Organisation Systems and human behavior

Consultancy as a profession
Consultancy Cycle, Communication for
consultants
Ethics in consultancy
Change management
Table of contents
1. Organisation System......................................................................................1
1.1 Closed System..............................................................................................1
1.2 Open System................................................................................................1-2
1.3 Example of Organisation System in Business
1.3.1 Functional Organisation Structure......................................................2-3
1.3.2 Divisional Organisation Structure......................................................3-4
1.3.3 Matrix Organisational Structure.........................................................4-5
1.3.4 Flat Organisational Structure..............................................................5-6
1.4 Why businesses need organisation system..................................................6-7
2. Organisation Behavior...................................................................................8
2.1 Features of organisation behavior............................................................9-10
2.2 Levels of analysis of Organisation Behavior
2.2.1 Individual........................................................................................10
2.2.2 Group..............................................................................................10-11
2.2.3 Organisation....................................................................................11
3. Consultancy....................................................................................................12
3.1 Consultants...............................................................................................12
3.1.1 Role of consultants..........................................................................12-13
3.2 The Consultant-Client Relationship.........................................................13-15
3.2.1 Consultant-Client Interface in consulting.......................................15-18
3.3 The Consultancy cycle.............................................................................18-20
3.4 The importance of communication in consulting.....................................21
3.4.1 Consultancy skills............................................................................22-23
3.5 Ethics in consultancy................................................................................24
4. Change Management......................................................................................25
4.1 Environmental change.............................................................................25
4.2 Organisational Change............................................................................25-26
4.3 Change in people.....................................................................................26
4.4 Kurt Lewin Three-stage Model of change
 4.4.1 Unfreezing......................................................................................27
4.4.2 Change............................................................................................27
4.4.3 Refreezing.......................................................................................27-28
4.5 Resistance to change................................................................................28
4.5.1 Reasons for resistance to change....................................................28-29
References..........................................................................................................30-33

Table of figures
Figure 1..............................................................................................................16
1. Organisation System
An organisational system is, quite simply, how a company is set up. A good organisational
structure lays out both a hierarchy and the flow of communication in a company. It is
important for every business, no matter its size, to implement an organisational system.
There are many benefits to having a well-defined organisational structure, including
improved efficiency, productivity and decision-making. Each structure has its strengths
and weaknesses. Ultimately, these pros and cons depend on the type of business you run,
your industry, the size of your organisation and other factors. It is important to consider
every kind of organisational system before deciding which is right for your company.

1.1 Closed System

Any organisation has to regularly exchange useful feedback among its own parts if it is to
thrive. However, an organisation can do that and still fail if it does not exchange that kind of
feedback with its customers -- people who are outside of the organisation.

An organisation that does not exchange feedback with its immediate outside environment is
called a closed system. You might be able to think of some examples of organisations that
quit listening to the opinions of those outside of it and, as a result, their products and
services continued to be lower quality.

Or, you might be able to think of organisations that, while they continued to have high-
quality products and services, their organisation was perceived as operating in a highly
unethical manner. Yet, the organisation ignored the opinions of those outside stakeholders
and eventually the organisation's sales and profit suffered.

1.2 Open System

So an open organisational system is one that regularly exchanges useful feedback with all of
its important external stakeholders, for example, its customers, collaborators, leaders in the
community and researchers in the industry.

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Those kinds of communications often require careful planning, implementation and
monitoring. Inexperienced or unwise leaders and managers might see that effort as a
distraction from focusing on their own visions and ideas. While that will seem passionate
and productive for a while, it soon will fail.

1.3 Examples of Organisational Systems in Business

There are four main types of organisational structures: functional, divisional, matrix and
flat. Each system has unique features.

1.3.1 Functional organisational structure

A functional organisational structure is a traditional hierarchy. Many companies, especially

larger corporations, follow the functional structure. This system features several
specialised divisions such as marketing, finance, sales, human resources and operations.
Then a senior manager oversees all the specialised divisions. The reporting flow is clear.
Each employee reports to their senior, including division heads, who report to the senior
management. Senior management oversees the entire structure. Because the company
remains split up into specialised divisions, employees tend to become specialised as well.
This causes a clear path for promotion and growth. However, the divisions can have
trouble communicating with one another. Because all departments report upwards, there is
little horizontal communication between them, leaving little space for whole-company
thinking, except at the top management level. This makes the functional organisational
system slow to adapt to change.

Advantages
A functional design has advantages:
1. The design permits division of labour and encourages specialisation.
2. It is easily understood by the employees. It needs no specialised knowledge for them
to understand that there are several departments, each performing a separate function,
and all departments must work in unison to achieve an organisation’s goals.
3. Functional design eliminates duplication.

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 4. The design enhances coordination and control within each of the functional area.
5. Career patterns and professional development in specialised area.
Disadvantages
Functional design fosters a limited point of view that focuses on a narrow set of tasks.
1. Employees may lose sight of the organisation as a whole.
2. Horizontal integration across functional departments often becomes difficult as the
organisation increases the number of geographic areas served and the range of goods
and services provided.
3. There is no accountability of each function for total results. Each department
functions as a stand-alone unit.

