Organization Renewal: The Challenge of Change Chapter 2 Organization Renewal: The Challenge of Change An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Learning Objectives Recognize factors contributing to change. Identify ways organizations use renewing processes. Determine ways to cope with change. Understand and apply sociotechnical-systems approach. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Figure 2.1 Stage 1 of OD’s 5 Stages An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Pressure for Change Downsizing. Market. Reengineering. Product. Flattening structures. Going global. Market. Product. Competition. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Renewal of Organizations Make adaptive changes to environment. The only constant is change. Focus on: Changing systems. System-wide impact. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Constant Change Increasing rate of change. Impact of future shock. Organizations need capacity to adapt to change. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Organization Renewal - Adapting to Change Organizational renewal important to survival. Defined as: An ongoing process. Builds innovation and adaptation. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Approaches to Change Two dimensions: Adaptive orientation. Environmental stability. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

4 Ways for Organization to Adapt to Change: Sluggish Thermostat Management. Satisficing Management. Reactive Management. Renewing/Transformation Management. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Figure 2.2 Model of Adaptive Orientation An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Sluggish-Thermostat Management Stable environment, low adaptation. Management style based on low risk. Organizations using this style: Have very stable goals. Highly centralized structure An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Satisficing Management Stable environment, high adaptation. Adequate and average. Planning and decision-making concentrated at top. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Reactive Management Hyper turbulent environment, low adaptation. Reacting after conditions change. Short-term, crisis type of adaptation. Usually involves: Replacing key people. Hasty reorganization. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Renewing/Transformation Management Hyper turbulent environment, high adaptation. Deal with future conditions before they occur. Faster at developing new ideas. More participative. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Systems Approach Breaks company into key processes. Creates teams from different departments to run them. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Organization as a System System is set of interrelated parts. Unified by design to achieve purpose or goal. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Basic Qualities of Systems part 1 of 2 Designed to accomplish objectives. Elements have established arrangement. Interrelationships exist among elements. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Basic Qualities of Systems part 2 of 2 Ingredients of process more vital than elements. Organization more important than elements. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Figure 2.3 Organization as Open System An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Open Systems In continual interaction with environment. Continually receives feedback from environment. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

The Sociotechnical System Coordinated human and technical activities. Consists of: Goals and values. Technical subsystem. Structural subsystem. Psychosocial subsystem (culture). Managerial subsystem. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Figure 2.4 The Sociotechnical System An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

High Performance Systems Occur by design, not by chance. Key variables are: Business situation. Strategy. Design elements. Culture. Results. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Contingency Approach Considers organization and environment. Identifies “if-then” relationships. Suggests change in directions. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Future Shock and Change Too much change in too short a time. Inability to adapt to accelerating change. Management reaction to change strained. Managers must be adaptable and flexible. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Organization Transformation (OT) and Organization Development OT and OD are approaches to managing change. Both are major ways of managing change. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Organization Transformation OT changes organization’s form or appearance. OT is a revolution. Transforms framework of organization. Unplanned changes in response to pressures. Change occurs in short time frame. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Organization Development OD like an evolution. Planned change on large scale. Longer time frame than OT. Gradual implementation. Modifies total organization or major parts. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

What OD Focuses On Individual effectiveness. Team effectiveness. Organization effectiveness. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Focus on Individual Effectiveness The goals are to improve: Managerial skills. Technical skills. Interpersonal competence. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Focus on Team Effectiveness (part 1 of 2) Emphasis on: Improving problem-solving. Working through conflicts. Team effectiveness. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Focus on Team Effectiveness (part 2 of 2) Team activities are: Task activities—what the team does. Team process—how the team works. Process observations examine: The way the group functions. Leadership, decision making, communication. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Focus on Organization Effectiveness Focus on total organization system. Improve effectiveness by changes in: Structure. Technology. Management. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall