MODULE 1

ORIGIN OF ORGANIZATION

An organization spelling differences is a social arrangement which pursues collective goals, controls
its own performance, and has a boundary separating it from its environment. The word itself is derived
from the Greek word organon, itself derived from the better-known word [Link] is
interested in organization mainly from an instrumental point of view. For a company, organization is a
means to an end to achieve its goals - which are to create value for its stakeholders (stockholders,
employees, customers, suppliers, community).

Organization development (OD) is a planned, organization-wide effort to increase an organization's

effectiveness and viability. Warren Bennis, has referred to OD as a response to change, a complex educational
strategy intended to change the beliefs, attitudes, values, and structure of organization so that they can better
adapt to new technologies, marketing and challenges, and the dizzying rate of change itself. OD is neither
"anything done to better an organization" nor is it "the training function of the organization"; it is a particular
kind of change process designed to bring about a particular kind of end result. OD can involve interventions in
the organization's "processes," using behavioural science knowledge[1] as well as organizational reflection,
system improvement, planning, and self-analysis.

ORGANIZATION THEORIES

There are several theories which explain the organization and its structure .

CLASSICAL ORGANIZATION THEORY

 Scientific Management approach

 Weber's Bureaucratic approach
 Administrative theory.
NEOCLASSICAL THEORY
MODERN ORGANIZATION THEORY

 Systems approach
 Socio-technical approach
 Contingency or Situational approach

Classical Organzaton Theory

Classical organization theories (Taylor, 1947; Weber, 1947; Fayol, 1949) deal with the formal
organization and concepts to increase management efficiency. Taylor presented scientific management
concepts, Weber gave the bureaucratic approach, and Fayol developed the administrative theory of the
organization. They all contributed significantly to the development of classical organization theory.

Taylor's scientific management approach

The scientific management approach developed by Taylor is based on the concept of planning of work
to achieve efficiency, standardization, specialization and simplification. Acknowledging that the
approach to increased productivity was through mutual trust between management and workers, Taylor
suggested that, to increase this level of trust,

 the advantages of productivity improvement should go to workers,

 physical stress and anxiety should be eliminated as much as possible,
 capabilities of workers should be developed through training, and
 the traditional 'boss' concept should be eliminated.

Taylor developed the following four principles of scientific management for improving productivity:

 Science, not rule-of-thumb Old rules-of-thumb should be supplanted by a scientific approach to each
element of a person's work.

 Scientific selection of the worker Organizational members should be selected based on some analysis,
and then trained, taught and developed.

 Management and labour cooperation rather than conflict Management should collaborate with all
organizational members so that all work can be done in conformity with the scientific principles
developed.

 Scientific training of the worker Workers should be trained by experts, using scientific methods.

Weber's bureaucratic approach

Considering the organization as a segment of broader society, Weber (1947) based the concept of the
formal organization on the following principles:

 Structure In the organization, positions should be arranged in a hierarchy, each with a particular,
established amount of responsibility and authority.

 Specialization Tasks should be distinguished on a functional basis, and then separated according to
specialization, each having a separate chain of command.

 Predictability and stability The organization should operate according to a system of procedures
consisting of formal rules and regulations.

 Rationality Recruitment and selection of personnel should be impartial.

 Democracy Responsibility and authority should be recognized by designations and not by persons.

Weber's theory is infirm on account of dysfunctions (Hicks and Gullett, 1975) such as rigidity,
impersonality, displacement of objectives, limitation of categorization, self-perpetuation and empire
building, cost of controls, and anxiety to improve status.

Administrative theory

The elements of administrative theory (Fayol, 1949) relate to accomplishment of tasks, and include
principles of management, the concept of line and staff, committees and functions of management.
 Division of work or specialization This increases productivity in both technical and managerial work.

 Authority and responsibility These are imperative for an organizational member to accomplish the
organizational objectives.

 Discipline Members of the organization should honour the objectives of the organization. They should
also comply with the rules and regulations of the organization.

 Unity of command This means taking orders from and being responsible to only one superior.

 Unity of direction Members of the organization should jointly work toward the same goals.

 Subordination of individual interest to general interest The interest of the organization should not
become subservient to individual interests or the interest of a group of employees.

 Remuneration of personnel This can be based on diverse factors such as time, job, piece rates,
bonuses, profit-sharing or non-financial rewards.

 Centralization Management should use an appropriate blend of both centralization and de-
centralization of authority and decision making.

 Scalar chain If two members who are on the same level of hierarchy have to work together to
accomplish a project, they need not follow the hierarchy level, but can interact with each other on a
'gang plank' if acceptable to the higher officials.

 Order The organization has a place for everything and everyone who ought to be so engaged.

 Equity Fairness, justice and equity should prevail in the organization.

 Stability of tenure of personnel Job security improves performance. An employee requires some time
to get used to new work and do it well.

 Initiative This should be encouraged and stimulated.

 Esprit de corps Pride, allegiance and a sense of belonging are essential for good performance. Union
is strength.

 The concept of line and staff The concept of line and staff is relevant in organizations which are large
and require specialization of skill to achieve organizational goals. Line personnel are those who work
directly to achieve organizational goals. Staff personnel include those whose basic function is to support
and help line personnel.

 Committees Committees are part of the organization. Members from the same or different hierarchical
levels from different departments can form committees around a common goal. They can be given
different functions, such as managerial, decision making, recommending or policy formulation.
Committees can take diverse forms, such as boards, commissions, task groups or ad hoc committees.
Committees can be further divided according to their functions. In agricultural research organizations,
committees are formed for research, staff evaluation or even allocation of land for experiments.

 Functions of management Fayol (1949) considered management as a set of planning, organizing,

training, commanding and coordinating functions. Gulick and Urwick (1937) also considered
organization in terms of management functions such as planning, organizing, staffing, directing,
coordinating, reporting and budgeting.

Neoclassical theory

Neoclassical theorists recognized the importance of individual or group behaviour and emphasized
human relations. Based on the Hawthorne experiments, the neoclassical approach emphasized social or
human relationships among the operators, researchers and supervisors (Roethlisberger and Dickson,
1943). It was argued that these considerations were more consequential in determining productivity than
mere changes in working conditions. Productivity increases were achieved as a result of high morale,
which was influenced by the amount of individual, personal and intimate attention workers received.

Principles of the neoclassical approach

The classical approach stressed the formal organization. It was mechanistic and ignored major aspects
of human nature. In contrast, the neoclassical approach introduced an informal organization structure
and emphasized the following principles:

 The individual An individual is not a mechanical tool but a distinct social being, with aspirations
beyond mere fulfilment of a few economic and security works. Individuals differ from each other in
pursuing these desires. Thus, an individual should be recognized as interacting with social and
economic factors.

