Introduction

Change is a law of nature. We live in a dynamic world where nothing remains static. Everything around us keeps on changing We visualize change in all living creatures, social customs and traditions, political and economic environment, seasons and in perceptions, conceptions and behaviour of human beings. These changes may be slow or rapid, deliberate or spontaneous permanent or temporary, cyclic or non-cyclic, controllable or non-controllable, desirable or undesirable. So the change is the inevitable phenomenon of life.

 

Organisational Change:

Organisational change refers to the alteration of structural relationships and role of the people in the organisation. It is largely structural in nature. These changes may be pressurized by internal or external forces, may affect only one or all the levels and departments or may be related to the organisational structure (hierarchy), people, technology, working or social environment. When any alteration in the organisational relationship takes place, it disturbs the existing equilibrium. As a matter of fact, when an organisation goes on operating for sometime, an adjustment between its people, their structural relationship and technical set up is established. People get adjusted and get used to a set of working relationships, social groups and a organisational and individual life. So long as this equilibrium exist, set pattern of it is easier for the people to adjust in organisation. But when & change is introduced, the existing equilibrium of relationships is disturbed and the problem of new adjustment is created. The problem of readjustment creates various fears and apprehensions in the mind of the people and generates vivid problems and difficulties.

Pressures For Organisational Change: Pressures for change in the organisation may be created by both the external as well as internal pressures. The pressures for organisational change are as follows:

1. Internal Factors:

a. Existing organisational deficiencies

b. Sequential changes

c. Changes in managerial personnel

d. Employee pressures.

2. External factors:

a. Market conditions

b. Social pressures

c. Technology

d. Political pressures and legal requirements.

1. Internal Factors: These include:

a. Existing organisational deficiencies: Certain organisational deficiencies and adjustments become apparent in due course of time. Unnecessary lengthy chain of command, unmanageable span of control, lack of coordination between the departments, barriers in communication, disparity in authority and responsibility, multiplicity of unnecessary committees, lack of uniformity in policies, lack of cooperation between line and staff are some of the common organisational deficiencies and which obviously call for their removal and, hence, necessitating changes in the existing organisational pattern.

b. Sequential change: Every organisational change requires readjustments, sequential changes and supportive changes. For example, creation of a new department may cause the appointment on some new managerial positions, which in turn may necessitate reallocation of authority, responsibility and duties of the concerned departments. Other departments might have to realign their structure, tasks, objectives and staffing. Often managers forget to take into account the potential domino effects and which result in the problems of coordination and control. It is, therefore, necessary that before any significant change is made, the possible consignment of the change must be identified and evaluated and the problem of change should be examined in its total perspective.

c. Changes in Managerial Personnel: Change in the managerial personnel in the organisation may take place on account of new appointments, transfers, promotions caused by expansion and technological changes. Change in the top level managers invariably involves certain organisational changes, Managers differ in their skills, styles and philosophies. Managerial behaviour is always very personalized and selective, and whenever a new manager is appointed, he favours his own organisational objectives, policies, procedures and style of functioning, different from those of his predecessors. He, therefore, introduces sweeping change in the organisation to suit his style of working.

d. Employee pressures: Ever increasing demand of the employees for better job security and job satisfaction, better safety and welfare, congenial working environment, higher wages and perquisites, participation in managerial process and more authority and power also precipitate changes in the organisation structure and pattern.

2. External Factors: These include:

a. Market conditions: Changing market conditions also have a great impact on the organisation. Changes in market conditions may include changes in the nature and extent of demand, caused by varying consumer needs, goals and preferences; changes in nature and volume of supply, caused by the entry of new suppliers, new products and substitutes and new competitions; changes in the factors of production e.g. capital, labour, material and changes in other market conditions relating to price, quality, transport, packaging, warehousing, financing, etc. These changes call for necessary adjustments, alterations, expansion or contraction in the organisation.

b. Social pressures: Changes in the social pattern of life, social values and norms, customs and traditions, culture and. education have a great bearing on the organisational relations and system. Political philosophy (capitalism, socialism or communism) move for social justice and equality, uplift of the downtrodden and many other such social factors would influence organisational system of recruitment and selection, technology and structural relationships.

c. Technology: Technology is changing at a very rapid speed. Today’s technology becomes obsolete tomorrow. Mechanization, computerization and automation have greatly affected the functioning of the modern organisations. New processes and methods become imperative for promoting organisational efficiency, economy, safety and welfare.

d. Political pressures and legal requirements: Changes in government and political philosophy and legal enactments also force organisations to incorporate necessary changes. Changes in labour, corporate and taxation laws, economic policies relating to industry, business, agriculture, export, import, controls and regulations and incentives and concessions all have a great bearing on the organisations and they are compelled to change themselves accordingly.

