Organizational Compliance
 expected behaviour within an organization
 signifies an organization’s concrete efforts to stop, detect, and/or else act in response suitably to unlawful
behaviour linked with the activities of those individuals working on behalf of an organization
 provides a support to the organization’s goals, recognizes the limits of legal and moral activities, and create a
system to make the management aware of situations when the organization is reaching close to or crossing a
limit or approaching towards any complication that prevents the attainment of an objective
Objectives:
(a)
Ensuring that all officials in an organization observe relevant laws and regulations in their work
(b)
Articulating a wider set of ethical standards related to aspiration that are well-understood within the
organization and become a practical guideline for organization members making decisions that elevates
ethical concerns.
Principles of Organizational Compliance
I.Establishing Compliance Programmes
Principle 1: Manage Compliance: Organizations must practise compliance through the construction and continuance of
an effective compliance programme.
Principle 2: Contain Risks: Effective compliance programmes are intended to avoid, identify and act in response to legal
risks and to encourage compliance with the law.
Principle 3: Respond to Change: Effective compliance programmes are dynamic in nature that is planned to be flexible
and modified, when suitable, to reflect changing circumstances.
Principle 4: State Compliance Policy: Effective compliance programmes declare that it is the organization’s policy to
conform to all applicable laws.
Principle 5: Endorse at Top Levels: The highest governing authority within an organization should endorse the
organization’s compliance programme.
Principle 6: Create Compliance Accountability: Effective compliance programmes ascertain responsibility for compliance
throughout the organization.
Principle 7: Ensure Program Fairness: Effective compliance programmes are designed to operate honestly and equitably.
II.Structure and Control
Principle 8: Maintain High-Level Oversight: Specific high-level personnel of the organization should be responsible for
the implementation and supervision of the compliance programme.
Principle 9: Assign Individual Responsibility: A compliance programme must have the support of senior officials of the
organization. Each individual of the concerned organization is accountable for supporting and conform to the
compliance programme’s standards and measures.
Principle 10: Delegate Authority Responsibly: The organization has to practice due diligence to stop the allocation of
extensive flexible authority to persons having a susceptibility to engage in illegal activities.
Principle 11: Enforce internally: The organization takes logical steps to realize compliance with its standards and the law.
Principle 12: Reward Success: Rewards and punishments are important tools in endorsing compliance.
III.
Communication and Training
Principle 13: Communicate Standard: The organization’s compliance programme has a communication element, the
intention of which is to make employees and other agents conscious of applicable standards of conduct and to
encourage compliance.
Principle 14: Match Training to Tasks: Effective compliance programmes communicates suitable compliance information
and inspiration to the employees and other officials of organization.
Principle 15: Tailor Training to Audience: Effective compliance programmes are framed to reach the proposed audience.
Principle 16: Describe Communication Responsibilities: All levels of management are accountable for the function of an
organization’s compliance communications programme.
IV.
Responses to Violations
Principle 17: Respond proactively: Effective compliance programmes must be practical in its approach to deal effectively
with incidents of non- compliance.
Principle 18: Gather Compliance Information: Effective compliance programmes have access to the resources related
with investigation, evaluation and reporting and use these resources to monitor compliance.
Principle 19: Consider Offense Reporting: Effective compliance programmes address the instances for external reporting
of infringements of the law.
Principle 20: Evaluate Program Effectiveness: Effective compliance programmes use occurrences of non-compliance to
assess its own effectiveness, to correct deficits and to consequence improvements.
Compliance Theory
 the prime component of the relationship between the people in power and the ones on whom it is exercised
 can be attained with power
3 Organizational Power
(a)Coercive power:
Coercive power involves the potential use of physical force to make someone comply, such as in a master–slave
relationship. It uses force and fear to control lower-level participants. Examples of organizations that rely on coercive
power include prisons, custodial mental hospitals, and basic training in the military.
(b)Remunerative or utilitarian power:
Utilitarian power uses remuneration or extrinsic rewards to control lower-level participants. Most business firms
emphasize such extrinsic rewards. These rewards include salary, merit pay, fringe benefits, working conditions and job
security. Besides many business firms, utilitarian organizations include unions, farmers’ co-ops, and various government
agencies.
(c)Normative power:
Normative power depends on a belief that authorities have a right to govern behaviour. It controls through
allocation of intrinsic rewards, such as interesting work, identification with goals, and making a contribution to society.
Management’s power in this case rests on its ability to manipulate symbolic rewards, allocate esteem and prestige
symbols, administer ritual, and influence the distribution of acceptance and positive response in the organization.
Involvement
 the orientation of a person to an object, considered in terms of intensity and direction
Types:
(a)Alienative involvement:
 designates an intense, negative orientation. It means that the power subject disagrees with the power holder and
submits against his will in fear of physical pain or confinement. Inmates in prisons, patients in custodial mental
hospitals, and enlisted personnel in basic training all tend to be alienated from their respective organizations.
