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

6. 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

7. 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

8. 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

9. 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
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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
An Experiential Approach to Organization Development 8th edition
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12. Satisficing Management
Stable environment, high adaptation.
Adequate and average.
Planning and decision-making concentrated at top.
An Experiential Approach to Organization Development 8th edition
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13. Reactive Management Hyper turbulent 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
Hyper turbulent 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
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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.
An Experiential Approach to Organization Development 8th edition
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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.
An Experiential Approach to Organization Development 8th edition
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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.
An Experiential Approach to Organization Development 8th edition
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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
An Experiential Approach to Organization Development 8th edition
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23. 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
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24. Contingency Approach Considers organization and environment.
Identifies “if-then” relationships.
Suggests change in directions.
An Experiential Approach to Organization Development 8th edition
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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.
An Experiential Approach to Organization Development 8th edition
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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.
An Experiential Approach to Organization Development 8th edition
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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.
An Experiential Approach to Organization Development 8th edition
Copyright ©2011 Pearson Education, Inc. Publishing as Prentice Hall

31. 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

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

33. 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