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  1. 1. Prepared by: Karthik Sreeram (RA1652003010001) Abhijit Kumar (RA1652003010015)
  2. 2. ACKNOWLEDGEMENT This project would not have come to fruition without the help of several individuals to whom we owe many thanks. our deepest thanks to our Lecturer, Mr. Narayan Swamy, without whose constant guidance, support and time, this project, would have been a distant reality. We would like to express my gratitude and appreciation to to our Times pro coordinators Dr. V. P. NANTHINI PARTHASARATHY and Mr .G.S. Arun Prasad. for providing us with the right kind of environment in the college, which helped us in the realisation of this project. We would also like to thank our families, friends and other well-wishers, who supported us on all accounts, during the preparation of this project. Karthik Sreeram R Abhijit Kumar MMS (BA) (i)
  3. 3. INDEX ACKNOWLEDGEMENT........................................................................................................i INDEX.......................................................................................................................................ii WHAT IS ORGANISATIONAL CHANGE?.......................................................................1 Planned change ....................................................................................................................2 Unplanned change...............................................................................................................2 Radical Change......................................................................................................................2 Transformational change..................................................................................................2 FORCES FOR CHANGE........................................................................................................3 RESISTANCE TO CHANGE.................................................................................................5 STRATEGIES FOR MANAGING RESISTANCE TO CHANGE....................................7 CONCEPTS.......................................................................................................................11 Driving forces.............................................................................................................11 Restraining forces.....................................................................................................11 Equilibrium.................................................................................................................11 BACKGROUND...................................................................................................................13 UNFREEZING......................................................................................................................13 2.MOVEMENT.....................................................................................................................14 3.REFREEZING...................................................................................................................14 ORGANIZATIONALDEVELOPMENT..........................................................................19 Sensitivity Training:..................................................................................................200 Survey Feedback:.......................................................................................................200 Process Consultation:...............................................................................................200 Team Building:............................................................................................................211 Intergroup Development:.......................................................................................211 Appreciative Inquiry:...............................................................................................211 ENVIRONMENT FOR CHANGE..................................................................................222 SOURCES OF INNOVATION....................................................................................222 CREATING A LEARNING ORGANIZATION............................................................233
  4. 4. What’s a learning organization?...........................................................................233 Managing learning:....................................................................................................233 CISCO: A CASE STUDY..................................................................................................244 CHALLENGE.....................................................................................................................255 SOLUTION ........................................................................................................................266 RESULTS..............................................................................................................................28 CONCLUSION...................................................................................................................289 (ii)
  5. 5. 1 WHAT IS ORGANIZATIONAL CHANGE? Also known as reorganization, restructuring and turnaround. Organizational change occurs when business strategies or major sections of an organization are altered. It is defined as a change that has significant effects on the way work is performed in an organization. Organizational change may be apparent when there is a gap between how the work area is operating and how it should be operating to ensure successful future growth. Organizational change may be a result of the work area identifying goals that they want to achieve. CHANGE MANAGEMENT Change management is astructuredapproachto shifting individuals,teams and organisations from a current state to a desired future state. It is an organisational process aimed at helping employees to accept and embrace changes in their current business environment. Kotter defines change management as the utilizationof basic structuresand toolsto control any organizational change effort. Goal of change management is to minimizethechange impacts on workers and avoid distractions. Change agents are responsible for managing change activities. They see a future for the organization, which others have not identified, and they are able to motivate, invent and implement this vision. Change agents can be managers or non- managers, current or new employees, or outside consultants. In this era of globalization, Organizations need to cope up with the dynamic and inevitable changes, which take place very often. Because of these changes the competition among firms is becoming intense and every organization should be flexible enough to implement the changes whenever required for its survival.
