1. Organization Change / Organization Development
Professor Alexander Settles

2. Structure should follow strategy
Growth
Concentration
Diversification
Stability
No change
Retrenchment
Turnaround
Divestment
Liquidation

3. Definition of OD
Organization Development (OD) is a planned process of change in an organization’s culture through the utilization of behavioral science technology, research, and theory.

4. Definition of OD
OD refers to a long-range effort to improve an organization’s problem-solving capabilities and its ability to cope with changes in its external environment with the help of external or internal behavioral-scientist consultants.

5. Definition of OD
OD is an effort (1) planned, (2) organization-wide, and (3) managed from the top, to (4) increase organization effectiveness and health through (5) planned interventions in the organization’s “processes,” using behavioral science knowledge.

6. Organization Development is...
a systemwide application and transfer of behavioral science knowledge to the planned development, improvement, and reinforcement of the strategies, structures, and processes that lead to organization effectiveness.

7. Action Research Model Problem Identification Joint diagnosis
Consultation with a
behavioral scientist
Joint action planning
Data gathering &
preliminary diagnosis
Action
Data gathering after action
Feedback to Client

8. Positive Model Design and Deliver Ways to Create the Future
Initiate the Inquiry
Inquire into Best Practices
Discover Themes
Envision a Preferred Future
Design and Deliver Ways to Create the Future

9. Comparison of Planned Change Models
Similarities
Change preceded by diagnosis or preparation
Apply behavioral science knowledge
Stress involvement of organization members
Recognize the role of a consultant
Differences
General vs. specific activities
Centrality of consultant role
Problem-solving vs. social constructionism

10. General Model of Planned Change
Planning
and
Implementing
Change
Evaluating
and
Institutionalizing
Change
Entering
and
Contracting
Diagnosing

11. Processes for Planned Organization Change
Process Model
Planned organization change requires a systematic process of movement from one condition to another
Unfreezing
Process by which people become aware of the need for change
Change
Movement from the old way of doing things to a new way
Refreezing
Process of making new behaviors relatively permanent and resistant to further change

12. Process of Organizational Change

13. Processes for Planned Organization Change
The Continuous Change Process Model
Incorporates the forces for change, a problem-solving process, a change agent, and transition management
Takes a top management perspective
Perceives forces and trends that indicate need for change
Determines alternatives for change
Selects the appropriate alternative

14. Continuous Change Process Model of Organization Change

15. Processes for Planned Organization Change
The Continuous Change Process Model
Change agent: a person responsible for managing a change effort
Assists management with problem recognition/definition
Can be involved in generating/evaluating potential action plans
Can be from inside or outside of the organization
Implements the change
Measures, evaluates, controls the desired results
Transition management
Process of systematically planning, organizing, and implementing change

16. OD: Group and Individual Change
To set team goals and priorities
To examine relationships among those doing the work
To analyze and allocate the way work is performed
To examine how a group is working
Team Building Goals

17. Resistance to Change The Resistance to Change Paradox
Organizations invite change when change offers competitive advantage
Organizations resist change when change threatens the organization’s structure and control systems
Organizations must balance stability (permanence) with the need to react to external shifts (change)
Resistance can warn of the need to reexamine the need for change

18. Resistance to Change: Sources of Resistance to Change
Organizational Sources
Overdetermination
Narrow focus of change
Group inertia
Threatened expertise
Threatened power
Resource allocation changes
Individual Sources
Habit
Security
Economic factors
Fear of the unknown
Lack of awareness
Social factors

19. Managing Successful Organization Change and Development
Keys to Managing Change in Organizations
Consider international issues
Take a holistic view
Start small
Secure top management support
Encourage participation by those affected by the change
Foster open communication
Reward those who contribute to change

20. Different Types of Planned Change
Magnitude of Change
Incremental
Quantum
Degree of Organization
Over organized
Underorganized
Domestic vs. International Settings

21. Diagnosing Organizational Systems
The key to effective diagnosis is…
Know what to look for at each organizational level
Recognize how the levels affect each other

