1. Organization Renewal: The Challenge of Change
Chapter 2
Organization Renewal:
The Challenge of Change
An Experiential Approach to Organization Development 8th edition
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2. 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.
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3. Figure 2.1 Stage 1 of OD’s 5 Stages
An Experiential Approach to Organization Development 8th edition
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4. Pressure for Change Downsizing. Market. Reengineering. Product.
Flattening structures.
Going global.
Market.
Product.
Competition.
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5. Renewal of Organizations
Make adaptive changes to environment.
The only constant is change.
Focus on:
Changing systems.
System-wide impact.
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6. Constant Change Increasing rate of change. Impact of future shock.
Organizations need capacity to adapt to change.
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7. Organization Renewal - Adapting to Change
Organizational renewal important to survival.
Defined as:
An ongoing process.
Builds innovation and adaptation.
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8. Approaches to Change Two dimensions: Adaptive orientation.
Environmental stability.
An Experiential Approach to Organization Development 8th edition
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9. 4 Ways for Organization to Adapt to Change:
Sluggish Thermostat Management.
Satisficing Management.
Reactive Management.
Renewing/Transformation Management.
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10. Figure 2.2 Model of Adaptive Orientation
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11. Sluggish-Thermostat Management
Stable environment, low adaptation.
Management style based on low risk.
Organizations using this style:
Have very stable goals.
Highly centralized structure
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12. Satisficing Management
Stable environment, high adaptation.
Adequate and average.
Planning and decision-making concentrated at top.
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13. Reactive Management Hyperturbulent environment, low adaptation.
Reacting after conditions change.
Short-term, crisis type of adaptation.
Usually involves:
Replacing key people.
Hasty reorganization.
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14. Renewing/Transformation Management
Hyperturbulent environment, high adaptation.
Deal with future conditions before they occur.
Faster at developing new ideas.
More participative.
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15. Systems Approach Breaks company into key processes.
Creates teams from different departments to run them.
An Experiential Approach to Organization Development 8th edition
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16. Organization as a System
System is set of interrelated parts.
Unified by design to achieve purpose or goal.
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17. Basic Qualities of Systems part 1 of 2
Designed to accomplish objectives.
Elements have established arrangement.
Interrelationships exist among elements.
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18. Basic Qualities of Systems part 2 of 2
Ingredients of process more vital than elements.
Organization more important than elements.
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19. Figure 2.3 Organization as Open System
An Experiential Approach to Organization Development 8th edition
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20. Open Systems In continual interaction with environment.
Continually receives feedback from environment.
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21. 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
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22. Figure 2.4 The Sociotechnical System
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23. High Performance Systems
Occur by design, not by chance.
Key variables are:
Business situation.
Strategy.
Design elements.
Culture.
Results.
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24. Contingency Approach Considers organization and environment.
Identifies “if-then” relationships.
Suggests change in directions.
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25. 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.
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26. Organization Transformation (OT) and Organization Development
OT and OD are approaches to managing change.
Both are major ways of managing change.
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27. 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.
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28. Organization Development
OD like an evolution.
Planned change on large scale.
Longer time frame than OT.
Gradual implementation.
Modifies total organization or major parts.
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29. What OD Focuses On Individual effectiveness. Team effectiveness.
Organization effectiveness.
An Experiential Approach to Organization Development 8th edition
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30. Focus on Individual Effectiveness
The goals are to improve:
Managerial skills.
Technical skills.
Interpersonal competence.
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31. Focus on Team Effectiveness (part 1 of 2)
Emphasis on:
Improving problem-solving.
Working through conflicts.
Team effectiveness.
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Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

32. 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.
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33. Focus on Organization Effectiveness
Focus on total organization system.
Improve effectiveness by changes in:
Structure.
Technology.
Management.
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34. 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.
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35. 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.
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36. 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.
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37. 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
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38. 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
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39. 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

40. 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

41. 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.
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42. 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.
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43. 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.
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44. 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.
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45. 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.
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46. 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
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47. 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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48. An Experiential Approach to Organization Development 8th edition
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