Technostructural

Interventions
♦ Chapter 14: Restructuring
Organizations
♦ Chapter 15: Employee Involvement
♦ Chapter 16: Work design

Nurul Amal Shaik Mohd Rodhi

(G1126196)
Fairuz Rusdi (G1122444)

PSYC 6220-Organizational Change & Development

Technostructural Interventions

Change programs
focusing on the
technology and structure
of organizations
(Cummings & Worley, 2009)
Restructuring organizations
Organization structure describes
how overall work of the organization
is divided into subunits and how
these subunits are coordinated for
task completion.

Designed to fit at least 4 factors :

environment, organization size, technology &
organization strategy
Common Organizational
Structure
1) Functional structure
 2) Unit Structure / Divisional Structure
Advantages Disadvantages
Provide employees with
opportunities for learning
new skills & expanding
knowledge
Recognize key
interdependencies &
coordinate resources toward
an overall outcome
May not have enough
specialized work to use
people’s skill and abilities
fully
Specialist may feel
isolated from their
professionals
colleagues & may fail
to advance their career
specialty
3) Matrix Structure
Advantages
Disadvantage
s
managers
between the demands of two
Allows multiple orientation individual who can be caught
Can cause role conflict for the

Maintains consistency
between different
departments & projects Very difficult to introduce

Provide mechanisms to deal

with multiple sources of Heavy managerial costs &
power in the org support
4) Process Structure
Senior Management Team
Chair and Key Support Process Owners

Developing New Products Process

Process Owner Cross-Functional Team Members

Acquiring and Filling Customer Orders Process

Process Owner Cross-Functional Team Members

Supporting Customer Usage Processes

Process Owner Cross-Functional Team Members
 Disadvantage
Advantages s
Less useful in
The work flow & each organizations that have
department’s connections automated or outsourced
to the customer are much many processes & thus
clearer to all do not have job assigned
organizational members to them as the structure
intends
5) Network Structure
Producer
organization

Designer Broker Distributor

organizatio organizatio organizatio
n n n

Supplier
organization
 Disadvantage
Advantages
s
Can cause
problems when
Cost effective the
& flexible organization
must rely on
the
Focus the performance
organization on of an external
its central company over
purpose which it may
have little
control
Downsizing
Refers to interventions aimed at
reducing the size of the organization,
accomplished by decreasing the
number of employees through layoffs,
attrition, redeployment or early
retirement or by reducing number of
organizational units or managerial
levels through divestiture, outscoring,
reorganization or delayering
(Cummings & Worley, 2009)
Application Stages
Clarify the organization’s strategy

Assess downsizing options & make

relevant choices
Implement the changes
Address the needs of survivors and those
who leave

Follow through with growth plans

 Downsizing tactics
(Cameron et al.,1993)

Tactic Characteristics Examples

Workforce • Reduces headcount
• Short-term focus
• Attrition
•Retirement/buyout
reduction • Fosters transition • Lay-offs

Organization • Changes organization

• Medium-term focus
• Eliminate functions,
layers,
redesign • Fosters transition and products
transformation • Merge units
• Redesign tasks

Systemic • Changes culture

• Long-term focus
• Change responsibilities
• Foster continuous
• Fosters transformation improvement
• Downsizing is normal
Reengineering
The fundamental
rethinking & radical
redesign of business
processes to achieve
dramatic improvements in
performance

(Cummings & Worley, 2009)

 Characteristics of
Reengineering in Organisations
• Work units change from functional departments
to
process teams
• Jobs change from simple tasks to
multidimensional work
• People’s roles change from controlled to
empowered
• The focus of performance measures and
compensation shifts from activities to results
• Organisation structures change from
hierarchical to flat
• Managers change from supervisors to coaches;
executives change from scorekeepers to leaders
Re-engineering Process
•
• Prepare the organisation
• Specify the organisation’s strategy and
objectives
• Fundamentally rethink the way work
gets done
– Identify and analyse core business
processes
– Define performance objectives
– Design new processes
• Restructure the organisation around the
new business processes
Employee
Involvement
Seeks to increase members’
input decisions that affect
organization performance
and employee well-being
(Cummings & Worley, 2009)