22. Organization-Level Diagnostic Model
Inputs
Design Components
Outputs
General
Environment
Industry
Structure
Technology
Strategy Structure
HR Measurement
Systems Systems
Effectiveness
Organization
Culture

23. Organization Environments and Inputs
Environmental Types
General Environment
Task Environment and Industry Structure
Rate of Change and Complexity
Enacted Environment
Environmental Dimensions
Information Uncertainty
Resource Dependency

24. Organization Design Components
Strategy
the way an organization uses its resources (human, economic, or technical) to gain and sustain a competitive advantage
Technology
the way an organization converts inputs into products and services
Structure
how attention and resources are focused on task accomplishment

25. Organization Design Components
Human Resource Systems
the mechanisms for selecting, developing, appraising, and rewarding organization members
Measurement Systems
methods of gathering, assessing, and disseminating information on the activities of groups and individuals in organizations

26. Organization Design Components
Organization Culture
The basic assumptions, values, and norms shared by organization members
Represents both an “outcome” of organization design and a “foundation” or “constraint” to change

27. Outputs Organization Performance Productivity Stakeholder Satisfaction
e.g., profits, profitability, stock price
Productivity
e.g., cost/employee, cost/unit, error rates, quality
Stakeholder Satisfaction
e.g., market share, employee satisfaction, regulation compliance

28. Group-Level Diagnostic Model
Inputs
Design Components
Outputs
Organization
Design
Goal Clarity
Task Group
Structure Functioning
Group Performance
Composition Norms
Group
Effectiveness

29. Group-Level Design Components
Goal Clarity
extent to which group understands its objectives
Task Structure
the way the group’s work is designed
Team Functioning
the quality of group dynamics among members
Group Composition
the characteristics of group members
Performance Norms
the unwritten rules that govern behavior

30. Group-Level Outputs Product or Service Quality Productivity
e.g., cost/member, number of decisions
Team Cohesiveness
e.g., commitment to group and organization
Work Satisfaction

31. Possible Effects of Feedback What is the direction of the feedback?
Feedback occurs No
Change NO
Is the energy created
by the feedback?
YES
Energy to use
data to identify and
solve problems
What is the direction of the feedback?
Energy
to deny or
fight data
Do structures and
processes turn energy
into action?
Failure,
frustration,
no change NO
Anxiety,
resistance,
no change
YES
Change

32. The Design of Effective Interventions
Contingencies Related to the
Change Situation
Readiness for Change
Capability to Change
Cultural Context
Capabilities of the Change Agent

33. The Design of Effective Interventions
Contingencies Related to the
Target of Change
Strategic Issues
Technology and structure issues
Human resources issues
Human process issues

34. Intervention Overview
Human Process Interventions
Technostructural Interventions
Human Resources Management Interventions
Strategic Interventions

35. Human Process Interventions
Process Consultation and Team Building
Third-party Interventions (Conflict Resolution)
Organization Confrontation Meeting
Intergroup Relationships
Large-group Interventions

36. Technostructural Interventions
Structural Design
Downsizing
Reengineering
Parallel Structures
High Involvement Organizations
Total Quality Management
Work Design

37. Human Resources Management Interventions
Goal Setting
Performance Appraisal
Reward Systems
Coaching and Mentoring
Career Planning and Development
Management and Leadership
Managing Work Force Diversity
Employee Wellness Programs

38. Strategic Interventions
Transformational Change
Integrated Strategic Change
Organization Design
Culture Change
Continuous Change
Mergers and Acquisitions
Alliances and Networks

39. Strategic Interventions
Transorganizational Change
Self-designing Organizations
Organization Learning and Knowledge Management
Built to Change Organizations

40. Change Management Activities
Motivating Change
Creating Vision
Effective
Change
Management
Developing
Political Support
Managing the Transition
Sustaining Momentum

41. Motivating Change Creating Readiness for Change
Sensitize the organization to pressures for change
Identify gaps between actual and desired states
Convey credible positive expectations for change
Overcoming Resistance to Change
Provide empathy and support
Communicate
Involve members in planning and decision making

42. Creating a Vision
Discover and Describe the Organization’s Core Ideology
What are the core values that inform members what is important in the organization?
What is the organization’s core purpose or reason for being?
Construct the Envisioned Future
What are the bold and valued outcomes?
What is the desired future state?