 The work group The neoclassical approach highlighted the social facets of work groups or informal
organizations that operate within a formal organization. The concept of 'group' and its synergistic
benefits were considered important.

 Participative management Participative management or decision making permits workers to

participate in the decision making process. This was a new form of management to ensure increases in
productivity.

Modern theories

Modern theories tend to be based on the concept that the organization is a system which has to adapt to
changes in its environment. In modern theory, an organization is defined as a designed and structured
process in which individuals interact for objectives (Hicks and Gullet, 1975). The contemporary
approach to the organization is multidisciplinary, as many scientists from different fields have
contributed to its development, emphasizing the dynamic nature of communication and importance of
integration of individual and organizational interests. These were subsequently re-emphasized by
Bernard (1938) who gave the first modern and comprehensive view of management. Subsequently,
conclusions on systems control gave insight into application of cybernetics. The operation research
approach was suggested in 1940. It utilized the contributions of several disciplines in problem solving.
Von Bertalanffy (1951) made a significant contribution by suggesting a component of general systems
theory which is accepted as a basic premise of modern theory.

Some of the notable characteristics of the modern approaches to the organization are:

 a systems viewpoint,
 a dynamic process of interaction,
 multilevelled and multidimensional,
 multimotivated,
 probabilistic,
 multidisciplinary,
 descriptive,
 multivariable, and
 adaptive.

Modern understandings of the organization can be broadly classified into:

 the systems approach,

 socio-technical theory, and
 a contingency or situational approach.

The systems approach

The systems approach views organization as a system composed of interconnected - and thus mutually
dependent - sub-systems. These sub-systems can have their own sub-sub-systems. A system can be
perceived as composed of some components, functions and processes (Albrecht, 1983). Thus, the
organization consists of the following three basic elements (Bakke, 1959):

(i) Components There are five basic, interdependent parts of the organizing system, namely:
 the individual,
 the formal and informal organization,
 patterns of behaviour emerging from role demands of the organization,
 role comprehension of the individual, and
 the physical environment in which individuals work.

(ii) Linking processes The different components of an organization are required to operate in an
organized and correlated manner. The interaction between them is contingent upon the linking
processes, which consist of communication, balance and decision making.

 Communication is a means for eliciting action, exerting control and effecting coordination to link
decision centres in the system in a composite form.

 Balance is the equilibrium between different parts of the system so that they keep a harmoniously
structured relationship with one another.

 Decision analysis is also considered to be a linking process in the systems approach. Decisions may
be to produce or participate in the system. Decision to produce depends upon the attitude of the
individual and the demands of the organization. Decision to participate refers to the individual's
decisions to engross themselves in the organization process. That depends on what they get and what
they are expected to do in participative decision making.

(iii) Goals of organization The goals of an organization may be growth, stability and interaction.
Interaction implies how best the members of an organization can interact with one another to their
mutual advantage.

Socio-technical approach

It is not just job enlargement and enrichment which is important, but also transforming technology into
a meaningful tool in the hands of the users. The socio-technical systems approach is based on the
premise that every organization consists of the people, the technical system and the environment
(Pasmore, 1988). People (the social system) use tools, techniques and knowledge (the technical system)
to produce goods or services valued by consumers or users (who are part of the organization's external
environment). Therefore, an equilibrium among the social system, the technical system and the
environment is necessary to make the organization more effective.

The contingency or situational approach

The situational approach (Selznick, 1949; Burns and Stalker, 1961; Woodward, 1965; Lawrence and
Lorsch, 1967) is based on the belief that there cannot be universal guidelines which are suitable for all
situations. Organizational systems are inter-related with the environment. The contingency approach
(Hellriegel and Slocum, 1973) suggests that different environments require different organizational
relationships for optimum effectiveness, taking into consideration various social, legal, political,
technical and economic factors.

Organizational structures

The study of organizations includes a focus on optimizing organizational structure. According to

management science, most human organizations fall roughly into four types:

 Pyramids or hierarchies
 Committees or juries
 Matrix organizations
 Ecologies

Pyramids or hierarchies

A hierarchy exemplifies an arrangement with a leader who leads leaders. This arrangement is often
associated with bureaucracy. Hierarchies were satirized in The Peter Principle (1969), a book that
introduced hierarchiology and the saying that "in a hierarchy every employee tends to rise to his level of
incompetence".

An extremely rigid, in terms of responsibilities, type of organization is exemplified by Führerprinzip.

Committees or juries

These consist of a group of peers who decide as a group, perhaps by voting. The difference between a
jury and a committee is that the members of the committee are usually assigned to perform or lead
further actions after the group comes to a decision, whereas members of a jury come to a decision. In
common law countries legal juries render decisions of guilt, liability and quantify damages; juries are
also used in athletic contests, book awards and similar activities. Sometimes a selection committee
functions like a jury. In the Middle Ages juries in continental Europe were used to determine the law
according to consensus amongst local notables.

Committees are often the most reliable way to make decisions. Condorcet's jury theorem proved that if
the average member votes better than a roll of dice, then adding more members increases the number of
majorities that can come to a correct vote (however correctness is defined). The problem is that if the
average member is worse than a roll of dice, the committee's decisions grow worse, not better: Staffing
is crucial.

Parliamentary procedure, such as Robert's Rules of Order, helps prevent committees from engaging in
lengthy discussions without reaching decisions.

Staff organization or cross-functional team

A staff helps an expert get all his work done. To this end, a "chief of staff" decides whether an
assignment is routine or not. If it's routine, he assigns it to a staff member, who is a sort of junior expert.
The chief of staff schedules the routine problems, and checks that they are completed.

If a problem is not routine, the chief of staff notices. He passes it to the expert, who solves the problem,
and educates the staff – converting the problem into a routine problem.

In a "cross functional team", like an executive committee, the boss has to be a non-expert, because so
many kinds of expertise are required.

Organization: Cyclical structure

A theory put forth by renowned scholar Stephen John has asserted that throughout the cyclical nature of
one’s life organizational patterns are key to success. Through various social and political constraints
within society one must realize that organizational skills are paramount to success. Stephen John
suggests that emphasis needs to be put on areas such as individual/ group processes, functionality, and
overall structures of institutions in order to maintain a proper organization. Furthermore, the individual's
overall organizational skills are pre-determined by the processes undertaken.:

Matrix organization

This organizational type assigns each worker two bosses in two different hierarchies. One hierarchy is
"functional" and assures that each type of expert in the organization is well-trained, and measured by a
boss who is super-expert in the same field. The other direction is "executive" and tries to get projects
completed using the experts. Projects might be organized by regions, customer types, or some other
schema. matrix management

Ecologies

This organization has intense competition. Bad parts of the organization starve. Good ones get more
work. Everybody is paid for what they actually do, and runs a tiny business that has to show a profit, or
they are fired.

