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Managing Organisational Change

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Managing Organisational Change

  1. 1. MANAGING ORGANISATIONAL CHANGE By: Kotlo Anirudh Reg.No:130606007 Department of Pharmacy Management Pharmaceutical Marketing MCOPS, Manipal Guided by: Dr. D.Sreedhar Associate Professor and Head Department of Pharmacy Management MCOPS,Manipal
  2. 2. CONTENTS Definition Forces for change Merits and demerits of change Types of organizational change Resistance to change Managing change Examples of successful change Conclusion References
  3. 3. DEFINITION • It is the process of planning and implementing change in an organization in such a way to minimize employee resistance, cost and simultaneously maximizing effectiveness of change.
  4. 4. Why is it Important to Adapt to Change? • Times change, people change, things change situations change hence so do the organizations. • Organizational change occurs as a reaction to an ever- changing environment or as a response to a current crisis situation. On the other hand, it is triggered by a progressive manager
  5. 5. • Individuals, teams, or organizations that do not adapt to change in timely ways are unlikely to survive. • The Organizations which recognize the inevitability of change, learn to adapt to it, and attempt to manage it, will be the most successful.
  7. 7. Forces for Change: Environmental ForcesForces for Change: Environmental Forces • Put pressure on how a firm conducts its business and its relationships with customers, suppliers, and employees. • Environmental forces include: – Political factors – Economic factors – Changing customer needs and preferences
  8. 8. Political Factors: • A firm which has monopoly in an country will have to compete with other international global firms in terms of quality and standards. • Ex: Ambassador. Many Indian companies did not bother to fund for the design and alignment and to allocate funds and have lagged behind.
  9. 9. Contd… • International politics affects trade and business hence the countries receive status of favored nations or by sanctions imposed on them. • Ex: North and South Korea, Germany and other countries.
  10. 10. Economic Factors: • In context of the increased competition between the companies with low margins, organizations try to minimize the cost by keeping lean and trim. • Ex: Banking sector and employees working for fixed hours during the day have to work overtime in the night for west clients.
  11. 11. Changing Customer Needs And Preferences: • With availability of variety of products there is an perceived change in customer preferences. This led to greater competition and reduced product life cycle. –Ex: Small products: Telephone –Big products: Car, Fridge
  12. 12. Forces for Change: Internal Forces • Come from decisions made within the company. • May originate with top executives and managers and travel in a top-down direction. • May originate with front-line employees or labour unions and travel in a bottom-up direction.
  13. 13. Profitability Issues • Issues such as loss of revenue, market share and profits, loss incurred leads to the restructuring and reengineering the change in an organization. • Ex: Gujarat electricity board.
  14. 14. Individual /Group Expectations • Organization must look into the needs and expectations of it's members by issues such as members ambitions, capabilities, fears and frustration.
  15. 15. TYPES OF ORGANISATIONAL CHANGE EVOLUTIONARY • Change is gradual, intermittent, and narrowly-focused • Its main purpose is to make continuous improvement in order to adjust to environmental changes REVOLUTIONARY • Change is rapid, dramatic, and broadly focused • It often happens when the current operation method can no longer fulfill the demand and significant change has to be made
  17. 17. MERITS OF CHANGE 1. Cost Savings • By properly managing change within your organization, you can help reduce the incidents that would affect efficiency, and help to maintain company productivity. • When you manage your employees successfully through the change process, that can instill confidence that the next change can be done as efficiently. • By breeding confidence in the organization's ability to effect change, you can control the costs of change significantly.
  18. 18. 2. Organizational Structure • By introducing change of any kind to the organization, you will be testing the strength of the organizational structure. • As change is implemented, you will begin to see what areas of your structure are strong and which areas require re-evaluation. • In this way you can use change within your organization as one of the ways you monitor and evaluate your organizational structure.
  19. 19. 3. Corporate Relationships • The reasons for your change, and the implementation of that process, need to be done as efficiently as possible to help preserve the important relationship. • Strong management of corporate relationships cannot only help to maintain your revenue stream, it can also strengthen the confidence your vendors and customers have in your company.
  20. 20. DEMERITS OF CHANGE 1. Change Might Not Equal Progress • Many companies emphasize a culture of continuous improvement. While never being satisfied with the status quo can drive excellence in your organization. • Every organization can be improved, no matter how well it is performing, but a manager should always ask the question: "How is this proposed change going to improve my organization's ability to achieve our key goals?”
