Tag: University of Mumbai BMS Notes

Everything you need to know about the causes of organizational conflict. Conflict is a psychological state of mind when people are in a state of dilemma whether to do or not to do a thing.

In organizational conflict, it may imply difference of opinion with persons or groups and sometimes they manage to show down and slow down other and plan strategies for that.

Conflict is an essential fact of organizational life. In fact, the very nature of an organization guarantees the emergence of conflict.

Firstly, organizations consist of people with divergent personalities, perceptions, and values. Secondly, these people are put on jobs with contrasting features that impart unequal degrees of status and frequently foster competition.

Some of the causes of organizational conflicts are:

1. Inter-Relation-Dependence of Departments

In a business organization various activities / functions are divided into various departments. There is a specialization work and there is inter relationship and interdependency of department, the departmental executives have to interact and communicate each other on variety of matters for the attainment of organizational objectives.

During this process there are the chances of difference of opinion, disagree on some matters, clashes friction and all this ultimately resulted into the conflicts which harmful to the organization.

2. Due to Scarcity or Limited Resources

Wherever the resources are limited every departmental head trying to get maximum resources their respective departments and this may give rise to conflict. Moreover if there is unequal distribution of resources, conflict may be arisen. Even if there is any error is made distribution of resources indifferent operative areas may give rise to organizational conflict.

3. Ambiguous Objectives and Goals

If the organizational objectives and goals are not clear cut and easily understandable conflict may arise and obstruct the smooth flow of work.

4. Individual Difference

Very individual is differ from the other individual. Every employee possess a different personality traits and characteristic or features. This ultimately resulted in behaviour, conduct and attitude of the employees and may give rise to organizational conflict. Individual differences is one of the main causes of the conflict.

5. Absence of Time Management

For smooth running of organization and timely attainment of objectives, makes the organization profitable. If proper schedules are maintained for various activities the developmental executives may try to shift their responsibilities on one another and start blaming one another it gives rise to conflicts among departments.

6. Lack of Accurate Forecasting of Eventualities

In modern times changes are taking place very fast in and around the business concern. The environment changes are indispensable and unavoidable in the world. If there is lack of accurate predictions of coming eventualities may give rise to conflicts in the organization. The adverse effects these eventualities creates, problems tension, clashes, friction, and conflicts among the people working in an organization.

7. Employees Dissatisfaction

The employees may be dissatisfied due to number of reasons such as wrong placement, no promotion, poor wages and salaries, lack of leadership and motivation, demotion, transfer, changes in duties or responsibilities, unhealthy working conditions, lack of welfare facilities etc. Such conditions depressed the employers. The stress, strain, tension, depression, frustration will be found among the employees at work place causes conflicts for other organizations.

8. Poorly Defined Responsibilities, Authority and Role

If the duties, responsibilities and authority of the employee is poorly defined, chaos and disorder may occur in the organization. If the role of the employee is also not clear, the role conflict is likely to occur.

9. Undesirable Demands of Trade Union / Workers

One of the leading causes of organizational conflict is undesirable, unjustifiable demands of organizational conflict between the management and workers.

10. Lack of Communication

If there is no proper communication between the employees definitely it gives rise to conflict among the employees. In the absence of proper communication network, misunderstanding, confusion doubts may be created in the mind of the employees which ultimately resulted into organizational conflicts.

11. Poorly Defined System of Payment

The poorly defined system of wage and salary payment is one of the leading cause of conflicts among the employees at workplace.

12. Lack of Discipline and Rules and Regulation

If there is no code of discipline, and formal rules and regulation for leaves, promotion, transfer, training, demotion, holidays may give the scope for chaos and disorder, irregularities, indiscipline among the employees which give rise to organizational conflict.

13. Faulty Performance Appraisal and Reward System

If there is faulty or defective performance appraisal and reward system is adopted, it definitely give rise to conflict among the employees and management.

14. Poor, Imbalanced Authority / Power Distribution

Whenever there is imbalance between authority and responsibility of the executives as well as employees give rise to conflicts. Moreover if there is authority hierarchy is not properly maintained there are chances of conflicts. The executives who gets more power may misuse it and conflicting situations may be arise.

People deal with conflict in a variety of ways, therefore you need different conflict resolution strategies.

We at Participation Company spend a lot of time talking about conflict resolution through active listening and training people to resolve conflict using a variety of strategies. This is how the Thomas-Kilmann measurement instrument and their five conflict resolution strategies came to our attention.

Kenneth Thomas and Ralph Kilmann developed five conflict resolution strategies that people use to handle conflict, including avoiding, defeating, compromising, accommodating, and collaborating.

This is based on the assumption that people choose how cooperative and how assertive to be in a conflict. It suggests that everyone has preferred ways of responding to conflict, but most of us use all methods under various circumstances. It is helpful to understand the five methods, particularly when you want to move a group forward.

Conflict Resolution Strategy 1: Avoiding

Avoiding is when people just ignore or withdraw from the conflict. They choose this method when the discomfort of confrontation exceeds the potential reward of resolution of the conflict. While this might seem easy to accommodate for the facilitator, people aren’t really contributing anything of value to the conversation and may be withholding worthwhile ideas. When conflict is avoided, nothing is resolved.

Conflict Resolution Strategy 2: Competing

Competing is used by people who go into a conflict planning to win. They’re assertive and not cooperative. This method is characterized by the assumption that one side wins and everyone else loses. It doesn’t allow room for diverse perspectives into a well informed total picture. Competing might work in sports or war, but it’s rarely a good strategy for group problem solving.