Lead to quicker, more responsive decisions,

continuous performance improvements & greater
employee flexibility, commitment and satisfaction.
4 key elements (Cummings & Worley, 2009) :

Power

Rewards
EI Informatio
n

Knowledge & skills

EI Applications: Parallel
Structures (Cummings & Worley, 2009)

♦ Provide members with an alternative setting in

which to address problems & to propose innovative
solutions free from the existing, formal
organization structure & culture
♦ 2 most common parallel structure:
1) Cooperative union-management projects

2) Quality circles
EI Applications: Parallel
Structures
1 Define the purpose & scope

2 Form steering committee

Communicate with organization
3 members
Create forums for employee problem
4 solving
5)Address the problems & issues
5, 6 6)Implement & evaluate the changes
EI Applications: Total Quality
Management (TQM)

Quality is achieved when organizational

processes reliably produce products and
services that meet or exceed customer
expectations
(Cummings & Worley, 2009)

Emphasize the concept of quality

 Total Quality Management
(TQM)
Is a combination of a number of organization
improvement techniques and approaches including
the use of quality circles, statistical quality control,
statistical process control, self-managed teams and
task forces & extensive use of employee
participation.
(French & Bell,
1999)
EI Application: Total Quality
Management (TQM)
Gain long-term senior
management commitment
Train members in quality methods

Start quality improvement projects

Measure progress
Rewarding accomplishment
EI Application: High-Involvement
organizations (HIOs)

Create organizational conditions that support

high levels of employee participation

Address almost all organizational features

(org. structure, job design, information system,
career system, selection, training, reward
system, personnel policies, physical layout)
(Cummings & Worley, 2009)
 Work Design
♦ Work design – creating jobs & work groups that
generate high levels of employee fulfillment and
productivity

Sociotechnical systems approach

Focuses on Focuses on Focuses to
Engineering approach

Motivational approach
efficiency & motivational optimize
simplificatio theories & both the
n attempts to social & the
enrich the technical
work aspects of
experience work
systems
The Complete Job Characteristic Model
Hackman & Oldham have provided an
OD approach to work redesign based
on a theoretical model of what job
characteristics lead to the
psychological states that produce “high
internal work motivation”
(French & Bell, 1999)
 STRATEGIC
CHANGE
INTERVENTIONS

PSYC 6220-Organizational Change & Development

 Understanding the
Introduction
UNDERSTANDING
Balanced Scorecard
STRATEGIC
INTERVENTIONS

“Without a strategy, an organisation is like a ship without a

rudder, going round in circles. It’s like a tramp; it has no places
to go.” (Ross and Kami)
What is Strategic Interventions ?

Cummings and Worley (2009) describes Strategic

Interventions as:

“ Interventions that involve managing

the organisation’s relationship to its
external environment and the internal
structure and process necessary to
support a business strategy”
 What is Strategic Interventions ?

Strategic interventions contribute to align the

organization with its environment and that
which links the internal functioning of the
organization to the larger environment;
transforming the organization to keep pace
with changing conditions.

– Cummings and Worley (2009)
 What is Strategic Interventions ?

Strategic intervention help organizations to

gain a better understanding of their
current state, and their environment, that
allow them to better target strategies for
competing or collaborating with other
organizations
– Cummings and Worley (2009)
 Transformational Change
Integrated Strategic Change
Organisation Design
1 Culture Change
Continuous Change
Self-designing Organisatons
2 Learning Organisation
Built-to-change Organisation
Transorganisational Change
Mergers & Acquisitions
3 Alliance Intervention
Network Intervention
 UnderstandingPart
the1
Transformational Change
Balanced Scorecard

“Without a strategy, an organisation is like a ship without a

rudder, going round in circles. It’s like a tramp; it has no places
to go.” (Ross and Kami)
What is Transformational Change?
Organisation transformation implies radical changes from its
members behavior, internal functions, corporate structures,
company values and norms, and the organisational arrangement.

