UNIT -5 Organization Behaviour

Code – BBA (102)

UNIT 5

 Management of Change: Change and

Organizational development
Resistance to change, Approaches to managing
organizational change, Organizational
effectiveness, Organizational culture, Power
and Politics in Organizational Quality of work
life, Recent advances in OB.

Organizational change

Introduction:
Change refers to alternation in system. It is a continuous process which effects the
organization and its working patterns.

The dictionary meaning of change as a noun is — ‘making or becoming different, difference

from previous state, substitution of one for another, variation’ etc. We are experiencing
changes in all spheres of our lives — food, drinks, clothing, relationships, ambitions, living
standard, work, tools, techniques.

Organizational change refers to the process of growth, decline and transformation within the
organization. Organizational change is necessary for companies to succeed and grow.

Organizations may change their strategy or purpose, introduce new products or services,
change the way they produce and sell, change their technology, enter new markets, close
down departments or plants, hire new employees, acquire other organisations become
acquired by other organisations and what not! In doing so, they may turn larger, smaller or
stay the same in terms of size.

Definition:

Organizational change refers to the actions in which a company or business alters a major
UNIT -5 Organization Behaviour
Code – BBA (102)

component of its organization, such as its culture, the underlying technologies or

infrastructure it uses to operate, or its internal processes. –Tim Stobierski.

Organizational changes are of two types:

1. Reactive changes and
2. Proactive changes (planned changes).

1. Reactive Changes: Reactive changes occur when forces compel organization to

implement change without delay. In other words, when demands made by the forces are
compiled in a passive manner, such a change is called reactive change.

2. Proactive Changes: Proactive changes occur when some factors make realize
organization think over and finally decide that implementation of a particular change is
necessary. Then, the change is introduced in a planned manner

Factors of Organizational changes –

a) External factors
b) Internal factors
 External Factors
Technological adaptation
Changes in marketing condition
Social changes
Political and legal changes

 Internal factors
Changes in Managerial personnel
Change in policies
Spam of management
Deficiency in organizational practices
UNIT -5 Organization Behaviour
Code – BBA (102)

Nature of Organisational Change

The nature of organisational change is inherently dynamic and multifaceted. It encompasses
several key characteristics that define its nature and impact on an organisation some of them
are:
1. Continuous: Organisational change is an ongoing process rather than a one-time
event. It recognises that organisations must continually adapt, evolve, and improve to
remain relevant and competitive in a rapidly changing business environment.
2. Complex: Organisational change is complex due to the interplay of various factors,
such as organisational structure, culture, processes, technology, and human
dynamics. It involves multiple stakeholders, intricate relationships, and
interconnected elements that require careful consideration and management.
3. Disruptive: Change disrupts the status quo within an organisation. It challenges
existing routines, practices, and mindsets. It can create uncertainty, resistance, and
discomfort among employees, requiring effective change management strategies to
minimise negative impacts and facilitate a smooth transition.
4. Contextual: The nature of organisational change is shaped by the unique context of
each organisation. Factors such as industry dynamics, market conditions, regulatory
requirements, and internal capabilities influence the nature and scope of change
initiatives. What works for one organisation may not necessarily work for another.
5. Strategic: Organisational change is often driven by strategic considerations. It aligns
with the organisation’s vision, goals, and long-term objectives. Change initiatives are
typically designed to improve performance, enhance competitiveness, foster
innovation, capitalise on opportunities, or address challenges that impact the
organisation’s strategic position.

Causes of Organisational Change

UNIT -5 Organization Behaviour
Code – BBA (102)

Organisational change can be triggered by various factors, both internal and external, some
common causes of organisational change are:

1. External influences: Changes in the external environment, such as market

dynamics, technological advancements, industry regulations, or shifts in
customer preferences, can prompt organisations to adapt and change in order to
stay competitive.

2. Competitive pressures: Intense competition within the industry or the

emergence of new market players can drive organisations to implement changes
in their strategies, processes, or products to gain a competitive advantage.

3. Organisational growth or decline: Significant growth or decline within an

organisation can necessitate changes to accommodate the increased scale or to
restructure and optimise operations during periods of decline.
4. Technological advancements: Rapid advancements in technology can trigger
organisational change as organisations adopt new technologies, upgrade
systems, or automate processes to improve efficiency, productivity, and
competitiveness.

5. Mergers and acquisitions: When organisations undergo mergers, acquisitions,

or partnerships, changes are often required to integrate operations, align cultures,
streamline processes, and realise synergies.

6. Internal inefficiencies or performance gaps: Identifying internal

inefficiencies, performance gaps, or areas for improvement can drive
organisations to implement changes in processes, systems, or structures to
enhance performance, productivity, and operational effectiveness.

7. Leadership and strategic shifts: Changes in leadership, new strategic

directions, or shifts in organisational priorities can lead to changes as
organisations align with the new vision, goals, or strategic objectives.