Debra wrote an illuminating article on how conflict resolution failure can lead to revolution. It’s what can happen when people feel like they aren’t being listened to and start being assertive.

Conflict Resolution Strategy 3: Accommodating

Accommodating is a strategy where one party gives in to the wishes or demands of another. They’re being cooperative but not assertive. This may appear to be a gracious way to give in when one figures out s/he has been wrong about an argument. It’s less helpful when one party accommodates another merely to preserve harmony or to avoid disruption. Like avoidance, it can result in unresolved issues. Too much accommodation can result in groups where the most assertive parties commandeer the process and take control of most conversations.

Conflict Resolution Strategy 4: Collaborating

Collaborating is the method used when people are both assertive and cooperative. A group may learn to allow each participant to make a contribution with the possibility of co-creating a shared solution that everyone can support.

A great way to collaborate and overcome conflict is to reach out and touch them.

Conflict Resolution Strategy 5: Compromising

Another strategy is compromising, where participants are partially assertive and cooperative. The concept is that everyone gives up a little bit of what they want, and no one gets everything they want. The perception of the best outcome when working by compromise is that which “splits the difference.” Compromise is perceived as being fair, even if no one is particularly happy with the final outcome.

The practices, principles, policies and values of an organization form its culture. The culture of an organization decides the way employees behave amongst themselves as well as the people outside the organization.

Types of organization culture

1. Normative Culture

In such a culture, the norms and procedures of the organization are predefined and the rules and regulations are set as per the existing guidelines. The employees behave in an ideal way and strictly adhere to the policies of the organization. No employee dares to break the rules and sticks to the already laid policies.

2. Pragmatic Culture

In a pragmatic culture, more emphasis is placed on the clients and the external parties. Customer satisfaction is the main motive of the employees in a pragmatic culture. Such organizations treat their clients as Gods and do not follow any set rules. Every employee strives hard to satisfy his clients to expect maximum business from their side.

3. Academy Culture

Organizations following academy culture hire skilled individuals. The roles and responsibilities are delegated according to the back ground, educational qualification and work experience of the employees. Organizations following academy culture are very particular about training the existing employees. They ensure that various training programmes are being conducted at the workplace to hone the skills of the employees. The management makes sincere efforts to upgrade the knowledge of the employees to improve their professional competence. The employees in an academy culture stick to the organization for a longer duration and also grow within it. Educational institutions, universities, hospitals practice such a culture.

4. Baseball team Culture

A baseball team culture considers the employees as the most treasured possession of the organization. The employees are the true assets of the organization who have a major role in its successful functioning. In such a culture, the individuals always have an upper edge and they do not bother much about their organization. Advertising agencies, event management companies, financial institutions follow such a culture.

5. Club Culture

Organizations following a club culture are very particular about the employees they recruit. The individuals are hired as per their specialization, educational qualification and interests. Each one does what he is best at. The high potential employees are promoted suitably and appraisals are a regular feature of such a culture.

6. Fortress Culture

There are certain organizations where the employees are not very sure about their career and longevity. Such organizations follow fortress culture. The employees are terminated if the organization is not performing well. Individuals suffer the most when the organization is at a loss. Stock broking industries follow such a culture.

7. Tough Guy Culture

In a tough guy culture, feedbacks are essential. The performance of the employees is reviewed from time to time and their work is thoroughly monitored. Team managers are appointed to discuss queries with the team members and guide them whenever required. The employees are under constant watch in such a culture.

8. Bet your company Culture

Organizations which follow bet your company culture take decisions which involve a huge amount of risk and the consequences are also unforeseen. The principles and policies of such an organization are formulated to address sensitive issues and it takes time to get the results.

9. Process Culture

As the name suggests the employees in such a culture adhere to the processes and procedures of the organization. Feedbacks and performance reviews do not matter much in such organizations. The employees abide by the rules and regulations and work according to the ideologies of the workplace. All government organizations follow such a culture.

Functions of Organizational Culture

1. The first function of culture is that it has a Boundary-Defining role which means that culture helps to create distinctions between one organization and others.
2. Culture helps to create a sense of identity for the organization members.
3. Culture facilitates the generation of commitment to something larger the than one’s individual self interest. Culture encourages the members of the organization to give priority to organizational interests over and above their personal interests.
4. Culture enhances the Social System Stability. Culture is also known as the social glue that helps to hold the organization together by providing appropriate standards for what employees should say and do. It provides a list of social do’s and don’ts for the employees.
5. Culture finally, serves as a sense making and control mechanism that guides and shapes the attitudes and behaviours of employees. This function is particularly important in the study of organizational behaviour. Every organization has its own set of assumptions, understandings and implicit rules to guide the day to day behaviour of the employees. The newcomers will be accepted as fully fledged members of the organization only when they learn to obey these rules. Conformity to the rules is generally the primary basis for rewards and promotions.

Thus, culture is beneficial to the organization as it enhances organizational commitment and increases the consistency of employee behaviour. Culture is beneficial to the employee also as it reduces ambiguity. Employees become very clear as to how things are to be done and what is more important for the organization.

Change is one of few certainties in our work lives. Regardless of industry, company size, or leadership team experience, your team or organization is bound to experience several major transitions.  If you are in a leadership role, you are in a unique position to anticipate and plan for change so as to maximize its benefits and mitigate disruption in your organization.  Why does this matter?  Because research tells us that initiatives with excellent change management are six times more likely to meet objectives than those with poor change management.  Just increasing your change management rating from “poor” to “fair” means you are three times more likely to meet objectives.

