1. Organization Renewal: The Challenge of Change
Chapter 2
Organization Renewal:
The Challenge of Change
An Experiential Approach to Organization Development 7th edition

2. An Experiential Approach to Organization Development 7th edition
Learning Objectives
Recognize factors contributing to change.
Identify ways organization uses renewing processes.
Determine ways of coping with change.
Understand and apply sociotechnical-systems approach.
An Experiential Approach to Organization Development 7th edition

3. Change Agent: Can the CEO Make a Difference? (part 1 of 2)
Young and Rubicam (Y&R) - one of world’s largest advertising conglomerates.
Within four years Y&R has had three CEOs.
Newest CEO is Ann Fudge.
Y&R has history of departments protecting turf.
An Experiential Approach to Organization Development 7th edition

4. Change Agent: Can the CEO Make a Difference? (part 2 of 2)
Fudge’s goal to make businesses work together.
Some employees skeptical of collaboration.
Making staff responsible to clients.
Fudge’s approach not revolutionary but brings people along.
An Experiential Approach to Organization Development 7th edition

5. An Experiential Approach to Organization Development 7th edition
Challenges of Change
Pressure for change:
Market, product, and competition.
Downsizing, reengineering, flattening structures, and going global.
An Experiential Approach to Organization Development 7th edition

6. Renewal of Organizations
Make adaptive changes to environment.
The only constant is change.
Focus on changing systems and system-wide impact.
An Experiential Approach to Organization Development 7th edition

7. An Experiential Approach to Organization Development 7th edition
Constant Change
Increasing rate of change.
Impact of future shock.
Organizations need capacity to adapt to changing environment.
An Experiential Approach to Organization Development 7th edition

8. Organization Renewal - Adapting to Change
Organizational renewal important to survival.
Defined as ongoing process of building innovation and adaptation.
An Experiential Approach to Organization Development 7th edition

9. An Experiential Approach to Organization Development 7th edition
Key Factors in Renewal
Informed opportunism.
Direction and empowerment.
Friendly facts.
A different mirror.
Teamwork and trust.
Stability in motion.
Attitudes and attention.
Causes and commitment.
An Experiential Approach to Organization Development 7th edition

10. Table 2.1 Lessons in Corporate Renewal (part 1 of 2)
An Experiential Approach to Organization Development 7th edition

11. Table 2.1 Lessons in Corporate Renewal (part 2 of 2)
An Experiential Approach to Organization Development 7th edition

12. An Experiential Approach to Organization Development 7th edition
Approaches to Change
Two dimensions:
Adaptive orientation.
Environmental stability.
An Experiential Approach to Organization Development 7th edition

13. Figure 2.1 Model of Adaptive Orientation
An Experiential Approach to Organization Development 7th edition

14. Satisficing Management
Stable environment, adaptation.
Adequate and average.
Planning and decision-making concentrated at top.
An Experiential Approach to Organization Development 7th edition

15. An Experiential Approach to Organization Development 7th edition
Reactive Management
Dynamic environment, low adaptation.
Reacting after conditions change.
Short-term, crisis type of adaptation.
Replacement of key people and hasty reorganization.
An Experiential Approach to Organization Development 7th edition

16. Renewing/Transformation Management
Dynamic environment, high adaptation.
Deal with future conditions before conditions occur.
Faster developing new ideas and more participative.
An Experiential Approach to Organization Development 7th edition

17. An Experiential Approach to Organization Development 7th edition
Systems Approach
Horizontal corporation breaks company into key processes.
Creates teams from different departments to run them.
An Experiential Approach to Organization Development 7th edition

18. Organization as a System
System is set of interrelated parts.
Unified by design to achieve purpose or goal.
An Experiential Approach to Organization Development 7th edition

19. Basic Qualities of Systems
Designed to accomplish objectives.
Established arrangement.
Interrelationships exist among elements.
Process more vital than basic elements.
Organization more important than elements.
System consists of inputs, processes, outputs.
An Experiential Approach to Organization Development 7th edition

20. Figure 2.2 Organization as Open System
An Experiential Approach to Organization Development 7th edition

21. An Experiential Approach to Organization Development 7th edition
Open Systems
In continual interaction with environment.
Continually receives feedback from environment.
An Experiential Approach to Organization Development 7th edition

22. Our Changing World: Back to Basics at Ford (part 1 of 2)
Implosion at Ford Motor.
Ford went from well managed to losing $200 per vehicle.
Bill Ford says it was “massive implosion.”
Refocused on automobiles.
“Back to basics” is theme of turnaround.
Ford says it will take 3 to 5 years.
An Experiential Approach to Organization Development 7th edition

23. Our Changing World: Back to Basics at Ford (part 2 of 2)
European model is Ford’s guide.
Ford implemented “flex factories.”
Flex factories produce more than one model on the same production line.
But European model not tested.
An Experiential Approach to Organization Development 7th edition

24. 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 7th edition

25. Figure 2.3 The Sociotechnical System
An Experiential Approach to Organization Development 7th edition

26. 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 7th edition

27. An Experiential Approach to Organization Development 7th edition
Contingency Approach
Considers organization and environment.
Identifies “if-then” relationships.
Suggests change directions.
An Experiential Approach to Organization Development 7th edition