1.3.2 Divisional organisational structure

A divisional organisational structure divides the business up into teams based on the
projects the employees are working on. This system includes many different types of
teams, including legal, public relations, research and business development. Further, teams
are created around specific projects. For example, a pharmaceutical company might have
separate teams dedicated to each medication they manufacture. Each project team has a
director or vice president and exercises a certain level of autonomy within the
organisation. The divisional structure allows employees to become deeply familiar with
their team’s work. However, divisions are often unaware of what other teams are doing,
and do not communicate with each other. Employees may not be able to work effectively
across divisions when necessary. Ultimately, this system can be challenging to manage due
to its spread-out structure.

Advantages
Divisional structure has some advantages:
1. Clear accountability,
2. Separate strategic and operational control,
3. Divisional managers can concentrate on responsible area and can improve
performance,

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 4. Enhances ability to respond quickly to changes in external environment,
5. Enhances development of general managerial talent,
6. Leads to competitive spirit within the organisation,
7. Allows new business and new products to be added easily.

Disadvantages
The divisional structure is not without limitations.
1. It can be very expensive, due to requirement of functional specialists, duplication of
staff services, facilities and personnel and better qualified divisional managers,
2. Chance of differences in image and quality may occur across divisions,
3. There is an urge to focus on short-term performance, because divisional performance
is measured on ROI and revenue growth.

1.3.3 Matrix organisational structure

A matrix system is a cross between a functional structure and a divisional structure. From
a birds-eye perspective, the business is set up in a functional structure, with a traditional
hierarchy and specialised divisions. However, when you look at those divisions up close,
they are each set up in a divisional organisational structure. This means they are split up
into projects and smaller teams. The matrix type of organisational structure is quite
complex and requires a lot of planning, not to mention strong systems of communication
across the organisation. However, when the matrix structure works well, it eliminates a lot
of the issues that pop up with divisional or functional-only organisations. Communication
can travel to the right people, which increase productivity and holistic thinking. Further,
employees are exposed to other departments and projects, encouraging cross-collaboration.
On the downside, the matrix structure can quickly become confusing for employees when
there are too many managers, and it’s not clear who to report to.

Advantages

1. Clear articulation of project objectives

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 2. Workable way of integrating project objectives with functional objectives
3. Efficient use of limited human resources
4. Rapid (often interdisciplinary) information flow through the project
5. Retention of expert teams through the life of the project
6. Rapid dispersion of team members back into the functional organization upon project
completion without organizational disruption
7. Project management trains managers to become leaders in the functional organization
8. Project structures develop team spirit and high morale

Disadvantages

1. Two-boss problems, leaving project members caught in the middle

2. Project members playing bosses against one another
3. Increases organizational complexity
4. Requirement for high degree of cooperation between functional and project
management
5. Potential for conflicting management directives
6. Difficulty of establishing priorities suiting both functional and project management
7. Possible slowdowns in management reaction to events when two structures required
for solution
8. Possible structural collapse in "crunch time"
9. Increase in management overhead costs

1.3.4 Flat organisational structure

Flat organisational structure flattens much of the hierarchy and allows employees more
autonomy over their work. Often, flat organisations are split up into temporary teams,
although they usually do not have formal structures. There are still some top-down
dynamics in a flat system. Often, there is at least some senior leadership steering the ship.
However, this system is predicated on disrupting the traditional hierarchical structures of
businesses. Many startups and tech companies tend towards a flat organisation, as it

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encourages innovation and employee input. The thinking is that when employees are not
tamped down , they will think freely and generate fresh, profitable ideas. This increases
communication across teams and eliminates some of the communication issues that can
happen when messages travel up a top-down structure. Unfortunately, a flat system is
difficult to maintain as a company grows, and the need for more structured communication
systems comes into play. Further, employees in a flat organisation can become
overwhelmed with doing too many different tasks, and do not have a lot of room to grow
or be promoted.

Advantages

1. It Is Cost Efficient
2. It Promotes Faster Decision Making

3. It Allows Clear Communication

4. It Requires Less Dominance and Supervision

Disadvantages

1. Management Can Easily Lose Control

2. Work-Relationship Could Struggle

3. It Can Create Power Struggle

4. It Makes Employee Retention Difficult

5. It May Hinder Growth

6. There Is Less Motivation

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1.4 Why Businesses Need Organisational Systems?

Organisational systems are important for businesses of every size. Having a solid, well-
defined structure in place erases confusion and lays out simple processes for employees to
follow. Each worker should know exactly who they report to. Without some type of
hierarchy or structure in place, a workplace can become chaotic. Employees may not
understand who is responsible for what, causing important things to fall through the
cracks. A solid organisational structure streamlines a company and keeps everyone on the
same page.

An organizational system puts every person in their correct place, able to contribute their
part to the company. Having a system improves overall efficiency, heightens productivity
and provides clarity to everyone in the organization. Every department can work better
when roles are clearly defined and objectives are shared. Further, the proper organisational
system can improve decision-making, as information flows throughout the organization.
Upper-level managers can collect information from all divisions, giving them greater
insight into the entirety of a company’s operations.