Below are six common barriers to effective organizational culture

1. Individual Change Resistance

Most people don’t enjoy change.  The status quo tends to be more convenient and comfortable, so our resistance to a new process, strategy or organizational structure (no matter how logical or promising) is almost inevitable.  Part of our human nature involves us being very sensitive to certain kinds of perceived threats in our social environment, which by extension includes our workplace.  Harvard Business Review outlines ten reasons why individuals tend to resist change:

• Loss of control, especially over processes that have been built up over time.
• Excess uncertainty, which we seek to avoid at all costs.
• Surprise changes with little to no room for mental preparation.
• Changes to everyday work habits and routines.
• Loss of face, particularly for those who have built their reputation on the status quo.
• Concerns about competence as it relates to the new environment.
• More work, especially in the transition period.
• Ripple effects, as the change begins to affect other departments and even customers.
• Past resentments that can spring up against the person responsible for or affecting the change.
• True risks, to both your team’s happiness and livelihood.

Addressing these perceived threats at both an individual, as well as the team and organizational levels, is key to successful change management.

2. Lack of Communication

At its core, successful organizational change is really a successful communication exercise.  In fact, one study found that the single biggest reason for organizational failure to successfully implement any kind of change is “clear and frequent communication.”  When combined with your team’s natural resistance for change outlined above, this barrier makes sense. In fact, every single one of the 10 reasons for individual change resistance can least be partially mitigated through intentional and proactive communication.

Communication should take center stage in both the planning and implementation phases of change management.   Whenever a project or new direction is planned, communication should begin before its actual implementation or execution. Set clear expectations, communicate potential timelines, and report organizational progress to plan at regular intervals.  During unplanned or crisis-driven change, keeping everyone on the same page is just as critical. In a recent article, the Harvard Business Review outlined additional strategies to communicate effectively during times of intense organizational change.

3. Lack of Strategic Direction

Communication is key but will be unsuccessful if it lacks direction or a cohesive message. From the moment you begin to plan or implement any type of organizational change, first clarify your objectives.  Think of your objectives as the roadmap that will guide you to your intended destination.  Ideally, your change management strategy should include the following five components:

• An overarching goal or intended outcome of the process.
• Clear, measurable objectives related to the overall outcome.
• An estimated timeline of achieving your objectives.
• Regular benchmarks or check-ins to evaluate your progress toward goal.
• An outline of strategic communication to keep everyone involved on the same page.

With the right strategy, you will improve your chances of getting buy in so staff are more likely to take a productive vs. disruptive role in the change process.

4. Lack of Consistency

We all experience it, and we can all become frustrated by it. Cognitive dissonance describes what happens when your ideas, beliefs, or behaviors contradict each other. You see an ad, but the product doesn’t deliver on its promises. You experience one of your role models commit an unethical act. You hear great things about organizational change, but all you can see is the increased workload it will bring you for the next six months.

During organizational change or transition, some cognitive dissonance is inevitable. Your team will experience an initial increase in their workload and painfully discover many ways in which the new way of doing things (such as a new business software platform) is actually more time consuming or initially cumbersome than the old one.  If the gap between the perceived benefits of the change and the real work it will take to accomplish change is too long or too great, progress stalls and problems can arise.

Observing positive benefits that were promised actually materialize helps to generate buy-in on and maintain energy for change on behalf of your employees. That’s why planning so you can achieve a few early “wins” and then reinforce them frequently through communication, is so important to a successful change process.

Encourage your implementation team to speak out. Left alone, contradictions between hoped for benefits and lived reality will fester and cause resentment, which in turn will undermine the change. Then, align your communication with expectations to make sure that people experience as much consistency between their expectations and actual outcomes as possible.

5. Cultural Barriers

As soon as a project involves or affects multiple people from diverse groups, cultural barriers can emerge.  For example, if your organization is geographically dispersed, it is likely that people working in different regions will disagree not only on the impact of the change itself, but also regarding the “right” way to go about implementing it.  The often-cited 6-D Model of National Cultures by Gert Hofstede offers some insight into ways in which people in from various cultures may differ in how they perceive the world and approach their work.  Various sub-cultures within your organization can have similar effects on whether or not your change management process will be successful.

Overcoming cultural barriers to change management requires an in-depth understanding of who all the stakeholders in a change process are and what they care most about.  Frequent communication, proportional representation within your implementation team, and upward feedback channels are key to managing change in a way that integrates instead of alienating diverse groups of stakeholders within your organization.

6. Lack of (Perceived) Leadership Buy-In

The old cliché that states, “change starts at the top but happens at the bottom” still rings true.  Few organizational changes are successful without strong support and sponsorship from people at the highest levels of the organization.  Here, perception is key. You might have the necessary buy-in from the CEO, but that matters little if front line employees don’t actually know about it. Wherever possible, involve top leadership in high visibility activities that range from all staff kickoff meetings to regular small group feedback sessions. The more active and visible your organizational leaders are throughout the change process, the better.  Ideally, everyone in management should be involved in the change and actively sponsoring it.

Companies with impressive employee retention rates and high employee satisfaction levels, all have one thing in common they understand the importance of a strong workplace culture. They also know that you must truly invest in your people if you want to get the best out of them.

