Module 3 and Module 4 Amizone

Amity School of Business

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Contents• Module 3:Planned Change

• Introduction to planned change

• Process of planned change

• Models and techniques involved in change management- TQM

• Business process reengineering

• Learning organization

• Module 4: Implementation of change models

• Lewin’s force-field analysis,

• Kotter’s eight-step model,

• Action research model.


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Reacting to Change

• Unplanned change: “Fire fighting”.

• Planned change: Results from deliberate attempts by managers to improve organizational operations.


PLANNED CHANGE

• Organization development is directed at bringing about planned change to increase an organization's effectiveness. It is generally initiated and implemented by managers, often with the help of an OD practitioner either from inside or outside of the organization.

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Purpose of Planned changeOrganizations can use planned change:• to solve problems,• to learn from experience, • to reframe shared perceptions, • to adapt to external environmental changes,• to improve performance,• and to influence future changes.

Overall, the general purpose of planned change is to increase an organization’s effectiveness.

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Types of Planned change• Steps in planned change may be implemented in a

variety of ways, depending on the client's needs and goals, the change agent's skills and values, and the organization's context. Thus, planned change can vary enormously from one situation to another.

• To understand the differences better, planned change can be contrasted across situations on three key dimensions:

1. Magnitude of organizational change

2. Degree to which the client system is organized.

3. Whether the setting is domestic or international.5


1. Magnitude of Change• Planned change efforts can be characterized as falling

along a continuum ranging from incremental changes that to quantum changes that.

1.Incremental changes: involve fine-tuning the organization

2.Quantum changes: entail fundamentally altering how organization operates and are directed at significantly altering how the organization operates.

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2. Degree of Organization• On the basis of degree to which client system is organized

there are two types of organizations:

• Over organized: Highly mechanistic, bureaucratic organizations.

• Under organized: Too little constraint or regulation for effective task performance.

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3. Domestic Vs International setting

• Western Culture• (Domestic Setting) : Action

research model of planned change was developed in western societies. It reflects the underlying values and assumptions of these geographic settings, including equality, involvement, and short-term time horizons.

• Planned change follows the typical steps in action research process.

• Asian Culture• (International setting):Asian

countries are more hierarchical and status conscious, are less open to discussing personal issues, more concerned with saving "face," and have a longer time horizon for results.

• The action research process must be adapted to fit the cultural context.

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Process of Planned ChangeBullock and Batten have given an integrative model of planned change. This model describes two major dimensions of change process:

• Change phases: Sequential states of an

organization processing change.

• Change Processes: OD methods to move

an organization from one state to another.


Change Phases – Integrative model gives 4 basic phases of change:

1.Exploration

2.Planning

3.Action

4. Integration phase


• Change Processes– how specific intervention strategies are designed and carried out. Four main types:

– Human process interventions

– Techno structural interventions

– Strategic interventions

– HRM interventions


Module -4: Models of Planned Change

• Lewin’s force-field analysis,

• Kotter’s eight-step model,

• Action research model.

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Lewin’s Three-Step Change Model

Unfreezing: involves encouraging individuals to discard old behaviors by shaking up the equilibrium state that maintains status quo. It includes change efforts to overcome the pressures of both individual resistance and group conformity. Often organizations accomplish unfreezing by eliminating the rewards for current behaviors and showing that such behavior is not valued.

Changing/Moving: It aims at altering the behavior of the individuals, departments or organization in which changes are to take place. It implies developing new behaviors, values and attitudes.

Refreezing: means stabilizing a change intervention by balancing driving and restraining forces. Organizations encourage the new behaviors and avoid the old ways of functioning by rewarding them.