Companies who utilize this organization type reflect a rather one-sided view of what goes on in
ecology. It is also the case that a natural ecosystem has a natural border - ecoregions do not in general
compete with one another in any way, but are very autonomous.

The pharmaceutical company GlaxoSmithKline talks about functioning as this type of organization in
this external article from The Guardian.

Goal Setting

In an organization, goal setting is one of the control systems, a component of the appraisal process and
an effective tool for human resource management (Locke, 1968; Sherwin, 1976). The concept of goal
setting is now used to increase the performance of the organization as well as the individual through
management by objectives. Drucker (1954) suggested that management by objectives can be useful for
managers for effectively managing the future direction of the organization.

Importance of goal setting

Well specified and clear goals improve performance in an organization by:

 making clear what people have to do;

 solving specific problems related to the work as they emerge during the process of goal setting;

 reducing ambivalence in the assigned work and thus encouraging increasing efforts;

 supporting people to find a connection between their work and the achievements of the organization;

 assisting individuals in allocating their time, efforts and personal resources to important areas;

 giving a feeling of accomplishment and contentment when specified goals are achieved; and

 providing some control over the people and their work in an organization. Goals are an objective way
of assessing performance in the organization.

There is a definite linkage between goal setting and performance. Latham (1981) reported that

 specified goals are better than vague or general goals,

 difficult and challenging but attainable goals are better than relatively easy goals,

 goals evolved through participation and accepted by workers are preferred to assigned goals, and

 objective and timely feedback about progress toward goals is better than no feedback.

The process of goal setting

Peter Drucker suggested thirty years ago that a systematic approach to goal setting and appraising by
results leads to improved organizational performance and employee satisfaction. This concept of goal
setting is now widely used in most organizations. The process of goal setting (or management by
objectives as it is often called) involves several steps (Luthans, 1985):

(i) The first step in the process is setting general organizational objectives and preparing an action plan.
Goal setting is based on a top-down approach, and involves:
 identifying key result areas in the organization,

 identifying measures of performance,

 stating objectives, and

 evolving agreement between members of top management on the objectives and goals set.

(ii) Once goals are formulated, the second step is to activate the system for implementation. For
successful implementation of such a system, it is essential to prepare the members in the organization.

(iii) The third step is to set individual goals. Individual goals are decided jointly by superiors and
subordinates. Once goals are finalized, an action plan is developed for implementation.

(iv) The fourth step involves:

 ensuring that work is carried out in the right direction,
 identifying obstacles, and
 making adjustments to eliminate obstacles.
(v) Finally comes appraisal of performance of the individual against the set targets. An appraisal and
feedback system is an important part of goal setting. The individual is given feedback on his or her
performance, and provided with suitable rewards and motivation

EVOLUTION OF ORGANISATION DEVELOPMENT

Kurt Lewin (1898–1947) is widely recognized as the founding father of OD. At the core of OD is the concept
of organization, defined as two or more people working together toward one or more shared goal(s).
Development in this context is the notion that an organization may become more effective over time at
achieving its goals.

OD is a long range effort to improve organization's problem solving and renewal processes, particularly
through more effective and collaborative management of organizational culture, often with the
assistance of a change agent or catalyst and the use of the theory and technology of applied behavioral
science. Although behavioral science has provided the basic foundation for the study and practice of
organizational development, new and emerging fields of study have made their presence known.
Experts in systems thinking, leadership studies, organizational leadership, and organizational learning
(to name a few) whose perspective is not steeped in just the behavioral sciences, but a much more multi-
disciplinary and inter-disciplinary approach have emerged as OD catalysts. These emergent expert
perspectives see the organization as the holistic interplay of a number of systems that impact the process
and outputs of the entire organization. More importantly, the term change agent or catalyst is
synonymous with the notion of a leader who is engaged in doing leadership, a transformative or
effectiveness process as opposed to management, a more incremental or efficiency based change
methodology.

Organization development is a "contractual relationship between a change agent and a sponsoring

organization entered into for the purpose of using applied behavioral science and or other
organizational change perspectives in a systems context to improve organizational performance and the
capacity of the organization to improve itself".

Organization development is an ongoing, systematic process to implement effective change in an

organization. Organization development is known as both a field of applied behavioral science focused
on understanding and managing organizational change and as a field of scientific study and inquiry. It is
interdisciplinary in nature and draws on sociology, psychology, and theories of motivation, learning,
and personality.

Contractual relationship

Although neither the sponsoring organization nor the change agent can be sure at the outset of the exact
nature of the problem or problems to be dealt with or how long the change agents' help will be needed,
it is essential that some tentative agreement on these matters be reached. The sponsoring organization
needs to know generally what the change agent's preliminary plan is, what its own commitments are in
relation to personal commitments and responsibility for the program, and what the change agent's fee
will be. The change agent must assure himself that the organization's, and particularly the top
executives', commitment to change is strong enough to support the kind of self-analysis and personal
involvement requisite to success of the program. Recognizing the uncertainties lying ahead on both
sides, a termination agreement permitting either side to withdraw at any time is usually included.[2]

Change agent
A change agent in the sense used here is not a technical expert skilled in such functional areas as
accounting, production, or finance. He is a behavioral scientist who knows how to get people in an
organization involved in solving their own problems. His main strength is a comprehensive knowledge
of human behavior, supported by a number of intervention techniques (to be discussed later). The
change agent can be either external or internal to the organization. An internal change agent is usually a
staff person who has expertise in the behavioral sciences and in the intervention technology of OD.
Beckhard reports several cases in which line people have been trained in OD and have returned to their
organizations to engage in successful change assignments.[3] In the natural evolution of change
mechanisms in organizations, this would seem to approach the ideal arrangement. Qualified change
agents can be found on some university faculties, or they may be private consultants associated with
such organizations as the National Training Laboratories Institute for Applied Behavioral Science
(Washington, D.C.) University Associates (San Diego, California), the Human Systems Intervention
graduate program in the Department of Applied Human Sciences (Concordia University, Montreal,
Canada), Navitus (Pvt) Ltd (Pakistan), and similar organizations.

The change agent may be a staff or line member of the organization who is schooled in OD theory and
technique. In such a case, the "contractual relationship" is an in-house agreement that should probably
be explicit with respect to all of the conditions involved except the fee.