A solid organisational system eliminates many business problems, including the

duplication of work and conflicts between positions. If a business has been well-thought-
out, each employee has a distinct role, and roles do not overlap with one another. There is
no “runaround” where nobody is sure who is responsible for a particular task or project.
Because of this, cooperation is increased and employees feel a sense of pride in their work.
Workers avoid the frustration of having ever-shifting roles and goal posts. They can focus
on what they do best.

Choosing the proper organisational system can take your business to the next level. For
example, if your business is product-based, a matrix or divisional structure will likely be
ideal. These are project-based structures that focus on specialised teams. Small startups, on
the other hand, may consider a flat structure to allow all employees to contribute their
skills and expertise without the hierarchy interfering.

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2. Organisation Behavior
Organisational Behavior (OB) is the study of human behavior in organisational settings, the
interface between human behavior and the organisation, and the organisation itself.
Organisational Behavior researchers study the behavior of individuals primarily in their
organisational roles. One of the main goals of organisational behavior is to revitalise
organisational theory and develop a better conceptualisation of organisational life.
The study of organisational behavior includes areas of research dedicated to improving job
performance, increasing job satisfaction, promoting innovation, and encouraging leadership.
Each has its own recommended actions, such as reorganising groups, modifying
compensation structures, or changing methods of performance evaluation.
Organisations are usually studied from two perspectives
i. Micro

Micro perspective focuses on human beings in the organisation. It studies human beings as
individuals – an individual’s psychological make-up, his interaction with other individuals
and groups, variables determining his behavior in the organisation and the strategies that can
be adopted to govern his behavior as a desirable one in the organisation. The micro
perspective of organisational study is taken care of in “OB”.
ii. Macro

Macro perspective considers organisation as a unit of analysis. It emphasizes on the study of

human behavior as a collectivity of people, how organisations are structured, how
technology affects people in the organisation and how organisation interacts with the

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environment. The macro aspect of organisational study is taken care of in “Organisational
Theory”.
Any definition of OB should put emphasis on 3 features:
 Organisational Behaviour is the study of human behavior.
 The study is about behavior in organisations.
 Knowledge about human behavior would be useful in improving an organisation’s
effectiveness.

2.1 Features of Organisational Behaviour

The essential characteristics of organisational behaviour are as follows:

(i) An Integral Part of Management.
OB is a part of general management and not the whole of management. It represents
behaviour approach to management. It is significant to note that because of the importance
of human behaviour in organisations.
(ii) A Field of Study.
OB is a field of study backed by a body of theory, research and application associated with a
growing concern for people at the workplace. Its study helps in understanding the human
behaviour in work organisations. It includes creative thinking among the managers to solve
human problems in organisations.
(iii) Inter-disciplinary Approach.
The field of organisational behaviour is heavily influenced by several other behavioural
sciences and social sciences. The prominent among these are psychology, sociology and
anthropology. Organisational behaviour draws a rich array of research from these
disciplines. What makes it a field in its own right is the attempt to integrate various aspects
and levels of behaviour.
(iv) Levels of Analysis.
OB involves three levels of analysis of behaviour – individual behaviour, group behaviour
and behaviour of the organisation itself. It helps in demolishing ‘incorrect’ assumptions one
may hold about behaviour. It provides a rational thinking about people.
(v) Goal-Oriented.

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OB is an action – oriented and goal-directed discipline. The major goals of organisational
behaviour are to understand, explain and predict human behaviour in the organisational
context so that it may be moulded into result-yielding situations. It provides a rational
thinking about people and their behaviour.
(vi) Human Tool.
OB is a human tool for human benefit. It helps in understanding and predicting the
behaviour of individuals. It provides generalisations that managers can use to anticipate the
effects of certain actions on human behaviour.
(vii) Science and Art.
OB is both a science as well as an art. The systematic knowledge about human behaviour is
a science. The application of behaviour knowledge and skills clearly leans towards being an
art. However, organisation behaviour is not an exact science like physics or chemistry. It
cannot provide specific answers to all organisational problems. The exact prediction of
behavior of people in organisations is also not possible. It is possible to predict relationships
between variables on a broad scale, but it is difficult to apply predictive models in all
situations.
(viii) Satisfaction of Employees’ Needs.
OB seeks to fulfill employees’ need and aspirations. Every employee in the organisation
wants to fulfill his needs through organisational activities. It is the organisation’s
responsibility to provide congenial climate in the organisation so that people may get need
satisfaction and the organisation may attain its objectives. Thus, both organisation and
individuals can be benefited by each other.

2.2 Levels of Analysis of Organisation behavior

Organisational Behaviour focuses on three levels of analysis:

2.2.1 Individual
Organisations are made up of their individual members. The individual is a central feature of
organisational behaviour, whether acting in isolation or as part of a group, in response to
expectations of the organisation, or as a result of influence of the external environment. The

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behaviour of individuals is a complex phenomenon and is affected by a large number of
factors such as personality, attitudes, perception, learning, motivation, social, cultural and
other factors. The study of behaviour of an individual working in the organisation is also
known as micro organisational behaviour.
2.2.2 Group
Behaviour pattern of individuals is also influenced by the groups to which they belong.
Research studies have shown people behave differently in groups than as individuals.
Several factors influence the behaviour of groups such as group goals, norms,
communication, leadership, cohesiveness, etc. Understanding of group dynamics is essential
to reduce conflicts and improve morale and productivity. Understanding the effect of group
relationships is important for managers in today’s organisations. Inter group relationships
may be in the form of cooperations or competition. The co-operative relationships help the
organisation in achieving its objectives.
2.2.3 Organisation
An organisation is a system composed of several interdependent individuals and groups.
Individuals and groups operate within the structure of formal organisation. They participate
in shaping the culture of the organisation and also in organisation development. At times,
they may resist change, while they may fight for change in certain situations. Stress caused
by the activities of individuals and groups has to be managed at the organisational, group
and individual levels. The study of behaviour from the perspective of the whole organisation
is also referred to as macro organisational behaviour.

