ORGANIZATION EFFECTIVENESS AND CHANGE

Organization Effectiveness and Change Presentation

ORGANIZATIONAL CULTURE & CHANGE

Organization Effectiveness and Change Presentation

CULTURE
What is Culture? It is the set of important understanding that members of community share in common. 2 types of culture: SOCIETAL---Consists of patterned ways of thinking, feeling and reacting that are acquired by language and symbols that create a distinctiveness among human group.
ORGANIZATIONAL---The deeper level of basic assumptions and beliefs that are shared by members of an organization, that operate unconsciously and define in a basic taken for granted fashion an organization's view of its self and its environment.

Organization Effectiveness and Change Presentation

ORGANIZATIONAL CULTURE
An iceberg whereby the surface is based on a much deeper (and bigger) reality, yet this reality is usually unexamined.

Organization Effectiveness and Change Presentation

THE ORGANIZATIONAL ICEBERG

Goals

Formal organization

Strategy Structure Systems & procedures Products & services Financial resources Management

Informal organization

Values, attitudes & beliefs Leadership style & behaviour Org. Culture & norms of behaviour Power, politics & conflict Informal groupings

Organization Effectiveness and Change Presentation

ORGANIZATIONAL CULTURE & CHANGE

organizational life is not as neat, tidy or predictable as formal elements of organization such as structure, strategy & technology may imply. The culture and politics of many organizations constrain the degree of change and transformation in which they can successfully engage, even though such change may be highly desirable for meeting the challenges and demands of the wider environment.

Organization Effectiveness and Change Presentation

ORGANIZATIONAL CHANGE

Organization Effectiveness and Change Presentation

ORGANIZATIONAL CHANGE

The illiterate of the 21st century will not be those who cannot read or write, but those who cannot learn, unlearn, and relearn. Alvin Toffler

Organization Effectiveness and Change Presentation

CHANGE
What is Change? Change refers to any alternation which occurs in the overall work environment of an organization. Coping process of moving from a unsatisfactory present state to a desired state. Change has following characteristics:
Change results from pressure forces internally & externally. Whole organization is affected by the change in any part. Change takes place in all parts of organization at varying rates of speed and degree of significance.

What is Planned Change? Results from deliberate attempts by managers to improve organizational operations.
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CHANGE-IMPORTANT FACTS
Change is the single most important factor in business today: every business is an ongoing source of change. every professional discipline is a process of change. Every market force (customers, competitors, technology, regulations, distribution channels, suppliers, etc.) creates change that forces our change in response. Complex change is typically accepted if enough time is allowed. Rapid change can occur if its a small adjustment.

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ORGANIZATIONAL CHANGE
What is Organizational Change? Organizational change is in regard to organization-wide change, as opposed to smaller changes such as adding a new person, modifying a program, etc. Also known as organizational transformation. It designates a fundamental and radical reorientation in the way the organization operates. Example of organization-wide change include a change in mission, restructuring operations e.g. restructuring to self-managed teams, layoffs, etc., new technologies, mergers, major collaborations, "rightsizing", new programs such as Total Quality Management, reengineering, etc.
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ORGANIZATIONAL CHANGE
Management of Organizational Change Management of change is defined as a conscious and concerted initiative by managers. To watch over the behavior of uncontrollable forces, to assess their impact and influence of the controllable forces. And to evolve appropriate strategies and action programmes to maintain a dynamic equilibrium between these 2 forces.

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ORGANIZATIONAL CHANGE
What is provokes Organizational Change? Change should not be done for the sake of change; it's a strategy to accomplish a goal. Organizational change is provoked by major outside driving forces like substantial cuts in funding, addressing major new markets/clients, need for dramatic increases in productivity/services, etc.

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ORGANIZATIONAL CHANGE
What is provokes Organizational Change? Organization-wide change is undertaken to evolve to a different level in their life cycle, e.g., going from a turbulent, entrepreneurial organization to more stable and planned development. Example Transition to a new chief executive can provoke organization-wide change when his or her new and unique personality pervades the entire organization.

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ORGANIZATIONAL CHANGEIMPORTANT FACTS

Globalization of markets demands globalization of businesses. Change with times, or get left behind. You will be hired to bring about change; not to just maintain the status quo. You will need to become a change agent. Change will not stop, it will only go faster. No matter how well planned, it will not be trouble free. Each of us is accountable to making change acceptable.

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ARTICLE-A LETTER OF COMPLAINT

List out the problems faced by the customer? What changes has to be brought about by the manager to ensure complete customer satisfaction?

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FORCES OF CHANGE
2 Types of Forces:
INTERNAL FORCES EXTERNAL FORCES

Human Resource Problems/Prospects

Demographic Characteristics Technological Advancements

Managerial Behavior/Decisions

Market Changes Social & Political Pressures

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LEVELS OF CHANGE
3 Levels of Change:
LEVELS OF CHANGE
INDIVIDUAL LEVEL CHANGE Like change in job assignment, transfer to new location etc. Group work prominent in organizations. Both Formal & Informal Groups considered while implementing change eg Trade Union. These changes affect both Individual & Group and take place over long period of time. Always taken by Top Management. Eg. Reorganization of Org. Structure, Shift in Organizations Objective.
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GROUP LEVEL CHANGES

ORGANIZATION LEVEL CHANGES

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TYPES OF CHANGE
4 Types of Change: TYPES OF CHANGE
STRATEGIC CHANGE Change in the mission of the organization. Eg. Acquisition of BA over US Airways. STRUCTURAL CHANGE Shifts in the authority & responsibility distribution. Eg. Decentralized Operations and Participative Management Styles.

PROCESS ORIENTED Relates to technological developments, information CHANGE processing, automation etc. PEOPLE ORIENTED CHANGE Changes directed towards performance improvement, group cohesion, loyalty etc.
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RESISTANCE TO CHANGE
Why do Organization resist change? Group inertia Peer pressure, group norms. Security. Threat to established power relationships. Threat to established resource allocations. Limited focus of change Change affects others in the organization. Poor communication. Threat to expertise.

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RESISTANCE TO CHANGE
Is Resistance bad????? Resistance is not all bad. Resistance is important as it: forces management to check and recheck the proposals. helps identify specific problem areas where change is likely to cause difficulty. gives management information about the intensity of employee emotions on the issues. provides a means of release of emotions. This causes employees to think and talk more about the changes.

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RESISTANCE TO CHANGE
The causes of Resistance are as follows: Economic Factors:- It relates to basic economic needs of workers like life, job security and safety. Psychological Factors:-These are sense of pride, achievement, self fulfillment etc. Social Factors:- These are needs like friendship, belongingness etc. The informal groups created in the organizations lead to resistance for change.