-Cummings and Worley (2009)

Organisational transformation involves creation of a new
organizational vision
(Porras and Silvers as cited in Smither, Houston, &
McIntire, 1996)

A change in which the organisation moves to a radically

different, and sometimes unknown, future state.
(Nelson & Quick, 2011)
Triggered by
Environmental
6 Change Is Aimed at
Competitive Advantage
Characteristic • Uniqueness – unique bundle of
and Internal s
of
resources which represent
completive advantage
Disruption transformationa • Value – higher-than-average price

change or exceptionally low in cost

•Must experience a severe threat to
survival l • Imitation difficulty
• Some choose to change even though
not subjected to external pressures Involves Significant Change Is
due to seeing business opportunities
•(Dunphy, Griffiths & Benn, 2007). Learning Systematic and
• Transformational Revolutionary
Change Demands a change requires learning
Involves reshaping
and innovation. Members
New Organizing must learn to enact new organisation’s design
Paradigm behaviors to implement elements and its entire
Involving gamma types of new strategic directions nature
change (Bartunek & Louis, as Triggered by Senior Executives
cited in Cummings and
Worley, 2009) - discontinuous and Line Management
shifts in mental or play key role in actively leading transformation in
organisational frameworks. deciding the when, how, who and what
 Understanding the
Balanced Scorecard

Integrated Strategic
Change
Points on Integrated Strategic
Change

Comprehensive OD intervention aimed

1 at a single organisation or business unit.

Business strategy and organisation

design must be aligned, changed
2 together to respond to external and
internal disruption

Helps members manage transition

3 between current strategic orientation and
the desired future orientation
Integrated Strategic Change Key Features
(Cummings & Worley, 2009)

ISC extends traditional OD process into a highly participative process.

It has 3 key features
Worley, Hitchin, and Ross (as cited in Cummings & Worley, 2009)

1. Unit of analysis: I) Strategy and II) Organisation design =

Organisation’s Strategic Orientation
Strategy and design that supports it must be considered as integrated whole.

2. Creating the strategic plan, gaining commitment and support,

planning implementation and execution is one integrated process
The ability to repeat such a process effectively is rare and difficult.

3. Individuals and groups throughout the organisation are integrated

into the analysis, planning and implementation
This is to create a more achievable plan, maintain strategic focus, direct attention, etc.
Stages of ISC
Plan
Impl
emen
tatio
n
Strategic Change
Plan

Strategic Choice

Strategic Analysis
 ISC Stages
STRATEGY
STRATEGIC PLANNING IMPLEMENTATI
Exercising Designing the
ON
Strategic Implementing
Strategic Strategic
Analysis the Plan
Choice Change Plan

• Readiness for • Once existing • “How” • Alignment issues

change orientation • Teamwork
• Senior understood, new • Change plan: • Organisational/per
management’s one must be • Types, magnitude, sonal learning
willingness to carry designed schedule of • senior managers-
out change • “what” of strategic change activities initiate actions,
• Understanding change, define • Associated costs allocate resources,
current products/service • Organisation set goals, give
organisation • Markets to be Culture feedback
design served, way • Power and political
• Explain current outputs will be issues
performance levels produced
 Why is Integrated Strategic
Change Valuable ?

Aligns thinking

Facilitating future Shows distance to

state and needed
changes finish line

Strategy helps
the
organisation by

Rationalizes & justifies

Guides actions
a focus on culture

Informs key
relationships
 Understanding the
Balanced Scorecard

Organisation Design
 Organisation Design
Organisation design is “the process of constructing and adjusting an
organisation’s structure to achieve its business strategy and goals” (p.
518). Nelson and Quick (2011)

Configures the organisation ‘s structure, work designs, human

resources practices, management and information systems to guide
members behaviors in strategic direction. Cummings and Worley (2009)

Key notion : “fit”, “congruence” or “alignment” among

elements
The idea that the organisation is designed to support particular
strategy (strategic fit) . Different design elements must be aligned
with each other
Better fits, More effective Lawrence and Larsch (1986)
Organisation Design Model
Organization Strategy

Strategic
Fit

Organisation Design

Management and
Information Systems
Structure
Design
Fit

Human Resource Work

Practices Design
 Organisation Design Types (Burns & Stalker, 2009;
Cummings & Worley, 2009)