  6. 6. 2 SOME BASIC FORMS OF CHANGE Planned change It is a change resulting from a deliberate decision to alter the organization. Companies that wish to move from a traditional hierarchical structure to one that facilitates self-managed teams must use a proactive, carefully orchestrated approach. Not all changes are planned. Unplanned change It is imposed on the organization and is often unforeseen. Changes in government regulations and changes in the economy, for example, are often unplanned. Responsiveness to unplanned change requires tremendous flexibility and adaptability on the part of the organizations. Managers must be prepared to handle both planned and unplanned forms of change in organizations. Radical Change It is a process by which firms regain competitive advantage after it has been lost or threatened significantly. The type and extent of change undertaken depends upon the firm’s resources and capabilities; its competitive environment; and its leadership. Radical change is divergent, meant to fundamentally change the firm’s processes, systems, structures, strategies, and core values.” Transformational change Transformational change occurs when organizations incur drastic changes and must essentially transform themselves. This can occur when an organization faces different technologies, significant changes in supply and demand, unexpected losses etc. PLANNED CHANGE UNPLANNED CHANGE RADICAL CHANGE TRANSFORMATIONAL CHANGE
  7. 7. 3 FORCES FOR CHANGE Given a choice, most organizations prefer stability to change because the more predictable and routine activities are, the higher the level of efficiency that can be obtained. Thus, the status quo is preferred in many cases. But organizations are not static; they are continuously changing in response to a variety of forces coming from both inside and outside. For leaders, the challenge is to anticipate and direct change processes so that the performance is improved. EXTERNAL FORCES The major external forces for change are:- 1. Nature of the workforce: Almost every organization must adjust to a multicultural environment, demographic changes, immigration and outsourcing. 2. Technology is continually changing jobs and organization. Ex: faster, cheaper and more mobile computers and handheld devices. 3. Economic shocks: rise and fall of global housing market, financial sector collapse, global recession. 4. Competition is changing. Competitors are as likely to come from across the ocean as from across town. Ex: increased government regulation of commerce. 5. Social trends don’t remain static. Companies must continually adjust product and marketing strategies to be sensitive to changing social trends. The State Bank of India did the same when it started a zero-balance bank account program for villagers. FORCES FOR CHANGE EXTERNAL FORCES INTERNAL FORCES
  8. 8. 4 INTERNAL FORCES Pressures for change that originate inside the organization are generally recognizable in the form of signals indicating that something needs to be altered, such are the internal forces. 1. Declining effectiveness is a pressure to change. A company that experiences its third quarterly loss within a fiscal year is undoubtedly motivated to do something about it. Some companies react by instituting layoffs and massive cost – cutting programs, whereas others look at the bigger picture, view the loss as symptomatic of an underlying problem, and seek the cause of the problem. 2. A crisis situation also may stimulate change in an organization. Strikes or walkouts may lead management to change the wage structure. The resignation of a key decision-maker is one crisis that causes the company to rethink the composition of its management team and its role in the organization. A much-publicized crisis that led to change with Exxon was the oil spill accident with Exxon’s Valdez oil tanker. The accident brought about many changes in Exxon’s environmental policies. 3. Changes in employee expectations also can trigger change in organizations. A company that hires a group of young newcomers may be met with a set of expectations very different from those expressed by older workers. The work force is more educated than ever before. Although this has its advantages, workers with more education demand more of employers. Today’s workforce is also concerned with career and family balance issues, such as dependent care. The many sources of workforce diversity hold potential for a host of differing expectations among employees. 4. Changes in the work climate at an organization can also stimulate change. A workforce that seems lethargic, unmotivated, and dissatisfied is a symptom that must be addressed. This symptom is common in organizations that have experienced layoffs. Workers who have escaped a layoff may grieve for those who have lost their jobs and may find it hard to continue to be productive. They may fear that they will be laid off as well, and many feel insecure in their jobs. SOURCE: http://www.nptel.iitm.ac.in/courses/IIT- MADRAS/Management_Science_II/Pdf/6_1.pdf
  9. 9. 5 RESISTANCE TO CHANGE SELF INTEREST Ego often interferes with the ability to adapt to change. Some want to maintain the status quo to better advance their own personal agendas; others have differentmotivations. In the end, employeesacting in their own self-interest, instead of the organization'sgreater good, will resist change. FEAR OF THE UNKNOWN Change often brings with it substantial uncertainty. Employees facing a technological change, such as the introduction of a new computer system, may resist the change simply because it introduces ambiguity into what was once a comfortable situation for them. This is especially a problem when there has been a lack of communication about the change. FEAR OF LOSS When a change is impending, some employees may fear losing their jobs, particularly when an advanced technology like robotics is introduced. Employees also may fear losing their status because of a change. Computer systems experts, for example, may feel threatened when they feel their expertise is eroded by the installation of a more user – friendly networked information system. Another common fear is that changes may diminish the positive qualities the individual enjoys in the job. Computerizing the customer service positions at Southwestern Bell, for example, threatened the autonomy that representatives previously enjoyed. FEAR OF FAILURE Some employees fear changes because they fear their own failure. Introducing computers into the workplace often arouses individuals’ self – doubts about their ability to interact with the computer. Resistance can also stem from a fear that the change itself will not really take place. In one large library that was undergoing a major automation effort, employees had their doubts as to whether the vendor could really deliver the state – of – the – art system that was promised. In this case, the implementation never became a reality – the employees’ fears were well founded POOR COMMUNICATION Changes within an organization start with key decision makers. It is up to them to pass along the details to team members and ensure all questions and complaints are handled before changes go into effect. Unfortunately, as news of a change