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ORGANIZATIONAL CHANGECHANGE AGENTS

People who drive change are change agents. We are all agents of change: Change-agent skills are as important to our success as our professional discipline skills. The purpose of our jobs is to change what is possible, as companies and as individuals, by adding value every day. Can be consultant or trainer, external or internal. No ideal change agent, particular requirement relate to actual situation in organization.

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CHANGE AGENTSLEVELS OF LEADERSHIP SKILLS

Jim Canterucci defines Change Leaders on 5 levels as follows:
Level I :- Small change initiatives with clear direction Accepts the need for change, communicates and defends the need for change throughout the organization, creates an open and receptive environment Level II:- Change projects at local level Defines and initiates change, identifies leverage points for change in processes and work habits

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CHANGE AGENTSLEVELS OF LEADERSHIP SKILLS

Level III:- Transformation of a central vision into change initiatives and organization-wide communication Leads change, translate the vision of the organization into the context of a specific change initiative and bring this message to the entire organization, redirects approaches in the face of new opportunities. Level IV:- Generates change with a high degree of transformation Manages complex change, understands the cultural dynamics of the current state of an organization, creates a strategic practical course, balancing the current reality with the need for rapid adoption of the desired future reality

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CHANGE AGENTSLEVELS OF LEADERSHIP SKILLS

Level V:- Ability to revolutionize organizations Champions change, challenges the status quo by comparing it to an ideal or a vision of change, causes crisis in order to support dramatic actions and change efforts, transforms the organization

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CHANGE AGENTS CHARACTERSTICS

As per Havelock & Shaskin following factors:
HOMOPHILY EMPATHY LINKAGE PROXIMITY STRUCTURING CAPACITY OPENNESS REWARD ENERGY SYNERGY

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CHANGE AGENTS CHARACTERSTICS

As per Havelock & Shaskin following factors:
HOMOPHILY
Degree of closeness and similarity between the change agent and the client.

EMPATHY
Involves understanding of feelings and emotions and thoughts.

LINKAGE
Degree of collaboration between the change agent and the client.

PROXIMITY
Easy access to each other.

STRUCTURING
Involves proper and clear planning of all activities that are related to change.

CAPACITY
Refers to the org. capacity to provide the resources that are need for successful org. development effort and implementation.

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CHANGE AGENTS CHARACTERSTICS

OPENNESS Refers to the conceptual environment which is conducive to the development of respect and understanding for each others ideas, needs and feelings. REWARD Rewards should in both long and short run. Greater potential for rewards, the more determined the effort required for change. ENERGY Amount of effort put into the change process. Involves both physical & psychological energy.

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CHANGE AGENTS-SERVICES PROVIDED

Activities in which change agents are involved: Provides specialized perspectives, skills & knowledge to the organization. Helps with problem solving procedures: identifying, defining, clarifying the problems, assessing alternatives etc. Provide training and skill building to employees. Assist in Team Learning skills.

Develop and conduct surveys within the org.

Imparting skills once the external leaves.

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MANAGING COMPLEX CHANGE

All elements are needed to effectively manage complex change Without visionconfusion. Without skill-anxiety Without incentivegradual change Without resourcesfrustration Without action planfalse starts
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Vision Skill Incentive Resources Action Plan

Organization Effectiveness and Change Presentation

LEWINS FORCE FIELD THEORY OF CHANGE

organizational change occurs when: forces for change strengthen restraining forces lessen, or both processes occur simultaneously

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LEWINS FORCE FIELD THEORY OF CHANGE

Steps in Force Field Analysis: 1. Define problem (current state) and target situation (target state). 2. List forces working for and against the desired changes. 3. Rate the strength of each force. 4. Draw diagram (length of line denotes strength of the force). 5. Indicate how important each force is. 6. How to strengthen each important supporting force?
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ORGANIZATIONAL CHANGE PRESENTATION

LEWINS FORCE FIELD THEORY OF CHANGE

Steps in Force Field Analysis: 7. How to weaken each important resisting force? 8. Identify resources needed. 9. Make action plan: timings, milestones, responsibilities.

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LEWINS THREE-STEP CHANGE MODEL

Unfreezing

Refreezing

Movement or Transition

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LEWINS MODEL-UNFREEZING
Help people accept that change is needed because the existing situation is not adequate.

LEWINS MODEL- MOVEMENT OR TRANSITION

Involves rearranging of current work norms and relationships to meet new needs.

LEWINS MODEL-REFREEZING
Reinforces the changes made so that the new ways of behaving become stabilized.

PRE-REQUISITES FOR EFFECTIVE CHANGEFLEXIBILITY

The ability to adapt or deal with ambiguity The ability to successfully handle several things at one time The ability to prioritize, delegate and provide clear communication

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PRE-REQUISITES FOR EFFECTIVE CHANGE-FOCUS

The ability to grasp & share vision and long & short term goals.
The ability to celebrate gains made. The ability to focus on solutions-not reasons for failure

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PRE-REQUISITES FOR EFFECTIVE CHANGEATTITUDE

The ability to be a stabilizing force. The ability to take care of oneself. The degree of belief that change breeds creativity.

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PHASES OF ORGANIZATIONAL CHANGE

Ending Transition Beginning

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PHASES OF ORGANIZATIONAL CHANGEENDING

The goal of this phase is to understand the change process and the steps needed to move through it. Dealing with grief and loss issues Normalizing change Communication in the ending phase

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PHASES OF ORGANIZATIONAL CHANGETRANSITION

The goal of this phase is to regain the expected decreases in productivity. Identifying priorities Identifying & minimizing resistance to change. Identifying personal strengths, needs and resources. Communication in the transition phase.
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PHASES OF ORGANIZATIONAL CHANGEBEGINNING

The goal of this phase is implementing the new. Flexibility, focus & attitude. Stress management for change. Communication in the beginning phase. Developing an action plan.

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ARTICLE-A LETTER OF COMPLAINT

List out the problems faced by the customer? What changes has to be brought about by the manager to ensure complete customer satisfaction?

