Organization Renewal: The Challenge of Change Chapter 2 Organization Renewal: The Challenge of Change An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

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. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Figure 2.1 Stage 1 of OD’s 5 Stages An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Pressure for Change Downsizing. Market. Reengineering. Product. Flattening structures. Going global. Market. Product. Competition. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Renewal of Organizations Make adaptive changes to environment. The only constant is change. Focus on: Changing systems. System-wide impact. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Constant Change Increasing rate of change. Impact of future shock. Organizations need capacity to adapt to change. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Organization Renewal - Adapting to Change Organizational renewal important to survival. Defined as: An ongoing process. Builds innovation and adaptation. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Approaches to Change Two dimensions: Adaptive orientation. Environmental stability. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

4 Ways for Organization to Adapt to Change: Sluggish Thermostat Management. Satisficing Management. Reactive Management. Renewing/Transformation Management. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Figure 2.2 Model of Adaptive Orientation An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Sluggish-Thermostat Management Stable environment, low adaptation. Management style based on low risk. Organizations using this style: Have very stable goals. Highly centralized structure An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Satisficing Management Stable environment, high adaptation. Adequate and average. Planning and decision-making concentrated at top. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Reactive Management Hyperturbulent environment, low adaptation. Reacting after conditions change. Short-term, crisis type of adaptation. Usually involves: Replacing key people. Hasty reorganization. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Renewing/Transformation Management Hyperturbulent environment, high adaptation. Deal with future conditions before they occur. Faster at developing new ideas. More participative. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Systems Approach Breaks company into key processes. Creates teams from different departments to run them. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Organization as a System System is set of interrelated parts. Unified by design to achieve purpose or goal. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Basic Qualities of Systems part 1 of 2 Designed to accomplish objectives. Elements have established arrangement. Interrelationships exist among elements. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Basic Qualities of Systems part 2 of 2 Ingredients of process more vital than elements. Organization more important than elements. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Figure 2.3 Organization as Open System An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Open Systems In continual interaction with environment. Continually receives feedback from environment. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

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 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Figure 2.4 The Sociotechnical System An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

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 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Contingency Approach Considers organization and environment. Identifies “if-then” relationships. Suggests change in directions. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

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. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Organization Transformation (OT) and Organization Development OT and OD are approaches to managing change. Both are major ways of managing change. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

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. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Organization Development OD like an evolution. Planned change on large scale. Longer time frame than OT. Gradual implementation. Modifies total organization or major parts. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

What OD Focuses On Individual effectiveness. Team effectiveness. Organization effectiveness. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Focus on Individual Effectiveness The goals are to improve: Managerial skills. Technical skills. Interpersonal competence. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Focus on Team Effectiveness (part 1 of 2) Emphasis on: Improving problem-solving. Working through conflicts. Team effectiveness. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

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. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Focus on Organization Effectiveness Focus on total organization system. Improve effectiveness by changes in: Structure. Technology. Management. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

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. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

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. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

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. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

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. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Key Words and Concepts Client System. Closed systems. Content. Organization employing practitioner. Assist them in planning change. Closed systems. Self-contained. Isolated from environment. Content. Task of the group. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Contingency approach. Dynamic equilibrium. Entropy. Feedback. 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. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Horizontal corporation. 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. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Organization transformation (OT). 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. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Renewing/transformational management. 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. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Satisficing management. Sluggish 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. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Stable environment. System. 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. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

Systems approach. Task activities. Team process. 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. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

OD Skills Simulation 2.1 OD Practitioner Behavior Profile I Purpose: To illustrate growth for interpersonal competence and career planning. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

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. An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

An Experiential Approach to Organization Development 8th edition Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall