Organisational Change and Development

Chapter 21 Organisational Change and Development

What the Chapter Covers

This chapter deals with organisational change and development. Change is now commonplace in most organisations, and many of them have to change if they are to survive and prosper. However, change can take many different forms, some of which encounter strong resistance on the part of employees, often because the feelings, emotions and desires of the people most affected by the change are ignored in the change process. With this in mind the chapter gives an introduction to the subject of organisational change and covers:  the significance of organisational change  types of organisational change  triggers to organisational change: external and internal  resistance to change and remedies suggested in the literature  approaches to implementing change  planned organisational change and associated change models  Organisational Development (OD) and its distinguishing characteristics  OD interventions, methods of intervention and an evaluation of OD  the emergent approach to organisational change  continuous change: the learning organisation The chapter closes with an overview section that reviews its contents, and in addition to the material which addresses the learning outcome set-out at its start, the chapter has a single recurring theme: that change is only likely to be effective if it is planned carefully and handled sensitively.

New Concepts Introduced in Chapter

Action Research: a participative method of bringing about change in human behaviour that involves stages of data collection, problem diagnosis, action planning, action, re-evaluation

Adaptation: an incremental change, which occurs as an organisational reaction to a change in its environment

Change Agent: an expert from either inside or outside an organisation who facilitates and guides an OD intervention

Change Strategy: the general approach used to bring about change in humans in an organisation

Emergent Approach (to change): a contingency perspective that rejects the idea of a universally applicable recipe for organisational change

Fine-tuning: an incremental change that occurs as a result of an organisation’s anticipation of changes in its environment

Force Field Analysis: a way of conceptualising a stable situation as forces pushing (in favor of)

1 change balanced by those restraining change

Lewin Model: a three-stage (unfreeze-move-refreeze) method of bringing about change in human behaviour

Organisational Change: a move from being in one organisational state to being in another state

Organisational Development (OD): a long range, organisation wide strategy for change, that focuses on an organisations human resources and uses the techniques of applied behaviourial science

OD intervention: a programme to bring about change in an organisation, or on or more of its parts

Planned Organisational Change: a set of internal actions designed to produce specific outcomes

Re-creation: a transformational change, which occurs as a result of drastic changes in an organisation’s environment

Re-orientation: a transformational change, which occurs in anticipation of drastic changes in an organisation’s environment

Teaching Materials in Textbook

Time Out Exercises: Hints for Completing

For all three exercises in this chapter you have the option of using your own university or college as a vehicle. You are strongly recommended to do this because the answers to all exercises can be related to each other.

Exercise on page 658: Triggers to Organisational Change

The first task here is for you to develop a list of major changes in the institution across the last three years. Once this is done you will probably find that answering the questions is quite straightforward. Since most institutions are constantly undergoing change, the list is potentially endless, but if you find it difficult to get started, work in a group of three or four students in order to identify changes. Three examples that could be given are: 1. institutions having to cope with increased numbers of students 2. more stringent funding regimes for educational institutions 3. more stringent funding provisions for students

Question 1

Using the examples above all three have their origins in the environment. The first from the Government’s aim of having an increased proportion of school leavers enter further or higher education, and the second and third from its aim of containing costs in the educational service.

2 Question 2

Although other changes could have been triggered internally, with the examples given above this is very unlikely. An internally prompted change that could be mentioned is that institutions have had to adapt to students working part-time to support themselves.

Exercise on page 664: Change and Resistance

Question 1

Again you have to start by identifying changes that have affected you and other students. Three possible changes here are:  lower level of grants and the requirement pay a proportion of course fees. This mainly affects students, and for many of them establishes a necessity to work-part time to support themselves. However, it also has some impact on universities and colleges, because students have less time to study (drop-out rates are rising) and the number of students who default on fee payment is also tending to rise.  course delivery: larger classes and a move in many institutions to a ‘learning’ (rather than teaching) approach to course delivery, in which students are required to take a higher degree of responsibility for their own learning, e.g. a greater onus on students to study away from the classroom. Clearly this affects students and teaching staff  assessment: a move to mass methods of assessment that are easy and quick to mark, e.g. group based (rather than individual) assignments and multiple choice methods. Again this affects students and teaching staff.

Questions 2 and 3

Protest about student grants and fees has been very visible, but so far, the changes have not been resisted. The same is true for methods of course delivery and assessment, although there does seem to be slightly increased tendency for students to appeal assessment grades.

Exercise on page 672: Introduction of Change

In terms of the three changes identified above for the previous exercise, all have probably been introduced without consultation. In the case of maintenance grants and fees, although they were phased in, the changes here were introduced by Government edict.. Course delivery and assessment, is usually a matter for a particular institution, and once again this has probably been done by simply telling students at the start of an academic year what would happen.

Supplementary Illustrative Material

Given below is an additional OB in Action feature to supplement those in Chapter 21. It is associated with material on pages 678-681 of the book and illustrates the use of some of the methods that would typically be used in an Organisational Development intervention.