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ARTICLEMANAGEMENT OF CHANGE

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ORGANIZATION DEVELOPMENT
Organizational Development or O.D. is a planned effort initiated by process specialists to help an organization develop its diagnostic skills, coping capabilities, linkage strategies and a culture of mutuality.
A planned effort examining, thinking and planning Initiated by process specialists-Mgr is the key element to success. Diagnostic skills- data collection-overtime Coping capabilities-problem-solving, confront and cope Linking strategies-Indl.& Organl. Goals Culture of Mutuality-OCTAPACE-fostering of certain values and open and proactive systems viz. openness, confrontation, trust, authenticity, pro-activeness, autonomy, collaboration and experimentation.
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ORGANIZATION DEVELOPMENT
Definition of O.D.by Edgar Schein
An organization is the planned coordination of the activities of a number of people for the achievement of some common explicit purpose or goals through the division of labour and function, and through a hierarchy of authority and responsibility. Development is the act, process, result or state of being developed-which in turn means to advance, to promote the growth of, to evolve the possibility of, to further, to improve or to enhance something. Two elements stand out viz. (a)Development may be an act, process or an end state (b)Development means bettering something Thus, O. D. is the act, process or result of furthering, advancing, or promoting the growth of an organization.
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ORGANIZATION DEVELOPMENTCHARACTERSTICS
The O. D. Approach to Change treats the organization as a system. A system is an orderly group of logically related parts, principles and beliefs. Alternatively, it is a grouping or arrangement that relate or interact with each other in such a way as to form a whole. Characteristics as follows: Total view not a limited view

Relationship between the Organization and the environment and the internal dynamics of the Organization
Continuous Improvement--Teams-temporary, semi-permanent and permanent

Inter-personal Communication
Individuals- self awareness and self acceptance-developing skills, knowledge and ability of individuals
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ORGANIZATION DEVELOPMENTOBJECTIVES
The objectives are as follows: Individual and group development. Development of organization culture and processes by constant interaction between members irrespective of levels of hierarchy. Inculcating team spirit. Empowerment of social side of employees.

Focus of value development.

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ORGANIZATION DEVELOPMENTOBJECTIVES
6. Transformation and achievement of competitive edge of the organization. 7. Achieve organization growth by total human inputs by way of research and development, innovations, creativity and exploiting human talent.

8. Behaviour modification and self managed team as the basic unit of an organization.

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ORGANIZATION DEVELOPMENTPROCESS
The O. D. process consists of three components-diagnosis, action and program management.
Diagnosis Component consists of continuous collection of data about the total system, its sub-units its processes, and its culture. Action component consists of all the activities and interventions designed to improve the organizations functioning. Includes following: PLANNING STRATEGY FOR CHANGE COLLECTION OF DATA

ACTION PLANNING AND PROBLEM SOLVING

Program management component is designed to ensure success of the program.

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ORGANIZATION DEVELOPMENTPROCESS
DIAGNOSIS Starts with the identification of the problem. Analysis of various symptoms-both overt and covert may help in identifying the problem. Provide its causes and determine the nature of future action needed. Bad Decisions might be taken beacuse manager may not completely know the nature and depth of the problem. Hence adequate information should be gathered to identify the problem.

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ORGANIZATION DEVELOPMENTPROCESS
PLANNING STRATEGY FOR CHANGE
Employment of management consultants to suggest strategies. He/She should analyze the need for change and plan strategies of change. Action Plans are developed to correct problems, seize opportunities and maintains areas of strengths .These are interventions specifically to address issues at the individual, group, inter-group, or organizational levels.

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ORGANIZATION DEVELOPMENTPROCESS
COLLECTION OF DATA
Surveys performed to determine organizational climate and behavioral problems. He/She should analyze the need for change and plan strategies of change. Action Plans are developed to correct problems, seize opportunities and maintains areas of strengths .These are interventions specifically to address issues at the individual, group, inter-group, or organizational levels.

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ORGANIZATION DEVELOPMENTPROCESS
ACTION PLANNING AND PROBLEM SOLVING
Work Groups are assigned to review the data collected, to talk among themselves areas of disagreement and to establish priorities to change. Groups use data to develop specific recommendation to change. Discussions focuss on actual problems in their organization. Plans are specific with fixed responsibility and deadline date specified.

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ORGANIZATION DEVELOPMENTPROCESS
EVALUATION
OD is a long process, hence requirement of carefully monitoring the program and getting feedback on the same is required. This process helps in introducing modifications, wherever necessary. Use of critique sessions, systematic appraisal of change effforts and comparison pre and post training behavioral pattern is effective for appraisal of OD Program.

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ORGANIZATION DEVELOPMENTADVANTAGES
Following are the benefits/advantages of OD: Opportunity for People to work as human rather than mere resource in production process. Equal Opportunities provided to members to develop full potential. Effective Organization in meeting its goal. Creates Environment for exciting and challenging work. Creates a sense of belongingness in employees towards work, organization and work environment.

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ORGANIZATION DEVELOPMENTLIMITATIONS
Following are the limitations/disadvantages of OD: OD is not powerful than the behavioural science concepts and the limitation of the latter cannot be ignored. Requirement of correct personal who can take initiative and bring about change. Local Circumstances within the organization play a very important role and its significance in performance cannot be ignored.

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ORGANIZATION TRANSFORMATION
5 STEPS TO SUCCESSFUL ORGANIZATIONAL TRANSFORMATION
1. Establishing a sense of urgency -Examining market and competitive realities -Identifying and discussing crises,potential crises, or major opportunities 2. Forming a powerful guiding coalition -Assembling a group with enough power to lead the change effort -Encouraging the group to work together as a team 3. Creating a vision -Creating a vision to help direct the change effort -Developing strategies for achieving the vision

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ORGANIZATION TRANSFORMATION
5 STEPS TO SUCCESSFUL ORGANIZATIONAL TRANSFORMATION 4. Communicating the vision -Using every vehicle possible to communicate the new vision and strategies -Teaching new behaviors by the example of the new coalition. 5. Empowering others to act on the vision -Getting rid of obstacles to change -Changing systems or structures that seriously undermine the vision -Encouraging risk taking and non-traditional ideas, activities, and actions

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ORGANIZATION DEVELOPMENTINTERVENTIONS
OD interventions are sets of structured activities in which selected organizational units engage in a series of tasks which will lead to organizational improvement. Interventions are actions taken to produce desired changes. They are building blocks which are the planned activities designed to improve organizations functioning through participation of members.

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ORGANIZATION DEVELOPMENTINTERVENTIONS
There are one of four reasons why there is need for OD interventions:
The organization has a problem- some thing is broken, and corrective actions need to be taken i.e. it needs to be fixed.

Alignment activities- interventions- are developed to get things back in tune. Features of the organization are out of alignment, parts of the organization are working at crosspurposes.

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ORGANIZATION DEVELOPMENTINTERVENTIONS
There are one of four reasons why there is need for OD interventions:
Enabling actions- interventions- are developed to seize the opportunity .The organization sees an unrealized opportunity: something it wants is beyond its reach. New vision- interventions- are developed to make the new vision a reality .The vision guiding the organizational changes: yesterdays vision is no longer good enough. Actions to build the necessary structures, processes, and culture to support the.

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ORGANIZATION DEVELOPMENTINTERVENTIONS
Generally OD interventions follow a well-planned overall OD strategy and get revealed as events unfold and are answers to the following questions:
What are the change/improvement goals of the program? What parts of the organization are most receptive to the OD program? What are the key leverage points( individual or group) in the organization What are the most pressing problems in the client organization? What resources are available for the program in terms of client time and energy and internal and external facilitators?

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ORGANIZATIONAL CLIMATE
Organizational climate is the process of quantifying the culture of an organization. It is a set of properties of the work environment, perceived directly or indirectly by the employees, that is assumed to be a major force in influencing employee behavior. In other words, Organizational climate is often defined as the recurring patterns of behavior, attitudes and feelings that characterize life in the organization. The organizational climate facilitates the firm to identify the deficiencies in connection with different organizational factors, such as organizational structure, employee compensation system, communication level, physical atmosphere, organizational culture, etc.
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ORGANIZATIONAL CLIMATE
As per Moran and Volkwein (1992), Organizational Climate is defined as "a relatively enduring characteristic of an organization which distinguishes it from other organization, hence,
(a) embodies members' collective perceptions about their organization with respect to such dimensions as autonomy, trust, cohesiveness, support, recognition, innovation and fairness; (b) produced by member interaction; (c) serves as a basis for interpreting the situation; (d) reflects the prevalent norms and attitudes of the organization's culture; and (e) acts as a source of influence for shaping behavior."

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ORGANIZATIONAL CLIMATE
FEATURES OF ORGANIZATIONAL CLIMATE
GENERAL PERCEPTION Org. Climate is a general express of what the org. is. It represents the summary perception which people have about an organization. It reflects how an organization is different from other organizations. Gives distinct identity to the organization.

DISTINCT IDENTITY

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ORGANIZATIONAL CLIMATE
FEATURES OF ORGANIZATIONAL CLIMATE
ENDURING QUALITY Built up over a period of time. Represents a relatively enduring quality of internal environment that is experienced by the organizational members. Several Dimensions such as Individual Autonomy, Authority, Structure, Leadership Style, Pattern of communication etc.

MULTI-DIMENTIONAL CONCEPT

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ORGANIZATIONAL CLIMATE
COMPONENTS OF ORGANIZATIONAL CLIMATE
MEMBERS CONCERN INTERPERSONAL RELATIONSHIPS DEGREE OF CONTROL INDIVIDUAL FREEDOM

TYPE OF STRUCTURE
MANAGEMENT ORIENTATION STYLE REWARD SYSTEM RISK TAKING

CONFLICT MANAGEMENT
DEGREE OF TRUST

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ORGANIZATIONAL CLIMATE
MEMBERS CONCERN Orientation of an org. is the main concern of its members as its important determinant of the culture. Eg Oriented towards Performance Excellence then climate is characterised by Achievement. Reflected by Informal Groupings. Either rigid or flexible.

INTERPERSONAL RELATIONSHIPS DEGREE OF CONTROL

For eg. Rigid then Impersonal or Bureaucratic Atmosphere.

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ORGANIZATIONAL CLIMATE
INDIVIDUAL FREEDOM Sufficient freedom or autonomy to work and exercise authority result efficiency in operations Clarity of authority and responsibility.

TYPE OF STRUCTURE

Serves as the basis of Inter personal relations between superiors and subordinates.
Centralisation and Decentralisation of Work.

MANAGEMENT ORIENTATION STYLE

Style of Managers-Task Oriented or Relations Oriented.

Autocratic-Task Oriented.

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ORGANIZATIONAL CLIMATE
REWARD SYSTEM System of rewards and punishments is an important concept. Rewards based on merit and productivity lead to atmosphere of competition amongst the employees. Important to promote atmosphere where innovative ideas are promoted.

RISK TAKING

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ORGANIZATIONAL CLIMATE
CONFLICT MANAGEMENT Cooperative Atmosphere, conflicts to be resolved in healthy manner. Important for maintenance of peace in the organization.

DEGREE OF TRUST

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ORGANIZATIONAL CLIMATE
FACTORS INFLUENCING ORGANIZATIONAL CLIMATE
Organizational Context Highly favorable climate when the existing organizational techniques are such that workers' objectives are absolutely harmonized to the principles of the company. Structure It is the framework that establishes formal relationships and defines power as well as functional responsibility. Process Communication, decision making and control are some of the significant procedures through which the organization carries out its goals.

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ORGANIZATIONAL CLIMATE
FACTORS INFLUENCING ORGANIZATIONAL CLIMATE
Physical Environment The external conditions of environment, the size and location of the building in which the staff works, the size of the town, climate conditions, noise in the work place, etc., affect the organizational climate. System Values & Norms: Every firm has apparent and fairly evident formal value system where certain types of behavior are rewarded as well as motivated, and certain kinds of behaviour compels a person to formal sanctions.

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ORGANIZATIONAL CLIMATE
Motivational Analysis of Organizational-Climate (MAO-C)
It is an instrument that assess motivational climate of an organization based on the six motives.

The profile includes six scores on six motives. The two highest scores are generally used to interpret the climate: the highest score shows the dominant climate and the next highest the secondary climate. The combination of these two motives, thus, characterizes the organizational climate.
Generally, there are six different kinds of dominant climate characterized by different motives.
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ORGANIZATIONAL CLIMATE
The six motives characterizing dominant organizational climates are listed in the table given below: -

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ORGANIZATIONAL CLIMATE
TECHNIQUES FOR IMPROVING ORGANIZATIONAL CLIMATE
OPEN COMMUNICATION 2 way communication to be promoted. CONCERN FOR PEOPLE

Mgt to work for the improvement of working conditions.

Should be interested in Human Resource Development. Involvement of Employees in goal setting and taking decisions. Improve sense of commitment and enhances loyalty.
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PARTICIPATIVE DECISION MAKING

ORGANIZATIONAL CLIMATE
TECHNIQUES FOR IMPROVING ORGANIZATIONAL CLIMATE
CHANGE IN POLICIES Mgt can change climate by modifying policies, procedures and rules Tech Changes will improve working conditions of employees, the change therefore will be easily acceptable.

TECHNOLOGICAL CHANGE

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ORGANIZATIONAL CULTURE
What is Culture ?
The attitude, traits and behavioral patterns which govern the way an individual interacts with others is termed as culture. Culture is something which one inherits from his ancestors and it helps in distinguishing one individual from the other.

What is Organization Culture ?

Organization culture refers to the beliefs and principles of a particular organization. The culture followed by the organization has a deep impact on the employees and their relationship amongst themselves. Every organization has a unique culture making it different from the other and giving it a sense of direction. It is essential for the employees to understand the culture of their workplace to adjust well.

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ORGANIZATIONAL CULTURE
Types of Organizational Culture Strong vs Weak culture
organizational culture can be labelled as strong or weak based on sacredness of the core values among organizational members and the degree of commitment the members have to these core values. The higher the sacredness and commitment, the stronger the culture increases the possibility of behaviour consistency amongst its members, while a weak culture opens avenues for each one of the members showing concerns unique to themselves.