A poor workplace culture could actually end up costing an employer money, as it could result in absenteeism, employee stress, poor health and a high turnover of staff.  Therefore, working hard to achieve a good culture is not only beneficial for those you employ, it’s also good for the productivity of your business.

These things are easy to talk about, but often less easy to achieve. So, what does a good company culture actually look like?

Responsive to employee needs

Aside from salary and pension schemes, employees have become increasingly interested in ‘lifestyle benefits’ that respond to their personal circumstances and aid a healthier work/life balance. These can include things such as flexitime working, work from home options and study days.

Ongoing development

Does your company promote continuous employee growth and development? It’s important for an employee know their employer is invested in their personal and professional development take the necessary steps to do so. Promoting a culture of continuous development can be done so by developing mentoring schemes or training days.

Social calendar

A good balance of social interaction alongside business activity is good for morale. A healthy calendar of social events outside of the office can help instigate inter-team bonding as well as creating a buoyant atmosphere.

Open, honest feedback

Employers need to create an open culture that allows employees at every level to share their ideas, suggestions and concerns. With structured feedback strategies in place, employers can then monitor employee satisfaction levels and help alleviate issues as they arise.

A little extra

Alongside the more traditional benefits, employees usually respond well to other smaller, more personalised perks – such as free breakfast, early Friday finish or a charity partnership that’s chosen by employees.

Innovative approach

This applies to the innovative ways in which the company conducts business, but also the way it engages with its staff. Is your company striving to be a thought-leader in its sector? Do employees have the chance to attend industry events to keep up with the latest trends and advancements in their field? Do they feel able to incorporate new ideas and technology into their work?

Committed leadership

A great workplace needs buy-in from all team members – but particularly from those at management level. Clear, committed and inclusive leadership will be an essential component in maintaining a great company culture. Make sure the leaders in your organisation understand the culture and are able to effectively communicate and uphold it.

The Carrot and Stick Approach of Motivation is a traditional motivation theory that asserts, in motivating people to elicit desired behaviors, sometimes the rewards are given in the form of money, promotion, and any other financial or non-financial benefits and sometimes the punishments are exerted to push an individual towards the desired behavior.

The Carrot and Stick approach of motivation is based on the principles of reinforcement and is given by a philosopher Jeremy Bentham, during the industrial revolution. This theory is derived from the old story of a donkey, the best way to move him is to put a carrot in front of him and jab him with a stick from behind. The carrot is a reward for moving while the stick is the punishment for not moving and hence making him move forcefully.

Thus, an individual is given carrot i.e. reward when he performs efficiently and is jabbed with a stick or is given a punishment in case of non-performance. While giving the punishments, the following points need to be taken care of:

• Punishment is said to be effective in modifying the behavior if an individual selects a desirable alternative behavior.
• If the above condition does not occur the behavior will be temporarily suppressed and may reappear after the punishment is over.
• The punishment is more effective when given at the time the undesirable behavior is actually performed.
• The management should make sure, that punishment is properly administered and does not become a reward for the undesirable behavior.

Thus, carrot and stick approach of motivation should be applied carefully such that, both have the positive motivational effect on the people in the organization.

Meaning and Implications of Carrot and Stick Approach

Carrot refers to rewards, which are offered or promised to individuals to act in the desired way; while stick refers to punishments which are to be inflicted on individuals, for not acting in the desired way. In away, carrot refers to positive motivation; and stick refers to negative motivation.

Following are the implications of Carrot and Stick Approach:

(i) An overdose of ‘Carrot’ element, in the system of motivation invites laziness and fewer attitudes towards work on the part of individuals. This happens, specially, because many- a-times, people get carrot i.e. rewards regardless of their performance e.g. salary increase, seniority based promotions, etc.

(ii) An overdose of ‘stick’ element, in the system of motivation leads to retaliatory behaviour on part of people, strong organisation of labour unions against management atrocities, poor quality workmanship etc.

Points of comment

(i) There are many other techniques of motivation; other than carrots and sticks.

(ii) Management must evolve an ideal mix of ‘Carrot’ and ‘Stick’ elements; in its motivational schemes: F.W. Taylor’s ‘Differential-piece rate system of wage-payment’ is an instance of such a mix.

Specific Carrots (Rewards) and Sticks (Penalties):

A brief account of specific rewards and penalties; which form part of the management motivational system is given below:

1. Carrots (rewards)

(a) Monetary rewards

• Wages/ salaries paid in cash
• Pay increment on a regular basis.
• Cash awards
• Payment of allowances in cash
• Bonus payment
• Granting leave with pay
• Profit sharing schemes for employees.
• Payment of pension rules.
• Incentive schemes of wage payment.

Rewards capable of measurement in terms of money:

• Travel concession
• Reimbursement of medical expenses
• Subsidized food, housing etc.
• Free uniforms
• Education to employees’ children-free or subsidized.
• Job security.

(b) Non-monetary rewards

• Promotions
• Delegation of authority
• Assignment of challenging work
• Certificates of merit
• Status symbols like, providing a separate room, peon, private Secretary, telephone facilities etc.

2. Sticks (penalties or punishment)

(a) Monetary punishment

• Loss of job (meaning loss of regular income)
• Fines
• Penalties
• Withholding annual salary increment

(b) Non-monetary punishment

• Demotion
• Transfer to an inconvenient work place.
• Taking unfit for delegation of authority
• Not allowing an individual to participate in decision-making.