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3. Consultancy
Literally, consultancy means the act of consulting. It is the process of seeking the advice of
a consultant. According to New Webster's Collegiate Dictionary 'to consult' means 'to ask
advice of' or 'to seek the opinion of' and - 'consultant' means 'one who consults or gives
expert advice'. However consultant is a word that is likely to be misunderstood until one
becomes more fully aware of the many kinds of consultants. It is used in a generic sense
and it gets the right meaning only when some prefixes are added like 'management',
'technical', 'investment', 'tax' etc. A consultant is an independent and qualified person who
provides professional service to individuals, organisations or business undertakings.

The Management Consultancy Association of India defines management consulting as "an

advisory service contracted for and provided to business, public and other undertakings by
specially trained and qualified persons. It is a process of interaction wherein the consultant
in an objective and independent manner diagnoses and investigates problems and issues
concerned with management practices, analyses these, recommends appropriate action and
provides assistance when requested in implementation of recommended solutions.
3.1 Consultant
A consultant who is an expert in the relevant field or discipline identifies and investigates
the problems of clients and on the basis of his expertise. He makes suitable suggestions and
also helps in the implementation of recommendations. Consultants give specialised services
to clients in the form of advice, information and knowledge. They charge commission or fee
for their services.

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3.1.1Role of Consultants
Consulting is an art. A consultant provides an expert professional service to his clients.
Generally, consultants follow a 'problem-solving approach' towards client's problems. They
help the clients by: - identifying and investigating problems concerned with strategy, policy,
markets, organisation, procedures and methods. - formulating recommendations for
appropriate - action by factual investigation and analysis with due regard for broader
management and business implications. - Discussing and agreeing with the client the most
appropriate future course of action. - providing assistance where required by the client to
implement recommendations.

In carrying out these activities, professional consultants should be expected to exercise

independence of thought and action, deal with the clients problems in the right perspective,
give well-balanced advice and continuously strive to improve their professional skills and to
maintain a high quality of service. Consultants are necessarily problem solvers who are
presented with an issue or a situation and asked to suggest recommendations on how it
should be dealt with. They may play an innovative role, developing new ideas, methods and
systems on behalf of their clients. Consultants may act as 'an extra pair of hands' doing
things which people or organisations are perfectly capable of doing but which they do not
have the time or inclination to do.

Sometimes, consultants act as investigators engaged to carry out an investigation or review

of a matter, which is too delicate or complex. Such investigations are necessary where the
problems faced by the clients are fundamental to the nature of business carried on by them.
Consultants can also act as change agents. They can bring change to the client's organisation
and manage the change process. In this role they are facilitators who are deploying their
independent point of view and consulting expertise.

3.2 The Consultant - Client Relationship

The consultant-client relationship implies dealings or interactions over time. The duration of
relationship depends on the nature and extent of services rendered by the consultant. It may

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be one that lasts for days or weeks for solving specific problems like event management,
building design or interior decoration. Consultants may also build up long lasting
relationship with clients in areas like investment, tax or software consultancy. The role of
consultant has a direct bearing on consultant-client relationship. In this context, the
consultant has certain duties towards the clients and strict adherence to certain guidelines.
These duties are:

1. Providing clients with information.

Consultants have to provide information to their clients both external and internal to their
organisations. External information relates to aspects such as economic, political and
commercial relevant to the clients' problem. The internal information relates to the client's
own organisation, its structure, strengths, efficiencies and inefficiencies. In helping the
clients to obtain information, the consultant must keep up with the latest knowledge and
developments in the respective areas.
2. Providing clients with techniques.
In the consultant-client relationship, the consultant has to provide practical methods that
help the clients in achieving desired objectives. These techniques are broadly divided into
technical and managerial. When a consultant diagnoses a problem calling for expertise in a
particular technical area, he should make it clear to the client that a specialised technical
consultant is required. Managerial techniques include flow charts and diagrams, control
charts, budgets, cash flow analysis etc.

3. Providing clients with an objective point of view.

A consultant should have an objective point of view when gathering information and
conveying opinions to the clients. The client looks upon a consultant as an interested party
receiving objective information from him and advising him what to do. The consultant must
be not only objective but also informed so that he remains in the superior position.

