Organizational Change and Development

Organizational Change and Development DIPAK KUMAR BHATTACHARYYA Professor (OB/HRM) Xavier Institute ofmanagement Bhubaneswar OXFORD UNIVERSITY PRESS

Preface PART 1 Understanding Organizational Processes and Change 1 c 1. Understanding Organizational Systems, Structure, and Design 3 Introduction 3 Definitions and Principles of an Organization 5 Organization, Organizing, and Organizational Structure 6 Systems View of an Organization 6 Feedback Loop 7 Organizational Structure and Systems 10 > Components of Organizational Structure 11 Types of Organizational Structure 12 Adhocracy and Bureaucracy: The Two Ends of a Continuum 13 Organizational Effectiveness 14 Systems Theory, Systems Analysis, and Systems Thinking 15 Principles of Systems Theory 16 Open Systems Approach to an Organization 17 Organizational Cybernetics, Viable Systems Model, and Organizational Systems 18 Open Systems Concepts and Orchestra Organization 19 Chaos Theory 20 Socio-technical Systems Thinking 22 Systems Dynamics 23 Business Process Approach to an Organization 23 Michigan Model 24 Harvard Model 24 Guest's Model 24 Warwick Model 24 Elements of the Business Process Model 25 Description of Business Process Model 25 Normative and Descriptive Models 27 Organizational Design 28 Bureaucratic Model 29 Behavioural Model 29 Role of Critical Success Factors in Organizational Design 30 Human Resource Information Systems and Its Usage in Organizational Design 32 Organizational Culture and Design 35 Business Process Re-engineering 36 Situational Aspects of Organizational Design 36 2. Introduction to Organizational Change Introduction 44 Content and Process Theories of Organizational Change 45 43

Need for Organizational Change 46 Philosophy of Organizational Change 47 Organizational Change, Transformation, and Renewal 49 Change Triggers 50 Business Development-driven Change 51 Environment-driven Change 52 Culhlre-driven Change 53 Strategy-driven Change 54 Business Plan-driven Change 55 Process-driven Change 55 Competency-driven Change 55 Performance-driven Change 55 Innovation-driven Change 56 Key Elements for Success in Organizational Change 57 Organizational Change through Training and Development 58 Organizational Transition 58 Generic Change or Transition Models 59 Types of Change 62 Planned vs Emergent Change 62 Episodic vs Continuous Change 63 Developmental, Transitional, and Transformational Change 63 Systems Thinking and Change 66 Strategies of Change Management 67 Normative Re-educative Strategy 67 Rational-empirical Strategy 67 Power-coercive Strategy 68 Action-centred Strategy 69 Petsonal Construct Psychology and 'Organizational Change 70 ABC Technique and Organizational Change 71 Integrative Approach to Organizational Change 72 Role of Organizational Change Consultants 73 Common Drawbacks in Implementing Organizational Change 74 3. Organizational Change Process 82 Introduction 83 Organizational Change Process through Personal Examination 83 Features of Organizational Change 84 Theories of Organizational Change 86 Change Processes 87 Change Process and Its Stages of Unfreezing, Changing, and Refreezing 88 Organizational Change Process 88 Business Environment-led Change Process 89 Strategic Planning-focused Change Process 90 Customer and Market-driven Change Process 91 Organizational Culture-driven Change Process 91 Organizational Structure and the Change Process 93 Leadership Performance-driven Change Process 93 SWOT Analysis and the Change Process 95 Environmental Scanning and Feedback-enabled Change Process 97 Role and Significance of HRD in the Organizational Change Process 98 Focus of die HRD System 98 Role of HRD Manager in Organizational Change Process 99 HRD Culture and Climate 100 Competencies as Enablers of Organizational Change Process 101 Organizational Change through Management of Manpower Redundancy 102 Mergers and Acquisitions 103 Change Processes Involved during Mergers and Acquisitions 104 Recent Research on Mergers and Acquisitions 106

