INTERNAL/EXTERNAL FORCES OF CHANGE
Poor financial performance
Inefficiency of existing business processes and systems
Need to increase profitability
Existence of cultural misfits to organisation goals and objectives
Changes in technology
General macro-economic environment
Changes in consumer tastes, preferences, purchasing patterns & frequencies
Declining market shares due to competition
ORGANIZATION-WIDE VERSUS SUBSYSTEM CHANGE
Organization-wide change could be a major restructuring, collaboration or “rightsizing.” organizations usually undergo organization-wide change to evolve to a different level in their life cycle that is, changing from a highly reactive, entrepreneurial organization to an organization that has a more stable and planned development. Experts assert that successful organizational change requires a change in culture – cultural change is another example of organization-wide change. Whereas a change in a subsystem is where you add or remove a product or, retooling of a certain department, or a new way of delivering product or services is implemented
TRANSFORMATIONAL VERSUS INCREMENTAL CHANGE
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transformational change is also known as radical, fundamental change might be changing an organization’s structure and culture from the traditional top-down, hierarchical structure to a large amount of self-directing teams. Incremental change might include continuous improvement as a quality management process or implementation of new computer system to increase efficiencies. Many times, organizations experience incremental change and its leaders do not recognize the change as such. ‘‘Incremental change deals with smaller, more adaptive changes while transformational change requires major shifts in direction or perspective’’
REMEDIAL VERSUS DEVELOPMENTAL CHANGE
Remedial Change is to improve the poor performance of a product or the entire organization, reduce burnout in the workplace, and help the organization to become much more proactive and less reactive, or address large budget deficits. Remedial projects often seem more focused and urgent because they are addressing a current, major problem. Change can also be developmental – to make a successful situation even more successful, like expanding the amount of customers served, or duplicate successful products or services. Developmental projects can seem more general and vague than remedial, depending on how specific goals are and how important it is for members of the organization to achieve those goals.
‘‘The perspective on change assumes that the purpose of change is to help the business to develop in such a way that it can do even better what it does well at present. The aim of management operating under developmental change is to optimise systems and through such optimisation, manage the change’’
UNPLANNED VERSUS PLANNED CHANGE
Unplanned change usually occurs because of a major, sudden surprise to the organization, which causes its members to respond in a highly reactive and disorganized fashion. Unplanned change might occur when the Chief Executive Officer suddenly leaves the organization, significant public relations problems occur, poor product performance quickly results in loss of customers, or other disruptive situations arise. Planned change occurs when leaders in the organization recognize the need for a major change and proactively organize a plan to accomplish the change. Planned change occurs with successful implementation of a Strategic Plan, plan for reorganization, or other implementation of a change of this magnitude.
The term bureaucracy has been widely used with invidious connotations directed at government and business. Bureaucracy is an administrative system designed to accomplish large-scale administrative tasks by systematically coordinating the work of many individuals. Mark Weber (1864-1920) has observed three types of power in organizations: traditional, charismatic, and rational-legal or bureaucratic. He has emphasized that bureaucratic type of power is the ideal one. Weber analyzed the functioning of church, government, military, and business organization believed that the bureaucratic structure is the most efficient form of structure for all types of organization. It is the most rational means of carrying out imperative control over human beings.
STRENGTHS OR ADVANATAGES OF BUREAUCRACY
Bureaucratic structure has been considered once superior than ad hoc or temporary structure. It has been termed as rational and ideal leading to efficiency. The efficiency in bureaucratic organization comes through rationality and predictability of behaviour because everyone knows the consequences of his action before actually the action is undertaken.
Control through hierarchy
Always on Time
Marked to Standard
The basic feature of bureaucratic structure is hierarchy of positions in the organization. Hierarchy is the system of ranking various positions in descending scale from top to bottom of the organization. In bureaucratic structure offices also follow the principle of hierarchy, that is, each lower office is subject to control and supervision by higher office. Thus no office is left uncontrolled in the organization.