Sponsoring organization

The initiative for OD programs comes from an organization that has a problem. This means that top
management or someone authorized by top management is aware that a problem exists and has decided
to seek help in solving it. There is a direct analogy here to the practice of psychotherapy: The client or
patient must actively seek help in finding a solution to his problems. This indicates a willingness on the
part of the client organization to accept help and assures the organization that management is actively
concerned.[2]

Applied behavioral science

One of the outstanding characteristics of OD that distinguishes it from most other improvement
programs is that it is based on a "helping relationship." Some believe that the change agent is not a
physician to the organization's ills; that s/he does not examine the "patient," make a diagnosis, and write
a prescription. Nor does s/he try to teach organizational members a new inventory of knowledge which
they then transfer to the job situation. Using theory and methods drawn from such behavioral sciences
as (industrial/organisational psychology, industrial sociology, communication, cultural anthropology,
administrative theory, organizational behavior, economics, and political science, the change agent's
main function is to help the organization define and solve its own problems. The basic method used is
known as action research. This approach, which is described in detail later, consists of a preliminary
diagnosis, collecting data, feedback of the data to the client, data exploration by the client group, action
planning based on the data, and taking action.[4]

Systems context

OD deals with a total system — the organization as a whole, including its relevant environment — or
with a subsystem or systems — departments or work groups — in the context of the total system. Parts
of systems, for example, individuals, cliques, structures, norms, values, and products are not considered
in isolation; the principle of interdependency, that is, that change in one part of a system affects the
other parts, is fully recognized. Thus, OD interventions focus on the total culture and cultural processes
of organizations. The focus is also on groups, since the relevant behavior of individuals in organizations
and groups is generally a product of group influences rather than personality.[2]

Improved organizational performance

The objective of OD is to improve the organization's capacity to handle its internal and external
functioning and relationships. This would include such things as improved interpersonal and group
processes, more effective communication, enhanced ability to cope with organizational problems of all
kinds, more effective decision processes, more appropriate leadership style, improved skill in dealing
with destructive conflict, and higher levels of trust and cooperation among organizational members.
These objectives stem from a value system based on an optimistic view of the nature of man — that
man in a supportive environment is capable of achieving higher levels of development and
accomplishment. Essential to organization development and effectiveness is the scientific method —
inquiry, a rigorous search for causes, experimental testing of hypotheses, and review of results.

Organizational self-renewal

The ultimate aim of OD practitioners is to "work themselves out of a job" by leaving the client
organization with a set of tools, behaviors, attitudes, and an action plan with which to monitor its own
state of health and to take corrective steps toward its own renewal and development. This is consistent
with the systems concept of feedback as a regulatory and corrective mechanism.[2]

Early development

Kurt Lewin played a key role in the evolution of organization development as it is known today. As
early as World War II, Lewin experimented with a collaborative change process (involving himself as
consultant and a client group) based on a three-step process of planning, taking action, and measuring
results. This was the forerunner of action research, an important element of OD. Lewin then participated
in the beginnings of laboratory training, or T-groups, and, after his death in 1947, his close associates
helped to develop survey-research methods at the University of Michigan. These procedures became
important parts of OD as developments in this field continued at the National Training Laboratories and
in growing numbers of universities and private consulting firms across the country.

The failure of off-site laboratory training to live up to its early promise was one of the important forces
stimulating the development of OD. Laboratory training is learning from a person's "here and now"
experience as a member of an ongoing training group. Such groups usually meet without a specific
agenda. Their purpose is for the members to learn about themselves from their spontaneous "here and
now" responses to an ambiguous hypothetical situation. Problems of leadership, structure, status,
communication, and self-serving behavior typically arise in such a group. The members have an
opportunity to learn something about themselves and to practice such skills as listening, observing
others, and functioning as effective group members.[5]

As formerly practiced (and occasionally still practiced for special purposes), laboratory training was
conducted in "stranger groups," or groups composed of individuals from different organizations,
situations, and backgrounds.A major difficulty developed, however, in transferring knowledge gained
from these "stranger labs" to the actual situation "back home". This required a transfer between two
different cultures, the relatively safe and protected environment of the T-group (or training group) and
the give-and-take of the organizational environment with its traditional values. This led the early
pioneers in this type of learning to begin to apply it to "family groups" — that is, groups located within
an organization. From this shift in the locale of the training site and the realization that culture was an
important factor in influencing group members (along with some other developments in the behavioral
sciences) emerged the concept of organization development.[5]

Case history

The Cambridge Clinic[citation needed] found itself having difficulty with its internal working relationships.
The medical director, concerned with the effect these problems could have on patient care, contacted an
organizational consultant at a local university and asked him for help. A preliminary discussion among
the director, the clinic administrator, and the consultant seemed to point to problems in leadership,
conflict resolution, and decision processes. The consultant suggested that data be gathered so that a
working diagnosis could be made. The clinic officials agreed, and tentative working arrangements were
concluded.[5]

The consultant held a series of interviews involving all members of the clinic staff, the medical director,
and the administrator. Then the consultant "thematized", or summarized, the interview data to identify
specific problem areas. At the beginning of a workshop about a week later, the consultant fed back to
the clinic staff the data he had collected.

The staff arranged the problems in the following priorities[5]:

1. Role conflicts between certain members of the medical staff were creating tensions that
interfered with the necessity for cooperation in handling patients.
2. The leadership style of the medical director resulted in his putting off decisions on important
operating matters. This led to confusion and sometimes to inaction on the part of the medical
and administrative staffs.
3. Communication between the administrative, medical, and outreach (social worker) staffs on
mutual problems tended to be avoided. Open conflicts over policies and procedures were thus
held in check, but suppressed feelings clearly had a negative influence on interpersonal and
intergroup behavior.

Through the use of role analysis and other techniques suggested by the consultant, the clinic staff and
the medical director were able to explore the role conflict and leadership problems and to devise
effective ways of coping with them. Exercises designed to improve communication skills and a
workshop session on dealing with conflict led to progress in developing more openness and trust
throughout the clinic. An important result of this first workshop was the creation of an action plan that
set forth specific steps to be applied to clinic problems by clinic personnel during the ensuing period.
The consultant agreed to monitor these efforts and to assist in any way he could. Additional discussions
and team development sessions were held with the director and the medical and administrative staffs.

A second workshop attended by the entire clinic staff took place about two months after the first. At the
second workshop, the clinic staff continued to work together on the problems of dealing with conflict
and interpersonal communication. During the last half-day of the meeting, the staff developed a revised
action plan covering improvement activities to be undertaken in the following weeks and months to
improve the working relationships of the clinic.

A notable additional benefit of this OD program was that the clinic staff learned new ways of
monitoring the clinic's performance as an organization and of coping with some of its other problems.
Six months later, when the consultant did a follow-up check on the organization, the staff confirmed
that interpersonal problems were now under better control and that some of the techniques learned at the
two workshops associated with the OD programs were still being used.[5]

Modern development
In recent years, serious questioning has emerged about the relevance of OD to managing change in
modern organizations. The need for "reinventing" the field has become a topic that even some of its
"founding fathers" are discussing critically.[7]

With this call for reinvention and change, scholars have begun to examine organizational development
from an emotion-based standpoint. For example, deKlerk (2007) [8] writes about how emotional trauma
can negatively affect performance. Due to downsizing, outsourcing, mergers, restructuring, continual
changes, invasions of privacy, harassment, and abuses of power, many employees experience the
emotions of aggression, anxiety, apprehension, cynicism, and fear, which can lead to performance
decreases. deKlerk (2007) suggests that in order to heal the trauma and increase performance, O.D.
practitioners must acknowledge the existence of the trauma, provide a safe place for employees to
discuss their feelings, symbolize the trauma and put it into perspective, and then allow for and deal with
the emotional responses. One method of achieving this is by having employees draw pictures of what
they feel about the situation, and then having them explain their drawings with each other. Drawing
pictures is beneficial because it allows employees to express emotions they normally would not be able
to put into words. Also, drawings often prompt active participation in the activity, as everyone is
required to draw a picture and then discuss its meaning.

