Theory and Practice of Organisation

Development and Transformation

Models for Understanding

Organisation
Ajay K Jain
Professor of Leadership & Organization Design
www.ajaykjain.com
 Change is avalanching down…

• Change has always been around

• But rate has increased – unprecedented degrees of uncertainty
• Most unprepared to deal with it
 Trends shaping change in organisations
1. Globalisation (new govt, markets, new global
economy)
2. Digital Revolution (redefining business)
3. New governmental Regulations
4. New organisational forms (Global Teams)
5. Environmental changes (Global Warming)
6. Increase in social awareness (Diversity)
7. Open Source knowedge
Exercise

•What is the most critical change that your

organisation needs to make right away?

• What stops your organisation from

making that change?

•How to overcome these obstacles?

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Organization: The Five Parts

Strategic
Apex

Techno- Middle Support

Structure Line Staff

Operating Core
 Components of an organization
• Technical Core; Production Department

• Technical support Staff; Creating innovation in the

technical core for better adaptation

• Administrative Support; Maintenance, HR, Finance

• Management; Top Management (Direction,

Strategy, goals and policies); Middle Management
(implementation, information to top and down)
 Organizations as Open System
• Organizations are social entities that are goal directed,
are designed as deliberately structured and coordinated
activity systems, are linked to the external
environment.

• The stories of HP, IBM, Xerox etc., illustrate that

organizations are not static, they continuously adapt to
shifts in the external environment.

• System character (predictable change)

• System: Functional interdependence of parts
• Openness to environmental input (State of Flux)
 The Open-Systems Perspective

Inputs: Outputs:
labour products
organisation
money services
materials policies
technology decisions
skills information
values ideas
attitudes
 Organizational Goals & Effectiveness
• Objectives Or Goals of Organization- A desired
state of affairs that organization attempts to reach.
– Profit (ROI-Input/Output, Efficiency)
– Growth (Expansion, Diversification, Innovation)
– Sustainability (Economic, Ethical, Ecological)

• What Organizations do?

– Input (Raw Material)
– Throughtput (Adding Value)
– Output (Product & Services)
– Feedback Mechanisms (Negative Entropy)
 Effectiveness Vs. Efficiency
• Organizational Effectiveness is the degree to which an
organization realizes its multiple goals.

• Efficiency pertains to the internal working of the

organization. Organizational efficiency is the amount of
resources used to produce a unit of output.

• Sometime efficiency leads to effectiveness.

• In other organizations, efficiency and effectiveness are

not related.
 Relationship between Efficiency & Effectiveness

Do we know who are our clients & stakeholders?

No
Ineffective
Yes
Do we know what are their needs?
No
Ineffective
Yes
Are we meeting their needs?
Yes No
effective Ineffective

Are we meeting these needs at optimum cost?

Yes No
efficient Inefficient
 Effectiveness & Efficiency

Is the organisation effective?

Yes No
Is the organisation

Operations
Driven
efficient

Marketing Survival
Driven ?
Guiding Framework

Business
Environment
Technology, COVID
Deregulations etc.
Organizational
Effectiveness
FIT (Sustainable
Profitable
Growth)
Organization
Development and
Transformation
Fit is an ongoing organizational process for achieving excellence
through OD intervention strategies.
Areas of Working with
Organization
Transformation
Strategy

Structure Systems

Shared
Values

Staffing Skills

Style

Source: McKinsey & Company.

 The Organisational Iceberg

• An Indian story (An elephant and four blind man) helps in

understanding this organizational iceberg.
 3 + 1 Perspectives
•Interests •Artifacts
•Power Values
•Networks Assumptions
•Political •Cultural

•Spiritual •Strategic
Design
•Understanding
•Self •Incentives
•(cognitive, •Grouping
•affective and •Coordination
•conative processes
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 •Elephant and the Blind Men: from “Panchtantra” (story book for
kids)

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 Four Perspectives
•Strategic Design
•Organizations are machines
•An organization is a mechanical system crafted
to achieve a defined goal. Parts must fit well
together and match the demands of the
environment.
Action comes through planning. You
are an Architect.
•Political
•Organizations are contests
•An organization is a social system
encompassing diverse, and sometimes
contradictory, interests and goals.
Competition for resources is expected.
Action comes through power.
You are a Politician.