Mechanistic Design Organic Design

•• Cost
Cost minimization
minimization •• Innovation
Innovation –– competing
competing on
on new
new
Strategy
products
products

Structure •• Formal/hierarchical
Formal/hierarchical •• Flat,
Flat, lean,
lean, and
and flexible
flexible
•• Works
Works best
best in
in stable
stable ••Works
Works best
best in
in dynamic
dynamic and
and
environment
environment uncertain environment
uncertain environment

Work Design •• Traditional

Traditional jobs
jobs •• Enriched
Enriched jobs
jobs
•• Traditional
Traditional work
work group
group •• Self-managed
Self-managed jobs
jobs

Human •• Selection
Selection to
to fit
fit job
job •• Selection
Selection to to fit
fit organisation
organisation
Resource •• Training
Training only
only when
when needs
needs arise
arise •• Training
Training isis continuous
continuous
Practices •• Job-based
Job-based pay
pay •• Skill-based
Skill-based paypay

Management and •• Command

Command andand control
control •• Employee
Employee involvement
involvement
Information System •• Centralized
Centralized decision-making
decision-making •• Decentralized
Decentralized decision-
decision-
•• Closed,
Closed, exclusive
exclusive making
making
• Open, inclusive
 Organisation Design Stages
Organisation design follows three broad steps (Galbraith et al., as cited in Cummings and
Worley, 2009):

STRATEGY
STRATEGIC PLANNING IMPLEMENTATI
ON
Clarifying the Designing the Implementing
design focus organisation the design

• Organisation • Configure design • Putting into place

assessment for • “How” Designing (practices,
framework the Strategic
• Upper leadership for structures, systems)
• Gap analysis – Change •
overall direction Members must be
problems to address Plan
• Results in design, motivated to
component design, implement
and how to • Stakeholders must
implement support
 Understanding the
Balanced Scorecard

Culture Change
 What is Corporate Culture ?
The shared beliefs and values that organisations pass on to
newcomers, such as accepted ways of behaving, roles and norms
Smither, Houston and McIntire (1996)

The pattern of assumptions, values, and norms that are more or less
shaped by organisation members
(Cummings & Worley, 2009)

A pattern of basic assumptions considered valid and taught to new

members as the way to perceive, think , and feel in the organisation
(Nelson & Quick, 2011)

Schein suggests that organisation culture has three levels : (1) visible
artifacts, (2) testable values (3) invisible basic assumptions
(as cited in Nelson & Quick, 2011)
Elements of Corporate Culture
(Cummings & Worley, 2009)

Basic
Assumptions

Values

Norms
Artifacts
 Organisation Culture and
Organisation Effectiveness
Most theorists regard strong cultures as desirable, since
having employees holding similar views about the
company and its environment can make organisations
more effective (Smither, Houston, & McIntire, 1996).

Culture affects performance indirectly through its

influence on the organisations’s ability to implement
change. However, certain accounts where change failed
due to the culture not supporting the new strategy.
(Cummings and Worley, 2009)
Guidelines for Cultural Change
(Cummings and Worley 2009; Senior, 2002)

1 Formulate Clear Strategic Vision

Display Top Management
2 Commitment
Model Culture Change at
3 Highest Levels
Modify Organisation to Support
4 Organisational Change
Select and Socialize
5 Newcomers
 Evaluating Culture Change

Large scale cultural change may be necessary in certain situations

such as if the firm’s culture does not fit a changing environment or if
the industry is extremely competitive (Cummings and Worley, 2009).

Changing corporate culture is not always easy but at times risky due
to organisational culture, is much less visible and with many layers,
dimensions and types therefore more difficult to change (Senior, 2002).