Stage 1: Unfreezing: Three ways of unfreezing an organization are:

i. Disconfirmation:

ii. Induction of guilt or anxiety:

iii. Creation of psychological safety:

Stage 2: Movement: is accomplished through cognitive restructuring. Two main processes for accomplishing this stage are:

i. Identification with a new role model

ii. Scanning the environment for new information

Stage 3: Refreezing: Helping the client to integrate the new point into:

1. The total personality and self concept.

2. Significant relationships

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Unfreezing the Status QuoUnfreezing the Status Quo

Desired State

Status Quo

RestrainingForces

Driving Forces

Time


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Kotter’s Eight-Step Model for Organizational Transformation

John P. Kotter has given eight steps for Leading Organizational Change:1. Establish a Sense of Urgency• Examining market and competitive realities• Identifying and discussing crises, potential crises or major opportunities.• Provide evidence from outside the organization that change is necessary2. Form a Powerful Guiding Coalition• Assembling a group with enough power to lead the change effort.• Attract key change leaders by showing enthusiasm and commitment.• Encouraging the group to work together as a team.


3. Develop a Compelling Vision and Strategy• Creating a vision to help direct the change effort.• Developing strategies for achieving that vision.4.Communicate Widely• Using every vehicle possible to communicate the new vision and

strategies.• Teaching new behaviors by the example of the guiding coalition.5.Empower Others to Act on the Vision• Getting rid of obstacles to change.• Changing systems or structures that seriously undermine the

vision.• Encouraging risk taking and nontraditional ideas, activities, and

actions.

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6. Generate Short-term Wins• Planning for visible performance improvements.• Creating those improvements.• Recognizing and rewarding those employees involved in the improvements.7. Consolidate Gains and Create Greater Change• Using increased credibility to change systems, structures, and policies that

don’t fit the vision.• Hiring, promoting and developing employees who can implement the vision.• Reinvigorating the process with new projects, themes, and change agents.8.Institutionalize Changes in the Organizational Culture• Articulating the connections between new behaviors and corporate success.• Developing the means to ensure leadership development and succession.

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ACTION RESEARCH MODEL

• This approach to organization change shows that research can be practical; it can serve as an instrument for action and change.

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Action Research Model

Action Research is a "process of systematically collecting research data about an ongoing system relative to some objective, goal, or need of that system; feeding these data back into the system; taking actions by altering selected variables within the system based both on the data and on hypotheses; and evaluating the results of actions by collecting more data."

-French and Bell

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Types of Action Research

DiagnosticParticipantEmpiricalExperimental


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ACTION RESEARCH MODEL: It is a cyclical process containing eight main phases/steps:


Module 3:

Models and techniques involved in change management

• TQM

• Business process reengineering

• Learning organization

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What is Quality?

Quality is “fitness for use”(Joseph Juran)

Quality is “conformance to requirements”(Philip B. Crosby)

Quality of a product or services is its ability to satisfy the needs and expectations of the customer.


Total Quality Management• Total= Made up of whole • Quality= Degree of excellence a product/service provides.• Management= Act/art ( manner of handling, controlling,

directing, etc.)

TQM is an art of Managing the whole to achieve excellence.

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Amity School of BusinessTQM

• Quality first became a concern in the 1960s when Japan began to introduce quality circles.

• TQM is an organisational change intervention that is concerned with quality. TQM can be defined as

… an approach to doing business that attempts to maximise the competitiveness of an organisation through the continual improvement of the quality of its products, services, people, processes and environment (Goetsch & Davi)

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Evolution of Quality Management

Inspection

Quality Control

Quality Assurance

TQM

Salvage, sorting, grading, blending, corrective actions, identify sources of non-conformance

Develop quality manual, process performance data, self-inspection, product testing, basic quality planning, use of basic statistics, paperwork control.

Emphasis on prevention,Quality systems development, advanced quality planning, comprehensive quality manuals, use of quality costs, failure mode and effects analysis, SPC.

Policy deployment, involve supplier & customers, involve all operations, process management, performance measurement, teamwork, employee

involvement.