(b)
Calculative involvement:
 refers to the subject’s deliberate choice to comply in expectation of a reward or in avoidance of sanctions.
Calculative involvement designates either a negative or a positive orientation of low intensity. Calculative
orientations are predominant in relationships of merchants who have permanent customers in various types of
business associations.
(c)
Moral involvement:
 designates a positive orientation of high intensity. It is the result of agreement based on norms and values. The
involvement of the parishioner in her church or synagogue, the devoted member of his political party, and the
loyal follower of her leader are all moral.
Organizational Development
 is a conscious and calculative effort to increase an organization’s ability
 readiness to meet the possible changes in future, thus, it is a systemic learning and expansion strategy intended
to change the basics of beliefs, attitudes and relevance of values, and structure of the current organization to
better absorb unruly technologies, changing market opportunities and ensuing challenges and chaos
 A response to change, a complex educational strategy intended to change the beliefs, attitudes, values and
structure of organizations so that they can adapt to new technologies, markets and challenges and the dizzying
rate of change itself (Bennis)
 a planned effort, organization-wide, managed from the top, to increase organizational effectiveness and health
through planned interventions in the organization’s processes, using behavioural science knowledge’ (Beckhard)
 a designed effort which is initiated by process specialists and helps an organization to develop (a) its diagnostic
skills (b) coping capabilities (c) linkage strategies (in the form of temporary and semi-permanent system) and (d)
a culture of mutuality (Pareek)
OD is an interdisciplinary and primarily behavioural science approach that draws from such fields as organization
behaviour, management, business, psychology, sociology, anthropology, economics, education, counselling and
public administration.
Models of Organizational Development
1. Lewin’s Change Model (Unfreeze – Change – Refreeze)
1. Unfreeze: This first stage of change involves preparing the organization to accept that change is necessary.
This would involve first breaking down the existing status quo before you can build up a new way of operating.
2. Change: The change stage follows the uncertainty created in the unfreeze stage. This is the stage where
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3. Refreeze: When the changes are taking shape and people have adopted the new ways of working, the
organization is ready to refreeze. A stable organization chart and consistent job descriptions among others would be the
outward signs of the refreeze
2. Planning Model
1. Scouting: The most important objective of this stage is to find out the best points that need to be changed or
from where the change should be initiated.
2. Entry: After the selection of entry point, a ‘contract’ is negotiated through the entry point. The purpose of
‘contract’ is to define if and interpret how the succeeding stages of the planned change process will be carried out
3. Diagnosis: The primary aim of this phase is moving forward in order to enhance the functioning of the system
by altering the supposed complexity into precise problems.
4. Planning: Planning phase is based on the results of the diagnosis phase. These results may require a
renegotiation of the entry contract. Changes can be made in the contract during the planning phase to include those
members of the system who will be responsible for implementing the change and/or will be immediately affected by it.
5. Action: During the action phase, the plan of action developed in the planning phase is implemented. The
action plan, in most of the cases, proceeds smoothly if the work of the previous four phases has been done well.
6. Evaluation: Based on the objectives defined during the planning phase, the evaluation of the change strategy
is carried out. It becomes advisable to evaluate the change against task sub-goals because that is an indicator to whether
the change is progressing as intended or not.
7.Termination: It is thoughtful to discuss and tentatively agree on the conditions of termination to avoid any
kind of chaos later on. Of course, as the change strategy progresses these conditions will become clearer and may
change also depending on the progress. There are two types of termination situations:
•
Enhancement of the organization’s capacity for achievement of similar goals in the future
•
Successful achievement of the goals as per the earlier plans
Action Research Model
 the foundation stone (‘no action without research, no research without action)
 holds that planned change is a cyclical process. The cycle starts with initial research about the
organization which provides information to guide subsequent actions. Moving further in the cycle, the
results of the action are assessed to provide further information to guide further action, and so on.
Steps:
1.Entry (Problem identification): This stage starts with a comprehension of the problems that could be resolved with the
help of organizational development that could be resolved with the help of organizational development
•
The amount of available resources
•
The possibility of relating with the client
•
The adaptability of the client towards the change
•
The client’s values and motivation
•
The probable leverage points of change
2. Contracting (Consultation with a behavioural science expert): After their preliminary contact, the client and the OD
practitioner have analysed each other to the maximum limit. The OD contract states three critical areas: (i) What each
expects to get from the relationship, (ii) How much time each will invest, when, and at what cost, and (iii) The ground
rules under which the parties will operate. This would help in establishing a sound relationship between the two parties
involved.
3. Diagnosis (Data gathering and preliminary diagnosis): At this step, the OD practitioner, often in conjunction with
organization members collects preliminary data about the organization.
4. Feedback: The diagnostic data is sent back to the client. Members have the potential to establish the strengths and
weaknesses of the organization or the department under study.