  10. 10. 6 spreads through the hierarchy, details are sometimes skewed and members end up receiving inaccurate, second-hand information. Poor communication can therefore cause resistance to change. DISRUPTION OF INTERPERSONAL RELATIONSHIPS Employees may resist change that threatens to limit meaningful interpersonal relationships on the job Librarians facing the automation effort described previously feared that once the computerized system was implemented, they would not be able to interact as they did when they had to go to another floor of the library to get help finding a resource. In the new system, with the touch of a few buttons on the computer, they would get their information without consulting another librarian. PERSONALITY CONFLICTS When the change agent’s personality engenders negative reactions, employees may resist the change. A change agent who appears insensitive, to employee concerns and feelings may meet considerable resistance, because employees perceive that their needs are not being taken into account. INTERNAL AND EXTERNAL POLITICS Organizational change may also shift the existing balance of power in the organization. Individuals or groups who hold power under the current arrangement may be threatened with losing these political advantages in the advent of change. CULTURAL ASSUMPTIONS AND VALUES Sometimes cultural assumptions and values can be impediments to change, particularly if the assumptions underlying the change are alien to employees. This form of resistance can be very difficult to overcome, because some cultural assumptions are unconscious. Some cultures tend to avoid uncertainty may be met with great resistance. LACK OF TRUST Trust plays a big role in running a successful organization. When organization members feel they cannot trust each other or key decision makers, it becomes difficult for them to accept organizationalchanges. They may ascribe the changes to somenegativeunderlyingreasonor evenassume they will eventually lose their jobs. SOURCE: http://smallbusiness.chron.com/causes-resistance-change-organization- 347.html
  11. 11. 7 MANAGING RESISTANCE TO CHANGE The traditional view of resistance to change treated it as something to be overcome, and many organizational attempts to reduce the resistance have only served to intensify it. The contemporary view of resistance holds that resistance is simply a form of feedback and this feedback can be used very productively to manage the change process. One key to managing resistance is to plan for it and to be ready with a variety of strategies for using the resistance as feedback and helping employees negotiate the transition. STRATEGIES FOR MANAGING RESISTANCE TO CHANGE EFFECTIVE COMMUNICATION  The details of the change should be provided, but equally important is the rationale behind the change.  Providing accurate and timely information about the change can help prevent unfounded fears and potentially damaging rumors from developing.  Open communication in a culture of trust is a key ingredient for successful change. It is also beneficial to inform people about the potential consequences of the change.  Educating employees on new work procedures is often helpful. Studies on the introduction of computers in the workplace indicate that providing employees with opportunities for hands – on practice helps alleviate fears about the new technology.  Communication can help dissipate some fear of unknown elements. Management should also see that there is a two way communication between the management and workers so that the so former comes to know about the reactions of the latter directly without delay.  Delaying the announcement of a change and handling information in a secretive fashion can serve to fuel the rumor mill.  The drawback of this approach is that it is expensive to implement and does not always yield the desired results. PARTICIPATION AND INVOLVEMENT  Employees must be engaged and involved in order for change to work  Participation by a large group can move change further along. Participation helps employees gain understanding about the change.
  12. 12. 8  Individual will find it difficult to resist the change, which they participated. Prior to making a change, all those persons who are going to the affected by the change, can be brought into the decision making process.  Their doubts and objectives should be removed to win their cooperation. Getting opinions out in the open, so that they are looked at and evaluated is an important trust building task.  This involvement of the workers can overcome resistance, obtain personal commitment and increase the quality of the change decisions. FACILITATION AND SUPPORT  Change agents can offer facilitation and supportive efforts to overcome resistance.  Facilitative support means removing physical barriers in implementing change by providing appropriate training, tools, machinery etc.  Supportive efforts include listening, providing guidance, allowing time off after a difficult period and providing emotional support.  Emotional support is provided by showing personal concern to the employees during periods of stress and strain.  The drawback of this method is that it is timeconsuming and expensive and its implementation offers no assurance of success. LEADERSHIP  A capable leader can reinforce a climate of psychological support for change.  Greater the prestige and credibility of the person who is acting as a change agent, the greater will be the influence upon the employees who are involved in the change process.  A strong and effective leader can exert emotional pressure on his subordinates to bring about the desired change.  Most of the times, there is no resistance from the subordinates and if they resist, the leader tries to overcome resistance by leadership process. NEGOTIATION AND AGREEMENT  Negotiation and Agreement technique is used when costs and benefits must be balanced for the benefit of all concerned parties.  If people or groups are losing something significant in the change and if they have enough power to resist strongly.  Negotiation before implementation can make the change go much more smoothly, even if at the later stages if some problems arise, the negotiated agreement can be referred to.