4. Providing clients with Problem Diagnosis and recommendation

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Among all the consultant-client relationship roles, providing clients with problem diagnosis
and recommendation is the most difficult one. This is because the consultant must tell the
client what is wrong, what to do and how to do it. There are also chances of disagreement or
conflict between consultant and client in this respect. But diagnosing problems is the critical
task of a consultant. He must have skill and expertise since there are no rules of thumb for
making the diagnoses. However, consultants can follow different approaches developed by
researchers for diagnosing and recommending solutions and prepare a checklist of the
procedures to be followed at different stages of their work.
5. Providing clients with final report and follow up
A consultant's report is a formal statement of the results of an investigation or of any matter
on which definite information is required, as directed by some clients. Every report should
contain a statement of the problem, the procedures followed to solve the problem, the
conclusions reached by the consultant and his recommendations including follow up
measures. The structure of the report, its length and degree of details should be decided in
advance by the consultant and client prior to the start of an assignment. It is the practice of
consultants nowadays to submit shorter reports with more detailed appendices since a typical
client often doesn't have the time, patience and skill to read voluminous reports.

3.2.1 Consultant-Client Interface in Consulting

Personal selling is viewed as the most important promotional tool of consultancy services. It
helps the consultant to make direct contact with the clients, facilitates two way
communications and builds confidence among the clients. Moreover, the buying behaviour
of individual and corporate clients dictates that the consultants themselves can only
undertake effective personal selling in the context of consultancy services. Personal selling
in consultancy services is a long drawn process, which involves a series of sequential steps.
Figure 1 indicates the various stages involved in successful selling a professional service
offering to a prospective client.

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 Initial Contact

Client Courting

Meeting and
Proposal

Negotiation and
Closing

Continuing
Relationship
Management

Figure 1
I. Initial Contact
The initial contact between the client and the consultant is obviously the first step in
personal selling process. A consultant cannot always expect clients to knock on his door for

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professional help. An enterprising consultant needs prospective clients for business
development and a large segment of target clients are left out in the absence of proper
marketing communication. Therefore, it is necessary to contact new and prospective clients
either by calling personally, mailing or conducting seminars, workshops etc. Some referral
sources can also be made use of by the consulting firms for making initial contacts with
prospective clients.

2. Client Courting
At this stage the task of the consultant is to sustain the interest of the prospective client and
build confidence in the firm. Client-courting involves focusing upon the client's problems
and diagnosing the problem through listening, questioning, information gathering and
reference to report on client problems. The consulting firm may also introduce its key
personnel to the prospective client at this stage and also inform him about the experience and
success stories of the firm. The object of client courting is to instill confidence in the minds
of prospective clients.

3. Meeting and Proposal

If the courtship is successful the next step is a meeting between the prospective client and
the consultant. It is a new business discussion in which a written or verbal proposal is
presented to the prospective client for proceeding with the consultancy work. The proposal
contains an in depth analysis of the problem facing the client, the solutions offered and the
benefits expected of the solutions. The consultant may explain how the solutions are going
to benefit the client or minimise the negative effects.

4. Client Negotiation and Closing

In order to reach this stage of the selling process the consultant has to - convince the
prospective client that the client problem has been analysed thoroughly and the solution
offered by him is appropriate and the consulting firm is capable of providing it. The
prospective client may express concerns or raise objections to the solution or service offered.

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It may also relate to the staff, fee or timing of services. But the consultant can surmount
these objections or concerns by negotiation and settlement. Closing and satisfying the
prospective client is the last step during the meeting. It is also an important part of the
negotiation process. Closing involves agreement and determination of the prospective
client's readiness to accept the service and close the negotiation. The consultant can close the
meeting with a statement confirming the prospective client's sound business decision and
reemphasising the firm's willingness to help the prospective client in doing better in his
business.
5. Client Relationship Management
The success of any consulting firm as in the case of any service firm is dependent not upon
getting new clients but upon retaining the existing clients. Therefore, it is essential that a
consulting firm maintains good relationship with the clients. Clients always prefer to
approach a consultant with whom they have some past experience or business dealings.
Taking followup actions and evaluation of the effectiveness of the meeting can contribute to-
building sound relationship with clients.

3.3 The Consultancy Cycle

Consultants cannot follow a typical pattern in their service assignments. But in most
assignments they do the following consultancy activities in their service delivery process.

1. Problem Identification
Initially, the consultant discusses with the client the reasons for the assignment, its
objectives and the terms of reference. Clients will start with their own description of the
problem. But it is the duty of the consultant to test these descriptions to obtain essential data
on the back ground to the assignment and the environment in which it is to take place. The
consultant must attempt at this point, to establish whether the client has any 'hidden agenda'.
Sometimes, the client may not have understood the factors underlying the problems or may
not have described them in the right perception. An experienced consultant will always want
answers at this stage, to such questions as 'who really wants the assignment to take place and

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why?', 'What kind of resources is the client prepared to invest in?', 'What does the client
really expect from the assignment?' etc.

2. Project Planning
This involves decisions on what work needs to be done, who does it, the timetable, the costs
involved and methods of monitoring and controlling progress. These preliminary
assessments have to be developed into much more detailed programme schedules. This
enables the consultant to specify the particular service to be delivered at each stage. Planning
helps in rendering time bound actions and controlling operations.