Point of Comment

Promotion (carrot) and demotion (stick) may have monetary implications also e.g. in form of increase or decrease of pay, respectively.

Change is inevitable in the life of an organization. In today’s business world, most of the organizations are facing a dynamic and changing business environment. They should either change or die, there is no third alternative. Organizations that learn and cope with change will thrive and flourish and others who fail to do so will be wiped out. The major forces which make the changes not only desirable but inevitable are technological, economic, political, social, legal, international and labour market environments.

In very simple words, we can say that change means the alteration of status quo or making things different. “The term change refers to any alterations which occurs in the overall work environment of an organization.”

“When an organizational system is disturbed by some internal or external force, change frequently occurs. Change, as a process, is simply modification of the structure or process of a system. It may be good or bad, the concept is descriptive only.”

There are a number of factors both internal and external which affect organizational functioning. Any change in these factors necessitates changes in an organization. The more important factors are as follows:

1. External Forces

Every organization exists in some context; no organization is an island in itself. Each must continually interact with other organizations and individuals- the consumers, suppliers, unions, shareholders, government and many more. Each organization has goals and responsibilities related to each other in the environment. The present day environment is dynamic and will continue to be dynamic. Changes in social, political, economic, technology, and legal environment force organizations to change themselves. Such changes may result in organizational changes like major functions production process, labour-management relations, nature of competitions, economic constraints, organizational methods etc. In order to survive in the changing environment, organization must change. How the change in various environmental, organizations, must change. How the changes in various environmental factors necessitate change in the organization may be seen in following context:-

(a) Technology

When there is a change in technology in the organizational environment and other organizations adopt the new technology, the organizations under focus become less cost effective and its competitive position weakens. Therefore, it has to adopt new technology, its work structure is affected and a new equilibrium has to be established.

(b) Marketing conditions

Since every organization exports its outputs to the environment, an organization has to face competition in the market. There may be two types of forces which may affect the competitive position of an organization —other organizations supplying the same products and, buyers who are not buying the product. Any changes in these forces may require suitable changes in the in the organization. For example, when Indian economy was liberalized, there were many foreign organizations that entered the Indian market. This forced many Indian organizations to realign themselves with the new situations. The result in that there have been many cases of divesting the business and concentrating on the core business, acquiring core business, and developing competitive competence to face competitive threats. Similarly, there may be changes in buyers in terms of their needs, liking disliking and income disposal for a product. These changes from the organizations to bring those products which meet buyer’s requirement.

(c) Social changes

Social changes reflect in terms of people’s aspirations, the needs, and their ways of working. Social changes have taken place because of the several forces like level of education, urbanization, feeling of autonomy, and international impact due to new information sources. These social changes affect the behavior of people in the organization. There, it is required to make adjustment in its working so that it matches with people.

(d) Political and legal changes

Political and legal factors broadly define the activities which an oganisation can undertake and the methods which will be followed by it in accomplishing those activities. Any changes in these political and legal factors may affect the organization operation.

2. Internal Forces

It is not only the changes in external factors, which may necessitate organizational changes; any change in organization’s internal factors may also necessitate changes. Such a change is required because of two reasons: changes in managerial personnel and deficiency in existing organizational practices.

(a) Changes in the managerial personnel

Besides environmental changes there is a change in managerial personnel. Old managers are replaced by new mangers, which necessitated because of retirement, promotion, transfer or dismissal. Each new manager brings his own ideas and way of working in the organization. The relationships, more in the organization. The relationships, more particularly informal ones, changes because of changes in managerial personnel. Moreover, attitude of the personnel change even though there is no changes in them. The result in that an organization has to change accordingly.

(b) Deficiency in Existing organization

Sometimes, changes are necessary because of deficiency in the present organizational arrangement ad process. These deficiencies may be in the form of unmanageable span of management, large number of managerial levels, lack in co-ordination between various departments, obstacles in communication, multiplicity of committees, lack of uniformity in policy decisions, lack of cooperation between the line and staff, and so on. Beside these internal factors, there are two more internal factors that give rise to organizational changes.

(c) Nature of the work force

The nature of work force has changed over a passage of time. Different work values have been expressed by different generations. Workers who are in the age group of 50 plus value loyalty to their employers. Workers in their mid thirties to forties are loyal to themselves only. The youngest generation of workers is loyal to their career. The profile of the workforce is also changing fast. The new generation of workers has better educational; they place greater emphasis on human values and questions authority of managers. Their behavior has also become very complex and leading them towards organizational goals is a challenge for the managers. The employee turnover is also very high which again put strain on the management.

(d) To avoid developing inertia

In many cases, organizational changes take place just to avoid developing inertia or inflexibility. Conscious manager take into account this view of organization that organization should be dynamic because any single method is not the best tool of management every time. Thus, changes are incorporated so that the personnel develop liking for change and there is no unnecessary resistance when major change in the organization are brought about.

Kurt Lewin’s Three Stages model or the Planned Approach to Organizational is one of the cornerstone models which is relevant in the present scenario even. Lewin, a social scientist and a physicist, during early 1950s propounded a simple framework for understanding the process of organizational change known as the Three-Stage Theory which he referred as Unfreeze, Change (Transition) and Freeze (Refreeze).

According to Lewin, Change for any individual or an organization is a complicated journey which may not be very simple and mostly involves several stages of transitions or misunderstandings before attaining the stage of equilibrium or stability.

For explaining the process of organizational change, he used the analogy of how an ice block changes its shape to transform into a cone of ice through the process of unfreezing.