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ORGANIZATIONAL CULTURE
Types of Organizational Culture Soft vs Hard Culture
Soft work culture can emerge in an organization where the organization pursues multiple and conflicting goals. In a soft culture the employees choose to pursue a few objectives which serve personal or sectional interests. Eg Indian PSUs where the management feels constrained to take action against employees to maintain high productivity. The culture is welfare oriented; people are held accountable for their mistakes but are not rewarded for good performance. Consequently, the employees consider work to be less important than personal and social obligations.

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ORGANIZATIONAL CULTURE
Types of Organizational Culture Formal vs Informal culture :
The work culture of an organization, to a large extent, is influenced by the formal components of organizational culture. Roles, responsibilities, accountability, rules and regulations are components of formal culture. They set the expectations that the organization has from every member and indicates the consequences if these expectations are not fulfilled

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ORGANIZATIONAL CULTURE
Myths about Organizational Culture
Culture is same as groupthink
Groupthink refers to group members hiding any differences in how they feel and think and behave in a certain way. The phenomenon of groupthink is mostly used in a face to face situation when dealing with small groups. Culture, on the other hand, is a much larger phenomenon characterised by historical myths, symbols, beliefs, and artifacts.

Culture is same as organization

Culture is a result of sustained interaction among people in organizations and exists commonly in thoughts, feelings, and behaviour of people. organizations on the other hand, consist of a set of expectations and a system of reward and punishment substained by rules, regulations, and norms of behaviour.
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ORGANIZATIONAL CULTURE
Myths about Organizational Culture

Culture is a social structure Social structures in various collectives exhibit tangible and specific ways in which people relate to one another overtly. However, culture operates on a system of unseen, abstract, and emotionally loaded forms which guide organizational members to deal with their physical and social needs.

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ORGANIZATIONAL CULTURE
Myths about Organizational Culture
Organizational culture is same as organizational climate Organizational culture is a macro phenomenon which refers to the patterns of beliefs, assumptions, values, and behaviors reflecting commonality in people working together whereas Organizational climate is a micro phenomenon and reflects how employees in an organization feel about the characteristics and quality of culture like morale, goodwill, employee relations at the organizational, department or unit level. It refers to the psychological environment in which behaviour of organizational members occurs. It is persistent set of perceptions held by organizational members.
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ORGANIZATIONAL CULTURE
Levels of Organizational Culture Level One Organizational culture observed in the form of physical objects, technology and other visible forms of behavior like ceremonies and rituals. Though visible but at superficial level. Level Two Greater awareness and internalization of cultural values. Tried and tested way of solving problems. If the group is successful there will be shared perception of that success, leading to cognitive changes turning perception into values and beliefs.
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ORGANIZATIONAL CULTURE
Levels of Organizational Culture Level Three Represents a process of conversion. When the group repeatedly observes that the method that was tried earlier works most of the time, it becomes the preferred solution and gets converted into underlying assumptions or dominant value orientation. The conversion process has both advantages. The advantages are that the dominant value orientation guides behavior, however at the same time it may influence objective and rational thinking.

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ORGANIZATIONAL CULTURE
Level 2- Value in Physical, Social Environment
Level 1Artifacts, Technology, Visible and Audible

Level 3Assumptions about Human Nature, Relationships and Behavior

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ORGANIZATIONAL CULTURE
Levels of Organizational Culture Level Three Represents a process of conversion. When the group repeatedly observes that the method that was tried earlier works most of the time, it becomes the preferred solution and gets converted into underlying assumptions or dominant value orientation. The conversion process has both advantages. The advantages are that the dominant value orientation guides behavior, however at the same time it may influence objective and rational thinking.

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ORGANIZATIONAL CULTURE
Features of Organizational Culture Acceptance and appreciation for diversity. Regard for and fair treatment of each employee as well as respect for each employees contribution to the company.

Employee pride and enthusiasm for the organization and the work performed.
Equal opportunity for each employee to realize their full potential within the company. Strong communication with all employees regarding policies and company issues
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ORGANIZATIONAL CULTURE
Features of Organizational Culture Strong company leaders with a strong sense of direction and purpose. Ability to compete in industry innovation and customer service, as well as price. Lower than average turnover rates (perpetuated by a healthy culture). Investment in learning, training, and employee knowledge.

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SOCIALISATION: FAMILIARISATION WITH ORGANIZATIONAL CULTURE

MEANING It is the process of indoctrinating the new employees into the organization culture. The org. takes steps to get the new entrants adapt to the existing culture. It socializes the new employees and moulds them to accept its standards and norms. The process helps employees to be able to understand the basic values, norms and customs for organizational roles.

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SOCIALISATION: FAMILIARISATION WITH ORGANIZATIONAL CULTURE

MEANING Those who donot adjust to the customs are labelled as nonconformists or rebels. Functions Uniformity of Behaviour Reduces Conflicts Reduces Ambiguity.

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SOCIALISATION: PROCESS

Outcomes

Productivity
Pre-arrival

Encounter

Metamorphosis

Commitment

Turnover

Unit 2, Lecture 1: Organizational Socialization Concepts

SOCIALISATION: PROCESS
PRE-ARRIVAL STAGE Learning Period occurs before a new worker joins the organisation. Selection of employees on the basis of judgment of his/her existing values, beliefs, attitudes and expectations. Candidate must be aware of the organization values and expectation during the selection process in order to minimize the wrong selection.

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SOCIALISATION: PROCESS
ENCOUNTER STAGE Stage occurs when employee joins the organization. At this stage employee comes to know about the org. practically and may find divergence between his/her expectations and those of the organisation. Here socialising with the employee plays an important role as this will help him deattach with the previous values, beliefs etc. For this purpose Induction programs are conducted by the organisation.

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SOCIALISATION: PROCESS
METAMORPHOSIS OR TRANSFORMATION STAGE Real transformation takes place. Employee adjusts to his work groups values and norms and becomes comfortable with the org and his job. During and after the stage employee becomes a contented employee and likes the place of work and environment therein. This increases commitment and productivity of his colleague.

