ORGANIZATIONAL BEHAVIOR Organizational Change Organizational Culture THE ORGANIZATION

ORGANIZATIONAL BEHAVIOR Organizational Change & Organizational Culture THE ORGANIZATION SYSTEM Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

OBJECTIVES LEARNING AFTER STUDYING THIS CHAPTER, YOU SHOULD BE ABLE TO UNDERSTAND: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. The Nature of Change Resistance to Change Type of Resistance Possible Benefits of Resistance Three Stages in Change Understanding Organization Development Common Organization Development Assumptions The Organizational Development Process Benefits and Limitations of Organization Development Define organizational culture and describe its common characteristics. Creating an Ethical Organizational Culture Creating a Positive Organizational Culture Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

The Nature of Change: Change is any alteration occurring in the work environment that affects the ways in which employees must act. Organizations tend to achieve an equilibrium in their social structure Disequilibrium occurs when employees are unable to make adequate adjustments. Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

The Nature of Change (Contd. ): • This disequilibrium makes a dilemma for managers. - One of their role is to be proactive which means they should introduce continual organizational changes so as to bring better fit between firm and its environment. - Their second role is to be reactive which is to restore and maintain the group equilibrium and personal adjustment that change upsets. Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

The Nature of Change (Contd. ): • Organizational changes involve minor changes and more dramatic changes. - Minor changes affect only a few people and in these cases a new equilibrium may be reached readily. - More dramatic changes deals with the entire core of an organization. Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

Why resistance occurs: • Employees resist change because it threatens their needs for : Security, Social Interaction, Status, Competence and Self-Esteem. Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

Reason for Resistance : 1. They may not feel comfortable with the nature of the change itself 2. It stems from the method by which change is made 3. Is the inequity experienced when people perceive themselves being change o Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

Types of Resistance : There are three different types of resistance to change. Ø Logical Resistance. ( or Rational Resistance): This is based on disagreement with facts, rational reasoning, logic, and science. It occurs because of the time and efforts which is needed to adjust to change. Ø Sociological Resistance. ( or Social Resistance): Sociological resistance also is logical, when it is seen as a product of a challenge to group interests, norms, and values. Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

Types of Resistance (Contd. ): There are three different types of resistance to change (Contd. ). Ø Psychological Resistance. ( or Emotional Resistance ): This is typically based on emotions, sentiments, and attitudes. It is internally logical from the perspective of the employees’ attitudes and feelings about change because they may fear the unknown, mistrust the management’s leadership, or feel that their security and self-esteem are threatened. Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

Possible Benefits of Resistance: Resistance is not all bad. It can bring some benefits as follows: Ø Encourage management to reexamine its change proposals. Ø Help to Identify specific problem areas where a change is likely to cause difficulties. Ø Management may be encouraged to do a better job of communicating the change. Ø Gives managers information about the intensity of employee emotions on an issue. Ø Encourage employees to think and talk more about a change. Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

Three Stages in Change: -Unfreezing means that old ideas and practices need to be cast aside so that new ones can be learned. -Changing is the step in which the new ideas and practices are learned. The changing step usually is also mixed with hope, discovery, and excitement. -Refreezing means that what has been learned is integrated into actual practice. Successful on-the-job practice must be the ultimate goal of the refreezing step. Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

Understanding Organization Development: Organization Development (OD) is the systematic application of behavioral science knowledge at various levels to bring about planned change. It helps managers recognize that organizations are systems with dynamic interpersonal relationships holding them together. Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

Understanding Organization Development: General objective of OD is to change all parts of the organization in order to make it more humanly responsive, more effective, and more capable of organizational learning and self-renewal. Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

Common Organization Development Assumptions : OD assumptions need to be shared with managers and employees so that those groups will clearly understand the basis for the OD program. Common Organization development assumptions are as follow: ØIndividuals - People want to grow and mature. - Employees have much to offer that is not now being used at work. - Most employees desire the opportunity to contribute. Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

Common Organization Development Assumptions : ØGroups – Groups and teams are critical to organizational success. – Groups have powerful influence on individual behavior. – The complex roles to be played in groups require skill development. ØOrganization – Excessive controls, policies, and rules are detrimental. – Conflict can be functional if property channeled. – individual and organizational goals can be compatible. Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

The Organizational Development Process: -Initial diagnosis -Data collection -Data feedback and confrontation -Action Planning and problem solving -Use of interventions -Evaluation and follow-up Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

The Organizational Development Process: 1. Initial diagnosis. The consultant meets with top management to determine the nature of the firm’s problems, to develop the OD approaches most likely to be successful, and to ensure the full support of top management. 2. Data collection. Surveys may be made to determine organizational climate and behavioral problems. Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

The Organizational Development Process: 3. Data feedback and confrontation. Work groups are assigned to review the data collected, to mediate areas of disagreement, and to establish priorities for change. 4. Action planning and problem solving. Groups use the data to develop specific recommendations for change. Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

The Organizational Development Process: 5. Use of interventions. Once the action planning is completed, the consultant helps the participants select and use appropriate OD interventions. 6. Evaluation and follow-up. The consultant helps the organization evaluate the results of its OD efforts and develop additional programs in areas where additional results are needed. Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

Benefits of OD: -Change throughout organization -Greater motivation -Increased productivity -Better quality of work -Higher job satisfaction -Improved teamwork -Better resolution of conflict -Commitment to objectives -Increased willingness to change -Reduced absences -Lower turnover -Creation of learning individuals and groups Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

Limitations of OD: -Major time requirement -Substantial expense -Delayed payoff period -Possible failure -Possible invasion of privacy -Possible psychological harm -Potential conformity -Emphasis on group processes rather than performance -Possible conceptual ambiguity -Difficulty in evaluation -Cultural incompatibility Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

Organizational Culture: A common perception held by the organization’s members; a system of shared meaning Seven primary characteristics: 1. 2. 3. 4. 5. 6. 7. Innovation and risk taking Attention to detail Outcome orientation People orientation Team orientation Aggressiveness Stability Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

Creating an Ethical Organizational Culture: • Characteristics of Organizations that Develop High Ethical Standards – High tolerance for risk – Low to moderate in aggressiveness – Focus on means as well as outcomes • Managerial Practices Promoting an Ethical Culture – Being a visible role model – Communicating ethical expectations – Providing ethical training – Rewarding ethical acts and punishing unethical ones – Providing protective mechanisms Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

Creating a Positive Organizational Culture: • Positive Organizational Culture – A culture that: • Builds on employee strengths • Rewards more than it punishes • Emphasizes individual vitality and growth • Limits of Positive Culture: – May not work for all organizations or everyone within them Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU

Questions Finance & Banking Jahangirnagar University Mahfuza Khatun Lecturer, F & B, JU