Stage 1: Unfreezing

This is the first stage of transition and one of the most critical stages in the entire process of change management. It involves improving the readiness as well as the willingness of people to change by fostering a realization for moving from the existing comfort zone to a transformed situation. It involves making people aware of the need for change and improving their motivation for accepting the new ways of working for better results. During this stage, effective communication plays a vital role in getting the desired support and involvement of the people in the change process.

Stage 2: Change

This stage can also be regarded as the stage of Transition or the stage of actual implementation of change. It involves the acceptance of the new ways of doing things. This is the stage in which the people are unfrozen, and the actual change is implemented. During this stage, careful planning, effective communication and encouraging the involvement of individuals for endorsing the change is necessary. It is believed that this stage of transition is not that easy due to the uncertainties or people are fearful of the consequences of adopting a change process.

Stage 3: Freeze (Refreezing)

During this stage, the people move from the stage of transition (change) to a much more stable state which we can regard as the state of equilibrium. The stage of Refreezing is the ultimate stage in which people accept or internalize the new ways of working or change, accept it as a part of their life and establish new relationships. For strengthening and reinforcing the new behaviour or changes in the way of working, the employees should be rewarded, recognized and provided positive reinforcements, supporting policies or structures can help in reinforcing the transformed ways of working.

The three stages of Change Management can be aptly explained through the aid of an example of Nissan Motor Company which was on the stage of bankruptcy due to the issues of high debts and dipping market share.

During that period, Carlos Ghosn took charge as the head of the Japanese automaker who was faced with the challenge of implementing a radical change and turning around the operations of Nissan, yet by keeping the resistance to change under control which was inevitable under such circumstances by forming cross-functional teams to recommend a robust plan of change in different functional areas. For facing the business challenges, he developed a change management strategy and involved the employees in the process of change management through effective communication and reinforcement of desired behaviours. For refreezing the behavioural change of the employees, he introduced performance-based pay, implemented an open system of feedback for guiding and facilitating the employees in accepting the new behaviour patterns at work.

According to Branch (2002, p. 4), Lewin’s change management model can be implemented in three ways:-

• Changing the behaviour, attitudes, skills of the individuals working in the organization.
• Changing the existing organizational structures, systems and processes
• Changing the organizational climate, culture and interpersonal style.

Lewin’s model stressed on the interdependence of various units as well as subunits in an organization. This model assumes that organizations function under static conditions and move from one state of stability to another state of stability in a planned way, but the present day organizations function in turbulent scenarios and uncertain business environments. Furthermore, several critics criticized Lewin’s planned approach to change management for the following reasons:

• It was criticized for being too simple and mechanistic, as a result of which it may not be applicable for the present organizational scenario.
• Lewin’s Planned change model fails to take into consideration the radical or transformational change; it is only useful if incremental change is implemented in an organization
• This model ignores the role of Power & Politics and conflicts. Moreover, it ignores the importance of feelings and experiences of employees which play a crucial role in the entire change process. The model is very plan or goal driven.
• This model supports top-down approach to change management and ignores the importance of bottom-up approach in the change management process.

Lewin’s Force Field Analysis

Kurt Lewin’s Force Field Analysis attempts to explain how the process of change works by diagnosing the driving and the restraining forces that lead to organizational change. One side of the model represents the driving forces, and the other side represents the restraining forces. The driving forces push the organizations towards the new state, and the restraining forces are the factors which provide resistance to change or are regarded as the behaviours of the employees that block the process of change. According to Lewin, stability can be achieved when both the driving and restraining forces reach a stage of equilibrium, which should be approximately of equal strength from the opposite directions.

According to the Force Field Analysis model of Kurt Lewin, effective change happens by unfreezing the existing state of affairs or the current situation, moving to a changed or a desired situation and then refreezing for making the change relatively permanent. During the stage of Unfreezing, the driving forces should be made stronger to motivate a change in the behaviour or ways of working, while the restraining forces should be made weaker or removed. Driving forces create a sense of urgency for the change. The driving forces from the external environment could be Globalization, Technological Development and IT revolution, changes in the workforce, etc. Apart from this, the driving forces may originate within the organization through the efforts of the corporate leaders.

Any change process should start with informing the employees about the influence of the external driving forces like competitors, changing trends in the consumer demands and preferences, regulatory compliances and various other factors. Apart from this for implementing change effectively, the restraining forces should be reduced or removed.

The restraining forces or the resistance from the employees can be controlled by way of effective communication and involvement of the employees in the process, training initiatives for strengthening the new set of knowledge and skills, implementation of stress management techniques to help employees in coping with the stressors, negotiation for ensuring compliance and the last method is implementation of coercive measures if all the other measures fail and the need for change is urgent in nature.

Creativity is a phenomenon whereby something new and somehow valuable is formed. The created item may be intangible (such as an idea, a scientific theory, a musical composition, or a joke) or a physical object (such as an invention, a printed literary work, or a painting).

Scholarly interest in creativity is found in a number of disciplines, primarily psychology, business studies, and cognitive science, but also education, technology, engineering, philosophy (particularly philosophy of science), theology, sociology, linguistics, and economics, covering the relations between creativity and general intelligence, personality type, mental and neural processes, mental health, or artificial intelligence; the potential for fostering creativity through education and training; the fostering of creativity for national economic benefit, and the application of creative resources to improve the effectiveness of teaching and learning.

