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Chapter 2

Chapter 2. Organization Renewal: The Challenge of Change. 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.

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Chapter 2

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

  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. An Experiential Approach to Organization Development 7th edition

  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. An Experiential Approach to Organization Development 7th edition

  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. An Experiential Approach to Organization Development 7th edition

  5. Challenges of Change Pressure for change: • Market, product, and competition. • Downsizing, reengineering, flattening structures, and going global. An Experiential Approach to Organization Development 7th edition

  6. Renewal of Organizations Make adaptive changes to environment. The only constant is change. Focus on changing systems and system-wide impact. An Experiential Approach to Organization Development 7th edition

  7. Constant Change Increasing rate of change. Impact of future shock. Organizations need capacity to adapt to changing environment. An Experiential Approach to Organization Development 7th edition

  8. Organization Renewal -Adapting to Change Organizational renewal important to survival. Defined as ongoing process of building innovation and adaptation. An Experiential Approach to Organization Development 7th edition

  9. Informed opportunism. Direction and empowerment. Friendly facts. A different mirror. Teamwork and trust. Stability in motion. Attitudes and attention. Causes and commitment. Key Factors in Renewal An Experiential Approach to Organization Development 7th edition

  10. Table 2.1Lessons in Corporate Renewal (part 1 of 2) An Experiential Approach to Organization Development 7th edition

  11. Table 2.1Lessons in Corporate Renewal (part 2 of 2) An Experiential Approach to Organization Development 7th edition

  12. Approaches to Change Two dimensions: • Adaptive orientation. • Environmental stability. An Experiential Approach to Organization Development 7th edition

  13. Figure 2.1Model of Adaptive Orientation An Experiential Approach to Organization Development 7th edition

  14. Satisficing Management Stable environment, adaptation. Adequate and average. Planning and decision-making concentrated at top. An Experiential Approach to Organization Development 7th edition

  15. Reactive Management Dynamic environment, low adaptation. Reacting after conditions change. Short-term, crisis type of adaptation. Replacement of key people and hasty reorganization. An Experiential Approach to Organization Development 7th edition

  16. Renewing/Transformation Management Dynamic environment, high adaptation. Deal with future conditions before conditions occur. Faster developing new ideas and more participative. An Experiential Approach to Organization Development 7th edition

  17. Systems Approach Horizontal corporation breaks company into key processes. Creates teams from different departments to run them. An Experiential Approach to Organization Development 7th edition

  18. Organization as a System System is set of interrelated parts. Unified by design to achieve purpose or goal. An Experiential Approach to Organization Development 7th edition

  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. An Experiential Approach to Organization Development 7th edition

  20. Figure 2.2Organization as Open System An Experiential Approach to Organization Development 7th edition

  21. Open Systems In continual interaction with environment. Continually receives feedback from environment. An Experiential Approach to Organization Development 7th edition

  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. An Experiential Approach to Organization Development 7th edition

  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. An Experiential Approach to Organization Development 7th edition

  24. 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 7th edition

  25. Figure 2.3The Sociotechnical System An Experiential Approach to Organization Development 7th edition

  26. 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 7th edition

  27. Contingency Approach Considers organization and environment. Identifies “if-then” relationships. Suggests change directions. An Experiential Approach to Organization Development 7th edition

  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. An Experiential Approach to Organization Development 7th edition

  29. Table 2.2Millennial Megatrends: Gateways to Twenty-first Century An Experiential Approach to Organization Development 7th edition

  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. An Experiential Approach to Organization Development 7th edition

  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. An Experiential Approach to Organization Development 7th edition

  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. An Experiential Approach to Organization Development 7th edition

  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. An Experiential Approach to Organization Development 7th edition

  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. An Experiential Approach to Organization Development 7th edition

  35. OD Focuses On: • Individual effectiveness. • Team effectiveness. • Organization effectiveness. An Experiential Approach to Organization Development 7th edition

  36. Focus on Individual Effectiveness The goals are improved: • Managerial skills. • Technical skills. • Interpersonal competence. An Experiential Approach to Organization Development 7th edition

  37. Focus on Team Effectiveness (part 1 of 3) Emphasis on: • Improving problem-solving. • Working through conflicts. • Group effectiveness. An Experiential Approach to Organization Development 7th edition

  38. Focus on Team Effectiveness (part 2 of 3) Activities focus on task activities and team process. Task activities—what the team does. Team process—how the team works. An Experiential Approach to Organization Development 7th edition

  39. Focus on Team Effectiveness (part 3 of 3) Process observations examine: Content—the task of the group. Process—the way the group functions. An Experiential Approach to Organization Development 7th edition

  40. Focus on Organization Effectiveness Focus on total organization system. Improve effectiveness by changes in: • Structure. • Technology. • Management. An Experiential Approach to Organization Development 7th edition

  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. An Experiential Approach to Organization Development 7th edition

  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. An Experiential Approach to Organization Development 7th edition

  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. An Experiential Approach to Organization Development 7th edition

  44. Hyperturbulent environment - rapid change. • Information overload - increasing volume of information. • Open system - interrelated and acts with its environment. An Experiential Approach to Organization Development 7th edition

  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. An Experiential Approach to Organization Development 7th edition

  46. Process - the way the group functions. • Process observation - technique used in examining groups. • Reactive management - waiting until something becomes a problem before reacting. An Experiential Approach to Organization Development 7th edition

  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. An Experiential Approach to Organization Development 7th edition

  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. An Experiential Approach to Organization Development 7th edition

  49. Task activities - what the group does. • Team process - how group works and relationships among team members. An Experiential Approach to Organization Development 7th edition

  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. An Experiential Approach to Organization Development 7th edition

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