Failure of culture change efforts due to change introduced to

employees requires them to function in new and different ways
which contradict with powerful norms and values of organisation.
(Smither, Houston, & McIntire, 1996)
 UnderstandingPart
the2
Continuous
Balanced Change
Scorecard

“Without a strategy, an organisation is like a ship without a

rudder, going round in circles. It’s like a tramp; it has no places
to go.” (Ross and Kami)
 What is Continuous Change?
Continuous change interventions extends transformational change
into a nonstop process of strategy setting, organisation designing,
and implementing the change
(Lawrence, Dyck, Maitlis, & Mauws, as cited in Cummings and Worley, 2009)

Focus is on learning, changing, and adapting and on how to

produce constant flow of new strategies and designs and not
only transforming existing ones
(Cummings and Worley, 2009)

Continuous learning at individual level : changing behavior of

one’s skills, knowledge, and worldview
At organisational level: deepening and broadening of
organisational capabilities
(Sessa & London, 2006)
 Understanding the
Balanced Scorecard

Self-Designing Organisations
 Self-Designing Organisations

Developed by Mohrman and Cummings in response to demands

of organisations in adapting to turbulent environments (adaptive
change).

This approach helps members translate corporate values and

general prescriptions for change into specific structures,
processes and behaviors suited for change
(Cummings and Worley, 2009).

This intervention includes considerable innovation and learning

as organisations gain the capacity to design and implement
significant changes continually (Cummings and Worley, 2009).
 Application Stages
The self-design approach is described in three stages (Cummings and Worley, 2009):

STRATEGY
STRATEGIC PLANNING IMPLEMENTATI
ON
Implementin
Laying the
Designing g and
foundation
assessing
• Acquiring • What needs to be • Involves ongoing
knowledge about Designing
refined and modified cycle of action
how the the
for the change Strategic learning: changing
organisations Change structures and
function Plan behaviors,
• Valuing corporate assessing progress
values that guide and making
change process necessary
• Diagnosing to modifications
determine what
needs to be
changed
The Self Design Strategy enables organisations to
adapt to demands of change from five important
perspectives: (Cummings and Worley, 2009)
Attends to interest
of multiple
stakeholders
Constant Systematic
organisational change
learning Adaptive process
Change
Demand
s

Occurring at
multiple levels of Dynamic change
the organisation process
 Understanding the
Balanced Scorecard

Learning Organisations
 Learning Organisations
Senge (1990) defines the learning organization as “…organizations where
people continually expand their capacity to create the results they truly desire,
where new and expansive patterns of thinking are nurtured, where collective
aspiration is set free, and where people are continually learning to see the
whole together” (p. 14).

This intervention is aims at helping organisations develop and use

knowledge to change and improve themselves constantly
(Cummings and Worley, 2009).
At the organisational level, learning is demonstrated through
changes in vision, strategy, policies, structure, products or
services (Sessa & London, 2006)

Includes two interrelated change process: (1) Organisation

Learning (OL) and (2) Knowledge Management (KM).
 OL Processes
Organisations may apply learning process to three types of
learning:

Single-loop learning
1 Improving the status quo

Double-loop learning
2 Changing the status quo

Deutero-learning
3 Learning how to learn
 3 Types of Learning
• Where an objective or goals is defined and
Single –loop an individual works out the most favored
way of reaching the goal however which
Learning the goal itself is not questioned (Argyris,
as cited in Senior, 2002).

Double-loop • Where error is detected and corrected in ways

determining why the error occurred in the first
Learning place (Sessa & London, 2006).

• Where members of an organisation learn

Deuterolearning how to carry both single and double loop
learning(Sessa & London, 2006).
 How OL Affects Organisation
Performance
Organisational Competitive
Learning Knowledge
Strategy
Management
Organisation
Characteristics
• Structure Organisation
• Information Learning
Processes: Organisation
system Knowledge: Organisation
• Discovery
•Human • Invention • explicit Performance
Resources • Production • tacit
practice • Generalization
• Culture
• leadership
What are Knowledge Management
Interventions ?
KM interventions focuses on tools and
techniques that enable organisations to
collect, organize and translate
information into useful knowledge
(Cummings and Worley, 2009)

Includes formal debriefing sessions, organized

learning programs, attended and supported by senior
managers and executives. Recognition and reward
systems are key ingredients of effective KM process
(Oden, 1999)
 Application Stages for KM
• Identifying the kinds of knowledge
Generating
Knowledge
that creates most value