Mergers and Acquisitions in India 109 Strategic Focusing in the Organizational Change Process 110 Scenario Planning for Effective Organizational Change Process 110 Forces of Scenario Planning 112 Steps for Scenario Planning 112 Application of Delphi Technique in Scenario Planning 113 Nominal Group Method 114 4. Organizational Effectiveness and Excellence 119 Introduction 119 Measuring Organizational Effectiveness\l21 Organizational Effectiveness Inventory 122 \. OE Cycle 122 Dashboard 122 Open Systems Model 126 Contemporary Models of Organizational Effectiveness and Excellence 127 The McKinsey Way of Problem-solving Approach 131 Excellence Model of Peters and Waterman 132 Management by Objectives for Organizational Effectiveness and Excellence 133 EFQM Excellence Model 133 Quality Management Principles for Organizational Excellence 135 Managerial Roles Theory for Achieving Organizational Effectiveness and Excellence 135 Managerial Skills and Competencies 135 Skill Inventories 137 Multi-skilling 138 Skills for the New Millennium 138 Developing Competencies for Effective Organizational Change 140 P-CMM Model for Organizational Excellence 140 Shingo Prize Model of Organizational Excellence 143 Malcolm Baldrige Model for Organizational Excellence 144 Organizational Change through Six Sigma 145 Six Sigma in Organizations 147 Lean Practices to Achieve Organizational Excellence 149 Orgarma^n^ 157 5. Managing Organizational Change Introduction 160., Nature of Change 161 Responsibility for Managing Change 162 Change Management Principles 162 Change Transitions for Individual Employees 163 Organization Improvement Process through Change Management 166 Implementing Change Improvement Systems 167 Change Management Survey 167 159 The Commitment Curve 170 Mobilizing the Organization 171 Types of Change 171 Change Management The Skill Requirements 172 Political Skills 172 Analytical Skills 172 People Skills 173 System Skills 173 Business Skills 173 Change Management Iceberg 173 Change in Organizational Culture 174

Managing Organizational Change through Modification of Group Behaviour 176 Effective Change Management 178 Explain the Need for Change 178 Discuss in Detail the Issues Involved 178 Facilitate the Change Programme with Training and Support 179 Implement the Desired Change 179 Reinforce the Change 179 Qualities of a~change_agent 180 Approaches to Change ^^ Management 180 6. Power, Leadership, and Organizational Change 185 Introduction 186 Theories of Power 187 Organizational Power and Control 189 Power and Systems of Organizational Membership 190 Sources of Power 191 Organizational Sources 191 Individual/Personal Sources 192 Power and Empowerment 193 Definition and Concept of Empowerment 193 Understanding Power and Empowerment Implications in Practice 193 The Process of Empowerment 194 Organizational Politics 195 Tfansactional and Transformational Leadership 196 Contingency Framework of Change 197 Environment and Leadership 199 Culture and Climate of Leadership 200 Leadership 201 Leadership and Power 201 7. Technology Management 207 Introduction 208 Concept of Technology Management 209 Sociological Issues in Technology Management 209 Organizational Structure and Design 210 Economic Issues in Technological Change 211 Strategic Technology Management 211 Human Resource Management and Technology Management 213 Design and Engineering 213 Processing Fabrication and Assembly 214 High Speed Machining 214 Inspection 214 Integration and Control 214 Network Communications 215 Technology Planning 216 Principles of Technology Planning 216 Technology Transfer 217 Technology Innovation 218 Technology and Organizational Design 218 8. Technology and Culture 224 Introduction 224 Culture and Organizations 225 Proactive and Reactive Technological Cultures 227 Proactive Technological Culture 227 Transition from Reactive to Proactive Technological Culture 228 Existing Manufacturing Systems 230 Steps in the Technology Transitioning Process 232

9. Attitude Measurement for Change Management Introduction 237 Employee Attitudes in the Organizational Change Process 238 Approaches to Attitudinal Change 239 Strategies for Attitudinal Change 239 Attitude Measurement for Organizational Change 243 HRD Initiatives and Attitudinal Change 243 Use of Scalihg^Iechniques to Map Attitude 245^ Iikert Scales 246 Other Measures of Attitudes 246 Attitude Surveys 246 Likert's Summated Rating Scale 248 Thurstone's Equal Appearing Intervals Scale for Attitudinal Survey 249 Gunman's Cumulative Scale 249 Johari Window 249 10. Organizational Culture and Change Introduction 255 Organizational Culture 255 Aspects of Organizational Culture 256 Differences in Organizational Cultures 257 Dimensions of Cultures and Their Influence on Organizations 258 High Context vs Low Context 258 Monochrome vs Polychronic 258 Future vs Present vs Past Orientation 259 Quantity of Time 259 Power Distance 260 Individualism vs Collectivism 260 Definition and Characteristics of Organizational Culture 261 Detailed Contents Organizational Culture as External 236 and Internal Variables 262 Types of Organizational Culture 263 Organizational Culture from a Global Perspective 265 Mergers and Their Impact on Organizational Culture 266 P&G-Gillette 267 Tata-Corus 267 HP-Compaq 267 Daimler-Chrysler 268 Organizational Culture Change Process 268 Organizational Structure 269 Organizational Diagnostics 269 Attitudes towards Work 269 Organizational Commitment 270 Organizational Climate 271 Models of Organizational Culture Change 272 Root Metaphor 272 External and Independent Variable 272 Internal Variable 272 Management-directed Cultural 254 Change 273 11. Change through Performance Management 279 Transformation of Tata Consultancy Services (TCS) 279 Introduction 280 Overview of Performance Management 280 Dimensions of Performance 281 Performance Models 282 Performance-driven Organizational Change 284 Performance-driven Organizational Change Process 286 Setting Standards of Performance 288 Guidelines for Performance Standards 288

