MANAGING are to adjust effectively.
RESISTANCE  Participation: It is difficult for individuals to resist a
TO CHANGE change decision in which they participated.
 Empathy & Support: Active listening is an excellent
tool for identifying the reasons behind the
resistance
 Manipulation & Cooptation: Manipulation
refers to covert influence attempts.
 Negotiation: another way to deal with
resistance to change is to exchange something
of value for reduction in resistance.
 Coercion: Coercion is the application of direct
threats or force on the resisters.
  Use of group forces
METHODS OF  Change of change agent
INTRODUCING  Shared rewards
CHANGE  Co-operation of unions
PERMANENTLY  Concern for employees
 Organization Development (OD) is a planned
Organizational approach to improve employee and
Development organizational effectiveness by conscious
interventions in those processes and structures
that have an immediate bearing on the human
aspect of the organization.
Features of
 Organizational Development is an
OD educational strategy that attempts to bring
about a planned change.
 Organizational Development relates to real
organizational problems instead of
hypothetical cases.
 Organizational Development uses sensitivity
training methods and lay emphasis on the
significance of experiment based training.
 Its change agents are almost external consultants
outside of the organization.
 The external change agents and internal
organization executives establish a collaborative
relationship that involves mutual trust, influence
and jointly determined goals.
PROCESS
OF OD
 6
PLANNING &
IMPLEMENTATION

1
PROBLEM
IDENTIFICATION
O D 5
EVALUATION &
FEEDBACK
2
DATA 4
COLLECTION DIAGNOSIS
ORGANIZATIONAL
DEVELOPMENT
TECHNIQUES
 ORGANIZATIONAL
DEVELOPMENT

RELATIONSHIP STRUCTURAL
TECHNIQUES TECHNIQUES

MANAGEMENT BY
GRID TRAINING OBJECTIVES
TEAM BUILDING JOB REDESIGN
SURVEY SUPPLEMENTAL
ORGANIZATIONAL
FEEDBACK PROCESS
  Management by objectives is the process of
defining specific objectives within an
organization that management can convey to
organization members, then deciding on how
to achieve each objective in sequence.
MBO  This process allows managers to take work that
needs to be done one step at a time
 This process also helps organization members
to achieve each objective, which reinforces a
positive work environment and a sense of
achievement.
  Job redesign is an effort where job
responsibilities and tasks are reviewed, and
JOB possibly re-allocated among staff, to improve
output.
REDESIGN  Redesigning jobs can lead to improvements in
both productivity and in job satisfaction.
GRID  The Grid Training is the comprehensive
organization development program developed
TRAININ by Blake and Mouton, which focuses on the
overall development of individuals, groups and
G the organization as a whole.
SURVEY  Survey Feedback is tool which provides an
organization with a honest opinion of what
FEEDBAC their present or future customers think about
them and helps them in taking an informed
K decision.
TEAM  Team building is a collective term for various
BUILDIN types of activities used to enhance social
relations and define roles within teams, often
G involving collaborative tasks.
  As mobile phones became popular, the Finnish company
Nokia dominated the market. However, the company exited
the market in 2014 because it was no longer profitable. It
was a major decision for the firm, although this isn’t the first
time Nokia has reinvented itself.
Nokia . . .
Transforms  Nokia’s executives decided to sell the device business to
Microsoft. Nokia’s new core business is now networking
Again equipment. This wasn’t a decision executives made lightly;
Nokia was already in a partnership with networking
equipment manufacturer Siemens. The company’s
leadership realized networking equipment is a better
business strategy. To that end, they bought out Siemens and
put a new portfolio strategy, corporate structure, business
plan, capital structure, and management team into place.
 Since transitioning from manufacturer of mobile
devices to one of networking equipment, Nokia has:

 had a steadily growing share price

 an enterprise value which has grown 12-fold since July
2012
 returned billions of dollars in cash to its shareholders
 become the most valuable company in Finland yet
again
 Our business doesn’t have to be
as big as nokia to successfully
change. Just need a
comprehensive plan which
addresses as many aspects of
the restructuring as possible and
the right people to make it
work.

 In addition, be aware of which

way the market’s heading;
nokia’s shift worked because
executives knew which way the
wind was blowing.
 Success didn’t happen overnight — it
required careful planning and adherence to
the plans. Change initiatives which work are
possible, as long as you’re willing to put in
the time and effort.
Thank You
F or
..listening..
Pramudha N M

2016-31-015
MBA-ABM