Need of TQM

• Rising Customer Expectations

• Increasing Competitive Pressure

• Changing perceptions of customers

• Internal pressure for improvement

• Managers and workforce perceptions

• To survive

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Steps to implement TQM:

• Defining outputs,

• Establishing project teams,

• Creating a mission,

• Identifying the customers,

• Defining customer requirements,

• Developing output specifications,

• Defining team processes,

• Identifying measurement of output,

• Evaluation of output, and

• Measuring customer satisfaction29


BASIC PRINCIPLES OF TQM

Approach Management Led

Scope Company Wide

Scale Everyone is responsible for Quality

Philosophy Prevention not Detection

Standard Right First Time

Control Cost of Quality

Theme On going Improvement


W E Deming • Reduction in process variability by extensive use of

statistics will lead to improvement in quality and increase in productivity

• Talked about New Climate (organisational culture)– Joy in work– Innovation– Co-operation

• Win-Win approach• He proposed a 14 point TQM programme.


W E Deming 14 Points

Amity School of BusinessSeven Deadly Sins

• Lack of vision and mission as regards quality & process improvement.• Emphasis on short term profit.• Personal performance appraisal systems.• Mobility of top management.• Running a company on visible figures alone

– Customer satisfaction level– Employee morale– Relationship with your vendors– Confidence the market has in your company

• Excess non-productive expenditure.• Excessive cost of warranty.

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Improve Quality

Productivity improves

Provide jobs and more jobs

Deming’s Chain Reaction

Cost decreases because of less rework, fewer mistakes, fewer delays, snags, better use of machine time and materials

Stay in business

Capture the market with better quality and lower price


PLAN

CHECK

DOACT

The Deming Cycle or PDCA Cycle

Plan a change to the process. Predict the effect this change will have and plan how the effects will be measured

Implement the change on a small scale and measure the effects

Adopt the change as a permanent modification to the process, or abandon it.

Study the results to learn what effect the change had, if any.


Relation between OD and TQMAccording to French & Bell

" because of the emphasis on creating an organizational culture that features extensive participation, an emphasis on teams and teamwork, cooperation between teams and units, the generation of valid data and continuous learning, TQM appears to be highly congruent with OD approaches and values."

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• Total quality management (TQM) became extremely popular during the 1980s and early 1990s as OD intervention.

• TQM interventions utilize established quality techniques and programs that emphasize quality processes, rather than achieving quality by inspecting products and services after processes have been completed. The important concept of continuous improvement embodied by TQM has carried over into other OD interventions.

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Spectrum of Change

• Automation

• Rationalization

of procedures

• Reengineering

• Paradigm shift

Amity School of BusinessAutomation

• refers to computerizing processes to speed up the existing tasks.

• improves efficiency and effectiveness.


Rationalization of Procedures• refers to streamlining of

standard operating procedures, eliminating obvious bottlenecks, so that automation makes operating procedures more efficient.

• improves efficiency and effectiveness.


Business Process Reengineering

• refers to radical redesign of business processes.

• Aims at– eliminating repetitive,

paper-intensive, bureaucratic tasks

– reducing costs significantly

– improving product/service quality.


Paradigm Shift• refers to a more

radical form of change where the nature of business and the nature of the organization is questioned.

• improves strategic standing of the organization.


Business process re-engineering (BPR)• Business Process: simply a set of activities that transform a

set of inputs into a set of outputs (goods or services) for another person or process using people and tools.

• Reengineering: assumes the current process is irrelevant - it doesn't work, it's broke, forget it. Start over.

Amity School of BusinessBPR

• Business Process Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed.


• is focused on fundamentally rethinking and radically redesigning a business process to bring about dramatic improvements in performance.

(Hammer & Champy, The Reengineering Revolution)

• focused on the implementation of new technology, rather than the improvement of business processes.

• can be copied from other companies (benchmarking), bought (from an IT company or consultant), or they can be original ideas

(Thomas 1994).