Ease of task due to division of work
Work of the organization is divided on the basis of specialization to take the advantages of division of labour. Thus, division of labour tries to ensure that each office has a clearly defined area of competence within the organization and each official knows the areas in which he operates and the areas in which he must abstain from action so that he does not overstep the boundary between his role and those of others. Further, division of labour also tries to ensure that no work is left uncovered.
A notable feature of bureaucracy is that relationship among individuals is governed through the system of official authority and rules. Official positions are free from personal involvement, emotions and sentiments. Thus, decisions are governed by rational factors rather than personal factors. This impersonality concept is used in dealing with organizational relations as well as relations between the organization and outsiders.
WEAKNESS OR PROBLEMS OF BURAUCRACY
There are many dysfunctional sides of bureaucracy which is sometimes known as bureau pathology. Seeing the requirement of a contemporary organization, Bureaucracy has many pitfalls and therefore is not suitable. Some of the most common factors are;
In bureaucratic structure there are many consequences which have not been envisaged but may occur due to the system.
Trained incapacity in the organization. It means that a person is only trained to look at the matter from a single point of view. Thus he does not know anything beyond the training given to him and therefore he tries to correlate the matter with total situation on the basis of his training.
Conflict between professional and bureaucrats. The main reason is the difference in orientation between the professionals and bureaucrats. Professionals try to work according to their discipline for efficiency whereas bureaucrats adhere to rules and regulations.
Many a times there raises a conflict between organization and individuals. Human beings work better when there is free environment but bureaucracy puts lots of restrictions on movement through rules and regulations
The most important criticism of bureaucracy comes from behavioural scientists who studied human behaviour in the organization. According to them, the bureaucratic structure is completely inhuman and sees humans as machines. For example Argyris hold the view that “individual move from immaturity to maturity and over the period he matures, while bureaucratic organization is designed to suit immature personality”. A mature human needs less control, innovation and latitude in behaviour and flexible working condition. The bureaucratic design goes against the fundamental human behaviour.
A pioneering criticism of bureaucracy comes from organizational psychologist Warren Bennis. He sees the model as overly mechanical and no longer useful.
FORMAL AND INFORMAL ORGANISATION
The formal organization have some specific objective to be achieved, they are designed that way. Formal organizations have well defined jobs, each having a definite authority, responsibility and accountability. According to classical theorists, some of the characteristics of formal organization are:-
The top management designs the whole structure of the organization to fulfill certain requirements-performance of important activities by which they achieve the goals of the organization.
The structure is based on the principles of division of labor and efficiency in operations.
The main concern is the performance of jobs (conglomerate of activities) and is not worried about the individual performance of employee.
They are well explained about their control and coordination among themselves via processes, procedures, rules, etc.
The job holder is given some authority and responsibility and they have to adhere it. Based on this concept of authority and responsibility they are placed in hierarchy, which determines their status.
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Informal organization comes in view when the people are placed in a group on basis of some common element in them. For example, Litterer has viewed that “the informal organization refers to people in group associations at work, but these associations are not specified in the blueprint of the formal organization. The informal organization means natural groupings of people in the work situation.”
When people start working together they develop some kind of grouping or pattern of relationship among them which is not issued by formal organization. There are high chances that the newly developed relationship is more complex than the official prescribed ones. For example Davis observes that “beneath the cloak of formal relationships in every institution, there exists a more complex system of social relationships called the informal organization.
Informal organization is not designed or planned; it is formed on its own in the workplace.
It is created on basis of some common factors among the members, that can be age, sex, place of origin, caste, religion, culture, likes and dislikes, etc.
A member of an informal organization can be a member of other organization at the same time.
And finally the behavior of the member follows the common protocol controlled by group norms and not by the norms of formal organization.
Organizational development is a way to increase the long term health and performance of the organization, at the same time improve the life of its members. In organizational development the people and the organization both undergoes a change for positive growth and betterment of both.
‘‘organization is a planned and collaborative process for understanding, developing, and changing organizations to improve their health, effectiveness and self renewing capabilities’’
Organizational development helps companies by:
Empowering leaders and individual employees.
Creating a culture of continuous improvement and alignment around shared goals.
Making change easier and faster.
Putting the minds of all employees to work.
Enhancing the quality and speed of decisions.