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SOCIALISATION: COMMITMENT FORMATION MODEL

New entrants: Compliance commitment Rewards are critical Low emotional investment

Early entrants: Identification commitment Motivated by sense of obligation Feeling of participation

Full members: Internalization commitment Fully accept goals of the organization Self merges with organization

Unit 2, Lecture 1: Organizational Socialization Concepts

EMPOWERMENT
EMPOWERMENT Refers to increasing the spiritual, political, social, or economic strength of individuals and communities. In other words it is the process of supporting another person or persons to discover and claim personal power. WORK PLACE EMPOWERMENT Means empowerment of employees in the work place providing them with opportunities to make their own decisions with regards to their tasks. One of the most important and popular management concepts. Companies have been initiating empowerment programs in attempts to enhance employee motivation, increase efficiency, and gain competitive advantages in the turbulent contemporary business environment.
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EMPOWERMENT
EMPOWERMENT IN MANAGEMENT The three keys that managers must use to empower their employees are: share information with everyone, create autonomy through boundaries and replace the old hierarchy with self-managed teams. Empowerment is simply the effective use of a managers authority, and subsequently, it is a productive way to maximize all-around work efficiency. Share information with everyone this is the first key to empowering people within an organization. Another strong point that this brings is trust; by allowing all of the employees to view the company information, it helps to build that trust between employer and employee.
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EMPOWERMENT
EMPOWERMENT IN MANAGEMENT Create autonomy through boundaries this is the second key to empowerment which also builds upon the previous one. By opening communication through sharing information, it opens up the feedback about what is holding them back from being empowered. Replace the old hierarchy with self-managed teams this is the third and final key to empowerment which ties them all together. By replacing the old hierarchy with self-managed teams, more responsibility is placed upon unique and selfmanaged teams which create better communication and productivity.

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EMPOWERMENT
NEED FOR EMPOWERMENT TO GAIN CUSTOMER SATISFACTION CUSTOMIZATION AIDS COMPLAINT MANAGEMENT INCREASED PRODUCTIVITY & COST EFFICIENCY EMPLOYEE SATISFACTION COMMITMENT & LOYALTY POTENT TOOL FOR INTERNAL MARKETING

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EMPOWERMENT
NEED FOR EMPOWERMENT TO GAIN CUSTOMER SATISFACTION Employee empowerment is the most imp tool to achieve customer satisfaction. Employee empowerment helps not only in performing the task or job efficiently as expected but it also helps in satisfy the customer beyond what was expected or specified. Eg. Disney, MC Donalds.

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EMPOWERMENT
NEED FOR EMPOWERMENT CUSTOMIZATION Customer contact employees have a high degree of personal contact with customers, it gives them opportunity to identify their needs and requirements closely and offer products, services or solutions that are just right for customers. Helps in cultivating long term relations.

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EMPOWERMENT
NEED FOR EMPOWERMENT AIDS COMPLAINT MANAGEMENT Handling of problems, issues, complaints etc on the spot. Empowerment gives employee to take decisions on the spot and aiming at customer satisfaction. Eg.AT&T Universal Card Services.

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EMPOWERMENT
NEED FOR EMPOWERMENT INCREASED PRODUCTIVITY & COST EFFICIENCY Employee satisfaction through empowerment. It in turn leads to organizational effectiveness in terms of productivity and efficiency. Eg. GEs Financial Service Operation

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EMPOWERMENT
NEED FOR EMPOWERMENT EMPLOYEE SATISFACTION COMMITMENT & LOYALTY Human Nature to respond favourably when given respect, attention & recognition. Empowerment provide all of the above and inturn improves confidence and self esteem of the employees. Empowerment fills the feeling of ownership in employees.

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EMPOWERMENT
NEED FOR EMPOWERMENT POTENT TOOL FOR INTERNAL MARKETING Internal Marketing works on a simple concept thay satisfies employee can satisfy customers more effectively and efficiently. Hence both should be given equal importance. Empowerment creates compatibilty between organisational objectives and individual satisfaction.

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EMPOWERMENT-PROCESS
Phase- I Studying the work environment of the employees. Phase- II Redefining tasks and reallocating resources. Phase III Focusing on the psychological and motivational needs of employees in empowered position.

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EMPOWERMENT-PROCESS
Phase- I Studying the work environment of the employees.
Several objectives of empowerment like improving the quality of service encounters, increasing efficiency and productivity, etc. But utmost importance is to study the work environment, where employees work. Hence it is important to consider the following: present level of employee- skills, confidence, and enthusiasm towards job etc; financial and physical resources of the organization; present level of decision making authority with customer contact employees etc.; and Relationship between frontline employees and next, organizational hierarchy.
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EMPOWERMENT-PROCESS
Phase- I Studying the work environment of the employees.
Such analysis framework that helps management design the empowering process for employees, so that the ultimate objectives of empowering are effectively met. Biswajeet Pattanayak has proposed the following guidelines for empowerment process. Understand why the organization is making the change and what it wants to achieve? Select strong leaders to head the change Involve people in planning how to introduce empowerment Create transition project teams to test and co-ordinate efforts and communicate results Provide training in new skills and behaviors Acknowledge and reward achievements
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EMPOWERMENT-PROCESS
Phase-II: Redefining tasks and reallocating resources:
Every organization will have its own concept about empowerment. No specified process which is universally applied, every organization has to design the empowerment on individual basis on the analysis of management in Phase-I. Includes number of activities such as information sharing, redesigning communication system, job enrichment, allocating resources or providing decision-making authority.

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EMPOWERMENT-PROCESS
Phase-II: Redefining tasks and reallocating resources:
Pailin has defined empowerment as having three major dimensions Influence over standards/participative decisionmaking: Employee input is essential for job design and setting of appropriate performance standards, and it should be taken seriously. Therefore, decision-making should be participative so that there is continuous feedback to management on how to improve service delivery. Resource availability: To be truly empowered, employees must be given adequate tools to do the job. They need information about customers, about their organization, its products, and its performance. They must have access to the basic equipment and supplies necessary to serve customers well. Full support from senior management.
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EMPOWERMENT-PROCESS
Phase-II: Redefining tasks and reallocating resources:
Pailin has defined empowerment as having three major dimensions Decision-making authority: Empowered employees must have the authority to make timely decisions. This affects customer satisfaction most directly. Bowen and Lawler defined empowerment as the sharing of 4 commodities with frontline employees: Information about organizations performance Rewards linked to the organizations performance Knowledge that, allows the workers to understand the organizations performance and make contributions to it. Power to make decisions that influence the organizational performance.
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EMPOWERMENT-PROCESS
Phase-III: Focussing on the psychological and motivational needs of employees. Delegating- authority to employees may be necessary to empower them, but it doesnt guarantee that they will have the will or incentive to use it. The employment should be thought as a motivational construct - the act of giving a person a sense of power. Important to psychologically enable employees.

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EMPOWERMENT
ROLE OF MANAGERS FOR SUCCESSFUL EMPOWERMENT Zaharik & Kennigham have stated duties at the managerial level for succesful empowerment: Mentoring In problem solving, decision-making, and teamwork skills. Managers must foster a spirit of trust, treat workers with respect, and listen carefully to their ideas. Coaching Coaching employees to do their work better. Managers to recognize achievement and provide encouragement and psychological support.

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EMPOWERMENT
ROLE OF MANAGERS FOR SUCCESSFUL EMPOWERMENT Setting goals Setting Goals and providing incentives through compensation and special awards, both monetary and otherwise. Managers must ensure that the goals of lower level units are consistent with the goals of the Organization as a whole. Facilitating Facilitating the work of the front line by making available resources and training. Managers job to help teams and individuals identify their training needs.