Developing a Performance Metric 290 Performance Matrix 292 Effective Performance Modelling 294 The Human Side of Performance Metrics 294 Customer-focused Metrics 294 Designing Metrics 295 Various Dimensions of Performance 295 Managing Change through Balanced Scorecard 297 Perspectives of Balanced Scorecard 297 HR Scorecard 301 Process of Developing HR Scorecard 301 Key Benefits of HR Scorecard 302 Competency Mapping and Competency Development 303 Performance Improvement through Knowledge Management Practices 304 Knowledge Management and Resource-based Competitive Advantage 305 12. TQM Practices and Organizational Change 310 Introduction 310 TQM and the Operating Environment of Organizations 311 ISO Standards and TQM Systems 313 Selection and Use of the ISO 9000:2000 Family of Standards 313 Optimizing die Cost of Quality 314 Teams and Teamwork 315 Organizational Change and TQM 318 Employee Empowerment 319 Quality of Work life (QWL) 319 Organizational Change through Innovation and Creativity 320 PART 3 Nature of Organizational Development 327 13. Organizational Development 329 Introduction 330 Definitions and Concepts of OD 331 Certain Clarifications about OD 333 Need for OD in Organizations 333 OD as Action Research Process 335 Strategic Aspects of OD 336 Hfstory or Evolution of OD 338 Laboratory Stem 339 Survey Research Feedback Stem 339 Socio-technical Stem 339 Features of OD 340 Characteristics of OD 340 Principles of OD 341 Individuals 341 Groups 342 Organizations as Human Entities 342 OD in Different Types of Organizations 342 OD and Management. Development 343 Goals of OD 344 Steps in OD 345 Important Triggers for OD 346 Knowledge Explosion 346 Rapid Product Obsolescence 346 Changing Composition of die Labour Force 346 Growing Concern over Personal and Social Issues 346 Increasing Internationalization of Business. 347 OD and Organizational Involvement 347 OD and Leadership Development 347

Role of an External Consultant in OD Processes 348 Ethical Guidelines for OD Professionals 349 Organizational Life Cycle Analysis 350 OD and Business Process Re-engineering (BPR) 352 14. Organizational Diagnosis and Development Introduction 359 Definitions and Concepts 359 Objectives of Organizational Diagnosis 360 The Diagnostic Cycle 360 Different/Forms of Organizational Diagnosis 361 Organizational Analysis for Diagnosis 363 358 Areas of Measurement for Organizational Analysis 363 Attitudes towards Work 364 Organizational Commitment 364 Organizational Climate 365 Organizational Health Survey 366 Questionnaire Development for Organizational Diagnosis 367 Use of Interview as a Diagnostic Tool 368 Task Forces for Organizational Development 370 Assessment Centres Approach for Organizational Diagnosis 371 Observational Methods of Organizational Diagnosis 371 Secondary Data and Unobtrusive Measures 372 PART 4 Organizational Development Interventions and Strategies 379 15. Approaches and Models 381 Introduction 382 Different Models and Approaches ofod 382 Organizational Life Cycle Model 387 - OD Models 387 Force Field Analysis 388 Leavitt's Model 388, Iikert's System Analysis 389 Open Systems Theory 390 Weisbord's Six-box Model 390 Congruence Model for Organization Analysis 393 McKinsey's 7-S Framework 394 Tichy's Technical-political-cultural (TPC) Framework 394 High-performance Programming 395 Harrison's Model of Diagnosing Individual and Group Behaviour 396 Burke-Iitwin Causal Model 397 ACHIEVE Model 397 PRIMO-F Business Growth Model 398 IDEAL Model 399 ADKAR Model of Individual Change 400 Bridges' Transition Model 401 Action Research Model 401 Dannemiller-Tyson Interactive Strategic Planning 402 Mobius Model 402 World Healing Model 403 Organizational Development through Competency Development 404

