This document provides an overview of managing change and organization development. It discusses the nature of change, costs and benefits of change, resistance to change, and frameworks for interpreting change. It also covers the role of transformational leadership in change, practices to build support for change, and the meaning and characteristics of organization development. Organization development is defined as the systematic application of behavioral science knowledge at various levels to bring about planned change, with the general objective of making the organization more effective and capable of self-renewal.

1. Chapter 14
Managing Change
049953
SOROUSH KIANI

2. Chapter Objectives
The Nature of Change
Costs and Benefits of Change
Resistance to Change
Basic Frameworks for Interpreting Change
Role of Transformational Leadership in Change
Practices to Build Support for Change
Meaning and Characteristics of OD (Organization Development)
Benefits and Limitations of OD (Organization Development)

3. The Nature of Change
Change is any alteration occurring in the work
environment that affects the ways in which employees
must act.
- The whole organization tends to be affected by change in any part
of it.
- Change is a human as well as technical problem.
Organizations tend to achieve an equilibrium in their
social structure. When change comes along, it requires
employees to make new adjustments as the organization
seeks a new equilibrium.
Disequilibrium occurs when employees are unable to
make adequate adjustments.

4. The Nature of Change
This disequilibrium makes a dilemma for managers.
- One of their role is to be proactive which means they should introduce continual
organizational changes so as to bring better fit between firm and its environment.
- Their second role is to be reactive which is to restore and maintain the group
equilibrium and personal adjustment that change upsets.
Organizational changes involve minor changes and
more dramatic changes.
- Minor changes affect only a few people and in these cases a new equilibrium may be
reached readily, such as adding new members to a work group.
- More dramatic changes deals with the entire core of an organization. Examples include
hostile takeovers of firms, reengineering of organizations, act of public terrorism and etc.

5. Responses to Change
Work change is further complicated by the fact that
it does not produce a direct adjustment. Instead, it
operates through each employee’s attitudes to
produce a response which is related to their feelings
toward the change.
Obviously there was no direct connection between
the change and the response. Some other intervening
variable , which is later stated employee attitude ,
changed expected pattern.
The way that people feel about a change is one factor
that determines how they will respond to it.

6. Responses to Change
 These feeling are not the result of chance; They are caused.
- One cause is Personal History.
- Second cause is The Work Environment itself.
 Feelings are not a matter of logic. They are in two separate
category. So logic is not a successful method to modify
these feelings.
Hawthorne Effect
 Hawthorne effect means that the mere observation of a
group tends to change the group.
- When people are observed, or believe that someone cares about them, they act
differently.

7. Response to Change
Group Response to Change
People interpret change individually and have their
own probable response to it. On the other hand, they
often show that they our belong to the group by
joining with other group member in some uniform
response to change.
Basically, the group react with the feeling, “We’re all
in this together. Whatever happens to one of us
affects all of us.”

8. Response to Change
To reach equilibrium, a group is often inclined to
return to its best way of life whenever any change
occurs. For this the net result is a self-correcting
mechanism. This self-correcting characteristic of
organizations is called homeostasis.

9. Costs and Benefits
All changes are likely to have some costs. Because of
costs, proposals for change are not always desirable.
Each change requires a detailed cost-benefit analysis.
If changes doesn’t provide benefits above costs, there
is no reason for the changes.
These cost s are not merely economic; they also are
psychological and social. All of these costs must be
considered in determination of benefits and costs.
The organizational goal always is benefits greater
than costs.

10. Costs and benefits
Psychological costs also are called Psychic costs
because they affect a person’s inner self, the Psyche.
Knowledge of individual differences helps us predict
that people will react in widely varying ways to
change. Some will perceive only the benefits, while
others see only what it costs them.
In some cases the psychic costs of change can be so
severe that they affect the psychological and even
physical health of employees.
The reality of change is that frequently there is no
clear-cut 100 percent benefit for all parties.

11. Resistance to Change
Resistance to change consists of any employee
behaviors designed to discredit, delay, or prevent the
implementation of a work change.
Employees resist change because it threatens their
needs for :
- Security
- Social Interaction
- Status
-Competence
-Self-Esteem

12. Resistance to Change
Nature and Effects
Despite of the nature of the change, some employee try to
protect themselves from its effect. Their action may range
from complaints, foot-dragging, and passive resistance to
absenteeism, sabotage, and work slowdowns.
All employees tend to resist it because of the psychic
costs that accompany it and also managers resist it too.
Although people tend to resist change, this tendency is
offset by their desire for new experiences and for the
rewards that come with changes.