 

Resistance Of Change:

Resistance to change is the most baffling problem which the manager has to face. The resistance to change may be caused by a host of economic, social or psychological factors. It may be implicit or explicit and individual or collective. Implicit resistance may be manifested through resignation, tardiness, low morale, lack of motivation, increased absenteeism and increased requests for transfer. Explicit response on the other hand may assume the form of strikes, go slow tactics, dharnas, gheraos, violent behaviour and sabotaging activities. There may be the resistance on the individual level as well as on organisational level. Followings are the reasons for resistance to change:

1. Reasons for individual resistance:

a. Economic reasons.

b. Social reasons

c. Psychological reasons.

2. Reasons for organisational resistance:

a. Inflexibility in organisational structure

b. Resource constraints

c. Threat to power and influence

d. Fear of loss of investment.

 

Reasons ForIndividual Resistance To Change:

Individuals by nature dislike change. The following are reasons for individual resistance to change:

a. Psychological reasons/Personal reasons

b. Social reasons.

c. Economic reasons.

a. Psychological reasons/Personal reasons: Even without any reason, some people have an inherent liking for status quo arrangements. Change may involve risk and uncertainty and lower the happiness and convenience. People who are comfortable with status quo arrangement, inevitably resist change unless strongly motivated. Another associate reason is the fear of unknown. Future represents unknown and this unknown threatens and sores the people who then become victims of their own pessimistic thoughts. Another reason for resistance is the ego-defensiveness. Change may be ego-deflating for some managers. For example, creative ideas from salesmen may be turned down by the marketing manager because he feels that his ego may be deflated by accepting the ideas. Human beings are basically creatures of habit and dislike the uncertainty that change brings about.

b. Social reasons: Change often results in disturbance of the existing social relationships. People in work organisations develop some sort of informal relationships and any change breaking these relationships will be strongly resisted. Group pressures also bring about resistance to change in individuals,

c. Economic reasons: These include the fear of technological unemployment, fear of reduced work hours and consequently less pay after change, fear of demotion and low wages, obsolescence of skills, etc. Whenever people sense that new machinery pose a threatening challenge for their existence, they resist change. For example, many managers in today’s industries are resisting the introduction of computers.Further, when people perceive any psychological degradation of the job they are performing, they simply try to maintain status quo and resist change.

 

Reasons For Organisation Resistance To Change:

Many times, the resistance to change is initiated by the organisation as a whole or by the top management. Followings are the main reasons for organisational resistance.

1. Inflexibility in organisational structure.

2. Resource constraints

3. Threat to power and influence

4. Fear of loss of investment.

1. Inflexibility in organisational structure: Some organisational structures have built-in mechanism for resistance to change. For instance, in a typical bureaucratic structure, when chain of command is clearly spelled out, authority, responsibilities and duties are clearly defined, flow of information is stressed through proper channel and the entire pattern is highly mechanistic and rigid, and any change in the organisation structure or pattern would either be impossible or strongly refuted.

2. Resource constraints: Organisational change usually involves a huge expenditure and sufficiency of resources usually is a major constraint. In such situations, change is resisted by the departmental heads and employees. This is true when government forces the organisations to introduce certain technological, organisational or social changes but does not provide adequate human and physical resources, the organisations oppose such changes. Similarly, when trade unions pressurize management to introduce certain changes for the safety, welfare and comfort of the employees, the management put resistance to such changes for lack of availability of funds.

3. Threat to power and influence: Managers occupying top, key and prestigious positions resist change when they perceive that the change may threat to their position, power or influence. Introduction of new technology, reshuffling in organisation structure (levels, department, authority or responsibility) or reallocation of resources may disrupt the existing power relationship and may adversely affect some of the top executives. They initiate resistance in order to safeguard their interest by maintaining status quo.