43. Developing Political Support
Assess Change Agent Power
Identify Key Stakeholders
Influence Stakeholders

44. Change as a Transition State
Desired
Future
State
Current
State
Transition
State

45. Implementation and Evaluation Feedback
Diagnosis
Design and
Implementation
of Interventions
Implementation of
Intervention
Implementation
Feedback
Evaluation
Feedback
Clarify
Intention
Plan for
Next Steps
Measures of
the Intervention and Immediate
Effects
Measure of
Long-term
Effects
Alternative
Interventions

46. Institutionalization Framework
Organization
Characteristics
Indicators of
Institutionalization
Institutionalization
Processes
Intervention
Characteristics

47. Organization Characteristics
Congruence
Extent to which an intervention supports or aligns with the current environment, strategic orientation, or other changes taking place
Stability of Environment and Technology
Unionization

48. Intervention Characteristics
Goal Specificity
Programmability
Level of Change Target
Internal Support
Sponsor

49. Institutionalization Processes
Socialization
Commitment
Reward Allocation
Diffusion
Sensing and Calibration

50. Indicators of Institutionalization
Knowledge
Performance
Preferences
Normative Consensus
Value Consensus

51. Contingencies Influencing
Structural Design
Environment
Worldwide
Operations
Organization
Size
Structural
Design
Organization
Goals
Technology

52. The Downsizing Process
Clarify the organization’s strategy
Assess downsizing options and make relevant choices
Implement the changes
Address the needs of survivors and those who leave
Follow through with growth plans

53. Downsizing Tactics

54. The Reengineering Process
Prepare the organization
Specify the organization’s strategy and objectives
Fundamentally rethink the way work gets done
Identify and analyze core business processes
Define performance objectives
Design new processes
Restructure the organization around the new business processes.

55. Characteristics of Reengineered Organizations
Work units change from functional departments to process teams
Jobs change from simple tasks to multidimensional work
People’s roles change from controlled to empowered
The focus of performance measures and compensation shifts from activities to results.
Organization structures change from hierarchical to flat
Managers change from supervisors to coaches; executives change from scorekeepers to leaders

56. Characteristics of Transformational Change
Triggered by Environmental and Internal Disruptions
Aimed at Competitive Advantage
Systemic and Revolutionary Change
Demands a New Organizing Paradigm
Driven by Senior Executives and Line Management
Involves Significant Learning

57. Integrated Strategic Change (ISC)
is a deliberate coordinated process that
leads to gradually or radically systemic
realignments between the environment
and a firm’s strategic orientation resulting
in improvement in performance and
effectiveness.

58. The Integrated Strategic Change Process
Strategy S1
Strategy S2
Strategic
Change
Plan
Organization O1
Organization O2
Implementation
Strategic Analysis
Strategic Choice

59. ISC Application Stages
Strategic Analysis
Assess the readiness for change and top management’s ability to carry out change
Diagnose the Current Strategic Orientation
Strategic Choice
Top management determines the content of the strategic change
Designing the Strategic Change Plan
Development of a comprehensive agenda to achieve the change
Implementing the Strategic Change Plan

60. Organizational Design
Conceptual Framework
Strategy
Structure
Work Design
Human Resources Practices
Management and Information Systems
Key Point
Fit, Congruence, Alignment among Organizational Elements

61. Organization Design Model
Organization Strategy
Strategic Fit
Organization Design
Structure
Management and Information Systems
Design Fit
Work
Design
Human Resource
Practices

62. Organization Designs

63. Organization Design Application Stages
Clarifying the Design Focus
Create the overall framework, begins with examining strategy and objectives and determining organization capabilities needed
Designing the Organization
Results in an overall design for the organization, detailed designs for the components, and preliminary plans for how to implement
Implementing the Design
Puts the new structures, practices and systems into place, draws heavily leading and managing change methods