  13. 13. 9 MANIPULATION AND CO-OPTATION  Used in the situation, where other methods are not working or are not available.  Managers can resort to manipulation of information, resources and favors to overcome resistance. Or they can resort to co-optation, which means to co-opt an individual, perhaps a key person with in a group, by giving him a desirable role in designing or carrying out the change process.  Thistechnique has some doubtful ethics and it may also back firein some cases. COERCION  Managers may resort to coercion if all other methods fail or for some reason are inappropriate.  Coercion may be in form of explicit or implicit threats involving loss of jobs, lack of promotion and the like.  Managers sometimes dismiss or transfer employees who stand in the way of change.  Coercion can seriously affect employee’sattitudes and have adverse consequences in the long run. EFFORTS AT THE GROUP LEVEL  A group is a cluster of persons related in some way by common interests over a period of time.  Although change can be obtained individually; it is more meaningful if it is done through a group. Therefore, management should consider the group and not the individual as the basic unit of change. Group dynamics offer some basic help in the regard.  The more attractive the group is to the members, the greater is the influence of the group to accept or resist a change.  Groups can exert pressure on those factors of the members which are responsible for the group being attractive to the members. Normally attitudes, values and behaviour are more common factors determining the group attractiveness.  The degree of prestige of a group, as interpreted by the members will determine the degree of influence the group has over its members.  Group interactions should be encouraged; it should be provided full information by the management. The management should also explain the rationale of change and try to convince that the interests of the group members would not be adversely affected. SOURCE: http://www.change-management.com/tutorial-5-tips-resistance.htm
  14. 14. 10 APPROACHES TO MANAGING ORGANISATIONAL CHANGE: LEWIN’S THREE STEP MODEL The concept of "change management" is a familiar one in most businesses today. But, how businesses manage change (and how successful they are at it) varies enormously depending on the nature of the business, the change and the people involved. And a key part of this depends on how far people within it understand the change process. One of the cornerstone models for understanding organizational change was developed by Kurt Lewin back in the 1940s, and still holds true today. His model is known as Unfreeze – Change – Refreeze, refers to the three-stage process of change he describes. Kurt Lewin, a physicist as well as social scientist, explained organizational change using the analogy of changing the shape of a block of ice. SOURCE: http://www.scribd.com/doc/21556594/Change-Management- ewin%E2%80%99s-3-Step-Model Mr. KURT LEWIN
  15. 15. 11 CONCEPTS Driving forces • Driving forces are forces that push in a direction that causes change to occur. • Driving forces facilitate change because they push the person in the desired direction. • They cause a shift in the equilibrium towards change. Restraining forces • Restraining forces are forces that counter driving forces. • Restraining forces hinder change because they push the person in the opposition direction • Restraining forces cause a shift in the equilibrium which opposes change. Equilibrium • Equilibrium is a state of being where driving forces equal restraining forces and no change occurs • Equilibrium can be raised or lowered by changes that occur between the driving and restraining forces. SOURCE: http://www.businessdictionary.com/definition/driving-forces.html
  16. 16. 12 • Unfreezingis the process which involves finding a method of making it possible for people to let go of an old pattern that was counterproductivein someway. • Unfreezingis necessary to overcome the strains of individualresistanceand group conformity. • Unfreezingcan be achieved by the use of these three methods. • Increase the driving forcesthat directbehavior away fromthe existing situationor statusquo. • Decrease the restraining forcesthat negatively affect the movement fromtheexisting equilibrium. • Find a combinationof the two methodslisted above. UNFREEZING • This stage involvesaprocessof change in thoughts,feeling, behavior, or all three, that is in some way moreliberating or moreproductive. • Once team membershave opened up their minds, change can start. The change process canbe dynamicand, if it is to be effective, it will probably take some time and involvea transition period. • In order to gain efficiency, peoplewill haveto take on new tasks and responsibilities, whichentail a learningcurvethat will at first slow the organization down. • A change processhas to be viewed as an investment, both in terms oftime and the allocationofresources: after the new organization and processeshavebeen rolled out. MOVEMENT • Change will only reach its fulleffect if it’s made permanent. Once the organizationalchanges have been madeand the structurehas regained its effectiveness, effortsshould be made to cement them and make sure the new organization reaches the standard. • “Re-freezing” givespeoplethe opportunity to thrive in the new organizationand take full advantage of the change. REFREEZING