Making conflict constructive instead of destructive.
Giving leaders more control over results, by giving employees more control over how they do their job.
Main benefit of organizational development
The upshot of organizational development brings increase in:
Profits (cost reduction, for nonprofits).
Product and service quality.
Personal feelings of effectiveness.
Job, work, and life satisfaction.
Some of the Different form of organizational development can be achieved by business process re-engineering (BPR) and total quality management (TQM).
BUSINESS PROCESS RE-ENGINEERING
Business process reengineering is the main way in which organizations become more efficient and modernize. Business process reengineering transforms an organization in ways that directly affect performance
‘‘BPR is a tool that is specifically designed in order to help the organization where large scale improvements are needed In a world where change is the only constant, there is a need of tool and techniques to help organization become more effective. In a competitive world there is a need for ways to stay ahead of the field or to catch up before it is too late. In a complex world there is a need for mechanism that can make apparently complicated things simpler. BPR is an undeniably powerful tool that can help in all the circumstances’’
Seven principles of reengineering to streamline the work process and thereby achieve significant levels of improvement in quality, time management, and cost:
1. Organize around outcomes, not tasks.
2. Identify all the processes in an organization and prioritize them in order of redesign urgency.
3. Integrate information processing work into the real work that produces the information.
4. Treat geographically dispersed resources as though they were centralized.
5. Link parallel activities in the workflow instead of just integrating their results.
6. Put the decision point where the work is performed, and build control into the process.
7. Capture information once and at the source.
TOTAL QUALITY MANAGEMENT
TQM means that an organizations culture us defined by a practical philosophy of management that supports the constant attainment of customers satisfaction through an organization-wide, integrated system of technical and statistical tools, fundamental and behavioural technique. An employee training to analyze, understand and solve quality problems. This evolutionary concept involves the continuous improvement of organizational process under a disciplined approach, focusing on process quality and resulting in high quality products services
(Carr, et al, 1992; Lakhe and Mohanty 1994, sashkin and kiser 1993)
TQM is the integration of all functions and processes within an organization in order to achieve continuous improvement of the quality of goods and services. The goal is customer satisfaction. Quality expert JM JURAN also says that TQM is set of management processes and systems that create delighted customers through empowered employees, leading to higher revenue and low cost.
TQM can be applied to any type of organization; it originated in the manufacturing sector and has since been adapted for use in almost every type of organization imaginable, including schools, highway maintenance, hotel management, and churches. As a current focus of e-business, TQM is based on quality management from the customer's point of view.
Bennis W G. (1969) Organisation Development, Reading MA: Addison Wesley.
Carr, David, et al (1992) Business Process Redesign: How Americas Top Companies Blast Past the Competition, Coopers and Lybrand, Arlington, VA.
Chris Argyris, (1957) Personality and Organisation, Harper Brothers, New York.
Kroon, J (1995) General Management. S.A. : taylor and francis.
Litterer J A. (1973) Organisations, John Wiley, New York.
Mike Robson and Philip Ullah (30 may 1996) A Practical Guide To Business Process Re-Engineering, Gower Publishing Limited, Aldershot, GB
Newstrom J W. and Keith Davis (1997) Organisational Behaviour, McGraw-Hill, New York.
Sashkin, marshall and Kenneth kiser (1993) Putting Total Quality Management to Work: What TQM Means, How to Use It, and How to Sustain It Over the Long Run,
Berrett-Koehler Publishers, San Francisco, CA.
Sullivan, R.L. (May 2005) Practicing Organization Development. Chichester/US: John Wiley and Sons Ltd.
Swan, R.A. & Holton, E.F. (Nov 2001) Foundations of Human Resource Development. New York/US: McGraw-Hill Education – Europe.
Weber Max, ( 1947) The Theory of Social and Economic Organisation, Free Press, New York.
MANAGING CHANGE IN ORGANIZATIONS
CLC - 41479
It gives me immense pleasure to present for the subject MANAGING CHANGE IN ORGANIZATINS to Professor ALI TARIQ.
This project is presented with great care. Nevertheless, suggestion and comments will be highly appreciated and shall be tried to overcome it.