16. Globalization and Organizational Change and Development 409 Introduction 410 Definitions and Concepts 410 Factors Promoting Globalization 413 Technology Transfer and Globalization 414 Globalization and OD Processes through HR 415 Aligning HR Strategy widi Business Goals 415 Major Institutions Regulating Globalization 418 World Trade Organization (WTO) 418 International Monetary Fund (IMF) 419 World Bank 420 United Nations (UN) 420 Organization for Economic Cooperation and Development (OECD) 420 United Nations Conference on Trade and Development (UNCTAD) 420 Globalization Challenges for Managing Organizational Change and Development 421 Managing HR 421 Managing Diversity 421 Interdependence 422 Managing Ambiguity 422 Organizational Preparedness to Cope with the Challenges of Globalization 422 Review of Organizational Purpose and Values 423 Core Processes and Decentralized Authority 424 Leadership 425 Globalization and Organizational Transformation 426 Strategic Alignment 427 17. Knowledge Management and Change 433 Introduction 433 Knowledge Management 435 Assumptions 436 Integral Components 437 Benefits 438 Enablers of Knowledge Management in Organizations 438 Knowledge Management Strategy 441 Knowledge-Strategy Link 443 Strategic Framework for Mapping Knowledge 444 Gap Analysis 446 Strategic Knowledge Management in Indian Organizations 447 Indian Companies and Knowledge Management Practices 447 Knowledge Management and Resource-based Competitive Advantage 448 Knowledge Management and Organizational Change 449 18. Change Management Strategies 453 Introduction 454 Definitions and Concepts 455 Principles of Change Management Strategy 459 Philosophies of Strategic Change Management 461 Steps for Strategic Change Management 461 Successful Change Management Strategies 462 Strategic Organizational Change in the Institutional Framework 463 Selection of Organizational Change Strategy 464

PART 5 Contemporary Issues in Organizational Development 469 19. Organizational Development and Diversity Management 471 Introduction 472 Definitions and Concepts 472 Gender Diversity and Modern Organizations 473 Diversity Management 473 Contextual Issues of Diversity Management 474 Strategic Approach to Cultural Diversity Management 474 Tools for Cultural Diversity Management 476 Productivity, Innovation, and Talent Management 476 Aspects of Diversity Management 477 General Diversity Management 477 Different Approaches to Diversity 478 Business Performance and Diversity 479 Diversity as a Business Imperative 479 Cross-cultural Diversity Issues/and Globalization 480.. / Cross-cultural Practices in die US and India 480 Diversity and Propensities of Multinational Organizations 481 Challenges of Workforce Diversity 483 Effective Management of Workplace Diversity 483 Future Corporate Challenges for Diversity 484 20. Organizational Transformation through Teamwork Introduction 490 Team Building Exercises 491 489 Objectives of T-group 491 Benefits of T-group Training 492 Role Analysis 493 Nature, Purpose, and Types of Teams 494 Types of Teams 494 Team Management Wheel A Model for Teamwork 495 Productive Team for Organizational Change and Development 496 Measurement of Team Effectiveness 497 Team-building Quiz 498 Belbin's Team Role Self-perception Inventory 498 Organizational Transition through Teamwork 501 Cross-cultural Teamwork 502 21. Organizational Change, and Development Research 508 Introduction 509 Change Management Research 510 Deriving Causal Connections 510 Process Support dirough Research 511 Implementation Help through Research 511 Different Approaches to Organizational Change Research 512 Literature Review for Organizational Change Research 512 Model Building in Organizational Change Research 513 Common Change Management Research Tools 514 Observation as Tool 514 Online Questionnaire 514 Action Research 515 Standard Research Tools for Organizational Change and Development 515

Myers-Briggs Type Indicator (MBTI) Assessment 515 Strengui Deployment Inventory (SDI) 515 Klein Group Instrument (KGI) 515 Pearson-Marr Archetype Indicator (PMAI) 516 Leadership Spectrum Profile (LSP) 516 FIRO-B (Fundamental Interpersonal Relations Orientation-behaviour) Assessment 516 Thomas-Kilmann Conflict Mode Instrument (TKI) 516 Work Environment Scales (WES) 516 Role of Organizational Change and Development Research 517 Understanding Organizational Change Research Tools and Techniques 518 Quantitative Paradigm 518 Qualitative Paradigm 519 Validity and Reliability 521 Data Types and Preparation for Analysis 522 Scaling Techniques 522 Otiier Types of Scale 525 Processing and Coding of Data 528 Making Use of Collected Data 528 Measurers of Central Tendency 528 Three Measures of Variability 529 Two Measures of Relationship 531 Four Measures of Relative Position 531 Inferential Statistics 532 Framing of Hypouieses 533 Power and Statistical Errors 535 Simple Analysis of Variance 537 Multiple Comparison of Variances 538 Analysis of Covariance 538 Research Discussion 538 Conclusion and Recommendations 539 Qualitative Research Considerations 539 Focus Group 539 Interview Technique 540 Odier Types of Interview 541 Understanding Personality 544 Determinants of Personality 544 Individual Behaviour and Performance 545 Thinking and Decision-making Process 545 Measurement of Personality Traits 546 Index 551