MODULE 2

OD interventions

"Interventions" are principal learning processes in the "action" stage (see Figure 1) of organization
development. Interventions are structured activities used individually or in combination by the members
of a client system to improve their social or task performance. They may be introduced by a change
agent as part of an improvement program, or they may be used by the client following a program to
check on the state of the organization's health, or to effect necessary changes in its own behavior.
"Structured activities" mean such diverse procedures as experiential exercises, questionnaires, attitude
surveys, interviews, relevant group discussions, and even lunchtime meetings between the change agent
and a member of the client organization. Every action that influences an organization's improvement
program in a change agent-client system relationship can be said to be an intervention.[10]

There are many possible intervention strategies from which to choose. Several assumptions about the
nature and functioning of organizations are made in the choice of a particular strategy. Beckhard lists
six such assumptions:

1. The basic building blocks of an organization are groups (teams). Therefore, the basic units of
change are groups, not individuals.
2. An always relevant change goal is the reduction of inappropriate competition between parts of
the organization and the development of a more collaborative condition.
3. Decision making in a healthy organization is located where the information sources are, rather
than in a particular role or level of hierarchy.
4. Organizations, subunits of organizations, and individuals continuously manage their affairs
against goals. Controls are interim measurements, not the basis of managerial strategy.
5. One goal of a healthy organization is to develop generally open communication, mutual trust,
and confidence between and across levels.
6. People support what they help create. People affected by a change must be allowed active
participation and a sense of ownership in the planning and conduct of the change.[3]
Interventions range from those designed to improve the effectiveness of individuals through those
designed to deal with teams and groups, intergroup relations, and the total organization. There are
interventions that focus on task issues (what people do), and those that focus on process issues (how
people go about doing it). Finally, interventions may be roughly classified according to which change
mechanism they tend to emphasize: for example, feedback, awareness of changing cultural norms,
interaction and communication, conflict, and education through either new knowledge or skill practice.
[11]

Action research

Wendell L French and Cecil Bell define organization development (OD) at one point as "organization
improvement through action research".[4] If one idea can be said to summarize OD's underlying
philosophy, it would be action research as it was conceptualized by Kurt Lewin and later elaborated and
expanded on by other behavioral scientists. Concerned with social change and, more particularly, with
effective, permanent social change, Lewin believed that the motivation to change was strongly related
to action: If people are active in decisions affecting them, they are more likely to adopt new ways.
"Rational social management", he said, "proceeds in a spiral of steps, each of which is composed of a
circle of planning, action, and fact-finding about the result of action".[9]

Figure 1: Systems Model of Action-Research Process

Lewin's description of the process of change involves three steps [9]:

"Unfreezing": Faced with a dilemma or disconfirmation, the individual or group becomes aware of a
need to change.

"Changing": The situation is diagnosed and new models of behavior are explored and tested.

"Refreezing": Application of new behavior is evaluated, and if reinforcing, adopted.

Figure 1 summarizes the steps and processes involved in planned change through action research.
Action research is depicted as a cyclical process of change. The cycle begins with a series of planning
actions initiated by the client and the change agent working together. The principal elements of this
stage include a preliminary diagnosis, data gathering, feedback of results, and joint action planning. In
the language of systems theory, this is the input phase, in which the client system becomes aware of
problems as yet unidentified, realizes it may need outside help to effect changes, and shares with the
consultant the process of problem diagnosis.
The second stage of action research is the action, or transformation, phase. This stage includes actions
relating to learning processes (perhaps in the form of role analysis) and to planning and executing
behavioral changes in the client organization. As shown in Figure 1, feedback at this stage would move
via Feedback Loop A and would have the effect of altering previous planning to bring the learning
activities of the client system into better alignment with change objectives. Included in this stage is
action-planning activity carried out jointly by the consultant and members of the client system.
Following the workshop or learning sessions, these action steps are carried out on the job as part of the
transformation stage.[5]

The third stage of action research is the output, or results, phase. This stage includes actual changes in
behavior (if any) resulting from corrective action steps taken following the second stage. Data are again
gathered from the client system so that progress can be determined and necessary adjustments in
learning activities can be made. Minor adjustments of this nature can be made in learning activities via
Feedback Loop B (see Figure 1). Major adjustments and reevaluations would return the OD project to
the first, or planning, stage for basic changes in the program. The action-research model shown in
Figure 1 closely follows Lewin's repetitive cycle of planning, action, and measuring results. It also
illustrates other aspects of Lewin's general model of change. As indicated in the diagram, the planning
stage is a period of unfreezing, or problem awareness.[9] The action stage is a period of changing, that is,
trying out new forms of behavior in an effort to understand and cope with the system's problems. (There
is inevitable overlap between the stages, since the boundaries are not clear-cut and cannot be in a
continuous process). The results stage is a period of refreezing, in which new behaviors are tried out on
the job and, if successful and reinforcing, become a part of the system's repertoire of problem-solving
behavior.

Action research is problem centered, client centered, and action oriented. It involves the client system in
a diagnostic, active-learning, problem-finding, and problem-solving process. Data are not simply
returned in the form of a written report but instead are fed back in open joint sessions, and the client and
the change agent collaborate in identifying and ranking specific problems, in devising methods for
finding their real causes, and in developing plans for coping with them realistically and practically.
Scientific method in the form of data gathering, forming hypotheses, testing hypotheses, and measuring
results, although not pursued as rigorously as in the laboratory, is nevertheless an integral part of the
process. Action research also sets in motion a long-range, cyclical, self-correcting mechanism for
maintaining and enhancing the effectiveness of the client's system by leaving the system with practical
and useful tools for self-analysis and self-renewal.[5]

