4. Overview of Business Environment
External Forces
ECONOMIC
Environment
Internal Forces
BUSINESS
Internal Environment
Values,
Mission & Objectives.
Human Resources,
Co. Image & Brand Equity
TECHNOLOGICAL
FACTORS
MARKETING
INTERMEDIARIES
DEMOGRAPHIC
FACTORS
SOCIAL
CULTURAL
FACTORS
Non - Economic Environment
Dr.Renu IMT CDL
5. Shift in Trend
From To
networkingn
Emphasis on continuity Emphasis on change
Industrial era Information era
National economy Global economy
Technology development Technology sophistication
Stability & predictability Sudden change
Long term Short term
Centralization Decentralisation
Hierarchies Networking
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7. Internal forces affecting Organization
1. System Dynamics
2. Structure focused change
3. Technological change
4. Inadequacy of administrative processes
5. Individual group expectation
6. Person forced change
7. Resource constraint
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8. 8. Profitability issues
9. Strategic flexibility
10. Need of strategic excellence
11. Autonomy & flexibility for employees
12. Safety & security employees
13. Unethical practical by employees
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9. Example
Bata India plans to prune 300 staff through fresh
VRS.
Bata plan VRS to 300 employees in 2006 to
reduce staff & to implement its financial &
operational restructuring .
Bata has an employee strength of 9500 . Bata
offered its VRS package in 2005. Co. plan to
open 40 retail stores across the country in
2006 & modernize its 150 existing stores
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10. Case study
Gujarat electricity board makes a turnaround
wiping out Rs 2542 crore . Board has
announced Rs200 crore for 2005-06. GEB
increases revenue through strict supervision
of power distribution. GEB restructured loans
worth Rs. 4130 crores and has brought down
interest rates from 9.51 % to 8.6%.
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12. External forces
•Suppliers of inputs
•Workers and their unions
•Customers
•Market intermediaries
•Competitors
•Public
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13. External forces affecting organization
Economic policies : . Political Conditions Resources
Industrial Policy Political Stability
Trade Policy
Monetary Policy
Fiscal Policy
Corruption rule of law
and
governance including
business
law and regulations
Natural resources
Human resources
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14. Types of changes
Change as incremental & intrinsic to
organization
Change as extrinsic & revolutionary
Change as patterned & predictable
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15. Newman change
Tushman calls minor incremental organizational
change as Convergence.
Goss – reinvention
Tushman – strategic change
Two types – Reactive , anticipatory
All changes are continuous, discontinuous,
participative and directive.
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17. Primary schools of thoughts
1. Life cycle theory
5 stages of organizational life cycle:
Creativity
Direction
Delegation
Coordination
Collaboration
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23. Theories at individual level
Theory E = changing the economy value of
organization
Theory O = changes based on organizational
capacity
Dr.Renu IMT CDL
24. Goals Leadershi
p
Focus Process Reward
system
Use OD
consultan
ts
Theory E Maximise
sharehold
er top
down
Manage
change
from top
down
Emphasis
structure
& systems
Plan &
establish
program
Motivate
through
financial
incentives
Consultan
t analyse
problems
Theory O Develop
organizati
onl
capabilitie
s
Encourage
participati
on from
bottom up
Build up
corporate
culture :
employee’
s behavior
&
attitudes
Experienc
e & evolve
Motivate
through
commitm
ent use
pay as fair
exchange
Consultan
ts support
managem
ent in
shaping
their own
solutions.
Theory E
& O
Explicitly
embrace
b/w
economic
value &
org
capability
Set
direction
from the
top &
engage
people
Focus on
structure
& system
and the
soft
Plan for
spontanei
ty
Use
incentive
to
reinforce
change
Consultan
ts are
expert
resources
who
empower
employee
s.
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25. Perspectives on OC
1. Contingency perspective
2 Major dimensions :
Specialization, integration
Specialization refer as DOL , ( horizontal or
vertical)
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26. Integration : ways & means of coordinating work
of individuals in the organization.
Ways are direct supervision, systems, goals,
plans & targets , rules & procedures.
Relation b/w change & environment
2. Components of environment – complexity &
stability
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27. Studies found organization as Mechanistic
organization.( rules procedure & clear
hierarchy of authority , decision making
centralized )
Configurational approach - consider two
variables at a time such as environment, size
and structure
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29. Population ecology perspective
Leaders might not possess adequate information
about the environment.