13. Resistance to Change
One lesson for management is that a change is likely to
be either a success or problem, depending on how
skillfully it is managed to minimize resistance.
Insecurity and change are conditions that illustrate
how a chain-reaction effect may develop in
organizational behavior.
A chain-reaction effect is a situation in which a
change ,or other condition, that directly one person or
a few persons may lead to a direct or indirect reaction
from many people because of their mutual interest in
it.

14. Resistance to Change
Reasons for Resistance
Employees may resist changes for three broad
reasons:
-They may not feel comfortable with the nature of the change it self. It may violate
their belief system, they may believe the decision is technically incorrect, or they my
simply be reluctant exchange comfort of certainty and familiarity for uncertainty.
-The method by which change is introduced. People may resent having been ill-
informed, or they may reject an insensitive and authoritarian approach that did not
involve them in the change process.
-The inequity experienced when people perceive themselves being changed while
someone else appear to gain the benefits of the change.
Their resistance will be even more intense if all three
reasons exist.

15. Resistance to Change
Type of Resistance
There are three different types of resistance to
change.
 Logical Resistance.( or Rational Resistance) This is based on disagreement with
facts, rational reasoning, logic, and science. It occurs because of the time and
efforts which is needed to adjust to change.
 Psychological Resistance.( or Emotional Resistance ) This is typically based on
emotions, sentiments, and attitudes. It is internally logical from the perspective
of the employees’ attitudes and feelings about change because they may fear the
unknown, mistrust the management’s leadership, or feel that their security and
self-esteem are threatened.
 Sociological Resistance.( or Social Resistance) Sociological resistance also is
logical, when it is seen as a product of a challenge to group interests, norms,
and values.

16. Resistance to Change
Implications of Resistance
All three types of resistance must be anticipated and
treated effectively if employees are to accept change
cooperatively. If administrators work with only one of
them they will fail to made change.
In a typical operating situation full support can’t be
gained for every change that is made. What manager
seeks is climate in which people trust managers, have a
positive feeling toward most changes, and feel secure
enough to tolerate other changes.
If management can’t win support, it may need to use
authority.

17. Resistance to Change
Possible Benefits of Resistance
Resistance is not all bad. It can bring some benefits
as follows:
 Encourage management to reexamine its change proposals.
 Help to Identify specific problem areas where a change is likely to cause
difficulties.
 Management may be encouraged to do a better job of communicating the
change.
 Gives managers information about the intensity of employee emotions on an
issue.
 Encourage employees to think and talk more about a change.

18. Implementing Change Successfully
Some changes originate within the organization, but
many come from the external environment. For example
Government passes laws, new development in technology
arise, competitors introduce new services and etc. then
the organization should respond to them.
Although stable environment mean less change, dynamic
environments are now the norm, and they require more
change.
Transformational Leadership and Change
Management has key role in initiating and implementing
change successfully.

19. Implementing Change Successfully
Not only do managers sometimes overlook simple but
important details, but they may fail to develop a master
strategy for planned change. An overall plan should
address Behavioral issues, such as employees’ difficulty
in letting go of old methods and the general need to
create an organization to welcomes change.
Transformational Leaders are instrumental in this
process. They are managers who initiate bold strategic
changes to position the organization for its future.
There are three important elements of transformational
leadership : Creating Vision, Exhibiting charisma, and
stimulating learning.

20. Implementing Change Successfully
-Creating Vision. Transformational leaders create and communicate a vision for the
organization. A vision crystallized long-range image or idea of what can and should
be accomplished. A vision may also integrate the shared beliefs and values that
serve as a basis for changing an organization’s culture.
-Communicating Charisma. Leaders should persuade employees that the vision is
urgent and motivate them to achieve it. Charisma is a leadership characteristic that
can help influence employees to take early and sustained action. Charismatic
leaders are dynamic risk takers, they can be warm mentors who treats employees
individually and guide them to take action, and also they need to recognize the
“emotional vulnerability” that employees experience.
-Stimulating Learning. The critical Task for transformational leaders is to develop
people’s capacity to learn from the experience of change. This process is called
double-loop learning which means that the way a change is handled should not only
reflect current information gathered but also prepare the participations to manage
future changes even more effectively. This process is in sharp contrast to single-
loop learning which is just focus on current problems.