MODULE 3

Requirements for Successful Organizational Change

Cummings and Worley (Organization Development and Change, 1995) describe a comprehensive,
five-phase, general process for managing change, including: 1) motivating change, 2) creating
vision, 3) developing political support, 4) managing the transition and 5) sustaining momentum.
That process seems suitable for organizing and describing general guidelines about managing
change. Whatever model you choose to use when guiding organizational change, that model should
include the priorities and areas of emphasis described in the following five phases of change. The
collaborative consulting model described integrates highlights from all of the five phases.
Motivating Change
This phase includes creating a readiness for change in your client organization and developing
approaches to overcome resistance to change. General guidelines for managing this phase include
enlightening members of the organization about the need for change, expressing the current status of
the organization and where it needs to be in the future, and developing realistic approaches about
how change might be accomplished. Next, organization leaders need to recognize that people in the
organization are likely to resist making major changes for a variety of reasons, including fear of the
unknown, inadequacy to deal with the change and whether the change will result in an adverse effect
on their jobs. People need to feel that their concerns are being heard. Leaders must widely
communicate the need for the change and how the change can be accomplished successfully.
Leaders must listen to the employees – people need to feel that the approach to change will include
their strong input and ongoing involvement.
Creating Vision
Leaders in the organization must articulate a clear vision that describes what the change effort is
striving to accomplish. Ideally, people in the organization have strong input to the creation of the
vision and how it can be achieved. The vision should clearly depict how the achievement of the
vision will improve the organization. It is critically important that people believe that the vision is
relevant and realistic. Research indicates that cynicism is increasing in organizations in regard to
change efforts. People do not want to hear the need for the latest “silver bullet” that will completely
turn the organization around and make things better for everyone all the time. They want to feel
respected enough by leaders to be involved and to work toward a vision that is realistic, yet
promising in the long run.
Often the vision is described in terms of overall outcomes (or changes) to be achieved by all or parts
of the organization, including associated goals and objectives to achieve the outcomes. Sometimes,
an overall purpose, or mission, is associated with the effort to achieve the vision, as well.
Developing Political Support
This phase of change management is often overlooked, yet it is the phase that often stops successful
change from occurring. Politics in organizations is about power. Power is important among
members of the organization when striving for the resources and influence necessary to successfully
carry out their jobs. Power is also important when striving to maintain jobs and job security. Power
usually comes from credibility, whether from strong expertise or integrity. Power also comes from
the authority of one’s position in the organization.
Some people have a strong negative reaction when talking about power because power often is
associated with negative applications, for example, manipulation, abuse or harassment. However,
power, like conflict, exists in all human interactions and is not always bad. It is how power and
conflict are used and managed that determine how power and conflict should be perceived.
Matters of power and politics are critically important to recognize and manage during organizational
change activities. Change often means shifts in power across management levels, functions and
groups. To be successful, the change effort must recruit the support of all key power players, for
example, senior management, subject matter experts and others who are recognized as having strong
expertise and integrity.
A strong mechanism for ensuring alignment of power with the change effort is to develop a network
of power-players who interact and count on each other to support and guide the change effort.
Means to manage power can include ensuring that all power-players are involved in recognizing the
need for change, developing the vision and methods to achieve the vision, and organization-wide
communication about the status of change. Any recommendations or concerns expressed by those in
power must be promptly recognized and worked through.
Managing Transition
This phase occurs when the organization works to make the actual transition from the current state to
the future state. In consultations, this phase usually is called implementation of the action plans.
The plans can include a wide variety of “interventions,” or activities designed to make a change in
the organization, for example, creating and/or modifying major structures and processes in the
organization. These changes might require ongoing coaching, training and enforcement of new
policies and procedures. In addition, means of effective change management must continue,
including strong, clear, ongoing communication about the need for the change, status of the change,
and solicitation of organization members’ continuing input to the change effort.
Ideally, the various actions are integrated into one overall Change Management Plan that includes
specific objectives, or milestones, that must be accomplished by various deadlines, along with
responsibilities for achieving each objective. Rarely are these plans implemented exactly as planned.
Thus, as important as developing the plan, is making the many ongoing adjustments to the plan with
key members of the organization, while keeping other members up-to-date about the changes and the
reasons for them.
Sustaining Momentum
Often, the most difficult phase in managing change is this phase when leaders work to sustain the
momentum of the implementation and adjustment of plans. Change efforts can encounter a wide
variety of obstacles, for example, strong resistance from members of the organization, sudden
departure of a key leader in the organization, or a dramatic reduction in sales. Strong, visible,
ongoing support from top leadership is critically important to show overall credibility and
accountabilities in the change effort. Those participating in the change effort often require ongoing
support, often in the form of provision of resources, along with training and coaching. The role of
support cannot be minimized – despite its importance during organizational change, the role of
support is often forgotten. At this point in a consulting project, it may be wise for you to ensure you
have ongoing support (often from other consultants) that can provide you ongoing objectivity,
affirmation, provision of resources and other forms of support. Employee performance management
systems play a critical role in this phase of organizational change, including in setting goals, sharing
feedback about accomplishment of goals, rewarding behaviors that successfully achieve goals and
accomplish change, and addressing performance issues.

Overcoming Resistance To Change

Top Ten Reasons People Resist Change:

1. THE RISK OF CHANGE IS SEEN AS GREATER THAN THE RISK OF STANDING STILL
Making a change requires a kind of leap of faith:  you decide to move in the direction of the unknown
on the promise that something will be better for you.  But you have no proof.  Taking that leap of faith
is risky, and people will only take active steps toward the unknown if they genuinely believe – and
perhaps more importantly, feel – that the risks of standing still are greater than those of moving forward
in a new direction.  Making a change is all about managing risk.  If you are making the case for change,
be sure to set out in stark, truthful terms why you believe the risk situation favors change.  Use numbers
whenever you can, because we in the West pay attention to numbers.  At the very least, they get our
attention, and then when the rational mind is engaged, the emotional mind (which is typically most
decisive) can begin to grapple with the prospect of change.  But if you only sell your idea of change
based on idealistic, unseen promises of reward, you won’t be nearly as effective in moving people to
action.  The power of the human fight-or-flight response can be activated to fight for change, but that
begins with the perception of risk.

2. PEOPLE FEEL CONNECTED TO OTHER PEOPLE WHO ARE IDENTIFIED WITH THE OLD
WAY
We are a social species.  We become and like to remains connected to those we know, those who have
taught us, those with whom we are familiar – even at times to our own detriment.  Loyalty certainly
helped our ancestors hunt antelope and defend against the aggressions of hostile tribes, and so we are
hard wired, I believe, to form emotional bonds of loyalty, generally speaking.  If you ask people in an
organization to do things in a new way, as rational as that new way may seem to you, you will be setting
yourself up against all that hard wiring, all those emotional connections to those who taught your
audience the old way - and that’s not trivial.  At the very least, as you craft your change message, you
should make statements that honor the work and contributions of those who brought such success to the
organization in the past, because on a very human but seldom articulated level, your audience will feel
asked to betray their former mentors (whether those people remain in the organization or not). A little
good diplomacy at the outset can stave off a lot of resistance. 