• Organizing the valued knowledge into

Organizing
Knowledge
a form that members can use readily

• Creates mechanisms for members to

Distributing
Knowledge
gain access to needed knowledge
 Understanding the
Balanced Scorecard

Built-To-Change Organisations
Built-To-Change (B2C)
Organisations “In a rapidly
changing
environment, this
change capability
can be a source of
B2C organisations are sustained
designed for change, not competitive
stability. They are based on advantage”
design guidelines that
(Cummings and Worley,
promote change capability
2009).
in the management, reward
systems, structure
information, decision
processes, and leadership

(Cummings and Worley, 2009)

Design Guidelines for
B2C
Structure
Managing Talent Reward System Information and
&
Decision Process
Leadership

Selection practices Enhance employee Internal Structure Dynamic flow of

motivation level and Leadership information &
importance transparency

• Seek quick • Key role : • Flat, lean, • Moved

learners wanting motivating and flexible throughout the
to take initiative, reinforcing change organisation organisation,
desire professional structures information is
growth and thrives • Shared & spread transparent and
change leadership current
 B2C Stages
Lawler and Worley (2006)

The following 5 initiatives can help the transition to a B2C organisation :

Create a Build an Establish
Change- Orchestra Strategic Seek
Pursue
Friendl tion Adjustment as virtuous
Proximity
y Capabilit a Normal spirals
Identity y Condition
• Addresses • Intervention i. Skills for • Employee • Periods in
organisation looks outward to change empowerment the life of an
identity – gain insight of developed practices organization
core values, environmental among • Involves
norms, demands employees bringing all
beliefs • Seniors ii. Organisation prior
executives commit effectiveness processes
time to think about function together
future paths – created
scenario-planning iii. Members learn
how to apply
change
 The Built to Change Logic
Lawler and Worley (2006)

Organization Design Is the Issue

Change is Traditional
Inevitable Design Is a
and Problem
Normal
Human Nature is
Not Competitive Advantage
The Problem is Change
 UnderstandingPart
the3
Transorganizational
Balanced Scorecard
Change

“Without a strategy, an organisation is like a ship without a

rudder, going round in circles. It’s like a tramp; it has no places
to go.” (Ross and Kami)
Transorganizational
Change Transorganizational
strategies allows
organisation to
perform tasks that
are too costly and
complicated for
Cummings and Worley single organisations
(2009) states that
transorganzational change
to perform.
(Cummings and Worley,
involves interventions that
2009)
move beyond the single
organization to include
merging, allying or
networking with other
organisations.
 Mergers and Acquisition
Mergers and acquisition (M&As) involve the
combination of two organisations
(Cummings and Worley, 2009)

• Integration of two previously independent

“Merger” organisations into a new organisation

• Involves the purchase or “buyout” of one

“Acquisition” organisation by another for integration
into the acquiring organisation
 Why M&As are Done?
(Cummings and Worley, 2009; Galpin & Herndon, 2009)

Improve
1 innovation 2 To achieve operational
efficiencies

To gain access to global

3 markets, technology, etc

4 To grow revenue

5 Resource sharing
 Why Do M&As Fail ?
The high failure rate of M&As are the results of serious
limitations in how companies approach it
(Saint-onge & Chatzkel, 2009).
A set of factors has been found to be to be consistently associated with poor M&A
efforts according to Galpin and Herndon (2007):

Cultural Lack of People-Related Differences in

Incompatibility Communication, Issues Management
Leadership and Styles
Decision-making
 M&As Application Stages
(Cummings and Worley, 2009)

1. Pre-combination Phase
Establish Perform a Develop
Search/Select Create an Due Merger
Candidate Business Diligence Integration
M&A Team
Case Assessment Plans

2. Legal combination

Complete financial Announce the

negotiations
Close the deal combination

3. Operational combination
Day 1 activities
Organisational &
Cultural integration
technical integration
activities
activities
Recommendations for M&A Success
For M&A efforts to succeed, Galpin and Herndon (2007) have suggested the
following:

Conduct due-
Determine the
diligence required or desired
Select dedicated, analyses
capable people for degree of
the team integration