64. The Concept of Organization Culture
Artifacts
Norms
Values
Basic
Assumptions

65. Diagnosing Organization Culture
Behavioral Approach
Pattern of behaviors (artifacts) most related to performance
Competing Values Approach
Pattern of values emphasis characterizing the organization
Deep Assumptions Approach
Pattern of unexamined assumptions that solve internal integration and external adaptation problems well enough to be taught to others

66. Competing Values Approach
Flexibility & Discretion
Clan
Adhocracy
External Focus & Differentiation
Internal Focus & Integration
Hierarchy
Market
Stability & Control

67. Culture Change Application Stages
Establish a clear strategic vision
Get top-management commitment
Model culture change at the highest level
Modify the organization to support change
Select and socialize newcomers; downsize deviants
Develop ethical and legal sensitivity

68. Self-Designing Organizations
Systemic change process altering most features of the organization
Process is ongoing, never finished—continuous improvement and change
Learning as You Go—on-site innovation
Need support of multiple stakeholders
All levels of the organization adopt new strategies and change behaviors

69. Organization Learning & Knowledge Management
Organization Learning interventions emphasize the structures and social processes that enable employees and teams to learn and share knowledge
Knowledge Learning focuses on the tools and techniques that enable organizations to collect, organize, and translate information into useful knowledge

70. Organization Learning: An Integrative Framework
Knowledge Management
Competitive
Strategy
Organization
Characteristics
Organization
Learning Processes
Organization
Knowledge
Organization
Performance
Structure
Information
Systems
HR Practices
Culture
Leadership
Discovery
Invention
Production
Generalization
Tacit
Explicit

71. Characteristics of a Learning Organization
Structures emphasize teamwork, information sharing, empowerment
Information systems facilitate rapid acquisition and sharing of complex information to manage knowledge for competitive advantage
Human resources reinforce new skills and knowledge
Organization culture encourages innovation
Leaders model openness and freedom to try new things while communicating a compelling vision

72. Organization Learning Processes
Single loop learning
Most common form of learning
Aimed at adapting and improving the status quo
Double loop learning
Generative learning
Questions and changes existing assumptions and conditions
Deuterolearning
Learning how to learn
Learning how to improve single and double loop learning

73. Knowledge and Performance
Organization knowledge must be relevant and applied effectively to the competitive strategy
Link organization learning processes to organization performance
Growing emphasis on the value of intellectual assets and services

74. Knowledge Management Interventions
Generating Knowledge
Identify knowledge for competitive strategy
Develop ways to acquire or create that knowledge
Organizing Knowledge
Put knowledge into a usable form
Codification and Personalization
Distributing Knowledge
Making knowledge easy to access, use & reuse

75. Built-To-Change Organizations
Organizations are designed with the ability to change constantly to create the best sustainable source of competitive advantage.
Organizations operate in complex and rapidly changing environments

76. Built to Change Application Stages
Create a Change-Friendly Identity
Pursue Proximity
Build an Orchestration Capability
Establish Strategic Adjustment a Normal Condition
Seek Virtuous Spirals

77. Application Stages for Transorganizational Development
Identification
Convention
Organization
Evaluation
Who should
belong to the
transorganizational
System (TS)?
Relevant skills,
knowledge,
and resources
Key stakeholders
How to organize
for task
performance?
Communication
Leadership
Policies and
procedures
Should a TS
be created?
Costs and
benefits
Task
perceptions
How is the TS
performing?
Performance
outcomes
Quality of
interaction
Member
satisfaction

78. Mergers and Acquisitions
Merger - the integration of two previously independent organizations into a completely new organization
Acquisition - the purchase of one organization by another for integration into the acquiring organization.
Distinct from transorganizational systems, such as alliances and networks, because at least one of the organizations ceases to exist.