  17. 17. 13 APPLICATION OF KURT LEWIN’S MODEL: A Case Study When the management of a large oil company decided to reorganize its marketing function in the Western United States. BACKGROUND The oil company had three divisional offices in the West, located in Seattle, San Francisco, and Los Angeles. The decision was made to consolidate the divisions in to a single regional office to be located in San Francisco. The reorganization meant transferring over 150 employees, eliminating some duplicate managerial positions, and instituting a new hierarchy of command. A move of this magnitude was difficult to keep secret. The rumor of its occurrence preceded the announcement by several months. The decision itself was made unilaterally. It came from the executive offices in New York. The people affected had no say whatsoever in the choice. For those in Seattle or Los Angeles, who may have disliked the decision and its consequences – the problems inherent in transferring to another city. Undergoing the reassignment of responsibilities their only recourse was to quit. Actually only less than 10 percent quit. 1. UNFREEZING The status quo can be considered to be an equilibrium state. To move from this equilibrium to overcome the pressures of both individual resistance and group conformity unfreezing is necessary. It can be achieved in one of three ways. The driving forces, which direct behavior away from the status quo, can be increased. The restraining forces, which hinder movement from the existing equilibrium, can be decreased. BEFORE AFTER SAN FRANSISCO CONSOLIDATED OFFICE SEATTLE DIVISION OFFICE SAN FRANSISCO DIVISION OFFICE LOS ANGELES DIVISION OFFICE
  18. 18. 14 A third alternative is to combine the first two approaches. Companies that have been successful in the past are likely to encounter restraining forces because people question the need for change. Similarly, companies with strong cultures excel at incremental change but overcome it by restraining forces against radical change. 2. MOVEMENT The oil company’s management could expect employee resistance to the consolidation. To deal with that resistance, management could use positive incentive to encourage employees to accept the change, such as these; Increase in pay can be offered to those who accept the transfer. The company can pay liberal moving expenses. Management might offer low cost mortgage funds to allow employees to buy new homes in San Francisco. Employees could be counseled individually. Each employee’s concerns and apprehensions could be heard and specifically clarified. Assuming that most of the fears are unjustified, the counselor could assure the employees that there was nothing to fear and then demonstrate, through tangible evidence, that restraining forces are unwarranted. If resistance is extremely high, management mat have to resort to both reducing resistance and increasing the attractiveness of the alternative if the unfreezing is to be successful. To be effective, change has to happen quickly. Organizations that build up to change do less well than those that get to and through the movement stage quickly. 3. REFREEZING Once the consolidation change has been implemented, if it is to be successful, the new situation needs to be refrozen so that it can be sustained over time. Unless this last step is taken, there is a very high chance that the change will be short lived and that employees will attempt to revert to the previous equilibrium state. The objective of refreezing, then, is to stabilize the new situation by balancing the driving and restraining forces. How could the oil company’s management refreeze its consolidation change? By systemically replacing temporary forces with permanent one. For instance, management might impose a permanent upward adjustment of salaries. The formal rules and regulations governing behavior of those affected by the change also be revisedto reinforcethe newsituation Overtime, ofcourse,the work group’s own norms will evolve to sustain the new equilibrium. But until that point is reached management will have to rely on more formal mechanisms.
  19. 19. 15 APPROACHES TO MANAGING ORGANISATIONAL CHANGE: KOTTER’S EIGHT STEP MODEL 30 years of research by leadership guru Dr. John Kotter have proven that 70% of all major change efforts in organizations fail. Why do they fail? Because organizations often do not take the holistic approach required to see the change through. However, by following the 8 Step Process outlined by Professor Kotter, organizations can avoid failure and become adept at change. By improving their ability to change, organizations can increase their chances of success, both today and in the future. In “Leading Change” (1996), Dr. John Kotter outlined an 8-Stage Process to Creating Major Change: SOURCE: http://www.mindtools.com/pages/article/newPPM_82.htm SOURCE: http://workplacepsychology.net/2010/02/05/implementing-change-and- overcoming-resistance/ DR. JOHN KOTTER
  20. 20. 16 • Develop a sense of urgency around the need for change. This may help you spark the initial motivation to get things moving. • Open an honest and convincing dialogue about what's happening in the marketplace and with your competition. • What you can do: - Identify potential threats, and develop scenarios showing what could happen in the future. - Examine opportunities that should be, or could be, exploited. - Start honest discussions, and give dynamic and convincing reasons to get people talking and thinking. Step 1: Create Urgency • Bring together a coalition, or team, of influential people whose power comes from a variety of sources, including job title, status, expertise, and political importance. • Once formed, your "change coalition" needs to work as a team. • What you can do: - Identify the true leaders in your organization. - Ask for an emotional commitment from these key people. - Work on team building within your change coalition. - Check your team for weak areas. Step 2: Form a Powerful Coalition • Link ideas and concepts to an overall vision. • A clear vision can help everyone understand why you're asking them to do something. • What you can do: - Determine the values that are central to the change. - Develop a short summary (one or two sentences) that captures what you "see" as the future of your organization. - Create a strategy to execute that vision. Step 3: Create a Vision for Change • Communicate the vision more frequently and powerfully, and embed it within everything that you do. • Use the vision daily to make decisions and solve problems. When you keep it fresh on everyone's minds, they'll remember it and respond to it. • What you can do: - Talk often about your change vision. - Openly and honestly address peoples' concerns and anxieties. - Apply your vision to all aspects of operations – from training to performance reviews. Tie everything back to the vision. Step 4: Communicate the Vision