Qualities of a Creative Person

When you hear the word “creative” what do you think of? Creativity can come in all shapes and forms, bring all sorts of ideas to the surface, and inspire change in the world. But creativity is also a vague term because of how many outlets there are, and with that comes two things: a challenge and an opportunity. For example, it is very easy to walk beside a creative group of people, and become blind to seeing whose intentions are genuine. It is even easier to become blind to your own. Examining personal characteristics from time to time is a cool opportunity to see what traits of yours are being practiced creatively, because we all know humans have plenty of traits in other departments. This can not only help you to gain perspective, but to see what really constitutes as a creative characteristic, which in return may help you see if your ‘creative’ intentions are being practiced or forgotten. I know, a mouthful right? The truth is, sometimes we lose sight of ourselves, sometimes we lose sight of what our purpose is, and sometimes we lose sight of what true creativity is. Creativity stands out, it doesn’t have a certain definition, and it just exists as it is. So what are the characteristics of creative people? And are you one of them? Here’s ten that might put some things into perspective.

1. Energetic

Creative people have a certain energy surrounding them. They tend to radiate a great deal of energy and put their whole heart into what they expend their energy on. This type of energy is different than lets say, hyper-ness, in that it drives the creator into a positive direction and isn’t aimlessly expended. Energy helps the creator to pour passion into their creation and spread energy to others when they see what they have created. Being energetic is often contagious, and creative people love to rub their energy off on other individuals. Trust me, this energy is unlike anything else and if you’ve felt it before, then you’ll know what I am talking about.

2. Intelligent

Being intelligent is another characteristic of being creative. There is an array of wisdom within the mind of a creative person, much like a gift that is hard to find. Creatives are smart and know how to utilize it in all the right areas. They are quick to come with ideas, and resourceful with their surroundings. Intelligence can come in many forms, but creative people tend to practice the abstract, artistic side of intelligence more often than not. Wisdom is a strong characteristic in the mind of a creative, because more intelligence naturally leads to more creative success.

3. Sensitive

While being intelligent is a dominant characteristic, creative people also have a submissive side to them. They are sensitive to many things, because their hearts are constantly open to the world. Being emotional comes easy to them and many things make them cry. Creatives easily see both the joy and pain in everyday life which makes them sensitive to the whole spectrum of living. Being sensitive and vulnerable allows a creative to rip away any self doubt and spill their complete passion and effort into their work. A sensitive heart may be perceived as submissive, but it truly is a gift for a creative to possess.

4. Ambitious

Creatives are highly ambitious in their pursuits. They are always looking for the next project and have an eager hand. Almost nothing discourages their preference to try something new. Constant creating causes creatives to look for more, and ambition gives them more. They seek and seek and eventually find what they are looking for. Whether that be in the smallest part of their day or the biggest event of their life, there is always something to pull from their experience to inspire their work.

5. Naive

Another submissive characterisitc many creatives have is to be naive. Being naive can be a very dangerous thing in this world, and creative people tend to fall into that naive pool quite often. But being naive isn’t entirely dangerous, it can help creatives learn from their mistakes and grow. It can help them open certain doors accidentally which helps them flourish from new discoveries. There is a certain amount of childlike innocence in a creative person because they look at the world with hopeful eyes and try to see the best in humanity. Being curious, or having a wandering spirit, goes hand in hand with being naive; The world is your backyard, but beware of dog, the world might bite back sometimes.

6. Rebellious

Creatives are alot more rebellious than one may think. They take lots of risks and often. They aren’t afraid to mess up because they tend to see the good in it if they do. They may have lots of bruises and scars to prove their mistakes, but their rebellion keeps their heart alive with fire. With a heart full of fire and daring spirit, nothing can hurt a creative, not even the nastiest response from the world. Being rebellious means stepping out of the box and trying something out even it is results in failure, because creatives choose to look at is at an opporunity to grow either way it turns out.

7. Extroverted and Introverted

Can one person be both extroverted and introverted? Creatives sure can! Creative people have two sides to them, the private side and the public side. They can be social and personal, talkative and silent, shy and confident, all in the same body. Being extroverted has its perks and so does being introverted. Creative people are very willing to embrace things, and see the benefits in balancing just the right amount of extroverted, introverted-ness in order to reap all of its benefits.

8. Playful

Being playful is what creatives are all about. They play with ideas until they get the result desired. They play with paints to achieve the right color, play with lens to capture the perfect photo, play with metal to build the right model, and you know quite well creatives ‘play with fire’. Being playful allows a creative to have fun. It allows them to take what they do less seriously and put the joy into it by simply having a good time. And sometimes the best things come by mistake, or by accident, or by playing with fire.

9. Open minded

If there is any person that is open minded, it’s your creative friend, or anyone that is creative in this world for that matter. This is a big one, considering how open to possibilities creatives have to be to reap success. Being open minded allows creatives to climb mountains and venture into secret lands. It allows people to see through another lens without captivating themselve into a box of boundaries or restrictions. Being open minded helps creatives to be set free, and a creative that is free has the sky as their limit.

10. Dreamer

Creatives never stop dreaming. They dream in the day, in their minds constantly, in the evening, in the night and all over again the next day. Creatives dream because of how goal oriented they are, and they dream of these goals realistically in order to motivate them. Creatives can also get carried away, however, just like any individual. But for the most part, this dreaming we are talking of, its untouchable, Because when a creative person wants something they go for it  full heartedly, even if it did start out as a dream.

