Organization Change / Organization Development

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 Action Data gathering & preliminary diagnosis Data gathering after action Feedback to Client

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

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. 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 Resistance to Change: Sources of Resistance to Change

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 eachother

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

23. Organization Environments and Inputs • Environmental Types • General Environment • Task Environmentand 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 • 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 Goal Clarity Task Group Structure Functioning Group Performance Composition Norms Group Effectiveness Organization Design

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 Feedback occurs Is the energy created by the feedback? No Change NO Energy to use data to identify and solve problems YES 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 Implementation Feedback Implementation of Intervention Evaluation Feedback Design and Implementation of Interventions Measure of Long-term Effects Measures of the Intervention and Immediate Effects Clarify Intention Plan for Next Steps 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