79. Merger and Acquisition Rationale
Diversification
Vertical integration
Gaining access to global markets, technology, or other resources
Achieving operational efficiencies, improved innovation, or resource sharing

80. Merger and Acquisition Application Stages
Pre-combination Phase
The organization must identify a candidate organization, work with it to gather information about each other, and plan the implementation and integration activities
Legal Combination Phase
The two organizations settle on the terms of the deal, gain approval from regulatory agencies and shareholders, and file appropriate legal documents
Operational Combination Phase
Implementing the operational, technical and cultural integration activities

81. Strategic Alliances
When two organizations formally agree to pursue a set of goals
There is sharing of resources, intellectual property, people, capital, technology, capabilities or physical assets
Common alliances are licensing agreements, franchises, long-term contracts, and joint ventures

82. Alliance Intervention Application Stages
Alliance Strategy Formulation
Clarify the business strategy and why an alliance is needed
Partner Selection
Leverage similarities and differences to create competitive advantage
Alliance Structuring and Start-up
Build and leverage trust in the relationship
Alliance Operation and Adjustment

83. Network Interventions
Involves three or more companies joined together for a common purpose
Each organization in the network has goals related to the network as well as those focused on self-interest
Characterized by two types of change: creating the initial network (transorganizational development) and managing change within an established network

84. Cultural Context for Change
Context Orientation
Power Distance
Uncertainty Avoidance
Achievement Orientation
Individualism

85. Context
The extent to which meaning in communication is carried in the words
Organizations in high context cultures tend to value ceremony and ritual, the structure is less formal, there are fewer written policies, and people are often late for appointments

86. Power Distance
Extent to which members of a society accept that status and power are distributed unequally in an organization
Organizations in these cultures tend to be autocratic, possess clear status differences, and have little employee participation

87. Uncertainty Avoidance
The extent to which members of a society tolerate the unfamiliar and unpredictable
Organizations in these cultures tend to value experts, prefer clear roles, avoid conflict, and resist change

88. Achievement Orientation
The extent to which people in a society value assertiveness and the acquisition of material goods
Organizations in these cultures tend to associate achievement with wealth and recognition, value decisiveness, and gender roles are clearly differentiated.

89. Individualism
The extent to which people in a society believe they should be responsible for themselves and their immediate family
Organizations in these cultures tend to encourage personal initiative, value time and autonomy, accept competition, and autonomy is highly valued

90. International Strategic Orientation
Characteristics of the International Design
Sell existing products/services to nondomestic markets
Goals of increased foreign revenues
Implementing the International Orientation
OD facilitates extending the existing strategy into the new market
Cross-cultural training and strategic planning

91. The Global Strategic Orientation
Characteristics of the Global Design
Centralized with a global product structure
Goals of efficiency through volume
Implementing the Global Orientation
OD supports career planning, role clarification, employee involvement, conflict management and senior management team building to help achieve improved operational efficiency
OD helps the organization transition to global integration from local responsiveness

92. The Multinational Strategic Orientation
Characteristics of the Multinational Design
Operate a decentralized organization
Goals of local responsiveness through specialization
Implementing the Multinational Orientation
OD helps with intergroup relations, local management selection and team building
OD facilitates management development, reward systems, and strategic alliances

93. Transnational Strategic Orientation
Characteristics of the Transnational Design
Tailored products
Goals of learning and responsiveness through integrations
Implementing the Transnational Orientation
Extensive selection and rotation
Acquire cultural knowledge and develop intergroup relations
Build corporate vision

94. Global Social Change Organizations
Their primary task is a commitment to serve as an agent of change in the creation of environmentally and socially sustainable world futures
They have discovered and mobilized innovative social-organizational architectures
They hold values of empowerment in the accomplishment of their global change mission
They are globally-locally linked in structure, membership, or partnership and thereby exist as entities beyond the nation-state
They are multi-organizational and often cross-sectoral

95. Application Stages of Global Social Change Organizations
Build the local organization
Using values to create the vision
Recognizing that internal conflict is often a function of external conditions
Understanding the problems of success
Create horizontal linkages
Build a network of local organizations with similar views and objectives
Develop vertical linkages
Create channels of communication and influence upward to governmental and policy-level, decision-making processes