Organizational changeUnit 110 min read
Unit 1 – Introduction to Organizational Development (OD) & Change: concepts, models & real‑world use
Unit 1 of Organizational Change explains what OD is, distinguishes planned, first‑order and second‑order change, presents Lewin’s and Burke‑Litwin models, outlines the consultant‑client relationship and highlights cultural, ethical and resistance issues.
Key points
- OD is a systematic, data‑driven effort to improve an organization’s effectiveness and health.
- Planned change follows a cycle of diagnosis → planning → implementation → evaluation.
- First‑order change tweaks existing systems; second‑order change transforms the whole paradigm.
- Lewin’s three‑stage model and the Burke‑Litwin causal model are foundational frameworks for change agents.
- Consultants must master diagnostic tools, cultural sensitivity, ethics and resistance‑management strategies.
1. What is Organizational Development (OD)?
Organizational Development (OD) is a planned, organization‑wide effort aimed at increasing effectiveness and well‑being through data‑based interventions in the organization’s processes, structures, and culture.
Key attributes:
| Attribute | Explanation |
|---|---|
| Systemic | Views the organization as an interrelated system; changes in one part affect the whole. |
| Human‑focused | Emphasises people’s attitudes, skills, and relationships. |
| Planned | Change is intentional, not accidental. |
| Data‑driven | Uses surveys, interviews, and performance metrics to diagnose problems. |
| Long‑term | Seeks sustainable improvement rather than quick fixes. |
2. Planned Change vs. First‑Order & Second‑Order Change
2.1 Planned Change
A planned change follows a logical sequence:
2.2 First‑Order vs. Second‑Order Change
| Dimension | First‑Order Change | Second‑Order Change |
|---|---|---|
| Scope | Incremental adjustments to existing processes (e.g., updating a software version). | Fundamental transformation of underlying assumptions, values, or mission. |
| Speed | Usually rapid, low resistance. | Slower, high resistance, requires cultural shift. |
| Goal | Improve efficiency or solve a specific problem. | Redefine the organization’s identity or business model. |
| Examples | Introducing a new reporting template. | Moving from a product‑centric to a service‑centric business model. |
3. Classic Change Models
3.1 Lewin’s Three‑Stage Model
- Unfreeze – Create awareness that current ways are inadequate.
- Change (Transition) – Implement new behaviours, processes, or structures.
- Refreeze – Stabilize the new state so it becomes the norm.
3.2 Burke‑Litwin Causal Model
The Burke‑Litwin model links external environment → organizational mission → leadership → culture → structure → management practices → systems → individual & group performance → organizational performance.
Why consultants need to know these models: they provide a diagnostic map to locate where change is required and guide the design of interventions.
4. The Consultant‑Client Relationship
- Client System – The organization (or a specific unit) that seeks change.
- Change Agent / OD Consultant – An external or internal professional who facilitates the change process.
Key roles of the consultant:
| Role | Description |
|---|---|
| Diagnostician | Collects data, identifies gaps. |
| Facilitator | Guides group discussions, workshops. |
| Coach | Develops leaders’ change‑leadership capabilities. |
| Implementer | Helps roll out interventions, monitors progress. |
| Evaluator | Assesses impact and recommends adjustments. |
Skills Required
- Analytical & research skills
- Interpersonal & communication skills
- Cultural intelligence
- Ethical judgment
- Project‑management competence
5. Cultural Factors Influencing Change
Culture shapes values, norms, and behaviours. In Nepal, high power distance and collectivist orientation affect how change is communicated and accepted.
| Cultural Dimension | Influence on Change |
|---|---|
| Power Distance | Employees may expect top‑down directives; participative approaches need careful framing. |
| Collectivism | Group consensus is vital; resistance can spread quickly if a key subgroup opposes. |
| Uncertainty Avoidance | High avoidance leads to fear of ambiguous new processes; detailed plans reduce anxiety. |
| Long‑Term Orientation | Emphasises sustainability; change initiatives should highlight long‑term benefits. |
6. Ethics in OD
Ethical considerations ensure trust and legitimacy. Core principles:
- Confidentiality – Protect sensitive organizational data.