3. PEOPLE HAVE NO ROLE MODELS FOR THE NEW ACTIVITY

Never underestimate the power of observational learning.  If you see yourself as a change agent, you
probably are something of a dreamer, someone who uses the imagination to create new possibilities that
do not currently exist.  Well, most people don’t operate that way.  It’s great to be a visionary, but
communicating a vision is not enough. Get some people on board with your idea, so that you or they
can demonstrate how the new way can work. Operationally, this can mean setting up effective pilot
programs that model a change and work out the kinks before taking your innovation “on the road.”  For
most people, seeing is believing.  Less rhetoric and more demonstration can go a long way toward
overcoming resistance, changing people’s objections from the “It can’t be done!” variety to the “How
can we get it done?” category.
4. PEOPLE FEAR THEY LACK THE COMPETENCE TO CHANGE
This is a fear people will seldom admit.  But sometimes, change in organizations necessitates changes in
skills, and some people will feel that they won’t be able to make the transition very well.  They don’t
think they, as individuals, can do it.  The hard part is that some of them may be right.  But in many
cases, their fears will be unfounded, and that’s why part of moving people toward change requires you
to be an effective motivator.  Even more, a successful change campaign includes effective new training
programs, typically staged from the broad to the specific.  By this I mean that initial events should be
town-hall type information events, presenting the rationale and plan for change, specifying the next
steps, outlining future communications channels for questions, etc., and specifying how people will
learn the specifics of what will be required of them, from whom, and when.  Then, training programs
must be implemented and evaluated over time.  In this way, you can minimize the initial fear of a lack
of personal competence for change by showing how people will be brought to competence throughout
the change process.  Then you have to deliver.

5. PEOPLE FEEL OVERLOADED AND OVERWHELMED

Fatigue can really kill a change effort, for an individual or for an organization.  If, for example, you
believe you should quit smoking, but you’ve got ten projects going and four kids to keep up with, it can
be easy to put off your personal health improvement project (until your first heart attack or cancer scare,
when suddenly the risks of standing still seem greater than the risks of change!).  When you’re
introducing a change effort, be aware of fatigue as a factor in keeping people from moving forward,
even if they are telling you they believe in the wisdom of your idea.  If an organization has been through
a lot of upheaval, people may resist change just because they are tired and overwhelmed, perhaps at
precisely the time when more radical change is most needed!  That’s when you need to do two things: 
re-emphasize the risk scenario that forms the rationale for change (as in my cancer scare example), and
also be very generous and continuously attentive with praise, and with understanding for people’s
complaints, throughout the change process.  When you reemphasize the risk scenario, you’re activating
people’s fears, the basic fight-or-flight response we all possess.  But that’s not enough, and fear can
produce its own fatigue. You’ve got to motivate and praise accomplishments as well, and be patient
enough to let people vent (without getting too caught up in attending to unproductive negativity).

6. PEOPLE HAVE A HEALTHY SKEPTICISM AND WANT TO BE SURE NEW IDEAS ARE
SOUND
It’s important to remember that few worthwhile changes are conceived in their final, best form at the
outset.  Healthy skeptics perform an important social function:  to vet the change idea or process so that
it can be improved upon along the road to becoming reality.  So listen to your skeptics, and pay
attention, because some percentage of what they have to say will prompt genuine improvements to your
change idea (even if some of the criticism you will hear will be based more on fear and anger than
substance).

7. PEOPLE FEAR HIDDEN AGENDAS AMONG WOULD-BE REFORMERS

Let’s face it, reformers can be a motley lot.  Not all are to be trusted.  Perhaps even more frightening,
some of the worst atrocities modern history has known were begun by earnest people who really
believed they knew what was best for everyone else.  Reformers, as a group, share a blemished past . . .
And so, you can hardly blame those you might seek to move toward change for mistrusting your
motives, or for thinking you have another agenda to follow shortly.  If you seek to promote change in an
organization, not only can you expect to encounter resentment for upsetting the established order and
for thinking you know better than everyone else, but you may also be suspected of wanted to increase
your own power, or even eliminate potential opposition through later stages of change. 

I saw this in a recent change management project for which I consulted, when management faced a
lingering and inextinguishable suspicion in some quarters that the whole affair was a prelude to far-
reaching layoffs.  It was not the case, but no amount of reason or reassurance sufficed to quell the fears
of some people.  What’s the solution?  Well, you’d better be interested in change for the right reasons,
and not for personal or factional advantage, if you want to minimize and overcome resistance. And
you’d better be as open with information and communication as you possibly can be, without reacting
unduly to accusations and provocations, in order to show your good faith, and your genuine interest in
the greater good of the organization.  And if your change project will imply reductions in workforce,
then be open about that and create an orderly process for outplacement and in-house retraining.  Avoid
the drip-drip-drip of bad news coming out in stages, or through indirect communication or rumor.  Get
as much information out there as fast as you can and create a process to allow everyone to move on and
stay focused on the change effort.

8. PEOPLE FEEL THE PROPOSED CHANGE THREATENS THEIR NOTIONS OF THEMSELVES

Sometimes change on the job gets right to a person’s sense of identity. When a factory worker begins to
do less with her hands and more with the monitoring of automated instruments, she may lose her sense
of herself as a craftsperson, and may genuinely feel that the very things that attracted her to the work in
the first place have been lost. I saw this among many medical people and psychologists during my
graduate training, as the structures of medical reimbursement in this country changed in favor of the
insurance companies, HMO’s and managed care organizations.  Medical professionals felt they had less
say in the treatment of their patients, and felt answerable to less well trained people in the insurance
companies to approve treatments the doctors felt were necessary.  And so, the doctors felt they had lost
control of their profession, and lost the ability to do what they thought best for patients. 

My point is not to take sides in that argument, but to point out how change can get right to a person’s
sense of identity, the sense of self as a professional.  As a result, people may feel that the intrinsic
rewards that brought them to a particular line of work will be lost with the change.  And in some cases,
they may be absolutely right. The only answer is to help people see and understand the new rewards that
may come with a new work process, or to see how their own underlying sense of mission and values
can still be realized under the new way of operating.  When resistance springs from these identity-
related roots, it is deep and powerful, and to minimize its force, change leaders must be able to
understand it and then address it, acknowledging that change does have costs, but also, (hopefully)
larger benefits.

9. PEOPLE ANTICIPATE A LOSS OF STATUS OR QUALITY OF LIFE

Real change reshuffles the deck a bit.  Reshuffling the deck can bring winners . . . and losers.  Some
people, most likely, will gain in status, job security, quality of life, etc. with the proposed change, and
some will likely lose a bit.  Change does not have to be a zero sum game, and change can (and should)
bring more advantage to more people than disadvantage.  But we all live in the real world, and let’s face
it – if there were no obstacles (read: people and their interests) aligned against change, then special
efforts to promote change would be unnecessary. 