3. Data Collection
The first stage in any assignment is the collection of data about the client organisation itself.
Data collected may relate to the environment in which it exists, the type of organisations, its
objectives, policies, strategies, procedures and workflows. The data may be collected by
interviews, meetings and observation. In complex assignments the consultant may make a
detailed investigation into the climate of the organisation, its culture and management style.
He may also conduct attitude or opinion surveys to elicit information and data relating to the
problem.

4. Analysis
In the analysis stage, the complex mass of data and information are closely examined to find
key elements. Analysis facilitates the orderly arrangement of data into logical patterns, thus
promoting understanding and pointing the way to an appropriate diagnosis of the problem.
Analysis concentrates on facts but will also subject opinions to critical examination in order
to establish the extent to which they are founded on fact. The aim of the analysis will be to
provide a precise structure and meaning for the assignment, which will serve as a means of
communication and enable those involved to make their judgments within a clearly defined
framework.

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5. Diagnosis
This is the process of identifying the root cause or causes of the problem or the real needs of
the organisation in the area under review. A good diagnosis will be based on rigorous
analysis and will establish not only the immediate factors to be taken into account but the
long-term causes or implications. As far as possible the diagnosis will be specific, but it
might be necessary to present a general picture of the context in which the situation has
arisen which has prompted the need for action.

6. Recommendations
The recommendations should flow logically from the analysis and diagnosis. There will
inevitably be alternative solutions or courses of action which will have to be evaluated.
Good consultants will always formulate their recommendations in conjunction with their
clients. This will involve testing the alternatives, and this is often an interactive process, as
through further analysis and discussion, the way forward becomes clearer. The
recommendations should indicate how they should be implemented and the timetable and
costs of implementation.

7. Feed back
Though the recommendations are formulated jointly with the client, it is still necessary to
make necessary feedback of the recommendations. The feedback may take the shape of a
formal document, in a highly readable form. Sometimes, oral presentation with supporting
data may be made available.

8. Implementation
The agreement to go ahead with the recommendations either in whole or with amendment
should lead to the preparation of an implementation programme. The programme will
contain how the consultant will help in the implementation of recommendations. In this
context, consultants are not simply advisers. They get involved in the process of ensuring
that the recommendations which they have contributed really work.

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9. Follow up and evaluation
Consultants may be asked to follow up the assignment. Follow up is necessary to evaluate its
impact and make suggestions on any amendments to the original recommendations. Majority
of consultants also gets job satisfaction on follow up when they realize that the
recommendations really help the clients.

3.4 The Importance of Communication in Consulting

Creating and operating a small business is a complicated process that often involves making
decisions and performing tasks that are outside of the owner's area of expertise. Consultants
are professionals who are experts in certain fields and provide advice related to their areas of
expertise. Excellent communication skills are vital to be a successful consultant.
 Consultants Are Paid to Communicate

Consultants are advisers who are paid for their insights. Consultants must be able to
communicate their ideas to clients effectively to make their services worthwhile.
Communication skills can be just as important to consultants as technical expertise.

 Breaking Down Complex Concepts

Consulting and advising often involve describing complex topics to people who may not
have a background in those topics. Consultants must have excellent communication skills in
order to break down complex, technical ideas in a way that is useful to the layman. A
consultant should understand the backgrounds and knowledge of his audience to provide the
most meaningful advice possible.

 Understanding Goals

Consultants make recommendations about how companies can achieve goals and overcome
problems. A solid understanding of the objectives and problems clients face is essential for
consultants to perform their jobs effectively. Forming such an understanding requires
excellent writing and oral comprehension and the ability to ask questions to clarify points

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that are unclear. Consultants should also understand what resources clients have available to
make recommendations that are financially feasible.

 Avoiding Miscommunication

Communication skills also are important to consultants to avoid misunderstandings. If a

client misinterprets the advice of his consultants, the client might make a poor decision that
harms his business. As a result, the client could blame the consultant for providing bad
advice. It is a consultant's responsibly to communicate precisely to avoid confusion.

3.4.1 Consultancy Skills

Consultants use their subject expertise, acquired through education, training and largely by
experiences, on behalf of their clients. Ultimately, however, it is the skill with which that
expertise is used which differentiates the good from the not so good consultants.
Consultancy skills are essentially those required to carry out the consultancy activities as
stated earlier. These include analytical ability, diagnostic and interactive skills and the ability
to communicate clearly and persuasively. Analytical and diagnostic skills are particularly
important in problem solving. Interactive and communication skills are critical for all types
of consultancy services. The mix of consultancy skills varies for different types of
assignments. However, the following are the important skills a consultant need in
discharging his services efficiently.