7 Strategies for Effectively Managing Organizational Change

1. Put people first

Successful change management prioritizes people. People fuel change and sustain its
momentum. Change initiatives fail when the people involved don’t understand, believe in or
engage in the change.
UNIT -5 Organization Behaviour
Code – BBA (102)

Leaders make change easier when they engage employees in the change. Leaders accomplish
this through proactive change management communication that creates a desire to change
across the workforce.

2. Work with a change management model

Leaders are up against company culture, organizational momentum and human psychology
when enacting change. To make change happen, they need the right tools to guide them.
Change management models help leaders connect business strategy to action, which increases
the likelihood of success.

There are a variety of change management models from which to choose (e.g., Prosci’s
ADKAR model, Lewin’s Change Management Model, Kotter’s Change Management
Model). Each model varies, but all follow similar core tenants of identifying needs and
planning for and implementing change.

3. Empower employees through communication

Communication is an essential part of effectively managing organizational change. A vision
for change is only as powerful as the communication that supports it. Effective change
management communication provides clarity for why the change is needed and mobilizes
employees with a sense of urgency for the change. Companies fail to drive meaningful
change when they fail to communicate.

4. Activate leadership
A recent Prosci survey cited “active and visible executive sponsorship” as the top reason
change initiatives succeed. Leadership’s impact on change management is well-understood.
The problem is that many leaders don’t understand the vital role they play in change. Educate
leaders on their roles, and you’ll enable them to advance change successfully.

5. Make change compelling and exciting

Employees can better understand the rationale behind a change when organizations prioritize
purposeful, clear and consistent communication. This targeted communication strategy
provides the context to understand the why, what and so what of the change. Effective
communication answers the most important question people are thinking: What does this
UNIT -5 Organization Behaviour
Code – BBA (102)

mean to me; how will it impact my work? With a deeper, clearer understanding of the
change, employees are much more likely to ask, “How can I help?”

6. Pay attention to high and low points in momentum

There will be both high and low points during change management initiatives. Leaders can
proactively manage and leverage these points in time. During the high points of change,
leaders should celebrate wins to fuel momentum. At the low points, leaders can reset
communication strategies to listen to employee input and build trust and support. Being
proactive helps leaders manage momentum for the greatest success.

7. Don’t ignore resistance to change

Change resistance is poisonous to an organization’s transformation. Resistance is much easier
to counter when it’s identified early. Leaders should pay attention to the signs of change
resistance, including inaction, procrastination, withholding information and the spread of
rumors. Communication is the key to identifying resistance. Create feedback loops with
employees, like surveys, feedback channels and input sessions to proactively identify signs of
resistance, then take fast action.

Lewin’s Change Model of Change?

Kurt Lewin’s change model states that restraining forces influence the behavior of
organizations and individuals, ultimately deciding the fate of change. The driving forces
motivate and steer employees toward the new state. The restraining forces highlight potential
resistance to change, acting as the prime barriers to change initiatives. Lewin’s three stages of
change included:

 Unfreeze: Preparing for a desired change.

 Change: Implementing the desired change.
 Refreeze: Solidifying and adopting the desired change.

Lewin suggests that it is crucial to balance these forces through effective change
communication and employee involvement by providing training to bridge the skill
gap. Change agents must implement stress management techniques, ensure compliance is
met, and use convincing change reasoning.
UNIT -5 Organization Behaviour
Code – BBA (102)

Process of changes
1. Identify the need of changes
2. Determine elements to be changes
3. Planning for change
4. Assessing changes forces
5. Actions of change
6. Feedback and review
UNIT -5 Organization Behaviour
Code – BBA (102)

What is Organizational Effectiveness?

Organizational Effectiveness denotes the degree to which a business proficiently attains its
goals by streamlining internal operations, optimizing resource utilization, and aligning with
strategic objectives. Successful organizations often demonstrate elevated productivity,
contented employees, and flexibility in response to evolving environments.

Importance of Organization Effectiveness

1. Organizational effectiveness is essential as it directly impacts an entity's capacity to

realize its objectives and flourish within a dynamic environment.

2. A highly efficient organization ensures optimal resource utilization, maximizes

productivity, and swiftly adjusts to changes. This leads to heightened
competitiveness, sustainability, and overall success.
UNIT -5 Organization Behaviour
Code – BBA (102)

3. Effective organizations cultivate a positive work culture, encouraging employee

engagement, and satisfaction ultimately boosting productivity and innovation.

4. Additionally, they excel in communication and collaboration, dismantling silos, and

facilitating information flow across departments. This leads to streamlined
operations, minimized redundancies, and expedited decision-making processes.

5. In the era of rapid technological progress and global interconnectedness,

organizational effectiveness enables adaptability and resilience.