BUSINESS PROCESS RE-ENGINEERING (BPR)


The primary GOALS of BPR are: radical change dramatic outcomes transformation or replacement of an overall

process• BPR seeks improvements of performance in

terms of :– Cost– Quality– Service– Speed

OBJECTIVES OF BPR

Amity School of BusinessElements of BPR

Amity School of BusinessCharacteristics of BPR

Process Orientation An organization should be viewed and organized as a portfolio of processes, not as a functional hierarchy.

Radical and discontinuous Improvement

Look only for dramatic returns and don’t use the present as a basis for the redesigned solution.

Customer Orientation Process activities are evaluated in terms of the value they create to the external/internal customer.

Empowerment Shift authority and accountability to the front line worker.

Top Down Top management initiates, controls, and monitors the exercise, due to the broad cross-functional scope.

IT enabled Creative use of IT to enable process innovation, not just automate current activities.

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Differences between traditional IT implementations and BPR:

Basis for comparison

Traditional IT Implementations

BPR

implementations Essence Problem solving Reinventing work

Approach Incremental improvement Radical change

Style Analytical Creative &innovative

Perspective Micro perspective Macro perspective

Goal Enhancement Paradigm-break

Change Limited Wholistic scope

Domain Functional area Entire business system


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What to reengineer?

BPR changes processes, and not

functions, departments, geographies or tasks.

Amity School of BusinessWhy Reengineer?• Customers

– Demanding– Sophistication– Changing Needs

• Competition– Local– Global

• Change– Technology– Customer Preferences– Change becomes constant.

• reduced product cycles• reduced time to develop new products• more environment scanning


What BPR Is NOT• Although BPR may cause or involve aspects of all of the

following, it is – NOT downsizing– NOT restructuring– NOT reorganizing,– NOT TQM ...

Amity School of BusinessBenefits of Reengineering

The rewards of reengineering are many including:

1. empowering employees;

2. eliminating waste, unnecessary management overhead, and obsolete or inefficient processes;

3. producing often significant reductions in cost and cycle times;

4. enabling revolutionary improvements in many business processes as measured by quality and customer service; and

5. helping top organizations stay on top and low-achievers to become effective competitors.

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Characteristics of reengineered processes• Several jobs are combined into one.

• Workers make decisions: Compress organization vertically to reduce chain of command.

• The process steps are performed in a natural order.

• Eliminate process linearity and sequence where possible.

• Processes have multiple versions.

– Standardization is dead: One size does NOT fit all. Create multiple versions of the same process, each tuned to meet the needs of different inputs, situations, or markets.

• Work is performed where it makes the most sense.

• Checks and controls are reduced.

• Reconciliation is minimized - minimize external contact points

• A case manager provides a single point of contact.

• Hybrid centralized/decentralized operations are prevalent.

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Fundamental – BPR starts with basic questions.Why do we do what we do?Ignore what is and concentrate on what should be.

Radical – Redesign current structures and procedures entirely.Business reinvention vs. business improvement

4 aspects of Reengineering


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• Dramatic: Not gradual but epochal– Reengineering should be brought in “when a need

exits for heavy blasting.”• Companies in deep trouble.• Companies that see trouble coming.• Companies that are in peak condition.

• Business Process: Key target of Reengineering– a collection of activities that takes one or more kinds

of inputs and creates an output that is of value to a customer.


Key Steps in BPR

Select The Process & Appoint Process Team

Understand The Current Process

Develop & Communicate Vision Of Improved Process

Identify Action Plan

Execute Plan


Similarities between TQM and BPR

• Both need- top management commitment• Both need to focus on process improvement, quality

improvement, teamwork and employee training before implementing the activities.

• Both are performance oriented.• Both take team approach.