1. Listening Skills
Effective consultants listen actively to their clients. As facilitators, their role may be to
gather the ideas from the clients. Consultants take information from clients by careful
listening. They listen and then analyse and interpret the information received from clients.
Consultants are also agents of change. As such, they can not only help to release ideas but
also analyse, assess and structure them so that they combine to make a powerful contribution
to the achievement of change.
2. Communication Skills
Consultants need good communication skills. Effective communication is critical for
reflecting, clarifying, interpreting and probing. Reflecting is what consultants do when they

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mirror the client's ideas so that they can be expressed more freshly and objectively.
Clarifying is rephrasing the client's statements so that they become clearer, sharper and more
precise. Interpreting may require putting together the implications of several statements. In
probing, consultants elicit from their client's ideas and opinion which the latter may not have
expressed, or even be fully aware of.
3. Motivational Skills
A consultant needs motivational skills to influence the minds of his clients. He should be
self-motivated and have a positive mental attitude. He should be willing to adapt to different
situations, open-minded and receptive to new thoughts and ideas. A consultant should act as
a facilitator of change.
4. Problem-solving Skills
The success of a consultant depends to a great extent on his problem solving skills. A good
consultant must have an analytical mind, critical thinking and problem-solving abilities. He
must be able to understand a problem, analyse and solve it with logistics for implementation
in a timely and organised manner.
5. Decision-making Skills
Another important skill required for successful consultants is the ability to take quick
decisions. A consultant must be able to find alternative solutions to a problem and evaluate
these alternatives to arrive at an appropriate solution. He must have expert knowledge
regarding the tools and techniques used for managerial decision-making.

6. Human relations Skills

A consultant has to be client-focused and committed to meeting the needs of clients. He
must recognise the client's needs, must be able to put them at ease while interacting with
them, and build trust and respect with clients. Good negotiation skills are extremely
necessary while employing the services of personnel in the service delivery process. He
must be able to build teamwork and maintain long-term working relationship with
employees.

7. Time management Skills

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Time is the most valuable resource of man. Management of time is important for timely
implementation of suggestions by clients. Time is fixed for all and time cannot be saved or
stored. The important aspect of time management is defining priorities that are putting first
things first. 'Planning your work and working your plans' is the essence of time management.
A consultant has to deliver the right services quickly at the place assigned to him and within
the time that is allotted to him.

3.5 Ethics in Consultancy

Ethics involves learning what is right or wrong, and then doing the right thing – however, in
organisational consulting, the right thing is not always easy to identify. Ethics includes the
fundamental ground rules by which we live our lives. Values that guide how we ought to
behave are considered moral values, for example, values such as respect, honesty, fairness
and responsibility. Statements around how these values are applied are sometimes called
moral or ethical principles. Ethical consultants must have a set of principles, which defines
ethical behavior and guides the consultants’ actions toward those behaviors. This is true
whether you are an external consultant or an internal leader wanting to lead employees fairly
and equally. Many times, those principles are documented as a code of ethics. Also,
consultants must be able to recognise ethical dilemmas and have at least one tool to use to
address the dilemma. Information in this subsection will help you to develop your principles
for ethical consulting, recognise ethical dilemmas and resolve those dilemmas, as well.

Codes of Ethics to Avoid Behaviors That are perceived as Unethical

It is critical that consultants establish some major principles, or guideposts, to ensure that
they consult in a manner that is fair and equitable and also that minimises the liabilities as a
consultant. Consultants might refine description of their preferred values and behaviors by
developing a code of ethics or conduct of conduct. Here are some important ethical
guidelines for consulting during organisational change.
1. Do no harm to your client.

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2. Keep client information private unless the client or law requests otherwise.
3. Do not create dependence by you on your client, nor by your client on you.
4. Anticipate and avoid conflicts of interest (for example, representing two opposing
interests at once).
5. Do not act in the official capacity as an advocate for your client.
6. Do not go beyond your own expertise.
7. Do not skip the discovery phase of consulting.
8. Treat others the way you want them to treat you.

4. Change Management
The concept of change implies that there is a perceptible difference in a situation, a person, a
work team, an organisation or a relationship, between two successive points in time.

4.1 Environmental change

There is a new phenomenon: the unprecedented depth, complexity and pace of
technological, social and other changes occurring at present. Today’s organisations operate
in an environment that is continually changing. The ability to adapt to changes in the
environment has become a fundamental condition of success and survival in business.
In a particular business or other organisation, the practical question is what to regard as its
external environment. This question is increasingly difficult to answer. Often managers are
totally perplexed when they realize that their organisation can be affected by forces –
economic, social or political – which they would previously never have considered when
making business decisions. Competition can come from sectors and countries that in the past
were never thought of as potential competitors. New sources of finance and new ways of
mobilising resources for business development and restructuring have required profound
changes in corporate financial strategies. New information and communication technologies
have permitted many new ways of doing business and running complex organisations that
were unthinkable with old technologies. Environmental considerations, increased mobility of

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people and changing social values have created new constraints and new opportunities for
decision–makers responsible for running business firms.
This is where management consultants can step in to render an invaluable service to their
clients. Making clients aware of the complexity and dynamics of environmental changes and
of new opportunities provided by them, and helping them to react to these changes promptly
and effectively, is currently the most important and forward-looking area of management
consulting.
4.2 Organisational change
Organisations are continually forced to adapt to the environment within which they exist and
operate, and to react to new environmental changes, constraints, requirements and
opportunities. But more than that, businesses and other organisations also generate changes
in their external environment, for example by developing and marketing new products and
services that capture a significant part of the market, launching and publicizing products that
will change consumer taste, or pioneering new technologies that become dominant and
change the shape of whole industrial and service sectors. Thus they modify the business
environment, both nationally and internationally.
Change can affect any aspect of an organisation. It may involve products and services,
technologies, systems, relationships, organisational culture, management techniques and
style, strategies pursued competencies, performances, or any other feature of a business. It
can also involve the basic set-up of the organisation, including the nature and level of
business, legal arrangements, ownership, sources of finance, international operations and
impact, diversification, and mergers and alliances with new partners
4.3 Change in people
The human dimension of organisational change is a fundamental one. For it is the behaviour
of the people in the organisation – its managerial and technical staff, and other workers –
that ultimately determines what organisational changes can be made and what real benefits
will be drawn from them. Business firms and other organisations are human systems above
all. People must understand, and be willing and able to implement, changes that at first
glance may appear purely techno-logical or structural, and an exclusive province of higher