  21. 21. 2. Internal Resistance • According to an article by organizational change expert Garrison Wynn, the top two reasons people resist change are lack of knowledge about coming changes and fear of the unknown. • The key tools for managing this problem are complete, honest, and timely communication with your work force, clear communication of the value of the change, and patience with your team as they go through an inevitable adjustment phase.
  22. 22. 3. Choosing the Wrong Solution • Sometimes management doesn't sufficiently investigate the true cause of a problem, the stakeholders affected by the solution, and potential unintended consequences of change. • This approach creates all the costs of change without the intended benefit, plus it can create problems in areas that were functioning properly.
  23. 23. RESISTANCE TO CHANGE • Selective Perception • Lack of Information • Fear of the Unknown • Habit • Self interest • Uncertainty • Lack of trust and understanding
  24. 24. Overcoming Resistance to Change • Education and Communication • Participation and Involvement • Facilitation and Support • Negotiation and Agreement • Manipulation and Co-optation • Promote Positive Attitudes towards Change.
  25. 25. Implementing Organizational Change
  26. 26. CHANGE AGENTS • Change agents are the agents who assume the responsibility for managing change activities. • Change agents can be managers or non managers people inside the organization or outside consultants. • Examples: –Bill gates -Microsoft. –Mikio Kitamo-Toyota.
  27. 27. MANAGING CHANGE • Establish a sense of urgency • Form a powerful guiding coalition • Develop a compelling vision and strategy • Communicate widely • Empower others to act on the vision • Generate short-term wins • Consolidate gains and create greater change • Institutionalize changes in the organizational culture
  29. 29. Wipro Success Mantra • Wipro implemented the change in its organization by innovation which is defined as “implementation of an new idea and resulting into a marketable product or service.” • The top management at Wipro developed a framework for innovation and tried to foster the innovation. • The innovation process at Wipro is represented by
  30. 30. INNOVATION CHANGE IN WIPRO Create own &no to IP Stakeholder benefits Satisfy customer Top management Exciting rewards &recognitions Tolerance for mistakes Adhere to reviews Dedicated resource Sharp focus Innovative framework Idea capture Customer validation
  31. 31. • This would take an estimated time of 6-18 months which would not only cover the costs but also bring in revenues for the company. • To boost up employee satisfaction with his ideas the innovation centre provided the necessary funds and the infrastructure.
  32. 32. • The change in the organization with the innovation process was an huge plus to the company which enabled them with a strong portfolio and good revenue streams. • Wipro shifted its change by implementing the consulting services rather than the traditional software services business.
  33. 33. Tata Business Excellence Model • This model was introduced in 1996 by the TATA group. • This model is based on the TOTAL QUALITY MANAGEMENT (TQM) . • In April 2000,TISCO introduced (PEP) performance ethic program under which it planned to promote younger, hardworking to higher positions based on their performances.
  34. 34. Contd… • It aimed at removing hierarchy, performance based payment and hardcore team work. • This exercise also aimed to cut management staff from 4000 to 3000.
  35. 35. ORGANISATIONAL STRUCTURE: • Encourage growth in business, flexibility in decision making process and encourage team work among the managers and work force PERFORMANCE MANAGEMENT SYSTEM: • Would identify and reward strong performers and also offer development to each of the employee.
  36. 36. • Muthuraman MD of TISCO ,explained the benefits of performance ethics program. • “Youngsters are getting higher salary than some of the seniors and after the restructuring ,the average age of the managers has fallen by 10 years. Through this program TISCO has reduced the hierarchical levels from 13 to 5”. • The company also achieved ISO 14001 certification.
  37. 37. CONCLUSION • Organizational Change Management aligns groups expectations, communicates, integrates teams and manages people. • It makes use of performance metrics, such as financial results, operational efficiency, leadership commitment, communication effectiveness, and the perceived need for change to design appropriate strategies.
  38. 38. REFERENCES 1.Stephen P R. Organizational behavior.9th ed. New Delhi: Prentice Hall of India pvt. ltd; 2001.p:543-545. 2.Radha R S. Change Management Concepts And Applications. New Delhi: Tata McGraw Hill Education Pvt. Ltd; 2011.p:6-11,181-197. 3.Bhatia S K. Management of change and Organizational Development. New Delhi: Deep & Deep Publication Pvt. Ltd;2003.p:3-15,20-29.
  39. 39. 4. Ian P, Richard D, Gob A. Managing organizational change. New Delhi: Tata McGraw Hill Education India Pvt. Ltd; 2006.p:49-52,145-153. 5. Richards L. Why Is Change Important in an Organization[INTERNET]. [updated on 2013 Mar; Cited on 2013 Nov 10]. Available from: http://smallbusiness.chron.com/change-important- organization-728.html 42