- Informed Consent – Participants must understand the purpose of data collection.
- Transparency – Clearly communicate the scope and limits of the consultant’s role.
- Beneficence – Interventions should aim to improve overall well‑being, not just profit.
7. Resistance to Change
7.1 Why Resistance Occurs
| Reason | Typical Manifestation |
|---|---|
| Loss of Control | Employees fear reduced autonomy. |
| Fear of Incompetence | Concern about lacking skills for new tasks. |
| Bad Timing | Change introduced during high workload periods. |
| Mistrust of Leadership | Past broken promises fuel skepticism. |
| Cultural Misfit | New practices clash with established norms. |
7.2 Strategies to Overcome Resistance
- Communication – Clear, two‑way dialogue.
- Participation – Involve employees in design and decision‑making.
- Support & Training – Provide resources to build required competencies.
- Negotiation & Agreement – Offer incentives or trade‑offs.
- Co‑optation – Bring influential skeptics into the change team.
8. Worked Example: “Old Family Bank”
Scenario: A regional bank (Old Family Bank) experiences declining loan‑portfolio growth due to outdated credit‑scoring procedures.
Step‑by‑Step Application of Lewin’s Model:
- Unfreeze – Senior management shares market data showing competitors’ faster loan approvals. Town‑hall meetings highlight the risk of losing market share.
- Change – A cross‑functional team pilots a digital credit‑scoring system (AI‑based). Training sessions are held for loan officers.
- Refreeze – The new system becomes the standard; performance dashboards are linked to bonuses, reinforcing the behavior.
Outcome: Within six months, loan approval time drops from 10 days to 2 days, and loan volume rises by 15 %.
9. In the Real World
| Product / Company | OD Idea Used | How It Is Applied |
|---|---|---|
| eSewa (digital wallet) | Second‑order change | Shifted from a simple payment gateway to a full‑service financial platform (e‑wallet, micro‑loans, insurance), requiring a cultural shift toward data‑driven decision making. |
| Daraz (e‑commerce) | Lewin’s Unfreeze‑Change‑Refreeze | During the 2022 “Fast Delivery” initiative, Daraz un‑froze employee mindsets with data on delivery delays, introduced a new logistics software (change), and refroze the process by linking KPI bonuses to on‑time delivery. |
| Ncell (telecom) | Burke‑Litwin model | When the Nepalese government announced 5G licensing, Ncell diagnosed external pressure → revised mission → re‑aligned leadership vision → reshaped culture toward innovation, resulting in a rapid 5G rollout. |
| Bank of Kathmandu (loan interest redesign) | First‑order change | Adjusted interest‑rate calculation formula to reflect RBI guidelines – an incremental tweak without altering the bank’s core business model. |
10. Summary of Key Points
- OD is a systemic, planned, data‑driven approach to improve organizational health.
- Planned change follows a diagnostic‑planning‑implementation‑evaluation loop.
- First‑order change = incremental; Second‑order change = transformational.
- Lewin’s and Burke‑Litwin models provide practical roadmaps for consultants.
- Successful change hinges on cultural awareness, ethical conduct, and effective resistance management.
Exam tip
- Remember the diagram: Lewin’s three‑stage model is frequently asked; draw it quickly with the three boxes and label each stage.
- For model comparison (first‑ vs second‑order), use the table format – examiners love clear side‑by‑side points.
- When a question mentions a “client system,” immediately link it to the consultant’s roles (diagnostician, facilitator, etc.).
- Ethics and cultural factors are often paired; cite at least two cultural dimensions (e.g., power distance, collectivism) and one ethical principle (confidentiality).
- Practice a short case analysis (like the Old Family Bank) – outline the change steps, identify resistance, and propose one strategy to overcome it. This structure scores full marks.
Based on the TU BBM syllabus for Organizational change (ELE224), unit 1.
Discussion
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