An Experiential Approach to Organization Development 7 th edition Chapter 2 Slide 1 Chapter 2 Organization Renewal: The Challenge of Change

An Experiential Approach to Organization Development 7 th edition Chapter 2Slide 1

Chapter 2Chapter 2

Organization Renewal:

The Challenge of Change

An Experiential Approach to Organization Development 7 th edition

Chapter 2Slide 2

Learning Objectives

Recognize factors contributing to change.

Identify ways organization uses renewing

processes.

Determine ways of coping with change.

Understand and apply sociotechnical-systems

approach.


Chapter 2Slide 3

Change Agent: Can the CEO Make a Difference? (part 1 of 2)

Young and Rubicam (Y&R) - one of world’s

largest advertising conglomerates.

Within four years Y&R has had three CEOs.

Newest CEO is Ann Fudge.

Y&R has history of departments protecting turf.


Chapter 2Slide 4

Change Agent: Can the CEO Make a Difference? (part 2 of 2)

Fudge’s goal to make businesses work

together.

Some employees skeptical of collaboration.

Making staff responsible to clients.

Fudge’s approach not revolutionary but brings

people along.


Chapter 2Slide 5

Challenges of Change

Pressure for change:

Market, product, and competition.

Downsizing, reengineering, flattening

structures, and going global.


Chapter 2Slide 6

Renewal of Organizations

Make adaptive changes to environment.

The only constant is change.

Focus on changing systems and system-wide

impact.


Chapter 2Slide 7

Constant Change

Increasing rate of change.

Impact of future shock.

Organizations need capacity to adapt to

changing environment.


Chapter 2Slide 8

Organization Renewal -Adapting to Change

Organizational renewal important to survival.

Defined as ongoing process of building

innovation and adaptation.


Chapter 2Slide 9

Key Factors in Renewal

Informed opportunism.

Direction and

empowerment.

Friendly facts.

A different mirror.

Teamwork and trust.

Stability in motion.

Attitudes and attention.

Causes and commitment.


Chapter 2Slide 10

Table 2.1Lessons in Corporate Renewal (part 1 of 2)


Chapter 2Slide 11

Table 2.1Lessons in Corporate Renewal (part 2 of 2)


Chapter 2Slide 12

Approaches to Change

Two dimensions:

Adaptive orientation.

Environmental stability.


Chapter 2Slide 13

Figure 2.1Model of Adaptive Orientation


Chapter 2Slide 14

Satisficing Management

Stable environment, adaptation.

Adequate and average.

Planning and decision-making concentrated at

top.


Chapter 2Slide 15

Reactive Management

Dynamic environment, low adaptation.

Reacting after conditions change.

Short-term, crisis type of adaptation.

Replacement of key people and hasty

reorganization.


Chapter 2Slide 16

Renewing/Transformation Management

Dynamic environment, high adaptation.

Deal with future conditions before conditions

occur.

Faster developing new ideas and more

participative.


Chapter 2Slide 17

Systems Approach

Horizontal corporation breaks company into key

processes.

Creates teams from different departments to

run them.


Chapter 2Slide 18

Organization as a System

System is set of interrelated parts.

Unified by design to achieve purpose or goal.


Chapter 2Slide 19

Basic Qualities of Systems

Designed to accomplish objectives.

Established arrangement.

Interrelationships exist among elements.

Process more vital than basic elements.

Organization more important than elements.

System consists of inputs, processes, outputs.


Chapter 2Slide 20

Figure 2.2Organization as Open System


Chapter 2Slide 21

Open Systems

In continual interaction with environment.

Continually receives feedback from

environment.


Chapter 2Slide 22

Our Changing World:Back to Basics at Ford (part 1 of 2)

Implosion at Ford Motor.

• Ford went from well managed to losing $200

per vehicle.

• Bill Ford says it was “massive implosion.”

Refocused on automobiles.

• “Back to basics” is theme of turnaround.

• Ford says it will take 3 to 5 years.


Chapter 2Slide 23

Our Changing World:Back to Basics at Ford (part 2 of 2)

European model is Ford’s guide.

Ford implemented “flex factories.”

Flex factories produce more than one model on

the same production line.

But European model not tested.


Chapter 2Slide 24

The Sociotechnical System

Coordinated human and technical activities.

Consists of:

Goals and values.

Technical subsystem.

Structural subsystem.

Psychosocial subsystem (culture).

Managerial subsystem.


Chapter 2Slide 25

Figure 2.3The Sociotechnical System


Chapter 2Slide 26

High Performance Systems

Occur by design—not by chance.

Key variables are:

•Business situation

•Strategy

•Design elements

•Culture

•Results


Chapter 2Slide 27

Contingency Approach

Considers organization and environment.

Identifies “if-then” relationships.

Suggests change directions.


Chapter 2Slide 28

Future Shock and Change

Too much change in too short a time.

Inability to adapt to accelerating rates of

change.

Management reaction to change strained.

Managers must be adaptable and flexible.


Chapter 2Slide 29

Table 2.2Millennial Megatrends: Gateways to Twenty-first

Century


Chapter 2Slide 30

OD in Practice: Steve Jobs and Innovation (part 1 of 3)

Apple and Pixar examples of renewal and

transformation.

Jobs—computer visionary or terrible manager?

• Not typical corporate manager.

• An innovator and a visionary.

• Examples: Apple’s iPod, Pixar’s movies.


Chapter 2Slide 31

OD in Practice (part 2 of 3)

Jobs’ Charismatic Leadership.

• Caused internal problems.

• Drew talented people.

• Management style of berating others who

disagreed with ideas.

• Perfectionist approach to product

development.


Chapter 2Slide 32

OD in Practice (part 3 of 3)

The Future.

• iPod faces stiff competition.

• Will iPod become “nitch” music player?

• Pixar continues to have successful movies.

• Refused new Disney contract.


Chapter 2Slide 33

Organization Transformation (OT) Like a Revolution

Changing organization’s form or appearance.

OT a revolution.

Transforms framework of organization.

Unplanned changes in response to pressures.

Change occurs in short time frame.


Chapter 2Slide 34

OD - The Planned Change Process

OD like an evolution.

Planned changes on large scale.

Longer time frame.

Gradual implementation.

Modifies total organization or major parts.


Chapter 2Slide 35

OD Focuses On:

Individual effectiveness.

Team effectiveness.

Organization effectiveness.


Chapter 2Slide 36

Focus on Individual Effectiveness

The goals are improved:

Managerial skills.

Technical skills.

Interpersonal competence.


Chapter 2Slide 37

Focus on Team Effectiveness (part 1 of 3)

Emphasis on:

Improving problem-solving.

Working through conflicts.

Group effectiveness.


Chapter 2Slide 38


Activities focus on task activities and team

process.

Task activities—what the team does.

Team process—how the team works.


Chapter 2Slide 39


Process observations examine:

Content—the task of the group.

Process—the way the group functions.


Chapter 2Slide 40

Focus on Organization Effectiveness

Focus on total organization system.

Improve effectiveness by changes in:

• Structure.

• Technology.

• Management.


Chapter 2Slide 41

Key Words and Concepts

Client System - organization employing a

practitioner to assist them in planning

change.

Closed systems - self-contained and isolated

from environment.

Content - task of the group.


Chapter 2Slide 42

Contingency approach - attempt to determine

proper management technique to employ.

Dynamic equilibrium - steady state, reacting

with environment.

Entropy - movement toward disorder and

eventual termination.


Chapter 2Slide 43

Feedback - results, reaction from behavior.

Future shock - inability to cope with rapid

change.

Horizontal corporation - flattening hierarchical

organizational charts; reduction in layers of

management.


Chapter 2Slide 44

Hyperturbulent environment - rapid change.

Information overload - increasing volume of

information.

Open system - interrelated and acts with its

environment.


Chapter 2Slide 45

Organization renewal - ongoing process of

building innovation into an organization.

Organization transformation (OT) - coping

with unplanned change by changing

organization form (revolution).

Participant-observer - actively participate

while being aware of group process.


Chapter 2Slide 46

Process - the way the group functions.

Process observation - technique used in

examining groups.

Reactive management - waiting until

something becomes a problem before

reacting.


Chapter 2Slide 47

Renewing/transformational management -

plans for change; makes contingency plans.

Satisficing management - does only what is

necessary to get by.

Sluggish management - based on low risk

and formalized procedures.


Chapter 2Slide 48

Sociotechnical System - open system of

coordinated human and technical activities

with five major subsystems.

System - set of interrelated elements unified

to achieve a goal or purpose.

Systems approach - set of interrelated

elements unified to achieve a goal or

purpose.


Chapter 2Slide 49

Task activities - what the group does.

Team process - how group works and

relationships among team members.


Chapter 2Slide 50

Preparations for Next Chapter

Read Chapter 3.

Prior to class, form into groups of six and

select roles. Read the instructions for OD

Skills Simulation 3.1. Complete Step 1.

Read and analyze Case: The Dim Lighting

Co.

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An Experiential Approach to Organization Development 7 th edition Chapter 2 Slide 1 Chapter 2 Organization Renewal: The Challenge of Change