An Experiential Approach to Organization Development 8 th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall Chapter 2 Slide 1

An Experiential Approach to Organization Development 8 th editionCopyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Chapter 2Slide 1

Chapter 2

Organization Renewal:

The Challenge of Change


Chapter 2Slide 2

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.


Chapter 2Slide 3

Figure 2.1 Stage 1 of OD’s 5 Stages


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Pressure for Change

• Market.

• Product.

• Competition.

• Downsizing.

• Reengineering.

• Flattening structures.

• Going global.


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Renewal of Organizations

• Make adaptive changes to environment.

• The only constant is change.

• Focus on:– Changing systems.– System-wide impact.


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Constant Change

• Increasing rate of change.

• Impact of future shock.

• Organizations need capacity to adapt to change.


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Organization Renewal -Adapting to Change

• Organizational renewal important to survival.

• Defined as:– An ongoing process.– Builds innovation and adaptation.


Chapter 2Slide 8

Approaches to Change

Two dimensions:

• Adaptive orientation.

• Environmental stability.


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4 Ways for Organization to Adapt to Change:

• Sluggish Thermostat Management.

• Satisficing Management.

• Reactive Management.

• Renewing/Transformation Management.


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Figure 2.2Model of Adaptive Orientation


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Sluggish-Thermostat Management

• Stable environment, low adaptation.

• Management style based on low risk.

• Organizations using this style:– Have very stable goals.– Highly centralized structure


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Satisficing Management

• Stable environment, high adaptation.

• Adequate and average.

• Planning and decision-making concentrated at top.


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Reactive Management

• Hyperturbulent environment, low adaptation.

• Reacting after conditions change.

• Short-term, crisis type of adaptation.

• Usually involves:– Replacing key people.– Hasty reorganization.


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Renewing/Transformation Management

• Hyperturbulent environment, high adaptation.

• Deal with future conditions before they occur.

• Faster at developing new ideas.

• More participative.


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Systems Approach

• Breaks company into key processes.

• Creates teams from different departments to run them.


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Organization as a System

• System is set of interrelated parts.

• Unified by design to achieve purpose or goal.


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Basic Qualities of Systemspart 1 of 2

• Designed to accomplish objectives.

• Elements have established

arrangement.

• Interrelationships exist among

elements.


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Basic Qualities of Systemspart 2 of 2

• Ingredients of process more vital than

elements.

• Organization more important than

elements.


Chapter 2Slide 19

Figure 2.3Organization as Open System


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Open Systems

• In continual interaction with environment.

• Continually receives feedback from environment.


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The Sociotechnical System

• Coordinated human and technical activities.

• Consists of:– Goals and values.– Technical subsystem. – Structural subsystem.– Psychosocial subsystem (culture).– Managerial subsystem.


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Figure 2.4The Sociotechnical System


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High Performance Systems

• Occur by design, not by chance.

• Key variables are:– Business situation.– Strategy.– Design elements.– Culture.– Results.


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Contingency Approach

• Considers organization and environment.

• Identifies “if-then” relationships.

• Suggests change in directions.


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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.


Chapter 2Slide 26

Organization Transformation (OT) and Organization

Development• OT and OD are approaches to

managing change.

• Both are major ways of managing change.


Chapter 2Slide 27

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.


Chapter 2Slide 28

Organization Development

• OD like an evolution.

• Planned change on large scale.

• Longer time frame than OT.

• Gradual implementation.

• Modifies total organization or major parts.


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What OD Focuses On

• Individual effectiveness.

• Team effectiveness.

• Organization effectiveness.


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Focus on Individual Effectiveness

The goals are to improve:

• Managerial skills.

• Technical skills.

• Interpersonal competence.


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Focus on Team Effectiveness (part 1 of 2)

Emphasis on:

• Improving problem-solving.

• Working through conflicts.

• Team effectiveness.


Chapter 2Slide 32

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.


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Focus on Organization Effectiveness

• Focus on total organization system.

• Improve effectiveness by changes in:– Structure.– Technology.– Management.


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OD ApplicationGoogle’s Culture

• Operates under freewheeling managerial style.

• Challenge to develop further creative culture.

• Co-managed by:– CEO Eric Schmidt.– Founders, Larry Page and Sergey Brin.


Chapter 2Slide 35

• World wide workforce of over 20,000.

• Uses fluid work groups.– Engineers move to projects that interest

them.

• Engineers work on own projects 20 percent of time.

• Outward impression is disorganized.– But Google maintains focus and strategy.


Chapter 2Slide 36

OD ApplicationApple and Renewal

• Mission to provide more choices, better products.

• Result is innovative, profitable company.

• One of most innovative companies

• On Fortune 500 list of return to shareholders.


Chapter 2Slide 37

• Success attributed to culture.– Defined primarily by co-founder Steven

Jobs.

• Jobs’ perfectionist approach caused internal problems.

• Jobs’ management style:– Tends toward throwing tantrums.– Humiliating employees who disagree.


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Key Words and Concepts

• Client System.– Organization employing practitioner.– Assist them in planning change.

• Closed systems.– Self-contained.– Isolated from environment.

• Content.– Task of the group.


Chapter 2Slide 39

• Contingency approach.– Attempt to determine proper management

technique.

• Dynamic equilibrium.– Steady state.– Reacting with environment.

• Entropy.– Movement toward disorder.– Eventual termination.

• Feedback.– Results and reaction from behavior.


Chapter 2Slide 40

• Future shock.– Inability to cope with rapid change.

• Horizontal corporation.– Flattening hierarchical organizational charts.– Reduction in layers of management.

• Hyperturbulent environment.– Rapid change.

• Open system.– Interrelated and acts with environment.


Chapter 2Slide 41

• Organization renewal.– Ongoing process of building innovation into

organization.

• Organization transformation (OT).– Coping with unplanned change.– Changes organization form (revolution).

• Participant-observer.– Actively participate while being aware of

group process.


Chapter 2Slide 42

• Process observation.– Technique used in examining groups.

• Reactive management.– Waits until something is problem before

reacting.

• Renewing/transformational management.– Plans for change.– Makes contingency plans.


Chapter 2Slide 43

• Satisficing management.– Does only what is necessary to get by.

• Sluggish management.– Based on low risk and formalized

procedures.

• Sociotechnical System.– Open system of coordinated human and

technical activities.– Consists of five major subsystems.


Chapter 2Slide 44

• Stable environment.– Unchanging basic products and services.– Static level of competition.– Slow, steady rate of growth.

• System.– Set of interrelated elements.– Unified to achieve a goal or purpose.


Chapter 2Slide 45

• Systems approach.– Concerned with relationships among

departments and– Interdependencies between elements and

external environment.

• Task activities.– What the group does.

• Team process.– How group works.– Relationships among team members.


Chapter 2Slide 46

OD Skills Simulation 2.1OD Practitioner

Behavior Profile I• Purpose:

– To illustrate growth for interpersonal competence and career planning.


Chapter 2Slide 47

Preparations for Next Chapter

• Read Chapter 3.

• Read instructions for OD Skills Simulation 3.1. – Prior to class, form teams of six and select

roles.– Complete Step 1.

• Read and analyze Case: The Dim Lighting Co.


Chapter 2Slide 48

Documents

An Experiential Approach to Organization Development 8 th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall Chapter 2 Slide 1