3 OB in Action: Merging Two Giants

One of the most difficult change situations to manage can be the merger of two large organisations. Because many so-called mergers are effectively ‘take-overs’, there is a dominant party and employees tend to find themselves in a situation where there are winners and losers and as a result, for some time afterwards, the organisation is wracked with internecine warfare and despondency. When the two British insurance giants Commercial Union and General Accident merged in 1998 to form CGU they were determined to avoid this. From the outset it was decided that a ‘new’ organisation should be created, with a strategy aimed at melding both groups of employees into an integrated ‘whole’. The structural design aims for the new organisation included a flatter structure with a minimal number of levels, in which decision making would be devolved to the lowest possible level, with clear accountability for all positions. Since the two prior organisations were somewhat bureaucratised, this inevitably involved a headcount reduction, with the closure of approximately 30 branch offices and the total loss of about 2500 posts. However, by freezing recruitment and the introduction of a voluntary severance scheme, compulsory redundancies were kept to a minimum. Moreover, the methods used to slot staff into posts within the new organisation purposely aimed to treat people with fairness and consideration, with selection on the basis of merit and use of selection processes that were transparent. Steps to bring about integration began well before the merger formally took place, and this was addressed by a programme involving all relevant stakeholders (workforce, business partners and trade unions) in planning the change. The methods used have some resemblance to survey-feedback and intergroup confrontation techniques, which was no mean feat when it is remembered the target groups each consisted of the workforce of a whole organisation. This initiative was given the title of ‘The Discovery Programme’, the first two phases in which are described below. In Phase 1, 200 supervisory employees were trained to undertake a culture audit of both organisations. These people operated in pairs (one from each merger partner) and using a questionnaire they answered questions designed to elicit information on how employees in each company viewed their own and the other organisation. Phase 2 consisted of a two-day conference for over 400 people drawn from both organisations, together with trade union representatives, who by now were in close consultation. The overall task of the conference was to review the results of the culture audit together with other internally generated survey material, and to derive conclusions about the steps necessary to make CGU an ideal place in which to work, in the eyes of its employees. To do this participants were divided into four large groups, each of which focused on a separate issue and to ensure a diversity of opinions, each group was divided into 12 sub-groups who worked in parallel. Eventually groups exchanged conclusions and made presentations reflecting the characteristics of the new organisation that employees would like to see put in place. At the end of the event directors gave a public commitment to try to build an organisation with these characteristics and together with information from other sources, the conference was used to derive a specification for a ‘best place to work’. With a merger involving companies of this size implementation is not achieved overnight. As such there were additional implementation phases, which by now have mostly been completed. Opinion in the new company is that the ‘Discovery Programme’ did much to create enthusiasm that sustained the merger. Moreover, it seems to have resulted in a continued commitment on the part of the organisation to involving its employees in matters of this nature.

Source: Clarry, T (1999) Premium Bonding, People Management 2 September; 34-39

4 Useful Sources of Additional Material

For those who enjoy exploring study materials on the internet, given below are a number of potentially useful websites that give further information on the topics and issues covered in the chapter. http://www.icon.co.za/~fjcm/change.htm A good overview of the change process in organisations, which covers: reasons for change, typical problems confronting organisations in the change process, resistance to change, organisational development and evaluation of change. http://www.bokkies.freeserve.co.uk/outsource/articles/internal.htm A short article that explores outsourcing, which is a change that often encounters fierce resistance from organisational members. http://www.gsm.mq.edu.au/lmsf/content/himoc.html A powerfully argued paper by P J Gollan and E M Davis entitled High Involvement Management and Organisational Change: Beyond Rhetoric. The paper gives an extensive exploration of the desirability (indeed, necessity) of adopting a participative approach to change. http://www.nova.edu/ssss/QR/QR2-4/rhodes.html A paper by Carl Rhodes, entitled Researching Organisational Change and Learning: A Narrative Approach. The paper reports research on change that explicitly set-out to explore the matter through the eyes of employees; those most affected by the changes. http://www.changeperform.com.au/cultural_change_process.html A short paper, which argues that if they are to succeed, many changes also require some change to organisational culture to take place. The paper then goes on to consider the matter of cultural change and its inherent problems and difficulties. http://bprc.warwick.ac.uk/shef-find.html A paper by Siobhan Corrigan of the Institute of Work Psychology, the University of Sheffield. The paper, which is entitled Human and Organisational Aspects of Business Process Reengineering, presents the findings of research on what can often be very extensive and highly disruptive change initiatives. http://www.shef.ac.uk/~change/CS1.htm A very useful site that gives access to 10 case studies in change management, which arise out of research conducted at Sheffield University. All organisations were small to medium sized firms located in South Yorkshire and the cases give a useful picture of the range of issues addressed by change initiatives, together with the methods of intervention used. http://www.new-paradigm.co.uk/culture-complex.htm Reprint of an article entitled Culture and Complexity: New Insights on Organisational Change. It argues that culture is a much more complex phenomenon than is normally portrayed, and that it is the unsophisticated view that tends to result in unsuccessful attempts at cultural change.