CHAPTER 15

STRATEGIC CHANGE INTERVENTION

©Transorganizational Change
Presented by: Donato P. Galila
Learning Objectives
 Explain the rationale and logic behind organization collaboration.
 Describe and apply organization development (OD) interventions that enable mergers
and acquisitions.
 Discuss and apply the OD process to alliance formation and development.
 Describe the process of network formation and trans-organizational development as well
as how network change.
Trans-organizational Rationale
 Trans-organizational strategies allow organizations to perform tasks that are too costly
and complicated for single organizations to perform.
 Goods and services are exchanged between organizations and transactions occur.
 Trans-organizational strategies work best when transactions occur frequently and are
well understood.
Trans-organizational Systems
Members maintain their separate organizational identities and goals
Tend to be under organized and member organizations are loosely coupled
Different from mergers and acquisitions
Network interventions may be appropriate
Mergers and Acquisitions
o Merger – the integration of two previously independent organizations into a completely
new organization
o Acquisition – the purchase of one organization by another for integration into the
acquiring organization
o Distinct from trans-organizational systems, such as alliances and networks, because at
least one of the organizations ceases to exist
Mergers and Acquisition Rationale

 Diversification
 Vertical integration
 Gaining access to global markets, technology, or other resources
 Achieving operational efficiencies, improved innovation, or resource sharing
Merger and Acquisition Application Stage
Pre-combination Phase
 Search for and select candidate
 Create and M&A team
  Establish the business case and perform a due diligence assessment
 Develop merger integration plans

Legal Combination Phase

 The two organizations settle on the terms of the deal, gain approval from
regulatory agencies and shareholders, and file appropriate legal
documents

Operational Combination Phase

 Implementing the operational, technical and cultural integration activities
Strategic Alliance Interventions
 When two organizations formally agree to pursue a set of goals
 There is sharing of resources, intellectual property, people, capital, technology,
capabilities or physical assets
 Common alliances are licensing agreements, franchises, long-term contracts, and joint
ventures
Strategic Alliance Application Stages
Alliance Strategy Formulation
 Clarify the business strategy and why an alliance is needed
Partner Selection
 Leverage similarities and differences to create competitive advantage
Alliance Structuring and Start-up
 Build and leverage trust in the relationship
Alliance Operation and Adjustment
Network Interventions
 Involves three or more companies joined together for a common purpose
 Each organization in the network has goals related to the network as well as those
focused on self-interest
 Characterized by two types of change: creating the initial network ( trans-organizational
development) and managing change within in established network
Application Stages for Trans-organizational Development

Identification Convention Organization Evaluation

How to organize for
Who should belong task performance? How is the TS
to the trans- performing?
organizational Should a TS be -Communication
systems (TS)? created? -Performance
-Leadership outcomes
-Relevant skills, -Costs and benefits
knowledge, and -Policies and -Quality of
resources -Task perceptions procedures interaction

-Key stakeholders -Member satisfaction

Managing Network Change

 Create instability in the network
 Manage the tipping point
- The Law of the Few: Sales people, Mavens, Connectors
- Stickiness
- The power of Context
 Rely self-organization