4. Fear of loss of investment: In case when organisations have invested a huge capital in their permanent assets and training the employees, they are afraid of their capital being sunk, if they introduce a new technology.

 

Overcoming Resistance To Change:

Following techniques are commonly employed by managers inorder to overcome resistance to changes:

1. Education and communication.

2. Participation and involvement.

3. Facilitation and support.

4. Negotiation and agreement.

5. Manipulation and co-operation.

6. Explicit or implicit coercion.

1. Education and communication: The useful technique is to educate the people who resist change about the advantages of introducing change and the limitations of not having it. The manager concerned should clearly explain what the change is, when it is likely to be introduced and how it will be implemented, why the change is required etc.

2. Participation and Involvement: Another technique is to have a dialogue with the resistors and allow them to participate in the change programme. Participation ensures commitment from members.

3. Facilitation and support: The change agent listens to the subordinates, provides emotional support and gives training in skills to cope with the change. The agent through emotional support helps the resistors to adjust to the new demands.

4. Negotiation and agreement: When the group is resistingchange in a strong way, negotiation and agreement will be helpful.Under this method, the change agent offers incentives to resistors in order to tackle the resistance problem.

5. Manipulation and co-operation: Cooperation involvesgiving individuals meaningful role in designing, and implementing change programmes. When all other techniques have failed, manipulation is usually resorted to by the change agent.

6. Explicit or implicit coercion: Under this method, the change agent threatens the resistors with the loss of job, of status, of promotion possibilities, etc. or by actually firing or transferring them. Usually this is followed when change is absolutely essential for the survival of the enterprise.

Resistance to change should not be viewed by managers as necessarily bad, resistance to change can be beneficial. “Resistance can signal to managers the need for improved communication about the meaning and purpose of the change. It can reveal the need for more effective approaches to inducing and implementing the change. Resistance can suggest the need for more realistic timing. It can reveal the inadequacy of current procedures for anticipating changes”. So, managers should understand that the absence of resistance to change could be harmful to an organisation and when resistance does occur, it should not be thought of as something to be overcomed.

 

Approaches To Manage Organisational Change:

There are two popular approaches to manage change:

1. Lewin’s three step model

2. Action research model.

1. Lewin’s Three Step Model: Kurt Levin argued that successful change in organisations .

a. Unfreezing the status quo

b. Movement to a new state

c. Refreezing the new change to make it permanent.

1. Unfreezing means the change efforts to overcome the pressure of both individual resistance and group conformity.

Refreezing stabilizes a change intervention by balancing driving and restraining forces.

The status quo can be considered to be an equilibrium state. To move from this equilibrium to overcome the pressure of both individual resistance and group conformity, unfreezing is necessary. It can be achieved by one of the three ways .

1. The driving force that direct the behaviour away from the status quo can be increased.

2. The restraining forces, which hinder movement from theexisting equilibrium, can be decreased.

3. The third alternative is to combine the first twoapproaches.The driving force that direct the behaviour away from the status quo can be increased.

The management could expect employee resistance to the consolidation. To deal with that resistance, management could use positive incentives to encourage employees to accept the change. For instance, increase in pay can be offered to those who accept the transfer. Very liberal moving expenses can be paid by the company. Of course, management might also consider unfreezing and acceptance of the status quo by removing restraining forces, Employees could be counselled individually about each employee’s concern and apprehension heard and specifically clarified fear and then Assuming that most of the fears are unjustified, the counsellor should assure the employee that there was nothing demonstrate, through tangible evidence, that restraining forces are unwarranted.

Once the consolidation change has been implemented, if it is to be successful to the new situation, needs to be refrozen so that it can be sustained over time. Unless this last step is taken, there is very high chance that the change will be short lived and that employees will attempt to revert to the previous equilibrium state. The objective of refreezing, then, is to stabilize the new situation by balancing the driving and restraining forces.

Kurt Lew model of changing people can be summarized as follows:

1. Unfreezing, changing and refreezing. Unfreezing refers to making individual aware that the present behaviour is inappropriate, irrelevant and unsuitable for change.

2. New learning occurs during the second phase changing.

3. After learning the individual internalise the beliefs,practices he has learnt, i.e. the new behaviour becomes part of hisbehaviour repertorie.

People focussed change efforts are generally made throughsuch techniques as sensitivity training, transactional analysis,team building workshops, management by objectives, etc.

1. Action Research Model: Action research refers to a change process based on systematic collection of data and then selection of a change action based on what the analyzed data indicates. Its importance lies in providing a scientific methodology for managing planned change. The process of action research consists of the five steps given below:

Step I Diagnosis: The change agent, often an outside consultant in action research, begins by gathering information about problems, concerns and needed change from members of the organisation. This diagnosis is analogous to the physician’s search to find what specifically ails a patient. In action research, the change agent asks questions, interviews employees, reviews records and listens to the concerns of employees.                       

Step II Analysis: The information gathered during the diagnostic stage is then analyzed. What problems do people key in on? What patterns do these problems seem to take? The change agent synthesizes this information into primary concerns, problem areas, and possible actions.

Step III Feedback: Action research includes extensive involvement of the change targets. That is, the people, who will be involved in any change program, must be actively involved in determining what the problem is and participating in creating the solution. So, the third step is sharing with employees what has been found from steps one and two. The employees, with the help of the change agent, develop action plans for bringing about any needed change.

Step IV Action: Now the action part of action research is set in motion, the employees and the change agent carry out the specific actions to correct the problems that have been identified.

Step V Evaluation Finally, consistent with the scientificunderpinnings of action research, the change agent evaluates theeffectiveness of the action plans. Using the initial data gathered aspoints of reference, any subsequent changes can be compared andevaluated.

Action Research provides at least two specific benefits for an organisation:

1. It is problem focused. The change agent objectively looks for problems and the type of problem determines the type of change action. While this may seem intuitively obvious, a lot of change activities aren’t done this way. They are solution centred. The change agent has a favourite solution, for example, implementing, flextime or a management by objectives program and then seeks out problems that his solution fits.

2. Because action research so heavily involves employees in the process, resistance to change is reduced. In fact, once employees have actively participated in the feedback stage, the change process typically takes as a momentum of its own. The employees and groups, that have been involved, become an internal source of sustained pressure to bring about the change.

 

Response To Change:

Different people react differently for a given change depending upon their attitude. The perception of the individual about the change may lead to one of the following reactions :

1. Acceptance

2. Resistance

3. Tolerance

4. Rejection.

1. Acceptance: If the employee perceives that the change is largely beneficial to him and he is capable of adjusting himself to the change without any overwhelming sacrifice, he accepts the change. His attitude is positive and he looks enthusiastic, supportive and cooperative towards the change.

2. Resistance: If the employee feels that the change will affect him adversely and he will not be able to adjust it or the change requires extraordinary personal effect or sacrifice on his part, he starts opposing the change through active protests, sabotaging or committing unwanted activities. His attitude becomes negative. He looks worried, afraid and may becomenon-cooperative or vindictive.

3. Tolerance: If the employee perceives that the change is neither very much beneficial nor poses any danger, he becomes indifferent and tolerates the change wihout offering any resistance.

4. Rejection: If he finds that the change may result in serious losses (loss of job, demotion, abdication of power, etc.) without expectation of any gain in return, he totally rejects the change and fights it back tooth and nail. The response to a change may range from complete acceptance to the active resistance and complete rejection of the change.

 

Management Of Change:

Change is an inevitable and inescapable fact of life. It is theonly permanent thing in this world. No organisation exists in isolation; rather, every organisation exists in environment upon which it must depend for the resources necessary to sustain it. In this competitive world the organisation must, in return for the resources it uses, provide goods and services to the environment more efficiently than its competitors. In other words, it must maintain a viable relationship with a changing environment. To achieve long term viability, one organisation must turn out good performance by managing changes in the environment intelligently. Modern organisations are learning to cope with changes. They are beginning to realize the importance of managing change in a planned way. Generally speaking, management of change involves a series of steps.