28. Future Shock and Change
Too much change in too short a time.
Inability to adapt to accelerating rates of change.
Management reaction to change strained.
Managers must be adaptable and flexible.
An Experiential Approach to Organization Development 7th edition

29. Table 2.2 Millennial Megatrends: Gateways to Twenty-first Century
An Experiential Approach to Organization Development 7th edition

30. OD in Practice: Steve Jobs and Innovation (part 1 of 3)
Apple and Pixar examples of renewal and transformation.
Jobs—computer visionary or terrible manager?
Not typical corporate manager.
An innovator and a visionary.
Examples: Apple’s iPod, Pixar’s movies.
An Experiential Approach to Organization Development 7th edition

31. OD in Practice (part 2 of 3)
Jobs’ Charismatic Leadership.
Caused internal problems.
Drew talented people.
Management style of berating others who disagreed with ideas.
Perfectionist approach to product development.
An Experiential Approach to Organization Development 7th edition

32. OD in Practice (part 3 of 3)
The Future.
iPod faces stiff competition.
Will iPod become “nitch” music player?
Pixar continues to have successful movies.
Refused new Disney contract.
An Experiential Approach to Organization Development 7th edition

33. Organization Transformation (OT) Like a Revolution
Changing organization’s form or appearance.
OT a revolution.
Transforms framework of organization.
Unplanned changes in response to pressures.
Change occurs in short time frame.
An Experiential Approach to Organization Development 7th edition

34. OD - The Planned Change Process
OD like an evolution.
Planned changes on large scale.
Longer time frame.
Gradual implementation.
Modifies total organization or major parts.
An Experiential Approach to Organization Development 7th edition

35. An Experiential Approach to Organization Development 7th edition
OD Focuses On:
Individual effectiveness.
Team effectiveness.
Organization effectiveness.
An Experiential Approach to Organization Development 7th edition

36. Focus on Individual Effectiveness
The goals are improved:
Managerial skills.
Technical skills.
Interpersonal competence.
An Experiential Approach to Organization Development 7th edition

37. Focus on Team Effectiveness (part 1 of 3)
Emphasis on:
Improving problem-solving.
Working through conflicts.
Group effectiveness.
An Experiential Approach to Organization Development 7th edition

38. Focus on Team Effectiveness (part 2 of 3)
Activities focus on task activities and team process.
Task activities—what the team does.
Team process—how the team works.
An Experiential Approach to Organization Development 7th edition

39. Focus on Team Effectiveness (part 3 of 3)
Process observations examine:
Content—the task of the group.
Process—the way the group functions.
An Experiential Approach to Organization Development 7th edition

40. Focus on Organization Effectiveness
Focus on total organization system.
Improve effectiveness by changes in:
Structure.
Technology.
Management.
An Experiential Approach to Organization Development 7th edition

41. An Experiential Approach to Organization Development 7th edition
Key Words and Concepts
Client System - organization employing a practitioner to assist them in planning change.
Closed systems - self-contained and isolated from environment.
Content - task of the group.
An Experiential Approach to Organization Development 7th edition

42. An Experiential Approach to Organization Development 7th edition
Contingency approach - attempt to determine proper management technique to employ.
Dynamic equilibrium - steady state, reacting with environment.
Entropy - movement toward disorder and eventual termination.
An Experiential Approach to Organization Development 7th edition

43. An Experiential Approach to Organization Development 7th edition
Feedback - results, reaction from behavior.
Future shock - inability to cope with rapid change.
Horizontal corporation - flattening hierarchical organizational charts; reduction in layers of management.
An Experiential Approach to Organization Development 7th edition

44. An Experiential Approach to Organization Development 7th edition
Hyperturbulent environment - rapid change.
Information overload - increasing volume of information.
Open system - interrelated and acts with its environment.
An Experiential Approach to Organization Development 7th edition

45. An Experiential Approach to Organization Development 7th edition
Organization renewal - ongoing process of building innovation into an organization.
Organization transformation (OT) - coping with unplanned change by changing organization form (revolution).
Participant-observer - actively participate while being aware of group process.
An Experiential Approach to Organization Development 7th edition

46. An Experiential Approach to Organization Development 7th edition
Process - the way the group functions.
Process observation - technique used in examining groups.
Reactive management - waiting until something becomes a problem before reacting.
An Experiential Approach to Organization Development 7th edition

47. An Experiential Approach to Organization Development 7th edition
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.
An Experiential Approach to Organization Development 7th edition

48. An Experiential Approach to Organization Development 7th edition
Sociotechnical System - open system of coordinated human and technical activities with five major subsystems.
System - set of interrelated elements unified to achieve a goal or purpose.
Systems approach - set of interrelated elements unified to achieve a goal or purpose.
An Experiential Approach to Organization Development 7th edition

49. An Experiential Approach to Organization Development 7th edition
Task activities - what the group does.
Team process - how group works and relationships among team members.
An Experiential Approach to Organization Development 7th edition

50. Preparations for Next Chapter
Read Chapter 3.
Prior to class, form into groups of six and select roles. Read the instructions for OD Skills Simulation 3.1. Complete Step 1.
Read and analyze Case: The Dim Lighting Co.
An Experiential Approach to Organization Development 7th edition