Organization Renewal: The Challenge of Change: An Experiential Approach To Organization Development 8 Edition

Chapter 2
Organization Renewal:
The Challenge of Change
An Experiential Approach to Organization Development 8 th edition Chapter 2

Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall Slide 1
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.

Figure 2.1
Stage 1 of OD’s 5 Stages

Pressure for Change
• Market. • Downsizing.
• Product. • Reengineering.
• Competition. • Flattening
structures.
• Going global.

Renewal of Organizations
• Make adaptive changes to environment.
• The only constant is change.
• Focus on:
– Changing systems.
– System-wide impact.

Constant Change
• Increasing rate of change.
• Impact of future shock.
• Organizations need capacity to adapt to
change.

Organization Renewal -
Adapting to Change
• Organizational renewal important to
survival.
• Defined as:
– An ongoing process.
– Builds innovation and adaptation.

Approaches to Change
Two dimensions:
• Adaptive orientation.
• Environmental stability.

4 Ways for Organization to
Adapt to Change:
• Sluggish Thermostat Management.
• Satisficing Management.
• Reactive Management.
• Renewing/Transformation Management.

Figure 2.2
Model of Adaptive Orientation

Sluggish-Thermostat
Management
• Stable environment, low adaptation.
• Management style based on low risk.
• Organizations using this style:
– Have very stable goals.
– Highly centralized structure

Satisficing Management
• Stable environment, high adaptation.
• Adequate and average.
• Planning and decision-making
concentrated at top.

Reactive Management
• Hyperturbulent environment, low
adaptation.
• Reacting after conditions change.
• Short-term, crisis type of adaptation.
• Usually involves:
– Replacing key people.
– Hasty reorganization.

Renewing/Transformation
Management
• Hyperturbulent environment, high
adaptation.
• Deal with future conditions before they
occur.
• Faster at developing new ideas.
• More participative.

Systems Approach
• Breaks company into key processes.
• Creates teams from different
departments to run them.

Organization as a System
• System is set of interrelated parts.
• Unified by design to achieve purpose or
goal.

Basic Qualities of Systems
part 1 of 2
• Designed to accomplish objectives.

• Elements have established
arrangement.
• Interrelationships exist among
elements.

Basic Qualities of Systems
part 2 of 2
• Ingredients of process more vital than

elements.
• Organization more important than
elements.

Figure 2.3
Organization as Open System

Open Systems
• In continual interaction with
environment.
• Continually receives feedback from
environment.

The Sociotechnical System
• Coordinated human and technical
activities.
• Consists of:
– Goals and values.
– Technical subsystem.
– Structural subsystem.
– Psychosocial subsystem (culture).
– Managerial subsystem.

Figure 2.4
The Sociotechnical System

High Performance Systems
• Occur by design, not by chance.
• Key variables are:
– Business situation.
– Strategy.
– Design elements.
– Culture.
– Results.

Contingency Approach
• Considers organization and
environment.
• Identifies “if-then” relationships.
• Suggests change in directions.

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.

Organization Transformation
(OT) and Organization
Development
• OT and OD are approaches to
managing change.
• Both are major ways of managing
change.

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.

Organization Development
• OD like an evolution.
• Planned change on large scale.
• Longer time frame than OT.
• Gradual implementation.
• Modifies total organization or major
parts.

What OD Focuses On
• Individual effectiveness.
• Team effectiveness.
• Organization effectiveness.

Focus on Individual
Effectiveness
The goals are to improve:
• Managerial skills.
• Technical skills.
• Interpersonal competence.

Focus on Team Effectiveness
(part 1 of 2)
Emphasis on:
• Improving problem-solving.
• Working through conflicts.
• Team effectiveness.

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.

Focus on Organization
Effectiveness
• Focus on total organization system.
• Improve effectiveness by changes in:
– Structure.
– Technology.
– Management.

OD Application
Google’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.
• 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.

OD Application
Apple 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.

• 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.

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.
• 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.
• 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.

• 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.

• 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.

• 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.

• 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.

• 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.

OD Skills Simulation 2.1
OD Practitioner
Behavior Profile I
• Purpose:
– To illustrate growth for interpersonal
competence and career planning.

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.

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Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

• Designed to accomplish objectives.

An Experiential Approach to Organization Development 8 th edition Chapter 2

• Ingredients of process more vital than

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

• Team activities are:

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

An Experiential Approach to Organization Development 8 th edition Chapter 2

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