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EMPOWERMENT
ROLE OF MANAGERS FOR SUCCESSFUL EMPOWERMENT Coordinating The work of teams, helping to resolve problems within and between teams, allocating resources among them. Monitoring and evaluating Both internal and external performance. Producing consistent quality requires that diagnostic measures be regularly monitored. Include surveys of employee satisfaction and employee turnover & satisfaction.

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EMPOWERMENT
COSTS OF EMPOWERMENT The costs are as follows: Recruitment and Training Costs Costs of Errors Labour Costs

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ORGANIZATIONAL LEARNING
MEANING

Learning can be defined as a relatively permanent change in behaviour or potential behaviour that results from direct or indirect experience. The changes brought about by learning result from direct or indirect experience.

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ORGANIZATIONAL LEARNING
MEANING Learning means change. It is not simply a matter of adding something. There is always reorganization or restructuring. There may be unlearning. Learning involves a change in behavior; learning may make us respond differently. In other words, Learning can be defined as a relatively permanent change in behaviour or potential behaviour that results from direct or indirect experience. The changes brought about by learning result from direct or indirect experience. The learning organization is a representation of a desired end. Organizational learning is a representation of the dynamic human processes required to increase the cognitive capacity of the total organization.

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ORGANIZATIONAL LEARNING
LEVELS OF ORGANIZATIONAL LEARNING
Individuality At the individual level, managers need to do all they can to facilitate the learning of new skills, norms, and values so that individuals can increase their own personal skills and abilities and thereby he builds the organizations core competence. Group At the group level, managers need to encourage learning by promoting the use of various kinds of groups- such as selfmanaged groups or cross-functional teams- so that individuals can share or pool their skills and abilities to solve problems. Groups allow for the creation of synergism- the idea that the whole is much more than the sum of its parts which can enhance performance.

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ORGANIZATIONAL LEARNING
LEVELS OF ORGANIZATIONAL LEARNING
Organizational At the organizational level, managers can promote organizational learning through the way they create an organizations structure and culture. An Organizations structure can be designed to inhibit or facilitate inter-group communication and problem solving, and this affects team members approach to learning. Inter organizational Organizational structure and culture not only established the shared vision or framework of common assumptions that guide learning inside an organization, but also determine how learning takes place at the inter-organizational level.

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ORGANIZATIONAL LEARNING
ORGANIZATIONAL LEARNING: CURVE FOR CHANGE
It is the period of adaptation following change and there will be a temporary decline in effectiveness before a group reaches a new equilibrium. Employees need time to understand and adapt in order to accept change, trying to integrate the change so likely to be less effective. They have to get rid of old habits (unfreeze) and apply the new ones (refreeze), problems to be worked out. Procedures are upset, and communication patterns are disrupted. Conflicts develop about the change, and cooperation declines. Problems arise and time must be taken to resolve them.

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ORGANIZATIONAL LEARNING

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ORGANIZATIONAL LEARNING
APPROACHES FOR CHANGING AN EQUILLIBRIUM
The approaches are as follows:1. Adding new supporting forces 2. Removing restraining forces 3. Increasing the strength of a supporting force 4. Decreasing the strength of a restraining force 5. Converting a restraining force into a supporting force

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ORGANIZATIONAL LEARNING
APPROACHES FOR CHANGING AN EQUILLIBRIUM
The approaches are as follows:1. Adding new supporting forces 2. Removing restraining forces 3. Increasing the strength of a supporting force 4. Decreasing the strength of a restraining force 5. Converting a restraining force into a supporting force The techniques are as follows: Participation Shared Rewards Employee Security Communication Stimulating Employee Readiness Working with Unions
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ORGANIZATIONAL LEARNING
STEPS FOR STARTING ORGANIZATIONAL LEARNING The process does not start by consultant or by merely having a vision about org. future. Organizational Leaning to start with an understanding of the present capabilities in both the performance and learning systems. The Steps are as follows: Step 1: Knowledge of theory, Research, and Practice No Universal method, there are there are multiple theories but are not natural laws, they are simply explanations of social phenomena that have to be continuously tested within the organization.

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ORGANIZATIONAL LEARNING
Step 2: Understanding or Organization Learning Systems Model The organizational learning system provides a dynamic social basis for judging organizational actions of both learning and performing.

Step 3: Asking Questions for Inquiry Using the Organizational Learning Systems Model as a framework offers four sets of introspective questions, one set for each of the subsystems of learning actions. By asking these questions, the organization begins the process of generating new information concerning its learning system.
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ORGANIZATIONAL LEARNING
Step 4: Convert the New Information into meaningful knowledge Information is not knowledge. If not converted into actions then the organization is not learning; it is simply moving information. The process of learning begins with understanding and assigningmeaning to the information through reflection. Step 5: Analyze the inputs and Outputs of Each Subsystem The systems nature of organizational learning requires us to examine the inputs of each of the subsystems to ascertain the nature of the outputs. The analysis of the new information, using the context of the organizational learning system, allows the organization to develop knowledge of its strength and challenges.

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ORGANIZATIONAL LEARNING
Step 6: Respond to the Challenges of Each subsystem Challenge I- Inappropriate Screening Challenge II- Lack of Variety of Environmental Interface Actions Challenge III- Lack of Understanding of the Role of Managemental Cognition and the Environmental Interface Subsystem Challenge IV- Lack of Organizational Reflection Challenge V- Resistance to the Dual nature of Knowledge Challenge VI- Lack of Readiness Challenge VII- Lack of Information Movement Challenge VIII- Inappropriate Alignment of Roles Challenge IX- Lack of Understandable Policy Regarding Information Challenge X- Lack of Alignment in Multiple Organizational Organization Effectiveness and Change Memory.
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ORGANIZATIONAL LEARNING
Step 7: Take Action One of the questions that occurs in this reflection process is Once we have the information and have identified the challenges, where should we start from? Not all of the learning subsystems are equal in their influence on the organizational learning system. They all have necessary functions; however, the guiding function of the meaning and memory subsystem is the most influential and is also the most remote and penetrable to change. It is apparent through this cybernetic relationship, that the pattern maintenance function, as enacted through the meaning and memory subsystem, is a critical factor in understanding and possibly adjusting the organizations learning capacity.

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ORGANIZATIONAL LEARNING
MEANING

Learning can be defined as a relatively permanent change in behaviour or potential behaviour that results from direct or indirect experience. The changes brought about by learning result from direct or indirect experience.

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Creativity & innovation

introduction
What is Creativity? Creativity is the generation of ideas that result in the improvement in the efficiency or effectiveness of a system. The advantages of this are
1)It is results-oriented, thus establishing some objective criteria for the evaluation of creative input and 2) it opens the door to a proper valuation of creative activities that may be overlooked because

creativity
FACTORS AFFECTING CREATIVITY
1. Problem sensitivity 2. Idea fluency 3. Originality 4. Flexibility

creativity
Problem Sensitivity
This is basically the ability to recognize that a problem exists or to be able to cut through consider standing, false impression, lack of facts or other hurdles and recognize the fact problem.

Idea Fluency
Means that a person can pile up a large number of alternative solutions to a given problem in a given time. The value of this lies in the fact that the more ideas you have, the greater are the chances of finding a usable one. The more plentiful your opportunities to get out of

creativity
Originality
Means discovering something entirely new. It is finding new ways to very existing conditions, or new ways to adapt existing ideas to new conditions, or modification of something that will fit in an existing condition.

Flexibility
Creative flexibility is largely concerned with willingness to consider a wide variety of approaches to a problem. This is largely a matter of attitude. Another name of creative flexibility is creative expectancy meaning the creative person just expects to solve the problem no matter how many failures

THE CREATIVE PROCESS

Step 1
The creative process is perceptual, not analytical. Thus, the way creative people see the problem will affect the outcome more than any thing else. The clearer the presentation of the problem, the better the solution can be.

Step 2
Recruit and hire talented creative people, and be willing to invest in them. Talent can provide you with unlimited problem-solving possibilities; a lack of talent will seriously limit what

THE CREATIVE PROCESS

Step 3
Know your creative peoples styles, moods, interests, etc. Match your people to the problems, knowing you creative personnel takes time, but the rewards are more than what you pay for this effort.

Step 4
Once the problem is clear, the talent is good, and the people are matched to the problem, turn your attention to nurturing the right environment. A good fit between talent and surroundings can have a synergy effect. Convey confidence and encourage

THE CREATIVE PROCESS

Step 5 Be willing to help if problems surface but donot interfere. Be a good listener. Step 6 At this stage its necessary for the creatives to get little crazy .First, they will attack the problem with a vengeance. This stage is idiosyncratic and unpredictable, but let it unfold. If you want unique ideas that solve the problem differently than before, let minds race from one possibility to another.

THE CREATIVE PROCESS

Step 7 Give your creatives a free rein. But ensure that the work get done on time. This a balancing act. It takes experience to know when youve reached the point where the reins need to be tightened. Step 8 Do your critical thinking out of range of your creatives. Then, carefully prepare your evaluation of their work. Be clear and specific, but also considerate.

THE CREATIVE PROCESS

Step 9
The creative process is dynamic. Your reaction in the end to their creative work will affect how well the process works in the future. Be constructive, and make sure the process ends with a sense of selffulfillment for the creatives. Point out good aspects of all alternatives and let them know the final ideas are theirs.

THE CREATIVE PROCESS

CREATIVITY TO INNOVATION
Innovation refers to the process of bringing any new, problem-solving or opportunity-addressing idea into use.

Ideas for reorganizing, cutting costs, putting in new budgeting systems, improving communication, or assembling produces in teams are also innovations.

Inspiring innovation
1. Make it the norm 2. Put aside ego 3. Mix people up 4. Dont Fear Failure 5. Hire Outsiders 6. Abandon the Crowd 7. Let Go of Your Ideas 8. Dont Underestimate Science of Innovation 9. Merge Patience and Passion 10. Make It Meaningful

Obstacles to corporate innovation

Very Large organizations foster resistance to change
A large corporations is a formalized structure which maintains and manages the successes of the past. Procedures have been designed to achieve efficiency in doing what we do best. Innovation may disrupt the stable state of corporate society and interfere with the corporations vigorous and continuing efforts to be efficient. In a large, established organization, innovation thus meets a wall of resistance.

2. Innovation may threaten current successes

Frequently, large corporations are reluctant to innovate in areas which would compete with their already existing products, markets, and/or technologies. For eg.Honeywell, for instance might not be expected to develop a digital thermostat because it currently commands the dominant position in the mechanical thermostat market

Obstacles to corporate innovation

3. The corporate Hierarchy breeds conservative subordinates. The subordinate who takes risks thus may turn up as the one who seems to cause the most problems. Corporate life pertains, truly innovative people are not as likely to be promoted and rewarded vis--vis their conservative counterparts. 4. Product/market boundary charters sometimes preclude innovation. When development work goes on within a corporate divisional structure, division business charters sometimes cut off potentially successful innovations because they do not match the current narrow objectives of that division.

Obstacles to corporate innovation

5. In a large organization, the separation of power constitutes a weakest link constraint on innovation. Innovation requires both development and marketing of the product. These functions are usually separated in large organizations as a result, coordination is more difficult, and inflexibility is likely. Since enthusiasm and vision are critical to innovation, it is difficult for one function to sell its idea to the other. The result is conservative moves that satisfy the minimal vision of both functions.

Obstacles to corporate innovation

6. The politics of large organizations can lead to compromises that decreases the effectiveness of attempts at innovation The balance of organizational power can lead to other difficulties as is examplified by the old adage that a camel is a horse designed by a committee. However,the net result might be seen by consumers as a nothing product-not because it doesnt have striking components because the components might not be compatible with each other and hence and cancel each other out. Each member of the coalition can then, with justification, blame participants other than himself for the products failure.

Obstacles to corporate innovation

7. The large firms tend to emphasize short-run efficiency Large organizations use management control systems which emphasize financial measures such as short-term profits, the bottom line, and return on investment become the objectives. These are measured on a yearly basis. But the payoff from innovation is typically for at least five or more years.

Obstacles to corporate innovation

8. The rotation system of training managers at large corporations develop a short-run perspective in managers Large enterprises train their managers by rotating them through the organization. Assignments for fast-track, bright managers are seldom made for more than two years. Thus, these individuals do not see innovations are being within their horizons on any particular assignment.

Obstacles to corporate innovation

9. Large organizations can only get excited about something big Frequently, large corporations view a given market opportunity as too small to be interesting. However, these small market niches sometimes mushroom into sizable markets over time when proper market development is. Spin-off firms are often started by individuals who leave a large firm because it does not allow them to pursue an innovative project. Some times these spin-offs become very successful. The Control Data corporation is a prime example. CDC was a spin-off from the Univac division of Sperry Rand in 1957; now CDS dwarfs its parent organization.

Obstacles to corporate innovation

10. Large firms have marketing departments that follow, rather than lead the market Narrow and inappropriate application of the marketing concept has sometimes led companies to be driven by market needs which are existent and to ignore latent or potential needs.

Overcoming obstacles
Goals are set for innovative achievement. Managers are encouraged to take a long term perspective. Successful Innovation is rewarded. Failures are accepted as part of game. Engineers and research scientists are encouraged to meet the customer. Customers are carefully screened to identify new ideas.

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