Assets of the organization might be suited to the
current organizational needs.
Political resistance to change
Firm may have financial & legal compulsions
which may come in the way of its entry or exit
from present markets.
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32. Institutional perspective
• Refers to social norms, values & culture
• More importance to organization environment
than market or competitors.
Called symbolic elements.
( conform to lawful norms, standards )
Fr ex: kinetic
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35. Process oriented Perspectives
Change affect cultural and human systems
Different conceptualization of how change affect
organization
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37. Process based change Model
1. Lewin’s Model of Change
2. Planning Model
3. Galpin’s Model
4. Bullock & Batten’s Integrative Model
5. Schein’s Model of Change
6. Action Research Model
7. Isabella Model
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45. Managing Organisation Change
• Kurt Lewin: Two Theories
– Status QUO/ Equilibrium Point – Resultant of opposing
forces
– Three step model:
Unfreezing (The status Quo)
Movement (To new status/ Changing)
Refreezing (The new change)
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Unfreezing Movement Refreezing
53. Planning Model
Initially proposed by Lippit et. al. (1958), the planning model
was later refined after modifications by Kolb and Frohman
(1970). This model has often been employed in bringing about
planned change in organizations. The planning model proposes
seven-steps for change. That is, there should be free and open
sharing of information between the organization and the
change agent and this information must be such which can be
translated into action.
In this model planned change goes through a series of steps. As
the first step organization and change agents jointly explore the
need for and the areas that require change. Thereafter, they
develop mutual expectations. This is followed by identification
of specific goals toward improvement. As change cannot
proceed effectively without handling resistance, identification of
the actual and possible reasons of resistance to change are
worked out and planning is done for specific improvement
goals. Dr.Renu IMT CDL
54. The planning model
Exploring Entry Diagnosis
Planning
Action
Stabilization
and Evaluation
Termination
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55. Implementation of steps identified in planning is the next
stage followed by decision – making for termination of the
system or to begin another.
Model of the Change Management Process
Galpin (1996) proposed the model of the change
management process which provides guidance for
successfully implementing change. In his view a successful
organizational change effort must target two levels-the
strategic level and the grassroots level.
Strategic change refers to the up-front, initial effort involving
executives, senior managers, a small cadre of employees and
often consultants, who provide an outside view (Gaplin,
1996). This kind of change is broad and organization wide
and involves two primary goals – a technical or analytical
goal (involving generation of recommendations for change)
and a “soft side” goal (involving creation of momentum for
change). Dr.Renu IMT CDL
56. Grassroots change is the effort that drives change deep into
an organization by stressing implementation at the local level.
The primary goal here is to implement and sustain desired
changes.
Change does not occur in one leap but often entails several
key stages along the way. The nine stages require
management within an organization to understand and apply
the characteristics of both strategic and grassroots changes.
The early stages require greater application of the changes
characterised by strategic nature. During the early stages,
senior management establishes a need and develops a vision
for change and a select few analyse the current organization,
formulate recommendations, and detail them for testing. The
later stages call for a greater application of characteristics of
grassroots change.
Dr.Renu IMT CDL
57. More people horizontally and vertically across the
organization are involved during pilot testing and roll out, as
middle managers and supervisors are needed continually to
measure and reinforce the changes being tested and rolled
out in order to ensure successful implementation.
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58. Integrative Model for Planned Change
Bullock and Batten (1985) gave forward the integrative model
to describe both the temporal states and the change
processes involved in planned change. The integrative model
for planned change is based on the principle that
organizations exist in different states at different times. In
view of this, planned change can take place from one state to
another. There are four phases in this model ranging from
exploration phase to integration.
Exploration Phase
In this phase, the organization explores whether it is
prepared for specific change and whether it can commit its
resources toward such change. This change process is often
initiated by organizational members who are aware of the
need for change.
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59. Hereby a search process begins wherein organization
development resources and assistance are sought followed
by consultation of an organization development expert. The
change requirements are then assessed mutually by the
consultant and the organizational members. The members
make an assessment about the expert’s capabilities and the
consultant assesses the organization’s sense of commitment
and readiness for change, and the availability of necessary
resources. During this phase both sides settle the terms of
the work and clarify mutual expectations, cost and time
factors and the rules of the consulting relationship so as to
develop a collaborative relationship.
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