1. Recognition of the forces demanding change: The first step in the management of change is the recognition of forces necessitating change urgently or over a period of time. Forces may be internal or external. External changes include changing technological levels, changing market situations, changing products, changing consumer tests and preferences etc. Internal forces comprise the launching of a new product mix, erection of a separate department unit, etc. All forces certainly do not demand change. At least some require careful attention from management. The concerned manager should find out thediscrepancy between what is and what should be. He should also find out the real forces. demanding change.

2. Diagnosis of the problem: The most important step in managing change is the diagnosis. A manager may use various diagnostic techniques such as interviews, questionnaires, present observations, etc. Diagnosis helps the change agent to see what changes are needed in the structure, system or in people. Actually the initial diagnostic focus of a manager is on the organizational variables rather than on the psychology of individuals. Diagnosis leads to locating the specific problem areas and identification of the sources of problems. It also enables a manager to know which activities need further improvement and systematization.

3. Plan the change: Change can be made from one of (or all of, or some of) the four fronts-Change in structure, change in task, change in people, change in technology. A change agent has to consider the following points during the planning phase :

a. He should enlighten the need for change to theorganisational participants.

b. He should try to involve the subordinates in decision-making.

c. He should be in a position to convince the members of the benefits and pay offs from change and also alert them to the negative consequences and adverse effects in the absence of change.

d. He should select appropriate strategy-whether to change structure, or people, or technology, or task. Normally all the changes,include the change in behaviour of people..

4. Implementation of change: While implementing change, the change agent encounters resistance from organisational members. Research supports the view that creating and implementing change is more difficult than planning the change. In addition to the problem of resistance, manager also confronts the problem of control. Change disrupts normal course of events and during change it is quite likely that organisation losses control over many activities easily. Further, any change has the probability of altering the existing power among groups and individuals in the organisation. People constantly try for power and control in every organisation. Different individuals, groups, coalitions competing for power turn the organisation to a potential arena whereimplementing change becomes a challenging task.

5. Following up: Without proper feedback, management of change is rendered incomplete and useless. A manager of change agent must compare the standards present during the pre-change period with actual performance after implementing the change and ensure whether the change has been fruitful or wasteful. Any purposeless change is at the cost of the survival of the enterprise.The change agent in this last step should see that change in beneficial.

 

Role Of The Change Agent :

A professional process consultant may act as a change agent or insight managers may act change agent. The change agent influences behaviour and takes decisions in a direction considered desirable by the change agency. The change agent has to fill seven roles in the change process:

1. He makes the client organisation realize the need for change.

2. He identifies and diagnoses the client’s problems. He anticipates certain problems.

3. He prepares the blue print for implementation of change. He solicits the support of the client system to do so.

4. He makes himself acceptable to the client organisation.

5. The client is made receptive to the change which is never thrust upon the client.

6.  He stabilizes the change. He sees to it that the organisation does not revert to the earlier position.

7. He hands over the changed organisation to the client at opportune time and dissociates himself, terminating his relationship with the client.

One of the baffling problems a change agent confronts in the management of change is the resistance from the organisational participants. Often people working in organisations develop their established ways of working, interpersonal relationships, norms and values. They try to assess the environmental impacts and predict the outcomes of their efforts and behaviour. They function, in other words, in a state of their own contrived equilibrium. Any change in the organisation may disturb this equilibrium. “They perceive the change as threat to their existing or anticipated level of need satisfaction”. The change may create a situation of uncertainty, fear, insecurity and loss of self-esteem. They view the expected consequences of the change to be negative. Change invalidates existing conditions and disturbs the status quo arrangements, and as such, managers should view the negative responses from employees as something normal. When resistance does appear, it should not be thought of as something to be overcomed. Instead it can best be thought of as a useful red flag, a signal that something is going wrong.

 

Organisational Climate:

Organisational climate is a set of characteristics that describe an organisation and that distinguishes one organisation from another, are relatively enduring over a period of time and influence the behaviour of people in the organisation. It is the summary perception which people have about the organisation. Thus, it is the global expression of what the organisation is.

Organisational climate is thus the manifestation of attitudes of organisational members towards the organisation itself. An organisation tends to attract and keep people who fit its climate, so that its pattern are perpetuated atleast to some extent.

