3.Organizational Change

ORGANIZATIONAL CHANGE

MODELS & THEORIES

Process of Planned ChangeActions for change• U

nfreezing / Changing or Movement/ Refreezing

Kurt Lewin’s idea of Change• Introduced 2 ideas of change

▫Idea 1: Whatever is happening in any one point of time is an equilibrium point, reached after two types of forces interact. One force is in the direction of change (+ve) & the other is in the opposing direction (-ve). [Force-field Analysis]

▫Idea 2: Change is a three-stage process

Stage 1- Unfreezing the old behavior/ situationStage 2 - Moving to a new level of behaviorsStage 3 - Refreezing the behavior at the new level

Kurt Lewin’s three-stage model

Kurt Lewin

Change is a three-stage process

Unfreezing: Creating motivation and readiness to change. Disconfirmation creates pain & discomfort which causes guilt & anxiety, hence change.Moving: Changing through cognitive restructuring. Information and evidence gathered showing change is desirable & good.Refreezing: Integrate the new behaviour into individual’s attitude. Checks whether the change is fitting to the society where the individual operates.

Edgar Schein modified this theory by specifying psychological mechanisms involved in each stage. Later Ronald Lippitt, Jeanne Watson and Bruce Westley expanded this model into seven-stage model

7-Stage ProcessPhase 1 •Developing a need for change.

Phase 2 •Establishing a change relationship

Phase 3 •Diagnosing the client system’s problems.

Phase 4 •Examining alternative routes, establishing goals and intentions of action

Phase 5 •Transforming intentions into actual change efforts.

Phase 6 •Stabilizing change.

Phase 7 •Achieving terminal relationship.

Burke-Litwin Model

Warner Burke

Change

First order change (Transactional change)

Second order change (Transformational change)

OD interventions directed towards structure,

management practices, and systems (policies &

procedures) result in first order change.

OD interventions directed towards mission and strategy, leadership, and organization culture result in second order change.

Some features of organization change, fundamental nature of organization remains same. Also called Continuous /Incremental Change

Nature of organization is fundamentally & substantially changed. Also called Discontinuous/ radical change.

Change in Organizational Climate: Transactional Leadership

Change in Organizational Culture: Transformational Leadership

Transformational factors: Change the culture fundamentally.

Transactional factors: Change the climate generally.

Systems Theory• Ludwig Bertalanffy articulated the principles of

general systems theory in 1950. Kartz & Kahn were first to apply systems theory to organizations in 1966.

• Kast & Rosenzweig define system as▫“An organized, unitary whole composed of two

or more independent parts, components or sub-systems & delineated by identifiable boundaries from its environmental supra-system”.All organizations are open systems. Studying

open system helps to understand organizations

Nature of Systems

Sources of energy, materials, information, human resources

USERS

Inputs Transforming

Mechanism

Outputs

Internal Interface Mechanism

External Interface Mechanism

All open systems are Input-Throughput-Output mechanism

Nature of Systems• Every system is delineated by boundary; inside the

boundary is system, outside the boundary is environment. Boundaries of open systems are permeable, in that they permit exchange of information, resources and energy between the system and the environment.

• Open systems have purposes or goals, the reasons for existence. This purpose must align with needs of environment.

• Information is important in every system. Feedback is information from the environment to the system about its performance. Both positive & negative feedback is required by the system. Similarly systems ‘code’ useful information & incorporate it (non-useful information is screened out)

Nature of Systems• Steady state/ Dynamic homeostasis: is the property of a

system in which variables are regulated so that internal conditions remain stable and relatively constant.

• Differentiation: Systems tend to get more elaborate, complex and specialized over time called differentiation. This would require more integration and coordination.

• Equifinality: There are multiple ways to arrive at a particular outcome; every system have multiple paths to reach a goal.

• Sub-systems: Larger systems are made up of smaller sub-systems; these can be arranged into hierarchy of systems moving from less important to more important.

Systems Theory: Congruence Model

David A. Nadler

The

Con

grue

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David Nadler and associates of Delta Consulting Group developed this Congruence Model

Elements

Systems Theory: Congruence Model• Congruence Model is a good analytical tool to

assess:▫ Characteristics and functioning of the elements▫ Evaluating the ‘goodness of fit’ or how well

elements ‘go together’.

• The premise is that alignment (harmony/fit) must be present among the system components for the organization to produce satisfactory outputs.

Organizational Life Cycle• The life of an organization is complex and determined by

different influences occurring during its life cycle. According to several theoretical concepts of the organizational life cycle, the undergoing development of an organization is divided into different phases.

• Each phase contains relatively calm period called evolutionary phase followed by revolutionary phase. The revolutionary phase is characterized by dominant problems or crisis events, which needs to solved for further growth.

• The key dimensions used in this model of Organizational Life Cycle proposed by Greiner (1972) are: Organizational size [small/large] & Age of organization [young/mature].

Organizational Life Cycle

The Five Phases of Growth (Greiner, 1972)

Organizational Life Cycle• An organization can experience five different phases during its

development.

▫ Creativity Phase: entrepreneurially oriented, emphasis is on creating new products & markets. The crisis emerges when problems arise and there is confusion regarding “who is going to lead the organization out of confusion” called leadership crisis --- to solve this next evolutionary phase begins.

▫ Direction Phase: characterized by a growing degree of formalization and control. Top/middle level managers take responsibility of direction & lower level managers take responsibility of functions. These issues induce a crisis of autonomy. To solve the crisis next phase emerges.

▫ Delegation Phase: emphasis on decentralization to solve these conflicts. Lower level employees gain more responsibility & hence become motivated. The problem within this phase is the declining overall control, hence the crisis of control ---- to overcome this, the next phase is coordination phase.

Organizational Life Cycle▫ Coordination Phase: characterized by formal systems for

achieving coordination. Procedure and rules take precedence over problem solving. The phase is accompanied by the crisis of red-tape, which demonstrates that bureaucracy is influencing the firm’s processes. To solve this --- next evolutionary phase --- collaboration phase.

▫ Collaboration Phase: characterized by a deeper inclusion of teams, which should be more responsible in terms of mutual problem solving & decision making; skillful confrontation of interpersonal differences. The crisis to this final phase is not named. Firms, which have made it to the fifth phase, will be affected by new problems, for instance, information overload or a higher psychological pressure on the people, which then need to be addressed. The incremental development within this life cycle concept shows that there is no standstill within the lifetime of a company. Thus, it becomes obvious that a positive attitude towards change and innovation is essential for the survival of an organization.