Some people will, in part, be aligned against change because they will clearly, and in some cases
correctly, view the change as being contrary to their interests.  There are various strategies for
minimizing this, and for dealing with steadfast obstacles to change in the form of people and their
interests, but the short answer for dealing with this problem is to do what you can to present the
inevitability of the change given the risk landscape, and offer to help people to adjust. Having said that,
I’ve never seen a real organizational change effort that did not result in some people choosing to leave
the organization, and sometimes that’s best for all concerned. When the organization changes, it won’t
be to everyone’s liking, and in that case, it’s best for everyone to be adult about it and move on.

10.  PEOPLE GENUINELY BELIEVE THAT THE PROPOSED CHANGE IS A BAD IDEA
I’ll never forget what a supervisor of mine said to be, during the year after I had graduated from college,
secure as I was in the knowledge of my well earned, pedigreed wisdom at age twenty-two.  We were in
a meeting, and I made the comment, in response to some piece of information, “Oh, I didn’t know
that!”  Ricky, my boss, looked at me sideways, and commented dryly, “Things you don’t know . . . fill
libraries.”  The truth is, sometimes someone’s (even – gasp! – my) idea of change is just not a good
idea.  Sometimes people are not being recalcitrant, or afraid, or muddle-headed, or nasty, or foolish
when they resist.  They just see that we’re wrong. And even if we’re not all wrong, but only half wrong,
or even if we’re right, it’s important not to ignore when people have genuine, rational reservations or
objections. 

Not all resistance is about emotion, in spite of this list I’ve assembled here.  To win people’s
commitment for  change, you must engage them on both a rational level and an emotional level. I’ve
emphasized the emotional side of the equation for this list because I find, in my experience, that this is
the area would-be change agents understand least well.  But I’m also mindful that a failure to listen to
and respond to people’s rational objections and beliefs is ultimately disrespectful to them, and to
assume arrogantly that we innovative, change agent types really do know best.  A word to the wise: 
we’re just as fallible as anyone.

Overcoming Resistance to Change: Most Common Ways2

 Education and communication

 Participation and involvement
 Facilitation and support
 Negotiation and agreement
 Manipulation and co-optation
 Explicit and implicit coercion

MODULE 4

ORGANISATION TRANSFORMATION

Introduction

Organizations today are faced increasingly with fierce competition, demanding customers, economic
pressures, and financial crises. To be effective, they must reduce costs, improve product and service
quality, and respond quickly to new opportunities in the marketplace. This management accounting
guideline addresses the topic of transforming an enterprise in practical terms, describing common
practices, comparing structural options, and identifying relevant issues in planning, implementing, and
measuring the success of organizational transformation. The transformation involves complex and
simultaneous interactions. In his process, a variety of possible forms can emerge. Each of these forms is
a possible alternative future of the system-which may range from complete destruction and annihilation
of the system to a complete transformation to a higher level of complexity.

Definition

Organisational Transformation is a term referring collectively to such activities as reengineering,

redesigning and redefining business systems. The dominant enabling technology in transforming
organization is information and technology.

As business model change rapidly in the financial environment and mergers and acquisition change the
face of the organization. So, organization continually need to

a. A flexible, effective and efficient organization.

b. A customer-centric approach to organizational activities
c. Recognition of current strengths to create a more productive environment
d. Understanding and reaping the benefits of competitive IT and business alignment
e. Promotion of an integrated approach to IT and business

Three Types of Transformation

1. Improving Operation: To achieve a quantum improvement in the firm's efficiency, often by reducing
costs, improving quality and services and reducing development time.
2. Strategic Transformation: The process of changing strategy seeks to regain a sustainable competitive
advantage by redefining business objectives, creating new competences and harnessing these
capabilities to meet market opportunities.
3. Corporate Self-Renewal: Self-Renewal creates the ability for a firm to anticipate and cope with
change so that strategic and operational gap does not develop.

Phases of Transformation

Phase-1: It begins with the automation of existing activities to reduce cost and raise capacities and
expands to encompass a broader range of applications to optimize operations.
Phase-2: It focuses on adding features, functions, value-added processes and new service to the core
business.
Phase 3: It may become principal vehicles for growth; the existing business can be redefined.

Transformation Strategies

There are various strategies to transform organization. It may be followed:

1. Transformation through Values

In the changing business environment, values are guiding force for the companies. Values are nothing
but something we hold dear, something that reflects an ideal or an ethic. A value to individual is
purpose & meaning of life. Values to an organisation are foundations of culture. Organisation should
choose values i) compatible with society's core values, ii) Based on sublimation of basic human urges,
iii) compatible with purpose & operating context and iv) compatible with third world context.
2. Transformation through Organisation Development

Most people and organisations are riot prepared for the vastly accelerated pace of change. OD appears
to be one of the primarily methods for this. Organisation Development rests on three basic propositions
(Bennis, 1969)

* Organisations change forms throught the age. The changes taking place in that age make it necessary
to revitalize and rebuild organizations.
* The only way to change organizations lies in changing the climate of the organization.
* A new social awareness is required by people in organizations.

In short, the basic thrust behind OD is that the world is rapidly changing and that our organizations must
follow suit.

Greiner identified what he considered to be the seven most commonly used approaches to change.

a) The Decree Approach

b) The Replacement Approach
c) The Structural Approach
d) The Group Decision Approach
e) The Data Discussion Approach
f) The Group Problem Solving Approach
g) The T-Group Approach

3. Transformation through Reengineering

Reengineering is revolutionary, challenging the operation and even existence of fundamental processes.
It not only improves the old way of doing business, it seeks to create a new and better way.

4. Transformation through McKinsey's Plan

A ten point blue print for an organization

a) Organise primarily around process, not task.

b) Flatten the hierarchy by minimizing subdivision of processes.
c) Give senior leaders charge of processes & process performance.
d) Link performance objectives & evaluation of all activities to customer satisfaction.
e) More teams, not individuals, the focus of organization performance and design.
f) Combine managerial and non-managerial activities as often as possible.
g) Emphasise that each employee should develop several competencies.
h) Inform & Train people on a just-in-time, need to perform basis.
i) Maximise supplier and customer contact with every one in the organization.
j) Reward individual skill development and team performance instead of individual performance alone.

5. Transformation through Competitive Benchmarking

Benchmarking is the continuous process of measuring products, services and practices against the
toughest competitions or those companies recognize as industry leaders.

6. Transformation through Six Sigma

It is the statistical parameter used to describe variation. It can be described as going from appx 35,000
defects per million operation to not more than 3 defects per million. It focuses on achieving tangible
results as well as speaks the language of business. It uses as an infrastructure of highly trained
employees from various sectors of the company.

7. Transformation through Kaizen Principle

a) Small Improvement
b) Conventional Knowledge
c) Personal Involvement
d) Many people
e) Improve the process
f) Standardise- Do- Check- Act to Plan-Do-Check-Act