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management, but which will affect the working conditions, interests and satisfaction of
many other people.
In coping with organisational change, people have to change, too: they must acquire new
knowledge, absorb information, tackle new tasks, upgrade their skills, give up what they
would prefer to preserve and, very often, modify their work habits, values and attitudes to
the way of doing things in the organisation.
It is important to recognize that this requirement relates to everyone in an organisation,
starting with the most senior manager. Those who want their subordinates and colleagues to
change must be prepared to assess and change their own behaviour, work methods and
attitudes. This is a golden rule of organisational change.

4.4 Kurt Lewin Three-stage model of change

A useful concept of change in people was developed by Kurt Lewin. It is a three-stage
sequential model, whose stages are referred to as “unfreezing”, “changing” and “refreezing”.
4.4.1 Unfreezing
Unfreezing suggest an unsettling situation as it is assumed that a certain amount of anxiety
or dissatisfaction is called for – there must be a need to search for new information if
learning is to take place. Conditions that enhance the unfreezing process usually include a
more than normal amount of tension leading to a noticeable need for change – for example,
an absence of sources of information; removal of usual contacts and accustomed routines;
and a lowering of self-esteem among people. In some instances, these preconditions for
change are present before the consultant arrives on the scene. In other instances, the need for
change is not perceived and has to be explained if unfreezing is to occur – for example, by
making it clear what will happen if the organisation or the person does not change.
4.4.2 Change
Changing, or moving towards change, is the central stage of the model, in which both
management and employees start practicing new relationships, methods and behaviours. The
subprocesses of changing involve two elements:

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  Identification where the people concerned test out the proposed change, following
the external motives presented to them (e.g. by management or a consultant)
 Internalisation where individuals translate the general objectives and principles of
change into specific personal goals and rules: this process may be quite difficult,
usually requiring a considerable effort by the person concerned, and a great deal of
patience, creativity and imagination on the part of the consultant in assisting the
change to convert the external motives to internal motives for accepting the changes
proposed.

4.4.3 Refreezing
Refreezing occurs when the person concerned verifies change through experience. The
subprocesses involved require a conducive and supportive environment (e.g. approval by
responsible management) and are usually accompanied by a heightening of self-esteem as a
result of a sense of achievement derived from accomplishing a task. During the initial phases
of the refreezing stage it is recommended that the required behaviour should be continuously
reinforced by means of rewards, praise, and so on, to encourage and accelerate the learning
process. In the later phases, intermittent or spaced reinforcement will help to prevent
extinction of the newly acquired behavioural patterns. Eventually the new behaviour and
attitudes are either internalised, or rejected and abandoned.
Change in a particular person takes place at several levels: at the knowledge level
(information about change, understanding its rationale), the attitudes level (accepting the
need for change and a particular measure of change both rationally and emotionally) and the
behavioural level (acting in support of effective implementation of change).

4.5 Resistance to change

People are remarkably adaptable, can cope with change and generally accept it as a natural
fact of life. People resist and try to avoid changes that will leave them worse off in terms of
job content, conditions of work, workload, income, relationships, personal power-base,
lifestyle and the like. This is understandable. But a great deal of resistance may be met even
if the proposed change is neutral, or beneficial to the persons concerned.

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4.5.1 Reasons for resistance to change

Lack of conviction that change is needed

If people are not properly informed and the purpose of change is not explained to them, they
are likely to view the present situation as satisfactory and an effort to change as use less and
upsetting.
Dislike of imposed change
In general, people do not like to be treated as passive objects. They resent changes that are
imposed on them and about which they cannot express any views
Dislike of surprises
People do not want to be kept in the dark about any change that is being prepared:
Organisational changes tend to be resented if they come as a surprise.

Fear of the unknown

Basically, people do not like to live in uncertainty and may prefer an imperfect present to an
unknown and uncertain future.
Reluctance to deal with popular issues
Managers and other people often try to avoid unpleasant reality and unpopular actions, even
if they realise that they will not be able to avoid them forever.
Fear of inadequacy and failure
Many people worry about their ability to adjust to change and maintain and improve their
performance in a new work situation. Some of them may feel insecure and doubt their ability
to make a special effort to learn new skills and attain new performance levels.
Disturbed practices, habits and relations
Following organisational change, well-established and fully mastered practices and work
habits may become obsolete and familiar relationships may be altered or totally destroyed.
This can lead to considerable frustration and unhappiness
Lack of respect for and trust in the person promoting change

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People are suspicious about change proposed by a manager whom they do not trust and
respect or by an external person whose competence and motives are not known or
understood.

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