Provide continuous Speed up decisions

communication and
Strategy for
feedback M&A Success

Gain support of
Select a highly senior managers
capable leader
Clearly define
integration
approach
 Modelo de Cambio Estrategico

VISIÓN

BARRERAS
IMPLICADOS

S
IA
DIAGNÓSTICO E G
T
R A
T
ES
OBJETIVOS
AÑO 3
SITUACIÓN ACTUAL PLANES
DE ACCIÓN
OBJETIVOS
AÑO 2

OBJETIVOS PLANES
AÑO 1 DE ACCIÓN
MISIÓN
PLANES
DE ACCIÓN
ENTORNO
 Understanding the
Balanced Scorecard

Strategic Alliance Interventions

 Strategic Alliance
Defined
Long-term agreements
between firms that go
beyond normal market
transactions but fall short of
merger. Forms include joint
ventures, licenses, long-
term supply agreements,
and other kinds of inter-
firm relationships
(Porter, 1990).
Roll (2009) describes it
as an approach in which
two or more companies
agree to pool their
resources together to
form a combined force
in the marketplace
different from mergers,
in which does not
involve the emergence
of a new combined
entity. 

Child, Faulkner, and Tallman defines strategic alliance as a “formal agreement between
two or more organisations to pursue a set of private and common goals through the
sharing of resources”
(as cited in Cummings and Worley, 2009, p. 568).
 Alliance Application Stages
(Cummings and Worley, 2009)

Involves four major stages:

Alliance Alliance
Alliance Strategy Partner
Structuring Operation and
Formulation Selection Adjustment
and Start-up

• Clarify business • Search for • Structuring • Diagnosing

strategy appropriate partner partnership strategic alliance
• Understand why • Compatible • Relational quality – state
alliance is management styles, Trust Issues • Making
appropriate cultures, etc. appropriate
adjustments.
The Need for Strategic Alliances

Hamel, Doz and Prahalad (2002)

states the need for collaboration due to the following reasons:

♦ The need to absorb skills of the partner

♦ To reduce costs and avoid investments
♦ To penetrate new markets
♦ To provide short-cuts for some
companies
Benefits of the Strategic Alliances
(Soares as cited in IsoraIte, 2009)

1 Ease of market entry

2 Shared risks

Shared knowledge and

3 expertise

Synergy & Competitive

4 Advantage
 Understanding the
Balanced Scorecard

Network Interventions
Network interventions help organisations
join together for a common purpose
(Cummings and Worley, 2009).

Two types of change are involved in managing the

development of multiorganisation networks:
♦ Creating the initial network
♦ Managing change within that network
 Creating the Network
(Cummings and Worley, 2009)

Involves four major stages:

2.
1. Identification 3. Organization 4. Evaluation
Convention

• Identifying • Face-to-face • Task performance • Assessing how

members meeting organization network is performing
(existing/potential). • Costs and benefits • Feedback
• Task perceptions
 Managing Network Change
Create • In order for change to occur within a network, relationships
among member organisations' must become unstable
Instability in • OD practitioners can facilitate instability by changing
the Network patterns of communication among members.

• Gladwell (as cited in Cummings and Worley, 2009)

suggested the following in facilitating network change:
Manage the • The Law of the Few (Connectors, Mavens, Salesperson)
Tipping Point • Stickiness – the memorable impact of ideas or practices
• The Power of Context – relevance and meaningfulness of
a message to network members

• Networks tend to exhibit “self-organising” behavior

Rely on Self- • OD practitioners can rely on this feature to refreeze change
Organisation – once change has occurred in the network, variety of
controls can be leveraged to institutionalized it
Actualizing The Network Within
Organization can realize its network and collaborative potential by
pursuing the following path: (Camson, 2010)

Be clear about and publicize

common goals and objectives
1 that can drive network
collaboration. 
Support high quality

2 conversations and exchanges and

high quality actions to build
competencies and relationships
Build competencies and utilize
technology that will support
3 knowledge flow, relationships,
high quality conversations
Identify practices, attitudes and
4 business models that impede knowledge
flow, relationships, high quality
conversations and exchanges.
 References
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