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Chapter 2. Organization Renewal: The Challenge of Change. 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.

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chapter 2

Chapter 2

Organization Renewal:

The Challenge of Change

An Experiential Approach to Organization Development 7th edition

learning objectives
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

change agent can the ceo make a difference part 1 of 2
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

change agent can the ceo make a difference part 2 of 2
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

challenges of change
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

renewal of organizations
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

constant change
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

organization renewal adapting to change
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

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.

Key Factors in Renewal

An Experiential Approach to Organization Development 7th edition

table 2 1 lessons in corporate renewal part 1 of 2
Table 2.1Lessons in Corporate Renewal (part 1 of 2)

An Experiential Approach to Organization Development 7th edition

table 2 1 lessons in corporate renewal part 2 of 2
Table 2.1Lessons in Corporate Renewal (part 2 of 2)

An Experiential Approach to Organization Development 7th edition

approaches to change
Approaches to Change

Two dimensions:

  • Adaptive orientation.
  • Environmental stability.

An Experiential Approach to Organization Development 7th edition

figure 2 1 model of adaptive orientation
Figure 2.1Model of Adaptive Orientation

An Experiential Approach to Organization Development 7th edition

satisficing management
Satisficing Management

Stable environment, adaptation.

Adequate and average.

Planning and decision-making concentrated at top.

An Experiential Approach to Organization Development 7th edition

reactive management
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

renewing transformation management
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

systems approach
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

organization as a system
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

basic qualities of systems
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

figure 2 2 organization as open system
Figure 2.2Organization as Open System

An Experiential Approach to Organization Development 7th edition

open systems
Open Systems

In continual interaction with environment.

Continually receives feedback from environment.

An Experiential Approach to Organization Development 7th edition

our changing world back to basics at ford part 1 of 2
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

our changing world back to basics at ford part 2 of 2
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

the sociotechnical system
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

figure 2 3 the sociotechnical system
Figure 2.3The Sociotechnical System

An Experiential Approach to Organization Development 7th edition

high performance systems
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

contingency approach
Contingency Approach

Considers organization and environment.

Identifies “if-then” relationships.

Suggests change directions.

An Experiential Approach to Organization Development 7th edition

future shock and change
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

table 2 2 millennial megatrends gateways to twenty first century
Table 2.2Millennial Megatrends: Gateways to Twenty-first Century

An Experiential Approach to Organization Development 7th edition

od in practice steve jobs and innovation part 1 of 3
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

od in practice part 2 of 3
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

od in practice part 3 of 3
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

organization transformation ot like a revolution
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

od the planned change process
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

od focuses on
OD Focuses On:
  • Individual effectiveness.
  • Team effectiveness.
  • Organization effectiveness.

An Experiential Approach to Organization Development 7th edition

focus on individual effectiveness
Focus on Individual Effectiveness

The goals are improved:

  • Managerial skills.
  • Technical skills.
  • Interpersonal competence.

An Experiential Approach to Organization Development 7th edition

focus on team effectiveness part 1 of 3
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

focus on team effectiveness part 2 of 3
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

focus on team effectiveness part 3 of 3
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

focus on organization effectiveness
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

key words and concepts
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

slide42
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

slide43
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

slide44
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

slide45
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

slide46
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

slide47
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

slide48
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

slide49
Task activities - what the group does.
  • Team process - how group works and relationships among team members.

An Experiential Approach to Organization Development 7th edition

preparations for next chapter
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