How to achieve a more effective organization

1. Create goals and objectives

Identifying a business area to improve is typically the first step toward fostering a more
effective organization. Then, you can set SMART goals and clear objectives to track. For
example, an organization might want to improve its customer experience. SMART goals are:
Specific: Clearly defining your goal can help you know when you reach it.
Measurable: Having specific criteria to show you're progressing toward your goal can keep
you motivated.
Achievable: Setting goals you can reasonably accomplish within a time frame can help you
stay focused.
Relevant: Consider whether the goals you set are relevant to the organization's mission and
vision.
Time-bound: Establishing a time frame to reach objectives or milestones can help you pace
yourself and prioritize tasks.

2. Communicate goals to team members

UNIT -5 Organization Behaviour
Code – BBA (102)

You can create an effective communication system to share defined goals with team
members. This system can also help you convey strategic organizational decisions across
departments. Effective communication can ensure everyone understands the shared goals and
guidelines.

3. Develop effective strategies

You can create strategies that help an organization experience positive results. Completing
this step typically requires assessing the organization's current position and vision. For
example, suppose a company has plans to foster a more effective customer experience. Its
strategy might involve implementing a rewards program to encourage brand loyalty.
Focusing on the return on investment (ROI) can help you choose among potential strategies.

4. Consider the required resources

You can determine the organization's resources to meet all defined goals and objectives. For
example, it may hire candidates or retrain existing employees to implement a strategy.
Confirming that new employees fit the existing work culture can help ensure sustained
organizational effectiveness.

5. Measure the organization's effectiveness

You can assess how successfully a company reached its objectives by reflecting on its key
performance indicators (KPI). Doing this can help encourage greater accountability and
improved performance among team members.

Difference between Efficient and Effective Organization

UNIT -5 Organization Behaviour
Code – BBA (102)

Basis Efficient Organization Effective Organization

Focuses on minimizing resource Concentrates on achieving desired

waste and achieving tasks with the outcomes and goals regardless of the
Definition least amount of inputs. resources used.

Goal Prioritizes getting things done Prioritizes achieving meaningful

orientation quickly and at a lower cost. results and strategic objectives.

Emphasizes optimization and Prioritizes the strategic allocation of

Resource streamlining of resources to resources to achieve optimal results
utilization minimize expenses. even if it involves higher costs.

Design processes and systems to

Processes and Streamlines processes for align with organizational goals and
systems efficiency and productivity. maximize effectiveness.

Emphasizes the quality and impact of

Focus on Emphasizes the quantity of output the output focusing on achieving
output and tasks completed. long-term goals.

Embraces adaptability and innovation

Tends to be more rigid in to respond effectively to changes and
Adaptability processes to maintain efficiency. challenges

POWER

Power is the ability of an individual or a group to influence the behavior, decisions, and
actions of others to achieve desired outcomes. It doesn't necessarily depend on a formal
position within the organization.

Types of Power

1. Legitimate Power:
Derives from a formal position or role in the organization. For example, a manager
has power due to their title.
UNIT -5 Organization Behaviour
Code – BBA (102)

2. Reward Power:
Based on the ability to give rewards, such as promotions, raises, or praise, to influence
behavior.
3. Coercive Power:
Stems from the ability to punish or enforce compliance, such as demotions or
penalties.
4. Expert Power:
Comes from possessing specialized knowledge or skills that others depend on.
5. Referent Power:
Based on admiration, respect, or identification with the individual. Leaders with
charisma often have referent power.
6. Informational Power:
Derives from having access to valuable information that others lack.

Sources of Power

 Positional Power: Arises from one's role or status within the organization.
 Personal Power: Comes from individual attributes like expertise, charisma, or
interpersonal skills.

Authority
Authority is the legitimate right to make decisions, issue orders, and allocate resources
within an organization. It is formally granted by the organization through roles and positions.
Characteristics of Authority
1. Legitimacy:
Authority is recognized and accepted as legitimate by others within the organization.
2. Hierarchy:
Authority flows downward in an organization, from higher levels to lower levels (e.g.,
from executives to managers to employees).
3. Responsibility and Accountability:
With authority comes the obligation to perform duties and answer for decisions and
actions.

Types of Authority
1. Line Authority:
Direct authority to make decisions and give orders related to the organization’s core
functions. For example, a factory manager has authority over production workers.
 UNIT -5 Organization Behaviour
Code – BBA (102)

2. Staff Authority:
Advisory authority, where individuals provide expertise and guidance but do not
make direct decisions. For instance, HR managers often have staff authority.
3. Functional Authority:
Authority given to individuals to make decisions in specific areas across departments.
For example, a safety officer enforcing compliance with safety regulations.

Power vs. Authority

Aspect Power Authority
Source Can be informal or formal. Always formal and legitimate.
Limited to a specific role or
Scope Broader, not limited to formal roles.
position.
May not depend on organizational Depends on organizational
Dependency
hierarchy. structure.
Nature Influential and dynamic. Static and role-based.