21. Implementing Change Successfully
Three Stages in Change
Behavioral awareness in managing change us aided
by viewing change as a three-step process:
-Unfreezing means that old ideas and practices need to be cast
aside so that new ones can be learned.
-Changing is the step in which the new ideas and practices are
learned. The changing step usually is also mixed with hope,
discovery, and excitement.
-Refreezing means that what has been learned is integrated
into actual practice. Successful on-the-job practice must be the
ultimate goal of the refreezing step.

22. Implementing Change Successfully
Manipulating the Forces
 Social psychologist Kurt Lewin, who identified the three stages of
change, also suggested that any organization is a dynamic balance of
forces supporting and restraining any existing practice; there is an
equilibrium .
 Change is introduced within a group by a variety of
methods as follows:
- Adding new supporting forces.
- Removing restraining forces.
- Increasing the strength of a supporting force.
- Decreasing The strength of a restraining force.
- Converting a restraining force into a supporting force.
 At least one of these approaches must be used to change the equilibrium,
with greater success likely when more than one is adapted. The idea is to
help change be accepted and integrated into new practices.

23. Implementing Change Successfully
Building Support for Change
 Use of Group Forces.
-Effective change focuses on both individuals and groups.
-Any changes in group forces will encourage changes in individual behavior.
-The more attractive the group is to each member, the greater its influence on a group member
can be. If a member with high status support the change the influence will increase.
-If the change disrupt the group’s social system more than necessary, the group will tend to
meet resistance.
 Providing a Rationale for Change.
-Capable leadership reinforces a climate of psychological support for change.
-It is generally better to provide objective reasons for the change.
-Ordinary requests of change should be in accord with the objectives and vision of the
organization.
-Managerial and employee expectations of change may be as important as the technology of
change, but expectations are not enough alone.
- By believing that the change will work, the manager acts so as to fulfill that belief. This belief
is transferred to employees, who buy into probability of success and change their behavior
accordingly.

24. Implementing Change Successfully
 Participation.
-A fundamental way to build support for change is through participation.
-Participation encourage commitment rather than mere compliance with change.
-As participation increases, resistance to change tend to decrease.
-Employees want to involved and participate from the beginning to protect themselves from
changes surprises.
 Shared rewards.
-Another way to build employee support for the change is to make sure that there are enough
rewards for them in the change situation.
-Rewards give employees a sense that progress accompanies a change and also tell them that
we care about you and wants you as well as us benefit from this change.
-Also it is desirable for a change to pay off as directly and as soon as possible.
 Employee security.
-along with shared rewards, existing employee benefits need to be protected and that’s why
security during a change is very important.
-For this reason many employers guarantee workers protection from reduced earnings when
new technology and methods are introduced, or some offer retraining and delay installation of
labor-saving equipment.
-Grievance systems give employees a feeling of security that benefits will be protected and
differences about them fairly resolved.

25. Implementing Change Successfully
 Communication and Education.
-Communication is essential in gaining support for change.
-When a change occur all of a group members should informed even it affects only a few
of them.
-Since the flow of information may be weakest at the time it is needed most, special effort
is required to maintain it in times of change.
 Stimulating Employee Readiness.
-Change is more likely to be accepted if the people affected by it recognize a need for it
before it occurs.
-This awareness can happen both naturally or it can be induced by management.
-One of the more powerful way is when Workers discover for themselves that a situation
requires improvement.
 Working with the Total System.
-Resistance to change can be reduced by a broader understanding of employee attitudes
and natural reactions to change.
-It is essential for the managers to take a broader, system-oriented perspective on change
to identify the complex relationship involved.
-Organization development can be a useful method for achieving this objective.

26. Understanding Organization Development
Organization Development (OD) is the systematic
application of behavioral science knowledge at various
levels to bring about planned change.
It helps managers recognize that organizations are
systems with dynamic interpersonal relationships
holding them together.
General objective of OD is to change all parts of the
organization in order to make it more humanly
responsive, more effective, and more capable of
organizational learning and self-renewal.
It relies on a systems orientation, casual models, and a
set of key assumptions to guide it.

27. Understanding Organization Development
Foundations of OD
Change is so abundant in modern society that
organizations need all their parts working together in
order to solve the problems that are brought about by
change.
Organization Development is a comprehensive program
that is that is concerned with the interactions of various
parts of the organization as they affect one another.
One contribution of the systems orientation is to help
managers view their organizational processes in terms of
a model with three types of variable; Casual, Intervening,
End-result variables .

