Summarize and reflect upon your past, present and future experiences of change
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brown_eaod8_ppt_02.pptChapter 2
Organization Renewal:
The Challenge of Change
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.
Figure 2.1
Stage 1 of OD’s 5 Stages
Pressure for Change
- Market.
- Product.
- Competition.
- Downsizing.
- Reengineering.
- Flattening structures.
- Going global.
Renewal of Organizations
- Make adaptive changes to environment.
- The only constant is change.
- Focus on:
- Changing systems.
- System-wide impact.
Constant Change
- Increasing rate of change.
- Impact of future shock.
- Organizations need capacity to adapt to change.
Organization Renewal -
Adapting to Change
- Organizational renewal important to survival.
- Defined as:
- An ongoing process.
- Builds innovation and adaptation.
Approaches to Change
Two dimensions:
- Adaptive orientation.
- Environmental stability.
4 Ways for Organization to Adapt to Change:
- Sluggish Thermostat Management.
- Satisficing Management.
- Reactive Management.
- Renewing/Transformation Management.
Figure 2.2
Model of Adaptive Orientation
Sluggish-Thermostat Management
- Stable environment, low adaptation.
- Management style based on low risk.
- Organizations using this style:
- Have very stable goals.
- Highly centralized structure
Satisficing Management
- Stable environment, high adaptation.
- Adequate and average.
- Planning and decision-making concentrated at top.
Reactive Management
- Hyperturbulent environment, low adaptation.
- Reacting after conditions change.
- Short-term, crisis type of adaptation.
- Usually involves:
- Replacing key people.
- Hasty reorganization.
Renewing/Transformation Management
- Hyperturbulent environment, high adaptation.
- Deal with future conditions before they occur.
- Faster at developing new ideas.
- More participative.
Systems Approach
- Breaks company into key processes.
- Creates teams from different departments to run them.
Organization as a System
- System is set of interrelated parts.
- Unified by design to achieve purpose or goal.
Basic Qualities of Systems
part 1 of 2
- Designed to accomplish objectives.
- Elements have established arrangement.
- Interrelationships exist among elements.
Basic Qualities of Systems
part 2 of 2
- Ingredients of process more vital than elements.
- Organization more important than elements.
Figure 2.3
Organization as Open System
Open Systems
- In continual interaction with environment.
- Continually receives feedback from environment.
The Sociotechnical System
- Coordinated human and technical activities.
- Consists of:
- Goals and values.
- Technical subsystem.
- Structural subsystem.
- Psychosocial subsystem (culture).
- Managerial subsystem.
Figure 2.4
The Sociotechnical System
High Performance Systems
- Occur by design, not by chance.
- Key variables are:
- Business situation.
- Strategy.
- Design elements.
- Culture.
- Results.
Contingency Approach
- Considers organization and environment.
- Identifies “if-then” relationships.
- Suggests change in directions.
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.
Organization Transformation (OT) and Organization Development
- OT and OD are approaches to managing change.
- Both are major ways of managing change.
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.
Organization Development
- OD like an evolution.
- Planned change on large scale.
- Longer time frame than OT.
- Gradual implementation.
- Modifies total organization or major parts.
What OD Focuses On
- Individual effectiveness.
- Team effectiveness.
- Organization effectiveness.
Focus on Individual Effectiveness
The goals are to improve:
- Managerial skills.
- Technical skills.
- Interpersonal competence.
Focus on Team Effectiveness
(part 1 of 2)
Emphasis on:
- Improving problem-solving.
- Working through conflicts.
- Team effectiveness.
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.
Focus on Organization Effectiveness
- Focus on total organization system.
- Improve effectiveness by changes in:
- Structure.
- Technology.
- Management.
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.
- 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.
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.
- 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.
Key Words and Concepts
- Client System.
- Organization employing practitioner.
- Assist them in planning change.
- Closed systems.
- Self-contained.
- Isolated from environment.
- Content.
- Task of the group.
- Contingency approach.
- 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.
- 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.
- 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.
- 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.
- Satisficing 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.
- Stable environment.
- 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.
- Systems approach.
- 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.
OD Skills Simulation 2.1
OD Practitioner
Behavior Profile I
- Purpose:
- To illustrate growth for interpersonal competence and career planning.
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.