  21. 21. 17 • Put in place the structure for change, and continually check for barriers to it. • Removing obstacles can empower the people you need to execute your vision, and it can help the change move forward. • What you can do: - Identify, or hire, change leaders whose main roles are to deliver the change. - Recognize and reward people for making change happen. - Identify people who are resisting the change. - Take action to quickly remove barriers (human or otherwise). Step 5: Remove Obstacles • Create short-term targets – not just one long-term goal. • Each "win" that you produce can further motivate the entire staff. • What you can do: - Look for sure-fire projects that you can implement without help from any strong critics of the change. - Don't choose early targets that are expensive. - Reward the people who help you meet the targets. Step 6: Create Short-term Wins • Each success provides an opportunity to build on what went right and identify what you can improve. • What you can do: - After every win, analyze what went right and what needs improving. - Set goals to continue building on the momentum you've achieved. - Keep ideas fresh by bringing in new change agents and leaders for your change coalition. Step 7: Build on the Change • Make continuous efforts to ensure that the change is seen in every aspect of your organization. • It's also important that your company's leaders continue to support the change. This includes existing staff and new leaders who are brought in. • What you can do: - Talk about progress every chance you get. - Include the change ideals and values when hiring and training new staff. - Create plans to replace key leaders of change as they move on. This will help ensure that their legacy is not lost or forgotten. Step 8: Anchor the Changes in Corporate Culture
  22. 22. 18 APPROACHES TO MANAGING ORGANISATIONAL CHANGE: ACTION RESEARCH Action research is “a change process based on the systematic collection of data and then selection of a change action based on what the analyzed data indicate.” The process consists of five steps: diagnosis, analysis, feedback, action, and evaluation. These steps closely parallel the scientific method. 1. Diagnosis begins by gathering information about problems, concerns, and needed changes from members of the organization. 2. Analysis of information is synthesized into primary concerns, problem areas, and possible actions. Action research includes extensive involvement of the people who will be involved in the change program. 3. Feedback requires sharing with employees what has been found from steps one and two and the development of a plan for the change. 4. Action is the step where the change agent and employees set into motion the specific actions to correct the problems that were identified. 5. Evaluation is the final step to assess the action plan’s effectiveness. Using the initial data gathered as a benchmark, any subsequent changes can be compared and evaluated. Action research provides at least two specific benefits for an organization.  First, it is problem-focused. The change agent objectively looks for problems and the type of problem determines the type of change of action.  Second, resistance to change is reduced. Once employees have actively participated in the feedback stage, the change process typically takes on a momentum of its own. SOURCE: http://en.wikipedia.org/wiki/Action_research
  23. 23. 19 APPROACHES TO MANAGING ORGANISATIONAL CHANGE: ORGANIZATIONAL DEVELOPMENT Organizational development (OD) is a term used to encompass a collection of planned-change interventions built on humanistic-democratic values that seek to improve organizational effectiveness and employee well-being. The OD paradigm values human and organizational growth, collaborative and participative processes, and a spirit of inquiry. The underlying values in most OD efforts:  Respect for people  Trust and support  Power equalization  Confrontation  Participation SOURCE: http://directivecommunication.com/changeleadershipcultureenhancementprograms.html
  24. 24. 20 OD techniques or interventions for bringing about change: 1. Sensitivity Training:  It can go by a variety of names—laboratory training, groups, or T-groups (training groups)—but all refer to a thorough unstructured group interaction.  Participants discuss themselves and their interactive processes, loosely directed by a professional behavioral scientist.  Specific results sought include increased ability to empathize with others, improved listening skills, greater openness, increased tolerance of individual differences, and improved conflict resolution skills. 2. Survey Feedback:  One tool for assessing attitudes held by organizational members, identifying discrepancies among member perceptions, and solving these differences is the survey feedback approach.  Everyone can participate, but of key importance is the organizational “family.” A questionnaire is usually completed by all members in the organization or unit.  The data from this questionnaire are tabulated with data pertaining to an individual’s specific “family” and to the entire organization and distributed to employees.  Particular attention is given to encouraging discussion and ensuring that discussions focus on issues and ideas and not on attacking individuals.  Finally, group discussion in the survey feedback approach should result in members identifying possible implications of the questionnaire’s findings. 3. Process Consultation:  The purpose of process consultation is for an outside consultant to assist a manager, “to perceive, understand, and act upon process events” that might include work flow, informal relationships among unit members, and formal communication channels.  The consultant works with the client in jointly diagnosing what processes need improvement.  By having the client actively participate in both the diagnosis and the development of alternatives, there will be greater understanding of the process and the remedy and less resistance to the action plan chosen.
