OEC Handout # 1

An Overview of the Concepts of Organizational Change, Effectiveness and Develoment

Section 1: Organizational Change

"Change is the only constant in the universe". --Heraclitus, 500 BC

Change implies the following:
To make or become different.
Dissatisfaction with the old and belief in the new.
A qualitatively different way of perceiving, thinking, and behaving to improve over the past and present.
Continuity without change leads to stagnation, and change without continuity leads to conflicts.
The rate of change is faster than our ability to comprehend and cope with it.

What is organizational change?
Organizational change implies changes in the following:
Goals, Vision and Mission
Boundaries
Pattern of activities/administrative practices
Assumptions, values and belief
Culture
Structure
"Organizational change consists of goal-oriented and to a degree, pre-planned actions, the final result of which can be, more or less, clearly formulated in advance". --Van der Vlist

What is planned change?
"Planned change is a conscious, deliberate and collaborative effort to improve the operation of a system -whether it be a self-system, a social system, or a cultural system -through the utilization of scientific knowledge". --Bennis, Benne & Chin.
"...conscious, deliberate and collaborative effort to improve the operation of human system through utilization of valid knowledge". --Lippit

Elements of Planned Change
Outcome: goals, results, direction, improvement, renewal
History: causes, need, motive, context
Actors: External/Internal
Phases: steps, sequences
Communication: interaction, cultural aspects
Steering: monitoring, directing, guiding

Taxonomy of Change
Directional Change: Occurs under conditions of severe competitions, regulatory shifts in government policy, and unsuccessful business strategy.
Fundamental Change: Redefinition of current purpose or mission.
Operational Change: Improvement of quality, quantity, timeliness, unit cost of operations, in developing products and services.
Total Change: Developing a new vision, achieving a turnaround; a drastic surgery of the existing system.
Planned Change: Basically an operational change on a calculated basis as a response to internal and external demands e.g. downsizing.
Happened Change: Unpredictable. Occurs due to external causes over which one my have no control.
Transformational Change: Change involving the entire or a greater part of the organization due to a severe threat to its survival. The threat may occur from industrial discontinuities, shifts in a product’s life cycle or internal change e.g. union-management conflicts.
Revolutionary Change: Abrupt changes in the organization’s strategies and design.
Recreation: Tearing down the old structure and building a new one. A metamorphosis –becoming not just better but different.
Strategic Change: Change of all or most of the organization’s components.
Anticipatory Change: Changes carried out in expectation of an event. In anticipation of such change, the organization may tune-in (incremental change) or re-orient itself.
Reactive Change: Response to an event or series of events. Adaptive changes are limited t a sub-system or apart of the sub-system. Recreation can also be reactive but involves the whole organization.
[Source: Management of Organizational Changeby K Harigopal (Response Books)]

Why Chnage is important?
Business performance improves in the chosen market place
Financial performance is positive; there is sustained growth
Customers notice improvements in service or products
Customer loyalty increases
The organization benefits from continuous innovation and increase in knowledge capital
The organization has a successful image

Section 2: Organizational Effectiveness

What is organizational effectiveness?
Organizational effectiveness is the concept of how effective an organization is in achieving the outcomes the organization intends to produce.
Organizational effectiveness is the concept of how effective an organization is in achieving the outcomes the organization intends to produce.

Models of Organizational effectiveness
Human Relations Model
Means: Discussion, Participation, Consensus, Team work, Employee development
Ends: Morale and cohesion, commitment, human resource development
Internal Process Model
Means: Information management, communication, standardized decision making
Ends: timeliness, Stability, Efficacy
Rational Goal model
Means: Goal clarification, direction, decisiveness, planning, achievement of measurable goals, external positioning
Ends: External positioning, productivity, Goal achievement
Open System Model
Means: Commitment to experimentation, individual initiative, adaptation, readiness, insight
Ends: Creativity, cutting edge output, Growth, and external support

Section 3: Organizational Development

What is Organization Development?
"Organization Development is an effort – planned, organization-wide and managed from the top – to increase organizational effectiveness and health through planned interventions in the organization’s processes, using behavioural science knowledge".– Richard Beckhard
"Organization Development is a systemwide process of data collection, diagnosis, action planning, intervention and evaluation aimed at
i. enhancing congruence among organizational structure, process, strategy, people and culture;
ii. developing new and creative organizational solutions;
iii. developing the organization's self-renewing capacity.
It occurs through the collaboration of organizational members working with a change agent using behavioural science knowledge". –Michael Beer
"Organization Developemt refers to a long-range effort to improve an organization's problem solving capabilities and its ability to cope with changes in its external environment with the help of external or internal behavioural scientist consultants or change agents as they are sometimes called" –Wendell French

Value system of Organization Developemt
The basic value underlying all organization development theory and practice is that of choice. Through focused attention, and through the collection and feedback of relevant data to relevant people, more choices become available and hence better decisions are made.
More specifically, the value system of Organization Development revolves around humanistic, optimistic and democratic principles.
According to a survey conducted by the American Society of Training and Development, the managers ranked the values absolutely necessary for success of any Organization Developemt intervention in terms of importance in the following order:
Empowerment
Openness in communication
Ownership of process and outcome
Collaboration
Continuous learning

Assumptions in Organization Development:
The basic building blocks of an organization are groups (teams). Therefore the basic units of change are groups and not individuals.
An always relevant change goal is the reduction of inappropriate competition between parts of the organization and the development of a more collaborative condition.
Decision making in a healthy organization is located where the information sources are, rather than in a particular role or level of hierarchy.
Organizations, subunits, of organizations and individuals continuously manage their affairs against goals. Controls are interim measures and not the managerial strategy.
One goal of a healthy organization is to develop generally open communication, mutual trust, and confidence between and across levels.“People support, what they help create”. People affected by change must be allowed active participation and a sense of ownership in planning and conduct of change.

According to French & Bell, following assumptions hold good in Organization Developemt:
Most individuals have drives towards personal growthMost people desire to make and are capable of making, a higher contribution to the attainment of organizational goals than most organizational environment will permit.
The most psychologically relevant reference group for most people is the work-group
Most people wish to be accepted and to interact cooperatively with at least one small reference group and usually with more than one group.
The formal leader cannot perform all the leadership and maintenance functions in all all circumstances at all times; hence group members must assist each other with effective leadership and member behaviourSuppressed feelings and attitudes adversely affect problem solving, personal growth and job satisfaction.
The level of inter-personal trust, support, and cooperation is much lower in many groups and organizations than is either necessary or desirable.
The solution to many attitudinal and motivational problems are transactional.
The key movers in an OD effort need to have a relatively long range time perspective
Improved performance stemming from OD efforts needs to be sustained by appropriate changes in appraisal, training, staffing, tasks, and communication sub-systems.