•Spiritual Design
•Organizations are personifications
•An organization is a spiritual system crafted to
realize one’s potential. Self is the source of
design and transformation.
Action comes through personality and
values. You are the reservoir of
energy.
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•Cultural
•Organizations are institutions
•An organization is a symbolic system of
meanings, artifacts, values, and routines.
Informal norms and traditions exert a
strong influence on behavior.
Action comes through habit.
You are an Anthropologist.
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 Strategic Design Perspective
1. Key variables: formal structure (“the boxes”,
business processes), systems (info. systems, human
resource management systems, reward syst. etc.)
2. Key processes: grouping (differentiation), linking
(integration)
3. View of the environment: opportunities, threats,
resources, market
4. Role of the manager: “organisational architect”,
strategist, articulate vision, mission, goals
5. Stimuli for change: low internal congruence, lack of
“fit” between organisation & strategy/ environment
6. Barriers to change: inadequate
analysis/clarification of roles, structure, etc
 Political Perspective
1. Key variables: power, politics & influence,
stakeholders’ interests, dominant coalition,
2. Key processes: conflict, negotiation, cooperation
and integration, informal network
3. View of the environment: multiple stakeholders
4. Manager’s role: forge coalitions, identify &
leverage interests, negotiate, encourage, break
alliances
5. Stimuli for change: shifts in dominant coalition, in
power of stakeholders, triangulation, ‘3rd partying’
6. Obstacles to change: “entrenched interests”,
political correctness, (egoistic motives)
 Cultural Perspective
1. Key variables: shared mental maps, organisational
culture (artefacts, values, norms, assumptions)
2. Key processes: meaning and interpretation,
socialization and acculturation, integration,
legitimisation, conversation and dialogue
3. View of the environment: social and cultural
network,
4. Manager’s role: manage the culture, implement
values
5. Stimuli for change: challenges to basic norms &
assumptions, contending interpretations, evolution
of values, life cycle shifts
6. Impediments to change: dominant culture, ‘old’
leaders and old habits of employees
 Spiritual Perspective
1. Key variables: cognitions, emotions, motivation
2. Key processes: Looking within (Introspection)
and internal motivation, understanding self,
(Johari wind.)
3. View of the environment: An Expression of
Deeper self, human agency
4. Manager’s role: Role Modelling, Walk the talk
5. Stimuli for change: Personal success and
failures, Pains and sufferings, Breakthrough
success
6. Impediments to change: sense of inferiority or
superiority, low self esteem, low self efficacy
 Modes of Change
1. Inquiry and questioning mind
2. Process: How to be transformed?
3. Words. Dialogue and conversation
 1. Inquiry and Transformation
• The process of inquiry is itself an
intervention and the best way is through
involving people in the change process.

• The big challenge is knowing what

questions to be asked for appropriate
intervention strategy.
 2. Organisation as ‘Process’
1. Not the what, but the how
2. Not the final decision, but way in which
the decision was reached
3. Not the formal structure, but the actual
behaviours
4. The ’dynamics’ and ‘flow’ of human affairs
5. Forces acting out of awareness, under the
surface
6. All our behaviour and its consequences
 Change Management Process

Why change?

Define desired Understand

future state present state

Getting from here to there: gap analysis & change

approach

Manage the transition state

 Change Management Process
Why change?
1. Is there really a need?
2. Is change really possible? Do we have a choice? Do we see insurmountable constraints?
3. What is our motivation for wanting a change?
4. What is the system’s need for change: What problems or goals require change?
5. What is the system’s readiness for change
6. How can we gather information through “diagnostic” interventions so as to support our change goals? How can
we gather information without arousing resistance?
What is the desired future state?
1. What new way of working do we envision?
2. What values are needed for the new way of working?
What is the present state? How do we determine it?
1. What is the present way of working?
2. What values does the present way rest on?
3. What cultural assumptions support the present state and what cultural assumptions would facilitate or support
the desired future state?
4. Given what we have learned about the present state, is the desired future state feasible? What kind of change
program will be needed to achieve it? Do we need to reexamine the original change goals?
Gap analysis
1. What is the gap between the present state and the desired future state?
2. What kind of change program would begin to close that gap?
Making the transition plan
• Who will manage what?
• How will we assess progress?
• Establish timetable and criteria for progress?
• Who will take what action, bearing in mind that diagnostic inquiry is itself an intervention?
• How often should the team meet to check signals, share information and retool the plan?
 Process
1. Sequences of events
2. Interaction amongst components
3. Invisible forces

• Immediate versus ultimate causes

• How far back in history do you go to find out what really happened
and why?
• Inferences are based on observed patterns of behaviour that occur
over time and repeat themselves
• Test implicit responses by watching how new behaviour evolves
• Think Systemically; Time and context
• Invisibility creates need for ‘process consultants’ – hard for
participants to decipher what’s happening
• Insight enables client to consider new options
 3. Organisations as Words
• Organisations can be understood as
socially constructed verbal systems:
stories, discourses, texts, ‘voices’,
dialogues occurring simultaneously

• In groups working together to achieve

complex tasks, there are at least as
many voices as there are people……
…….though not all are heard
 Organisations as Words
• When we dialogue with one another,
organisational ‘structure’ is drowned out
(preventing a sound being heard) by the
humming of a living group of people organised
to do their work

• As knowledge is generated through dialogue,

people and their patterns of organising change
 Changing The Meaning
1. By helping people have conversations
they may not ordinarily have had,
2. OD can help members of an organisation
make different meaning about their day-
to-day working lives, remove barriers and
open up channels - and
3. so help the organisation to become
ready for its own transformation
 Self Reflection
1. No one has to change, but everyone
has to have the conversation
2. Change emerges as result of
interactions between people
3. When there’s enough connectivity,
new patterns emerge spontaneously
throughout the system
4. Even the smallest influence can
have far-reaching effects
 Focus of ODT Initiatives
• ‘Facilitating emergence’, not planning
change
• Evolving through established connectivity's
while establishing new ways of connecting
• Providing appropriate social, cultural,
technical conditions to support connectivity
and interdependence and promote self-
organisation
• Creating conditions to explore space of
possibilities, take risks, try new ideas,
share knowledge
 Self, Organisation, Emergence,
Creation of New Order
1. Emergent properties occur in system as a ‘whole
entity’
2. Generation of knowledge/new ideas through
interaction of people – not sum of existing ideas
3. Emergence creates irreversible structures, ideas,
relationships, organisational forms
4. Organisational learning: interaction of individuals
creates new patterns of thought at macro level
✓ See system as complete interacting ‘whole’, not assembly of distinct elements
✓ Derives from its component parts and their structure, but can’t be reduced to them
✓ Group decides what to do, how and when to do it.
✓ New forms become part of history and affect evolution