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Difference between TQM & BPR

Base Process Improvement (TQM)

Process Innovation (BPR)

Degree of Change Incremental Radical

Starting Point Existing Process Clean Slate

Frequency of Change Continuous One-Time

Time Required Short (weeks-months) Medium to long (depending on scope of BPR effort)

Inception/Participation Top-Down/Bottom-Up Top-Down

Scope Narrow; Task- or Function-oriented

Broad; Process-oriented

Risk Moderate High

Primary Enabler Statistical Control Information Technology

Type of Change Cultural Cultural and Structural

Focus Standardisation Flexibility

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Learning organizations

… are organizations where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn together.

(Senge, 1990)

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• A learning organization is one that has developed the continuous capacity to adapt and change.

• A learning company is an organisation that facilitates the learning of all its members and continuously transforms itself.

• That can adapt to change in external environment through continuous renewal of its structure & practices.

• David Garvin- “A learning organization is an organization skilled at creating, acquiring & transferring knowledge and at modifying its behavior to reflect new knowledge & insights.

What Is a Learning Organization?


Key features of the learning organisation• a learning culture

• key management processes that encourage interaction across boundaries

• tools & techniques that aid individual & group learning.

• skills & motivation to learn & adapt.

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Characteristics of a learning organization:

1. Everyone agrees to a shared vision.

2. People discard old ways of thinking and standard routines.

3. Members see that organizational processes and activities are interrelated.

4. People communicate openly across horizontal and vertical boundaries.

5. Employees sublimate departmental/personal interests for the shared vision.

The learning organization is a paradigm built on contemporary management concepts. No company has successfully achieved all the characteristics.

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Levels of organisation learning1. Single Loop Learning – focused on improving the status quo. This is

the most prevalent form of learning in organizations and enables members to reduce errors or gaps between desired and existing conditions.

2. Double - Loop Learning – (generative learning), aimed at changing the status quo. It operates at more abstract level than does single loop learning because members learn how to change the existing assumptions and conditions within which single loop learning operates.

3. Deuterolearning – involves learning how to learn. Here learning is directed at the learning process itself and seeks to improve how organization perform single and double loop learning.


Qualities of the learning organisation• Structure: Flatter Structure to facilitate OL• Information systems: Provide IT infrastructure for OL• Human resource practices: Designed to promote

member learning• Organisation culture: Considers organisation

culture(OCTAPACE).• Leadership: Effective leadership needed throughout the

organisation.

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Evolution of the learning organizationThere are three stages in the evolution of learning organization.

Stage 1: Surviving - companies that develop basic habits & processes & deal with problems as they arise on a ‘firefighting’ basis

Stage 2: Adapting – companies that continuously adapt their habits in the light of accurate readings & forecasts of environmental change.

Stage 3: Sustaining – companies that create their contexts as much as they are created by them, who achieve a sustainable, though adaptive, position in a symbiotic relationship with their environments

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Developing a Learning organizationVarious steps involved are:

1. Creating Awareness: that learning is necessary.

2. Environment: Centralized and mechanistic structures do not create a good environment for learning. A flexible and flatter structure must be formed that encourages innovations and information sharing.

3. Leadership: Leaders should foster the Systems Thinking concept and encourage both individual and organization to learn.

4. Empowerment: Shift the locus of control from managers to workers.

5. Develop learning labs: Create small scale models of real life settings where teals learn how to learn together through simulation games. Find out the failures and learn from their mistakes.

6. Set up an open, flexible atmosphere in the organizations, thus making organization a learning organization.

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Implementing a Learning OrganizationThe concept of learning organizations can be implemented using the following tools and techniques:

1. Strategic and scenario planning: to encourage thinking “out of the box” and experimentation.

2. Competitor analysis: to gather information if appropriate mechanisms are in place.

3. Information and knowledge management-to use information as a resource.

4. Capability Planning-Profiling both quantitative and qualitative competencies.

5. Team building-for developing shared vision, cohesiveness and an open climate.

6. Performance measurement- to encourage investment in learning

7. Reward and recognition systems-that encourage learning and personal development.

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Module 3 and Module 4 Amizone

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