28. Understanding Organization Development

29. Understanding Organization Development
 OD practitioners make a set of assumptions that guide their actions.
 Sometimes these assumptions are implicit and need to be examined to enable
double-loop learning.
 OD assumptions need to be shared with managers and employees so that those
groups will clearly understand the basis for the OD program.
 Common Organization development assumptions are as follow:
 Individuals
-People want to grow and mature.
-Employees have much to offer that is not now being used at work.
-Most employees desire the opportunity to contribute.
 Groups
-Groups and teams are critical to organizational success.
-Groups have powerful influence on individual behavior.
-The complex roles to be played in groups require skill development.
 Organization
-Excessive controls, policies, and rules are detrimental.
-Conflict can be functional if property channeled.
-individual and organizational goals can be compatible.

30. Understanding Organization Development
Characteristics of Organization Development
 A number of characteristics are implied in the definition of OD.
 Humanistic Values, which are positive beliefs about the potential
and desire for growth among employees. To be effective and self-
renewing an organization needs employees how tend to expand and
improve their skills.
 Use of a Change Agent. OD programs generally use one or more of
them, whose role is to stimulate, facilitate, and coordinate change. They
can be either internal or external, but they are always outsider.
Advantages of using external change agents are that they are more
objective and have diverse experiences.
 Problem Solving. OD emphasizes the process of problem solving. By
studding their own problem-solving process through action research,
employees learn how to learn from their experiences, so they can solve
their problem in future by they own. The cyclical process of using
research to guide action, which generates new data as the basis for new
actions, is know as action research or action science.

31. Understanding Organization Development
 Experiential Learning. When participants learn by experiencing in the
training environment the kinds of human problems they face on the job, the
process is called experiential learning. This approach tends to produce
more changed behavior than the traditional discussion and lecture alone.
 Interventions at Many Levels. An overall OD strategy is then developed
with one or more interventions, which are structured activities designed to
help individuals or groups improve their work effectiveness.
 Contingency Orientation. Organization development is usually
described as contingency-oriented. Although some OD practitioners rely on
just one or a few approaches, most OD people are flexible and pragmatic,
selecting and adapting actions to fit assessed needs.
 Summary and application. The OD process applies behavioral science
knowledge and strategies to improve an organization. It seeks to integrate
into an effective unit the four elements that affect organizational behavior –
people, structure, and environment .

32. Understanding Organization Development
the Organizational Development Process
OD is a complex process. It may take a year or more to
design and implement, and the process may continue
indefinitely.
Although there are many different approaches to OD, a
typical complete program include most of the following
steps :
-Initial diagnosis
-Data collection
-Data feedback and confrontation
-Action Planning and problem solving
-Use of interventions
-Evaluation and follow-up

33. Understanding Organization Development
1. Initial diagnosis. The consultant meets with top management to
determine the nature of the firm’s problems, to develop the OD
approaches most likely to be successful, and to ensure the full
support of top management.
2. Data collection. Surveys may be made to determine organizational
climate and behavioral problems. There are some questions that
consultant deal with their answer to develop information like:
a) What kinds of conditions contribute most of your job effectiveness?
b) What kinds of conditions interfere with your job effectiveness?
c) What would you most like to change in the way organization operates?
3. Data feedback and confrontation. Work groups are assigned to
review the data collected, to mediate areas of disagreement, and to
establish priorities for change.

34. Understanding Organization Development
4. Action planning and problem solving. Groups use the
data to develop specific recommendations for change.
5. Use of interventions. Once the action planning is
completed, the consultant helps the participants select
and use appropriate OD interventions.
6. Evaluation and follow-up. The consultant helps the
organization evaluate the results of its OD efforts and
develop additional programs in areas where additional
results are needed.
• Since the steps in OD are part of a whole process, all of
them need to be applied if a firm expects to gain the full
benefits of OD.

35. Understanding Organization Development
Benefits and Limitations of OD
 Organizational development is a useful organizational
intervention. Although it has some benefits there some
limitations as well.
 OD benefits in summary are as follows:
-Change throughout organization
-Greater motivation
-Increased productivity
-Better quality of work
-Higher job satisfaction
-Improved teamwork
-Better resolution of conflict
-Commitment to objectives
-Increased willingness to change
-Reduced absences
-Lower turnover
-Creation of learning individuals and groups

36. Understanding Organization Development
OD limitation in brief are as follows:
-Major time requirement
-Substantial expense
-Delayed payoff period
-Possible failure
-Possible invasion of privacy
-Possible psychological harm
-Potential conformity
-Emphasis on group processes rather than performance
-Possible conceptual ambiguity
-Difficulty in evaluation
-Cultural incompatibility
Finally, all managers should accept their roles as being
responsible for OD, since organizational improvement
is almost universally needed.