Creativity means creating something new. In the context of business, it means creation of new ideas, new method or new product/service.

Creativity is the “cognitive process of developing an idea, concept, commodity, or discovery that is viewed as novel by its creator or a target audience.” :Max H. Bazerman

“Creativity is not a quality of a person; it is a quality of ideas, of behaviours or products.” :Teresa M. Amabile

Creativity improves the quality of decisions. It increases the scope of alternatives to be considered for problem-solving. It is essential to deal with problems which are no-repetitive and novel as such problems cannot be solved by pre-defined solutions. They require imaginative thinking for their solution. As no problem has a single solution, creativity helps in generating new ideas that help in taking the final decision.

The creative approach to problem solving assumes the following:

1. There is always a better way of doing things. Past precedents, habits and conventional ways of doing things cannot always guide the future courses of action.
2. Problems have diverse perspectives. Each perspective should be probed, questions should be raised and answers should be found.
3. Things should not be taken for granted. Problems should be redefined and obvious facts should be challenged.
4. There is always scope for improvement. Managers should move from traditional ways to modern, computer-aided ways of managing organizations.
5. Managers should not be afraid of failures. Initial failures will lead to ultimate success.

Creativity in decision-making results in organizational innovations, new technology or new products.

In the era of globalization, competition is so intense that creativity is essential for organizations to take decisions that help in their survival and growth.

The creativity process requires:

1. Convergent thinking
2. Divergent thinking

In convergent thinking, the problem is solved according to pre-defined method or course of action. It pre-supposes solution to the problem and rationally moves towards that solution. Divergent thinking does not solve the problem in a pre-defined way. It analyses different aspects of the problem, views it in different ways and searches for alternative courses of action to solve that problem.

Components of Creativity

Teresa M. Amabile enumerates three components of creativity.

1. Domain skills

A manager can be creative in decision-making if he is theoretically and conceptually aware of the problem and its relevance to the environmental factors. In other words, he must have knowledge of the problem area and also the talent and ability to solve that problem. This is known as domain skill.

2. Creativity skills

The skills to do creative things; to think of new ways of doing the work, to think of new avenues of marketing are the creative skills that help to carry out the decision-making process.

3. Task motivation

Managers do not perform organizational tasks for earning only financial rewards. Money or financial considerations are not the only motives for taking up a novel task. Ego satisfaction and morale boost up are also the considerations that lead to creativity in decision-making.

Process of Creativity

The process of creativity consists of the following steps:

1. Problem finding or sensing

The entrepreneur faces a problem and selects to work on it. He feels curious to solve that problem. He thoroughly familiarizes himself with the problem, analyses its importance for the business and its relationship with other segments of the business.

This helps in identification of the problem as close as possible to reality so that alternatives can be generated which analyse the problem and provide solutions in the right direction. Curiosity leads to development of ideas.

2. Preparation

Once the problem is identified, the decision-maker concentrates on the problem and starts working on it. He collects information, analyses how others are using it and formulates hypotheses to work on. Information may be collected on the basis of past experience, through experience of others and also through study of new researches and innovations done in that field. If he wants to introduce a new product in the market, he studies the consumer buying behaviour before converting that idea into reality.

3. Gestation or Incubation

If, in the preparation stage, the decision-maker is not able to arrive at creative solution to the problem, he moves away from conscious deliberation to sub-conscious development of ideas. He moves away from the problem and engages in other routine activities while still thinking of the problem in his sub-conscious mind.

He thinks over collected information and makes decisions in his sub-conscious mind. He appears to be idle but actually he is trying to correlate what runs in his sub-conscious mind with the happenings around. As lot of information and ideas are already stored in his mind, sub-consciously they are combined and related to each other and help in generation of new ideas important for solving the problem.

4. Insight or Illumination

He thinks of all possible solutions at all times. He thinks of ideas while eating, walking or going to sleep. These ideas are put in writing so that he does not forget them in his conscious mind. In this process, there is flash of ideas in his mind.

These ideas come and go at the speed of light, some of which are spontaneously rejected while others are accepted for further analysis. Sometimes, it results in ideas which the decision ­maker may not have even thought of in his conscious mind.

Social gatherings and meetings may also result in new ideas. Compaq computer company was found as a result of social encounters. Rough sketch of portable computer was drawn on a paper napkin by three friends over lunch which turned into setting up of Compaq computer company.

5. Verification and application

The entrepreneur proves by logic or experiment that the idea can solve the problem and, therefore, can be implemented. He tests the ideas empirically through mathematical models and experimentation. If it is feasible, he applies it to solve the problem. Verification is an essential step in the creativity process because an idea that cannot be implemented is of no use howsoever good it may be.

Climate for Creativity

Managers create a climate that encourages creativity in the following ways:

1. Recognize the need for change

Though people are generally resistant to change, accepting the need for change is necessary to promote creativity. People must feel that they will be benefitted by change.

2. Encourage new ideas

The manager should welcome new ideas. Listening to new ideas and implementing the profitable ones encourages a creative climate in the organisation.

3. Interaction

Interaction with people within and outside the enterprise encourages exchange of useful information and generation of new ideas.

4. Tolerate failure

New ideas may prove to be failures. People should not get disheartened. They should consider time, money and energy in ideas that have failed as investment for bright future prospects.

5. Clear objectives

Managers must have purpose for creativity. They should know what ideas to be tried, when and for what. Clear objectives will optimize the use of time, energy and money.