  25. 25. 21 4. Team Building:  It utilizes high-interaction group activities to increase trust and openness among team members.  Team building is applicable to the case of interdependence. The objective is to improve coordinative efforts of members, which will result in increasing the team’s performance.  The activities considered in team building typically include goal setting, development of interpersonal relations among team members, role analysis, and team process analysis.  Team building can also address itself to clarifying each member’s role on the team. 5. Intergroup Development:  It seeks to change the attitudes, stereotypes, and perceptions that groups have of each other.  Once the causes of the difficulty have been identified, the groups can move to the integration phase—working to develop solutions that will improve relations between the groups.  Subgroups, with members from each of the conflicting groups, can now be created for further diagnosis and to begin to formulate possible alternative actions that will improve relations. 6. Appreciative Inquiry:  They identify a problem or set of problems, then look for a solution. Appreciative inquiry seeks to identify the unique qualities and special strengths of an organization. Discovery. • The idea is to find out what people think are the strengths of the organization. Dreaming • The information from the discovery phase is used to speculate on possible futures for the organization. Design •Based on the dream articulation, participants focus on finding a common vision of how the organization will look and agree on its unique qualities. Destiny • In this final step, participants discuss how the organization is going to fulfill its dream.
  26. 26. 22 CREATING A CULTURE FOR CHANGE STIMULATING INNOVATION Change refers to making things different. Innovation is a more specialized kind of change. There is no guaranteed formula with which an organization can become innovative; certain characteristics surface again and again. They are grouped into structural, cultural, and human resource categories. Innovation is a new idea applied to initiating or improving a product, process, or service. All innovations involve change, but not all changes necessarily involve new ideas or lead to significant improvements. Innovations in organizations can range from small incremental improvements to significant change efforts. SOURCES OF INNOVATION Structural variables are the most studied potential source of innovation. First, organic structures positively influence innovation because they facilitate flexibility, adaptation and cross-fertilization. Second, long tenure in management is associated with innovation. Managerial tenure apparently provides legitimacy and knowledge of how to accomplish tasks and obtain desired outcomes. Third, innovation is nurtured where there are slack resources. Finally, inter-unit communication is high in innovative organizations. There is a high use of committee, task forces, cross-functional teams and other mechanisms that facilitate interaction.
  27. 27. 23 CREATING A LEARNING ORGANIZATION What’s a learning organization? A learning organization is an organization that has developed the continuous capacity to adapt and change. All organizations learn—whether they consciously choose to or not; it is a fundamental requirement for their sustained existence. Most organizations engage in single-loop learning. When errors are detected, the correction process relies on past routines and present policies. Learning organizations use double-loop learning: When an error is detected, it’scorrected inways that involve the modification of the organization’s objectives, policies, and standard routines. Like second-order change, double-loop learning challenges deep-rooted assumptions and norms within an organization. It provides opportunities for radically different solutions to problems and dramatic jumps in improvement. Learning organizations are also characterized by a specific culture that values risk taking, openness, and growth—it seeks “boundarylessness”. Managing learning: What can managers do to make their firms learning organizations? Establish a strategy. Redesign the organization’s structure. Reshape the organization’s culture. Management sets the tone for the organization’s culture both by what it says (strategy) and what it does (behavior).
  28. 28. 24 ORGANIZATIONAL CHANGE IN CISCO: A Case Study BACKGROUND An enterprise with 300 locations in 90 countries, Cisco has 46 data centers and server rooms supporting the 65,000-plus employees. Fourteen of the data centers/server rooms are production or customer-facing and 32 are used for product development. Like most IT organizations of large enterprises, Cisco IT used a traditional siloed organizational structure, with staffers doing both implementational as well as operational work, often having to drop operational projects to complete deployments. With the traditional organizational arrangement, there was much duplication of effort and lack of focus across the organization. In many cases, employees were unaware of the duplication that existed across the organization. The original organizational model included regional network teams and regional voice teams that were responsible for all aspects of implementing and operating their environments and services.