Organisational climate is very important factor to be considered in studying and analysing organisations because it has a profound influence on the outlook, well being and attitudes of organisational members and thus on their total performance. It affects the behaviour of the people in three ways:

1. Defining the stimuli that confronts the individual.

2. Placing constants upon the individual’s freedom of choice.

3. Providing source of reward and punishment.

Organisational climate thus, provides a useful platform for understanding each characteristics of organisation such as stability, creativity and innovation, communication and effectiveness etc.

Organisational climate should be viewed from total system’s point of view. There may exist different climates within different departments in the organisation and these sub-climates will be integrated to form the organisational climate.

 

Features Of Sound Organisational Climate:

Features and characteristics of sound organisational climate are:

1. Linking rewards with performance rather than linking with other considerations such as blood relationship, friendship and social background.

2. Encouragement for participation and group decision and itsimplementation.

3. High standards of moral integrity in dealing with both internal and external matters.

4. High standards of excellence in every area of operation andevaluation.

5. High value assigned to interpersonal amity and tolerance ofindividual differences.

6. Encouragement for innovation and freedom to act uponideas.

7. Absence of political manoevering for organisational positions and other personal gains.

 

Factors Affecting Organisational Climate :

In every organisation there exist certain elements which exercise influence on the existing climate. These are :

1. Organisation structure

2. Organisation context

3. Physical environment

4. Process

5. System values and norms.

1. Organisation Structure: Structure is a framework that establishes formal relationships and delineate authority and functional responsibility. The actual arrangement of hierarchy affects climate. Highly decentralized structure results in sound. climate when the management feels the necessity of high degree of employee input in the total output. In a sharp contrast, if the management feels the necessity of maintaining greater degree of consistency in operations regarding decision making, it will follow centralized structure. Thus, structure affects climate.

2. Organisational Context: If the company is wedded to such a policy that it effectively utilizes the resources, both human as well as non-human, then it can be inferred that the climate is good. The manpower philosophy is generally expressed by rules, regulations and policies etc. The point is that the reactions of the employees and the degree to which they welcome and accept the managerial philosophy is very crucial to the development of sound and favourable climate. The climate is said to be highly favourable when the existing management techniques are such that employee’s goals are perfectly matched to the ideals of organisation.

3. Physical Environment: Physical environment includes the external conditions of environment, the size and location of the building in which an employee works, the size of the city or the place-all affect the organisational climate. Office decor, size and space a person has in doing the work are the important factors to be borne in mind as they affect climate. High level of noise brings a bad feeling and leads to frustration, nervousness, and aggression and will have a negative effect upon organisational climate. An employee performing his job in a relatively clean, quiet and safe environment will have a favourable perception of the organisational climate.

4. Process: There are so many elements of the process which an organisation follow to achieve its objectives. The elements include communication, decision making, motivation and leadership. In all these processes, the relationship between superior and subordinate is visible and, therefore, the superior can not afford to ignore this visible interface.

A leader has to be aware of the possible influence of his actions on the climate when deciding about the most appropriate control and supervision technique for a given situation. When a leader mismatches his style to the situation, it might abort any hope of attaining organisational objectives.

5. Systems Values And Norms: Every organisation has a formal value system where certain kinds of behaviours are rewarded and encouraged and certain kinds of behaviour forces an individual to formal sanctions. The formal value system is communicated to employees through rules, regulations and policies. From the organisational point of view, both formal and informal groups are very powerful in exerting influence on climate.

 

Elements Of A Favourable Climate:

Climate can range along a continuum from favourable to neutral to unfavourable. Both employers and employees want a more favourable climate because of its benefits, such as better performance and job satisfaction.

General typical elements that contribute to a favourable climate are as follows:

1. Quality of leadership

2. Amount of trust

3. Communication – upward and downward

4. Feeling of useful work

5. Responsibility

6. Fair rewards

7. Reasonable job pressures

8. Opportunity

9. Reasonable controls, structure and bureaucracy

10. Employee involvement and participation.

Employees feel that the climate is favourable when they are doing something useful that provides a sense of personal worth. They frequently want challenging work that is intrinsically satisfying. Many employees also want responsibility, as indicated in the motivation-maintenance model. They want to be listened to and treated as if they have value as individuals. They want to feel that the organisation really cares about their needs and problems.