  29. 29. 25 CHALLENGE Cisco IT’s Network and Data Center Services (NDCS) organization needed focus. NDCS engaged Cisco Advanced Services’ Network Availability Improvement Services organization (NAIS) to identify the areas that needed to be changed and recommend how to proceed. NAIS assesses and remediates the people, process, and tools needed to mitigate operational risk and network complexity by running an Operational Risk Management Analysis (ORMA). The ORMA is a Cisco support deliverable that outlines a roadmap for operational excellence and availability via a best-practice approach to network design, tools, process, and expertise. After the ORMA report was performed in 2006, it was apparent to Cisco Vice President of IT NDCS John Manville that organizational changes were needed to drive the team to provide the additional scalability and agility that Cisco’s business required. It was time to restructure the organization to accommodate the rapidly changing IT needs. The processes had to be consolidated and simplified, and communication/collaboration vehicles were needed. However, a change of this nature was not inconsequential; it would have a ripple effect throughout Cisco IT’s data centers and global wide.
  30. 30. 26 SOLUTION An organizational restructure to Cisco’s IT NDCS group solved the business problem. In Cisco’s second quarter of fiscal year 2008 (CY08 fourth quarter), Manville restructured NDCS to map ts own lifecycle business model, typically used by Cisco Services for customer network implementation. With more than 400 employees in NDCS, this was a substantial restructuring. The Cisco lifecycle methodology is comprised of six phases, all closely related Prepare phase: Business agility starts with preparation: anticipating the broad vision, requirements, and technologies needed to build and sustain a competitive advantage. In the Prepare phase, the organization determines a business case and financial rationale to support the adoption of new technology. Plan phase: Inthe Plan phase, the organization ascertains whether it has adequate resources to manage a technology deployment project to completion. IT develops a detailed project plan to identify resources, potential difficulties, individual responsibilities, and the critical tasks necessary to deliver the final project on time and on budget. Design phase: Developing a detailed design is essential to reducing risk, delays, and the total cost of network deployments. A design aligned with business goals and technical requirements can improve network performance while supporting high availability, reliability, security, and scalability. Prepare Plan Design Implement Operate Optimize
  31. 31. 27 Implement phase: In the implement phase, the organization works to integrate devices and new capabilities in accordance with the design, without compromising network availability or performance. Operate phase: Network operations represent a significant portion of IT budgets, so it is important to be able to reduce operating expenses while continually enhancing performance. Throughout the operate phase, the IT department proactively monitors the health and vital signs of the network to improve service quality, reduce disruptions, mitigate outages, and maintain high availability, reliability, and security. Optimize phase: A good business never stops looking for a competitive advantage. That is why continuous improvement is a mainstay of the lifecycle. Optimization is the continuous process of planning, designing, and implementing incremental improvements to existing processes.
  32. 32. 28 RESULTS The restructuring, together with the NAIS ORMA report affected change in NDCS. Over the past two years, NDCS has deepened its relationship with Cisco IT advanced services for significant results. Overall, the operational maturity comparison of 2006 to 2008 shows dramatic improvement in each of the five areas . Fig. THE NEW CISCO LIFECYCLE MODEL The restructuring led to a number of positive results: The team can now spend more time training and mentoring. The creation of “focus areas” within the team has enabled sub-teams to tackle specific service areas that require attention. The team developed a strategy around proactive operations, executed with matching team processes. In addition, reinforcement and consistent messaging within the team has enabled the team to fully use staff meetings to review metrics and directly connect them in to recognition and rewards for the team members.
  33. 33. 29 CONCLUSION In this era of globalization, Organizations need to cope up with the dynamic and inevitable changes, which take place very often. Because of these changes the competition among firms is becoming intense and every organization should be flexible enough to implement the changes whenever required for its survival. The changes that organizations make differ in scope. Some are minor whereas some are major & complex. The forces of organizational change are not isolated they appear to be global in nature, though different forces may be shaping change at different rates in different places. Employees tend to resist changes due to several reasons. But organizations are not static; they are continuously changing in response to a variety of forces coming from both inside and outside Pressures for change that originate inside the organization are generally recognizable in the form of signals indicating that something needs to be altered, such are the internal forces. As we have seen throughout the project and the case study, employees tend to resist change, but in the long run change is necessary and inevitable for an organization that wishes to grow. It is also imperative on part of organizations to understand the dynamics of change and communicate effectively and try to gain inputs and confidence of those who resist and are affected by the organizational change being undertaken. Often certain very effective models such as the Kurt Lewin’s Theory of Change, Action Research and Kotter’s Eight Step Model can be used and implemented to bring about a meaningful and comprehensive change in the organization. If an organization can gain inputs, create an effective plan of change and execute it perfectly, the returns will always be positive. Further, an organization should invest considerable time and money understanding the areas where change is needed and drawing plans for change. People should also be motivated to endorse and embrace change, and told how it can benefit them personally and the organization in general.
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